1. Introduction

1.1 Introduction

Established in 1952 with the pioneer department store of the city, H Karim Buksh (Pvt)

Ltd., the owning company of HKB Stores consists of three large departmental stores

located in Pakistan’s historical and cultural capital, Lahore, a city of over 9 million

people. Employing over 400 dedicated team members, HKB enjoys the trust and

confidence of over 7 million customers annually

HKB has an air-conditioned selling space of over 70,000 square feet, with both stores

being located in the city’s premier shopping areas, in terms of infrastructure, access,

and affluent shopper traffic. The stores feature the following departments:

• Brand name imported and local Groceries including meat and vegetables• Cosmetics, • Fabrics (Ladies and Gents), • Garments (Ladies, Gents and Children), • Toys • House Hold Linen• Crockery• Traveling Goods • Variety of Leading Brands from all over the world in the Gifts section.

1.1.1 Values

HKB pride itself on simple, old-fashioned values of customer care, and pioneering new

ideas when others shy away from the risks. This forward looking vision has led them to

build constantly and provide the best value for the customer’s money. Building amid an

uncertain environment has its challenges, but HKB knows of no other way to make HKB

a grand shopping experience for the entire family.

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1.2 Management

From its family origins over 50 years ago, HKB today is proud to boast a combination of

educated and cosmopolitan family top management and young professionals. The

company founder has held top positions in the local Chamber of Commerce and

Industry and the second generation Chief Executive is a graduate of the country’s top

business school. HKB enjoys the respect and support of leading businesses and

financial institutions of the country, and are proud of their spotless financial and

business reputation.

They are currently undertaking complete POS modernization featuring Retail-Pro and

are also building a company warehouse to ensure ready and complete supplies of

goods for our stores.

With their rapidly growing team of professionals and the systems development initiative,

HKB confidently positioned for high growth in a market that offers tremendous potential

to a well-managed retailer. It recognizes that much of this growth can, and should be

shared with leading foreign brands, and the association with Levi’s marked the first

tangible step in this direction.

1.3 Product

The wide and growing range of products available at HKB comes from years of trusted

and reliable sourcing. Whether it offers leading brands, sourced from local suppliers

both multi-national and indigenous, or whether they have to travel to the best known

wholesale centers of the world, it takes pride in personally ensuring that only carefully

chosen merchandise makes its way to the sales floor.

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The amazing speed with which a mind boggling range of products become available

round the world has led us to constantly seek dependable and reputable suppliers.

Today HKB is proud to be working with over 1200 vendors from 12 countries. The

relationships have been long and reliable, which provides the customers consistency

and variety all year round.

1.3.1 Grocery

Brand name imported and local Groceries including meat and vegetables, freshly flown

in Haagen Dazs ice cream and choicest chocolates such as Lindtt, Cadburys,

Toblerone, and After-Eights …just shows the reliability it has built into its global supply

chain. Virtually every product the customers can imagine for their household and

kitchen, including a complete range of oriental cooking provisions is always available in

fresh and plentiful quantities. And no grocery would ever be complete without the fresh

fruit and vegetables that the land of five rivers, the Punjab brings forth.

With HKB’s hygienic meat processing under controlled cooling and ventilation it ensures

the finest and healthy cuts on the dining tables. No matter what the customer crave,

fish, chicken, veal, mutton, or quality beef, HKB promises never to feed its customers

what they would not place at their own tables. And as the customers broaden their

tastes HKB would not be left behind and now offer a growing range of organic products.

1.4 Competitors

The competitors of HKB include Al-Fatah, Pace, Jalal Sons, Decent Store, Tes Mart and

other small and big grocery stores.

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1.5 Problem Definition

1.5.1 Problem Background

HKB started its business in 1952. At that time, it was considered to be one of the finest

departmental stores around. But, in recent years, many big departmental stores have

entered the market including Al-Fatah, Jalal Sons and Pace etc, the grocery sales of

HKB have not increased to a great extent.

1.5.2 Research Problem

“The grocery sales of HKB is stagnant in the market”

1.5.3 Research Objectives

Specific objectives are as follows:

To review the existing marketing system of grocery in the store. To assess the satisfaction level of the customers particularly grocery customers. To suggest measures for improving the satisfaction level of the customers.

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2. Review of Literature

2.1 Ahsan Rehman (2002)

In 2002, when HKB was going very successful, a research was conducted by Ahsan

Rehman. At that time Al-Fatah and HKB retail stores were competing with each other.

Both of them were building strategies to dominate the other. The purpose of the

research was to differentiate between both the stores and to calculate the market share

of both the stores on the basis of the customer response.

2.2 Nauman Asghar/ Suffian Asghar (2004)

Nauman and Suffian Asghar conducted a similar kind of research Their major focus was

on Pace Grocery section. They compared the Pace grocery section with both Al- Fatah

and HKB and in the end on the basis of research they decided that out of three which

one was most preferred by the consumers.

2.3 Uma Sekran (2004)

Uma Sekran wrote a book on Research Methods and Techniques. This book contains

methods that are quite useful for my research purpose. It has given the tools and

techniques that would help me during my research work. There were case studies that

were related to my research work. According to this book the research purpose should

be clearly defined and the steps in the research study should be followed. The first step

is to identify the problem, then write down the problem statement, data collection, data

analysis, evaluation of alternatives and then the research problem. The book also

contains a case study. According to this case study, the cradle of Indian handicrafts is

good example of how an organization can benefit through research because of solid

research they have many offices in different countries like Egypt, Italy and Taiwan, in

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addition to full fledged working office in India with six staff members and a general

manager. Through research the India office supervises the artisans, places, production

orders, and ensures quality control and strict adherence to the specification of the

orders. It also attends to detail connected with shipment of goods deal with the local

customs and oversees the payments related to the shipments. Through qualitative

research they get many benefits which were best for their organization and its growth.

2.4 HEALTH MAINTENANCE ORGANIZATION By (Akkar/Kumar/Day)

There are two basic kinds of health coverage. The health maintenance organization is

the best example of the prepaid group-practice type. This involves fixed monthly

payments directly to a group of doctors or clinic that is then responsible for all the health

needs coverage by the pain. The other type of coverage is the insurance type which

involves a company that collect premiums from subscribers, who can go to any clinic or

doctor they choose. The insurance company pays for the service covered by the policy.

In both cases there may be limit to the coverage of such items as hospitalization, drugs,

and office visits. The big drawback of HMO is restriction of the choice of physicians and

hospitals those affiliated with HMO. Generally, the total annual cost of HMO to the

consumer is lower than for group insurance plan. Once reason is that flat fee formula

discourages doctors from hospitalizations patients for longer than necessary Also, the

emphasis on preventative care produces fewer seriously ill patients.

Leading HMOs experimenting with the demi-science called alternative medicine

hoping to cure ills when regular medicine fails.

All doctors agreed that one way to keep initial costs down was to concentrate one larger

employers group. This meant that a two-stage marketing effort would be required, first

to get employer to agreed to offer the HMO plan as a subsided benefits and then to

persuade the employees to switch from their present health care plan.

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They should use the research objectives

1. General attitudes and awareness with respect to health care and the concept of

prepaid plans; and specific attitudes and knowledge regarding existing health

plans.

2. Process by which present plan was selected; sources of information and

influence.

3. Satisfaction with present plan overall with respect to specific characteristics of

The plan and intention to change.

Survey Methods for HMO Study

1. A telephonic contact was made with each household named in the sample to

determine the head of the household and obtain that person’s agreement to

participate. To minimize non response bias, at least five telephone call-backs

were made.

During the telephone call, arrangements were to deliver the questionnaires, and a pick-

up time was set.

2.5 Thomas. C. Kinnear and James R. Taylor

Thomas C. Kinnear and James R. Taylor discuss various methods of conducting a

research. The methods include data collection through Focus Groups, through

questionnaires, observations etc.

The basic studies like exploratory, descriptive research, causal research are also

explained in the book in detail. Furthermore, suggestions are also given in this book for

the selection of appropriate method for a particular project. This book also highlights the

basis and techniques that should be used during the designing of a questionnaire.

These techniques were very important since in maintaining a response a good tool is

required.

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2.6 Asad Ali (2006)

Asad Ali conducted a research on the satisfaction level of the customers of HKB store.

In this research he compared the customers of Al- Fatah with the customers of HKB.

According to his research Al- Fatah customers were more satisfied as compared to HKB

customers. The basic reason was that the employees of Al- Fatah were more

knowledgeable and the store is more user friendly as compared to HKB.

2.7 Nasreen Khalid (2007)

Nasreen Khalid did a useful survey regarding the market share of different Retail stores

in Lahore. Her research was based on the preference level of customers of different

demographics and professional backgrounds. Her research findings showed that the

market share of Al- Fatah is the most, followed by HKB. The interesting point of the

result was that although Al- Fatah only has one branch, yet it is leading the market.

2.8 Business Monitor International (2009)

Business Monitor International published a report on April 16, 2009 about the current

food and drink industry of Pakistan. This report is very comprehensive and covers

different areas of the industry by having a macroeconomic overview of the current

scenario. It also gives details about the mass grocery retail business, its SWOT analysis

and the leading players in this business.

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3. Research Methodology

HKB retail store is one of the best retail stores in Lahore. Still it is observed that some

people are not yet satisfied with HKB services. It is very important to evaluate these

dissatisfaction factors. It is very hard for three outlets to compete with so many

competitors. As compared to HKB, many retail stores like Pace, Decent Store are

increasing their branches. Hence the purpose is to evaluate the quality and

competitiveness of the grocery section of HKB. Research is Applied Research. The

research conducted will be both qualitative and quantitative in nature. Therefore, for the

purpose of research both a primary and secondary research will be conducted.

3.1 Specific

The basic emphasis of the research is on the quality of retail grocery section. The

quality would be measured on the basis of five quality dimensions responsiveness,

reliability, assurance, empathy and tangibles.

3.2 Data Collection

The data will be collected from both secondary and primary sources. The secondary

sources will be the available data from HKB annual reports. The primary sources will be

face to face interviews with people shopping at the grocery section of HKB and by

distributing questionnaires.

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3.2.1 Primary Data

Target Population

The decision making regarding grocery items is normally done by the female category.

Hence, the target population will include all those people who will be purchasing from

the grocery section.

Sample Size

In this research work 50 questionnaires will be distributed to different outlets of HKB

store in different areas. The sample is categorized in the following manner:

HKB 1 (20)

HKB 2 (20)

HKB 3 (10)

Total (50)

Sampling Procedure

The product nature would allow using non-probability sampling. The sampling will be

done on non- probability and convenient basis.

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Data Collection Methods

Depending on the nature of the project, combination of descriptive and exploratory

research will be used to conduct the study. The descriptive research would be used to

evaluate the overall scenario of the company. Exploratory research would be used to

identify variables for the grocery section of HKB. The various quality dimensions would

also play a substantial role during research work. Data collection method will be Face to

Face interviews at mall.

Data Collection Instruments

Data collection instruments would be questionnaire with the customers and

management, observation for supporting and other secondary instruments.

3.3 Data Analysis Techniques

3.3.1 Basic Statistical Techniques

Descriptive statistics was the technique used in data analysis. These techniques were

helpful for the accurate findings. Descriptive statistics includes mean, median, mode

and range.

Mean: x = ( Σ xi ) / n

Median: (n+1)/2

Mode: Number with most occurrences

Range: Maximum value- Minimum value

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3.4 Data Presentation Techniques

Frequency tables will be used, along with pie charts and bar charts for better

understanding of results.

3.4 Limitations

3.4.1 Limitations for Secondary Data

Non accessibility of data.

Less secondary information available.

Data available was outdated.

3.4.2 Limitations for Primary Data

Refusal Rate of respondents.

Biasness.

Exact response might be missing.

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4. Results and Discussions

Research conducted in order to find the reasons of stagnant sales of HKB grocery

section gave useful results through primary and secondary data so that

recommendations should be given to overcome this problem.

4.1 Survey Results:

4.2.1 Respondent Differentiation

Respondent differentiation means gender wise classification of the people who make

purchase at the HKB grocery section.

Figure 4.1 Gender wise Respondents Differentiation

50 respondents were distributed the questionnaires. Out of those 50, 25 were male

respondents, 22 were female respondents and 3 respondents did not mention their genders. It

means that the respondents were almost equally differentiated on the basis of their gender.

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50%44%

6%

0%

10%

20%

30%

40%

50%

60%

Male Female NotMentioned

Series1

4.2.2 Decision making in Household Grocery Purchasing

Figure 4.2: Decision Making in Purchase

Most of the respondent surveyed about the household grocery said that they

themselves buy grocery for their household use i.e. 61% bought grocery themselves

and 8 % said that their spouse do the grocery for their home and 30% of the

respondents said that their Mother or Mother in Law did the shopping for their

household.

4.2.3 Purchasing Regularity

Purchasing regularity means the consistency with which the buyers come to the store

for their grocery shopping. This would tell about the repeat purchases done by the

customers of HKB grocery section and would help to solve the problem more

accurately.

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61

8

30

0 20 40 60 80

self

spouse

mother

Table 4.1 Purchasing Regularity

The Table 4.1 shows that the respondents are asked about the frequency of purchasing

from HKB.

4.2.4 Quality Measurement by the Consumer

Customers have different perception about quality depending on various factors. Some

of these factors relating to the grocery store were presented to the customers in the

questionnaire for the quality measurement.

Figure 4.3: Measurement of Quality

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Frequency Percent Valid PercentCumulative

Percent

Valid Once a week 11 31.4 35.5 35.5

After 2 weeks 12 34.3 38.7 74.2

Once a month 5 14.3 16.1 90.3

More than 1 month 3 8.6 9.7 100.0

Total 31 88.6 100.0

Missing No Response 4 11.4

Total 35 100.0

25%

26%21%

18%

7% 3%

Convenience

Availability

Proper Functioning

Environement

EmployeeBehaviour

Other

For the customers, quality is being measured differently. Figure 4.3 clearly shows that the

customer measurement of quality is different. The majority of customer believes that employee

behavior is most important factor for the measurement of quality. Similarly, Convenience and

Proper Functioning also have a greater effect on the customer’s perception.

4.2.5 Availability of Brands

The availability of brands means whether the desired products and different brands in

those product categories are present at the grocery section of HKB stores or not.

Figure 4.4: Availability of Brands/Products

More than half of the respondents believe that the desired products and brands are available at

HKB. The respondents believe that the brand is available most of the time and they are satisfied

with the availability of the products and the desired brands but some were of the opinion that the

desired brands are sometime not available during the hour of need.

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33.3337.78

22.22

4.442.22

0.00

10.00

20.00

30.00

40.00

RATINGS

Series1 33.33 37.78 22.22 4.44 2.22

Strongly Agree Agree Disagree Strongly Disagree Not sure

4.2.6 External Environment

External environment means the availability and convenience of parking the vehicle outside

HKB store. The customers are not satisfied with the parking of HKB since they had to face a lot

of hazards regarding the car parking. 86% of the respondents were not satisfied with the parking

facilities offered by the store. This is a big issue that might affect the sales of HKB Store.

4.2.7 Internal Environment

The internal environment includes all those factors inside the store and particularly in

the grocery section which also play an important part and affect the consumers in one

way or the other. The internal factors that were included in the questionnaire were

timely opening and closing of store, functioning of checkout counters, the internal

environment and waiting in the queue for billing process.

Figure 4.5: Timely Opening and Closing of Store Figure 4.6: Functioning of Checkout Counters

Figures 4.5 shows that more than half of the customers are satisfied with the timely

opening and closing of the store and figure 4.6 shows that almost half of the

respondents are not satisfied with the functioning of the checkout counters.

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54%

20%

26%

Yes

No

Don’t Know

32%

48%

20%

Yes

No

Don’t Know

Figure 4.7: Is Environment User Friendly Figure 4.8: Wait for Billing of Products

Figure 4.7 shows that half of the respondents are not satisfied with the internal

environment of the store and don’t feel comfortable enough while shopping and figure

4.8 shows that customers have to wait for too long in the queues for the billing of the

grocery products and this whole process consumes a lot of their time.

4.2.8 HKB Advertisement

Advertisement and promotion plays a very vital role in the success or failure of a

product in today’s world. Any company needs to target its potential customers with

effective advertisements in order to attract them and make them buy the product

offered. If there are bi promotional tools used, the potential customers would never

know what the company has to offer them and they would never go out to buy it.

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44%

50%

6%

Yes

No

Don’t Know

70%

4%

26%

More

Less

Moderate

Figure 4.9:

More than 50% of the respondents said that they have never seen any outdoor advertisement from HKB and about 32% responded positively and said they have come to buy from HKB after watching a certain advertisement.

4.2.9 Employee Response

Employee response means how the sales persons and other management employees

behave and facilitate them in purchasing the grocery items from the store. Employee

knowledge about the products and their overall attitude were measured in the

questionnaires which were distributed to the respondents.

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32.2

15.6

52.2

0

10

20

30

40

50

60

Yes No response No

Have you ever seenHKB advertisement?

Figure 4.10: Employee Attitude Figure 4.11: Knowledge of Sales People

Figure 4.10 shows that the respondents are satisfied with the employee attitude. But figure 4.11

shows that majority of respondents believes that sales people does not have the required

knowledge about the products at HKB especially th.se who have been hired at the branch being

recently opened.

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60%

38%

2%

Yes

No

Don’t Know

42%

45%

13%

Yes

No

Don’t Know

5. Conclusions and Recommendations

5.1 Conclusions:

Some of the conclusions of this research study are as follows:

The customers are satisfied with the availability of products.

The internal and external environment is also quite satisfactory.

Parking is a big issue. The customer finds it difficult to park their vehicles.

The employee behavior is satisfactory but their knowledge is not up to the mark especially in the outlet that has recently been opened.

Cash counter problem is also noted since the customer had to wait for a long time for the billing of products.

The customer feels quite pleasant when they enter the HKB Retail Store.

The environment is considered user friendly.

5.2 Recommendations:

Following are few recommendations to HKB for the solution of the concerned problem:

The employees should have more product knowledge.

Parking problem should be solved immediately to avoid further sales damage.

In order to increase market, special focus should be given to customer retention.

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HKB should use different promotional tools and techniques to attract new customers.

HKB should give cuts, discounts on purchasing constantly its product like membership discounts.

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Bibliography

Electronic Sources

Google.com

Yahoo.com

Datamonitor.com

Non – Electronic Sources

Magazines

Uma Sekran (Research Methods & Techniques)

Thomas Kinnear and James R. Taylor (Marketing Research)

Ahsan Rehman (2002)

Nauman Asghar/ Suffian Asghar (2004)

Akkar/Kumar/Day

Asad Ali (2006)

Nasreen Khalid (2007)

Business Monitor International (2009)

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Appendix 3.1

QUESTIONNAIRE

Name: Gender: Age:

Institute of Management Sciences (IMS)

Note: I am a student of IMS and I am conducting a survey on HKB Store. Kindly,

oblige me with your precious time and fill the following set of questions. However it is

made sure that your personal information will be kept confidential, and the purpose of

this study is solely academic and not for business purpose.

Q: How often do you visit HKB for grocery shopping?

Daily 2-4 Times a week once a week

1-2 times a month

Q: Are the desired products / brands always available at HKB?

a) Yes b) No c) Don’t Know

Q: Do you think store opens and closes at mentioned time?

a) Yes b) No c) Don’t Know

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Q: Are all the checkout counters functioning all the time?

a) Yes b) No c) Don’t Know

Q: Do you think the attitude of the employees is friendly towards the customers?

a) Yes b) No c) Don’t Know

Q: Does the sales people have required knowledge about the product?

a) Yes b) No c) Don’t Know

Q: Do you find car parking outside HKB easily?

a) Yes b) No c) Don’t Know

Q: Is the environment of the store user friendly?

a) Yes b) No c) Don’t Know

Q: How much time you have to wait for the billing of products at the checkout counters?

a) More b) Less c) Moderate

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Q: Have you ever seen HKB advertisements on either TV or outdoor media?

Yes No

Q: How many more counters they should have?

a) 2 b) 3

c) Other Please Specify: ___________

Q: Do you find enough number of shopping trolleys/ shopping baskets in the store?

a) Yes b) No c) Don’t Know

Q: Are the products on the shelves / racks properly placed?

a) Yes b) No c) Don’t Know

Q: Are price tags properly pasted on all the products?

a) Yes b) No c) Don’t Know

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