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SUBMITTED TO: Mr. AMIT ADHLAKHA FACULTY GUIDE ICFAI UNIVERSITY (FMS)
0901120105
A THESIS ON
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This is to certify that the Management Thesis entitled as, Customers perception and satisfaction towards organized retail outlets Submitted to ICFAI UNIVERSITY in partial fulfilment of the requirement for the award of Master of Business Administration is record of original, project work done by me during the period of study in under the supervision of Mr. AMIT ADHLAKHA (Faculty Supervisor).
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DECLARATION
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QUESTINNAIRE BIBLIOGRAPHY
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NO MAN IS COMPLETE IN KNOWLEDGE BUT SINGLE RAY OF KNOWLEDGE CAN BE HELPFUL TO MAN. The research on Customers perception and satisfaction towards organized retail outlets and kirana stores has been given to me as part of the curriculum in Two-Year Masters Degree in Business Administration. I have tried my best to present this information as clearly as possible using basic terms that I hope will be comprehended by the widest spectrum of researchers, analysts and students for further studies. I have completed this study under the able guidance and supervision of Mr. AMIT ADHLAKHA (faculty guide); I will be failed in my duty if I do not acknowledge the esteemed scholarly guidance, assistance and knowledge. I have received from them towards fruitful and timely completion of this work. My acknowledgement may not redeem the debt I owe to my parents for their direct/indirect support during the entire course of this project. GUIDANCE IS THE BEST IN THE WAY OF PROGRESS. I also thankful to my friend who helped me a lot in the completion of this project. SUMEET THAPA
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ACKNOWLEDGEMENT
1) Indian retail market 2) Retail formats available in India 3) Fastest growing retail formats in India 4) Fastest growing retail segment in India
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ABSTRACT
This paper provides detailed information about the growth of organized retail sector in Dehradun. It discusses about the emergence of innovative practices that support the growth of the sector in a highly competitive environment. Though this sector is one of the fastest growing in the country but in Dehradun it is still in its nascent stage, however it is fast spreading and making its presence felt in different parts of the city. There is a vast untapped potential for organized retailing in Dehradun which is the key attraction not only to the domestic and global retailing chains operating here but also for the customers who belong to different cross sections of the society and visit them. An effort has been made, in the paper to know about the customers perception and satisfaction towards these organized retail stores in Dehradun so as to access their satisfaction level and decode whether the sector will be able to do a meaningful business in Dehradun.
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INTRODUCTION
Objective
The overall purpose of this endeavour is to investigate empirically customers perception and satisfaction towards organized retail outlets and kirana stores on the basis of various parameters.
Moreover this study aims at finding the discriminating factors that lead to customers preference towards organized retailers. To understand the overall shopping habits of customer. To know the major factors considered by customers while shopping in unorganized retail shops. To know the different class of customers shopping in unorganized retail shops. To understand the various promotional activities undertaken by the unorganized retailers. To know the satisfaction level of customers shopping in unorganized retail shops. Methodology The study involves the primary data which is collected through questionnaire, interview, and observation. It involves use of secondary sources such as web and other research articles printed by various financial institutions and other journals and magazine. It involves analysis and tabulation of data which is collected from customers is done by various means such as line graphs, pie charts and bar graphs. The project involves the study of customers perception.
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The study was conducted in Dehradun during the months of NOVEMBERDECEMBER 2010. Sampling Method and Sample Size: Three retail outlets and two kirana stores in Dehradun were randomly selected for this study. Fifty visiting customers from each outlet were personally interviewed with the help of especially structured questionnaire. In this way 250 customers were interviewed for the study. Research Instrument and Method: The survey was conducted on customers with the help of MBA students who were specially trained for the purpose. A well structured questionnaire was developed for conducting the study. The questionnaire was divided into two parts. First part was designed to obtain demographic information about the respondents age, income, literacy level and gender. Second part contained closed-ended questions relating to rating of retail outlets on various parameters. Analysis of Data: Customers perception towards different aspects of retail outlets and kirana stores were compared using Analysis of Variance (ANOVA). Before going in for analysis, the Likert Scale attributes were assigned weights as under: Agree =1, Neutral =0, Disagree = -1 Satisfied = 1, Neutral = 0, Dissatisfied = -1 Most Important = 2, Important = 1, Neutral = 0, Unimportant = -1, Most Unimportant = -2 and The results obtained through data analysis have been discussed in the paper.
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companies have laid out ambitious expansion plans for themselves and they may be hampered due lack of requisite skilled manpower. But retail offers tremendous for the growth of Indian economy. If all the above challenges are tackled prudently there is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth.
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The retail industry is divided into organized and unorganized sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46m) in size. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.
Unorganized market: Rs. 583,000 cores Organized market: Rs.5, 000 cores 5X growth in organized retailing between 2000-2005 Over 4,000 new modern Outlets in the last 3 years Over 5,000,000 sq. ft. of mall space under development The top 3 modern retailers control over 750,000 sq. ft. of retail space Over 400,000 shoppers walk through their doors every week 47 global fortune companies & 25 of Asia's top 200 companies are retailers.
Growth in organized retailing on par with expectations and projections of the last 5 Years: on course to touch Rs. 35,000 corers (US$ 7 Billion) or more by 2005-06The growth factors of the retail sector of Indian economy: Increase in per capita income which in turn increases the household consumption Demographical changes and improvements in the standard of living Change in patterns of consumption and availability of low-cost consumer credit Improvements in infrastructure and enhanced availability of retail space Entry to various sources of financing.
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Space occupied: Around 10000 Sq. ft. 30000 Sq. ft. Example: Landmark Groups LifeStyle, Trent India Ltd.s Westside. Discount store: Standard merchandise sold at lower prices with lower margins and higher volumes. Merchandise: A variety of perishable/ non perishable goods. Example: Viswapriya Groups Subiksha, Piramals TruMart. Specialty store: It consists of a narrow product line with deep assortment. Merchandise: Depends on the stores Example: Bata store deals only with footwear, RPGs Music World, Crossword. MBOs: Multi Brand outlets, also known as Category Killers. These usually do well in busy market places and Metros. Merchandise: Offers several brads across a single product category. Kirana stores: The smallest retail formats which are the highest in number (15 million approx.) in India. Merchandise: Mostly food and groceries. Space occupied: 50 sq ft and even smaller ones exist. Malls: The largest form of organized retailing today located mainly in metro cities, in proximity to urban outskirts. Merchandise: They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.
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In the above graph it shows that the in India the fastest growing retail segment is food and grocery because in India people spend more on eating. Then dressing because India is now turning to modern age and the people of modern age like to dress well and look well.
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In the above graph it shows that the there are many formats of retailing in India but the specialty store and supermarket is fastest growing formats in India.
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The glory of Vishal Groups success is the ascent it has come to accomplish in the field of manufacturing and retailing of readymade garments. The credit for this radiance goes to its dynamic of directors Mr. Ram Chandra Agarwal & Mrs Uma Agarwal who have transformed their foresightedness into an unending saga of growth. Identifying the immense market in fashion garment for the masses the Group has actually established benchmarks that many others are inspired to follow. Not resting on its laurels, the Group is busy identifying new avenues of growth and its companies are busy implementing the expansion plans to cash in on emerging potentials in the changing business environment of modern Indias enterprise. The jewel in Vishal Groups crown is its flagship company Vishal Retail Ltd. a company engaged in Hyper market stores with an average area of 25,000 to 30,000 sq. ft. through an impressive chain of 172 fully integrated stores in spread over the area of more than 24,00,000 sq. ft. in around 110 cities across India in 24 states. The turnover of the company for 09-10 was 1105 Crore. Maintaining the highest standards in quality and design, these stores have come to offer the finest fashion garments at down-to-earth price structure. A fact that is better visible in the constant flow of shoppers all through the year. Under the title of Vishal Mega Mart these stores have emerged as the regular haunts for the bargain-hunters and fashion enthusiasts alike. The saga of Vishal Group dates back to 2001 when its directors foresaw the emerging potentials in the retail industry which is indeed the largest sector in the global economy. Imbibing its innovative concepts and techniques the Group identified the vast scope of growth in retailing for the common man. Its stores
have gained an enviable prominence as being the ideal store for the common man where an extensive variety and quality is offered at a very, very reasonable price structure. The Groups expertise in the field of retail marketing over the years and its focus on regions, cities and exact customer preferences have earned the Group an undisputed leadership status to Vishal Group.
Bharti Retail
Bharti Retail is a wholly owned subsidiary of Bharti Enterprises. The Company operates easy day neighbourhood stores and compact hypermarket stores called easy day Market. Bharti Retail provides consumers a wide range of good quality products at affordable prices. easy day stores are one stop shops that cater to every family's day-to-day needs. Merchandise at easyday Market stores include apparels, home furnishings, appliances, mobile phones, meat shop, general merchandise, fruits and vegetables among others. Created on the neighbourhood shop format, the much-awaited retail operations EasyDaywas introduced by Bharti Retail Limited at Dehradun in Uttrakhnad. Bharti Retail Limited happens to be a wholly-owned subsidiary of Bharti Enterprises and its Easy Day retail operations will act as a one-stop shop catering to a familys day-to-day needs. As such, the Easy Day Stores will provide Indian consumers a wide range of products of excellent quality apart from proffering a nice ambience and service. Among the range of items you can look forward to buying from the EasyDay stores include personal care products, stationery, household articles, hosiery items, daily-need groceries like staples, processed foods, bakery and dairy products, meat and poultry and fresh produce. It was announced by the company that EasyDay will gives jobs to the locals in the Ludhiana area where it has been set up. Further on those who will be
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selected for the job will be trained by Bharti Academy of Retail, which has been established by Bharti Retail Limited. This academy has already trained about 1,800 local people from different sections of the society.
KUMAR STORES
4, Neshvilla Road Dehradun, Uttarakhand, 248001 Phone No: +91-135-2653145 +91-9837034784 Email: Samraat@Vsnl.Com
Directions: It Is Located On Neshvilla Road, 800 Metres From Clock Tower Hours of Operation: 8:30 Am To 8:30 Pm Closed: Sunday Payment Type: Cash, Visa, Master Card Business Description It Deals In All Kinds Of Cosmetics, Gift Novelties, White Metal, Toys, Decorative Pieces, Home Appliances, Stationery And All Other Items Of Daily Need.
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AMARTEX
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From The Director's Desk Amartex was born in 1988 as a small clothmanufacturing unit, established by the Grover family of Chandigarh. Set up with a modest capital, it is today a fully integrated manufacturing Company, boasting of an impressive turnover of Rs. 250 Crores and targeting 1000 Crores in coming two years. Mr. Arun Grover, the Managing Director, was quick to spot the discrepancies in the prevalent manufacturing to retail process. By the time the product reached the stories, the consumer paid a lot more than justified. Amartex revolutionized whole textile industry in north India with a swift and thorough process of backward integration which led to the setting up of every link in the chain. Today, the company has completed all in-house facilities, from manufacturing to retailing and is fastest growing. Amartex is a fully integrated manufacturing Company with a balanced mix of manufacturing and marketing. The Company is well equipped with modern manufacturing and marketing infrastructure, such as, weaving to processing, designing and garments manufacturing and is the fastest growing company in the region. All products rolling out of our premises find their way to every nook and corner in this region through 34 Company owned retail outlets. The Company provides consumers with a wide variety of apparel products and services to suit their individual needs. We have carved out a niche and name in the industry and cater. Amartex was brought into existence in 1988 by a team of competent promoters viz-a-viz The Grover Family. The core promoters have more than two decades of experience in manufacturing and marketing of textile products. The management of the Company comprises of an appropriate mix of qualified and competent Directors and Managerial Staff.
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THEORETICAL BACKGROUND
Unique Customer Perception (UCP)
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Marketing is a domain which is dynamic i.e. involves change, an important phenomenon not to be overlooked. We have come across a term Unique Selling Proposition (USP) which companies feel as a constant factor. Every organization is an open system of management which means change is inevitable and is associated with environmental factors. Companies need to focus not only on USP of their products but also on the Unique Customer Perception (UCP) of the final end users. The prop of marketing is based on the need identification and the USP's are prepared based on the identified needs. If the needs are wrongly identified then even the USP's which are unique to the product would not serve the purpose. USP identifies a product/service from its competitors while UCP is the perception or picture a customer develops from all types of promotional inputs from the company about their product or service. It is often seen that some brands do extremely well compared to other brands having the same resources. The reason for the brands not to do well is probably the communications which does not reflect the customers perception. So it is not the USP but UCP that plays an important role .This has lead to the concept - Customer Perception is the Rule and not Customer Satisfaction. Remember that a customer always buys a product or service with a lot of expectations which he has derived from the promotional inputs of the company or other sources including word of mouth. So a customer would be satisfied when Performance is equal to Expectation while would not be satisfied when Performance does not match with Expectations. Now this expectation is what has been derived from perception. Perception is not good or bad, right or wrong, it is just the way someone judges an experience based on their value system of what they believe should happen. Since people are unique, each of their perceptions are unique .On the other hand each situation is a "point of contact" with an employee that will tell the customer a "truth" about the company's idea of customer service. Each situation will create expectations of what the next experience will probably be like. Companies spend considerable amount on advertisement and in this world of competitive advantage advertisement has to be repetitive in nature. So companies need to understand the Unique Customer Perception to facilitate advertising and Sales Promotional (ASP) efforts towards a better bargain. The cost incurred on advertisement is huge i.e. if we refer to the 5 M's of advertising, Money is a budgetary constrain for an ideal advertising campaign.
Thus UCP has to be rightly analyzed for better results by the company to match performance and expectation.
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Most of the consumers who visit retail outlets regularly are the youth. The rest of the population who visit the retail outlets under study can be listed in the following descending order of distribution the working age group, the older age group, the middle age group, and senior citizens. It is not surprising that the youth most frequent malls and retail stores. What is unexpected, however, is the fact that more people who fall into the older age group visit the retail stores than those who fall in the middle age group. Then again, this deduction cannot be applied to the entire population of Bangalore. The disparity can be attributed to the small size of the sample under study. More women visit retail outlets than men. Two, more women are willing to fill out questionnaires and take a survey than men. A large number of consumers visit retail outlets for clothes/dresses/apparel. Accoutrement is the hottest selling item that any retail outlet can provide. One-third of the respondents indicated that the visit retail outlets to purchase groceries. Clothing is the fastest moving consumer good. Retail outlets that provide apparel can see a higher rate of turnover and sales volume. Customers give value to a great many number of factors when deciding which store to shop at. It would be prudent on the part of the company to identify their strong and weak areas, which attract or drive away customers to/from their stores. When choosing to shop at a particular store, or when favouring one store over the others, it is seen that most consumers make this decision based on the quality of the products on offer. Majority of the respondents feel that television advertising is the most effective means of advertising. This is indicative in spite of large number of commercials that the public is bombarded with.Good number of target consumers is satisfied with the stores at large. However, there are those who are unsatisfied or who have never visited the store at all. Such consumers form the potential market that the companies must strive to attract. The Study of consumer perception of three retail chains in Bangalore. The consumers preferences are changing rapidity and becoming highly diversified. It is difficult for the retail stores to satisfy all the needs of the customers. The most of the consumers want to get some attractive prices, good schemes and offers on every purchases and a shopping comfort as well. Those who are able to purchase their needs and want for a month in a bulk prefer to go to the retail chains. Because of competitions in the market the branded formals
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REVIEW OF LITERATURE
are also became cheaper so the younger generation prefers to purchase from the retail outlets of the brand the city. Only the big retail chains are able to satisfy all these needs of the new age consumers whereas there is still some consumers mostly of the old age are willing to purchase from the local kirana store. Some of them have perception that these big stores are too costly to afford and some of them are not able to make purchases in a bulk so they do not want to waste their time to go especially to the big store for 2-3 items purchase. In the case of other items like wristwatches, branded jewellery, mobiles, gift items and other, they prefer to take it from where they are getting cheap prices, good after sales services and the goodwill of the store. After studying the customer survey questionnaire statistically and theoretically as well and after observing the consumers mood and their preferences I can say that Big Retail is here to stay. Assuming that improvements in infrastructure and lower real estate costs become a reality, Big Retail still has a long way to go before satisfying the highly diverse needs of the Indian population. As a result, there will be a steady state where Big Retail will co-exist with Small Retail. Growth of Retail sector in India From this research, there are majority no. of customers who buys more than 3 times in a month as compare to other customers. So these customers are loyal customer. No of other customers who buy more than 2 times, 1 time in a month are also there. There were higher percentages of customers who like to buy from Shoppers stop as compare to other competitors. (Pyramid, Pantaloons etc.) means majority of customers are like to shop from Shoppers stop. So by organizing some events or with good product range & discounts, these remaining customers get diverted. As per the data collected through this survey, we can say higher no. of customers are youngsters. Along with professionals, businessmen etc. Between the age group 25-35. Majority of females customers are there, as compare to male customers. As per income range is concern, majority of customers are high class customers means income (30000+/month).who loves to shop in Lifestyle. They are really brand conscious. There is higher no. of customers who spend more than 3000 for their 1 time shopping, more than 3000 also. Some customers are there who even shop more than 10000 also. Retail sector in India In the past few years the whole concept of shopping has been altered in terms of format and consumer buying behavior. With the increasing urbanization, the
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Indian consumer is emerging as more trend-conscious. There has also been a shift from price considerations to designs and quality as there is a greater focus on looking and feeling good (apparel as well as fitness). At the same time, the Indian consumer is not beguiled by retail products which are high on price but commensurately low on value or functionality. However, it can be said that the Indian consumer is a paradox, where the discount shopper loyalty takes a backseat over price discounts. Indians have grown richer and thus spending more on vehicles, phones and eating out in restaurants. The spending is focused more outside the homes, unlike in other Asian countries where consumers have tended to spend more on personal items as they grow richer. Spending on luxury goods have increased twice as fast with 2/3 of India's population is under 35, consumer demand is clearly growing. The mall mania has bought in a whole new breed of modern retail formats across the country catering to every need of the value-seeking Indian consumer. An average Indian would see a mall as a perfect weekend getaway with family offering them entertainment, leisure, food, shopping all under one roof. An analysis of Indian Retail sector PJ GERMAIN The customer's perception: Customer perception is an important component of our relationship with our customers. Given that 90% plus of our orders at some point involve the phone, how we handle the telephone is essential to creating a perception for our customer that aligns with the company mission of service. Smiling stretches your vocal cords, and gives a more upbeat presentation to the customer. Slowing down ensures that the customers perception is of an organized systematic company that can handle their project. Getting it done right and on time consistently. Article source: http://www.fibre2fashion.com BY SOUMEN CHATTERJEE Unique customer perception (UCP): According to soumen, Unique Customer Perception is what is required by companies instead of Unique Selling Proposition. It is ultimately that customer look for satisfaction based on the picture of perception derived from various sources. If these perceptions of customer can be analyzed then promotion would be easier for customer centric marketing. This has lead to the concept - Customer Perception is the Rule and not Customer Satisfaction.
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Brand recognition will change customer perception: According to JenB, for a bigger stronger business you have to get some serious brand recognition happening. People need to know your name before any thing else. You want people to thing of you a certain way too. This is the ticket to getting the image that you want. If you get a lot of blank looks from people that are not current customers then you probably have no recognition at all. That means it is time for an advertising switch. Even if people dont buy the product they will recognized the name. Remembering a business is one step closer to trusting a business. Brand recognition is accomplished only by people seeing your logo and business name over and over again. This will create the repetition that your customers and future customers need to pick your product out of a crowd time and time again. Article Source: http://www.a1articles.com/article_1035917_15.html HUAWEI Satisfy customers perception is the biggest challenge: In meeting customers' requirements and measuring customers' satisfaction indexes, customer perception should be definitely a key consideration. Qualified services in the operation execution layer, technical management layer and business development layer are necessary. It is more important to understand customer expectations and make efforts to exceed their expectations. In customer satisfaction management, the biggest challenge is customer perception management, or customer perception satisfaction. The major characteristics of service is intangible, hence the core value of services is not like a physical product but the spiritual experience and perception of customers. The final aim and ideal effect of service provisioning is to have customers perceive and enjoy the service. Such perception is both at psychological and behaviour levels, and it is the contents of high quality life in the modern society. Customers are seeking for material deliverables as well as perceptive enjoyment when purchasing a service product. Since perceptive enjoyment is a vital service objective, one of the key service management objectives shall be meeting customers' perceptive enjoyment. Article source: Huawei Technologies Co. Ltd MORGAN STANLEY
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Quick Comment Impact on our views: We met Rakesh Biyani, Director Future Group, who heads the retail business. Our investment thesis regarding improving business outlook and availability of capital to fund growth plans continues to hold good. Management has consciously shifted focus to growth quality rather than just growth. We reiterate our Overweight rating and believe that any volatility in the stock price should be viewed as an entry opportunity. Here are the key takeaways from the meeting: Aggressive growth and margin targets: PRIL has set an aggressive 16-17% same store growth (SSG) target for F2010. This compares with F2009 SSG of 7.0%. The company plans to achieve this target by adopting active merchandise management. First, the company is likely to ensure that its fastest-selling products dont go out of stock. It has increased its order per SKU range from 900-1,400 to 600-6,000 to ensure reduced stock outs for fast-selling products. Second, it has put in place a system to continuously monitor underperforming categories/segments/SKUs so that they can be immediately replaced. Third, it has improved product quality and pricing across its merchandise (particularly private label) to ensure market share gains. Fourth, it has now set store-wise, product-wise and SKU-wise, daily/weekly sales targets so that the monitoring and feedback system improves significantly. Focus on efficiency to improve margins: The management is targeting 200250 bps improvement in gross profit margin, a 30% reduction in logistic costs, and a reduction in nonstore inventory during F2010. Gross margin improvement is likely to be driven by improvement in sell-through ratio (% of products sold through the primary store), from 79% in F2009 to 89% in F2010. The company achieved 79% in F2009, which was an improvement from 64% in F2008. Significant improvement in private label contribution, particularly in the apparel segment, may also help the overall mix improvement. TRENT LEYSHAN Creating the right Value Perception for your Customers According to Trent Leyshan Value Perception (VP) is the opinion your potential and current customers have of your product or service. This perception determines the value it adds to them in line with the problems it needs to solve or aspirations they want it to fulfil. Irrespective of your customers opinion being right of wrong in your mind, their opinion matters none the less, in fact, critically so. Some may suggest; But the customer my have it wrong In this instance we respond: whose fault is that: the customer, sales person, sales manager, marketing dept or Company Directors? One this is for sure, it certainly isnt the customers fault. Value cascades down the value deliver system into the customer. A breakdown on any level can be detrimental to a
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companys success. The customers positive perception, along with an effective sales process will help the customer make the appropriate buying decision.
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The retailer must make decisions regarding the merchandise offered depending on the sales targets and financial objectives of the store. Retailer should be very careful while deciding on the amount of stock to be maintained in each category; if large stocks are maintained in a particular category, there may not be sufficient resources left for providing a deeper assortment of goods. By taking into consideration this phenomenon all Peter England specialty stores are maintained on the basis of the per square foot SKUs. It means that as shown into the figures of assortment, every SKU are replenished in the fix quantity.
STORE LAYOUT
There are some key factors that a retailer should take into account, while developing a layout prototype. The following are the optimizing factors: Increasing sales Maximizing returns per square foot Coordinating the merchandise with the store format. Allowing flexibility in store design. Recognizing the needs and safety of the customers The store lay out should enable and incite the customers to move around the store to purchase more products than they have actually planned for. The store layout should tempt customer to walk along the inexpensive merchandise display section for impulse buying and then move on to expensive merchandise. There are three types of store layout 1. Grid layout 2. Race track layout 3. Free-form layout
STORE EXTERIORS
Generally, the first impression of a customer about a store is formed by its exteriors. The exterior of a store plays a vital role in attracting new customers and retaining existing customers. Retailer while planning their store exterior may consider any of the following option.
Marquee: typically carries store name along with the trade marks. Here you can see Peter England marquee is not much blowy and outside signboard is put which matching with its positioning tag line Honestly Impressive. Entrance and display window: From the photograph we can clearly make out that there is only one entrance in the store which shows the display of merchandise which store offers, so that it can attract the pedestrians easily. Door type and walk away: the door is of push-pull type which eases traffic congestion at the entrance and allows the customer to see interiors. There is ample of space available for the customer to freely move inside the store but because of the smaller parking space available, which is outside the store, it becomes very congested sometimes. STORE INTERIORS The principal objective of any retailer is to maximize its sales and customer satisfaction, and to minimize the operational costs. Therefore, the interior of the store should be designed in such a way that it serves. Lighting and Fragrance In the store lighting is used intelligently to highlight the merchandise and attract customers to specific departments in the store. Some of the main objectives they have achieved with lighting are following: Highlighting the displayed product. Capturing customers mood. Masking the unattractive features or places of the store. There is also a mild fragrance available into the store to influence the Purchasing decisions of the target market.
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1. Modular structure 2. Prefabricated structure 3. Prototype structure 4. Recessed structure 5. Distinct structure
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Family Income: The data shows that the proportion of customers visiting mega marts was inversely related with the family income. It came down from 62.20% of customers with low family income up to Rs. 25,000 per month to 6.40% of them having family income of more than Rs. 50,000 per month. This shows that mega marts could not attract the very rich class. They may instead prefer malls for shopping. Thus, people with high education and income do not visit the mega marts frequently. Table 1 : Socioeconomic Characteristics of Customers of Mega Marts Socio-Economic Characteristics Age (Years) : 16 25 26 35 36 45 46 55 56 65 Above 65 Place of residence rural urban Gender : Male Female Education : Matriculate Intermediate Graduate Post Graduate Above Post Graduate Number of Customers Percentage ( % )
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45.60 32.00 12.00 4.80 5.60 0.00 28.80 71.20 42.80 57.20 2.40 14.00 40.80 30.80 12.00
16 187 63
Decision Maker: Majority, i.e., 74.80% of the customers were decision makers themselves, while only 25.20% of them belonged to those families where the decision maker was some other family member. Thus, self decision making dominates the purchasing scenario at the mega marts. Therefore, it can be said that majority of the customers of mega marts were young female from urban areas, with medium level of education, and low level of family income. Perceptions of the Customers Towards Mega Marts The perceptions of the customers towards different aspects related to mega marts were observed through a number of Likert scale-based, ranking-based and multiple choice-based questions. Preference for Mega Marts The data given in Table 2 shows that the highest proportion, i.e., 42.40% of the customers assigned 1st rank to Vishal Mega Mart, while on the other hand, as high as 37.60% of them assigned the lowest rank, i.e., 5th rank to kaveri departmental stores. The overall ranking came to be 1st in favour of Vishal Mega Mart, followed by easyday, Amartex and Kumar stores, while kaveri departmental stores could only secure the least preference of the customers. Vishal Mega Mart's first position may be due to its easy approach location and parking facilities, compared to other mega marts. The Critical Difference (C.D.) value indicated that though there were some differences in the overall ranking of different mega marts, but statistically Vishal Mega Mart, V-Mart and easyday were at par. These three mega marts acquired the 1st preference, while easy day and Kumar stores could secure the 2nd preference of the customers.
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Ranking of Mega Marts in Order of Preference for Shopping Malls Vishal mega mart Rank Assigned 1 106 2 57 3 51 4 22 (8.80) 23 (9.20) 38 (15.20) 69 (27.60) 96 (38.40) 5 14 (5.60) 18 (7.20) 23 (9.20) 78 (31.20) 94 (37.60) 7.89 .7892 3.83 II 2.57 I 3.56 II 2.83 I Mean Rank 2.30 Overall Rank I
Easy day
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Reasons for Preferring a Mega Mart A perusal of Table 3 shows that the vast majority, i.e., 79.20% of the customers agreed upon the convenience of the mega mart responsible for their preference. This agreement on convenience was followed by reasons like less time consuming (77.60%), safety (71.20%) and location (70.00%), while the lowest proportion, i.e., 62.40% of the customers agreed upon the uniqueness of the mega mart responsible for their preference for a mega mart. Extent of Agreement on Different Reasons for Preferring a Particular Mega Mart Reasons Safety (%) Convenience (%) Uniqueness (%) Less Time Consuming (%) Location (%) F-ratio C.D. Note: Overall performance is based on the value of C.D. Agree 178 Neutral Disagree Mean Score 45 27 (10.80) 4 (1.60) 35 (14.00) 22 (8.80) 10 (4.00) 9.21 0.1892 0.66 I 0.68 I 0.48 II 0.77 I 0.60 Overall Preference I
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(70.00) (26.00)
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Overall preference for a particular mega mart came to be the highest of the order of 0.79 (79%) in favour of convenience of the mega mart, while the lowest preference was found to be in case of uniqueness of the mega mart. The C.D. value indicates that the customers preferred a particular mega mart keeping in view the convenience and location at the 1st place, followed by safety, uniqueness and less time-consuming status at the 2nd place. Thus, the mega marts should be convenient in terms of space, product range, billing system, multiple choice, etc., and should be located within an easy approach.
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Safety and Parking Facilities The customers opinion regarding safety and parking facilities at the mega marts is contained in Table 4. As much as 51.20% of the customers were satisfied over the safety at mega marts, while 30.80% of the customers expressed dissatisfaction over the same. About 19% of them could not comment on the safety status at the mega marts. Overall safety could secure only 0.20 (20%) score by the customers. This shows that safety at the mega marts is poor.
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Extent of Customers Satisfaction on Safety and Parking Facilities at Mega Marts A. Safety Number of Customers 128 45 77 0.20 51.20 18.00 30.80 %
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Satisfied Neutral Dissatisfied Mean Score B. Parking Facilities Satisfied Neutral Dissatisfied Mean Score
96 67 87 0.04
As far as parking facilities at the mega marts are concerned, only 38.40% of the customers were satisfied, while 34.80% of them expressed their dissatisfaction over the parking facilities. The mean level of satisfaction over parking facilities at mega marts came to be 0.04(4%), indicating an overall dissatisfaction of customers over parking facilities at the mega marts. Utility of Mega Marts The customers were asked about their extent of agreement over different utility aspects of mega marts in terms of `agree', `neutral', and `disagree', and the same are presented in Table 5. It shows that the highest proportion, i.e., 98.00% of the customers agreed upon mega marts as a place to shop, while the least proportion, i.e., 42.00% took the mega marts as a place to socialize. The mean score of agreement ranged between 0.98 in favour of mega marts as a place to shop, and 0.19 in favour of mega marts as a place to socialize. The CD value conveys that the extent of agreement as a place to shop significantly came to be the highest, followed by a place to compare. The mega marts as a place of enjoyment and a place to experience, could secure the third rating, while 4th and
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the lowest stage rating was found to be in case of mega marts as a place to socialize. Thus, the mega marts are generally taken to be a place to shop and to compare. Extent of Agreement on Different Utility Aspects of Mega Marts Utility Aspects A Place to Shop (%) A Place to Socialize (%) A Place to Enjoy (%) A Place to Experience (%) A Place to Compare (%) F-ratio C.D. Note: Overall rating is based on the value of C.D. 13.05 .0932 120 104 26 (10.40) 0.38 III 150 67 33 (13.2) 29 (11.6) 0.59 II 0.47 II Agree 245 Neutral 5 Disagree 0 (0) 57 (22.8) 0.19 IV Mean Score 0.98 Overall Rating I
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(42.00) (35.20)
(70.40) (18.00)
(48.00) (41.60)
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Spending on Different Items The data given in Table 6 show that the highest proportion, i.e., 35.90% of the customers' total spending was incurred on clothings, followed by 16.56% on footwears, 14.98% on grocery and 12.98% on cosmetics. The lowest proportion, i.e., 0.82% of the total spending at mega marts was incurred on communication instruments, followed by 2.08% on artificial jewellery and 7.82% on cosmetics. Thus, it can be said that the mega marts emerged as the most common shopping centres for clothings. Average Proportion of Spending on Different Items at Mega Marts Items Grocery Cosmetics Jewellery Clothing Eatables Footwear Consumer Durables Communications Total 14.98 12.28 2.08 35.90 9.56 16.56 7.82 .82 100.00 Mean III IV VII I V II VI VIII Position (%)
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Preference for Different Sale Promotion Schemes A perusal of Table 7 leads to the fact that majority, i.e., 62.40% of the customers assigned 1st rank to cash discount offered at mega marts, while the least rank was assigned to guarantee/warranty by as high as 45.60% of the customers. The overall ranking based on C.D. value came to be 1st in favour of cash discount, followed by free gifts schemes and financing facilities, while the least and the fifth rank was found to be in case of guarantee/warranty, preceded by lucky draw schemes. This shows that cash discount and free gifts schemes emerged as the most common sale promotion schemes amongst customers at mega marts. Ranking of Different Sale Promotion Schemes Attracting Customers Most Promotional Schemes Cash Discount (%) Lucky Draw Schemes (%) Free Gifts Schemes (%) Financing Facility (%) Guarantee/ 1 156 2 46 Rank Assigned 3 24 4 15 (6.00) 71 5 9 (3.60) 77 3.54 IV Mean Rank 1.89 Overall Rank I
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Importance of Different Factors for Purchase Decision Some factors were identified which influence the decision making for purchase by the customers. The factors were rated as per the level of importance. The results are presented in Table 8. It is obvious from Table 8 that the highest proportion, i.e., 74.80% of the customers considered the quality of products as most important, followed by 63.60% in favour of discount. Ambience was the most important factor only for 8.40% of them, while only for 11.20%, the pressure from family members came to be the most important factor while making a purchase decision. The mean rating of factors in terms of importance came to be significantly the highest for quality and discount, followed by value for money. The 3rd rating factors were fixed prices and need-based purchases, while there were wide range of products and display of products which acquired 4th level of importance. The next level of importance, i.e., 5th level, was secured by international brands, socioeconomic status and behaviour of the staff, while packaging stood at the 6th level of importance. Advertisement influenced the purchase decision of customers at the 7th level, while pressure from family members and ambience could secure only 8th and 9th level of importance, respectively. Thus, quality and discount emerged as the most important factors influencing customers' purchase decision, while family members' pressure and ambience came to be the least important factors in this regard.
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Importance of Factors Considered by Customers while taking a Purchase Decision Unimportant MostUnimportant Mean Rating 1.65 I
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Important
Neutral
Quality
187
Important Most
56
Overall Position
Factors
(%) Wide Product Range (%) International Brands (%) Discount (%) Packaging (%) Advertisement (%) Product Display (%) Ambience (%) Value for Money (%) Need-Based Purchases (%) Family Members Influence (%)
(0.00) 20
IV
0.45
(22.40) (26.40) (34.80) (14.00) (2.40) 159 77 10 4 (1.60) 59 0 (0.00) 4 0.42 VI 1.53 I
(18.80) (36.00) (20.00) (23.60) (1.60) 36 (14.4) 86 89 66 59 0 (0.00) 5 (2.00) 28 -0.14 IX 0.91 IV 0.30 VII
(16.40) (39.20) (24.80) (11.20 ) 112 30 0 0 (0.00) 0 (0.00) 0 0.19 VIII 1.12 III 1.27 II
Socio-Economic 54
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Status (%) Behaviour of the Staff (%) Fixed Prices (%) F-ratio C.D.
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1.07
III
11.12 0.1191
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FINDINGS
1. In this study it is found that the customers prefer to purchase from organized retail outlets as compare to unorganized retail outlets. 2. During the study it comes to know that customers spend 40%-50% of their monthly budget at organized retail outlets. 3. In this study it is found that organized retail outlets provide better quality, product range as compare to unorganized retail outlets. 4. In this study it is observed that in future the market share of unorganized retail will reduce, because Customers shifting from unorganized retail outlets to organized retail outlets. 5. During study it is observed that these organized retail outlets attracting the middle & upper class customers, the lower class person still prefer to purchase from the local kirana stores. 6. the findings of the study conclude that majority of the customers are youngsters aged between 16-25 and among them more males from the urban sector visit mega marts. 7. From the utility point of view, customers were more oriented towards safety and parking facilities. 8. people are least bothered about guarantee and warrantee as compared to quality and discount that they prefer more.
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1. The organized retail outlets should improve the quality of Vegetables & fruits they provide to customers. 2. The organized retail outlets should provide the free home delivery facility. 3. The organized retail outlets should increase the no. of billing counters in their outlets. 4. The organized retail outlets should also provide the credit facility to the lower class customers so that they can increase their market share. 5. The organized retail outlets should also provide the mobile van facility in the areas which are far away from the stores. 6. to attract the rural sector customers, mega marts may extend their advertisements offering special sale promotion schemes to the rural areas. 7. The customers are dissatisfied with the safety and parking facilities at the mega marts. Therefore, they should concentrate on developing these aspects properly, besides extending more cash discount and free gifts schemes to attract the customers at a higher level. 8. The mega marts should focus on quality, discount and attractive display of products, as these are very important factors considered by the customers while making purchase decisions.
LIMITATION
Due to the constraints of time, the study was confined to DEHRADUN city. The sample was taken on the basis of convenience; therefore the shortcomings of the convenience sampling may also be present in this study. The sample size chosen for the purpose was only indicative and not exhaustive owing to time constraints. There were some inherent limitations as far as collection of data is concerned. The respondents replied may be biased in favour of their centres.
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SUGGESTIONS
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CONCLUSION
The crux of the study is that most of the customers prefer to purchase from organized retail outlets as compare to unorganized outlets. Also its found that most of the respondents are satisfied with the quality, price and product range of the goods provided by organized retail outlets. In this study it is found that customers want to spend more at organized retail outlets in comparison to other local Kirana stores. During the study its also found that customers were happy from the services provided by organized outlets. This study also revealed that customer prefers the organized retailing over unorganized retailing, due to which the organized retailing become a threat to the local kirana stores & street hawkers.
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ANNEXURE
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1.
16 25 years 46 55 years
26 35 years 56 65 years
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2.
Gender :
Male
Female
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3.
Matriculate
Intermediate
Graduate
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20092011
Questionnaire
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4.
Note: Circle your Responses 5. Please indicate how important or unimportant each of the following characteristics is Important 5 5 5 5 5 Unimportant 1 1 1 1 1
(a) Safety (b) Uniqueness (c) Less Time Consumption (d) Location (e) Parking
4 4 4 4 4
3 3 3 3 3
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Post Graduate
Beyond PG
2 2 2 2 2
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6.
Please indicate the extent to which you agree or disagree with the following utility aspects of organized Retail Outlets. Strongly Agree 5 5 5 5 Strongly Disagree 1 1 1 1
(a) A place to shop (b) A place to socialize (c) A place to Enjoy (d) A place to experience
4 4 4 4
3 3 3 3
2 2 2 2
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7.
Please rank the following sales promotion schemes as per the degree of attractiveness. Attractive 5 5 5 5 5 Unattractiveness 1 1 1 1 1
(a) Cash Discount (b) Lucky Draw Scheme (c) Free Gift Scheme (d) Financing Facility (e) Guarantee / Warranty
4 4 4 4 4
3 3 3 3 3
2 2 2 2 2
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8.
Kindly indicate the importance of each of the following while making a purchase decision. Most Important 5 5 5 5 5 5 5 5 5 5 5 5 Most Unimportant 1 1 1 1 1 1 1 1 1 1 1 1
(a) Quality (b) Wide Product Assortment (c) Fixed Price (d) Presence of International Brands (e) Discounts (f) Packaging (g) Advertisement (h) Display of Products (i) Ambience (j) Value for Money (k) Socio Economic Status (l) Behaviour of Staff
4 4 4 4 4 4 4 4 4 4 4 4
3 3 3 3 3 3 3 3 3 3 3 3
2 2 2 2 2 2 2 2 2 2 2 2
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BIBLIOGRAPHY
WEBSITES:
Books
Kothari.C.R, Research Methodology, New Age (P) Limited, Second Edition, 2004. Pillai & Bagavathi, Marketing management, New Delhi, sultan Chand & Sons, 1999. David Gilbert, Retail Marketing Management, Prentice Hall, Second Edition, 2003.
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