project

A STUDY ON

CONSUMER BEHAVIOR AND SATISFACTION:

A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS

SUBMITTED IN THE PARTIAL FULFILLMENT OF MASTERS IN BUSINESS

ADMINISTRATION.

(PTU 2009-2011)

Under Supervision Of

Mr Pranjal

GJIMT

Submitted By:

Ankur Gulbadhar

MBA 4th Semester

ACKNOWLEDGEMENT

It gives me immense pleasure, to express my unfeigned and sincere thanks and gratitude

to my supervisor Mr.Pranjal for his valuable guidance sustained, encouragement and

constructive critic at every stage of work, without which it would have never been

accomplished.

I acknowledge with thanks the cooperation and help received from the management of

retail outlets. I thank them for providing me with the opportunity to converse with the

customers of their outlets and gather relevant data and other information.

I acknowledge with thanks the unsolicited cooperation and help provided by the

department, library and administrative staff of Gian Jyoti Institue of management and

technology Mohali

I owe special thanks for the help and support received from the faculty of department and

colleagues.

Ankur Gulbadhar

CERTIFICATE OF COMPLETION

This is to certify that the Final Project report entitled “A STUDY ON

CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL

STORES AND KIRYANA SHOPS ” Submitted to Punjab technical university in the

partial fulfillment of the requirement for degree of MBA, is a work carried out by Ankur

Gulbadhar Under my supervision and guidance.

Project Guide:

Mr.Pranjal

DECLARATION

I hereby declare that the Major Project Report, which is entitled “A STUDY ON

CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL

STORES AND KIRYANA SHOPS” is Compiled and submitted by me is my original

frame work. I have not copied the data from any previous report. However, my Project

Guide Mr. Pranjal helped me at various points while preparing this report.

Ankur Gulbadhar

LIST OF TABLES

4.1 T-Test Group Statistics 56-60

4.2 Independent sample tests 61

4.3 Reason to go to retail store 62

4.4 Reason to go kiryana store 63

LIST OF GRAPHS

Graph No. Graph Name Page No.

4.1 Gender 48

4.2 Age 48

4.3 Occupation 49

4.4 Income 49

4.5 Age and Store Type 50

4.6 Gender and Store Type 50

4.7 Occupation and Store Type 51

4.8 Income and store type 51

4.9 Awareness level 52

4.10 Visited once 53

4.11 Visit in last two times 54

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Executive Summary

This study titled “Study on consumer behavior and satisfaction: a comparison of retail

stores and kiryana shops” was carried out to have an understanding of the consumer

perception pertaining to the Retail Stores (Organized Retail) vis-à-vis Kiryana Stores

(Unorganized Retail) and to analyze the important determinants of store choice.

Further it was seen from the results and final findings that different variables that influence

the choice of stores. Among the governing factors, General Store Attributes Dimension,

Appearance Related Dimension, Salesperson Service Dimension, Physical Aspects,

Reliability, Personal Interaction, Problem Solving, Policy, Location, Convenience of

Shopping, Sales Personnel Service are statistically significant.

During project I covered mohali city and find out the major competitors of Spencer like

Reliance fresh, 6-Ten, and other unorganized stores like kiryana stores like Amrit

Confectioners, Sital departmental store, H.S. departmental store, gill store, P.D.store and then

try to find out the reason why people go over there and I basically took 10 factors on which

they rank the reason to retail store and kiryana store differently and then try to find the

satifaction level of the customer towards product range, cleanliness, prices, discount provided

by the retail and kiryana stores .

I came with major finding that young generation people prefer more to retail stores rather

than old people and in this fast growing competition we do not have enough time to go to

store buy themselves and so people prefer home delivery more which is provided by kiryana

stores

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TABLE OF CONTENTS

ACKNOWLEDGEMENT 3

List of Tables 4

List of Graphs 4

Executive Summary 5

CHAPTER 1: INTRODUCTION…………………………………………………………..

1.1 INTRODUCTION-INDIAN PERSPECTIVE ……………………………….9

1.1.1 Retail in India: Room for Everyone……………………………….. 16

1.1.2 Retail Formats………………………………………………………..19

1.1.3 Retail Market Trends ………………………………………………26

1.1.4 Potential Roadblocks to the Retail Growth Story………………. 28

1.1.5 Urban Vs Rural Retail Trends……………………………………..29

1.1.6 SWOT Analysis………………………………………………………32

1.1.7Conclusion………………………………………………………34

CHAPTER 2:

2.1 LITERATURE REVIEW………………………………………35

2.2 PURPOSE OF THE STUDY…………………………………39

CHAPTER 3: RESEARCH METHODOLOGY……………………………………41

3.1 RESEARCH OBJECTIVES……………………………………………..42

3.2 PROBLEM DEFINITION………………………………………………..43

3.3 RESEARCH DESIGN……………………………………………………43

3.4 METHOD OF DATA COLLECTION……………………………………45

3.5 SAMPLING…………………………………………………………………45

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3.6 STATISTICAL TECHNIQUES USED………………………………………46

3.7 LIMITATIONS OF THE STUDY……………………………………………46

CHAPTER 4: DATA INTERPRETATION AND ANALYSIS……………………48

4.1 RESPONDENTS PROFILE……………………………………………49

4.2 Z- TEST…………………………………………………………………56

CHAPTER 5: FINDINGS AND SUGGESTIONS …………………………………64

5.1 FINDINGS ………………………………………………………………65

5.2 SUGGESTIONS……………………………………………………………67

5.3 DIRECTIONS FOR FUTURE RESEARCH……………………………..68

References………………………………………………………………………………69

Annexures

Annexure A: Questionnaire……………………………………………………71

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CHAPTER 1

INTRODUCTION

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1.1 INTRODUCTION-INDIAN PERSPECTIVE

         “After leading the IT bandwagon, India is poised to grow as a retail hub. It is

imperative to sustain the modernization of the retail sector and dispel the myth that the game

is big vs. small or traditional vs. modern or organized vs. unorganized or local vs. foreign.

What is needed is to create an appropriate environment to propel retail.”,

That aptly sums up the importance the retail sector has assumed in India’s economic scenario

today.

Retail is seen as the next booming industry after IT. The Indian retail market is the fifth

largest retail destination globally. It was ranked second after Vietnam as the most attractive

emerging market for investment in the retail sector by AT Kearney's seventh annual Global

Retail Development Index (GRDI), in 2008.

A report by global consultancy firm, AT Kearney said "The consumer spending in India has

increased by an impressive 75 per cent in the last four years and will quadruple in the next 20

years." Moreover, India recently topped the Nielsen Global Consumer Confidence study,

conducted by Nielsen, a market research company.

Retailing in India can be classified under two broad headings: Organized and unorganized

currently, the size of Indian retail sector is US$ 328 billion with unorganized retail

accounting for a lion’s share of the market. Organized retailing contributes to roughly around

4% of the whole market. The top ten cities account for 96% of total organized retail, of

which the top six cater to 82%.

The rise in the disposable income of the Indian consumer is driving the revolution of the

Indian retail industry. Indian retailing industry has seen phenomenal growth in the last five

years. Organized retailing has finally emerged from the shadows of unorganized retailing and

is contributing significantly in the growth of Indian retail sector.

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The growth in Indian retailing is likely to rest on key determinants such as (i) Government

policy, (ii) Infrastructure development, (iii) GDP growth, (iv) Employment scenario and (v)

Changes in the retailing supply chain.

The share of organized retail is expected to rise significantly because more than $30 billion

of investment is being planned by both domestic and foreign players in retail space in the

coming five to seven years.

As per estimates, 92% of these investments are slated for urban areas whereas 8% for rural.

Of the urban investments, majority share of investments is slated for the hypermarket (38%)

and supermarket (21%) formats while 62% of urban investments are expected to go to A-type

or above cities. A break-up of expected urban investments in different formats and cities is

given below in Table 1:

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Table 1: Format-wise urban investments in retail expected in next 5 years

Format %Share

Hypermarket 38

Supermarket 28

Specialty Store 22

Cash n Carry 16

Department Stores 2

Source: FICCI Retail Report 2007

Source: FICCI Retail Report 2007

With roughly 60 percent of the total population below 30 years of age, favorable

demographics are expected to drive consumption across categories. The purchasing power of

a young consuming middle class has been talked of considerably since the time of economic

liberalization in 1991. Also, the growth in the income amongst the Indian households has

been on an increase witnessing a significant growth of 3.7% for the middle income

households during 2002-06. Also depicted in Figure1 is the increasing number of working

women population across the major cities of the country. This trends points toward

increasing number of dual income households which further leads to increased purchasing

power of the consumers

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Figure 1

Figure 2

 Source: NSSO; AC Nielsen; IRS-2002; KPMG Analysis

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With various factors impacting growth in retail, some segments are bound to grow faster than

others. For instance, increasing affluence is driving growth in the watches and jewelry

segment, while awareness of health is driving growth in lifestyle pharmaceuticals. However,

food and grocery is expected to see the highest growth with clothing emerging as the second

fastest growing segment. Despite Food and Grocery being the fastest growing retail segment

in India today, only 8% of it is in the organized retail segment, which offers a huge

opportunity for malls to exploit. Presently, this segment is being catered to by the

unorganized players, notably the kiryana stores. 

Figure 3

   Source: FICCI – KPMG Retail Survey, 2005       

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     According to the recent report by McKinsey & Company titled 'The Great Indian Bazaar, 

Organized Retail Comes of Age in India', India's overall retail sector is likely to grow to US$ 

450   billion   by   2015.   Another  McKinsey   report   'The   rise   of   Indian   Consumer  Market', 

estimates that the Indian consumer market is likely to grow four times by 2025. 

Retailing consists of all activities involved in selling goods or services directly to final

consumers for personal, non-business use. A retailer or retail store is any business enterprise

whose sales volume comes primarily from retailing.” Retail is India's largest industry,

accounting for over 10 per cent of the country's GDP and around eight per cent of the

employment. Retail industry in India is at the crossroads. It has emerged as one of the most

dynamic and fast paced industries with several players entering the market.

The presence of 15million kiryana stores brings into light the very fact that the Indian retail

industry is highly fragmented/ unorganized. Retailing in India is gradually inching its way

toward becoming the next boom industry, organized retailing in particular. The whole

concept of shopping has altered in terms of format and consumer buying behavior, ushering

in a revolution in shopping in India. Modern retail has entered India as seen in sprawling

shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and

food all under one roof.

The future of Indian retailing may even witness the concept of 24 hour retailing. Although

this concept has been in existence in few retail segments like pharmaceuticals and fuel, it still

remains to be a challenge for other segments like food and groceries, apparel etc to adopt this

trend.

Although the organized retailing in India is coming up in a big way, it cannot simply ignore

the competition from the conventional stores because of various factors like reach, extending

credit facility and other intangible factors like the human touch which are provided only by

the conventional stores.

The urban retail market has been adopting various new formats and the malls turned out to be

the trend setters by promising the concept of shoppertainment. The trends in the rural market

also have been changing from the old Haats and Melas to the rural malls like ‘Chaupal Sagar’

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launched by ITC, DCM Shriram Groups one-stop shopping destination called ‘Hariyali

Bazaar’, Godrej groups agri store ‘Adhar’ etc.

1.1.1 RETAIL IN INDIA: ROOM FOR EVERYONE

Evolution:

Historical Indian retail market consisted of weekly markets, village fairs and melas and the

19th century gave birth to the retail outlets in the form of convenience stores, Mom and Pop

stores/ kiryana stores. This helped the consumers on to stick to a particular store for their day

to day requirements and also avail the credit purchasing facility. And in the 1980’s people

have seen the new formats like supermarket, departmental stores and discount stores entering

into the Indian retail space. In less than a decade hypermarkets have gained all the applause

of the retail market and stood above all the other formats by bringing in the concept of “one

stop shopping.” This stood as an opening door for the new generation of the retail industry.

And very soon the malls became the trend setters in the new millennium.

This has coined the term of ‘shopper-tainment’ (shopping and entertainment) which can be

attributed to the changing life styles of the people.

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Figure 4: Evolution of the Indian Retail Market

The above given diagram is the pictorial representation which depicts the evolution of the

Indian retail market formats based on their category and value proposition. And a brief

description above formats based on some of the parameters like their offerings, space

occupied etc. is also given below for better understanding.

In recent times, sweeping changes have affected both the supply and the demand fronts of the

market. Customer spending as well as brand consciousness has been increasing substantially.

Also, they have started demanding a better shopping experience. To tap increasing potential

of the Indian consumers, a large number of corporate have entered the retail arena. These

include large Indian business groups such as the Tatas, RPG, Rahejas, Piramal,

Reliance,Bharti and Birlas as well as MNC brands in apparel, footwear and durables. The

entry into retailing by MNC brands has driven the growth of specialty chains and upgraded

the standards of existing multi-brand outlets.

The established players in the organized retail sector are: (i) RPG Group, (ii) K Raheja

Group; (iii) R Raheja Group; (iv) Tata Group; (v) Pantaloon Retail Ltd; (vi) Landmark

Weekly MarketsVillage FairsMelas

Convenience StoresMom and Pop/Kiryanas

PDS OutletsKhadi StoresCooperatives

Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls

Traditional/Pervasive Reach

Government Supported

Historic/Rural Reach

Modern Formats/ International

Source of Entertainme

nt

Neighborhood Stores/Convenienc

e

Availability/ Low Costs / Distribution

Shopping Experience/Efficien

cy

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Group; and (vii) Piramal Enterprise. The more recent entrants are Reliance, Bharti and Birlas

who have rolled out large investment plans for this sector.

Apart from these there are retailers like Viswapriya Group, DS Group, Nilgiris, etc. that have

been very successful in the different business formats in retailing.

Franchising arrangements with local entities are a popular medium of entry by for foreign

companies. Several global brands such as Marks and Spencers, Tommy Hilfiger and Nike

have entered the market through this kind of arrangement.

The Trends In Indian Retailing

The Retail Industry in India has shown an upward trend in different formats. Retailers are

venturing into a number of formats as Indian retail transits through experimental phase. Since

most of the formats are new to the consumers, retailers have to choose models that are

customized to Indian taste and habits. A trend that has been seen in the Indian retail scenario

has been that of differentiation of product and service. However, this alone will not be

sufficient for differentiating the store. While product differentiation would play a significant

role, the gap will diminish due to ease in global sourcing for all competitors.

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1.1.2 RETAIL FORMATS

Food and Grocery Retail Format

Food and grocery formats can be distinguished based on various parameters. These

findings are tabulated in the Table 2. As can be seen, the combinations of the seven

parameters have given rise to some generic retail formats. We can thus define a retail format

in terms of these seven parameters.

1. Categories of Merchandise

Category of merchandise refers to different types of goods held in the store. There are stores

that hold only grains and pulses, stores that hold other grocery items along with grains and

pulses and stores that hold consumer durables, clothes along with food and groceries.

2. Variety of Brands held in the store for each Type of Merchandise

Food and grocery stores can also be differentiated based on variety of brands held in the

store for each type of merchandise e.g. a Kiryana store would hold 5-6 brands of toilet

soap, however, a hypermarket would hold more than 10 brands of toilet soap.

3. Number of SKUs held in the store under each Brand

In small retail stores one may not find all SKUs under any given brand e.g. a Kiryana

store may hold only a 100 gm tube of toothpaste, however, hypermarket may hold all the

SKUs available for a particular brand of toothpaste.

4. Price of Merchandise

Retail stores can be differentiated based on price at which merchandise is sold in the store.

Thus we have stores that sell their merchandise at wholesale prices, maximum Retail

Price (MRP), discounted prices or at lowest price in the market (may be EDLP).

5. Service Offered in the Store

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Some food and grocery stores are over-the-counter (OTC) stores. Others are self-

service stores (essentially supermarkets and hypermarkets). Some stores also offer

home-delivery service to their customers. In some cases, stores offered home delivery

when the bill value exceeds a certain amount.

6. Accessibility

Accessibility is the ease with which one can reach a particular food and grocery store. It can

be defined either in terms of distance or time required to reach a particular store. Customers

prefer to use the latter.

7. Ambience

Ambience refers to the shopping conditions that exist within a store. It is a composite

parameter composed factors like of cleanliness, lighting, walking space and arrangement

of merchandise (display).

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Table 2: Value Proposition of Existing Food and Grocery Formats in India

Store Merchandize Number of brands

Number of SKUs

Price Service Accessibility Ambience

Kiryana Grains, Pulses, other Groceries, personal products

Medium (4-5 brands per product category)

Low MRP Home Delivery

High (Walking Distance)

Dull

Upgraded Kiryana

Grains, Pulses, other Groceries, personal products

Medium (4-5 brands per product category)

Low MRP Home Delivery+ Self Service

High (Walking Distance)

Medium

Supermarket Pulses, other Groceries, personal products , some other household items (plastics, utensils, etc)

Medium (4-5 brands per product category)

Medium Some Discount

Self Service + Home delivery based on bill amount

Medium (need to travel 10-15 mins)

Bright and Clean

Hypermarket Pulses, other Groceries, personal products, wet groceries Household appliances, clothes, Footwear etc

High (more than 6 brands per product category

High EDLP + Some Discount

Self Service + Home delivery based on bill amount

Low (need to travel more than 15 mins)

Bright and Clean

Wholesaler Grains and Pulses

Low (1-3 brands per product category)

Low Wholesale OTC – Home Delivery

Low (need to travel more than 15 mins)

Dull

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Different Formats Existing In The Food And Grocery Sector

Kiryana Store

Kiryana store, a combination of convenience and mom-and-pop stores, is a well-located

store. Ease of shopping, personalized services, credit availability and home delivery of

ordered merchandise are the major reasons for its patronage, even when it charges average

to above average prices, and carries a less number of items. These are generally over-the-

counter (OTC) stores and have a dull atmosphere. They carry about 5000 items. They are

small stores generally less than 500 sq ft. Yet, they service almost the complete

purchase basket of customers. They are also useful for fill-in merchandise and

emergency purchases. Many customers shop at least two to three times a week at

these stores. These stores face most competition from supermarkets that have started

providing longer hours and better stocks of non-food items.

Upgraded Kiryana Stores

Some stores have upgraded themselves to offer both OTC and self-service. This is a

unique format that provides a cleaner and more hygienic environment for shopping as

compared to a small Kiryana store. The merchandise and other elements of retail mix

remain as in case of Kiryana.

Supermarkets

A conventional supermarket is a self-service food store offering groceries with limited

sales of non-food items, such as health and beauty aids and general merchandise at

discounted prices. They are larger in size and carry 9,000 to 11,000 items. They occupy

between 1000 and 4000 sq. ft space. The self-service nature allows supermarkets to cut

costs, as well as increase volume. They are chosen due to volume sales, self-service, low

prices and cleaner and brighter ambience for shopping. Supermarkets offer medium

variety of brands and SKUs. Conventional supermarkets have to deal with intense

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competition from other types of food stores. Convenience stores offer greater customer

convenience; Hypermarkets have more product lines and greater variety, low prices, as

well as better gross margins; Wholesale dealers offer wholesale prices and have low

operating costs.

Hypermarkets

Hypermarkets are large (above 8000 sq. ft.) combination food and general merchandise

retailer. They stock a large assortment (40,000 to 60,000 items) and hence offer

more variety of merchandise, brands and SKUs. Merchandise includes groceries,

hardware, furniture, home appliances, clothes, sports equipment, and crockery.

Hypermarkets offer a clean, hygienic and bright environment for shopping. They offer

variety of promotional schemes to shoppers. Some hypermarkets are known to offer

lowest price in the market on their merchandise. This attracts consumers to such

hypermarkets. Economies of scale, efficient management of demand and supply chain

are main reasons why hypermarkets can offer lower prices in the market.

Wholesalers

Wholesalers, although not retailers in strictly sense, attract retail customers for grocery

and food items in India. They offer only one or two types of merchandise (grains and

pulses), low variety and only one or two pack sizes (in which merchandise can be

purchased). Purchase from wholesalers thus takes place in bulk. The main attraction of

the wholesaler is its low price that may be lower than prices offered by hypermarkets.

Other Existing Organized Retail Formats

Convenience store: A subdued version of a supermarket.

Merchandise: Groceries are predominantly sold.

Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.

Example: stores located at the corners of the streets, Reliance Retail’s Fresh and Select.

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Department store: A retail establishment which specializes in selling a wide range of

products without a single prominent merchandise line and is usually a part of a retail chain.

Merchandise: Apparel, household accessories, cosmetics, gifts etc.

Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and higher

volumes.

Merchandise: A variety of perishable/ non perishable goods.

Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.

Specialty store: It consists of a narrow product line with deep assortment.

Merchandise: Depends on the stores

Example: Bata store deals only with footwear, RPG’s Music World, Crossword.

Figure 5

Malls: The largest form of organized retailing today. Located mainly in metro cities, in

proximity to urban outskirts.

Merchandise: They lend an ideal shopping experience with an amalgamation of product,

service and entertainment, all under a common roof.

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Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.

Example: Pantaloon Retail’s Central, Mumbai’s Orbit.

MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in busy

market places and Metros.

Merchandise: Offers several brads across a single product category

The percentage of organized retail per sector wise is very miniscule and this does not mean

that there is stagnation of growth because if we look at the Figure 5 we can clearly observe

the burgeoning pace of growth happening in all the sectors of Indian retailing. The fastest

growing formats include specialty stores, supermarkets followed by hypermarkets. The

relatively newer concept of E-tailing is also fast gaining popularity in the Indian market by

growing at a significant 9%.

PRESENT PLAYERS AND THEIR RETAIL FORMATS:

Figure 6: Formats adopted by key players

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The above figure depicts the present scenario of the retail Industry in India i.e. the major

players present and the various retail formats that have been adopted by them. The fast

changing scenario demands the need of studying the various trends prevalent in the Indian

retail markets. These are discussed ahead.

1.1.3 RETAIL MARKET TRENDS:

New Product Categories: For a long time, the corner grocery store was the only choice

available to the consumer, especially in the urban areas. This is slowly giving way to

international formats of retailing. The traditional food and grocery segment has seen the

emergence of supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar),

convenience stores (ConveniO, HP Speedmart) and fast-food chains (McDonalds, Dominos).

However that foray has been made into the non-food segment. These include lifestyle/fashion

segments (Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon,

Levis, Reebok), books/music/gifts (Archies, MusicWorld, Crosswords, Landmark),

appliances and consumer durables (Viveks, Jainsons, Vasant & Co.), drugs and pharmacy

(Health and Glow, Apollo).

Increasing competition: Reliance is planning to launch a nationwide chain of hyper marts,

supermarkets, discount stores, department stores, convenience stores and specialty stores.

These 5,500 stores will be located in 800 cities and towns in India. Other new entrants such

as Bharti Enterprises and the AV Birla group will compete against well-established retailers,

such as Pantaloon Retail, Shoppers’ stop, Trent, Spencer’s and Lifestyle stores. Foreign

retailers are keenly evaluating the Indian market and identifying partners to forge an alliance

with in areas currently permitted by regulations.

Increase in Private Labels: Private labels have been gaining significance. More retailers are

introducing their own brands in all categories including Food & Groceries, apparel,

accessories, footwear. It is mainly growing among FMCG products in most supermarkets

with groceries accounting for 45.9%. They enhance the profitability levels of product

categories, increase retailers’ negotiation powers and create consumer loyalty. These own

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brands also do not have to manage intermediaries since retailers maintain oversight of the

supply chain.

Shifting Toward Tier II and III cities: Indian retailers are planning to extend operations

into Tier II and Tier III cities as heightened IT off shoring activity in these locations have

increased consumers’ disposable income. The population in these cities is typically well

educated and willing to purchase goods and services. Some major retailers, like Globus,

Reliance Retail and Pantaloon, have already begun building a retail presence in Tier III cities

before many retailers have finalized their Tier II retail operations.

Venturing into Agri-Business: India’s most prestigious business houses and global retailers

are planning to enter retail agri-business. Market entrants plan to invest in the entire value

chain, moving goods “from the farm to the fridge at home.” Viewed as India’s next “Sunrise

Sector,” retailers are employing contract farming as a means of boosting their ventures.

Contract farming enables farmers to access land, manpower and farming skill without having

to purchase land. Of the total Cultivable land of 400 million acres in India, contract farming

represents 7 million acres thus indicating a tremendous opportunity. For pure corporate

contracts between farmers and companies, only 2,00,000 acres are used.

Experimenting with formats: Selecting the right retail format is essential in modern

retailing. The difference between urban and rural customers is one of the reasons why

multiple formats are required in India. Local conditions and insights into buying-behavior

shape the format choice. No single format will be suitable for an all India strategy and

selecting the relevant format is the key success factor.

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1.1.4 POTENTIAL ROADBLOCKS TO THE RETAIL GROWTH STORY

Despite the spectacular growth projections, one must not remain oblivious to the potential

roadblocks that may hamper the growth of the organized retailing in the country. Some of

these are shown and described below.

Figure 7

Real estate costs: Most retailers interviewed expressed concerns about the high cost of real

estate today. On the other hand, the average purchase ticket size in India is still low. This

could lead to a situation of high fixed cost, with low contribution per sale for retailers. High

footfalls would be a necessary condition for success. Unless real estate costs become

conducive to retail growth, most retail business will take a longer time for break-even.

Distribution costs: A key bottleneck mentioned by respondents is the absence of distribution

networks connecting Tier-II towns with regional logistics hubs. There is scope for organized

logistics players like regional transport companies/ third party logistics (3PL) players to

develop these distribution networks including warehouses, cold chains and truck/ multi-

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modal services connecting these locations. Investments are being made in warehouses and

hubs by Indian corporate. Outsourced logistics service providers are also emerging.

Regulatory aspects: A point that kept emerging in various discussions with the retailers was

the dated regulations in the country. For example Weights and Measures Act expects all

goods to be available in the factory packed form in the stores. Similarly Agricultural Produce

Marketing Committee (APMC) Acts consider even small volume purchases to qualify as

wholesale deals. There are also variations among states with respect to aspects like store

timings. All these are hindrances that can restrict rapid growth of retailing in India.

Skilled retail personnel: A key concern raised by most respondents has been the expected

shortfall of trained manpower to meet expansion plans. With increasing competition from the

ITeS industry, retail manpower shortage could become a critical bottleneck that limits

player's expansion plans. Individual players are taking proactive measures like providing on-

the-job training, setting up retail academies etc to ensure availability of people with the right

skill sets. However, the industry as a whole would need to step forward and put in place

measures to deal with the critical gap.

1.1.5 URBAN VS RURAL RETAIL TRENDS:

Urban Trends

The urban retailing has been experimenting with many formats like the supermarkets,

hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be

embracing the trend of mall culture. It is a rich man's world too, with multi-screen cinemas,

restaurants, games and branded shops - well out of the reach of many of the country's one

billion people. But India's middle-classes, widely travelled and with deep pockets, are

flocking to malls.

India's organized retail industry accounts for just 3% of the country's total retail sales, though

it is poised to grow by 97% per year in the next five years to a staggering $24bn. Fuelling

this growth are India's sprawling shopping malls, which are increasingly challenging High

30

Street stores, corner shops and village markets alike. Just five years ago, there were shopping

arcades but no malls. Today there are nearly 100 big shopping malls in the country, more

than half of them in Delhi and Mumbai alone. And in two years there will be 360 malls

across the country. More than 20 are in various stages of development in Delhi and Mumbai.

Among them is India's biggest shopping mall, Ambi, which is being built in Gurgaon, near

Delhi. Spread over 3.2 million square feet, it is set to become a virtual town, where multi-

screen cinemas, recreational facilities for adults and children, food courts and branded outlets

will fill the space. It will have exclusive showrooms of international brands, where,

according to the developers, customers will have to shop by prior appointment. Analysts

comment that this is just the beginning and this is going to experience a ‘sea change’ once

the platform is opened up for the FDI

Figure 8

Rural Trends

Wal-mart, the world's largest corporation, also had its roots in rural America. Unlike many

other retailers who started from urban centers and then trickled down to rural areas, Wal-mart

had started from rural areas and then came closer to cities over a period of time. Many more

such concepts are likely to be tested in the future as marketers and retailers begin to

31

acknowledge that the rural consumer is more than a ‘poor cousin' of the urban counterpart.

The IMAGES KSA Report avers that these concepts are likely to go a long way in bringing a

huge untapped population within the purview of organized retailing, thereby, increasing the

size of the total market.

India's largely rural population has also caught the eye of retailers looking for new areas of

growth. ITC launched the country's first rural mall ‘ Chaupal Sagar' , offering a diverse

product range from FMCG to electronics appliance to automobiles, attempting to provide

farmers a one-stop destination for all of their needs. There has been yet another initiative by

the DCM Sriram Group called the ‘ Hariyali Bazaar' , that has initially started off by

providing farm related inputs and services but plans to introduce the complete shopping

basket in due course. Other corporate bodies include Escorts, and Tata Chemicals (with Tata

Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in

order to tap the vast rural market.

In INDIA RETAIL REPORT 2005, Mr. Adi B. Godrej, Chairman, The Godrej Group said

that his group had also launched the concept of agri-stores named 'Adhaar', which served as

one-stop shops for farmers selling agricultural products such as fertilizers & animal feed

and also providing farmers knowledge on how to effectively utilize these products. "There

are 8 stores already operating in Maharashtra and Gujarat and further expansion is very much

on the cards. FDI could indeed do a lot in this sector as entry of international retailers would

bring in the required expertise to set the supply chain in place which would result in

elimination of wastage, better prices and quality for consumers and higher income for

farmers besides of course farm produce retailing getting a facelift”.

Godrej Group's Agro and Food division, Godrej Agrovet Ltd. (GAVL) operates the format,

selling a variety of vegetables, fruits and herbs - both local and exotic thereby introducing the

concept of 'farm-to-plate' to urbanites. Tapping the fresh farm produce sector, the group plans

to take its recently launched retail concept – Nature's Basket - to newer cities steadily. Godrej

plans to open four more Nature's Basket stores in Mumbai before taking them national.

32

1.1.6 SWOT ANALYSIS:

A SWOT analysis of the Indian organized retail industry is presented below:

Strength:

1. Technology-intensive: Retailing is technology driven which helps the organized retailers

to score over the unorganized retailers. Successful organized retailers today work closely

with their vendors to predict consumer demand, shorten lead times, reduce inventory holding

and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive

advantage through distribution & information systems in the retailing industry. They

introduced two innovative logistics techniques – cross-docking and EDI (electronic data

interchange)

2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked

with an average unorganized retailer. This will provide variety in products (required breadth

& depth for consumers)

3. As a consequence of high volumes, procurement will be direct from the Manufacturer.

Hence, merchandise can be offered at lower costs.

Weakness:

1. Less Conversion level : Despite high footfalls, the conversion ratio has been very low in

the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual

conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other

hand, a high street store of retail chain has an average conversion of about 50-60%. As a

result, a stand-alone store has a ROI (return on investment) of 25-30%; in contrast the retail

majors are experiencing a ROI of 8-10%

2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix

for the mall outlets. Since the stand-alone outlets were established long time back, so they

have stabilized in terms of footfalls & merchandise mix and thus have a higher customer

loyalty base.

33

Opportunity:

1. The Indian middle class is already 30 Crores & is projected to grow to over 60 Crores by

2010 making India one of the largest consumer markets of the world. The IMAGES-KSA

projections indicate that by 2015, India will have over 55 Crores people under the age of 20 -

reflecting the enormous opportunities possible in the kids and teens retailing segment.

2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at

the rate of 25-30% p.a. and reach INR 1,00,000 Crores by 2010.

3. Percolating down : In India it has been found out that the top 6 cities contribute for 66%

of total organized retailing. While the metros have already been exploited, the focus has now

been shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been

concentrated in the metros is beginning to percolate down to these smaller cities and towns.

The contribution of these tier-II cities to total organized retailing sales is expected to grow to

20-25%.

4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking

for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a

diverse range of products from FMCG to electronic goods to automobiles, attempting to

provide farmers a one-stop destination for all their needs." Hariyali Bazar" is started by DCM

Sriram group which provides farm related inputs & services. The Godrej group has launched

the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as

fertilizers & animal feed along with the required knowledge for effective use of the same to

the farmers.

Threat:

1. If the unorganized retailers are put together, they are parallel to a large supermarket with

no or little overheads, high degree of flexibility in merchandise, display, prices and

turnover.

2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls

are just a place to hang around with family and friends and largely confined to window-

shopping.

34

3. Cultural Variation leads to variation in merchandise in India at different geographical

locations.

1.1.7 CONCLUSION:

Organized retailing in India has been maturing by passing through many trends with the entry

of many big players trying to build and strengthen their retail muscle by pumping in a lot of

money in the retail space. And in the light of this situation some feel that the conventional

stores may loose out their existence. Once the FDI is allowed into the Indian retail market

there may be drastic changes in the Indian retailing and its focus may also shift to the vast

untapped rural market which needs huge investments to build the infrastructure. All these

changes in the Indian retail market are finally going to end up by benefiting the Indian

consumer.

35

CHAPTER 2

LITERATURE REVIEW

36

2.1 LITERATURE REVIEW

In India and rest of Asia organized retail is expected to grow rapidly in future. One

factor in favor of this growth is the increased consumer valuation of time

(Messinger and Narsimhan, 1997). As shoppers face more and more paucity of time,

their preferences would shift towards one-stop shopping experiences. This supports the

popular belief that hypermarkets would flourish in future. In a study of store choice

behavior amongst audio equipment shoppers, Dash et al (1976) suggested that specialty

store shoppers were more certain than the department store shoppers about their

product choice being satisfactory. A housewife purchases fruits and vegetables from a

roadside vendor, whom she has been patronizing since long, rather than from a

supermarket. Taking a cue from this, it could be assumed that the perceived risk of

purchase going wrong is less at the vegetable vendor as compared to a supermarket,

where there is no guarantee of the fruits and vegetables being fresh. Here a store is

being chosen based on self- confidence that the customer has regarding the store.

Sharma and Krishnan (2002) have highlighted another important aspect with regard to

format choice by shoppers. The study found that sales people do not seem to enhance

preference for stores. Thus a simple not so literate grocer at a Kiryana store might prove

to be more effective than qualified and well trained salespeople at big hypermarkets.

This is one of the reasons why Kiryana stores are still so popular in India. Small stores seem

to be able to create a special relationship between the salespeople and their customers.

Zeithaml (1988) found that consumers consider both monetary and non-monetary costs-

such as time and effort, to evaluate value of shopping at a particular store. Hence

anything that can be built to reduce time, effort and search costs can increase

37

perceptions of value. Search costs for a shopper can be reduced by properly laying out and

displaying the merchandise. Use of appropriate signage can also reduce search effort. This

is where store ambience plays an important role. The shopping experience as created by

a clean, hygienic, well lit and neatly laid out store has been found to increase store

patronage.

Amongst parameters that define a store format Engel, Blackwell and Miniard (2001)

observed that price level, assortment and location of store appear as important drivers

for consumer‘s choice between store formats. Quality and service on the other hand

did not differentiate between formats in their study.

A different approach of assessing shoppers‘format choice decision process is based on

utility that shoppers derive from shopping at a particular store. Consumer‘s choice of

preferred store format is based on the perceived utility that s/he derives from the store

format (Solgaard and Hansen, 2003). In principle utility emerges based partly on what

the consumers perceive they receive and partly on what consumers perceive they give. To

receive the store service the consumer will incur some costs, i.e., spend a certain amount

of resources , time, effort and money. Since these resources are scarce, the consumers

would try to direct their resources towards the stores that will maximize their utility.

This theory was developed based on the Prospect Theory as explained by Khanmen

and Tversky (1979). Later the concept of Transaction Utility was modeled depending

on the difference between the selling price and reference price. To explain this

reference price was postulated and describes as the amount of money that a customer

expects to pay for a good or service. It is suggested that any purchase occasion is

associated with two utilities: acquisition utility and transaction utility. Acquisition utility

represents the economic gain or loss from the transaction. Where as transaction utility is

associated with purchase or (sale) and represents the pleasure (or displeasure) of the

financial deal per se and is function of the difference between the selling price (p) and

the reference price (q). The situation where p > q, the transaction utility is negative (rip-off

situation); conversely when p < q, the transaction utility is positive (bargain situation).

38

The total utility of a purchase is a sum of acquisition utility and transaction utility

(Thaler, 1983). The implication is that an individual may not buy a product if acquisition

utility is offset by loss in transaction utility when the price is sufficiently larger than

reference price.

However, even though this theory exemplifies a purchase situation, it has not been

applied in a retailing perspective. Given the basic tenet, it is felt that acquisition utility

and transaction utility can be used to explain the shoppers‘ choice of a format. The

theory may require modifications. Acquisition utility can be extended to include not only

the price of the merchandise but also other costs associated with shopping such as, cost

of product search, cost of information, size of purchase, and cost of access to the

store. Shopping, being essentially a process that occurs in a context of a store may have

a close association with the transaction utility. The perceived value delivered through

the transaction could include all non-monetary aspects of the 'deal' that may include

ambience and service at the retail point for explaining the transactional utility of the

format.

Shugar (1984) presents a theoretically logical development of factors influencing price

quality relationships. It suggests that customers compare the quality they experience with a

norm or standard, such as pre-purchase expectations about a particular product or service.

Any perceived discrepancy between the two leads to increased or decreased satisfaction

(Oliver, 1980).

Kenhove et al. (1999) found that store choice is differentiated by the nature of the task. They

studied the store choice decision across various tasks as described by the respondents, such

as urgent purchase, large quantities, difficult job, regular purchase and get ideas.

Store choice has also been found dependent on socio-economic background of consumers,

their personality and past purchase experience (Dodge and Summer, 1969). Lumpkin et al.

(1985) found that as compared to young shoppers, elderly shoppers were less price-conscious

and proximity of residence to store was not an important factor for them. They considered

39

shopping as recreational activity and thus chose a store that is perceived to be high on

“entertainment” value.

Hutcheson and Mutinho (1998) found that shoppers used a combination of the quality of

staff and “the occurrence of low prices and the frequency of promotions” in choosing a store.

The role of ambience in store choice has also been found significant. Kotler (1973) has

proposed atmospherics as an important part of retail marketing strategy.

In recent times, Leszczyc and Sinha (2000) indicated that store choice was a dynamic

decision and could be conceptualized as a problem of deciding when and where to shop. The

first decision regarding choice of the traditional store location and the second regarding the

timing of the shopping trip incidence.

Another study showed that shoppers demanded good service as well as quality merchandise

from the retailers (Business Today, 1999). Evidence for the effect of dissatisfaction can be

shown in the tendency for people to discuss their negative experiences more than the positive

ones, an effect widely known to bias surveys (deVaus, 1996).

Baker, Grewal and Parasuraman (1994) posited that consumers make inferences about

merchandise and service quality based on store environment factors and that these inferences,

in turn, influence store image. Merchandise quality, styling, price, assortment, location

convenience, staff service, general service, store environment and pleasantness of shopping

have been identified as components of store image (e.g., Lindquist 1974; Mazursky and

Jacoby 1986; Zimmer and Golden 1988).

2.2 PURPOSE OF THE STUDY

In recent years many Indian business houses and global retailers such as Vishal Mega mart,

Reliance, Tata, Aditya Birla Group, Trent, Giant, Big Bazaar, IKEA and Amway entered

Indian retail market. Competing with local outlets, they experienced lower than average

performance in certain cities. This provided me with the idea to start this research. I started

40

by trying to generate the list of factors that determine consumers’ shopping behavior in

retailing. In order to influence the choice of the consumers towards a particular store, it is

expected to obtain such benefits as frequent purchase, big amount of purchase, cost

reduction, and favorable word of mouth (Zeithaml and Bitner 1996).

This study was aimed at identifying the differences that exists in the consumer perception

regarding a Kiryana store and a Retail store. The difference was studied amongst a list of

factors inclusive of the store attributes, salesperson dimension, physical aspects, store policy,

etc.

Also the study was aimed at studying the various In-Store influences that affect the

repurchase behavior of the consumers visiting the store. This includes the physical evidence

that the store provides to the customers including the layout, store size, ease of searching for

the goods, contact personnel etc.

The study also aims at studying how the recommendation as well as repurchase behavior of

the customers varies as a function of the demographics i.e. the age, monthly income, gender

and occupation.

41

CHAPTER 3

RESEARCH METHODOLOGY

42

Marketing Research is a systematic and objective process of identifying and formulating the

marketing problems, setting research objectives and methods for collecting editing, coding,

tabulating, evaluating, analysis, interpreting and presenting data in order to find justified

solutions to these problems. Planning provides a framework within which the goals of

research are to be achieved. It facilitates the smooth sailing of the various research

operations, thereby, making research as efficient as possible the plan and procedure of any

research study is bound up with its purpose. The purpose of the present study was to study

the determinants of store loyalty.

The research methodology adopted for the study is described below:

3.1 PROBLEM DEFINITION

With the increasing number of retail stores, the survival of the shop around the corner

becomes an issue of concern. The study is aimed at understanding the perception of the

customers towards both the type of stores, their approach towards the various store attributes,

the marketing mix adopted by the stores etc so as to analyze if there is a shift in the store

preference by the customers.

3.2 RESEARCH OBJECTIVES

The objectives of the study are:

Primary Objectives:

To study the difference in consumer perception in a retail outlet vis-à-vis a kiryana store in

regard to the following parameters:

1. Analyse the type of store preferred- retail or kiryana

2. To study factors influencing choice of store

43

3. To analyse effect of 4Ps of Marketing (product, price, promotion, place)

4. To study purchase behavior

5. To study in store influences

6. To study satisfaction level

7. To study post purchase behavior.

Secondary Objectives

1. To study the factors influencing store choice among the current consumers

2. To study the affect of the In-Store influences on repurchase behavior.

3. To study the recommending behavior and switching behavior across demographic

variables

3.3 RESEARCH DESIGN

Type of the study

The study was both an exploratory and descriptive in nature. Firstly, exploratory study was

conducted to find out basic information regarding store attributes. The exploratory study was

helpful in formulating hypothesis & also in assessing how consumers make decision about

the specific retail type for buying goods. After carrying out the exploratory research,

descriptive study was carried out to identify the factors or variables so to understand the

determinants of store loyalty.

Hypothesis

H01: There is no significant difference between the consumer perception regarding a kiryana

store and a retail store.

H02: There is no significant positive relation between recommendation and repurchase

behavior and the Age of the customer.H02a: There is no significant positive relation between recommendation and repurchase behavior and

the Age of the kiryana store customer.

H02b: There is no significant positive relation between recommendation and repurchase behavior and

the Age of the retail store customer.

44

H3: There is no significant positive relation between recommendation and repurchase

behavior and the gender of the customer.H03a: There is no significant positive relation between recommendation and repurchase behavior and

the gender of the kiryana store customer.

H03b: There is no significant positive relation between recommendation and repurchase behavior and

the gender of the retail store customer.

H4: There is no significant positive relation between recommendation and repurchase

behavior and the occupation of the customer.H04a: There is no significant positive relation between recommendation and repurchase behavior and

the occupation of the kiryana store customer.

H04b: There is no significant positive relation between recommendation and repurchase behavior and

the occupation of the retail store customer.

H5: There is no significant positive relation between recommendation and repurchase

behavior and the monthly income of the customer. H05a: There is no significant positive relation between recommendation and repurchase behavior and

the monthly income of the kiryana store customer.

H05b: There is no significant positive relation between recommendation and repurchase behavior and

the monthly income of the retail store customer.

Scope of the study

The study will be conducted in Mohali. A few selected organized and un-organized stores

will be visited at different locations in the Mohali. The study however shall not be restricted

to only the large and popular stores but will be done in stores at different locations so as to

avoid data from similar consumer profiles

Need of study

Identification of customers and their buying behavior patterns have been the focus of a

number of retail store studies. The results of these studies have been useful to the marketing

managers in providing solutions to various marketing problems.

45

The aim of this study is to ascertain whether the consumer preference is actually shifting

from the shop around the corner to the retail biggie. This will help to judge whether the retail

format poses as a threat to the existence of the kiryana stores in mohali

3.4 METHOD OF DATA COLLECTION

Secondary Data:

The secondary data was referred to gain an insight into the work that has already been done

in the context of the retailing scenario in India. Previous researches, articles published

regarding the comparative studies, text on consumer behavior were studied. The sources were

management journals (Journal of Retailing, Journal of Marketing Research),Books,

Marketing Research Websites, Research papers, Print Articles etc.

Primary Data:

Primary data was collected through the structured questionnaires by survey method. The

questionnaires were personally dispersed to the respondents to using convenience sampling

to collect the relevant information after the secondary study had identified and refined

measurement items used for the study. Respondents were asked to assess their perception of

various items, including factors viewed as antecedents of quality and satisfaction.

Assessment was based on a five point likert scale which was included in self administered

structured questionnaires.

Items and Scale

The questionnaire included store image and store loyalty items in Likert 5 point scale and

other demographic items such as occupation and income. It was used for both types of stores.

It included items that are related to characteristics of store attributes and store choice in

Likert scale and demographic characteristics in nominal, ratio, and ordinal scale

46

3.5 SAMPLING

Sampling Unit

People who buy from grocery stores including modern retail format

Age group: above 20 yrs

City: Mohali

Time period: 2-3 weeks

Sampling Technique: Convenience Sampling

More emphasis on family member making the purchase decisions (Random size=150)Type of Store Retail Store Kiryana Store

Sample Size 74 76

3.6 STATISTICAL TECHNIQUES USED

For the analysis of the results of the study, various statistical tools were used using the aid of

MS EXCEL, SPSS

These statistical techniques used were:

1) Descriptive Statistics: Measures of central tendency such as mean, median, standard

deviation etc were worked out to study the nature and distribution of scores on

various variables. The means were calculated for the each of the thirty six attributes

including demographics before the t-test, correlation, chi-square could be applied.

2) Z- test: - test was used to assess whether the means of two groups (Retail store &

Kiryana store) are statistically different from each other or not. Z-test would help to

prove the hypothesis of the existence of factors that govern the customer’s choice of

the store.

3.7 LIMITATIONS OF THE STUDY

47

All research studies have their limitations and this study is no exception. In designing the

study the researcher attempted to be as scientific as possible, the present study nevertheless

has the following limitations.

1) The limitation concerns the nature of the measures used. The measures included in

this research were all based on the perceptions of the participating customers.

Therefore, the potential for data inaccuracies due to item misrepresentation or

predisposition to certain responses on the part of participant does exist.

2) Responses (with respect to store type preference and store attributes) have been

solicited from the customers in Mohali The perception of people in this area may

vary from those of the rest of India.

3) Some customers (of both retail and kiryana store) did not participate in this study.

As a result, the generalization of the findings of this research should be considered

carefully.

4) This study attempted to explore extensively underlying key attributes of store.

However, there may still be a possibility of missing key dimensions.

48

CHAPTER 4

DATA INTERPRETATION AND ANALYSIS

49

Q1. GENDER: Graph 4.1: Gender

Interpretation:

Out of the total respondents surveyed for the research 60% were females and 40% were

males. The data was collected through convenience sampling.

2. AGE: Graph 4.2: Age

The above chart shows that the maximum percentage of people i.e. 51.3%, visiting the store,

belong to the age group of 25 to 34 hence the survey largely included the young earning

individuals

50

3. OCCUPATION: Graph 4.3: Occupation

Interpretation:

Maximum respondents targeted were the housewives, followed by the working men/women.

A small percentage of the sample was students basically the residents of hostels/Paying

Guests.

4. INCOME: Graph 4.4: Income

Maximum number of people visiting the store is belonging to the income group 20001 to

30000 followed by varied percentages of other groups.

51

Comparison Of The Store Type Visited On The Basis Of Demographics

5. AGE AND STORE TYPE:

Graph 4.5

Across all age groups, higher number of respondents still visits the kiryana store.

6. GENDER AND TYPE OF STORE:

Graph 4.6

52

Approximately same number of men and women visit each type of store.

7. OCCUPATION AND TYPE OF STORE

Graph 4.7

Across all occupations, nearly equal preference is given to both the stores, however, larger

number of students prefer the modern retail stores for their purchases.

8. INCOME AND STORE TYPE:

Graph 4.8

53

There isn’t a significant difference observed between the store types visited on the basis of

the income pattern of the sample.

10. VISITED ONCE IN DIFFERENT STORES

Stores visited once

1.Big bazaar 98

2.6-ten 120

3.Vishal Mega Mart 23

4.Easy Day 1

5.More 14

6.Reliance 87

7.others 64

Graph 4.10

Interpretation:

Visited Once

98

120

23

114

87

64

0

20

40

60

80

100

120

140

visited once

1bigbazar 2.6-ten3.Vishal Mega Mart 4.Easy Day5.More6.Reliance7.others

54

6-Ten is mostly visited followed by big bazar,Reliance fresh and then unorganized stores

11. HOW MANY TIMES VISIT IN RETAIL STORES IN LAST TWO MONTHS?

Stores once 2 times 3 timesmore than

>3 times

1.Big bazaar 31 14 5 3

2.6-ten 21 18 36 45

3.Vishal Mega Mart 18 3 1 1

4.Easy Day 1 0 0 0

5.More 2 3 4 5

6.Reliance 21 13 17 36

7.others 12 15 28 9

Graph 4.11

55

12. T- TEST

T- test was calculated to compare the means of all the variables i.e. price, advertisement,

assortment, brand, store atmosphere, facilities, credit service, convenience of shopping,

location, promotion, sales personnel service, and product quality etc across the two store

types. We are primarily concerned with whether p (significance) is greater than or less than

0.05. The t value gives the estimated number of standard errors between the two means. So

as a rule of thumb, I report one digit behind the decimal for a t-value, and report two digits

behind the decimal for a p-value. T- test was used to assess whether the means of perceptions

regarding the two groups (Retail store & Kiryana store) are statistically different from each

other or not..

Visit inLast Two Months

31 21 181 2

21 12

1418

3

0 3

1315

536

1

0 4

17 283

45

1

05

369

0

20

40

60

80

100

120

140

Big ba

zari

2.6-te

n

3.Vish

al Meg

a Mart

4.Eas

y Day

5.More

6.Reli

ance

7.othe

rs

more than >3 times3 times2 timesonce

56

Group 1 was chosen as Kiryana Store

Group 2 was chosen as Retail Store.

The group statistics table provides the means, the standard deviation and the standard error

mean of the various variables considered.

The independent samples test provides information about the variables across which the

consumers perception differs as far as the retail store and the kiryana stores are concerned.

This helps to infer whether there actually exists a difference in the perception or not.

This independent t-test will hence help to test the hypothesis H0 i.e. there exists a difference

in the consumer perception across a retail store and a kiryana store.

Group Statistics

Str_type N Mean Std. Deviation Std. Error Mean

Merch_good 1 76 3.49 .872 .100

2 74 3.70 .887 .103

Prd_qual 1 76 3.01 .721 .083

2 74 3.50 .969 .113

Qual_price 1 76 3.20 .817 .094

2 74 3.32 .796 .092

LowPrice 1 76 3.33 .999 .115

2 74 3.20 .921 .107

Prd_Avail 1 76 2.88 1.188 .136

2 74 3.64 .973 .113

Variety 1 76 2.86 1.016 .117

57

2 74 3.50 1.076 .125

Att_schemes 1 76 2.57 1.147 .132

2 74 3.41 .964 .112

Product 1 76 3.21 .957 .110

2 74 3.68 .967 .112

Groc_greengroc 1 76 2.80 1.255 .144

2 74 3.47 .910 .106

Layout 1 76 2.66 .974 .112

2 74 3.88 .810 .094

Spacious 1 76 2.46 1.125 .129

2 74 3.85 1.002 .117

Easy_search 1 76 2.95 1.188 .136

2 74 3.57 .966 .112

Adv_POP 1 76 2.55 1.063 .122

2 74 3.30 .932 .108

Distance 1 76 3.91 1.133 .130

2 74 3.19 1.143 .133

Parking 1 76 3.24 1.165 .134

2 74 3.39 .841 .098

Phy_cond 1 76 3.11 1.066 .122

2 74 3.82 .765 .089

Phys_facilty 1 76 2.51 1.113 .128

2 74 3.65 .883 .103

Home_del 1 76 3.67 1.112 .128

2 74 3.28 1.117 .130

St_atmp 1 76 2.38 1.107 .127

2 74 3.41 .875 .102

Exch_ret 1 76 3.43 .971 .111

2 74 2.86 .911 .106

Queues 1 76 2.76 1.005 .115

2 74 3.05 1.226 .143

St_image 1 76 2.42 .942 .108

58

2 74 3.32 .796 .092

St_brand 1 76 2.36 .962 .110

2 74 3.51 .798 .093

Happiness 1 76 2.93 1.050 .120

2 74 3.50 .969 .113

Credit 1 76 3.39 1.223 .140

2 74 2.92 1.191 .138

Sman_kind 1 76 3.63 .892 .102

2 74 3.39 .904 .105

Sman_assist 1 76 3.36 .934 .107

2 74 3.32 .967 .112

St_promise 1 76 3.29 .877 .101

2 74 3.20 .776 .090

St_action 1 76 3.20 .924 .106

2 74 3.30 1.017 .118

Repurchase 1 76 3.47 1.013 .116

2 74 3.31 .875 .102

Independent Samples Test

Levene's Test for

Equality of

Variances t-test for Equality of Means

F Sig. t df

Sig. (2-

tailed)

Mean

Difference

Std. Error

Difference

95% Confidence Interval of

the Difference

Lower Upper

Merch_good Equal variances assumed .362 .548 -1.503 148 .135 -.216 .144 -.500 .068

Equal variances not

assumed-1.503 147.708 .135 -.216 .144 -.500 .068

Prd_qual EVA 12.217 .001 -3.498 148 .001 -.487 .139 -.762 -.212

EVNA -3.485 134.813 .001 -.487 .140 -.763 -.211

59

Qual_price EVA .001 .970 -.964 148 .337 -.127 .132 -.387 .133

EVNA -.964 148.000 .336 -.127 .132 -.387 .133

LowPrice EVA .625 .430 .804 148 .423 .126 .157 -.184 .436

EVNA .805 147.577 .422 .126 .157 -.184 .436

Prd_Avail EVA 6.001 .015 -4.242 148 .000 -.754 .178 -1.105 -.403

EVNA -4.254 143.805 .000 -.754 .177 -1.104 -.403

Variety EVA .077 .782 -3.774 148 .000 -.645 .171 -.982 -.307

EVNA -3.772 146.961 .000 -.645 .171 -.983 -.307

Att_schemes EVA 3.309 .071 -4.847 148 .000 -.840 .173 -1.182 -.497

EVNA -4.858 144.927 .000 -.840 .173 -1.181 -.498

Product EVA .405 .526 -2.962 148 .004 -.465 .157 -.775 -.155

EVNA -2.962 147.794 .004 -.465 .157 -.776 -.155

Groc_greengro

c

EVA 16.512 .000 -3.738 148 .000 -.670 .179 -1.025 -.316

EVNA -3.753 136.887 .000 -.670 .179 -1.024 -.317

Layout EVA 8.188 .005 -8.334 148 .000 -1.220 .146 -1.510 -.931

EVNA -8.354 144.507 .000 -1.220 .146 -1.509 -.932

Spacious EVA 3.106 .080 -7.987 148 .000 -1.391 .174 -1.735 -1.047

EVNA-8.000 146.866 .000 -1.391 .174 -1.734 -1.047

Easy_search EVA 3.954 .049 -3.503 148 .001 -.620 .177 -.970 -.270

EVNA -3.512 143.500 .001 -.620 .177 -.969 -.271

Adv_POP EVA 2.285 .133 -4.556 148 .000 -.745 .163 -1.068 -.422

EVNA -4.564 146.417 .000 -.745 .163 -1.067 -.422

Distance EVA 1.106 .295 3.867 148 .000 .719 .186 .351 1.086

EVNA 3.866 147.818 .000 .719 .186 .351 1.086

Parking EVA 11.662 .001 -.933 148 .353 -.155 .166 -.484 .173

EVNA -.937 136.592 .351 -.155 .166 -.482 .172

Phy_cond EVA 13.739 .000 -4.737 148 .000 -.719 .152 -1.019 -.419

EVNA -4.757 136.202 .000 -.719 .151 -1.018 -.420

Phys_facilty EVA 8.021 .005 -6.910 148 .000 -1.135 .164 -1.460 -.811

EVNA -6.931 142.192 .000 -1.135 .164 -1.459 -.812

Home_del EVA .745 .389 2.128 148 .035 .387 .182 .028 .747

60

EVNA 2.128 147.859 .035 .387 .182 .028 .747

St_atmp EVA 4.958 .027 -6.274 148 .000 -1.024 .163 -1.346 -.701

EVNA -6.293 142.011 .000 -1.024 .163 -1.345 -.702

Exch_ret EVA 1.011 .316 3.701 148 .000 .569 .154 .265 .873

EVNA 3.704 147.808 .000 .569 .154 .266 .873

Queues EVA 5.700 .018 -1.591 148 .114 -.291 .183 -.652 .070

EVNA -1.587 140.997 .115 -.291 .183 -.653 .072

St_image EVA 1.846 .176 -6.337 148 .000 -.903 .143 -1.185 -.622

EVNA -6.351 145.133 .000 -.903 .142 -1.184 -.622

St_brand EVA 1.497 .223 -8.015 148 .000 -1.158 .145 -1.444 -.873

EVNA -8.034 144.380 .000 -1.158 .144 -1.443 -.873

Happiness EVA .146 .702 -3.428 148 .001 -.566 .165 -.892 -.240

EVNA -3.432 147.577 .001 -.566 .165 -.892 -.240

Credit EVA .811 .369 2.414 148 .017 .476 .197 .086 .865

EVNA 2.414 148.000 .017 .476 .197 .086 .865

Sman_kind EVA .097 .756 1.635 148 .104 .240 .147 -.050 .529

EVNA 1.634 147.764 .104 .240 .147 -.050 .530

Sman_assist EVA .105 .747 .199 148 .842 .031 .155 -.276 .338

EVNA .199 147.445 .842 .031 .155 -.276 .338

St_promise EVA 1.574 .212 .641 148 .522 .087 .135 -.181 .354

EVNA .642 146.687 .522 .087 .135 -.180 .354

St_action EVA .887 .348 -.630 148 .530 -.100 .159 -.413 .213

EVNA -.629 145.830 .530 -.100 .159 -.414 .214

Repurchase EVA 3.435 .066 1.053 148 .294 .163 .155 -.143 .469

EVNA 1.055 145.931 .293 .163 .154 -.142 .468

For significance values >0.05, we consider the row of Equal Variance Assumed (EVA). If

the value of EVA <0.05, the variable is included amongst the factors where the costumer

believes that the two store types differ.

61

For significance values <0.05, we consider the row of Equal Variance Not Assumed

(EVNA). If the value of EVNA <0.05, the variable is included amongst the factors where the

costumer believes that the two store types differ.

As can be seen from the table above, specifically from the values in bold, it is observed that

the consumer perception about both types of the stores varies across a number of variables.

These include

Store has a good selection of merchandize

Availability of new fashionable products greater variety of brands of products available Store provides attractive schemes to make experience better Possibility of finding all products to be purchased Availability of grocery and green grocery under one roof Store layout is good Store is spacious and allows easy movement Easy to search for the product desired Advertisement/signage is attractive Store is located nearby Store is in good physical condition Physical facilities in store are better Store offer home delivery facility Luxurious atmosphere of the store attracts Easy exchange and return

Store has high class image Store has high brand name Greater happiness of shopping atmosphere Availability of credit facility

Hence, our initial hypothesis H0, pertaining to the primary objective of the study stands

proven i.e. there is a difference in the consumer perception regarding a retail store vis-à-vis a

kiryana store.

62

13. Reasons to buy food and grocery from retail store

1.Range of Product Available

2.Cleaniness and freshness of products

3.Behaviour of shop assistants

4.Discount and promotinal offers

5.Ease of locating products in the stores

6.proximity of the store from your home

7.cleaniness and ambiance of the store

8.Accuracy and speed of billing

9.Home delivery facility

10.Account facility with shop and making monthly payment

Total= 291 272 361 323 312 381 339 404 464 527

Avg= 1.94 1.81 2.4 2.15 2.08 2.54 2.26 2.69 3.09 3.51

Rank= 2 1 6 4 3 7 5 8 9 10

Interpretation:

The most important factor for buying food and grocery from retail store are

cleanliness of product followed by range of product ,ease of locating the product and least

important factor are home delivery, account facility with shop and making monthly payment

14. Reason to visit kiryana store?

1.Range of Product Available

2.Cleaniness and freshness of products

3.Behaviour of shop assistants

4.Discount and promotinal offers

5.Ease of locating products in the stores

6.proximity of the store from your home

7.cleaniness and ambiance of the store

8.Accuracy and speed of billing

9.Home delivery facility

10.Account facility with shop and making monthly payment

Total= 51 70 84 101 218 228 115 88 60 275

63

Avg= 1.59 2.18 2.62 3.15 6.81 7.12 3.59 2.75 2 8.59

Rank=1 3 4 5 8 9 7 5 2 10

Interpretation:

The most important factor for buying food and grocery from

kiryana store are range of product followed by home delivery facility, cleanliness, behavior

of employee and least important are proximity, account facility with shop and making

monthly payment

64

CHAPTER 5

FINDINGS AND SUGGESTIONS

65

5.1 MAJOR FINDINGS1) Across all age groups, higher number of respondents still visits the kiryana store. The

respondents of age group 25-34 years (51.33% of the total respondents) still prefer the

kiryana store. Whereas the relatively younger age group i.e. 15-24 years comprising

26.67% of the total respondents, has a higher preference for the retail store.

2) The findings of the study show that equal number of respondents, from the 50.7% of

the respondents whose monthly income lies between Rs 20,000 to Rs 30,000,visit the

kiryana as well as the retail store. While more number of people in the higher income

group i.e. >Rs 30,000, which constitute 15.3% of the total respondents shop at the

kiryana store.

3) According to the survey, larger number of housewives (48% of total sample) still

prefer kiryana store whereas the students (3.7% of the total sample) like visiting the

retail stores. Amongst the working respondents (43.3% of the total sample), larger

number still prefer to shop at kiryana store as opposed to the retail store.

4) T-test revealed some interesting facts. There exists a difference in the consumer

perception across a retail store and a kiryana store. This difference occurred across

variables such as:

Store has a good selection of merchandize

Availability of new fashionable products

greater variety of brands of products available

Store provides attractive schemes to make experience better

Possibility of finding all products to be purchased

Availability of grocery and green grocery under one roof

Store layout is good

Store is spacious and allows easy movement

Easy to search for the product desired

66

Advertisement/signage is attractive

Store is located nearby

Store is in good physical condition

Physical facilities in store are better

Store offer home delivery facility

Luxurious atmosphere of the store attracts

Easy exchange and return

Store has high class image

Store has high brand name

Greater happiness of shopping atmosphere

Availability of credit facility

5) Intention of repurchase is a significantly influenced by the good physical condition of

the store.

6) Salesperson related dimensions also play a significant role in the consumer’s decision

to repurchase from the store.

7) The factors amongst which all the variables for the retail store were categorized

include : Merchandise Characteristics, General Store Attributes, Policy, Reliability

and Physical Aspects

8) The factors amongst which all the variables for the kiryana store were categorized

include: Physical Aspects, General Store Attributes, Reliability, Merchandise

Characteristics and Monetary Benefits.

9) While studying the demographics affecting the recommending behavior of the

customers, it was observed that the kiryana store customers’ behavior had a

significant relation with their age.

10) It was observed that the monthly income parameter across the customer’s largely

influenced their repurchase from a retail store.

67

5.2 SUGGESTIONS

Each study becomes complete when it lays down a set of suggestions. Following are some of

the suggestions which store keepers (both retail as well as kiryana) should take into account

to improve service so as to induce greater customer satisfaction and to attain higher levels of

favorable perception in the minds of the consumers.

1) The study provides with a comprehensive list of the factors that influence the

consumer perception towards the two types of retail outlets. This would help to assess

the likely impact of any initiative in terms of its effect and importance on customer

retention.

2) In recent years, retail outlets have been making great efforts to improve service

quality to make customer return to the store. Rising expectations of service, quality

etc is an economic and social phenomenon. Moreover, customers are becoming

richer, more educated and better informed. Therefore, retail outlets must constantly

monitor customer expectations and not merely the performance as commonly done.

This can be conducted through customer surveys, depth interviews and other informal

means of research.

3) For kiryana store, store atmosphere, location, convenience of shopping, sales

personnel service have come out to be statistically significant so these are the areas

where one can make an improvement so as to retain the customers.

4) For retail store, the customers of think that Advertisement, availability of grocery and

green grocery under one roof, and greater happiness of shopping environment are

important. Thus these can be increased to increase store loyalty

5) Retail outlets should try to develop strategies that would enhance positive responses

and prohibit negative ones. Such strategies can include meeting the desired service

68

levels, preventing service problems, dealing effectively with the unsatisfied

customers and confronting customer complaints positively.

6) The role of customer-contact-personnel in the attainment of quality goals is of

paramount importance. Therefore, in their efforts to deliver high quality service to

customers’ store should not ignore the needs of their customer-contact employees

such as need for motivation, factors leading to satisfaction and commitment

enhancing factors.

7) Stores should focus on those factors which contribute more towards improving

perception of quality in mind of customers. In this way they can better understand the

needs of the customers and can satisfy those needs efficiently.

5.3 DIRECTIONS FOR FUTURE RESEARCH

Although the study expands the knowledge of relationship between quality, satisfaction and

other factors, viable prospects for future research remains.

1) Future research efforts should concentrate in building a broader conceptual model of

factors that influence store loyalty. This can be achieved by including other variables,

such as the interaction of the buyer with the technology employed during the service.

2) I have investigated the respondents at particular point of time but to get more accurate

their views should be collected at regular intervals over a period of time.

3) Also, since the scope of the study was limited to mohali, a closer look at the

important factors influencing consumer perception can be obtained by conducting the

research on a larger geographic area.

69

REFERENCES

Ajith Paninchukannath, “Organized Supermarkets of South India” Indian Journal of Marketing May 2008

David L Laudon, Albert J Della Bitta – Consumer Behavior

Dr. C P Gupta, Mitali Chaturvedi – Retailing: An Emerging Trend in India- Indian Journal of Marketing June 2007

Gitanjali Bhatnagar – Retail Revolution- Indian Journal of Marketing November 2004

Henry Arsael- Consumer Behavior and Marketing Action

K Ambarish Kumar “ In-Store Influences on Shoppers” P.U.Management Review

Zeithaml V (1988), —Consumer Perception of Price, Quality and Value: A Means-End

Model and Synthesis of Evidence“, Journal of Marketing, Vol. 52 (July)

70

ANNEXURE

71

Annexure A

QUESTIONNAIRE (After Pretest)

1. Gender 1. Male 2.Female

2. Age (in years): 1. 15-24 2. 25 - 34 3. 35~54 4. 55 and above

3. Occupation: 1. Student 2. House wife 3. Working 4. Other( please

specify)

4. Monthly Income: 1. <10,000 2. 10,001- 20,000 3. 20,001-30,000 4. >30,000

(in Rs.)

5.Following are certain statements regarding the retail store and mom n pop store

attributes. Kindly state your agreement or disagreement for the same as per the following

scale

1-Strongly Disagree 2- Disagree 3-Neither agree nor disagree 4- Agree 5- Strongly Agree

1 The store has a good selection of merchandise 1 2 3 4 5

2 The store offers excellent quality products relative to the

other stores1 2 3 4 5

3 The store offers excellent quality products relative to

price of the products1 2 3 4 5

4 The store offers low priced products 1 2 3 4 5

5 There is an availability of new (fashionable) products in

the store1 2 3 4 5

6 The store offers greater variety of brands of most

products1 2 3 4 5

7 The store frequently provides attractive gifts/schemes

which make the experience better1 2 3 4 5

8 There is a great possibility of finding all products which

are to be purchased1 2 3 4 5

9 Availability of groceries and green grocery under one 1 2 3 4 5

72

roof

10 The store layout is good 1 2 3 4 5

11 The store is spacious and allows easy movement 1 2 3 4 5

12 I am easily able to search for goods wanted. 1 2 3 4 5

13 The advertisements/signage in the store is very appealing 1 2 3 4 5

14 The store is located nearby 1 2 3 4 5

15 There is easy availability of parking 1 2 3 4 5

16 The store is in good physical condition 1 2 3 4 5

17 The physical facilities(shopping carts, elevator) at the

store are better1 2 3 4 5

18 The store offers Home Delivery option 1 2 3 4 5

19 There is a Luxurious atmosphere of lighting, color, and

other similar facilities attracts me to the store1 2 3 4 5

20 There is an easy return and exchange of goods 1 2 3 4 5

21 There are long queues/ long billing time 1 2 3 4 5

22 Availability of credit facility 1 2 3 4 5

23 The store has a high class image 1 2 3 4 5

24 The store has a high brand name 1 2 3 4 5

25 There is a greater happiness of shopping atmosphere 1 2 3 4 5

26 The salesperson at the store at courteous and kind 1 2 3 4 5

27 There is greater assistance of salesperson on product and

related information1 2 3 4 5

28 When the store promises to do something by a certain

time, it would do so.1 2 3 4 5

29 There is greater affirmative action and solution to

complaints by salesperson1 2 3 4 5

30 There is a high intention of repurchase from the store 1 2 3 4 5

31 I will recommend this store to someone who seeks my

advice.1 2 3 4 5

73

-------------------Thank You-------------------

74

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