A RESEARCH REPORT ON “UNDERSTANDING CONSUMER BUYING BEHAVOUR” RELIANCE RETAIL LTD. Reliance Retail Ltd., New Delhi IN PARTIAL FULFILMENT OF THE REQUIRMENT FOR THE AWARD THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (2008-2010) SUBMITTED BY: SUBMITTED TO: Shakeel Ahmad Mr. Rahul Gupta MBA –III RD SEM PROJECT GUIDE ROLL NO-0801570087 I.I.M.S.-Bareilly (U.P)
Understanding Consumer Buying Behavour
Nov 18, 2014
UNDERSTANDING CONSUMER BUYING BEHAVIOR AT RELIANCE INDIA
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
A
RESEARCH REPORT
ON
“UNDERSTANDING CONSUMER BUYING BEHAVOUR”
RELIANCE RETAIL LTD.
Reliance Retail Ltd., New Delhi
IN PARTIAL FULFILMENT OF THE REQUIRMENTFOR THE AWARD THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
(2008-2010)
SUBMITTED BY: SUBMITTED TO:
Shakeel Ahmad Mr. Rahul GuptaMBA –IIIRD SEM PROJECT GUIDE
ROLL NO-0801570087 I.I.M.S.-Bareilly (U.P)
INVERTIS INSTITUTE OF MANAGEMENT STUDIESBAREILLY
Preface
No professional studies are considered complete without practical work experience
every individual who is doing management studies has to undergo this practical study
Finance is said to be life blood of any business. There are many reasons for placing
the strategic functions in the hands of top management:
Strategic decisions are crucial for the survival of the firm.
The strategic actions determine potential of the firm
Centralisation of the strategic functions can result in a number of
economies to the firm.
While conducting a project work , the study have provided me the enterprise on how
to conduct such type of industrial project work & what procedure to be followed &
necessary steps to be taken to gather useful information in the limited time .
SHAKEEL AHMAD MBA – IIIRD Sem.
(2008-10)
2
2
Acknowledgement
The project report is an out comes of help & co-operation of many brilliant brains that
are behind this research report.
I must express my grateful thanks to MR. RAHUL GUPTA for his valuable help &
active co-operation in the preparation of this report.
I am highly thankful to Reliance Retail Ltd. Specially to the C.R.M (Head) Mr. Sanjay
Joshi for helping us in prepration of the project report on “Changing Customer
Preferences.”
“At last I would like to thank my parents, friends who made all this possible.”
Shakeel Ahmad
MBA – III Sem.
Roll no- 0801570087
3
3
TABLE OF CONTENT
1. INDRODUCTION OF RETAILING
2. COMPANY PROFILE
3. RETAILING SCENERIO GROWTH OF RETAILING IN INDIA RAPID EXPANSION
4. FRAMEWORK OF CONSUMER SATISFACTION CONSUMER BEHAVIOR AND RETAILING DECISSION RETAIL OUTLET SELECTION & BRAND SELECTION
5. CONSUMER RELATIONSHIP MANAGEMENT
6. THE MARKET RESEARCH PROCESS MARKETING RESEARCH BENEFITS OF QUESTIONNAIRE
7. OBJECTIVE OF STUDY
8. QUESTIONNAIRE FOR RESEARCH (TO KNOW THE CUSTOMER EXPECTATION FROM BIG RETAIL OUTLET)
9. RESEARCH REPORT (A)
10.FINDINGS & RECOMMENDATION
11. QUESTIONNAIRE FOR RESEARCH (TO KNOW THE CONSUMER BUYING BEHAVIOR)
12. RESEARCH REPORT (B)
13.FINDINGS & RECOMMENDATION
14. BIBLIOGRAPHY
4
4
INTRODUCTION OF RETAILING
5
5
RETAILING
The word 'Retail' is derived from the French word 'retailer' meaning 'to cut a piece off' or 'to break
bulk'. In simple terms it involves activities whereby product or services are sold to final consumers in
small quantities.
Retailing can be defined as the buying and selling of goods and services. It can also be defined as the
timely delivery of goods and services demanded by consumers at prices that are competitive and
affordable. Retailing involves a direct interface with the customer and the coordination of business
activities from end to end- right from the concept or design stage of a product or offering, to its
delivery and post-delivery service to the customer. The industry has contributed to the economic
growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in
the world today. Although retailing in its various formats has been around our country for many
decades, it has been confined for along time to family owned corner shops. Englishmen are great
soccer enthusiasts, and they strongly think that one should never give Indians a corner. It stems from
the belief that, if you give an Indian a corner he would end up setting a shop.
Retailing. It consists of the sale of goods or merchandise, from a fixed location such as a
department store or kiosk, in small or individual lots for direct consumption by the purchaser. [1]
Retailing may include subordinated services, such as delivery. Purchasers may be individuals or
businesses. In commerce, a retailer buys goods or products in large quantities from manufacturers or
importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user.
Retail establishments are often called shops or stores. Retailers are at the end of the supply chain.
Manufacturing marketers see the process of retailing as a necessary part of their overall distribution
strategy.
6
6
Shops may be on residential streets, or in shopping streets with few or no houses, or in a shopping
center or mall, but mostly found in the central business district. Shopping streets may or may not be
for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from
precipitation. Retailers often provided boardwalks in front of their stores to protect customers from
the mud. Online retailing, also known as e-commerce is the latest form of non-shop retailing (cf.
mail order).
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities
such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping
often involves window shopping (just looking, not buying) and browsing and does not always result
in a purchase. Most retailers have employees learn facing; a hyper real tool used to create the look of
a perfectly-stocked store (even when it's not).
TYPES OF RETAILING
There are three major types of retailing.
Market . The first is the market, a physical location where buyers and sellers converge. Usually
this is done on town squares, sidewalks or designated streets and may involve the construction of
temporary structures (market stalls).
Store trading. The second form is shop or store trading. Some shops use counter-service, where
goods are out of reach of buyers, and must be obtained from the seller. This type of retail is common
for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. Self-service,
where goods may be handled and examined prior to purchase, has become more common since the
Twentieth Century.
Virtual retail. A third form of retail is virtual retail, where products are ordered via mail,
telephone or online without having been examined physically but instead in a catalog, on television
or on a website. Sometimes this kind of retailing replicates parallel existing retail types such as
online shops or virtual marketplaces such as eBay or Amazon. Buildings for retail have changed
considerably over time. Market halls were constructed in the Middle Ages, which were essentially
just covered marketplaces. The first shops in the modern sense used to deal with just one type of
article, and usually adjoined the producer (baker, tailor, cobbler). In the nineteenth century, in
France, arcades were invented, which were a street of several different shops, roofed over. From this
there soon developed, still in France, the notion of a large store of one ownership with many
7
7
counters, each dealing with a different kind of article was invented; it was called a department store.
One of the novelties of the department store was the introduction of fixed prices, making haggling
unnecessary and browsing more enjoyable. This is commonly considered the birth of consumerism.
In cities, these were multi-story buildings which pioneered the escalator.
In the 1920's the first supermarket opened in the United States, heralding in a new era of retail: self-
service. Around the same time the first shopping mall was constructed, which incorporated elements
from both the arcade and the department store.
A mall consists of several department stores linked by arcades (many of whose shops are owned by
the same firm under different names). The design was perfected by the Austrian architecht Victor
Gruen. All the stores rent their space from the mall owner. By mid-century, most of these were being
developed as single enclosed, climate-controlled, projects in suburban areas. The mall has had a
considerable impact on the retail structure and urban development in the United States.
In addition to the enclosed malls, there are also strip malls which are 'outside' malls (in Britain they
are called retail parks. These are often connected to supermarkets or big box stores. Also, in high
traffic areas, other businesses may lease space from the supermarket or big box store to sell their
goods or services from. A recent development is a very large shop called a superstore. These are
sometimes located as stand-alone outlets, but more commonly are part of a strip mall or retail park
Local shops. Can be known as brick and mortar stores in the United States. Many shops are part
of a chain: a number of similar shops with the same name selling the same products in different
locations. The shops may be owned by one company, or there may be a franchising company that has
franchising agreements with the shop owners (see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods to such shops, sometimes
called 'pawn' shops. In other cases, especially in the case of a nonprofit shop, the public donates
goods to the shop to be sold (see also thrift store). In give-away shops goods can be taken for free.
There are also ‘consignment’ shops, which are where a person can place an item in a store, and if it
sells the person gives the shop owner a percentage of the sale price. The advantage of selling an item
this way is that the established shop gives the item exposure to more potential buyers.
The term retailer is also applied where a service provider services the needs of a large number of
individuals, such as with telephone or electric power.
8
8
Non-traditional exterior of a Super Target, Jacksonville.
Local shops can be known as brick and mortar stores in the United States. Many shops are part of a
chain: a number of similar shops with the same name selling the same products in different locations.
The shops may be owned by one company, or there may be a franchising company that has
franchising agreements with the shop owners (see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods to such shops, sometimes
called 'pawn' shops. In other cases, especially in the case of a nonprofit shop, the public donates
goods to the shop to be sold (see also thrift store). In give-away shops goods can be taken for free.
There are also ‘consignment’ shops, which are where a person can place an item in a store, and if it
sells the person gives the shop owner a percentage of the sale price. The advantage of selling an item
this way is that the established shop gives the item exposure to more potential buyers.
The term retailer is also applied where a service provider services the needs of a large number of
individuals, such as with telephone or electric power.
9
9
TYPES OF RETAIL OPERATIONS
Retail operations enable a store to function smoothly without any hindrances. The significant types
of retail operations consist of:
Department store
Specialty store
Discount/Mass Merchandisers
Warehouse/Wholesale clubs
Factory outlet
Retail Management System targets small and midsize retailers seeking to automate their stores. The
package runs on personal computers to manage a range of store operations and customer marketing
tasks, including point of sale; operations; inventory control and tracking; pricing; sales and
promotions; customer management and marketing; employee management; customized reports; and
information security.
THE EMERGING SECTORS IN RETAILING
Retailing, one of the largest sectors in the global economy, is going through a transition phase not
only in India but the world over. 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 Speed mart) and fast-food chains.
It is the non-food segment; however that foray has been made into a variety of new sectors. These
include lifestyle/fashion segments (Shoppers' Stop, Globus, Life Style, Westside),
apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, Music World,
Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant & Co.), drugs
and pharmacy (Health and Glow, Apollo).
10
10
Hyper marts
Large supermarkets, typically 3,500-5,000 sq. ft.
Mini supermarkets, typically 1,000-2,000 sq. ft.
Convenience stores, typically 750-1,000sq. Ft.
Discount/shopping list grocer.
The traditional grocers, by introducing self-service formats as well as value-added services such as
credit and home delivery, have tried to redefine themselves. However, the boom in retailing has been
confined primarily to the urban markets in the country. Even there, large chunks are yet to feel the
impact of organized retailing. There are two primary reasons for this. First, the modern retailer is yet
to feel the saturation' effect in the urban market and has, therefore, probably not looked at the other
markets as seriously. Second, the modern retailing trend, despite its cost-effectiveness, has come to
be identified with lifestyles. In order to appeal to all classes of the society, retail stores would have to
identify with different lifestyles. In a sense, this trend is already visible with the emergence of stores
with an essentially `value for money' image. The attractiveness of the other stores actually appeals to
the existing affluent class as well as those who aspire for to be part of this class. Hence, one can
assume that the retailing revolution is emerging along the lines of the economic evolution of society.
Retailing. Consumer Brands. Shopping Malls. Retail Distribution and Logistics.
Department Stores
India Retail: Global Brands and Chains Set Sights
India Retail has got airborne and the concept of organized retailing and better distribution and
logistics has set in. The Indian urban consumer is also now getting hooked to this new method of
home purchases that also combine into family outings and entertainment. The mall infrastructure
across cities and supply chain mechanisms across the country are getting into place. India Retail
11
11
seems set to grow exponentially in the next few years and the global giants are waiting at the wings
for entry. The government regulation on ownership in retail is the only obstacle for international
retailers. Global brands have however come in and set themselves up well.
Small Stores / Kiranas
Digital Enterprise (Enterprise Software, Knowledge & Knowledge)
Shopping malls
12
12
COMPANY PROFILE
13
13
Reliance Group
Type Public (NSE: RELIANCE)
Founded 1966 As Reliance Commercial Corporation
Headquarters Mumbai, India
Key peopleMukesh Ambani, Chairman & Managing
Director
Industry Oil Conglomerates
Products
Petroleum ProductsRetail StoresPolymersPolyestersChemicalsTextile
Revenue Rs 1,10,886 crore (2007)Employees ~90,358 (2004)
Website www.ril.com
14
14
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private
sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues
are in excess of US$ 25 billion. The flagship company, Reliance Industries Limited, is a Fortune
Global 500 company and is the largest private sector company in India.
Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.
Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical
integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and
gas exploration and production - to be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining and
marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and retail.
Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber
producer in the world and among the top five to ten producers in the world in major petrochemical
products.
The Group exports products in excess of US$ 15 billion to more than 100 countries in the world.
There are more than 25,000 employees on the rolls of Group Companies. Major Group Companies
are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and
Reliance Retail Limited), Indian Petrochemicals Corporation Limited and Reliance Industrial
Infrastructure Limited.
Growth has no limit at Reliance. I keep revising my vision.Only when you can dream it, you can do it."
15
15
Dhirubhai H. AmbaniFounder Chairman Reliance Group December 28, 1932 – July 6, 2002
Board of Directors of Reliance Industries Limited
Mukesh D. AmbaniChairman & Managing Director
Nikhil R. Meswani Executive Director
Hital R. MeswaniExecutive Director
H.S.Kohli Executive Director
Growth through Value Creation
Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, we are
aggressively working on introducing a pan-India network of retail outlets in multiple formats. A
16
16
world class shopping environment, state of art technology, a seamless supply chain infrastructure, a
host of unique value-added services and above all, unmatched customer experience, is what this
initiative is all about.
The retail initiative of Reliance will be without a parallel in size and spread and make India proud.
Ensuring better returns to Indian farmers and manufacturers and greater value for the Indian
consumer, both in quality and quantity, will be an integral feature of this project. By creating value at
all levels, we will actively endeavor to contribute to India's growth.
The project will boast of a seamless supply chain infrastructure, unprecedented even by world
standards. Through multiple formats and a wide range of categories, Reliance is aiming to touch
almost every Indian customer and supplier
Milestones
Starting as a small textile company, Reliance has in its journey crossed several milestones to become
a Fortune 500 company in less than 3 decades.
Reliance continues to cross newer & bigger milestones in its quest for what is known as "Growth is
Life".
GROWTH THROUGH GOVERNANCE
Reliance is in the forefront of implementation of Corporate Governance best practices
17
17
Corporate Governance at Reliance is based on the following main principles:
Constitution of a Board of Directors of appropriate composition, size and commitment to discharge
its responsibilities and duties.
Ensuring timely flow of information to the Board and its Committees to enable them discharge their
functions effectively.
Independent verification and safeguarding integrity of the Company's financial reporting.
A sound system of risk management and internal control.
Timely and balanced disclosure of all material information concerning the Company to all its
stakeholders.
Transparency and accountability.
Compliance with all the applicable laws and regulations.
Fair and equitable treatment of all its stakeholders including employees, customers, shareholders and
investors.
18
18
RETAILING SCENERIO
RETAILING SCENARIO
GLOBAL VIEW
19
19
Retailing in more developed countries is a big business and better organized than what in India.
According to a report published by McKinsey & Co. along with the Confederation of the Indian
Industry the global retail business is a worth a staggering US$ 6.6 trillion. In the developed world,
most of it is accounted for by the organize retail sector the service sector accounts for a large share of
GDP in most developed economies. And the retail sector forms a very strong component of the
service sector. In short, as long as people need to buy, retail will generate employment. Globally,
retailing is a customer-centric with an emphasis on innovation in products, processes and services.
With total sales of US$ 6.6 trillion, retailing is the world’s largest private industry, ahead of finance
and engineering. Some of the world’s largest companies are in this sector: over 50 Fortune, 500
companies and around 25 of the Asian Top 200 firms and retailers. Wal-Mart, the world’s second
largest retailer, has a turnover of US$ 260 billion, almost one-third of India’s GDP.
As many as 10% of the world’s billionaires are retailers. The industry accounts for over 8% of
GDP in western countries, and is one of the largest employers. According to the U.S.Department of
Labor, more than 22 million Americans are employed in the retailing industry in over 2 million
retail stores.
20
20
INDIAN VIEW
The retail scenario in India is unique. Much of it’s in the unorganized sector, with over 12 million
retail outlets of various sizes and formats. Almost 96% of these retail outlets are less than 500 sq.ft.
In size, the per capita retail space in India being 2 sq.ft. Compared to the US figure of 16 sq.ft.
India’s per capita retailing space is thus the lowest in the world.
With more than 9 outlets per 1, 000 people, India has the largest number in the world. Most of
them are independent and contribute as much as 96% to total retail sales Because of the increasing
number of nuclear families, working women, greater work pressure and increased commuting time,
convenience has become a priority for Indian consumers. They want everything under one roof for
easy access and multiplicity of choice.
This offers an excellent opportunity for organized retailers in the country who account for just 2%
(and modern stores 0.5%) of the estimated US $180 billion worth of goods that are retailed in India
every year.
21
21
The growth and development of organized retailing in India is driven by two main factors – lower
prices and benefits the consumers can’t resist. According to experts, economies of scale drive down
the cost of the supply chain, allowing retailers to offer more benefits offered to the customer.
The retail business in India in the year 2000 was Rs.400,000 crore and is estimated to go to Rs.800,000 crore by the year 2005, an annual increase of 20%.The contribution of the organized retail industry in the year 2000 was Rs.20,000 crore and is likely to increase to Rs.160,000 crore by 2005.
22
22
Retail Sales
Retail sales, which amounted to about Rs. 7, 400 billion in 2002, expanded at an average annual rate
of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also
expected to expand at a higher pace of nearly 10%. In a developing country like India, a large chunk
of consumer expenditure is on basic necessities, especially food related items. Hence, it is not
surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002.
The remaining 29% of retail sales are non-food items. The share of food related items fell over the
review period, down from 73% in 1999. This is to be expected as, with income growth, Indians, like
consumers elsewhere, spent more on non-food items compared with food products.
23
23
Sales through supermarkets and department stores are small compared with overall retail sales.
However, their sales grew much more rapidly (about 30% per year). As a result, their sales almost
tripled during this time. This high acceleration in sales through modern retail formats is expected to
continue during the next few years with the rapid growth in numbers of such outlets in response to
consumer demand and business potential
Growth of Retailing in India
Indian retailing industry has seen phenomenal growth in the last five years (2001-2006). Organized
retailing has finally emerged from the shadows of unorganized retailing and is contributing
significantly to the growth of Indian retail sector.
RNCOS’ “India Retail Sector Analysis (2006-2007)” report helps clients to analyze the opportunities
and factors critical to the success of retail industry in India.
Organized retail will form 10% of total retailing by the end of this decade (2010). From 2006 to
2010, the organized sector will grow at the CAGR of around 49.53% per annum.
Cultural and regional differences in India are the biggest challenges in front of retailers. This factor
deters the retailers in India from adopting a single retail format. Hypermarket is emerging as the
most favorable format for the time being in India.The arrival of multinationals will further push the
growth of hypermarket format, as it is the best way to compete with unorganized retailing in India.
Technology Impact
The other important aspect of retailing relates to technology. It is widely felt that the key
differentiator between the successful and not so successful retailers is primarily in the area of
technology. Simultaneously, it will be technology that will help the organized retailer score over
the unorganized players, giving both cost and service advantages.
24
24
Retailing is a `technology-intensive' industry. It is quoted that everyday at least 500 gigabytes of
data are transmitted via satellite from the 1,200 point-of-sales counters of JC Penney to its
corporate headquarters. Successful retailers today work closely with their vendors to predict
consumer demand, shorten lead times, reduce inventory holding and thereby, save cost. Wal-Mart
pioneered the concept of building a competitive advantage through distribution and information
systems in the retailing industry. They introduced two innovative logistics techniques - cross-
docking and electronic data interchange. Today, online systems link point-of-sales terminals to the
main office where detailed analyses on sales by item, classification, stores or vendor are carried out
online. Besides vendors, the focus of the retailing sector is to develop the link with the consumer.
`Data Warehousing' is an established concept in the advanced nations. With the help of `database
retailing', information on existing and potential customers is tracked. Besides knowing what was
purchased and by whom, information on softer issues such as demographics and psychographics is
captured.
Retailing, as discussed before, is at a nascent stage in our country. Most organized players have
managed to put the front ends in place, but these are relatively easy to copy. The relatively
complicated information systems and underlying technologies are in the process of being
established. Most grocery retailers such as Food World have started tracking consumer purchases
through CRM.
The lifestyle retailers through their `affinity clubs' and `reward clubs' are establishing their
processes. The traditional retailers will always continue to exist but organized retailers are working
towards revamping their business to obtain strategic advantages at various levels - market, cost,
knowledge and customer. With differentiating strategies - value for money, shopping experience,
variety, quality, discounts and advanced systems and technology in the back-end, change in the
equilibrium with manufacturers and a thorough understanding of the consumer behavior, the
ground is all set for the organized retailers. It would be important to note, however, that the
retailing industry in India is still a `protected industry'. It is one of the few sectors which still have
restrictions on FDI. Given the current trend in liberalization, it will not be long before the retailing
sector is also thrown open to international competition. This will see a further segregation of the
international retailing brands and the domestic retailers, thereby injecting much greater dynamism
into the market. That will be when the real action will begin.
25
25
Major retailers in India.
India’s top retailers are largely lifestyle, clothing and apparel
stores.
This is followed by grocery stores.
Following the past trends and business models in the west retail giants such as
Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros and small cities
almost doubling their current number of stores.
These Wal-Mart wannabes have the economy of scale to be low –medium cost retailers
pocketing narrow margin.
RETAILING IN INDIA
Even though India has well over 5 million retail outlets of all sizes and styles (or non-
styles), the country sorely lacks anything that can resemble a retailing industry in the
modern sense of the term. This presents international retailing specialists with a great
opportunity.
It was only in the year 2000 that the global management consultancy AT Kearney put a
figure to it: Rs. 400,000 crore (1 crore = 10 million) which will increase to Rs. 800,000
crore by the year 2007 – an annual increase of 20 per cent.
26
26
Retailing in India is thoroughly unorganized. There is no supply chain management
perspective. According to a survey b y AT Kearney, an overwhelming proportion of the Rs.
400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of
the market is organized.
As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet in area.
This means that India per capita retailing space is about 2 square feet (compared to 16
square feet in the United States). India's per capita retailing space is thus the lowest in the
world (source: KSA Technopak (I) Pvt. Ltd, the India operation of the US-based Kurt
Salmon Associates).
Just over 8 per cent of India's population is engaged in retailing (compared to 20 per cent in
the United States). There is no data on this sector's contribution to the GDP.
From a size of only Rs.20,000 crore, the ORGANISED retail industry will grow to Rs.
160,000 crore by 2007. The TOTAL retail market, however, as indicated above will grow
20 per cent annually from Rs. 400,000 crore in 2000 to Rs. 800,000 crore by 2007 (source:
survey by AT Kearney)
Given the size, and the geographical, cultural and socio-economic diversity of India, there is
no role model for Indian suppliers and retailers to adapt or expand in the Indian context.
The first challenge facing the organized retail industry in India is: competition from the
unorganized sector. Traditional retailing has established in India for some centuries. It is a
low cost structure, mostly owner-operated, has negligible real estate and labor costs and
little or no taxes to pay. Consumer familiarity that runs from generation to generation is one
big advantage for the traditional retailing sector.
In contrast, players in the organized sector have big expenses to meet, and yet have to keep
prices low enough to be able to compete with the traditional sector. High costs for the
organized sector arises from: higher labor costs, social security to employees, high quality
real estate, much bigger premises, comfort facilities such as air-conditioning, back-up
power supply, taxes etc. Organized retailing also has to cope with the middle class
psychology that the bigger and brighter a sale outlet is, the more expensive it will be.
The above should not be seen as a gloomy foreboding from global retail operators.
International retail majors such as Benetton, Dairy Farm and Levis have already entered the
market. Lifestyles in India are changing and the concept of "value for money" is picking up.
27
27
India's first true shopping mall – complete with food courts, recreation facilities and large
car parking space – was inaugurated as lately as in 1999 in Mumbai. (This mall is called
"Crossroads").
Local companies and local-foreign joint ventures are expected to more advantageously
position than the purely foreign ones in the fledgling organized India's retailing industry.
These drawbacks present opportunity to international and/or professionally managed Indian
corporations to pioneer a modern retailing industry in India and benefit from it.
The prospects are very encouraging. The first steps towards sophisticated retailing are being
taken, and "Crossroads" is the best example of this awakening. More such malls have been
planned in the other big cities of India.
An FDI Confidence Index survey done by AT Kearney, retail industry is one of the most
attractive sectors for FDI (foreign direct investment) in India and foreign retail chains
would make an impact circa 2003.
28
28
RAPID EXPANSION
29
29
Reliance to set up 2,500 retail outlets
RELIANCE Industries Ltd (RIL) will put up 2,500 petroleum retail outlets by April 2004. The entire
retail network will be up by end of 2005, Mr. Mukesh Ambani, Chairman, Reliance Industries Ltd,
said here on Wednesday.
"In the first phase we shall set up 2,500 petrol pumps across India by April 2004 and the entire
network will be ready by 2005," Mr. Ambani told reporters on sidelines of Chemtech World Expo
2003 conference here. The company has been given permission to set up 5,800 outlets for retailing
petroleum products across the country. He said the work would be completed in phases and the retail
outlet would be set up across the country simultaneously.
The company will also announce details of a hydrocarbon find on the western coast of India at an
"appropriate time".
Mr. Ambani confirmed that the company's find in the Cambay basin on the western offshore by
saying that Reliance would make an announcement on the find.
30
30
FRAMEWORK OF CUSTOMER
SATISFACTION
31
31
A GENERAL DEFINITIONAL FRAMEWORK OF CONSUMER SATISFACTION
Based on the insights provided by the literature review, group and personal interviews, we propose a
framework for developing context-specific definitions of consumer satisfaction. This framework is
not a generic definition of satisfaction. As noted above, innumerable contextual variables will affect
how satisfaction is viewed. As such, any generic definition of satisfaction will be subject to
chameleon effects. Rather than presenting a generic definition of satisfaction, we identify the
conceptual domain of satisfaction, delineate specific components necessary for any meaningful
definition of satisfaction, and outline a process for developing context-specific definitions that can be
compared across studies.
As concluded by the literature review and validated by the group and personal interview data, there
appears to be three essential components of consumer satisfaction:
1. Summary affective response which varies in intensity;
2. Satisfaction focus around product choice, purchase and consumption; and
3. Time of determination which varies by situation, but is generally limited in duration.
In this framework, satisfaction is limited to an affective response reflecting satisfaction as a holistic
evaluative outcome. This distinction does not preclude the importance of cognitions in determining
satisfaction; however, cognitions are bases for the formation of satisfaction, but the cognitions are
not satisfaction. This is similar to choice in that the brand chosen may be based on cognitive
evaluations; however, the choice is not cognition but the brands selected or not selected.
The summary affective response is defined as the holistic nature of consumer’s state of satisfaction,
the focus is the object(s) of consumer’s state, and timing refers to the temporal existence of
satisfaction. According to field data results and supported by extant satisfaction literature, these
components are applicable across situations and across consumers. All of these components are
32
32
critical to appropriately operationally the definition, to produce valid results, and make accurate
interpretations and managerial decisions. Thus, the following components should be included in any
context specific definition of consumer satisfaction.
Consumer satisfaction is: A summary affective response of varying intensity. The exact type of
affective response and the level of intensity likely to be experienced must be explicitly defined by a
researcher depending on the context of interest. With a time-specific point of determination and
limited duration. The researcher should select the point of determination most relevant for the
research questions and identify the likely duration of the summary response. It is reasonable to
expect that consumers may consciously determine their satisfaction response when asked by a
researcher; therefore, timing is most critical to ascertain the most accurate, well-formed response.
Directed toward focal aspects of product acquisition and/or consumption. The researcher should
identify the focus of interest based on the managerial or research question they face. This may
include a broad or narrow range of acquisition or consumption activities/issues.
By fleshing out these components, researchers should be able to develop specific definitions that are
conceptually richer and empirically more useful than previous definitions. To develop context-
relevant definitions and measures, researchers must be able to identify both the questions they are
interested in answering and some basic information about the setting and consumers. Specifically,
the researcher will need to provide details about all three components of satisfaction.
Satisfaction Focus - The difficult decision for a researcher is to determine the degree of detail
needed to define the satisfaction focus. For example, is satisfaction with the product an appropriate
focus (e.g., the automobile), or should it be limited to specific attributes (e.g., gas mileage) or
specific benefits (e.g., the automobile is fun to drive)? One way researchers could identify the
appropriate focus or foci is by surveying or interviewing existing or new customers during the
purchase process or at various points following purchase (Gardial et al. 1994). This information
would allow researchers to segment their customers on the basis of what foci are actually considered
when they determine their satisfaction. The purpose would be to develop a battery of satisfaction
survey instruments tailored to different types of customers and research questions.
Timing - As noted above, there are two important properties related to timing; time of determination
and duration. When examining time of determination, the researcher must identify which stage of the
purchase and consumption process is most important to the research question. For example, if an
automobile manufacturer is interested in repeat purchase, then the final stages of consumption may
be most appropriate. On the other hand, if the firm were interested in improving the warranty
33
33
program, then earlier stages would be most appropriate. Duration will also help identify the most
appropriate time of determination to consider. For example, if satisfaction is fleeting, then it should
be measured earlier in the process.
Summary Response - The final step is to identify appropriate affective responses. Intensity
represents the key properties of response. Affective responses can vary dramatically across a range
of responses. For example, Cadotte, Woodruff and Jenkins (1987) identify ten different types of
affective descriptors that may be appropriate in a restaurant setting. However, it is unreasonable to
assume that all of these will be appropriate in another specific context. Researchers must select
descriptors that accurately reflect the emotional responses to the relevant satisfaction focus. If the
range of intensity is too large, then there will be little variance in any measures of satisfaction. If the
range is too small, then the researcher does not obtain the maximum information that the consumers
can provide (Cox 1980).
34
34
Consumer behavior and retailing decisions
DECISION-MAKING with regard to retail outlet selection is very similar to consumer decision-
making on brands where the consumer goes through a process starting from identifying needs to
post-purchase issues. There are a few interesting and important dimensions associated with consumer
behavior and retail outlet selection.
Does the retail outlet have psychological implications on the target segment? When Titan and Timex
watches were retailed through exclusive shops, consumers wanting lower-end watches probably felt
that a typical Titan showroom was too elitist, which could have had a negative impact.
35
35
Does selection of outlets varies in accordance with types of product categories? While buying a TV
or a washing machine, would consumers visit an exclusive showroom of BPL, Onida or Sony, or
would they visit a multi-brand outlet?
Would there be differences in the psychographic (and demographic) profiles of consumers choosing
outlets? What is the sequence in which consumers are likely to go about their decisions? Will they
select the brand or the category first before choosing the outlet?
What is the impact of the image developed by a retail outlet? Is Food World different from a
neighborhood grocery shop in the minds of consumers? What kind of perception are consumers
likely to have with regard to shopping from an online outlet such as Fabmart vis-à-vis a brick-and-
mortar outlet like Fountainhead or Landmark?
Would consumers be interested in store or retail brands? Traditionally, retailers have been carrying
manufacturers' brands. But in recent times (at least to a significant extent in the foods category),
supermarkets such as Food World have started carrying retail or store brands. Nilgiri's is another
example in the South which carries its own brands of chocolates, biscuits and other commodities.
What contributes to retail equity or retail image or retail loyalty?
How do retail outlets handle perceived risks?
Marketers need in-depth knowledge about the various dimensions which link retailing and consumer
behavior. There is research required to handle retail decisions in a competitive context. McDonald's
found that a major chunk of its consumers decide to eat a few minutes before they make the purchase
decisions and hence it is building small outlets in large supermarkets such as Wal-Mart and Home
Depot. It is providing play areas to ensure a number of families visit its outlets with children. A few
companies also operate through kiosks in airports, malls and high-traffic areas. Sunglass Hut is a
brand which operates kiosks at various places which displays about 1,000 different models along
with their prices. Consumers could place an order through these kiosks and the product is home-
delivered.
36
36
RETAIL OUTLET SELECTION AND BRAND SELECTION
There are three fundamental patterns which a consumer can follow and they could be:
(I) Brand first, retail outlet second
(ii) Retail outlet first, brand second
(iii) Brand and retail outlet simultaneously.
37
37
A consumer wanting to buy a car may collect information on brands and purchase it from a retail
outlet based on his perception of price offered or after-sales service provided by the outlet (typically,
search for information on brands is followed by retail outlet selection in durables). In certain product
categories, especially where `category killers' exist, consumers may think of the retail outlet initially
and then the brands (television, refrigerator and audio products retailed through outlets like Vivek
and Co. in the South, could be an example).
One more dimension may be to compare brands in the evoked set at retail outlets which also exist in
an evoked set of their own. This is highly possible, especially in the Indian context where dealers
develop a social relationship with consumers, especially in semi-urban and rural areas. Primary
research could be used to discover the specific sequence involved in a situation of this kind. A `brand
first' dimension may need feature-based advertising and a `retail outlet first' dimension may require a
set of point-of-purchase (POP) materials and special training to sales personnel to recognize the
needs of consumers.
Further, if it is known that a number of consumers may be oriented to visit their favorite retailer
(before obtaining information on brands) in a geographical area, there would have to be more
emphasis on regional/local advertising which highlights the retail shop rather than regular brand-
based national advertising.
Strategies and sequences
Retail outlet first and brand second: When a number of consumers follow this sequence of
decision-making, display of point-of-purchase material and building the image of the outlet becomes
important. The manufacturer of the brand may have to ensure that the brand (and the variants
demanded) will be available at the key outlets in a locality. Point-of-purchase materials which are to
be used at the retail outlet may require primary research - should visuals be used, should product
features be used, should the POP material be in the regional language. There may also be a need to
monitor competition from other retail outlets to ensure that consumers are kept satisfied in terms of
service, price, promotional deals and ambience. This is especially applicable to durables retailing in
India (in cities). Retailers attempt to increase consumer traffic by providing a number of `add-ons'.
Brand first and outlet second: The brand was probably thought of by the consumers because
(i) The consumers may not have developed a relationship with any retailer which is strong
enough to get into the `evoked retail set'
38
38
(ii) The brand has got into the evoked set because of advertising or positive word of mouth.
Local advertising with the mention of brand names which have already got into the
evoked set would enable consumers to be `pulled' to the outlet.
Primary research may be required to identify the brands in the evoked set. This feedback may
have to be provided by the manufacturers of a brand to retailers in various regions (especially if it is
a brand with a major chunk of the market and one which is nationally advertised). Even
multinational outlets could make use of this approach and mention the brands in the evoked set (in a
given geographical area). This is likely to improve traffic to the outlet. Besides, the evoked set could
also change from time to time depending on the strategies of brands.
About two decades ago, brands like Solitaire, Dyanora and Crown may have been top-of-the-mind
(in a specific geographical area) but slowly gave way to other brands - these changes should be
captured (how often this happens, why, and the differences between markets) to formulate retail
strategies. The local advertising could be different from the national advertising for the brand. A
brand may be advertised on features nationally but the retail outlet in may prefer to highlight the
effective after-sales service associated with the brand as this may be a priority of consumers. The
interest generated in the brand would have to be backed by good pre-sale services at the outlet.
Brand and retail outlet simultaneously: When consumers think of the brand and retail outlet
together, it means that they have a certain preference for the outlet and would like to check the
evoked set of brands there. The marketer would have to carry out primary research to find out
specific markets where consumers have a very positive relationship with retailers. This is important
because of the influence of retailers over the purchase behavior of consumers in the Indian context.
It may also be worthwhile to check if the evoked brands are carried by the retailers who have a
positive relationship with the target segments. This is to ensure that the retailers who have a
favorable perception among the target segment carry the desired brands. Failing this, consumers may
turn to a different retailer, which would be to the disadvantage of a retailer who has already won the
confidence of consumers. Retail sales personnel also become important in this situation. The
prospective consumers are "carried over" to the purchase stage by the store personnel and hence
there should be incentive programs for the store personnel.
If a company such as BPL or Videocon is dealing with a number of brands/sub-brands, it has to
ensure the availability of specific brands which may interest the consumers. If the retail outlet is a
large one dealing with a number of brands (like Vivek), a shop-in-shop arrangement may be
preferable. This model puts the brand in focus and reinforces the positive association a consumer
39
39
may have about it. A considerable amount of pre-sale service would have to back up the shop-in-
shop concept.
The shop-in-shop concept creates an aura of exclusivity. Consumers tend to have higher expectations
about the pre-sale service and the attention given to them. A large store also is likely to stock several
brands and hence all brands in the evoked set would have to compete with each other to progress
from the evoked set to choice set. Large outlets may also have a built-in provision for a lower price
(because of volumes) and hence may be in a better position to clinch the deal with consumers who
may simultaneously consider both the brand and the retail outlet.
CUSTOMER RELATIONSHIP MANAGEMENT
40
40
Customer Relationship Management (CRM).
What is Customer Relationship Management (CRM)?
CRM is a term that is often referred to in marketing. However, there is no complete agreement upon
a single definition. This is because CRM can be considered from a number of perspectives. In
summary, the three perspectives are:
Information Technology (IT) perspective
The Customer Life Cycle (CLC) perspective
Business Strategy perspective
1. CRM from the Information Technology Perspective.
From the technology perspective, companies often buy into software that will help to achieve their
business goals. For many, CRM is far more than a new software package, the renaming of traditional
customer services, or an IT-based customer management system to support sales people. However,
IT is vital since it underpins CRM, and has the payoffs associated with modern technology, such as
speed, ease of use, power and memory, and so on.
41
41
2. CRM from the Customer Life Cycle (CLC) Perspective.
The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC).
However, CLC focuses upon the creation of and delivery of lifetime value to the customer i.e. looks
at the products of services that customers need throughout their lives. It is marketing orientated
rather than product orientated. Essentially, CLC is a summary of the key stages in a customer's
relationship with an organization.
3. CRM from the Business Strategy Perspective .
The Business Strategy perspective has most in common with many of the lessons and topics
contained on this website, and indeed within the field of marketing itself. The diagram below shows
the Marketing Teacher Model of CRM and Business Strategy. Our model contains three key phases -
customer acquisition, customer retention and customer extension, and three contextual factors -
marketing orientation, value creation and innovative IT
A commonly cited definition of CRM is that of CRM (UK) Ltd (2002), as follows:
42
42
Customer Relationship Management is the establishment, development, maintenance and
optimization of long-term mutually valuable relationships between consumers and organizations.
What you cry? What does that mean? Let's unpack the definition. The key to the definition is long-
term mutually valuable relationship. This is based upon a definition of marketing that considers
marketing as a mutually satisfying system of exchanges (for example Baker 2002). So CRM is the
building and maintenance of long-term customer relationships. The relationship delivers value to
customers, and profits to companies. The relationship is supported (but not driven) by cutting edge
IT. The business strategy is based upon the recruitment, retention and extension of products,
services, solutions or experiences to customers. This is the core of CRM.
RESEARCH PROCESS
43
43
Research Process
Once the need for research has been established, most research projects involve these steps:
1. Define the problem
2. Determine research design
3. Identify data types and sources
4. Design data collection forms and questionnaires
5. Determine sample plan and size
6. Collect the data
7. Analyze and interpret the data
8. Prepare the research report
Problem Definition
The decision problem faced by management must be translated into a market research problem in the
form of questions that define the information that is required to make the decision and how this
information can be obtained. Thus, the decision problem is translated into a research problem. For
example, a decision problem may be whether to launch a new product. The corresponding research
problem might be to assess whether the market would accept the new product.
The objective of the research should be defined clearly. To ensure that the true decision problem is
44
44
addressed, it is useful for the researcher to outline possible scenarios of the research results and then
for the decision maker to formulate plans of action under each scenario. The use of such scenarios
can ensure that the purpose of the research is agreed upon before it commences.
Research Design
Marketing research can classify in one of three categories:
Exploratory research
Descriptive research
Causal research
These classifications are made according to the objective of the research. In some cases the research
will fall into one of these categories, but in other cases different phases of the same research project
will fall into different categories.
Exploratory research
Exploratory research has the goal of formulating problems more precisely, clarifying concepts,
gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses.
Exploratory research can be performed using a literature search, surveying certain people about their
experiences, focus groups, and case studies. When surveying people, exploratory research studies
would not try to acquire a representative sample, but rather, seek to interview those who are
knowledgeable and who might be able to provide insight concerning the relationship among
variables. Case studies can include contrasting situations or benchmarking against an organization
known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test
them. Exploratory research is characterized by its flexibility.
Descriptive research
Descriptive Research is more rigid than exploratory research and seeks to describe users of a
product, determine the proportion of the population that uses a product, or predict future demand for
45
45
a product. As opposed to exploratory research, descriptive research should define questions, people
surveyed, and the method of analysis prior to beginning data collection. In other words, the who,
what, where, when, why, and how aspects of the research should be defined. Such preparation allows
one the opportunity to make any required changes before the costly process of data collection has
begun.
There are two basic types of descriptive research: longitudinal studies and cross-sectional studies.
Longitudinal studies are time series analyses that make repeated measurements of the same
individuals, thus allowing one to monitor behavior such as brand-switching. However, longitudinal
studies are not necessarily representative since many people may refuse to participate because of the
commitment required. Cross-sectional studies sample the population to make measurements at a
specific point in time. A special type of cross-sectional analysis is a cohort analysis, which tracks an
aggregate of individuals who experience the same event within the same time interval over time.
Cohort analyses are useful for long-term forecasting of product demand.
Causal research
Causal research seeks to find cause and affect relationships between variables. It accomplishes this
goal through laboratory and field experiments.
Data Types and Sources
Secondary Data
Before going through the time and expense of collecting primary data, one should check for
secondary data that previously may have been collected for other purposes but that can be used in the
immediate study. Secondary data may be internal to the firm, such as sales invoices and warranty
cards, or may be external to the firm such as published data or commercially available data. The
government census is a valuable source of secondary data. Secondary data has the advantage of
saving time and reducing data gathering costs. The disadvantages are that the data may not fit the
problem perfectly and that the accuracy may be more difficult to verify for secondary data than for
primary data. Some secondary data is republished by organizations other than the original source.
Because errors can occur and important explanations may be missing in republished data, one should
obtain secondary data directly from its source. One also should consider who the source is and
whether the results may be biased.
46
46
There are several criteria that one should use to evaluate secondary data.
Whether the data is useful in the research study.
How current the data is and whether it applies to time period of interest.
Errors and accuracy - whether the data is dependable and can be verified.
Presence of bias in the data.
Specifications and methodologies used, including data collection method, response rate,
quality and analysis of the data, sample size and sampling technique, and questionnaire
design.
Objective of the original data collection.
Nature of the data, including definition of variables, units of measure, categories used, and
relationships examined.
Primary Data
Often, secondary data must be supplemented by primary data originated specifically for the study at
hand. Some common types of primary data are:
Demographic and socioeconomic characteristics
Psychological and lifestyle characteristics
Attitudes and opinions
Awareness and knowledge - for example, brand awareness
Intentions - for example, purchase intentions. While useful, intentions are not a Reliable
indication of actual future behavior.
Motivation - a person's motives are more stable than his/her behavior, so motive is a better
predictor of future behavior than is past behavior.
Primary data can be obtained by communication or by observation. Communication involves
questioning respondents either verbally or in writing. This method is versatile, since one need only to
ask for the information; however, the response may not be accurate. Communication usually is
quicker and cheaper than observation. Observation involves the recording of actions and is
47
47
performed by either a person or some mechanical or electronic device. Observation is less versatile
than communication since some attributes of a person may not be readily observable, such as
attitudes, awareness, knowledge, intentions, and motivation. Observation also might take longer
since observers may have to wait for appropriate events to occur, though observation using scanner
data might be quicker and more cost effective. Observation typically is more accurate than
communication.
Personal interviews have an interviewer bias that mail-in questionnaires do not have. For example, in
a personal interview the respondent's perception of the interviewer may affect the responses.
Questionnaire Design
The questionnaire is an important tool for gathering primary data. Poorly constructed questions can
result in large errors and invalidate the research data, so significant effort should be put into the
questionnaire design. The questionnaire should be tested thoroughly prior to conducting the survey.
Measurement Scales
Attributes can be measured on nominal, ordinal, interval, and ratio scales:
Nominal numbers are simply identifiers, with the only permissible mathematical use being
for counting. Example: social security numbers.
Ordinal scales are used for ranking. The interval between the numbers conveys no meaning.
Median and mode calculations can be performed on ordinal numbers. Example: class ranking
Interval scales maintain an equal interval between numbers. These scales can be used for
ranking and for measuring the interval between two numbers. Since the zero point is
arbitrary, ratios cannot be taken between numbers on an interval scale; however, mean,
median, and mode are all valid. Example: temperature scale
Ratio scales are referenced to absolute zero values, so ratios between numbers on the scale
are meaningful. In addition to mean, median, and mode, geometric averages also are valid.
Example: weight
Validity and Reliability
The validity of a test is the extent to which differences in scores reflect differences in the measured
characteristic. Predictive validity is a measure of the usefulness of a measuring instrument as a
48
48
predictor. Proof of predictive validity is determined by the correlation between results and actual
behavior. Construct validity is the extent to which a measuring instrument measures what it intends
to measure.
Reliability is the extent to which a measurement is repeatable with the same results. A measurement
may be reliable and not valid. However, if a measurement is valid, then it also is reliable and if it is
not reliable, then it cannot be valid. One way to show reliability is to show stability by repeating the
test with the same results.
Attitude Measurement
Many of the questions in a marketing research survey are designed to measure attitudes. Attitudes are
a person's general evaluation of something. Customer attitude is an important factor for the following
reasons:
Attitude helps to explain how ready one is to do something.
Attitudes do not change much over time.
Attitudes produce consistency in behavior.
Attitudes can be related to preferences.
Attitudes can be measured using the following procedures:
Self-reporting - subjects are asked directly about their attitudes. Self-reporting is the most
common technique used to measure attitude.
Observation of behavior - assuming that one's behavior is a result of one's attitudes, attitudes
can be inferred by observing behavior. For example, one's attitude about an issue can be
inferred by whether he/she signs a petition related to it.
Indirect techniques - use unstructured stimuli such as word association tests.
Performance of objective tasks - assumes that one's performance depends on attitude. For
example, the subject can be asked to memorize the arguments of both sides of an issue.
He/she is more likely to do a better job on the arguments that favor his/her stance.
Physiological reactions - subject's response to a stimuli is measured using electronic or
mechanical means. While the intensity can be measured, it is difficult to know if the attitude
is positive or negative.
49
49
Multiple measures - a mixture of techniques can be used to validate the findings, especially
worthwhile when self-reporting is used.
There are several types of attitude rating scales:
Equal-appearing interval scaling - a set of statements are assembled. These statements are
selected according to their position on an interval scale of favorableness. Statements are
chosen that has a small degree of dispersion. Respondents then are asked to indicate with
which statements they agree.
Likert method of summated ratings - a statement is made and the respondents indicate their
degree of agreement or disagreement on a five point scale (Strongly Disagree, Disagree,
Neither Agree nor Disagree, Agree, Strongly Agree).
Semantic differential scale - a scale is constructed using phrases describing attributes of the
product to anchor each end. For example, the left end may state, "Hours are inconvenient"
and the right end may state, "Hours are convenient". The respondent then marks one of the
seven blanks between the statements to indicate his/her opinion about the attribute.
Staple Scale - similar to the semantic differential scale except that 1) points on the scale are
identified by numbers, 2) only one statement is used and if the respondent disagrees a
negative number should marked, and 3) there are 10 positions instead of seven. This scale
does not require that bipolar adjectives be developed and it can be administered by telephone.
Q-sort technique - the respondent if forced to construct a normal distribution by placing a
specified number of cards in one of 11 stacks according to how desirable he/she finds the
characteristics written on the cards.
Sampling Plan
The sampling frame is the pool from which the interviewees are chosen. The telephone book often is
used as a sampling frame, but has some shortcomings. Telephone books exclude those households
that do not have telephones and those households with unlisted numbers. Since a certain percentage
of the numbers listed in a phone book are out of service, there are many people who have just moved
who are not sampled. Such sampling biases can be overcome by using random digit dialing. Mall
intercepts represent another sampling frame, though there are many people who do not shop at malls
50
50
and those who shop more often will be over-represented unless their answers are weighted in inverse
proportion to their frequency of mall shopping.
In designing the research study, one should consider the potential errors. Two sources of errors are
random sampling error and non-sampling error. Sampling errors are those due to the fact that there
is a non-zero confidence interval of the results because of the sample size being less than the
population being studied. Non-sampling errors are those caused by faulty coding, untruthful
responses, respondent fatigue, etc.
There is a tradeoff between sample size and cost. The larger the sample size, the smaller the
sampling error but the higher the cost. After a certain point the smaller sampling error cannot be
justified by the additional cost.
While a larger sample size may reduce sampling error, it actually may increase the total error. There
are two reasons for this effect. First, a larger sample size may reduce the ability to follow up on non-
responses. Second, even if there are a sufficient number of interviewers for follow-ups, a larger
number of interviewers may result in a less uniform interview process.
Data Collection
In addition to the intrinsic sampling error, the actual data collection process will introduce additional
errors. These errors are called non-sampling errors. Some non-sampling errors may be intentional on
the part of the interviewer, who may introduce a bias by leading the respondent to provide a certain
response. The interviewer also may introduce unintentional errors, for example, due to not having a
clear understanding of the interview process or due to fatigue.
Respondents also may introduce errors. A respondent may introduce intentional errors by lying or
simply by not responding to a question. A respondent may introduce unintentional errors by not
understanding the question, guessing, not paying close attention, and being fatigued or distracted.
Such non-sampling errors can be reduced through quality control techniques.
Data Analysis - Preliminary Steps.
51
51
Before analysis can be performed, raw data must be transformed into the right format. First, it must
be edited so that errors can be corrected or omitted. The data must then be coded; this procedure
converts the edited raw data into numbers or symbols. A codebook is created to document how the
data was coded. Finally, the data is tabulated to count the number of samples falling into various
categories. Simple tabulations count the occurrences of each variable independently of the other
variables. Cross tabulations, also known as contingency tables or cross tabs, treats two or more
variables simultaneously. However, since the variables are in a two-dimensional table, cross tabbing
more than two variables is difficult to visualize since more than two dimensions would be required.
Cross tabulation can be performed
For nominal and ordinal variables.
Cross tabulation is the most commonly utilized data analysis method in marketing research. Many
studies take the analysis no further than cross tabulation. This technique divides the sample into sub-
groups to show how the dependent variable varies from one subgroup to another. A third variable
can be introduced to uncover a relationship that initially was not evident.
Conjoint Analysis
The conjoint analysis is a powerful technique for determining consumer preferences for product
attributes.
Hypothesis Testing.
A basic fact about testing hypotheses is that a hypothesis may be rejected but that the hypothesis
never can be unconditionally accepted until all possible evidence is evaluated. In the case of sampled
data, the information set cannot be complete. So if a test using such data does not reject a hypothesis,
the conclusion is not necessarily that the hypothesis should be accepted.
The null hypothesis in an experiment is the hypothesis that the independent variable has no effect on
the dependent variable. The null hypothesis is expressed as H0. This hypothesis is assumed to be true
unless proven otherwise. The alternative to the null hypothesis is the hypothesis that the independent
variable does have an effect on the dependent variable. This hypothesis is known as the alternative,
52
52
research, or experimental hypothesis and is expressed as H1. This alternative hypothesis states that
the relationship observed between the variables cannot be explained by chance alone.
There are two types of errors in evaluating hypotheses:
Type I error: occurs when one rejects the null hypothesis and accepts the alternative, when
in fact the null hypothesis is true.
Type II error: occurs when one accepts the null hypothesis when in fact the null hypothesis
is false.
Marketing Research Report
The format of the marketing research report varies with the needs of the organization. The report
often contains the following sections:
Authorization letter for the research
Table of Contents
List of illustrations
Executive summary
Research objectives
Methodology
Results
Limitations
Conclusions and recommendations
Appendices containing copies of the questionnaires, etc.
Concluding Thoughts
Marketing research by itself does not arrive at marketing decisions, nor does it guarantee that the
organization will be successful in marketing its products. However, when conducted in a systematic,
analytical, and objective manner, marketing research can reduce the uncertainty in the decision-
making process and increase the probability and magnitude of success.
Marketing Research
53
53
Managers need information in order to introduce products and services that create value in the mind
of the customer. But the perception of value is a subjective one, and what customer’s value this year
may be quite different from what they value next year. As such, the attributes that create value
cannot simply be deduced from common knowledge. Rather, data must be collected and analyzed.
The goal of marketing research is to provide the facts and direction that managers need to make their
more important marketing decisions.
To maximize the benefit of marketing research, those who use it need to understand the research
process and its limitations.
Marketing Research vs. Market Research
These terms often are used interchangeably, but technically there is a difference.
Market research deals specifically with the gathering of information about a market's size and trends.
Marketing research covers a wider range of activities. While it may involve market research,
marketing research is a more general systematic process that can be applied to a variety of marketing
problems.
The Value of Information
Information can be useful, but what determines its real value to the organization? In general, the
value of information is determined by:
The ability and willingness to act on the information.
The accuracy of the information.
The level of indecisiveness that would exist without the information.
The amount of variation in the possible results.
The level of risk aversion.
The reaction of competitors to any decision improved by the information.
The cost of the information in terms of time and money.
54
54
Benefits of Questionnaire
1) The questionnaire is a list of question to be asked from the respondents .It also contains a
suitable space where the answers can be recorded.
2) A questionnaire is a method of obtaining specific information about a defined problem so that
the data, after analysis & interpretation, results in a better appreciation of the problems.
3) A questionnaire form, which has to be completed by an interviewer, is often referred as
schedule.
4) Questionnaire studies classified by structured & disguise
5) It is possible to classify questionnaires studies on a variety of bases. Three such bases, which
are of importance, are
6) The degree to which the questionnaire is formalized of structured.
7) The disguise or lack of disguise of the objectives of questionnaire.
8) The communication method used.
Questionnaire construction procedure
Questionnaire construction is still much more of an art than a science. Most of what is known about
making questionnaire is the result general experience. It can be discussed in nine steps. These steps
may vary in important in individual projects. These steps are-
Determine What Information is wanted: Specific statement of the information required for research
purpose & put in operation to motivate respondent.
Determine the type questionnaire to used: after deciding the information required
For the research, the next step is to decide the method of using the questionnaire or administering the
questionnaire. The questionnaire can be used by personal interview, mail, telephone or all of them.
The choice among these alternatives is largely determine by the type of information to be obtained.
55
55
Determine The Content Of Individual Question: Once the needed information is specified the
method of communication is decided, researchers are ready to begin formulating the questionnaire. A
first problem is to decide what to include in individual questions.
Determine The Type of Question to used: The three types of questions from least structured to most
structured are:
Open questions
Multiple questions
Dichotomous
Deciding on Wording of Questions: The wordings of questions must be show the following
Concepts:
1) Define the issue
2) Should question be subjective or objective?
3) Positive negative statement
4) Use species words
5) Avoid leading question
Decide on Question Sequence: The sequence can influence result obtained. A questionnaire has
three major sections:
Basic information
Classification information
Identification information
56
56
OBJECTIVE OF RESEARCH
Objective of Research
1) To know the employees need from the company.
2) To identify the members on the basis of skill and potentialities without regard of race, sex etc.
3) To create peaceful atmosphere in the organization.
4) Satisfy their workers and employees according to their need .
5) To create good and interesting atmosphere in the organization.
6) To study the employees behavior pattern in the organization.
57
57
7) To find out reason for grievances and conflict in industry.
8) To create a better relation between the management and trade union.
9) To improve industrial culture and listen to problem of common workers.
58
58
QUESTIONNAIRE(To study the employ expectation from
corporation)
QUESTIONNAIRE FOR RESEARCH WORK ( TO KNOW THE EMPLOY EXPECTATION FROM CORPORATION )
Q.1) Are your financial need fulfilled adequate by your pay?
a) Yes b) No Q.2) Does the organization take care for welfare of person of all age?
a) Yes - b) No -
Q.3) Is your work too challenging and tiring to limit your ability?
a) Yes b) No
59
59
Q.4)Does the work condition have risk of illness and injury?
a) Yes b) No
Q.5 Is your organization overcrowd and dirty?
a) Yes b) No
Q.6 Do you receive equal treatment in all matter like employ compensation ,job security etc.
a) Yes b) No
Q.7 Does the member of the work organization interest in terms of ideas and feeling?
a) Yes b) No
Q.8 Is your work group your own achievement s are not given importance?
a) Yes b) No
Q.9 Do you think that member of senior staff pay attention to grievances of junior Staff?
a) Yes b) No
Q 9.Do you prefer to accomplish work individually than in team
a) Yes b) No
Q 10. Are your social and individual requirement neglected in the organization?
a) Yes b) No
Q 11. Does the energy and the the time spent on the job effect life adversely?
a) Yes b) No
Q 12. Does the organization facilities the self-improvement for member?
60
60
a) Yes b) No
Q 13. Do you get the opportunities to improve your job?
a) Yes b) No
Q 14. Do you feel isolation from your organization encourage reciprocal help?
a) Yes b) No
Q 15. Do you identify yourself as member of organization on the basis of skill and potential without regard of race , sex ,etc.
a) Yes b) No
61
61
RESEARCH REPORT
Market Survey
Survey of Gautam Nagar (Delhi)
Q.1) what attracts you the most while shopping?
I II III IV
a. Discount on every item 108 62 54 76b. Overall discount 63 117 64 56c. Schemes like free offer 40 52 116 92 d. Availability of wide variety 117 63 39 81
62
62
Customer preference for discount on every product
These data shows that 60% of the total population survey gave preference to 1 st & 2nd to discount on
every item purchased. It shows that the people prefer to purchase the items from the stores where the
discount is given on every items purchased. It means that now a day price is the ultimate factor
responsible for affecting the behavior of the customer.
Customer preference for discount on total bill
63
63
This shows that only 15% of the population like discount on total bill. This helps us to know that
people of Bareilly did not like discount on total bill as Compared to the discount on each item
purchase. They want separate discount on each individual items
Customer preference for scheme like free offer
64
64
Here the given data shows that 14% of the customer needs free offer with the products while rest
them prefers different option. If we are going to launch any business we have to do in depth analysis
of that particular area and depending upon the customer preferences we have to launch the schemes.
In the present scenario customer are not very much influenced by the free offers and free gifts given
by the company.
Availability of wide variety of products in good atmosphere even
65
65
With less discount.
Majority of the population says that they will go to place where the atmosphere is good lot of variety
are available in this case 44% of customer are compromise with discount. Even they are getting
fewer discounts they are willing to visit such place for shopping. This is just because of changing
trends in the live style of the customer. They are highly considering the hygienic environment.
Q.2) Will you buy Sabzi/Fruits from Sabzi Mandi or Thelewala even when
66
66
getting fresh and cheap in big stores?
a) Yes - 135 b) No – 165
Customer preference for Big Store selling Fruits & Vegetables
Comparison of Sabzi Mandi, Thelewala Vs Big Stores
Only 42.5% of customer said that they will continue buying vegetables & fruits from Sabzi Mandi
even when they are getting more products in a near by store. Where as 57.5% of people said that
they will go to Big Store because there they will get all products at one place which make convenient
for shopping.
Q.3) Your preference would be?
67
67
a) Home Delivery -124
b) Like to go to store - 176
Customer choice between Home Delivery and Shopping
Only 28% of customer said that they will prefer home delivery where rest of them said that they will
prefer to go to store for shopping, because there they have lot of choice (alternative) they can make
comparison between the products. Where as in case of Home Delivery it’s not possible.
68
68
Q.4) Preferred timings for shopping
a) 6 a.m. to 9 a.m. -27 d) 3 p.m. to 6 p.m. -113
b) 9 a.m. to 12 a.m. -83 e) 6 p.m. to 8 p.m. -152
c) 12 p.m. to 3 p.m. -109 f) 8 p.m. to 10 p.m. -104
Here the given data shows that most prefer timing for shopping is between 6pm to 8pm followed by
3pm to 6pm. This proves that people of Bareilly prefer to go for shopping between 3pm to 8pm. This
is the convenient time for them
69
69
Q5)- CUSTEMER EXPECTATION FROM BIG STORE
1) Wide Variety :-
a) The product should be available in wide range with all branded products.
b) Discounts, schemes and free gifts on regular basis.
c) Quality, Quantity and reasonable rates to attract the interest of the customer.
d) Packaging.
e) Wide range of the product.
f) The product should be fresh and available at reasonable rate.
g) All newly launched products should be available.
70
70
2) Atmosphere of store and expected behavior of staff :-
a) Attractive appearance, cool environment and neat and clean.
b) Touch and feel and proper display of the product.
c) Staff should be educated and help in purchasing.
d) Pay equal attention to each customer.
3) Location and services :-
a) Nearer to home.
b) Wide space to avoid rush.
c) Separate department.
d) Parking facility.
e) Facility of Home delivery.
f) All time availability.
g) Long hours for shopping
h) Cards should be made so that no need to carry money
4) Payment facility :-
a) Cash payment.
b) Payment through debit and credit cards.
c) Payment should be convenient, no long queue at payment counter.
5) Time saving :-
a. Convenience shopping.
b. Membership card.
c. No bargaining (Fixed rates) it will save lot of time.
d. All the items should be display on the racks.
71
71
6) Additional facility :-
a) Should have sitting facility.
b) Medical section should open 24 hours.
c) Light refreshment facility-Coffee shop, Snacks shop, and Ice - cream parlor.
d) Mobile charging facility.
e) Should have place for entertainment of kids where they can play while their
parents in shop.
f) Place where customer can keep their other bag etc. safely while shopping in
store.
g) Stationary section should be there.
h) Hosiery items should also be available.
72
72
FINDINGS
FINDINGS
73
73
1. The most important features are people prefer to buy fresh Vegetables from Subzi market
rather than retail store.
2. Highly opposed by the owner of the traditional retail store.
3. Television is a major source of creating awareness.
4. The peak hour for purchasing the product is 6-8 pm.
5. Standard of living and life style Bareilly’s people is not so well.
6. Major consumer’s who want to buy the product from retail store having income group
between 5000-10000.
7. At present Subhiksha is playing crucial role in Bareilly but not get good response.
8. Government employees are interest toward to purchase the product from traditional
Kirana store situated near at their home.
9. The important feature is there is no advertisement and people are unaware of Reliance
Retail store.
10. People having less income prefer to purchase from the traditional store.
11. The age groups of 23-35 have to be give importance because it is potential age group.
12. Daily needs are generally purchase by the housewife’s so other companies may target
them.
74
74
RECOMMENDATION
RECOMMENDATIONS
75
75
1. Print media and television are major sources of awareness, so these Medias can be
concentrated for efficient result.
2. There should be one brand ambassador that should be well or famous personality
3. The age groups of 40-60 are not interested to go to retail outlet so these potential groups can
concentrate
4. Subhiksha is the major competitor and there is substantial between them.
5. There is also considerable difference between other competitor, so their necessities to
concentrate on other private player and their activity, product, price and facility etc.
6. Young generation and service man are interested in retail outlets, so these potential customers
have to be attracted towards subhiksha.
7. Low-level income group are not interested to go in retail outlet. These people have great deal
of money to purchase, so these customers have to be attracted.
8. The satisfied customers by existing traditional general store are important since they bring in
customer by word of mouth.
9. Safety and tax relief are the most important.
10. People do not know about the product, scheme, their price, quality, and benefit of purchasing
product from retail outlets, if informs this will improve the market share.
76
76
QUESTIONNAIRE-B(To study the Changing consumer
Preferences)(NUMBER OF FORMS=200)
QUESTIONNARE FOR RESEARCH WORK(B)
77
77
Catchments / store Code:
Dear Sir/ Madam,
We are MBA students are doing a survey on the consumer needs and behavior with respect to
retail stores in your city as part of our course. We request you to spend some of your valuable
time answering the questionnaire.
1. Please rank the following Parameters in the order of their importance (on a scale of 1-6,1-
being most important and 6-least important).
Parameters Ranking (1-6)
Personal attention
facility of home delivery
facility of credit purchase
Ambience/ aisles - touch and feel
Long term discount / free gifts
Parking facilities
2. Please tick the appropriate option & name it based on your choice of retailstore you buy your groceries from?
78
78
RESEARCH REPORT - B
Ranking for various Attribute
79
79
The above data shows that people are very least concern about the parking facilities as
compared to touch and feel of the product.
80
80
Attribution rated high on preference
The most important factors for the customer of Delhi are-1. Personal attention
2. Facility of home delivery
3. Facility of credit purchase
Ranking 1-3
Personal attention 65%
Facility of home delivery 64%
Facility of credit purchase 50%
Ambience / Aisles- touch &
feel
45%
Long term discount & free 43%
Parking facility 30%
This shows that people are how much influenced by the traditional shopping, that they
give most to the personnel attention. They are not much bothered about long term
discount. They are also very less concern about credit facility.
81
81
Ranking for various Attribute
82
82
Attribution rated low on preference
The least important factor for the customer of Delhi are-
1. Parking facility
2. Ambience /Aisles – touch & feel
3. Long term discount /free gift
Ranking 4-6
Personal attention 34%
Facility of home
delivery
35%
Facility of credit
purchase
48%
Ambience/ Aisles-
touch &feel
54%
Long term discount/free
gift
55%
Parking facility 72%
From the above data its shows that people of Delhi are least bothered about the
parking facilities. It has got the maximum in least rated attributes.
83
83
Satisfaction level of High Rated Attributes
The customers are satisfied from their preferred Kirana Store on following factors.
1. Personnel Attention
2. Facility of Home Delivery
People generally preferred the traditional method of shopping because of the personnel
attention given by the store keeper. They also preferred the facility of Home delivery
just because of the busy life schedule.
84
84
Satisfaction level of Low Rated Attributes
The customers are satisfied from their preferred Kirana Store on following.
1. Parking Facility
2. Facility of Home Delivery
3. Ambience/Aisles- Touch & Feel
4. Long term Discount/Free Gift
The above graph is showing that most of the people are dissatisfied by the parking
facility available in the market from where they usually go for their shopping. This
85
85
cause them lot of inconvenience during shopping. Generally the market is in busy
area.
Preference for Buying Daily Supply of Groceries
94% of the people use to buy their daily supplies from their neighborhood traditional
Kirana Store. Where as only 2% of them buy from Big Bazaar and the remaining use
to go Retail store. It shows that there is lot of potential avail in the Bareilly city.
recently Subiksha has operated there operation in the city. Vishal Mega Mart has also
planned to do the same.
86
86
Preference for Buying Monthly Supply of Groceries
80% of the people use to buy their daily supplies from their neighborhood traditional
Kirana Store. Where as only 5% of them buy from Big Bazaar and the remaining
15% use to go Retail store. People believe that big store is quite expensive as
compared to near by stores. Big stores they charged there operating cost, they are not
very much aware about the big stores.
87
87
1 Staples- Rice, Pulses, Sugar
2 Vegetables, Fruit & Fruit juices
3 Edible oils, Spices & Pickles
4 Bread Related
5 Snacks
6 Beverages
7 Meat & Eggs
8 Dairy Products
9 Cosmetics
10 Toiletries
11 Women & Baby Product
12 Washing Soap & Detergent
13 Mosquito Repellent etc.
88
88
Analysis on Assumptions
Packaged Milk is of better quality than loose Milk
The above data suggested that maximum no. of the surveyed population believe that loose milk which is either delivered at home or we go to dairy are of better quality than the packaged milk available in the market. But there are few who believe that packaged milk is of better quality then loose milk. There is potential in the market for selling packaged milk from the outlets.
A store of big company is expensive
In the present scenario small city like Bareilly people still believe that stores of big companies are expensive. In order to penetrate in such kind of market the investor has to do some awareness program for the customer to whom they are going to target.
89
89
Package flour, pulses, etc are of better quality than unbranded one.
Here we come to know that unbranded pulses, rice etc. are of better quality than branded one
Vegetables & fruits in sabzi market are cheaper than those available at air condition shop
90
90
Respondent has given the information that fruits and vegetables which are present in sabzi mandi are cheaper than those which are available in an Air Condition shop.
Vegetables & fruits in sabzi market are fresher than those available at air condition shop
Customer believes that vegetables are not fresh in air condition shop. They are only fresh at sabzi market
I will not purchase from a store which sells fresh meat. 91
91
There is opportunity to sell packet meat from the retail outlets, but it should be separated from the other items available at the stores.
I will prefer to buy vegetables from air-condition shop as compared to sabzi market.
92
92
I will purchase from a new store which provides cheaper goods even if I don’t know the store owner personally.
People are ready to purchase the products if they are getting it at lower price then other place even they know the shop keeper or not. This shows the potential in the market that company can deeply penetrate the market.
93
93
FINDINGS
FINDINGS
94
94
1. People are not preferred to buy from some big company’s store because they
are thinking that their administrative is also included.
2. In Bareilly the people are more interested in traditional pattern of buying.
3. After interpreting the consumption of milk .In Bareilly city the middle income
group is more than any other group.
4. For consumption of milk they prefer packed milk whether it is branded or
unbranded.
5. Bareilly is treated as b-class city where people are less concerned about home
delivery as compare to go to store for purchasing
6. In low rated attributes facility of credit purchase get equal opportunity in terms
of satisfied & dissatisfied.
7. Maximum numbers of people are satisfied that packaged flour, pulses, etc are
of better quality than unbranded one available at local Kirana Store.
8. Vegetables and fruits are cheaper and of better quality in Sabzi Mandi as
compared to those available at Air-Condition shop.
9. Most of the people prefer to buy from the shop where goods are available at
cheaper rate, whether they know the shopkeeper or not.
10. Milk available in loose at dairy and those supply at home are of better quality
than packaged milk.
11. They think that store of big company’s are expensive.
12. People are not satisfied by the parking facility from the General Stores where
they generally use to purchase their daily need items.
13. There is opportunity to sell meat in packet.
95
95
BIBLIOGRAPHY
BIBLIOGRAPHY
96
96
The following books and articles from various news papers, websites have
been consulted for completing this project.
BOOKS
Marketing Management by PHILIP KOTLER.
Research Methodology by Dr. ELHANCE.
Consumer Behavior by LEON, LESLIE LAZER.
WEBSITES
www.relianceretail.com
www.ril.com
97
97
Related Documents
