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Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.1 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
“A study on the customer perception towards unorganized grocery retailing in
North Bangalore”
by
Dr. Ritika Sinha[a] &
Prof. Mohammed Naveed
[b]
ABSTRACT
The beginning of retail business in India can be traced back to the emergence of weekly
bazaars and rural fairs (melas). These weekly bazaars, used to be big attraction to both urban and
rural people by catering their day to day requirements of grocery, utensils, spices, grain, clothing,
livestock, wooden/handmade candles, fruits etc. besides serving source of entertainment. In
comparison to weekly markets, village fairs usually were bigger in size with a wide variety of goods
sold from handmade items, food, clothing, cosmetics and small consumer durables.
Then the traditional age saw the emergence of the neighbourhood ‘kirana’ stores (usually
known as convenience stores or mom-and-pop stores) to cater as per the convenience of the Indian
consumers.
Today, the Indian retail industry together organized and unorganized employs 40 million
people becoming the second largest employment provider in the country after agriculture. For every
one thousand people 11 outlets are found. The large portion of Indian retail sector operates under
unorganized sector with over 90% of the industry share.
The unorganized retail shops/ stores run low on some critical factors which may become
decisive in the coming future with all the changing preferences of customers, exposure to
westernisation, economic shift in the societal class, changing income patterns, customer oriented
marketing efforts and ever changing technological changes etc.
As a proverb it is said that ‘the only thing that doesn’t changes is the change’, it can be seen
in retail sector as the customer perceptions and expectations are ever changing and hence it becomes
essential for the retailers to have a system in place to continuously watch or predict these changes
proactively.
This paper is intended to study the customer perception towards informal/ unorganized retail
shops with reference to grocery in northern part of Bangalore.
Keywords—Retailing, Unorganized industry, Customer’s perception, Organized
[a]
Dr. Ritika Sinha
Associate Professor,
Canara Bank School of Management Studies,
Bangalore University, Bangalore
[b]Prof. Mohammed Naveed U
Assistant Professor,
Dept. Of Management Studies,
HKBK College of Engineering &
Research Scholar,
Canara Bank School of Management Studies,
Bangalore University, Bangalore
E mail: [email protected]
1. Introduction
Traditional retailing/Unorganized retailing continues to be the backbone of the Indian retail
industry, with traditional/unorganized retailing contributing to over 95 per cent of total retail
revenues. The prototypical ‘baniya’outlets or the corner store formats compromise a key part of
Indian retail store formats mostly run as small family businesses. The unorganized retailing
comprises of ‘mom and pop’stores or ‘kirana’stores.
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.2 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
These are very small shops located near the residential areas, popularly known as ‘baniya
shops’. The UMP (Unique Marketing Preposition) of these stores is location advantage. These shop
owners in order to retain their customers can even go their customers’ houses to get orders. Trading
hours are flexible and the retailer to consumer ratio is very low due to the presence of several
‘kirana’stores in the locality. Credit facilities vary from store to store and customer to customer.
Customers’ reliability and relation with the shop keeper is enough to avail credit facilities.
Branding is not the criterion to attract the customers, as customers prefer low priced
products. Further, retailers’ suggestion and recommendation regarding any product or service plays
a significant role in the customers purchase decision.
Indian consumer categories
Source:
In India, the retail sector is the second larger employer. The retailing sector in India is
highly fragmented and consists huge number of small, independent and owner managed shops.
There are some 12 million retail outlets in India. Besides the country is also dotted with low cost
kiosks and pushcarts. In 2001, retail trade in India was worth Rs. 11226.7 billion.
There has been a boom in the retail trade in India owing to a gradual increase in the
disposable income of the middle class households. More and more players are venturing into the
retail business in India to introduce new and innovative techniques to meet the changing ideology
and the mind-set of the customers in this modern era.
2. Objectives
1) To study the customer mindset towards unorganized retailing.
2) To study the factors which are considered for positive perception among customers.
3) To know the importance of creating positive impression in the minds of customers.
3. Methodology
The nature of the present study in descriptive. The information for the current paper had to
be gathered from both the sources (internal as well as external). The primary data was collected
from approximately 100 respondents in a simple random sampling method. The secondary sources
like Text Books, Newspapers, Magazines, Journals, websites, and conference proceedings.
Indian consumers
0 20 40 60 80 100
Very rich
Consuming class
Climbers
Aspirants
Destitutes
million households
2006-07
2001-02
1995-96
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.3 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
An objectively structured questionnaire was framed using different types of scaling and
rating methods to bring the insights of informal/unorganized retail customers in and around the parts
of North Bangalore. The primary data was gathered by administering a structured questionnaire with
100 customers of selected areas of North Bangalore city.
The selection of customers was based on the convenient sampling, according to the
availability of them in a specified time period of the data collection.
3.1 Data Analysis
The collected data was analysed using Percentage analysis and also making use of rating
method.
3.2 Limitations of the Study
Sample size may not be too feasible for the large population of the area where
the study is conducted.
It is limited to very small area as only selected parts of North Bangalore is
chosen.
Hence the results cannot be generalized as the retail sector is very large.
Following are some of the characteristics of retailers operating under unorganized sector:
Criteria Features
Ownership Household Business
Size of operation Small store
Nature of employment Generally family members
Product availability Selective range of branded and unbranded
products
Selling price MRP
Store ambience Average
Promotions Usually depend on company promotions only.
Tax payment Usually taxes are evaded
Market experience Long term
Locations Round the corner located
Technopak Advisors Pvt. Ltd have estimated the category wise share of different
consumer items traded under both unorganized and organized retail in India as on 2006,2011 and
projections of 2016.The details of these estimates are given as under:-
S.No Category 2006 2011 2016 CAGR %
(2011-16)
1 Food and Grocery 217 325 425 5.50
2 Restaurants & Food Junction 4.6 8.8 15.8 12.50
3 Apparel 25 35 50.2 7.50
4 Furniture & Furnishings 6.5 9.1 17.1 13.50
5 Healthcare & Fitness services 0.4 1 2.5 20.00
6 Consumer Electronics
&Information Technology
16.5 22.7 42.8 13.50
7 Pharmacy 8 13.9 23.4 11.00
8 Jewellery, Watches etc 16.5 25.6 44.2 11.50
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.4 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
Source: Computed from Technopak Advisors Pvt. Ltd data
From the above listed table it can be affirmed that Food and Grocery constitutes the bulk of
Indian retailing and its share is estimated at US$ 325 Bn in 2011 (69% of the overall retail ) and is
expected to grow to US$ 425 Bn by 2016 (63% of the overall retail ), @ CAGR of 5.5%.
Apparel market in India is estimated at US$ 35 Bn in 2011 and is expected to grow to US$
50 Bn by 2016, @ CAGR of 7.5%. The next in importance is clothing and footwear, the share of
which has been about is estimated at US$ 5.5 Bn in 2011 and is expected to grow to US$ 8 Bn by
2016, @ CAGR of 8.5%.This has been followed by others like furniture, furnishing, appliances and
services whose share rose.
4. Data Analysis And Interpretation
Description of the sample
Profiling variable Details Percent
Gender
Female
Male
68
32
Age
15-25
25-35
35-45
Above 45
22
29
30
19
Profession
Employed
Professional
Business
Student
22
45
14
19
Family size
Family with no Kids
Family with 1 kid
Family with 2 kids
Family with above 2 kids
12
33
29
27
Monthly Income
Student
10000-14999
15000-24999
25000-34999
Above 35000
16
62
14
5
3
Monthly spending on consumables 1000
1001-2000
2001-3000
Above 3000
18
33
37
12
9 Beauty services 0.6 1.3 3 18.00
10 Footwear 3.6 4.5 8.3 13.00
11 Others 11 23 42.5 13.10
Total US $(Bn) 310 420 675 7.50
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.5 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
Table 1.0 shows customer response on various attributes of unorganized or informal stores.
Table 1.0
Attributes Extremely
satisfied Satisfied Neutral Dissatisfied
Extremely
Dissatisfied
Store image 7 22 15 35 21
Range of product
availability 3 21 42 14 20
Brand choices 2 20 37 31 11
Prices 13 25 40 18 4
Product freshness 0 32 24 21 23
Customer care 4 21 25 35 15
Store ambience 2 14 25 31 28
Credit availability 3 20 26 38 13
complements 0 12 31 32 25
Inference: From the abvoe table it can be inferred that product freshness and the prices are
the features which seems to be satisfying customers with a reasonable percentage of respondents,
where as, other attributes such as range of product, credit availability and customer care getting a
neutral response. Finally store image, brand choice, customer care, store ambience, complementary
attributes seems to be dissatisfying for the respondents.
Table 2.0 shows the unavailaility of products with informal retailer and table 3.0 shows the
various motives of purchases with informal retailer.
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.6 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
Table 2.0
Availability of Products Percentage
very Often 13%
Often 21%
Rarely 29%
Not at all 37%
Table 3.0
Motive of Purchase Percentage
Based on Need 79
Impulsive purchases 21
Inference: From the abvoe table it can be analysed that the product availability doesn’t
seem to be at serious levels as many respondents does get the products which they regularly
consume or buy where as still a considerable percentage of respondents do not get the products of
their choice.
From the above table it can also be seen that most of the customers of informal retailers are
driven by need based rather than impulsive purchases.
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.7 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
Table 4.0 shows the availability of variety with informal retailers and tabel 5.0 shows the
action taken by respondents for not finding the product with the informal retailer.
Table 4.0
Availability of Variety and Assortment Percentage
Good 21%
Fair 36%
Low 43%
Table 5.0
Action for not finding the product Percentage
Postpone the purchase 21%
Buy from another Retailer 69%
Forego the Purchase 10%
Inference: From the above tables it can be analysed that the respondents do not find the
variety and assortment to be adequate and thus find it to be low, whereas a considerable amoutn of
respondents feel it to be fair enough and a interestingly a reasonable percentage of respondents find
it to be good enough.
From the above table the respondents loyalty can be measured as they are low in terms of
showing loyalty towards retailers as they simply buy it from other retailer if they do not get the
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.8 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
product from the existing retailer. There are very low percentage of respondents who feel they
forego or postpone the purchases by not finding it with the exiting retailer.
Table 6.0 shows the Promotional factors which influence the customer’s perception and
table 7.0 show the various factors that influence the customer’s purchases.
Table 6.0
Influencing Factors Percentage
Advertisement 23%
Attractive Display 65%
Suggestion from Friends & Relatives 12%
Table 7.0
Factors influencing Customer Purchases Percentage
Price 53
Quality 21
Packaging 8
Shape 8
Brand/image 10
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.9 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
Inference: From the above tables it can be analysed that attractie POP (Point of Purchase)
and other displays drive the customers impulse which prompts customers to buy.
From the second table it can be seen that price is the most influencing factor that drives the
customers to purchase from informal/ unorganized retailer, where as, rest of other factors doesn’t
seem to be inflencing to a great extent.
5. Suggestions based on the study
It is a good prospect for the informal retailers that the customers from age
group 25-35 and 35-45 are at large. Hence, they should try to retain these customers interest
with creative and innovative policies in pricing and promotion.
The retailers in unorganized sector are running low on store ambience and
credit facilities as they should try to improve on these factors.
The retailers must adopt customer orientation techniques such as CRM, good
customer care and complementary techniques as most customers do not find it to be good
enough.
The informal retailers should cash on the positive attributes like product
freshness and low prices as these are the most preferred attributes of unorganized retailers.
The Informal retailers should make products available which are high on cir-
culation so that the needs of all customers can be satisfied under one roof.
The retailers in unorganized sector attract more of need based buyers and
hence should try to attract more impulsive buyers as the retail sector is known for impulse
purchases.
It is seen that majority of customers in the study feel that informal retailers
run low on variety and assortments, hence, this should be countered for better prospects to re-
tain customers by creating brand loyalty.
As various previous studies have revealed that attractive displays play a vital
role in promoting the product than any other means especially in retail sector. Hence, informal
retailers must also make use of such techniques more efficiently.
Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online) Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 8 No. 8 Oct 2014
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.10 Acme Intellects Research Center- A wing of Help to Help Charitable Trust®
6. Conclusion
With respect to the set objectives, following are the conclusion derived out of the study:
Pricing of the product has a great impact in deriving consumer perception while shopping
for grocery especially in unorganized retail market. The extent to which consumer‘s perception is
effected, decides the nature of the particular consumer‘s buying behavior. The buying behavior in
turn affects the way a consumer behaves towards the products that are availability with retailers.
Socio economic status and convenience of the consumer play very important role while purchasing
groceries.
The study establishes the fact that the players in the unorganized retail segment needs to do
more in today’s world of changing perception and to live up to the expectations of the customers to be
on competitive map.
7. References
1) Kotler, Philip (2004), “Managing Product Line, Brands, and Packaging”, Prentice Hall of
India, N.Delhi .
2) Schiffmann, Leon G., and Kanak, Leslie Lazar (2005), “Consumer Perception”, Consumer
Behaviour, Prentice Hall of India .
3) Aaker., David A., and Batra, Rajeev and Mayers, John G. (2000), “Brand, equity, image and
personality”, Advertising Management Prentice Hall of India, Pg 316-317.
4) Berman & Evans, “Retail Management # Strategic Approach”, Prentice-Hall of India, 9th
Edition.
5) Swapna Pradhan (2004), “Retailing Management”, Tata McGraw-Hill, N. Delhi.
6) Urvashi Gupta (2012), „Changing Consumer Preferences From Unorganized Retailing To-
wards Organized Retailing‟ Journal of Emerging Knowledge on Emerging Markets, Volume 4, Nov-
2012.
7) Arshad, S.A. and Hisam, M.W. (2008) “Issues in Retailing”, Research in Management and
Technology, Ed. by Aneet and Ramanjeet Singh, Deep and Deep Publications Pvt. Ltd., pp 109-118.
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10) Gupta, Urvashi (2012), “Impact of Organized Retailing on Unorganized Sector”, A study in
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organized retailers when shopping for groceries?” Asia Pacific Journal of Marketing and Logistics,
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13) www.researchandmarkets.com
14) www.ciionline.org
15) www.retaileducation.ca
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