I
“Influence of Supply chain Alignment and Application
of Technology on Consumer Satisfaction; Evaluating
Efficiency Measuring Mechanism and Outsourcing
Logistics: A study in Organised Food Retail”
Thesis Submitted to the Padmashree Dr. D. Y. Patil University, Department of Business Management
in partial fulfillment of the requirements for the award of the Degree of
DOCTOR OF PHILOSOPHY
In BUSINESS MANAGEMENT
Submitted by
Jyotinder Kaur Chaddah (Enrollment No. DYP-PhD-066100008.)
Research Guide Dr. R. K Srivastava
PADMASHREE DR. D.Y. PATIL UNIVERSITY, DEPARTMENT OF BUSINESS MANAGEMENT,
Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai – 400 614
June 2010
II
“Influence of Supply chain Alignment and Application
of Technology on Consumer Satisfaction; Evaluating
Efficiency Measuring Mechanism and Outsourcing
Logistics: A study in Organised Food Retail”
III
DECLARATION
I hereby declare that the thesis entitled “Influence of
Supply chain Alignment and Application of
Technology on Consumer Satisfaction; Evaluating
Efficiency Measuring Mechanism and Outsourcing
Logistics: A study in Organised Food Retail”
submitted for the Award of Doctor of Philosophy in
Business Management at the Padmashree Dr. D.Y.
Patil University Department of Business Management
is my original work and the thesis has not formed the
basis for the award of any degree, associate ship,
fellowship or any other similar titles.
Place: Date: Signature of the Guide Signature of the Head of the Dept. Signature of the student
IV
CERTIFICATE
This is to certify that the thesis entitled “Influence of
Supply chain Alignment and Application of
Technology on Consumer Satisfaction; Evaluating
Efficiency Measuring Mechanism and Outsourcing
Logistics: A study in Organised Food Retail” and
submitted by Ms. Jyotinder Kaur Chaddah is a
bonafide research work for the award of the Doctor of
Philosophy in Business Management at the
Padmashree Dr. D. Y. Patil University Department of
Business Management in partial fulfillment of the
requirements for the award of the Degree of Doctor of
Philosophy in Business Management and that the
thesis has not formed the basis for the award
previously of any degree, diploma, associate ship,
fellowship or any other similar title of any University
or Institution.
Also certified that the thesis represents an
independent work on the part of the candidate.
Place: Date: Signature of the Signature of the Guide Head of the department
V
ACKNOWLEDGEMENT In the first place, I am indebted to the Padmashree Dr. D.Y.
Patil University Department of Business Management,
which has accepted me for Doctorate program and provided
me with an excellent opportunity to carry out the present
research project.
I wish to express my deep sense of gratitude to my Guide,
Dr R. K Srivastava, and Director, SIES college of
Management Studies for his guidance and useful
suggestions, which helped me in completing the project.
The thesis could not have been completed, if not for the
help and encouragement from various people. I would like
to take this opportunity to thank Dr. Ramamirtham Gopal,
Director and Dean of Padmashree Dr. D. Y. Patil University
Department of Business Management for constantly
motivating me and giving valuable suggestions during the
development of this thesis.
Words are inadequate in offering my thanks to Dr Pradip
Manjrekar, Head-Research Cell for his encouragement
during the research work.
VI
I am highly indebted to Dr. Ajit Singh (Director General), the
Management, library team and Staff of Guru Nanak
Institute of Management Studies for their co-operation and
support in completing the project.
My thanks and appreciations also go to my colleagues Prof
Poonam Chauhan, Prof Rabiya Jidda and Prof Neha Mathur
in helping me in my research work.
Finally, I would like to express my heartfelt thanks to my
parents for their blessings and my friend Dr Sumi Jha for
all the help and wishes for the successful completion of the
thesis.
Place:
Date: Signature of the student
VII
TABLE OF CONTENTS
CHAPTER NO. TITLE
PAGE NO
LIST OF TABLES X LIST OF FIGURES XII LIST OF ABBREVIATIONS XIII EXECUTIVE SUMMARY XIV
CHAPTER -1 Introduction 31.1 Retail 31.1:1 Journey from Traditional to Modern
Retail 3
1.1:2 Key Developments in Food Retail 61.1:3 Food Retail is the Largest Segment
of Organised Retail in India 10
1.1:4 SCM Challenges in Food Retail 111.2 Purpose of Study 151.3 Problems and Issues 161.4 The Study is Specific to Food and
Grocery Retail 17
1.5 Defining Variables for Study 19CHAPTER -2 Literature Review 222.1 Consumer Value And Consumer
Satisfaction 23
2.2 Freshness 302.3 Emphasis on the relevance of
Housekeeping 31
2.4 Food Pricing 352.5 Consumer Complaint Redressing 372.6 Supply Chain 392.7 On Shelf availability & Out of Stock 442.8 Shelf Space Utilization 512.9 Technology in Retail 582.1 Efficiency Measurement Mechanism 642.11 Logistics 652.12 Manpower Utilization 672.13 Gaps in Literature Review 70
VIII
CHAPTER -3 Objectives And Hypothesis 723.1 Objectives 733.2 Hypothesis 75CHAPTER -4 Research Methodology 794.1 Sources of Data 794.2 Sampling 814.2.1 Sampling Design 814.3 Probability Sampling 854.3.1 Random Sampling 854.3.2 Stratified Sampling 874.4 Sample Justification 904.5 Response Rate 924.6 Questionnaire Description 944.7 Reliability Test 974.8 Overcoming errors 994.8.1 Pre-testing the Questionnaire and
the Pilot Study 102
4.9 Relating the questionnaire to research objectives
103
4.1 Approach to recording data 1034.11 Time Period of study 1044.12 Profile of Respondents 1054.13 Data Analysis Techniques 118CHAPTER -5 Result and Analysis 1235.1 Descriptive statistics 1235.1:1 Stock Availability 1245.1:2 Stock Display 1255.1:3 Total Supply Chain (Stock
Availability + Stock Display) 126
5.1:4 Consumer Satisfaction 1275.1:5 Use of Technology 1295.1:6 Measuring of Efficiency of Supply
Chain 137
5.1:7 Outsourcing Logistics 1535.2 Inferential Statistics 1555.2:1 Correlation and Regression 1565.2:2 Chi Square Test 164
IX
5.2:3 ANNOVA 1685.3 Summary of the Hypothesis Findings 169CHAPTER -6 Discussion 1716.1 Hypothesis 1 1726.2 Hypothesis 2 1756.3 Hypothesis 3 1786.3:1 Shelf Space Utilization 1796.3:2 Manpower Utilization 1826.3:3 Customer Complaint Monitoring 1846.3:4 Housekeeping 1856.4 Hypothesis 4 187CHAPTER -7 General Findings 1927.1 Findings from the Retailers 1927.2 Findings from the consumers 1957.3 Proposed Models based on the
hypothesis results(Model 1) 199
CHAPTER -8 Conclusion 202CHAPTER -9 Recommendations 207CHAPTER -10 Limitations of Study 222CHAPTER -11 Future Scope of Study 226CHAPTER -12 Implications of Research 229CHAPTER -13 Annexure 23113.1 Bibliography 23213.2 Questionnaire 263
X
LIST OF TABLES
T.NO. DESCRIPTION PAGE 4.3.2 Classification of Retail sample: The three
formats and their significant characteristics
89
4.12:1 Classification of Data collected on the profile of Age of the respondents
106
4.12:2 Classification of Data collected on the profile of Gender of the respondents
108
4.12:3 Classification of Data collected on the Martial Status of the respondents
110
4.12:4 Classification of Data collected on the educational qualification of the respondents
112
4.12:5 Classification of Data collected on the details of employment of the respondents
114
4.12:6 Classification of Data collected on the details of the size of the family
116
5.1:1 Descriptive Statistics for Stock Availability
124
5.1:2 Descriptive Statistics for Stock Display 1255.1:3 Descriptive Statistics for Total Supply
Chain :(Stock Availability + Stock Display)
126
5.1:4 Descriptive Statistics for Consumer Satisfaction
127
5.1:5 .1 Descriptive Statistics for Use Of Technology in planning and ordering of goods
129
5.1:5 .2 Descriptive Statistics for Use Of Technology, frequency table
130
5.1:5 .3 Descriptive Statistics for Use Of Technology, Retailers Perception
131
5.1:5 .4 Descriptive Statistics for Use Of Technology, Classification of Retailers response
134
5.1:5.5
Descriptive Statistics for Use Of Technology, Giving a Competitive Edge
136
XI
5.1:6.1 Descriptive Statistics for Shelf Space Utilization
139
5.1:6.2
Descriptive Statistics for different formats differ in monitoring manpower utilization2
141
5.1:6.3 Descriptive Statistics for record maintained of consumer complaint
145
5.1:6.4 Descriptive Statistics for monitoring House keeping
148
5.1:6.5 Descriptive Statistics for other parameters of efficiency measuring
151
5.1:7.1 Descriptive statistics for outsourcing logistics
153
5.2:1.1:1
Pearson correlation co-efficient between stock availability, stock display, total supply chain and consumer satisfaction
158
5.2:1.1:2 Regression between Supply Chain And Consumer Satisfaction
160
5.2:1.1:3 Co-efficient Table 161
5.2:1.2:1 Pearson correlation coefficient between Application of Technology and Consumer Satisfaction
162
5.2:1.2:2 Regression between Use of Technology And Consumer Satisfaction
163
5.2:2:1 Chi square table for measurement of efficiency monitoring practices of four important parameters
165
5.2:2:2 Chi square table for measurement of efficiency monitoring practices of other important parameters
167
5.2:3:1 Summary of ANOVA to test the significance of difference in outsourcing between different formats.
169
5.3 Summary Of The Hypothesis, Statistical Tools Used And Results
170
XII
LIST OF FIGURES
Fig.No DESCRIPTION PAGE4.12:1 Classification of Data collected on the
profile of Age of the respondents 106
4.12:2 Classification of Data collected on the profile of Gender of the respondents
108
4.12:3 Classification of Data collected on the Martial Status of the respondents
110
4.12:4 Classification of Data collected on the educational qualification of the respondents
112
4.12:5 Classification of Data collected on the details of employment of the respondents
114
4.12:6 Classification of Data collected on the details of the size of the family
116
5.1:5 .2 Descriptive Statistics for Use Of Technology for Planning and Ordering
131
5.1:5 .3 Descriptive Statistics for Use Of Technology, Retailers Perception
133
5.1:5 .4 Descriptive Statistics for Use Of Technology, Classification of Retailers response
135
5.1:5.5 Descriptive Statistics for Use Of Technology, Giving a Competitive Edge
137
5.1:6.1 Descriptive Statistics for Shelf Space Utilization
140
5.1:6.2
Descriptive Statistics for different formats differ in monitoring manpower utilization2
142
5.1:6.3 Descriptive Statistics for record maintained of consumer complaint
146
5.1:6.4 Descriptive Statistics for monitoring House keeping
149
5.1:7.1 Descriptive statistics for outsourcing logistics
154
XIII
List of Abbreviations
B2B Business to Business
CAGR Compounded Annual Growth Rate
CST Consumer Satisfaction Total
PDS Public Distribution System
POS Point of Sale
OOS Out of Stock
OSA On shelf availability
SCM Supply Chain Management
SCT Supply Chain Total
SKU Stock keeping Unit
Key words: Organised Retailing, Food and Grocery, Retail
formats, Consumer Satisfaction, Stock availability, Stock
Display, Efficiency Monitoring Mechanism
XIV
EXECUTIVE SUMMARY
Retail in India has come a long way. Since 2005 India has
been topping as one of the most attractive destination for
global retailers. The past 4-5 years have seen increasing
activity in food retailing. Total value of Indian retail is
estimated to be US$ 400 billion of which 6% or US$24 billion
is in organized retail. Various business houses have joined
or planning to join the retail bandwagon.
In the rapidly growing segment of organized retail, the
retailers are facing formidable challenge of remaining
competitive in pricing while incurring considerable
investment in real estate and entailing overhead of
organized business. Hence the only way modern retail can
control cost and sustain this explosive growth is by
managing efficiently the supply chain, use appropriate
technology and have effective operational controls.
Against this backdrop, the researcher undertook the study
to explore the effect of supply chain alignment and
application of technology on consumer satisfaction in
organized food retail in India. Further the researcher also
studied the efficiency monitoring practices in different retail
formats. Research was also extended to the area of
outsourcing logistics amongst different organized food and
grocery retail formats.
A total of 1103 consumers from 52 retail outlets in city of
Mumbai were included in the study. The data gathered was
response to a structured questionnaire designed to collect
XV
relevant information. Data was analyzed using relevant
statistical tools of Correlation, regression, chi square and
ANOVA. From the result of the study, it can be inferred that
supply chain alignment as measured in terms of stock
availability and stock display is significantly correlated to
consumer satisfaction. Similarly, use of Technology also
positively impacts consumer satisfaction. The Study also
shows that different store formats differ in giving
importance to measuring important efficiency parameters
like Shelf space utilization, Manpower utilization,
housekeeping, customer complaints.
In terms of outsourcing of logistics there is no significant
difference in practice followed by different store formats;
perhaps this could be due to the fact that still there are not
many dependable logistic service providers available who
can take over this function completely for the retailers. The
researcher also postulated a predictive mathematical model
which can be used by any retail chain as reference for
commissioning their own research in the area of supply
chain management and customer value perception.
Some general findings while interviewing the customers
and retailers which give useful insight to the overall
organized retail business are also included in the thesis.
Recommendations which can improve the overall organized
relevant business have also been included in this thesis
along with the areas where further research work may be
undertaken.
Page 1
CHAPTERS
Page 2
CHAPTER 1
INTRODUCTION
Table of Contents
No Titles Page No.
1 Introduction 3
1.1 Retail 3
1.1:1 Journey from Traditional to Modern Retail
3
1.1:2 Key Developments in Food Retail 6
1.1:3 Food Retail is the Largest Segment of Organised Retail in India
10
1.1:4 SCM Challenges in Food Retail 11
1.2 Purpose of Study 15
1.3 Problems and Issues 16
1.4 Why the Study is Specific to Grocery Retail
17
1.5 Defining Variables for Study 19
Page 3
1 INTRODUCTION :
1.1 Retail :
David Gilbert has defined retail as‖ any business that
directs its marketing efforts towards satisfying the final
consumer based upon the Organisation of selling goods
and services as a means of distribution. (Nair, 2006)
1.1:1 Journey from Traditional to Modern Retail :
Retail in India has come a long way, according to Sengupta
(2004), “India at the time of its independence in 1947 was in
the clutches of a vicious circle of poverty – characterized by
very low per capita consumption and one of the lowest income
levels in the world.” Retailing was focused more on the basic
necessities rather than luxury. In terms of retail institutions,
it was mainly kirana stores run by individuals and the wet
markets or bazaars. There were also the government-run
public distribution system (PDS) as well as different co-
operative stores. All these stores were having counter-
service – self-service was not a feasible option. Even in the
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early 1960s, it was reported that ―there is not a single
supermarket in all of India‖ (Westfall and Boyd, 1960, p. 14).
The popular perception is that consequent to the
liberalization and globalization of the Indian economy in the
early 1990s, modern retail took off in India somewhere in
the mid-1990s. However, research shows that it was much
earlier – in 1971 – when the first ―supermarket‖ – the face of
modern retail – was set up in India in the form of Nilgiris at
Bangalore.
Until the late 1990s, food retailing had been concentrated in
the south of the country. Southern India has been
witnessing revolutionized activity in food retailing. It has
thoroughly experienced the food retailing in various
formats. The reason being that most entrepreneurs who
started organised retail came from southern India and the
cost of real estate in the southern region was less than
other regions (particularly north and west). Since then,
however, organised food retailing has emerged across the
country, inspired by the presence of high potential markets
in the north, west and east as well as the success of some
non-food retailers and food services companies in these
regions.
Page 5
The food industry is on a roller coaster ride as Indians
continue to have a feast. Within modern trade, we have
various formats to cater to consumers like The Category
Killer, the Hypermarkets, Mid Sized Store and the
Convenience Store.
Since 2005 India has been topping as one of the most
attractive countries for global retailers. Modern retail,
accounting for 2-3 percent of the market, is expected to
grow at a compounded annual growth rate (CAGR) of 40
percent, from $8 bn. to $22 bn. by 2010. Overall India's retail
sector is expected to grow to $635 bn. by 2015 (Morierty et
al., 2007, p. 9).
There are various factors paving the way to revolutionizing
food retailing in India. Few among them are: Changing life
styles and tastes, growing need for convenience,
increasing disposable income and number of working
women, change in consumption patterns, higher
aspirations among youth, Impact of western lifestyle and
plastic money revolution.
Page 6
The past 4-5 years have seen increasing activity in food
retailing. Various business houses have joined the Retail
bandwagon. Though the retailers are facing increasingly
demanding customers and intensely competitive rivals,
more investments are flowing in and the share of organised
food sector is growing rapidly. Organised food retailing in
India is surely poised for a takeoff and will provide many
opportunities both to existing players as well as new
entrants.
1.1:2 KEY DEVELOPMENTS IN FOOD RETAIL
There are a number of key developments in the organised
food and grocery retail particularly in the area of attracting
and retaining customers and supply chain management
which are summarized below.
Customer intimacy
Successful retailers are focusing on the importance of
intimacy with the customer – the customer is the greatest
asset that a retailer has, not the store itself. Investments in
display, storage and technology are made with a strong
Page 7
sense of purpose to enhance the durability of the
connection with the customer.
The micro-strategies adopted by different groups towards
greater customer intimacy are diverse and complex, built
around core themes that promote care for food safety,
freshness, variety and price consciousness. Loyalty
programs have aimed at achieving repeat visitation.
―Quality will ensure that consumers stick to retailers like
glue.‖ Chaddah(2007).
Designated discount day and incentives have been created
with the aim of achieving repeat visit of the consumer.
Points of difference
Food Retailers in India are competing on many planes for
the loyalty of the consumer. ‗Sales‘, ‗specials‘ and ‗lowest
prices across the store‘ are common marketing tools used
by all food retailers, each also strives for a non-price point
of difference based on a combination of service, quality
goods, convenience, range and so on. The consumer
ultimately makes the shopping decision on these variables.
Major Chain retailers offer the convenience of a one-stop
Page 8
shop for all food and grocery lines and hence their
consumer appeal.
For new entrants like Walmart, Carrerfour, their point of
difference is being a low cost, everyday low cost retail
outlet characterized by a cheaper supply chain and low
store-operating costs.
Convenience retailers offer local convenience in shopping
for immediate necessities or smaller volume shopping
needs without the fuss of a major shopping mission –
though there is aggressive competition from the majors in
this area backed with faster checkouts.
Supply chain management
Over the years, the major chain retailers have adopted
different strategies as to how to manage logistics through
their businesses from point -of -delivery to back of store.
Major retailers in The Indian Retail industry have
announced efforts to take control of the logistics costs
from the supplier‘s factory gate into the back of the retail
store, through respective central warehousing systems.
Future Groups‘ Big Bazaar is one of the first to get on to the
Page 9
bandwagon. The company is reported to have spent more
than 100 crore on upgrading its supply chain management,
logistics and distribution system. These innovations are
planned to take significant costs out of the value chain –
mostly the costs incurred by suppliers and their
distributors in the delivery of orders direct to store and in
the cartage from supermarket warehouse to store.
Supply dynamics
The nature of product supply is having a major impact on
pricing over time. As noted, pricing is influenced by the
seasonality of availability in fresh product lines, though
major retailers attempt to smooth costs by sourcing from
suppliers capable of delivering year-round supply. This
approach extends to products which are affected by
international trade – suppliers holding large quantities of
commodity lines in times of export downturn may offer
lower prices to move volumes through retail as part of a
promotional program
Corporate Houses getting into organised Food and
Grocery Retail
Page 10
Corporate houses such as Godrej and Reliance are
already working into food retail. Greater participation
is expected from many other companies as well.
1.1:3 Food Retail is the largest segment of organised retail
in India :
The food and grocery retail sector, which had been a slow
starter, is currently attracting the maximum attention.
"Contrary to the belief that fashion is the largest segment of
organised retail in India, food & beverages is the major
segment." (Economic Times, 2005)
Despite an inherently low-gross margin, low-penetration
rate coupled with the huge market potential – 42.1 per cent
of total consumer shopping basket – (Businessworld, 2004,
p. 85) makes the food and grocery retail sector very
attractive for large business houses. Thus, we have today
mega Indian business houses and corporate like the
Reliance Group of Mukesh Ambani among others making a
foray into this space.
Page 11
1.1:4 Challenges in Supply Chain Management in Food
Retail :
Diversity of store formats, expansion into new sales
channels, and changing global supply sources are driving
the need for optimal supply chain management. Customer
demands are rising as well: to compete, retailers need to
provide wider choice, better quality, improved service and
convenience — all at lower cost.
Excellent retail supply chain management revolves around
understanding and balancing three key dimensions of
availability, inventory and cost. (Accenture, 2009) Managing
these trade-offs efficiently can result in supply chains that
improve business performance and drive competitive
advantage. Supply chain of most food retailers in India face
challenges like poor transport infrastructure, weather,
environment (Politics), and forecasts are not always
correct: very unlikely the actual demand will exactly equal
forecast demand.
Page 12
The 2005 report of AT Kearney on retailing states that
most retailers in India still don‘t have a stronghold on
operations –be it supply chain management or
procurement. In the Indian context, a countrywide chain in
food retailing is yet to be established as many supply chain
issues need to be addressed
The food supply chain in India is full of inefficiencies- a
result of inadequate infrastructure, too many middlemen,
complicated laws and an indifferent attitude. (KPMG 2005
report)
Therefore to derive the perfect food retail model for India,
the retailer has to fight issues like fragmented sourcing,
unpredictable availability, unsorted food provisions and
daily fluctuating prices as against consumer expectations
of round the year steady prices, sorted and cleaned food
and fresh stocks at all times.
Against this backdrop, the key imperative facing retailer in
India is that of creating a robust, scalable supply chains
that would facilitate their rapid spread across the country.
―India is a fragmented country and an absence of a strong
Page 13
infrastructure and logistics system makes it all the more
challenging to reach consumers ( Kaul, 2007)
The World Bank study on Indian Retail (2009) conducted,
says that the Indian logistics cost is one of the highest in the world.
In China the costs is estimated at 10 % of the total value of goods. In
comparison, the cost of logistics in India is 14 % of the total value of
goods.
Besides, India has a high ratio of retailers to consumers,
which means that an individual consumer can choose
between several similar competitors. Median incomes are
not high even for the growing middle class, which
increases price sensitivity and decreases brand loyalty.
Thus Indian food retailers face an uphill task of
differentiation in a highly price sensitive market.
Majority of the Retailers are trying to impress their
customers by offering goods at the cheapest rate over their
competitors, further they are unable to sustain critical mass
of sales volumes due to inefficiencies in supply chain
management resulting in un-viability of business.
Page 14
Continuing on the same note, today the retailers are
readjusting the pace of their business keeping their supply
chain performance and capabilities in mind.
The Indian retail market is estimated at US$ 400 billion
which is serviced through 12 million retail outlets with over
96 per cent of them smaller than 500 sq. feet. Recent
published figures of Retail Market in India is US 400$billion
of which 6% or US24 $Billion is in organised retail. (Sinha,
2010 cited from www.economictimes.com)
This is in line with forecasting of KSA Technopak, a retail
consulting and research agency, which had predicted that
by 2010, organised retailing in India will cross the US$ 21.5
billion mark. (KSA Technopak India Retail Report, 2005)
Efficient Supply Chain, Efficiency measuring practices,
Usage of Technology and Logistics management is the key
driver for the success and growth of organised retailing.
The retailers are attempting to benchmark few key
parameters like inventory turn around, availability of SKUs
with the prevailing international norms to identify gaps for
growth and sustainability of organised and modern retail in
India.
Page 15
This research is focused on understanding the current
practices in the organised food and grocery retail with
particular emphasis on identifying the areas that are
contributing to the customer satisfaction and postulating a
predictive model which can help retailers in improving their
overall operations
1.2. Purpose of Study :
No similar research initiative has been undertaken in India
that has focused on retail competitiveness and consumer
satisfaction through improved logistics, use of technology
for scheduling and optimizing inventory while ensuring no
stock outs.
The wastage levels for perishables are as high as 40
percent because of a large number of intermediaries, loss
during transportation, unpredictable demand forecast and
inadequate storage facilities. Therefore there is an urgent
need to look at a holistic picture of supply chain and
logistics.
In India Organised Retail is in its nascent stage hence there
is not enough literature available on efficiency measuring
mechanism in different format of organised food retail in
Page 16
India. Therefore there is a need to study variation in the
efficiency practices in different formats.
1.3 Problems and Issues :
Organised retail in India is still in nascent stage and there
are no well developed relevant models in use and the
supply chain is being managed sub-optimally. (Anand et.al,
2006)
The 2005 A T Kearney report on retailing mentions that
most retailers in India still do not have a stronghold on
operations. Therefore there is an urgent need to look at a
holistic picture of supply chain and develop an integrated
model that will work for retailers in India.
While Managers in the food retail sector are trying to get
consumer feedback, questions asked are mostly on the
service provided and behavioural aspects of staff rather
than on availability of stocks, freshness, pricing etc. Thus
the feedback cannot be used in any meaningful way to
tailor supply chain in value creation for customers.
Page 17
1.4 The study is specific to Food and Grocery retail :
According to Euromonitor International's research, more
than 90% of Indian consumers' retail food expenditure is
spent on fresh food categories, with sales largely driven by
fruit and vegetables.
Retail volume of fresh food hit 174 million tonnes in 2007,
representing impressive volume growth of 8.1% on the
previous year, much faster than the country's population
growth rate of 1.5%. Among the most influential factors are
rapid economic and personal income growth, expansion of
retail outlets, particularly in the cities, and scientific
advancement in improving production yields. These growth
drivers will become even more pronounced in the future, so
Indian consumers will continue to spend more per capita on
fresh food. Furthermore, it is estimated that there will be
130 million new consumers in India by 2015, according to
Euromonitor International's Countries and Consumers
database.
Food, beverages account for as much as 71 % of retail
sales in 2002.The spoilage rate is extremely high for
produce going up to 35 % of the total inventory.
Page 18
The food and grocery market in India is the sixth largest
grocery market in the world. It is expected to grow to $482
billion in 2020, with an overall growth rate of 104 %
Page 19
1.5. Defining Variables for Study :
Independent: Stock Availability, Stock Display, Total Supply
Chain, Technology and Outsourcing logistics
Dependent: Customer Satisfaction
1.5:1 Operational Definition of Variables
1. Customer Satisfaction: Customer satisfaction is a
measure of how products and services supplied by a
company meet or surpass customer expectation. It is
seen as a key performance indicator within business.
2. Stock Availability: Products that have to be sold are
at hand or available when needed. Product
availability, defined as the probability of having a
product in stock when a customer order arrives
(Chopra and Meindl, 2007, p. 77), is one of the key
performance
3. Stock Display: Products meant to be sold are shown
to the consumer for sale
4. Supply Chain Total: it is the integration of key
business processes like Stock Availability and Stock
Display across the Supply Chain for the purpose of
Page 20
adding value for customers and
stakeholders.(Lambert,2008)
5. Outsourcing logistics: Utilization of external
organizations to execute logistics activities that have
traditionally been performed by the organization
itself.
Page 21
CHAPTER 2
LITERATURE REVIEW
Table of Content
No. Title Page No.
2 Literature Review 22
2.1 Consumer Value And Consumer Satisfaction
23
2.2 Freshness 30
2.3 Emphasis on the relevance of Housekeeping
31
2.4 Food Pricing 35
2.5 Redressing Consumer Complaint 37
2.6 Supply Chain 39
2.7 On Shelf availability & Out of Stock 44
2.8 Shelf Space Utilization 51
2.9 Technology in Retail 58
2.10 Efficiency Measurement Mechanism 64
2.11 Logistics 65
2.12 Manpower Utilization 67
2.13 Gaps in Literature Review 70
Page 22
2. LITERATURE REVIEW :
The Indian Retail sector has caught the world‘s imagination
in the last few years. Topping the list of most attractive
retail destination for the last three years on a trot, it has
managed to attract global retail giants to scout for potential
partners who are waiting to enter the fray.
India‘s retail growth was largely driven by increasing
disposable incomes, favourable demographics, changing
lifestyles, growth of the middleclass segment and a high
potential for penetration into urban and rural markets.
Against this background, in the present modern retail
environment that appears to be transforming the retail
landscape, retailers must deal with increased competition.
Changes in customer expectations about product
assortments and service, and business demands drive
efforts to deliver improved business performance and
customer satisfaction. As a result retailers look beyond
their organizational boundaries to evaluate and integrate
the resources and capabilities of their suppliers and
Page 23
customers and thus create superior value and a competitive
advantage that they might sustain over time.
But what needs to be kept in mind is that, Retailing in India
will not succeed with cut and paste global formats, and in order to
succeed, retailers need a good understanding of the differences in
value perception of Indian consumers when compared to the rest of
the global market (McKinsey Quarterly, 2008).
Keeping in view the above scenario, modern retail in India
and objectives of this research study , the researcher
reviewed the literature on consumer value perception,
supply chain management, importance of On shelf
availability of products, use of technology , logistics etc.
The relevant literature on all these aspects of retailing is
given below.
2.1 Consumer Value And Consumer Satisfaction :
Over the last couple of years the Indian food and grocery
retailers have started to develop a different outlook towards
consumers. Food and Grocery organised retailer‘s
recognition that ―Customer is king‖ led to the beginning of
the customer driven movement. It would be appropriate to
say that Customer driven thinking is the ―the new mantra‖.
Page 24
It (Customer satisfaction) is viewed as a measure of the
size, loyalty, and the quality of the customer base of a firm
(Fornell et al. 2006; Morgan and Rego 2006). It is also
viewed as a measure of a retailer‘s economic health (Fornell
et al. 1996). Therefore it is not surprising that firms have
invested considerable resources in measuring customer
satisfaction.
Customer‘s Store satisfaction can be defined (Engel et al.,
1990, p. 481) as: The outcome of the subjective
evaluation, that the chosen alternative (the store) meets or
exceeds expectations. This definition is within the tradition
of conceptualizations of satisfaction that are used in the
literature.
Satisfaction is a consumer‘s post-purchase evaluation of
the overall service experience. It is an affective reaction
(Menon and Dubé, 2000) in which the consumer‘s needs,
desires and expectations during the course of the service
experience have been met or exceeded (Lovelock, 2001).
The literature of marketing in general and of retailing in
particular, leaves no doubt about the central role of
customer satisfaction. Anderson et al (1994) and many
Page 25
others opine that customer satisfaction impacts the
retailer‘s fortunes via customer retention and loyalty, and
hence ultimately via long term profits. Satisfied customers
buy more products, are less price sensitive and will be
more attentive to communications of the company and
hence more insulated from competitive encroachment (Blat
berg et al, 2001 and Oliver, 1997). Holbrook, 1994 was of the
view that obtaining customer satisfaction is fundamental
and essential in all exchange transactions. Meeting
consumer needs increases consumer satisfaction (Porter,
1985).
Superior value to consumers was established as one of the
most successful business strategies (Ravald and
Gronroos). Continuing on the same note, Woodruff (1997)
opined `that Consumer value as the next major source of
competitive advantage. In order to ensure that the customer
is satisfied with the shopping experience the Indian Food
and grocery retailers are leaving no stone unturned to offer
them value and variety.
Hence, one should treat customer satisfaction as an
intermediate product in the retailer‘s quest for profitability.
Page 26
According to Chaddah and Srivastava (2010) “satisfied
customers not only enhance retail customer retention in
grocery retail but also increase new customers through
word of mouth.”
Further, in a competitive marketplace where businesses
compete for customers, customer satisfaction is seen as a
key differentiator and has increasingly become a key
element of business strategy.
Consumer Satisfaction has often been regarded as an
antecedent of store loyalty (Bitner, 1990). Therefore, one of
the primary concerns in retailing is the production of
customer satisfaction as part of the process of building
customer equity (Blattberg et al, 2001) and profit.
Further, the importance of understanding consumer
behavior has never been more important to retailers.
Consumer research once was a task left to manufacturers
of consumer packaged goods, retailers have embraced this
responsibility, spending on research, and trying to
understand, and influence consumer behavior. (Grewal. et
al, 2009)
Page 27
But, according to KPMG‘s (2010) survey, though attracting
the customer was one of the top concerns of the retailers
investment in consumer research was not amongst their
top priorities.
KPMG (2010) Retailers should recognize that consumer is
the king and cannot be ignored. The true metric of success
may not be in terms of number of new stores added by a
company, rather increase in the same store sales through a
thorough understanding of consumer requirements.
It is recognized that greater understanding of customers
can enhance customer satisfaction and retail performance
(Grewal et. al,2009)
―Awareness of customer needs and satisfaction levels are
going to be the key to customer retention and loyalty
against increased competition.‖ According to Dr. Martha
Russell, President of Clickin Research.
But in many case retailers are not aware of what their
customer expect. Hence they are unable to deliver the right
value to the right customer and satisfy them .Especially in
this competitive scenario where the customer are well
informed, commanding and demanding at the same time it
Page 28
has become imperative for the organization to be updated
on the ―WHAT‖,‖WHY‖and ―HOW‖ of each and every
customer. This calls for empathizing with the customer by
indulging into their priorities and decision making.
The food retail industry is almost entirely consumer-driven.
In addition to Peter Drucker‘s ―the creation of value and
wealth for consumers‖ theory, recent study of consumer
value and satisfaction has gained utmost importance
among researchers and practitioners (Cronin et al., 2000,
Holbrook, 1999), If the retailers understand what the
consumers are looking out for it would aid the formulation
of important strategic decisions (Tellis and Gaeth, 1990). In
the same vein Zeithaml 1988 theory of assessing
consumer‘s purchase intention is a relevant research in the
same direction
In food and grocery retail customer information provides
insight into their needs. Knowledge of customer demand
can lead to better planning practices and lead times could
also be shortened. The more information a company has
about a customer, the less the uncertainty in the supply
chain. The power of supply chain management lies in
supply chain integration. The integration of the customer
Page 29
into the supply chain improves the information flow all
along the supply chain as stipulated by Fredendall, et-al.
(2001).
The further away the members in the supply chain are from
the end user, the less they know about the needs of the
customer. The less information the supply chain members
have about the customer‘s needs, the higher the level of
uncertainty in the supply chain and the more difficult the
planning process.
Availability of customer information could also lead to cost
reductions as fewer inventories would be held and the
product would also be available much faster to the
customer (Fredendall, et-al. 2001).
Value conscious Indian consumers, with a very low degree
of consumer loyalty (McKinsey, 2008), could pose a
challenge or even serious threat to the future growth of
incumbent firms if their needs are not met. Companies that
ultimately understand the Indian consumer will be the ones
to last out in the end (Indian Retail News, 2009).
Literature review on some of the other areas like Freshness,
Housekeeping, Pricing and redressing consumer complaint
Page 30
which are pertinent for consumer perception about the
retail outlet is summarized below
2.2 Freshness :
Freshness is an important guarantee of product safety.
Freshness is highly valued and is regarded as the single
most important element influencing the taste and quality of
the meal. (I V trung, et al)
Freshness is a decisive attribute for the consumer choice of
fruits and vegetables (Pe‘neau et al., 2006). A large number
of aspects are likely to be involved in consumer
perceptions of the freshness of a food product. (FDA, 2000)
The quality and freshness of perishable food items has
special importance to Asian consumers and perception of
the level of retail outputs (Safety, quality and freshness) of
retail outlets were found to be overwhelming determinants
of retail format choice. (Trung et.al, 2010).
Page 31
Similarly, the description of freshness is especially
influenced by the place where consumers obtained most of
their fruits and vegetables. (Vannoppen et al., 2002).
In addition consumers may have more trust in the quality,
safety, freshness and origin of goods sold at organised
retail outlets (Trung et al, 2010)
Product quality and product features were considered the
most important product choice criteria in a study of grocery
customers (Baltas and Papastathopoulou, 2003). Quality is
seen as ―a satisfaction-maintaining factor in the
supermarket sector‖ in that improvements in quality have a
small positive impact on satisfaction while reductions in
quality of the same magnitude have a significantly greater
chance of reducing satisfaction (Gomez et al., 2004, p. 273).
2.3 Emphasis on the relevance of Housekeeping :
Mazursky and Jacoby (1986) discovered that the
merchandise-related aspects (quality, price, and
assortment), service-related aspects (quality in general and
salespeople service), and pleasantness of shopping at the
Page 32
store are among the most critical components of store
image attributes.
Housekeeping is the area that has received significant
attention and can be described as relating to factors in the
store environment that can be designed in order to create
certain emotional and behavioral responses in the
consumer (Kotler, 1973).
It has been shown that a positive and clean atmosphere
can lead to approach behaviours, which implies that
consumers stay longer in the store, spends more money or
that the propensity for impulse buying increases (Donovan
and Rossiter, 1982). Some even relate atmospherics and
housekeeping to the possibility of creating long-lasting
consumer relationships (Babin and Attaway, 2000).
Underestimating the importance of the shopping
experiences within a retail store, retailers in the past
preferred to entice consumers into their stores by
announcing sales incentives (Kotler, 1973–1974). However,
retailers have come to realize the importance of
environmental cues and have tried to develop effective
retail store atmospherics and are paying attention in order
Page 33
to attract their target customers and increase their
profitability (Sirgy et al., 2000).
Turley and Milliman (2000) asserted that marketing
researchers have come to realize that the physical store
environment experienced at the point of purchase
influences consumers‘ shopping behaviour and, therefore,
the practice of creating influential atmospheres should be
an important marketing strategy for most exchange
environments
An organised and clean store , for example, been shown
to improve consumers‘ mood which in turn can lead to
making the experience of the store visit more positive.
(Spies et al., 1997) An unclean and negative atmosphere, it
is argued, may however lead to avoidance behaviour, such
as a desire to leave the store or a sense of dissatisfaction
(Donovan and Rossiter, 1982; Turley and Milliman, 2000).
―The look of the store and the way the food items are
displayed acts as a facilitator‖ (Chaddah,2009)
A growing body of academic research also supports the
importance of store environment as a marketing tool to
affect shoppers‘ approach behaviours (Fiore et al., 2000) as
Page 34
well as a dominant market differentiator (Reardon et al.,
1995; Roy and Tai, 2003). Thus, effectively managing the
retail store environment encountered by customers has
been identified as a viable retail management tactic (Babin
and Darden, 1995; Gilboa and Fafaeli, 2003) and has gained
a growing amount of attention from both industry and
academia (Smith and Burns, 1996). Schlosser (1998) noted
that, in the face of increased market competition, retailers‘
sole reliance on promotional techniques is inadequate;
retailers‘ efforts must turn from offering just price
promotions to creating a pleasant shopping experience.
Researchers also asserted that store environments can
influence consumers‘ willingness to purchase or entice
them to stay in the store for a longer period of time
(McDougall and Fry, 1974–75; Mano, 1999). According to
Chain Store Age, retailers reported a positive connection
between improving the retail store atmosphere and
increasing sales (―Store atmospherics,‖ 2005).
As consumers often infer retail store images from such
environmental cues (Bloemer and Ruyter, 1998), the store
environment may represent the most imperative channel
Page 35
through which retailers can communicate with their
consumers.
2.4 Food Pricing :
Towill (2005) considers price important for ―commodities‖
such as food. Price was a significant factor in retail outlet
choice (Maruyama&Trung, 2007). Shopping outlets are
significantly different in terms of general price levels for
products. It is well documented that a lower and stable
price in the form of general price levels accelerates retail
purchases. (Tigert, 1983)
Retailers usually use various instruments of pricing and
promotion policy to attract new customers and increase
customer loyalty. However, satisfaction with retail prices is
seldom investigated, although price perception has a
significant impact on satisfaction (Voss et al., 1998; Varki
and Colgate, 2001; Iyer and Evanschitzky, 2006), which is
known as an important predictor of retail sales performance
(Gómez et al., 2004) and store loyalty (Grace and O‘Cass,
2005).
It is important to consider that price is not the only means
by which retail outlets compete. Consumers consider a
Page 36
range of factors when purchasing food and grocery
products. These include product range and quality,
convenience of locating products, location of the retail
outlet, queuing time, opening hours and access to car
parking.
For mid size and large stores, price plays an important part
in this mix However, smaller stores often compete on the
basis of convenience, with many consumers prepared to
pay higher prices for hassle-free shopping.
Consumers increasingly have the opportunity to weigh a
range of price and convenience factors when deciding the
type of food products they purchase and the retail outlet
from which those products are bought. But one common
threads that runs across all the different format of retail
outlets is customer satisfaction.
Price, specifically in-store promotions and discounts, play
an important role in decreasing the strength of brand
loyalty (Walters, 1991; Wedel et al., 1995; Agrawal, 1996), or
in increasing the strength of store loyalty (Little and
Shapiro, 1980)
Page 37
2.5 Redressing Consumer Complain :
Complaint behaviour is referred to as dissatisfaction
response and finally feedback to the supplier (Bettencourt,
1997; Soderlund, 1998).
According to Ken Lehman, Chairman of Winning workplace
(1997), Retailers do not pay as much attention to consumer
complains as they used to. He says, Statistics back up this
claim-consumer complaint against retail stores grew by
104% in a 3 year period.
According to Purdue University‘s centre for customer
driven quality, nearly 70 percent of the business leaders
polled tabbed customer service as the most important
factor in building satisfaction and loyalty.
Further, the summary of empirical articles indicates four
key consequences of redressing complaint. They are
satisfaction, word of mouth, repurchase, and attitude to the
company.Davidow (2003)
Competition with traditional retail.
It is important to know how the traditional retail is operating
as they are the main competitors to the organised retail. In
this regard the following information gives useful insight
Page 38
Indian consumers trust items being fresh and reasonably
priced at the friendly neighborhood kirana store. Further,
even though unorganised food and grocery shops are
lacking in the modern service scope but as ―retailing is very
culture specific they (unorganised retailers) still hold a
favorable position in the market.‖ www.docstoc.com
According to Nielsen Shopper Trends (India), traditional
grocery stores continue to dominate the Indian retail scene
and are frequented more often by Indian shoppers.
According to this study, 39 percent of grocery buyers they
interviewed had visited a Supermarket/Hypermarket at least
once in four weeks, 97 percent of them visited a Traditional
store over the same period. Further. The survey also found
that shoppers do not explicitly state promotions as a factor
that influences their store choice. However, it is observed
that attractive and interesting promotions play a vital role in
store selection. Shoppers claiming to have checked the
newspaper or flyers for coupons and then having gone to
the store with attractive deals has increased over the years.
Another issue of Consumer advocacy or consumer
recommendation was reviewed. According to Retailer
Brand Survey published by Kurt Salmon Associates,
Page 39
consumer recommendation is directly linked to top-line
performance of retailer. While other factors certainly come
into play, the relationship between movement in advocacy
and same-store sales growth is statistically significant.
2.6 Supply Chain :
The term supply chain is described by Lummus and
Vokurka (1999) as ―all of those activities associated with
moving goods from raw materials stage through to the
consumer. This includes procurement, production
scheduling, and order processing, inventory control,
transportation, warehousing, and customer service. The
information systems necessary to monitor all of these
activities are also included. All these activities are then
integrated and coordinated into a seamless process to
involve all the partners in the supply chain‖.
According to Fredendall and Mill (2001) ―supply chain
management represents a significant change in the way
that organizations view themselves‖.
Stank et al. (2005, p. 27) describe supply chain management
as a ―strategic level concept.‖ Ho et al. (2002) conceptualize
SCM as having three core elements:
Page 40
1. Value creation
2. Integration of key business processes
3. Collaboration.
Based on this conceptualization, they define supply chain
management (SCM) as follows:
SCM is the philosophy of management that involves the
management and integration of a set of selected key
business processes from end user through original
suppliers, that provides products, services, and information
that add value for customers and other stakeholders
through the collaborative efforts of supply chain members
(Ho et al., 2002).
Persson (1997) in her study opined that supply chain
management is a homogeneous management concept. The
overall objective of SCM is to contribute to the
improvements in the company’s bottom-line and
profitability.
Related objectives include reducing the costs mainly by
reducing the inventory levels and increasing the revenues
by improving customer service through co-ordination and
integration along the material flow, win -win relationships
and end customer focus.
Page 41
The concept of supply chain management is becoming
more and more predominant in offering a solution to keep
costs to a minimum and to offer an acceptable level of
customer service (Southern, 1997: 220). Creating a
seamless operation from the point of origin to the point of
consumption is the main aim of supply chain management
(Anon, 2000).
Christopher (1992: 25) also stipulates, the importance of
customer service in supply chain total functioning must
therefore always be considered in a supply chain system
design. The integration of the customer in the supply chain
would lead to shorter response times and reductions in the
time spent on the development of products, which would
improve customer service. Gruen and Corsten (2003)
In a paper presented, Chaddah and Srivastava (2009)
opined that ―Inefficiencies in Supply Chain in India causes
Sub-optimal stock which results either in loss of sales
volumes or increase in food and grocery retailers cost.”
Corsten and Gruen (2003) indicated that most Out of stock
(OOS) situations occur at the store level, primarily through
Page 42
ordering and replenishment practices within the store.
Hence, a higher service level may require more and better
trained staff within store.
Increasingly, firms are adopting supply chain
management(SCM) to improve competitiveness
(Gunasekaran et al., 2008).The major forces behind this
development are increasing competitive pressure and a
belief that working cooperatively in supply chains can
create a competitive advantage.
In recent years, a growing amount of research has been
dedicated to investigating maturity model development and
performance measurements for the strategic management
of supply chain processes (Gunasekaran et al., 2001).
Higher levels of maturity in any business process result in:
better control of results; improved forecasting of goals,
costs and performance; greater effectiveness in reaching
defined goals. The concept of process maturity, including
supply chain processes, derives from the understanding
that processes have life cycles or developmental stages
Page 43
that can be clearly defined, managed, measured and
controlled throughout time.
Kevin McCormack‘s Five Stages of Supply Chain Maturity
show the progression of activities toward effective supply
chain integration. These stages are: Ad Hoc, defined,
linked, Integrated and extended. This model only mentions
the evolution of the five stages of supply chain maturity but
does not relate it with customer satisfaction or any other
business aspect. Likewise Morash and Clinton (1998)
investigated the creation of customer value through the supply
chain integration alternatives of collaborative closeness
and operational excellence.
―Organised food and grocery retailing chains going
national requires significant investments. Retailing within
this sector is not just about the front end, but involves
complex supply chain and logistics issues as well.‖ Says
Arvind Singhal, Chairman KSA Technopak.
Most retailers have already started exploring the
opportunity to develop their own supply chains that would
suit their needs precisely. Replicating the success stories
of the big names of the Western nations may still be distant
Page 44
dream for Indian food and grocery retailers, but at least the
winds are blowing in the direction of growth.
2.7 On -Shelf Availability and Out Of Stock :
On-shelf availability (OSA) of products in a retail store is an
important business criterion in the fast moving consumer
goods and retail sectors (Fernie and Sparks 2004) and is the
customer service output of a successful supply chain
system (Grant et al. 2006a); in other words ―if a product
isn‘t on the store shelf then you can‘t sell it…!‖ (Trautrims
2002)
Most researchers postulate that satisfaction is an
antecedent of loyalty. Indeed, customers who positively
evaluate the store keep visiting it. Even if satisfaction alone
does not explain loyalty, it remains nevertheless a
necessary stage in the formation and perpetuation of
loyalty. Further, shoppers who experience stock-outs leave
the store with a lower store image and less satisfaction,
measured on several scales (Zinszer et.al, 1981).
Page 45
Out –of- Stock (OOS) can be defined as: ―a product not
found in the desired form, flavor or size, not found in
saleable condition, or not shelved in the expected location‖
(Efficient Consumer Response – ECR Europe, 2003).
European grocery shoppers rate OOS as the third most
important issue after shorter queues and more promotions
(ECR Europe, 2003)
An OOS represents a situation where a product is not
available when a customer order arrives. Product
availability, defined as the probability of having a product in
stock when a customer order arrives (Chopra et.al, 2007), is
one of the key performance measures of the retailer.
Customer satisfaction for retail consumers is manifested by
product On Shelf Availability. Corsten and Gruen (2003)
argued that the ―availability of products is the new
battleground in the fast moving consumer goods and
grocery retail.‖
Page 46
When products are on the shelves, customers get better
service, supermarkets increase Profitability. The ability of a
store to provide a wide range of assortments and variety is
one of the critical factors to producing customer
satisfaction. However, larger the range, greater is the
chance that at some point of time, the store will suffer an
out-of-stock for some brand variant ( Bucklin, 1972).
Studies to date show that out of stock (OOS) can result in
substantial revenue losses for retailers. This is because of
the unwarranted assumption of product availability; many
retailers can face OOS costs in consumer markets. OOS
costs are predominantly influenced by retailers' stocking
decisions as well as store practices and conflicts in the
supply chain (Corsten and Gruen, 2003).
In the OOS situation, food and grocery retailers generally
order more than they need as a first response, thus
increasing inventory costs. However, the magnitude of
losses caused by OOS depends predominantly on
consumer responses to the OOS.
Page 47
Grocery stores in the USA lose $6 billion in sales per year,
$200,000 per average supermarket, due to out-of-stock
products in the top 25 grocery categories (Stadler, 2002).
Approximately, £2.5 billion a year in the UK is lost because
a product is not on the shelf when a customer is looking to
buy it (Rowat, 2006). In India, figures pertaining to losses
due to unavailability of stock are unavailable.
The issue of optimal product or service assortment and the
associated stocking decision is perhaps most directly
affected by consumer reaction to stock outs. Trade-offs
must be made between the breadth of product assortment
and the firm's ability to maintain adequate levels of
inventory for each of the products and brands the retailer
decides to carry. Thayer (1989) suggests that it may in fact
be this increased financial pressure, and the resultant
inventory management techniques, which is responsible for
the generally increasing levels of stock outs.
Emmelhainz et al‘s (1991) research result show, for
instance that a stock out can make a retailer face the loss of
up to 14 % of the buyers of the missing product. This
revenue loss not only stems from lost product sales during
Page 48
OOS period, but can also extend to later periods or other
product categories.
Unavailability of a specific brand in the retail store is
unexpected and often has a negative influence on
consumers' expectations and thus satisfaction, (Kucuk,
2008)
There are 5 things that can happen when a customer is
faced with an out of stock (OOS) item, notes University of
Colorado Professor Tom Gruen (2003). From the retailers
perspective, The world wide responses are ― Do not
purchase,9% Purchase elsewhere,31% Substitute with the
same brand,19% Substitute with a different brand,26%
Delay the purchase,15%.
To elucidate it further, the continuous occurrence of OOS
increases the likelihood of consumers switching brands or
stores depending on the level of consumer's brand and
store loyalty. In this context, many industry studies point
out that acquiring new consumer is less costly than re-
gaining consumers.
Because of the OOS, retailers might also face retention
costs of switching consumers in addition to the high-
Page 49
inventory cost of precautionary stocking decisions
regarding the frequently OOS item.
In other words, OOS costs are generally hidden costs in
many situations and are often difficult to detect by
companies. It can be very costly if the OOS situation is
frequently or constantly occurring for a company,
especially when one considers the risk of the total loss of
loyal consumers. (Kucuk, 2008)
In the Indian Context, the retail scenario is full of
challenges. An extremely disjointed system and limited
infrastructure create significant challenges for supermarket
chains. Infrastructure and transportation problems in India
also force the supermarkets to carry inventory stock for 45
days, compared to 14 days in Thailand and one to two days
in Europe.
From reviewing the literature, the researcher found that
many retailers view the daily replenishment from back store
inventory to be a task to be done in-between other tasks.
Literature review does not indicate major differences
between the stores. But what seems to discriminate the
stores is the attention or focus on this task, where some of
Page 50
the better performing stores indicate a better managerial
commitment towards replenishment (Aastrup et. al, 2008)
Internationally common weapon in fighting the war against
out-of-stocks is an automated replenishment system. The
new software gathers point-of-sale (POS) data, warehouse
inventory levels and analyzes sales and movement over
previous timeframes to electronically generate forecasts
and replenishment orders and establish perpetual
inventories. Internationally, Wal-Mart pioneered automated
replenishment for its food departments and grocery chains
such as Shop-Rite currently use the tool. (www.the
freelibrary.com)
To overcome the problem of Out –of- stock ,Nestle, Colgate
Palmolive, Hindustan Unilever Lever, J&J and six other
major suppliers joined forces with Food World, India's
leading food retailer and began sharing non-competitive
information, transportation systems and resources to
drastically improve service and create savings (Kamath,
2002).
Page 51
Out-of-stocks of many items, in addition to affecting own
sales, significantly affect the sales of the entire set of
remaining items in the category. (Boatwright et. al, 2007)
Internationally, In an effort to lower the stock out rates and
recover lost sales, grocers and manufacturers are
deploying collaboration and forecasting tools and data
analysis that use real-time data to monitor stock levels and
keep stores filled with the right products for visiting
consumers.
2.8Shelf Space Utilization :
Product variety influences a customer‘s perception of a
store (van Herpen and Pieters, 2002). In turn, perceptions
concerning product variety influence both satisfaction and
store choice (Hoch et al., 1999). This explains the reason
why the availability of a wide variety of products is ranked
higher as a store patronage attribute. Continuing on the
same note, Arnold et al., (1983) opined that Supermarket
shoppers ranked product variety third behind location and
price as determinants of store patronage.
Page 52
Paulins and Geistfeld (2003) echoed the same opinion and
concluded that when a store had an appealing merchandise
selection; it became a key reason why that store was
considered desirable.
Within a given trade area, studies emphasize the
‗uniqueness /depth of assortment‘ as a way of influencing
store loyalty and patronage. In consumer priorities,
assortment and variety comes after convenience and price
(Louviere and Gaeth, 1987).
Given that consumers are favorably inclined to revisit the
store where they have had positive shopping experiences
and found something they could not find anywhere else, it
is suggested that competing stores need to differentiate
themselves based on type and quality of assortment
offered. The emphasis here is on tailoring the
environmental clues using retail mix elements to foster
patronizing shopping experience and merchandise.
With the number of brand lines continually increasing,
allocating products on the store shelf in the best possible
arrangement poses a great challenge to the industry.
Page 53
Assortment depth (or selection) influences consumer store
choice; significant inventory investment and subsequent
allocation of display area by retailers are needed to
accommodate these preferences (Kahn and McAlister
1997).
Broniarczyk, Hoyer, and McAlister (1998) show that
consumers' perceptions of assortment can be unaffected
when certain low-preference items are eliminated and shelf
space is held constant. Thus the number of stock keeping
units in a category may be trimmed without affecting
assortment perceptions and, presumably, satisfaction with
the decision experience.
Further, modern retail grocery store formats with their shelf
service nature place a great deal of importance on the shelf
position of a product in terms of success or failure.
Food and beverage retailing practices have placed
increasing emphasis on shelf management. While price is a
major economic factor influencing sales of individual
products, other non price factors such as number of
shelves and their height are parameters to the sales of
product. (Folwell et.al, 1993)
Page 54
Shelf space is often the retailers’ scarcest resource. ―The
shelf is the location where any product meets the
consumer, and the shelf is also the final inventory location
in the retail supply chain.‖(Nogales et al, 2004) They further
elaborate, ―The shelves of a retail outlet is like a ‗silent
sales man‘, that is, it is in such a way that inspiring the
customer to take product from the shelf and finally
purchase it.‖
―Retail shelf space management is the core of retail
operations management decision support systems (DSS),
requiring a high volume of data related to marketing and
space configurations‖ (Lim et al., 2002).
Space allocation decision is very important in retail
operations and management. Considering the organization
and environmental factors retail firm encounters, the
management determines the strategy for space
management of the store. Once the decision of space
management strategy is been made, an appropriate
allocation model is adopted in the shelf space operation
and possibly affects the resulted performance. (Yang et al,
1999)
Page 55
Managing shelf space well can not only decrease inventory
level but also have stronger vendor relationship and higher
customer satisfaction as well. The decision of shelf space
allocation and management is therefore a critical issue in
retail operations management. (Yang et al, 1999)
The problem of space allocation and deciding on the
number of units to be displayed is so complex that most
retailers do not have enough knowledge to make
appropriate decision.
Shelf on which products are being displayed is one of the
major resources in retail environment. Accordingly, shelf
management has been considered as an important decision
to retailers. Retailers will not only increase their profit but
also decrease cost by managing shelf well. Increasing sales
by attracting the consumer‘s attention and encouraging
consumers to have additional purchase opportunities can
be implemented by proper management of shelf space
allocation and products display (location of the product
within a display, product adjancies, aesthetic elements,etc)
(Hwang et.al,1999)
Page 56
Shelf space problem arises when retailer has a large
number of products to display on limited shelf space
available at disposal. ―Retailers realise that they may lose
sales if they do not assign the necessary space to brands,
which also help to enhance store image.‖ (Nogales et. al,
2004)
Consumers expect a certain variety within store and
retailers must give at least a small display to every product
in a category (Gruen, Corsten, 2003). Increasing number of
products, high land cost and stiff competition have posed a
challenge to the retailer for efficient allocation of available
shelf space, which is often retailer‘s critical resource. The
size of display also strongly influences the number of sales.
The more shelf space allocated to a product, the more it is
recognized and sold. (Corsten and Gruen, 2003)
Hwang et al(1999) made a series of field experiments and
found that location of the product within a display,
especially the level of shelf on which the product is
displayed in case of multi-level shelf, has a significant
effect on sales.
Page 57
Shelf space management recognizes the interrelatedness of
products in the category and focuses on improving
performance of whole product category rather than the
performance of individual brands.
Shelf space allocation affects store profitability. Retailers
are increasingly looking regarding how to stock shelves for
maximum profitability, while improving the shopping
experience for their customers. Understanding shelf space
availability, along with consumer demand, allows retailers
to develop a replenishment strategy to avoid excess
inventory and plan for a rise in the purchasing of a product
based on season or promotions. (Blog: renjitrh sethyram:
retrial in Kerala :)
To conclude, the impact of displayed inventory level of a
product on retail sales is well established in the marketing
and operations management literature (Chung, 2003). A
major outcome of these studies is that demand of a product
is not an exogenous parameter, but is influenced by the
displayed inventory level maintained by the retailer.
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2.9 Technology in Retail :
A study of successful retailers reveals that the business
ability to build and defend a competitive position in the
market depends to a great extent on the capacity to invest
and use information (Weber and Kantamneni, 2002). In this
regard, Buxmann and Gebauer (1999) consider information
technology to be a key factor for the organization's
success.
The literature considers information technologies to be an
important source of competitive advantages for the
company. Among the benefits derived from IT solutions for
the retailer, the literature mentions the following: time
savings, lower personnel costs, reliability, accuracy, error
reductions as well as increased productivity through the
mechanization of labour-intensive tasks.
Further, generalized use of IT has involved a deep change
in an increasing number of business areas, with planning
and ordering ,order follow up, stock management as some
of the areas that has benefited most (Gil et al., 2007).
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In sum, IT solutions for planning and ordering, stock
management and follow ups generate efficiency
improvements in the internal processes. This progress will
affect positively end consumer experience (Gurau and
Ranchhod, 2002; leading to higher satisfaction levels
(Bitner et al., 2002) .
In the marketing services literature little attention has been
given to customer satisfaction with service improvements
(Timmor and Rymon, 2007). Since technology can enable
increased levels of service through greater customization
and flexibility (Bitner et al., 2002), the researcher expects
customer satisfaction to be positively affected by service
improvements reached, due to the technological solutions
implemented by retailers.
While retailers have expanded their markets and operate
stores in multiple locations, planning and ordering of
goods, controlling merchandising and store operations has
become more difficult. During the last couple of years, the
food and grocery retail has been experiencing a number of
changes associated with supply chain and customer
Page 60
interface management and the retailers have examined the
ways in which computers can improve the efficiency of
their operations and reduce costs (Al-Sudairy and Tang,
1998).
The technologies that Indian retailers have deployed over
the years to serve their distributed networks are without
standards. (KPMG, 2010).Further, most organised players
have managed to put the front ends in place, but these are
relatively easy to copy. The relatively complicated
information systems and underlying technologies are in the
process of being established.
It is widely felt that the key differentiator between the
successful and not so successful retailer is primarily in the
area of technology. Going forward technology is likely to be
a key differentiator to bring about efficiencies, save on
costs and offer better services to customer. The problem
with old technology is that there are no standards and in
many instances one does not integrate with the other.
(KPMG, 2010)
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Simultaneously, it will be technology that will help the
organised retailer score over unorganised players, giving
both cost and service advantage. According to Khan
& Manopichetwattana (1989) ―technology-consuming" firms
are distinguished from others by: greater profitability.
Retailing is Technology Intensive. The emergence of new
information Technologies such as standard barcodes,
scanning technologies, computerized inventory control and
replenishment system and electronic data interchange has
eliminated some manual store tasks and has contributed to
an increase in retail productivity.
The focus of the retailing sector today is to develop the link
with the consumer. ‗Data Warehousing‘ is an established
concept in the advanced nations. With the help of ‗database
retailing‘, information on existing and potential customers
is tracked. Besides knowing what was purchased and by
whom, information on softer issues such as demographics
is captured.
Page 62
Technology can be used to be effectively design and
implement loyalty and membership programs
Loyalty programs are packages of actions or benefits
offered to customers in exchange for repeat purchases
(palmer et al., 2000) a common practice in food retail,
Loyalty schemes are part of defensive marketing strategies
which aim to retain existing customers.
Retailers use loyalty cards to identify and to reward their
customers for their loyalty. More precisely, loyalty cards
enable companies to acquire knowledge about and develop
a better relationship with their customers.
Several authors‘ state loyalty and membership cards must
provide value to their holders (Mauri, 2003; Yi and jeon,
2003; Meyer-waarden, 2006b). It also helps Retailers to
differentiate themselves from their competitors.
Consumer satisfaction is manifested in loyalty: Dick and
Basu (1994) suggest that loyalty is the result of a more
favourable attitude and repeat purchase behaviour. Meyer-
Waarden (2006) found that loyalty programs have a positive
impact on customers‘ share of wallet.
Page 63
Bhattacharya and Sen (2003) propose that strategies to
develop customer identification are especially beneficial in
industries where consumers purchase frequently, and
differentiation between suppliers is low. DeWulf et al.,
(2001) show for relational investments in consumer–firm
relationships the existence of a reciprocity norm:
customers evoke obligation towards those who treat them
well or provide value.
In addition, customers who become members of the loyalty
program are likely to identify more strongly with the
company, because the membership relates them to a group
of privileged customers (Bhattacharya et al., 1995 ).
Hence, loyalty programs can create affective commitment, a
generalized sense of positive regard for, and attachment to,
the organization. In this way, loyalty programs not only buy,
but also earn, customer loyalty.
Page 64
2.10 Efficiency Measuring Mechanism :
One problem that deserves attention is the lack of
connection between strategy and measurements. Adams et
al. (1995) report that many measurement initiatives are not
derived from strategy and are therefore not supporting the
business. Although it seems obvious and natural to base a
measurement system on the company's strategy, Eccles
(1991) claims that a surprising number of retailers do little
to measure the variables described in their strategies.
Because of the missing connection, measures and
measurement activities seem focused on internal functions
instead of overall company performance and customer
needs.
He added, ―Managers in charge of the operations
sometimes introduce metrics to allow them to be in control.
When a specific problem or activity has received
management attention for a while, it is usually corrected.
Attention is then automatically focused on other and more
urgent problems. While new metrics are defined to monitor
the new problems, the old metrics are kept because the
problem might turn up again. Consequently, the number of
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metrics increases while consuming more and more
resources, but adding little value.‖
2.11 Logistics :
Logistics is an important component of supply chain
management (Stank et al., 2005). The Council of Supply
Chain Management Professionals (2007) defines logistics
management as ―that part of Supply Chain Management
that plans, implements, and controls the efficient, effective
forward and reverse flow and storage of goods, services
and related information between the point of origin and the
point of consumption in order to meet customers‘
requirements.‖ Stank et al. (2002) describe the
Importance of integrating the logistics processes of all
supply chain partners to better serve the needs of ultimate
customers. Rodrigues et al. (2005) identify logistics as ―one
of the largest costs involved in international trade.‖
Today, many companies are outsourcing some of their
logistics and supply chain functions to outside firms as
they wish to focus on their core business or because
another company can provide a competitive advantage
through that area. (Quinn & Hilmer, 1994).
Page 66
Logistics has emerged as a major tool in company
management. Its importance was recognized by retailers
when they began to exploit it to achieve a sustainable
competitive advantage. (Pache’, 1998).
Food retailers have quickly realized that logistics
outsourcing requires the acquisition of organization know-
how to optimise cost conditions, service and reactivity. In
fact they must have criteria to objectively compare
performances of the various contractors and then monitor
specialized service. (Pache‘ 1998)
Logistics outsourcing amounts to permanently managing a
series of contracts with specialized service providers
whose service quality, reliability and reactivity are not
known. Thus the idea of outsourcing logistics is moving
towards the mainstream (Pache‘, 1998)
Outsourcing logistics is a continuation of the strategic
approach and results from a very progressive
transformation of older managerial practices. The trend is
to resort to specialised service providers with whom long
term relational contracts are sometimes signed. (Stank and
Daugherty, 1997)
Page 67
So the transition from completely self handled to totally
outsourced logistics corresponds to a completely renewed
vision of the retailers
In other words, ―retailers can impose strict discipline on
suppliers in terms of quality control and delivery
schedules‖ (Fernie and Mckinnon, 1991) this improvement
in the performance of the supply chain should, in the last
resort, increase the value provided to end users.
2.12 Manpower Utilization In Retail :
Manpower practices of Retailers have not been the subject
of extensive academic research. This is unfortunate, as
effective HRM and efficient manpower practices are
important for the success of retailers of any size.
(Arrowsmith and McGoldrick, 1996). Due to multi-faceted
nature of large scale retailing, human resource manager in
large retail chains in particular face a number of formidable
challenges as they have to manage an often quite diverse
workforce spread across many retail role, functions and
location.
Page 68
Food and grocery retail is frequently associated with
irregular working hours and mediocre pay. Managing and
motivating a diverse workforce with disparate interests and
aspirations is often a challenge.
Automation has changed the nature of many jobs in the
Indian retail. The Researcher tried to understand how the
food and grocery organised retail outlets are optimizing
their manpower.
According to KPMG report on Indian Retail (2010): Time to
change Lanes, It is stated that Indian retailers are turning
their attention towards employee productivity to boost
sales. Many retailers are going slow on hiring in back end
operations with training staff high on their agenda.
Companies need to review their optimization strategies in
the changing environment as with effective optimization
they are likely to be able to bring about savings leading to
improved competencies even in an unfavorable climate.
Further Retailers like Reliance ,Reliance Fresh stores has a
unique model of manpower optimization in which it aims to
provide direct employment to 5 lakh young Indians and
indirect job opportunities to a million people. The company
Page 69
has plans to train students and housewives in customer
care and quality services for part-time jobs. This is unique
because it will create a talent from where the resource can
be drawn for peak demand periods in the stores.
In the same direction, Future Group strongly believes that
Talent management continues to be the core focus for the
company. Considering the multiple businesses and rapid
expansion expected across the business, the company saw
merit in taking a fresh guard to the way in which business
would run in order to meet the next leg of expansions.
During the year 2006-07, the company conducted an
extensive review of in-house talent management, which
involved mapping every managerial position in the
organization for their skill sets, competence and attitudinal
aspects as well as taking an inventory check of the existing
talent base and addressing their development needs.
Development Centers were created with in-house
assessors, which further aided in identifying potential
resources and helped chalk out post assessment
development plans.
Page 70
Continuing with its policy of strategic alliances, the
company is collaborating on joint degree programs with 15
management schools, design institutes and institutes of
higher learning in areas like food business, supply chain
management, design experience management etc. This
‗Seekho‘ program‘ for external and internal candidates has
ensured a steady stream of mid level, well trained retail
professionals every year.
The company‘s ‗Gurukool‘ program provides the front-end
employees an opportunity to imbibe the company‘s values
and a sense of ownership to the company.
(www.scribid.com)
2.13 Gaps in study and Important Variables :
While the literature review covers all important variables of
organised retail viz. supply chain, on shelf availability and
problem of stock out, shelf space utilization, consumer
satisfaction, technology in retail, measurement of efficiency
etc. There is no attempt made to correlate the supply chain
or use of technology with consumer satisfaction,
particularly in the Indian context and understand how the
independent variable of stock availability and stock display
impact consumer satisfaction. Thus, the literature is
Page 71
missing in integrating customer satisfaction with total
supply chain as measured in terms of stock availability and
stock display.
Further, on efficiency parameters like shelf space
utilization, manpower utilization, redressing consumer
complaint literature is mostly in the context of matured
western markets and detailed study on this in the organised
food and grocery sector has not been undertaken.
Page 72
CHAPTER 3
OBJECTIVES AND HYPOTHESIS
Table of Contents
No. Title Page No.
3.1 Objectives 73
3.2 Hypothesis 75
Page 73
Based on gaps identified in literature review
following objectives and hypothesis were set for the
research study
3.1 Objectives :
1. To study effect of Supply Chain Alignment on Customer
satisfaction.
For this research work, supply chain alignment is to be
measured in terms of availability of stock and its
effective display on the shelves in the store. For measuring
customer satisfaction, parameters like range of goods
available, freshness of stock, price fluctuation etc are used.
2. To study Application of Technology impacting Consumer
Satisfaction
The researcher is trying to find out how retailers are trying
to use different levels of IT as appropriate to their format
and achieve higher consumer satisfaction.
3. To study the differences in efficiency monitoring
practices in different retail formats.
Page 74
Here the Researcher is trying to assess whether different
formats differ in focus on their important efficiency
parameters.
4. To study variation in usage of outsourcing logistics
amongst different retail formats.
The Researcher is aiming to study in different retail
formats, the status of outsourcing of inward logistics for
receiving and replenishing stocks.
Page 75
3.2Hypothesis :
H1: There is a positive significant correlation
between Supply Chain Alignment and Consumer
Satisfaction.
Customer satisfaction is dependent on Stock
Availability and Stock Display which depends on
Alignment of Supply Chain. This view has also been
expressed by Christopher (1992:25) who stipulates
that the ultimate purpose of any supply chain is to
satisfy customers. Further, Corsten et.al (2003,
pg603) state ―Customer satisfaction for retail
consumers is manifested by product on shelf
availability‖
H2: Application of Technology is significantly related
to Consumer Satisfaction.
The focus of the retailing sector today is to develop
link with the consumer through the use of
Information Technology. This view has been
corroborated in the Metro –AG Report Germany
(2002) ―Use of technology, can drastically improve
Efficiency and Consumer Response performance.‖
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H3: Different Retail formats will differ in measuring
the important parameters of the efficiency of supply
chain.
In order to remain competitive it is imperative that
retail outlets measure efficiency and analyze data to
formulate their strategy for operations. Barros et.al
,2004 have made similar observation, ―The analysis
of efficiency measurement has become an
important activity in retail.‖
However each store format may differ in their focus
on the efficiency parameters based on their specific
requirements.
H4: Different retail formats differ in outsourcing
logistics of food items.
In Indian scenario there is a range of retail formats
covering small, medium and large stores.
Outsourcing of inward logistics for receiving and
replenishing stock will differ. It could be manual,
partly outsourced and completely outsourced.
Page 77
Morgan (2006) substantiates this observation, ―The
way in which outsourcing logistics is implemented
differs from one retailer to another.‖
Page 78
CHAPTER 4
RESEARCH METHODOLOGY
Table of Content
Number Title Pg
4 Research Methodology 79
4.1 Sources of Data 79
4.2 Sampling 81
4.2.1 Sampling Design 81
4.3 Probability Sampling 85
4.3.1 Random Sampling 85
4.3.2 Stratified Sampling 87
4.4 Sample Justification 90
4.5 Response Rate 92
4.6 Questionnaire Description 94
4.7 Reliability Test 97
4.8 Overcoming errors 99
4.8.1 Pre-testing & Pilot Study 102
4.9 Relating the questionnaire to research objectives
103
4.10 Approach to recording data 103
4.11 Time Period of study 104
4.12 Profile of Respondents 105
4.13 Data Analysis Techniques 118
Page 79
4. Research Methodology :
This research study is based on survey of organised food
and grocery retail outlets. For the purpose of the thesis
both Primary and Secondary sources of Data were used.
4.1 Sources of Data :
Primary and secondary data sources were used to collect
information about aspects of supply chain and customer
satisfaction in organised food and grocery retail
businesses. Survey involving personal face- to -face
interviews with both retailers and consumers of Mumbai‘s
organised food retail was conducted. Key participants in
Mumbai‘s food retail were included. Executives (general
managers, operations managers, buyers, store managers)
of 52 organised food and grocery retail outlets covering 11
hypermarkets, 7 mid sized outlets and 34 convenience
stores responded to the survey In addition to this 1103
consumers shopping in these outlets were interviewed.
Information collected from secondary data sources
included books, magazines, journals, reports and websites.
A systematic review of published reports like Datamonitor,
Page 80
Euromonitor, and KPMG about supermarkets in India was
conducted. These data that are intended to meet the needs
of government departments and local governments are
usually clearly defined, well documented and of a high
quality. Such data is accessible in compiled form, and are
widely used by other organization and individual
researchers (Saunders, et al, 2003)
Further, Data on the internet was located using search
engines like EBSCO and online journals of Retailing. The
researcher while accessing the secondary data excluded
the data which was not relevant to the researcher‘s
objective and questions.
The researcher made a quick assessment of the reliability
and validity of the data by looking at the source of the data.
Dochartaigh (2002) refers to this as assessing the
reputation of the source
―The secondary data provide a useful resource with which
to compare or set in context the researcher‘s own findings‖
(Saunders et al.2003). However, Prof. Bowley points out,
―secondary data should not be accepted at their face value‖
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The reason is that such data may be erroneous in many
respects due to bias, inadequate size of the sample,
substitution, errors of definition , arithmetic errors etc
(Gupta,2005). Keeping this in mind the researcher ensured
that the secondary data used is suitable for this research.
The suitability of data was judged in the light of the nature
and scope of investigation. The researcher checked the
adequacy of the data in the light of the requirements of the
survey.
4.2 Sampling :
Technique of Data collection was Sample Technique where
a part of the universe is studied and the conclusion about
the universe is drawn from this data. In consumer research
census is not practical and normal sampling technique is
used for the survey.
4.2 .1 Sampling design :
Sampling design is a definite plan for obtaining a sample
from a given population. It refers to the technique that the
researcher adopts in selecting items for the sample.
(Kumar, 2008)
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Outlining the universe and defining the sample unit:
While developing the sample design the first step
undertaken by the researcher was to clearly outline
and identify the set of objects to be studied. In this
case it was the organised food and grocery retailers
in the city of Mumbai and its suburbs and the
consumers shopping in these outlets.
Sample Frame: Sampling frame is the actual set of
units from which a sample has been drawn
(Shahjahan,2005) In this study the sample frame is
the organised Food and grocery outlets in Mumbai
and the population that shops in the organised food
and grocery retail. The researcher took care to
ensure that the source list is as representative of the
population as possible.
Here the source list was prepared by the researcher
which was comprehensive, reliable and appropriate. For
this purpose the sample frame was devised after going
through the various published reports that described the
Page 83
various attributes of the formats and enlisted the
recognized food and grocery retail outlets in Mumbai.
In terms of the consumers, the researcher attempted to
study customer satisfaction in organised food retail. For
this purpose, the researcher took care and interviewed
only those consumers who were shopping in these retail
outlets.
If the sampling frame is inappropriate it will lead to a
systematic bias: (Kumar, 2008) the researcher carried
out a careful investigation of the frame to be adopted
since the defects are not apparent until a detailed
investigation has been made.
Kish (1995) posited four basic problems of sampling
frames:
1. Missing elements: Some members of the population
are not included in the frame.
2. Foreign elements: The non-members of the
population are included in the frame.
3. Duplicate entries: A member of the population is
surveyed more than once.
Page 84
4. Groups or clusters: The frame lists clusters instead
of individuals.
The researcher took care to overcome the basic
problems of missing elements by extensively reviewing
the list of retailers in the city of Mumbai and carefully
excluded the non members of the population or foreign
elements in the source list i.e. In this case they were the
kirana stores who have only modernized their front- end
and display and cannot be included in the study.
Further the researcher made certain that there were no
duplicate entries or no member of the population was
surveyed more than once and that frame listed only
individuals and not any groups or clusters.
Sample Size:
― Sample size is one which fulfills the requirements of
efficiency, representativeness, reliability and flexibility for
the research work ,‖ (Kumar,2008) That is why the sample
of consumers and food and grocery retailers was so
selected that they truly and adequately represent the
universe otherwise the results obtained would be
misleading. Taking this into account the researcher
Page 85
interviewed 1103 consumers at 52 different food and
grocery retail formats across the city of Mumbai.
The size of the sample was considered to be optimum
because it fulfilled the requirements of representativeness
and reliability. Gupta (2005) emphasized that sample
selection and data collection are interwoven and one has an
impact on the other.
4.3 Probability Sampling :
Sampling for this thesis was not haphazard selection.
Probability sampling where every item in the universe has a
known chance or probability of being chosen for the study;
it includes Random sampling and stratified sampling
methods which were used by the researcher.
4.3.1Random Sampling :
To ensure balanced representativeness of the consumers,
the random sampling was used. According to Gupta (2005),
Simple random sampling refers to that sampling technique
in which each and every unit of the population has an equal
opportunity of being selected in the sample, ―personal bias
of the researcher does not influence the selection.‖
Page 86
This sampling was preferred over other techniques
especially convenience sampling because it may hardly be
representative of the population (Gupta, 2005). In
comparison, since random sampling is a probability
sampling, it eliminates bias due to personal judgment.
In terms of Retailer sampling, Stratified sampling was used.
In this type of sampling the population embraces a number
of distinct categories; the frame can be organised by these
categories into separate "strata." A stratum is a subset of
the population that shares at least one common
characteristic. (Gupta, 2005). According to Shahjahan
(2005) the units within each stratum are as homogeneous
as possible. Various Strata are non over- lapping. This
means each and every unit in the population belongs to one
and only one stratum.
This method could be used because the population could
be partitioned into smaller sub groups of population, each
of which is homogeneous according to the particular
characteristic of interest. Stratified sampling is
considered to be appropriate for this study because it
reduces sampling error and also the Variability within
strata is minimum while Variability between strata is
Page 87
maximum . C.J Grohman has rightly pointed out that this
type of sampling balances the bias of deliberate selection‖
(Gupta, 2005)
Further it was found to be representative of the population:
Since the population is first divided into various strata and
then a sample is drawn from each stratum there is a little
possibility of any essential group of the population being
completely excluded.
In addition to it being representative it was also considered
to be more accurate (Gupta, 2005) and the division of the
population into relative homogeneous sub –groups leads to
administrative convenience(Shahjahan,2005)
4.3.2 Stratified Sampling :
While applying Stratified sampling, the organised food and
grocery Retailers, were sub divided or stratified into
mutually exclusive groups and included all items in the
universe. After this a simple random sample was then
chosen independently from each group. Here the base of
stratification was the size of the store. The researcher
created three strata‘s for the purpose of this study viz.
Page 88
Hypermarket, mid -sized store and convenience stores.
Grocery retail formats are subject to a wide range of
variation(Kahn&McAllist,1997;Levy&Weitz,2001) The three
formats used for our study i.e. Convenience store, midsized
stores and hyper markets compete for the major shopping
trips and constitute the organised food and grocery
market(Marion ,1998)
Page 89
TABLE 4.3.2
Classification of Retail sample: The three formats and their
significant characteristics:
Area Convenience
stores
Midsized stores Hypermarket
Range Food products
and groceries
Broad and deep
food
assortments,
significant non
food
assortments
Very broad and
deep
assortments of
food and non
food products
USP Fast and
convenient
grocery
shopping
Broad range of
Food and non
food product
One stop
shopping:
Focus also on
shopping
experience
Size 1500-2500sq.ft 3,500-
5,000sq.ft
8000 sq.ft and
above
Sourcing centralized centralized centralized
Source: Researcher’s Own Analysis
Page 90
4.4 Sample Justification :
Mumbai was chosen for study because it is the most
important economic and commercial Centre. In addition to
this it is among the top 10 preferred location for organised
retail in India. (www.dnb.co.in/IndianRetailIndustry) Further,
Organised retailers from (Mumbai, Pune and Ahmedabad
have the highest share (67.1%) in the total floor space in
India. (www.dnb.co.in/IndianRetailIndustry)
―Mumbai‘s retail system is the most advanced, with the
largest number of supermarkets chains, the biggest
department stores and the largest diversified retail
conglomerates in India.‖ (www.cbreindia.co.in,
www.dnb.co.in/IndianRetailIndustry)
Organised retailing is growing parallel with real estate
development in Mumbai. With new residential complexes
coming up, there is ample opportunity for the Retail chains
to open new outlets in these locations catering to cluster of
nearby residential complexes. With middleclass population
living in these areas who would like to shop in modern
retail outlets, these stores quickly gain the needed critical
Page 91
mass of the customers for the commercial viability of the
enterprise.
Diversified residential complexes in the city of Mumbai truly
represent the urban middle class in India with scope for all
three retail formats to co-exist. Also retailers in Mumbai
have attained a certain level of maturity in to life cycle and
hence data can be relied upon to understand the current
scenario of organised retail and make future projections.
It may be mentioned that Mumbai is a trend setter in
organised retail which is being emulated by other metros.
Mumbaikars are well informed consumers and the local
supermarket chains showed much more willingness to co-
operate in this study than their counterparts in other cities
which further motivated the researcher to conduct the
study in the city of Mumbai.
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4.5 Response Rate :
Response rate is calculated by the number of individuals
who respond and complete the questionnaire divided by the
total number of individuals contacted as given below:
Response rate: Number of individuals who respond and complete the questionnaireX10 0
Total number of individuals contacted
Response rates are strongly affected by the method of data
collection. In general, the more interaction between the
potential respondents and the researcher, the higher the
response rate. (daa.com.au)The researcher collected the
data using face to face interviews.
In this research, a total of 80 Retailers were approached to
complete the questionnaire. Out of which 52 retailers filled
them which was used for the study. Though 3 more retailers
responded, they were not included in the study as they did
not permit the researcher to interview the consumers
shopping in there. Multiple outlets of various Retail store
chains were also covered.
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A total of 1680 respondents were approached out of which
1103 respondents from a cross section of people belonging
to different age, Gender, Marital Status, education level and
employment filled the questionnaire.
Thus response rate of questionnaire for Retailer was 65%
and for the consumers it was 65.5 %. According to Gupta
(2005) generally, the highest response rates in surveys
based on random samples are achieved when personal face
to face interviews are conducted with the respondent. For
this purpose the researcher conducted face –to face
interviews
In order to improve the responses, the researcher had a
short covering letter which focused on the importance of
the study and the respondent‘s reply. The questionnaire
was short and easy to complete. The researcher tried to
increase the trust by displaying the official documents and
stationery demonstrating it as an academic research work.
The researcher ensured that the questions were not
ambiguous, had clear instructions and asked only what was
necessary. In the beginning, before starting the data
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collection, the researcher phoned, emailed or personally
met the retail executives to inform about the interview and
set it up. The person approached were part of the target
population
4.6 Questionnaire Description :
In this research work questionnaire used was specifically
designed for this survey. Questionnaire is a data collection
tool in which each person is asked to respond to the same
set of questions in a pre determined order (deVaus, 2002).
To gain insights into the supply side and to understand the
operations of organised food retail, before formulating
questionnaire, key officials responsible for retail
modernization and experts from various economic and
distribution research centers in the city were met. Since the
intention was to gain an understanding of the relevant
issues, the interviews typically involved a great deal of
probing and exchanges.
In accordance with the topic of research and the purpose of
testing hypothesis, a questionnaire was prepared which
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included aptly worded questions with proper relevance and
emphasis on the data desired for the purpose of the
investigation.
The role of questionnaire is to ensure a structured
interview across all subjects. It is an important element in
the success of data collection. The survey through
questionnaire was administered by the interviewer through
face- to- face interview.
For the thesis two sets of questionnaires were prepared.
One for the retailer and the second for the consumer. Pre-
tested questionnaire with both open ended and closed
ended questions for retailers and another questionnaire
with only closed ended questions for consumers was
designed.
In the Retailers questionnaire, some additional questions
were included on measuring the efficiency parameter
which are not required for testing the hypothesis but would
give us an idea about over all controls being followed in
organise retail.
Further, the questionnaire can be broadly categorized into 2
divisions:
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The two sets of questions
1. Classification Data and
2. Questionnaire Data
Classification Data on profile of Respondents: Consists of
questions which include general preliminaries such as Age,
Gender, Marital status, occupation and educational
qualification. This was done to get a perspective on
distribution of profile of consumers.
For the questionnaire data, the researcher opted for a
structured interview because a structured interview is one
in which each subject or respondent is asked a series of
questions according to a fixed and a prepared interviewing
schedule. Semi structured interview was avoided as it could
mean different things to different people. (Brace 2004)
―Questions applying identification and description of the
respondents should come first followed by major
information questions.‖(Gupta, 2005) The sequence of the
questions was considered carefully in terms of the purpose
of the study and the persons who will supply the
information.
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Further, the questions were arranged in a logical order so
that a natural and spontaneous reply to each was induced.
The questionnaire administered to the consumer consisted
of 12 statements to be rated on a 4 point rating scale where
1 meant very low and 4 meant very high. The purpose of a
rating scale is to allow respondents to express both the
direction and strength of their opinion about a topic.
Typically, market researchers prefer respondents to make a
definite choice rather than choose neutral or intermediate
positions on a scale. For this reason, a scale without a
midpoint is preferable, provided it does not affect the
validity or reliability of the responses. (Garland, 1991)
The number of the questions included depended on the
objective and scope of the investigation: (Gupta, 2005). For
this thesis the questionnaire included four statements
regarding stock availability, two statements regarding stock
display and six statements regarding customer satisfaction
which the consumer at the food retail outlet had to respond
to by choosing the option that best suited him / her. These
options were rated from 1 to 4.
4.7 Reliability Test :
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The questionnaire was further tested for Cronbach Alpha α
reliability to test the internal consistency of the items.
According to Aiken,(2003) This is a general formula for
estimating the reliability of a test consisting of items on
which different scoring weights may be assigned to
different responses.
Reliability refers to the consistency of scores obtained by
the same person when re-examined with the same test on
different occasions or with different sets of equivalent
items or under variable examining conditions.
SPSS was used to analyze the data. In this research,
Cronbach Alpha reliability coefficient for the consumer
questionnaire was found to be 0.740 which is within the
acceptable range. (George and Mallery, 2003)
Another Set of Questionnaire was designed for the retailers.
Here split half reliability test was used which is a method of
assessing internal reliability by correlating scores from one
half of the items on an index or test with scores on the
other half of the items.
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Split half Co-efficient for the questionnaire was found to be
.741 which is within the acceptable range. Thus we accept
the questionnaire for the retailer as a reliable testing
instrument
For getting responses, both Nominal and Multiple choice
questions were used to get the answers. Nominal
questionnaire or Yes and No questions pose a simple
alternative to the respondent. While multiple choice
questions: the possible answers are known and few in
number. Nominal Scale was used for 13 questions
pertaining to efficiency measuring mechanism and rating
scale was used for the question on Technology. To get a
single response on outsourcing of logistics a three point
scale was used.
4.8 Overcoming errors :
In order to overcome bias in the selection process, the
researcher drew the sample entirely at random. Due to a
large sample size, the researcher had to take care of both
sampling as well as non sampling errors.
Cape, Lorch and Piekarski (2007) shows how drop out is a
function of length of questionnaire, as respondents become
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bored and fatigued. To overcome the danger of
respondents continuing reluctantly till end providing
potentially unreliable data, the researcher ensured only
relevant questions were asked and kept the length of the
questionnaire in mind while designing the questionnaire.
The researcher took care that the inclusion of data was
from within the population only thereby reducing the fear of
over coverage. Further, data was collected from consumers
in the retail store to minimize the error and ensure that
sampling frame included all the relevant elements in the
population and overcome the problem of under coverage.
Foddy (1994:17) emphasized that the questions must be
understood by the respondent in the way intended by the
researcher and the answer given by the respondent must
be understood by the researcher in the way intended by the
respondent. To address this concern and in order to
overcome the issue of measurement error, the researcher
clarified the question wherever necessary.
The researcher was cautious of making value judgments.
Further, during the interview, the interviewer took care to
never show any expression of surprise, agreement,
disagreement or criticism when the respondent was
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answering the questions asked so that the interviewee‗s
responses are not influenced
Respondents were encouraged to give frank and honest
responses; they were assured that their identity and the
identity of their retail organization would be protected.
The researcher obtained as much information as possible
about the objectives in order to maximize the value of the
study. For this the researcher tried to give an honest
indication of the time commitment involved as this is an
important concern of individuals deciding whether to
participate or not. The researcher explained briefly what the
survey is about and its purpose. In addition to this, the
researcher also outlined to what use the findings will be put
to.
Respondents were assured that all the information given
as part of the survey will be treated in strictest confidence.
The researcher assured them that under no circumstances
information on an individual retail outlet will go beyond the
academic project. The researcher also emphasized that any
findings of the survey will only be made available in the
form of aggregate results, so that it will be made impossible
to identify the replies of any individual firm.
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Further, Data entry was verified and rechecked in order to
reduce processing error.
Data specification was adequate and consistent with
respect to objective of the survey. The researcher informed
and took appointments to ensure that the retailers
participating in the survey were contacted at the time
convenient to them.
4.8.1 Pre-testing the questionnaire and the Pilot Study :
The questionnaire should be pre-tested with a group before
using it with a larger sample. The advantage of pre-testing
is that the shortcomings of the questionnaire are avoided.
(Saunders et.al, 2003) It also helped researcher get an idea
about the extent of non-response likely to take place.
The researcher undertook a pilot survey. ―The pilot survey
is particularly useful for uncovering problems with the
questionnaire document.‖ (Gupta, 2005, Kumar, 2008) It
has allowed the researcher to test the acceptability of the
questionnaire to the target sample. The acceptability of the
survey in terms of the length of the questionnaire or the
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time commitment required of the respondents was also
tested.
4.9 Relating the questionnaire to research objectives :
The researcher constructed and used the questionnaire to
facilitate the respondents to give the best information that
they had. Questionnaire was designed to collect data that
was required to answer the objectives of the study as
objectively as possible while minimizing the likelihood of
error occurring at any stage in the data collection and
analysis process.
4.10 Approach to recording data :
The researcher overcame the possibility of ‗mixing up data
from different interviews and not completing each
questionnaire at the time it took place‘ (Ghauri and
Gronhaug, 2002) by insisting on answering all questions
by the respondent and compiling the data as soon as it was
recorded.
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A full record of the interview should be compiled as soon
as possible after it has taken place (Healey, 1991; Robson,
2002.) The researcher adhered to this and tried to capture
the exact nature of the explanation provided as well as
general points of value particularly in the area of consumer
satisfaction from the interaction with the respondents.
4.11 The time period of study :
The researcher started collecting the data in 2007. The pilot
study was undertaken in 2007 and 2008. The primary data
collection was completed by December 2009.
The researcher would like to add that recent secondary and
tertiary source of literature were included in the literature
review.
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4.12 Profile of Respondents :
Classification of the profile of respondents: The
Classification Data pertains to data collected over six
questions. It was felt necessary to collect directly details of
respondents pertaining to age, gender, marital status,
education level, employment and size of the family to get an
overall profile of the customers shopping in organised retail
outlets.
The relevant charts and figures pertaining to the data
obtained with reference to the six classification factors
have been provided for the purpose of effective visual
presentation of sample distribution.
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4.12:1 Age
Table 4.12:1: Classification of Data collected on the profile
of Age of the respondents
Age Frequency
below 25 yrs 308
26-30 245
31-35 141
36-40 119
41-45 142
46 and above 148
Total 1103
Figure: 4.12:1: Classification of Data collected on the profile
of Age of the respondents
The 1103 respondents were divided into 6 groups according
to their age. 27.9 % or 308 respondents were below 25
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years, while 22.2 % or 245 respondents out of the total
sample were in the age group of 26-30.
Data clearly shows that organised retail is visited by all age
groups. Though 50% of customers are below the age of 30.
It could be due to demographics in India which is tilted
towards younger age.
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4.12:2 Gender
Table 4.12:2: Classification of Data collected on the profile
of Gender of the respondents
Gender Frequency
Male 480
Female 623
1103 1103
Figure: 4.12:2: Classification of Data collected on the profile
of Gender of the respondents
480 males in comparison to 623 females responded to the
questionnaire.
Gender distribution of shoppers in these retail outlets
comprising of 56.5% males and 43.5% males reveals that a
sizeable number of males are also shopping for food and
grocery items. This is quite different than shopping at
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vegetable markets and street vendors where overwhelming
majority of female shoppers would be expected. This also is
an indicator of changing social scene as growing number of
women are working, hence the responsibility of shopping
for essentials have to be shared.
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4.12:3Martial Status
Table 4.12:3 Classification of Data collected on the Martial
Status of the respondents
Gender Frequency
Married 653
Unmarried 450
1103 1103
Figure 4.12:3 Classification of Data collected on the Martial
Status of the respondents
59.2% or 653 respondents were married compared to 40.8%
or 450 respondents who were unmarried. Though the
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percentage of married shoppers is more, it is not
overwhelmingly in favor of any one group in terms of
marital status.
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4.12:4 Educational Qualification
Table 4.12:4 Classification of Data collected on the
educational qualification of the respondents
Qualification Frequency
Matriculate 46
Hsc 162
Graduate 569
Post Graduate 285
Others 41
Total 1103
Figure 4.12:4 Classification of Data collected on the educational qualification of the respondents From the above figures it clearly emerges that shoppers in
the organised food and grocery retail outlets are well
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educated as 77 % of them were found to be graduate and
above. 569 respondents (51.6%) were graduates followed by
285 or 25.8 % respondents who were postgraduates.
Moreover almost all shoppers are literate which helps a
great deal to the retailer in communicating with the
shoppers. Unlike in the Kirana shops where the customer is
able to directly talk to the shop owner and get the required
information on the goods, the same is not possible in case
of organised retail. Here a communication regarding price,
offers etc has to be displayed on the shelves and hence
require a minimum reading skill for the shopper to
understand the same.
Moreover these educated consumers consider non-
monetary cost such as time and effort in evaluating
shopping at a particular store. Hence anything that can be
built to reduce time, effort and search costs can increase
perceptions of value. The shopping experience as created
by a clean, hygienic, well lit and neatly laid out store would
increase store patronage by educated people.
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4.12:5 Employment
Table 4.12:5 Classification of Data collected on the details
of employment of the respondents
Employment Frequency
Government 52
Non-Government 317
Self-Employed 237
Retired 37
Non-working 460
Total 1103
Figure 4.12:5 Classification of Data collected on the details
of employment of the respondents
Close to 42% respondent or 460 respondents were non –
working; majority of them would be housewives who are
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not working. In Mumbai, because of the predominance of
private sector enterprise and the entrepreneurial spirit
majority of the population comes from non-government and
self employed segment and this is reflected in the sample
as well.
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4.12:6 Size of the family
Table 4.12:6 Classification of Data collected on the details
of the size of the family
Number of Family
members Frequency
1 14
2 80
3 203
4 546
5 and above 260
Total 1103
Figure 4.12:6 Classification of Data collected on the details
of the size of the family
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Small size nuclear families with three and four members
constitute approximately 68 % of the total size of the
sample. This segment is under constant time pressure and
is looking for convenience of one stop shopping with wide
product portfolio and hence patronize organised retail
outlet.
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4.13 Data Analysis Techniques Used :
Following Parametric and Non Parametric tests were used
to test the hypothesis
Correlation
Regression
Chi square
ANOVA
Correlation analysis deals with the association between two
or more variables (Gupta, 2005) Correlation was used
because researcher wanted to know whether there is a
correlation between Supply Chain and Consumer
satisfaction. Similarly data was tested for determining the
correlation between Use of Technology with Consumer
Satisfaction.
The Researcher used the Karl Pearson‘s method, popularly
known as Pearson‘s co-efficient of correlation. The
coefficient of correlation describes not only the magnitude
of correlation but also its direction.
Once the correlation is established, regression output is
obtained to determine statistically significant causal
relationship between independent and dependent variables.
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Here the value of R2 which is the value of coefficient of
determination determines the explainable part of the
dependent variable by the variation in the independent
variable. Any value was accepted as statistically significant
only if it has a minimum significance of .05 or 95%
confidence level.
According to Chou (1963)Regression analysis attempts to
establish the nature of relationship (causal etc) between
variables –that is , to study the functional relationship
between the variables and there by provide a mechanism
for prediction, or forecasting. The researcher used
regression output to formulate a predictive model using the
value of independent variable of supply chain to predict the
value of dependent variable of Consumer satisfaction.
Chi-square was used to test the third hypothesis, ―Different
Retail Formats differ in measuring the important parameters
of efficiency of supply chain.‖ Chi square is statistical
measure used in the context of sampling analysis for
comparing a variance to a theoretical variance.
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Since response used for testing this hypothesis was on
nominal scale (Yes or No), to establish whether variation to
response to each parameter by different categories of store
was statistically significant; non parametric test of Chi
square was used.
Chi Square values which were having significance of
minimum .05 were only used to accept categorical variation
in measuring of particular efficiency parameters.
ANOVA is used to simultaneously compare the mean of the
population. In this study the fourth hypothesis is, ―different
retail formats differ in outsourcing logistics of food items‖.
The researcher used ANOVA to establish whether the
difference among different retail formats in outsourcing
logistics is statistically significant. This is accepted only if
the computed F value has a significance of.05 or higher.
Here one way ANOVA was used because the researcher
took only one factor i.e. Outsourcing of logistics for food
items and investigated the differences in the response
among different categories of retail outlets
In addition to this, frequency, mean, range and standard
deviation of the data were also computed using SPSS. This
was basically done to get a perspective on the spread of
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data around the mean and also how score differ in different
formats of stores. Interpreting this gives useful insight
about status of supply chain total and consumer
satisfaction as perceived by the consumer.
Page 122
Chapter 5
Results and Analysis
TABLE OF CONTENTS
Sr.No Title Page
5 Result and Analysis 123
5.1 Descriptive statistics 124
5.1:1 Stock Availability 125
5.1:2 Stock Display 125
5.1:3 Supply Chain Total (Stock Availability + Stock Display)
126
5.1:4 Consumer Satisfaction 127
5.1:5 Use of Technology 129
5.1:6 Measuring of Efficiency of Supply Chain 137
5.1:7 Outsourcing Logistics 153
5.2 Inferential Statistics
155
5.2:1 Correlation and Regression 156
5.2:2 Chi Square Test 164
5.2:3 ANNOVA 168
5.3 Summary of the Hypothesis Findings 169
Page 123
5. RESULT AND ANALYSIS :
5.1 Descriptive statistics :
The researcher collected data from 1103 consumers of 52
organised food and grocery outlets comprising all three
formats of organised retail viz. Hypermarket, Midsized and
Convenience store. Statistics from this data give very
useful insight into how the retailers are aligning and
focusing on the supply chain so that the stocks are always
available and visible to the consumers, the level of
technology that is being used, how efficiency is monitored
and status of outsourcing of inward logistics.
The statistics on these parameters namely, Stock
Availability, Stock Display, Consumer Satisfaction, Use of
Technology, Measuring of efficiency and Outsourcing of
Logistics are tabulated and interpreted below.
Page 124
5.1:1 Stock Availability :
Table 5.1:1 Descriptive Statistics for Stock Availability
N Min Max Mean
Std.
Deviation
Stock
Availability
1103 4.00 16.00 11.79 2.25
There were 4 questions put to the consumers on the stock
availability and response was rated on a scale of 1 to 4 with
4 being the highest and 1 being the lowest.
In the table above, the Mean is 11.79 as against the
maximum of 16. This indicates that stocks of food and
grocery are mostly available to the consumers. However the
standard deviation is on the higher side which means that
there are stores which have a poor record of stock
availability and similarly some have good availability of
stock.
The range between 4 to 16 is confirming that there is a wide
deviation from the mean in the score on this parameter.
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5.1:2 Stock Display :
Table 5.1:2 Descriptive Statistics for Stock Display
N Min Max Mean
Std.
Deviation
Stock
Display 1103 2.00 8.00 5.94 1.11
One of the major differentiator between organised retail and
old unorganised kirana shop is the Stock display which
helps the consumer in locating the item they require,
stimulates demand and positively contribute to overall
shopping experience.
Data on this parameter was captured by asking two
questions. The mean value of 5.94 against a maximum of 8
is fairly high and indicates that retailers are giving due
priority to this parameters. However, the standard deviation
of 1.11 is on the higher side. It may be added that there is a
constant challenge faced by the retailers in balancing the
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number of SKUs on display within the constraint of space
available.
5.1:3 Supply Chain Total (Stock Availability + Stock Display)
Table 5.1:3 Descriptive Statistics for Supply Chain Total:
(Stock Availability +Stock Display)
N Min Max Mean
Std.
Deviation
Supply
Chain Total 1103 9.00 24.00 17.74 2.93
The above table integrates the responses by the consumer
to the questions on stock availability and stock display to
get an overall picture of supply chain total at the organised
food and grocery retail outlets. This shows that while there
are instances where the consumer is not getting the items
that she wants to shop for, most of her requirements are
available in the store.
Though standard deviation of Supply Chain Total is on the
higher side, the minimum value of 9.00 and the mean of
17.74 give a positive and encouraging picture about the
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status of stock availability in organised food retail outlets. It
indicates that due importance is being given to this aspect
of the retail business.
5.1:4 Consumer Satisfaction :
Table 5.1:4 Descriptive Statistics for Consumer Satisfaction
N Min Max Mean
Std.
Deviation
Consumer
Satisfaction 1103 7.00 24.00 16.13 2.94
Data was collected to understand and get an insight on
consumer perception about fulfilling her aspirations from a
modern organised Food and Grocery retail shopping
opportunity. For this purpose six relevant questions were
designed to get score on whether she is getting fresh
vegetables and fruits, is the pricing at the outlet stable and
whether she is a loyal customer who regularly shops at this
outlet , her overall shopping experience and does she
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recommend the outlet to others and does she buy similar
products from the street vendor.
From the above table the researcher found that the mean of
16.13 against a possible maximum value of 24 is lower
when compared it with 17.74 which is the mean of supply
chain total score. The standard deviation of 2.94 is on the
higher side and the range of 7-24 is wide. This means that
some of the consumers are satisfied with the shopping
experience offered by organised food and grocery retail
stores however some have given quite low score on
consumer satisfaction. Overall picture that emerges from
the above statistics indicates that there is scope for
retailers to improve the score on customer satisfaction
which will result in customer loyalty and achieving
sustained growth of business.
Page 129
5.1:5 Use Of Technology :
Table 5.1:5.1 Descriptive Statistics for Use Of Technology in
planning and ordering of goods
N Min Max Mean
Std.
Deviation
Use of
Technology 52 1.00 4.00 3.05 1.03
In order to get a perspective on how organised retail in
India in all formats viz Hypermarkets, midsized and
convenience stores is using Technology in Planning and
ordering the goods, a questionnaire was designed to
collect the data on the same. The question asked to the
Retailer was whether process of planning and ordering of
goods was fully automated, most of it automated, some of it
automated or it is manual. The responses were rated on a
scale of 1 to 4, with 4 denoting fully automated process for
planning and ordering while 1 signified it being Manual.
From the above table, the mean value of 3.0577 against the
maximum value of 4 shows that technology is adopted to a
large extent by all formats of the retail outlets .However the
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standard deviation of 1.03 is on the higher side and shows
that still there are outlets who have not modernized
beyond using barcode readers at the billing counter and
their process of ordering and planning is still manual.
From the above data the researcher can deduce that the
retailers are keen to use technology. They understand that
with the growing number of SKUs and consumer expecting
wide variety for his choice, the process of planning and
ordering is becoming complex. They will have to use
technology in order to ensure optimum level of stock
availability.
Table 5.1:5.2 Descriptive Statistics for Level of Use Of
Technology, Status of Automation table
Planning &Order Frequency
Not Automated 7
Some of it is Automated 5
Most of it is Automated 18
Fully Automated 22
Total 52
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We should not lose sight of the spread of the data while
interpreting the statistics and the significance of the same
can be inferred from the frequency table above.
It is evident that the data is negatively skewed as number of
readings below the mean of 3.057 are 30 and above are 22.
Thus the mean of 3.057 has to be viewed cautiously in
drawing conclusion about the extent to which technology
has been adopted by the retailers for planning and ordering
function.
Figure 5.1:5.2: Use of Technology for Planning and
Ordering -Percentage
The above figure clearly indicate that technology has
penetrated into organised retail operation as only 13% of
Page 132
retail outlets are on manual mode. 42% of outlets are now
completely relying on technology for planning and order
and additional 35% are using technology for planning and
ordering most of their items.
Table 5.1:5.3 Descriptive Statistics for Use Of Technology,
Retailers Perception
Frequency
Yes
Happy with use of Technology 50
Not Happy with the Use of
Technology
2
Total 52
The retailers were asked whether they were happy with the
use of technology and their response is tabulated above.
The objective of asking this question was to get an idea of
how the retailer themselves perceive the benefits of the use
of technology. The response would indicate the level of
commitment of the retailer in implementing technology
which is very important in getting the full benefit of
modernizing the process.
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The response of 50 out of 52 retailers in affirmation clearly
indicates that the retailers are acknowledging the
usefulness of Technology and are enthusiastic about the
same.
Figure 5.1:5.3 Are Retailers Happy with Use of Technology
The above figures show that overwhelming 96% of retailers
are happy to use technology.
Page 134
Table 5.1:5.4 Descriptive Statistics for Use Of Technology,
Classification of Retailers response
Level of Satisfaction Frequency
Very satisfied 13
Satisfied 37
Just Adequate -
Dissatisfied 2
Total 52
The researcher further classified the level of satisfaction in
using the technology as fully satisfied, satisfied, just
adequate and dissatisfied. The response to this is tabulated
in the frequency table above.
It was found that majority of the retailers, 37 out of 52 are
satisfied but not very satisfied. This could be due to host of
reasons like hardware, software and technical support
issues, gap in requisite IT skills, communication problems
with central office and warehouse and technology not being
user friendly.
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Figure 5.1:5.4: Are Retailers Satisfied with the Use of
Technology
From the above it is clear that 71% of the retailers are
satisfied with the use of technology. However there is
scope further upgrading technology and making it user
friendly for the staff so that they move to very satisfied
category. Currently only 25% of the retailers are satisfied
with the use of technology and only 45 of the retailers have
given a feedback that they are not satisfied with the use of
technology.
Page 136
Table 5.1:5.5 Descriptive Statistics for Use Of Technology,
Giving a Competitive Edge
Frequency
Competitive Edge by usage of
Technology
39
Not Gain Competitive Edge 13
Total 52
The researcher further asked whether the application of
technology has given them a competitive edge. The
response to this is tabulated in the frequency table above.
It is clear that a large proportion of Retailers, 39 out of 52
feel that technology is helping them in gaining a
competitive edge. Acknowledging the usefulness of
technology indicates that the retailers themselves are
inclined towards modernizing their business by using
relevant technology
Page 137
Figure 5.1:5.5 Are Retailers gaining competitive Edge with
the Use of Technology
75% of Retailers feel that they have gained competitive
edge by using technology. This means that there is an
inherent feeling among retailers that using right technology
will make their business more competitive.
5.1:6 Measuring of Efficiency Parameters :
Regular and periodic measurement of important parameters
of efficiency of retail operation is extremely important in
order to take necessary measures where the values are not
meeting the targets. This helps in ensuring that overall
business target of profitability and growth are met. For this
the researcher chose the four important parameters of
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space utilization, manpower utilization, record of consumer
complaint and housekeeping.
The researcher also collected data on 9 other standard
efficiency parameters which are normally expected to be
followed by all formats of organised retail. This was
undertaken to ascertain whether systems are in place in
the organised retail to meet the consumer aspirations and
business needs.
The data collected on 4 important parameters of shelf space
utilization, manpower utilization, record of consumer
complaint and housekeeping are tabulated below.
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Table 5.1:6.1 Descriptive Statistics for Shelf Space
Utilization
Question Frequency Total
Monitoring
of shelf
Space
utilization
Type of store Yes (1) No (0)
Convenience
Store
21 13 34
Mid sized 1 6 7
Hypermarket 8 3 11
Total 30 22 52
As per data in the frequency table above 8 out of 11
Hypermarkets and 21 out of 34 convenience stores do
focus on monitoring shelf space. However midsized stores
do not attach similar importance to this as only 1 out of 7
stores is monitoring this important parameter.
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Figure 5.1:6.1 Monitoring of Shelf Space Utilization
The score of large format in measuring the important
parameter of shelf space utilization is 73% followed by 62%
for the small retailers. However it is very low at 14% for the
midsized store.
Midsized stores are generally old establishments and low
score on this important parameter indicates that they have
still have not modernized and incorporated good operating
practices. Also there is inherently no urgency felt by this
category of Retailers in improving shelf space utilization as
they are not located in prime areas.
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Table 5.1:6.2 Descriptive Statistics for different formats
differ in monitoring manpower utilization
Question Frequency Total
Collect
Data on
Manpower
Utilization
Type of store Yes (1) No (0)
Convenience
Store
23 11 34
Mid sized 1 6 7
Hypermarket 11 - 11
Total 34 17 52
The frequency table above shows that large format stores
give due importance to this parameter of efficiency as all 11
stores included in the survey are maintaining a record of
manpower utilization. Even in convenience stores the figure
is significant as 23 out of 34 stores in this format are
monitoring manpower utilization. However, picture is rather
dismal in case of mid size store where only 1 out of 7 stores
appreciate the importance of this parameter and collect
data on manpower utilization.
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Figure 5.1:6.2 Different formats differ in monitoring
manpower utilization
Due to rapid growth of organised retail in India, shortage of
trained manpower is already being felt. Also because of
higher demand, labor is becoming expensive. Hence
manpower utilization is becoming critical and it is
imperative that retailers give due priority to monitoring this
important parameter.
From the above it is clear that large stores or Hypermarkets
without exception (100%) are collecting data on this
parameter and even in small stores this figure is 67.6%
However in medium store, it is only 14.3%.
Large stores have to employ qualified staff who can
satisfactorily learn the modern work practices that are
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being rolled out in these stores, be it interaction with the
customer, housekeeping, proper display of products,
regular replenishing of stock on the shelves and quickly
handling the billing. Since employees with these skills will
be expensive, to ensure that cost is kept under check, it is
imperative to keep a record of and judiciously use
manpower. This possibly explains why in 100% of
hypermarkets in the sample, record of manpower utilization
is maintained.
In small store format 68% of retailers maintain the record of
manpower utilization which is reasonably high. This is
because they also need to keep a close follow up on
manpower utilization as they cannot increase number of
employees due to space constraint and yet have to ensure
that all aspects of operations are covered.
The mid size stores are generally old establishments with
relatively older employees where potential to improve skills
is limited and replacing them is difficult. Hence retailers are
resigned to the fact that they will have to maintain the
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existing staff and hence do not give enough emphasis on
monitoring manpower utilization. Their score of 14.3% on
this parameter corroborates this.
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Table 5.1:6.3 Descriptive Statistics for record maintained of
consumer complaint
Question Frequency Total
Record
maintained
of customer
complain
Type of store Yes (1) No (0)
Convenience
Store
31 3 34
Mid sized 4 3 7
Hypermarket 11 - 11
Total 46 6 52
Frequency table above shows that out of 52 retail outlets
included in the survey, 46 are maintaining record of
consumer complaints. However proportion of large and
convenience stores in this are high as all 11 large stores
and 31 of 34 convenience stores monitor consumer
complaints.
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Figure 5.1:6.3 Maintaining records of customer complaints
Addressing consumer complaint is very important for
achieving customer satisfaction as it conveys to the
consumer that the retailer is sensitive to their feedback,
problems and complaints and is sincere in resolving the
raised genuine issues.
From the above it is clear that all large formats have without
exception a customer complain monitoring mechanism in
place. Even in small store it is being followed by 91% of the
retailers interviewed in this format
However, in medium stores only 57 % responded that they
maintain a record of consumer complaints and thus 43 % in
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this format do not have a formal system of recording and
addressing customer complaints.
100% score of large store or Hypermarkets reflects that this
category is sensitive to adverse impact that an unattended
consumer complain can have on the brand image of these
outlets. Small stores also have fairly high score because
these outlets are located in residential areas where there is
close interaction between customer and retailer and hence
the need to maintain that relation by displaying sensitivity
to consumer feedback. The score of 57% in the medium
store clearly indicates that though some of the outlets in
this format have adopted modern retail practices there is
still a fairly large chunk which has yet to modernize and
adopt good operating practices.
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Table 5.1:6.4 Descriptive Statistics for monitoring House
keeping
Question Frequency Total
Monitoring
house
keeping
Type of store Yes (1) No (0)
Convenience
Store
25 9 34
Mid -sized
stores
3 4 7
Hypermarket 11 - 11
Total 52
Picture that emmerges on monitoring of housekeeping from
frequency table above is that practice of monitoring of
housekeeping is not followed equally across all formats. In
large formats all 11 stores monitor housekeeping and 25
out of 34 convenience stores also monitor. Only 3 out of 7
mid size stores monitor housekeeping.
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Figure 5.1:6.4 Monitoring house keeping
One of the important association of the customers about
the quality of goods that he is purchasing is with the
standard of housekeeping of the store as he perceives. If
the products are cluttered and not displayed on the shelves
in an organised fashion it creates a negative image of the
store. This is particularly applicable in case of food items.
Ensuring a spic and span floor and removing regularly
damaged products from the shelves is very important
aspect of this parameter in creating positive image of the
store in the mind of the consumer.
As can be observed from the above table, there is a
noticeable difference in the amount of importance given to
housekeeping among different retail store formats in India.
100% of large stores interviewed by the researcher
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regularly monitor implementation of housekeeping
practices. In -fact, many Hypermarkets interviewed have
outsourced their housekeeping function to give it due
focus.
In small store nearly 74% are following a system of
monitoring housekeeping.
However the priority given to housekeeping in the mid sized
stores is not satisfactory as only 43% of the stores have a
system of formally recording the status of housekeeping.
Still some of the mid -sized stores which are old have not
upgraded their physical infrastructure like having optimum
shelf design, suitable illumination and proper flooring.
Hence this limitation on the infrastructure is a barrier for
their not focusing on improving housekeeping.
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Table 5.1:6.5 Descriptive Statistics for other parameters of efficiency measuring
Q.No. Questions Type of store Yes (1)
No (0) Total
Q1. Calculate the inventory turn around to compute ROI Convenience Store
82.40% 17.60% 100%
Mid sized 85.70% 14.30% 100%
Hypermarket 81.80% 18.20% 100%
Q2. Keep records to analyze stock outs Convenience Store
94.10% 5.90% 100%
Mid sized 100% - 100%
Hypermarket 100% - 100%
Q3. Record of wastage of food items due to damage Convenience Store
91.20% 8.80% 100%
Super Market 85.70% 14.30% 100%
Hypermarket 100% - 100%
Q4 Reconcile Stock, wastage and sales to ensure commercial controls
Convenience Store
91.20% 8.80% 100%
Mid sized 85.70% 14.30% 100%
Hypermarket 90.90% 9.10% 100%
Q5 structured monitoring model for measuring the efficiency of supply chain
Convenience Store
76.50% 23.50% 100%
Mid sized 57.10% 42.90% 100%
Hypermarket 90.90% 9.10% 100%
Q6 Collect data to analyze the increase in sales during sales promotion Vs targets
Convenience Store
82.40% 17.60% 100%
Mid sized 57.10% 42.90% 100%
Hypermarket 90.90% 9.10% 100%
Q7 Mechanism to trace slow moving items Convenience Store
85.30% 14.70% 100%
Mid sized 57.10% 42.90% 100%
Hypermarket 90.90% 9.10% 100%
Q8 Information gathered to know consumer preference Convenience Store
79.40% 20.60% 100%
Mid sized 57.10% 42.90% 100%
Hypermarket 72.70% 27.30% 100%
Q9 Membership card to know regular Vs floating customers
Convenience Store
44.10% 55.90% 100%
Mid sized 57.10% 42.90% 100%
Hypermarket 27.30% 72.70% 100%
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The researcher also collected data on 9 other efficiency
parameters which are expected to be monitored in
organised food and grocery retail across all the three
formats.
The above table shows variation in the score on efficiency
parameter of inventory turn around, incidents of stock outs,
food item wastage and reconciliation of stocks falls within
the narrow range of 82 to 100 % among all the three
formats. In the three other parameters, namely structured
efficiency monitoring model, measuring of increase in sales
during promotion and tracking slow moving items, the
range is 57-91% covering all the three formats. The data on
measuring consumer preference and product range and
having membership card, have a range of 57-79% and 27 to
57% respectively.
Overall picture from the data indicates that among the mid-
sized store format, a number of stores have still not
adopted modern retail practices. Both the large and small
stores are focusing on having the systems of modern
organised retail in place with an objective of aggressively
pursuing the agenda of profitable growth.
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5.1:7 Outsourcing of logistics :
Table 5.1:7.1 Descriptive statistics for outsourcing logistics
Self handled
Partly outsource
Comp outsource
Total
Type 1 2 3
Convenience Store
12 18 4 34
Mid Size 2 3 2 7
Hypermarket 3 5 3 11
Total 17 26 9 52
Data in the above table was collected with an objective to
understand how the inward logistics for food and grocery
items is handled by different formats. Do they handle it
themselves by having dedicated transport for bringing in
the goods from the source or they have tied up with the
logistic service provider. The question asked to the Retailer
was whether they completely outsource logistics, partially
outsource or handle it themselves.
Table above shows that only a small number of 9 outlets
out of 52 completely outsource logistics. Majority of the
retailers (26 out of 52) only partially outsource. There are
still sizeable number of retailers (17 out of 52) who handle
logistics themselves.
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Figure 5.1:7.1 outsourcing logistics percentage
Figures from above table clearly indicate that nearly half of
retail outlets across all formats (43% to 53%) are partially
outsourcing logistics. This means that they are tailoring
their logistics model as appropriate to their needs.
Very few of the retailers are following a model where inward
logistic is completely outsourced as indicated by low
figures of 11.8%, 28.6 % and 27.3 % for convenience, mid
and large sized stores respectively.
It must be understood that the full benefit of outsourcing of
logistics can only be realized provided there are mature and
modernized logistics solution provider available who have
the requisite capability of providing reliable and timely
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delivery. In India with the emerging organised retail
business this is a new opportunity for the logistics solution
providers and this is not yet completely matured and is still
evolving. Large reliable logistic solution providers are still
primarily confining to servicing large formats.
As we can derive from above table 35.3 % of small stores
are still completely managing themselves their inward
logistics where as the figure is 28.6% for medium and
27.3% for large stores.
The above figures indicate that there is no noticeable
difference in the outsourcing of logistics across different
retail formats.
5.2 Inferential Statistics :
The researcher has collected responses from 1103
consumers and 52 retailers across different formats of
organised retail. Hence the data to be analyzed is entirely
primary data. The objective of the analysis is to determine
its statistical significance. For example, whether there is
correlation between supply chain total and consumer
satisfaction, if so what is the strength of the relation, how
much of variation in dependent variable is explainable and
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have a model which can predict the value of dependent
variable. Similarly it will be important to know, statistically
significant operational difference among the three different
formats of food and grocery retail.
For this the statistical tools of correlation, regression, chi
square and ANNOVA were used with the help of SPSS
version 17 software.
Output from SPSS package and inference drawn from the
same is summarized below:
5.2:1 Correlation and Regression :
It is very important for getting an insight about organised
retail in India to know how elements of supply chain and
Use of Technology affect consumer satisfaction. Thus we
need to know whether there is a correlation between these
parameters. If so, what is the strength of this correlation
and by doing regression analysis we should be able to
establish regression equation where based on the values
of independent variables we are able to predict the value of
dependent variable.
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Correlation and regression exercise has been done for:
1. Supply Chain Vs Consumer satisfaction
2. Use of Technology Vs Consumer Satisfaction
5.2:1.1 Supply Chain Vs Consumer Satisfaction :
Here it is assumed that Supply chain is independent
variable and consumer satisfaction is dependent variable.
Supply Chain has two elements viz stock availability (SAT)
and Stock Display (SD); For Supply chain Total (SCT) both
these values have been taken together.
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The result of correlation analysis is tabulated below.
Table 5.2:1.1:1 Pearson correlation co-efficient between
stock availability, stock display, and supply chain total and
consumer satisfaction
Stock
Availability
Stock
Display
Supply
Chain
Consumer
satisfaction
.498 .474 .564
Significance .01 .01 .01
N=1103. N is the total sample size of this study
Independent Variable: Stock Availability, Stock Display,
Supply Chain Total
Dependent Variable: Consumer Satisfaction
From the above table it is clear that there is a positive
correlation between Supply chain Total and Consumer
Satisfaction. The strength of the relation is .564 at .01
significance or 99% confidence level. Correlation co-
efficient of total supply chain is computed by taking the
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values of stock availability and stock display together. We
have also determined the correlation between the individual
elements of supply chain viz Stock Availability and Stock
Display with consumer satisfaction. The above table shows
that there is a positive correlation between stock availability
and Consumer satisfaction and the strength of the
relationship is .498 at.01 significance and 99% confidence
level. Stock Display also has a positive co- relation with
consumer satisfaction and the strength of the relation is
.474 at .01 significance or 99% confidence level.
To find out as to how much of variation in dependent
variable is explained by the variation in Independent
variable the researcher has to obtain the regression output
of the data. This will be in form of tables, namely
Regression between Supply Chain and Consumer
Satisfaction
In order to construct a meaningful predictive model,
regression output of Data consisting of supply Chain Total
(SCT) and consumer satisfaction (CST) is done and the
results are tabulated below.
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Table 5.2:1.1:2 Regression between Supply Chain and
Consumer Satisfaction
Variable B R 2 F Beta t Sig
SCT .567 0.318 512.75 .564 22.644 .01
Independent Variable: Supply Chain Total (SCT)
Dependent Variable: Consumer Satisfaction (CST)
From the above tables the value of R2 is .318 which means
that 31.8% of the variation in customer satisfaction score
can be explained by variation in Total Supply Chain Score.
As mentioned by Shahjahan, (2007) the utility of regression
equation is judged based on:
1. The overall F test for the model. If this is significant at
.05 or 95% confidence level it indicates that model is good
overall. Significance level of .01 or 99% confidence level for
F value in the table above shows that our model meets this
requirement.
2. to decide the variable is good explanatory variable of the
dependent, individual t test for each variable is to be looked
at and it must be significant at .05 or95%. In the table above
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the significance level for the value of t is .01 or 99%
confidence and hence this condition is also met.
5.2:1.1:3 Coefficient Table
Model Unstandardized
Coefficients
B
(Constant) 6.077
SCT .567
From the co-efficient table we can write the regression
equation for the model as
Y=a+bX
Where y is the predicted value of consumer satisfaction
(CST), a is the intercept which is constant and has the value
of (6.077) and b=.567. Thus by putting any value of total
supply chain score as X we can predict the value of
consumer satisfaction equal to Y
5.2:1.2 Use of Technology Vs Consumer satisfaction :
With the increasing number of SKUs to be managed within
the limited space in the retail outlet, the supply chain
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function is becoming increasingly complex. The use of
technology in planning and ordering of goods as an aid to
the process of procurement cannot be over emphasized.
Researcher collected data on the use of technology and the
responses were on a four point scale where score being 4
(highest), if planning and ordering is fully automated and
1(lowest), if the process is manual.
Data for consumer satisfaction has been grouped for each
store. After entering the data for 52 retail outlets in terms of
use of technology and consumer satisfaction, correlation
and regression output was obtained using SPSS software.
Following table summarizes Correlation output.
Table 5.2:1.2:1 Pearson correlation coefficient between
Application of Technology and Consumer Satisfaction
Variables Pearson Coefficient
Independent Variable –
Application Of
Technology
Dependent Variable-
Customer Satisfaction
0.327
Sig. 0.05
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From the above table it is clear that there is a positive
correlation between Use of Technology and customer
satisfaction and strength of correlation is .327 and it is
significant at .05 levels or 95% confidence.
Explainable variation in consumer satisfaction by this
model can be determined by obtaining regression output
which is given below
Table 5.2:1.2:2 Regression between Use of Technology and
Consumer Satisfaction
Variable B R 2 F Beta T Sig
Use of
Technology
.523 .107 5.97 .327 2.44 .05
Independent Variable: Use of Technology (Overall T)
Dependent Variable: Consumer Satisfaction (CST)
In the table above the value of R2 is .107 which means that
10.7 % of variation in the consumer satisfaction is due to
independent variable of use of technology. Remaining
variation in consumer satisfaction could be due to other
factors which are not considered in this model.
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However, significance of .05 or 95% confidence level of the
value of F which is 5.97 indicates that the model is good
overall. Further, t value is 2.44 at .05 or 95% confidence
level which indicates that the concerned variable (use of
Technology) is significant in the model.
5.2:2 Chi –Square test :
In order to establish whether different retail formats differ in
measuring the efficiency parameters. 4 specific questions
were asked covering space utilization, manpower
utilization, customer complaints and housekeeping.
Response was collected using Nominal scales (Yes and No)
format from all the 52 retailers chosen for this research
project.
Scope of study was extended to other standard efficiency
parameters which are expected to be normally followed in
organised retail.
As this data is non numerical, non-parametric test of chi-
square was used by application of SPSS package to
determine the statistical significance of the difference in
efficiency measuring practices being followed in different
retail formats.
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Chi square analysis of 4 important parameters of efficiency
is tabulated below:
5.2:2.1 Chi square table for measurement of efficiency
monitoring practices of four important parameters
Parameters Pearson Chi
square
df Sig.
Shelf Space Utilization 6.653(a) 2 .036
Data on manpower
utilization
14.288(a) 2 .001
Customer complaints 8.407 2 .015
Monitoring of House
keeping
7.563 2 .023
Inference from the above table that we can draw is as
below:
Measuring shelf space utilization
The chi-square value is 6.653at a significance level of .036
or 96.4% confidence level. This shows that different food
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and grocery organised retail formats differ in giving
importance to and measuring of shelf space utilization
Measuring Manpower utilization The chi-square value is
14.288 at a significance level of .001. i.e. 99.9% confidence
level. This shows that different food and grocery organised
retail formats differ in giving importance to Manpower
utilization
Measuring of Customer Complaint The chi-square value is
8.407 at a significance level of .015 i.e. 98.5% confidence
level. This shows that different food and grocery organised
retail formats differ in giving importance to and measuring
of customer complaints
Monitoring of House Keeping
The chi-square value is7.563 at a significance level of .023
i.e. 97.7% confidence level. This shows that different food
and grocery organised retail formats differ in giving
importance to and monitoring House Keeping
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Other Efficiency Parameters :
Chi square analysis of other 9 parameters of efficiency is
tabulated below:
5.2:2.2 Chi square table for measurement of efficiency
monitoring practices of other important parameters
5.structured monitoring model 2.759(a) 2 .252
6.calculate Inventory turn around .053(a) 2 .974
7.Analyse stock outs 1.101 2 .577
8.Membership cards 1.696(a) 2 .428
9.Record of wastage of food
items
1.407(a) 2 .495
10.Analyse increase in sales 3.299(a) 2 .192
11.Consumer preference 1.574(a) 2 .455
12..Mechanism to trace slow
moving items
3.872(a) 2 .144
13.Periodically reconcile wastage
and sales to ensure commercial
controls
.204 2 .903
In all the other 9 efficiency parameters like inventory turn
around, record of wastage , analyzing stock outs etc the
range of value of chi-square is .053 to 3.872 which is much
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below the minimum acceptable value of 5.991 as given in
the chi square table for a df-2 and significance level of
0.05. Thus there is no statistically significant difference in
measuring these parameters among the three different
formats of retail outlets.
5.2: 3 ANOVA :
In order to know whether outsourcing of logistics is
different among the different retail formats, researcher
collected Data on this from all the 52 retail outlets and the
response was on a three point scale where score of 3 is
completely outsourced, 2 is partially outsourced and 1 is
self handled. Data was categorized under the three different
retail formats viz convenience stores, midsized stores and
hypermarkets. Data was then analyzed by subjecting it to
one way ANOVA using SPSS version 17. To test whether
the sample means are statistically significant at .05
significance level. This is tabulated:
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Table 5.2:3.1 Summary of ANOVA to test the significance of
difference in outsourcing between different formats.
Df F Sig.
2/49 .662 .520
In the above table the F value is .662 which is significant at
.520 which is much below the required significance of .05 or
confidence level of 95%. Thus we infer from the ANOVA of
the data that the outsourcing of logistics is statistically not
different among the three different retail formats.
5.3 Summary of the Hypothesis Findings :
Following table summarizes the findings of the Hypothesis
and statistical tools used for the analysis. The detailed
discussion on the findings on each hypothesis is covered
in the next chapter -Discussion
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Table 5.3 Summary Of The Hypothesis, Statistical Tools Used And Results
Sr. No Hypothesis Statistical Test
Results
1 There is a positive correlation between Supply Chain Alignment and Consumer Satisfaction
Correlation and Regression
(r=0.564,R2=0.318,
sig=.01) Hypothesis Accepted
2 Application Of Technology is significantly related to Consumer Satisfaction
Correlation and Regression
(r=0.327,R2 =.107,
Sig=.05).
Hypothesis Accepted
3 Different Retail Formats differ in measuring the important parameters of efficiency of supply chain
Chi-Square Shelf space utilization. (Pearson chi-square=6.653,sig=.036)
Manpower utilization(Pearson chi square 14.2888,sig=.001)
Complain Redressing(Pearson chi square =8.407,sig=.015)
Housekeeping(Pearson chi square= 7.563 ,sig=.023
Hypothesis Accepted
4 Different Retail formats differ in outsourcing logistics of food items.
ANOVA (F=.662, sig=.520)
Hypothesis Rejected
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CHAPTER 6
DISCUSSION
TABLE OF CONTENTS
No. Description Page
6.1 Hypothesis 1 172
6.2 Hypothesis 2 175
6.3 Hypothesis 3 179
6.3:1 Shelf Space Utilization 180
6.3:2 Manpower Utilization 183
6.3:3 Customer Complaint
Monitoring
185
6.3:4 Housekeeping 186
6.4 Hypothesis 4 188
Page 172
6.1 HYPOTHESIS 1 :
Hypothesis 1: ―There is a positive significant correlation
between Supply Chain Alignment and Consumer
Satisfaction‖
In the analysis of data for testing hypothesis1 we have used
statistical tool of Correlation and Regression. Stock
Availability(SA), Stock Display (SD) and Supply Chain Total
(SA+SD) are independent variables and Consumer
Satisfaction(CS) based on responses to six questions
covering shopping experience, freshness, pricing,
regularity of shopping at the same outlet, recommending
the store and purchasing the similar product from the
vendor is taken as dependent variable.
Based on correlation analysis(r=0.564, sig=.01) it is evident
that there is significant positive relationship between
supply chain and customer satisfaction Further from the
regression output the value of R2=0.318 at .01 sig , which
means that 31.8 % of variance on customer satisfaction is
explained by variation in supply chain score.
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Thus Hypothesis 1 ―There is a positive significant
correlation between Supply Chain Alignment and Consumer
Satisfaction‖ is accepted.
To get further insight into the impact of two different
elements of supply chain viz. stock availability and Stock
display, it will be useful to look at the correlation of these
with the consumer satisfaction.
Stock availability and customer satisfaction was found to
have a positive correlation and the value of Pearson
correlation coefficient is 0.498. The correlation was
significant at 0.01 level or 99% confidence level. The result
showed that there is a positive significant relationship
between the two variables of stock availability and
customer satisfaction. The extent to which the necessary
products are available in the retail outlet affects customer
satisfaction. Brasher, at the Institute of Grocery Distribution
(IGD) Retail Logistics Summit 2005, described criticality of
on-shelf availability as no retailer wants to lose a sale.
According to Supply-chain expert Rowat (2006), latest
research into on-shelf availability, ―it is not surprising when
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looking at the figures that on-shelf availability is seen as
extremely critical by the retail sector.‖
The relationship between stock display and customer
satisfaction was also found to be positive with Pearson
correlation coefficient being 0.474. The correlation was
significant at 0.01 level and 99% confidence level. The
result shows that there is a positive and significant
relationship between the two variables of stock display and
customer satisfaction. This means that the way is which
products are available on the shelf in a food retail outlet
affects customer satisfaction.
Displays at the point-of-sale or checkout point form another
well-known attention-capturing visual element in-store.
Although these displays are designed to stimulate
consumer purchases, they create consumer satisfaction
through the service that they provide. More often than not,
accomplishing consumer satisfaction also means a
favourable outcome to the retailer, such as repeat
purchasing, continued association and recommending the
store to others.
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From the above data it can be deduced that Stock
Availability and Stock Display influence Consumer
satisfaction significantly.
6.2 HYPOTHESIS 2 :
Hypothesis 2: ―Application of Technology is related to
consumer satisfaction‖
In the analysis of data for testing Hypothesis 2 we have
used statistical tool of correlation and Regression.
Application of Technology (AT) is independent variable
and Consumer Satisfaction (CS) is dependent variable.
Based on correlation analysis(r=0.327, sig=.05) it is evident
that there is significant positive relationship between Use of
Technology and customer satisfaction
Value of co-efficient of determination i.e. R2 is .107 which
means that 10.7% of variation in customer satisfaction can
be explained by variation in the use of Technology.
Thus Hypothesis, ―Application of Technology is
significantly related to consumer satisfaction‖ is accepted
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Since the result showed that there is a positive and
statistically significant relationship between Use of
Technology and customer satisfaction, it means that the
extent to which Technology is used in the organised food
retail outlet affects customer satisfaction.
In an increasingly competitive organised food retail
environment in India, retailers are trying to align the use of
Information Technology with their strategy to continually
improve and achieve higher consumer satisfaction. In this
regard it will be apt to quote Lowson (2001) who opined
―From the customer's point of view, information and
communication technologies allow improvements in retailer
service, saving shopping time through a wider assortment
and one-stop shopping.‖ This is in line with study
undertaken by the researcher.
Further some researchers are of the opinion that use of
technology has an important positive influence on entire
supply chain i.e. on the front end with consumers and at the
back end with the supplier. It will be relevant to quote
Lewis (2002) in this regard, ―IT solutions for logistic
processes have a positive influence on the value of the
retailer's relationships with its customers and suppliers.‖
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The Mean for Technology application score in the survey
among retailers is 3.0577 against a maximum of 4 which
seems on the higher side and is an indication of fairly high
adaptation of overall technology by the retailers across all
Retail formats.
The Grocery retailers are increasing their sophistication in
information technology. They are increasingly using
information technology to gain better knowledge about its
customers‘ needs and to transmit this knowledge to its
suppliers. The new technology is making it possible to gain
increased control over the flow of products.
Further, the technology has altered the labor-intensive
checkout process, thereby easing the work of employees in
an organised retail outlet.
Organizations must cope with an increasingly changing
environment. Such a change derives essentially from the
evolution and changes in customers‘ needs, technological
advances to satisfy those needs and the evolution in
business management (Porter, 1997).
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6.3 HYPOTHESIS 3 :
Hypothesis 3: Different Retail formats will differ in
measuring the important parameters of the efficiency of
supply chain.
For testing this Hypothesis, the researcher has used
statistical tool of chi-square as the data is non numerical
hence only non- parametric test can be used. From the
analysis, the chi square values of four parameters
considered for this research project are 6.653 for shelf
space utilization at significance level of .036 , 14.288 for
manpower utilization at significance level of .001, 8.407 for
customer complaint at significance level of .015 and 7.563
for housekeeping at a significance level of .023
From the above results we can say that Hypothesis 3,
―Different retail formats will differ in measuring the
important parameters of the efficiency of Supply chain‖ is
accepted.
The analysis of efficiency measurement has become an
important activity in retailing (Barros and Alves, 2004) It is
observed that most of the retailers (greater than 75%) are
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having an efficiency monitoring mechanism covering basic
parameters like calculating inventory turn around,
analyzing stock outs, record of wastage of food items,
analyzing increase in sales, membership cards, analyzing
consumer preference, mechanism to trace slow moving
items and periodically reconcile wastage and sales to
ensure commercial controls.
However on the important four parameters of space
utilization, manpower planning, customer complaint
monitoring mechanism and housekeeping, the emphasis
differs across different formats. The 4 different parameters
which have been considered for accepting this hypothesis
are discussed below:
6.3:1 Shelf Space Utilization :
The chi square coefficient value is 6.653. Which is
significant at .036 significance. This shows that different
food organised retail formats differ in giving importance to
and measuring of shelf space utilization.
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Further, the response of shelf space utilization among
different formats suggest that while significant number of
small stores(62%) and all large stores (100%) are
monitoring space utilization, it is very low (14%) for
midsized stores. This may be due to space constraints for
both small and large format stores. In small stores this
could be due to the fact that they have to accommodate
maximum number of SKU in minimum space. In large store
there is always a need to have a wide range of products and
SKUs and hence need to utilize shelf space effectively.
However mid- size stores have not carved a niche for
themselves and are actually competing with small stores in
terms of both range of products and number of SKUs and
hence do not feel the urgency for improving shelf space
utilization.
According to Buttle,(1984)The basic aim of shelf space
allocation is to improve the financial performance of the
retail store . Through research it has been found that all
the large stores are conscious of space utilization as they
are all located in premier real estate areas. Hence they can
ill afford to waste space. In India large retail formats are in
city centre or premium shopping destination unlike in the
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west where they are on the outskirts. This puts a lot of
pressure on the Retailer since the rentals are higher.
Some of the other drivers for measuring the space
utilization by the retailers as cited while reviewing the
literature are given below:
Even in the smaller stores that are part of bigger organised
food and grocery retail chain, there is an appreciation of
utilization of space. This is understandable because the
smaller retail outlets which are part of the large chain
always have pressure in keeping higher number of SKUs.
But in midsized stores, it is paradoxical that they have the
space but do not utilize it judiciously.
In India, in addition to chain of organised food retailers and
standalone stores, a large number of mom and pop stores
and co-operatives modernized themselves and joined the
organised retail bandwagon and have an urgent need for
neatly displaying the products and hence efficiently use the
available space.
Further most small stores are trying to address the problem
of space shortage by having back room storage facilities.
They are trying to have an efficient continuous system of
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replenishment of the stock particularly in food items. Thus
the consumer is always able to get the stock of the items
that he needs even though the retail outlet has only limited
space to display the goods because of efficient and optimal
space utilization.
It is evident that smaller stores are here to stay, this is
corroborated by Sanwalka of KPMG (2010) who is of the
view that smaller stores of 1,500-2,500 square feet in
neighborhoods might do better in India.
Some of the larger and well performing stores emphasize
having flexibility in space. This covers the situation in
which the shelves are spaced so that the number of faces
can easily be increased or reduced for individual SKUs in
relation to necessary new products and other activities.
6.3:2 Man Power Utilization :
The chi square coefficient value is 14.288 and is found to
be statistically significant at.001 significance .This shows
that different organised food retail formats differ in giving
importance to manpower utilization in their operation.
Baret et al, (1999) are of the view, ―Today retailers are
competing on Price and service quality and manpower
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utilization goes a long way in providing the correct
service.‖
Data gathered on manpower utilization shows that all large
stores 100%) are monitoring manpower utilization. However
it is practically not being followed (only 14%) in midsized
stores but a significant number of small stores (68%) are
monitoring this parameter to improve their service and
control costs to remain competitive.
Food and grocery retail manpower is frequently associated
with irregular working hours and mediocre pay. Retailers
are managing and motivating a diverse workforce with
disparate interests and aspirations. The problem is
compounded because manpower is getting increasingly
expensive.
A shortage of qualified manpower is already being felt and
hence it has to be carefully utilized. Unlike most mom and
pop stores, where family members and children are
employed and used as helping hands, organised food retail
has to employ qualified staff and have to adhere to the law
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of the land in complying with the statutory norms and labor
laws.
Hence it is imperative for the retailers to have a constant
vigil and need to innovate in utilizing manpower.
6.3:3 Customer Complaint Monitoring :
The response of retailers on this parameter is analyzed
and found Chi Square coefficient value of 8.47 which is
statistically significant at .05 significance. This shows that
there is a significant difference in monitoring of customer
complains in hypermarkets, midsized stores and
convenience stores.
It is observed that all large format retailers have without
exception a regular customer complaint monitoring
mechanism in place and over 91% small stores do
regularly monitor customer complaints. However in
midsized store this figure is only 57%.
As part of large organised Retail chain, redressing of
consumer complaint is very important for achieving
customer satisfaction as it conveys to the consumer that
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the retailer is sensitive to their feedback, problems and
complaints.
A survey by the National Retail Merchants Association
found that 14 percent of consumers who stop patronizing a
business do so because they had a complaint that was not
handled well. Continuing on the same note, veteran
consultant Bill Marvin, author of Cashing in On Complaints
(Hospitality Masters Press, 1997) Adds, ―Complaints just
show where the retailer‘s system is breaking down." Retail
Operators need to view complaints not as "traumatic," He
suggests, but rather as a way of "getting information from
consumers who are telling them where it's not working.‖
6.3:4 Housekeeping :
The chi square coefficient value is 7.563 and this has been
found to be statistically significant with the significance of
.023. This shows that different retail formats differ in
monitoring housekeeping of their outlet.
Housekeeping is shown to improve consumers‘ mood
which in turn can lead to making the experience of the store
visit more positive (Spies et al., 1997).
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One of the important perceptions of customers about
quality is the standard of housekeeping of the store as he
perceives. If the products are cluttered and not displayed
on the shelves in an organised fashion it creates a negative
store image.
Here again there was a significant difference in the amount
of importance given to housekeeping among different retail
store formats.
All large stores regularly monitor housekeeping. In-fact
Hypermarkets like Big bazaar have outsourced their
housekeeping department to give it due focus.
Many retailers are following a policy of every employee
taking the responsibility of cleaning the store by rotation.
This is a good concept; it is not completely achieving the
desired results because of lack of accountability, leading to
diluting of focus on this important parameter.
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6.4 HYPOTHESIS 4 :
Hypothesis 4: ―Different retail formats differ in outsourcing
logistics of food items.‖
In the analysis of data for testing hypothesis 4 we have
used statistical tool of ANOVA which incorporates variation
within the sample mean and also among the groups of data
which is three different formats in our case and the results
are described:
One way Analysis Of Variance (ANOVA) was used to test
the significance of difference in the outsourcing between
various formats of stores. The F value was found to be .662
at a significance of. 520. This is not meeting the minimum
significance of .05 for the F value which is required for
validation in social research. Thus the hypothesis,
―different retail formats differ in outsourcing logistics of
food items is rejected‖.
However if we observe the data in detail then it gives
important insight about the trend being followed by
different stores in their outsourcing of logistics for food
items.
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Some interesting and important revelations are worth
noting. Data reveals that there is an emerging trend to move
towards outsourcing logistics in all three retail formats.
About 27-28% of mid sized and large stores completely
outsourced their logistics in grocery whereas this figure is
only 12% in smaller stores. However these smaller stores
do outsource a major part of their logistics for their food
and grocery categories i.e.53%. This means that they have
optimized the logistics model as appropriate to their size
and probably ensuring that perishable items like meat,
poultry, milk etc are outsourced, whereas other items
particularly those of low volumes are bunched together and
logistics is self handled.
According to Stephaine Mckern (2008) ―The degree of
organization in the retail sector certainly affects the nature
of logistics that prevails in that country.‖ In congruence
with the above statement, it can be said that with food
retailing getting organised, a natural outcome of this is that
retailers across formats are moving towards adopting
outsourcing logistics as a philosophy for doing business.
According to Lynch (2000), this is very important for
retailers because manpower can then be deployed to focus
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on core retail functions which greatly improve the
productivity of the employees. Thus there will be fewer
people to train in fewer skills thereby increasing the level of
expertise.‖
Flexibility is another key outsourcing driver for Indian
Grocery retailers. As new markets and new products are
developed, it is difficult to forecast future logistics needs
accurately. Therefore it found that most retailers are
outsourcing majority of their processes.
However, Outsourcing logistics should not be considered
solution to all supply chain problems of the food retailers.
According to Burns (2001), ―Outsourcing is not necessarily
the best answer for every situation. The key to making the
appropriate decision about whether to perform an activity
in house or turn it over to an outside provider is to carefully
assess the pros and cons of both options and then make
the right choice that is best for them‖
In line with the above statement Logistics Providers in India
are trying to innovate and may have to move towards a
model of sharing their resources and expertise with a
number of stores so as to optimize the service and
resource deployment. By doing this the service provider
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will have enough business and will also be able to
penetrate all retail formats in a cost effective manner.
Today‘s the organised food retailer does not only want to
benefit from transportation and material handling service
offered by the Logistics provider, it wants to utilize a
combination of systems, facilities and technology benefits
from qualified logistics professionals .
Continuing on the same note, a challenge that Indian
organised grocery retailers are encountering is that they
may be limited number of quality logistics service provider.
Today outsourcing has become more skill oriented. The
Mckinsey Quarterly (2006) aptly referred to ―outsourcing
as having moved beyond economies of scale.‖ And
majority of grocery Retailers In India are looking at mature
service providers who is equipped to help them in other
processes like bunching, pre-packaging of merchandise,
special packaging requirements for promotions etc
besides fulfilling the strategy of Farm- to- Fork efficiently.
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CHAPTER 7
GENERAL FINDINGS
AND
PROPOSED MODEL BASED ON THE
HYPOTHESIS RESULTS
TABLE OF CONTENTS
NO DESCRIPTION PAGE
7 General Findings 192
7.1 Findings from the Retailers 192
7.2 Findings from the consumers 195
7.3 Proposed Models based on the
hypothesis results(Model 1)
200
Page 192
7. GENERAL FINDINGS :
During the survey and data collection some useful insights
were obtained, both from retailers as well as consumers
which are useful for practical application by the retailers in
improving their overall business efficiency.
Some of the important findings are summarized below:
7.1 Findings from the Retailers :
1. When Retailers were asked as to how they think that
technology has helped them in getting an edge over
competition, their response was very encouraging.
They feel that it helps in managing the inventory,
saves time, gives analysis of the sales pattern, and
reduces repetitive and manual work. We can infer
from this that acceptance for use of technology is
high and employees are motivated to adopt it in the
operations which help over all operations.
2. On the question of loss in sales due to out of stock
incidents, the figures were in the range of 2% to a
high of 20%. This figure only gives retailers estimates
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of direct sales lost, the intangible impact on sales
would be much higher as this is a major irritant to
the consumer and leads to a poor perception of the
retailer by the customer. Thus there is a need to fine
tune supply chain in working towards target of
number of stock outs.
3. Feedback of retailers on percentage of customers
who regularly shop at the outlet gives this figure to
be around 50-60%. This coincides with poor
penetration of membership cards and other loyalty
schemes, which is an important tool for motivating
customers to regularly shop from their patronised
outlet. This also reflects that in consumer‘s
perception there is no major difference in value
proposition among the different retail outlet.
4. According to the retailers, factors which encourage
and attract their customers to their store are
conducive ambience, availability of range of products
that they need freshness of fruits and vegetables,
competitive price and good display of products.
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Customers are also looking for bargains and
shopping on special and weekly sales promotion day.
In addition to this, retailers feel that product quality,
customer service, stock display and the location of
outlet are also important reasons which make
customer decide in favour of shopping at their outlet.
5. It came to the light while interviewing retailers that
wastage of food items was between 5 and 10%. This
is ironical that the outlets have incidences of stock
outs on one hand and wastage of food products on
the other. This clearly reflects that supply chain
management is not satisfactory. Other factors which
contribute to this situation, as observed during the
survey, are poor handling and dumping of food
items.
6. It was gathered from the retailers that there is an
increase in sales during promotional days; and in
this context they typically achieve 75% -95% of the
target of increase in sales set by them. This
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corroborates retailer‘s perception as already covered
above that customers are looking for bargains and
discounts. Hence, they prefer to shop on sales
promotion days.
7.2 Findings from the consumers :
During interaction with consumers some other factors
came to light which consumers considers important for his
overall shopping experience and satisfaction. These are
enumerated below:
1. Consumers consider good illumination very
important for the retail outlet as it helps locate the
product, assess its quality and also know about the
various sales promotions on offer.
2. Consumers feel that the incidents of missing price
placard on the shelves storing food items is an
irritant to their shopping experience. They lament
that in the absence of display of price and other offer
details, they do not purchase the item unless it is
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important and specifically included in their shopping
list.
3. One of the major differentiator between organised
and unorganised food and grocery retail outlet is the
product display. Changes in customer expectations
about product display have resulted in their
demanding better display. Consumers are annoyed
if they come across the stock display in these
organised retail outlets similar to that of Kirana
shops.
4. Delay while making the payment at checkout counter
causes customer dissatisfaction. The artificial
queues created due to fewer checkout counters
during promotional days leads to consumer
disappointment. Customer expects minimum time
while paying his bill and checking out of the store.
Some customers patronize certain stores only
because of no rush at the payment counter.
5. The consumers expect that the shelf label have
correct details of price especially about items on
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promotional offer. She is disappointed when she
realises at the payment counter that the offer is no
longer applicable and the retailer had not changed
the label. Such incidents lead to forming poor image
about the store and leads to consumer
dissatisfaction.
6. Consumers sometimes encounters situations where
the store has stock of vegetables and fruits in the
bulk storage room, yet there is stock out of items in
the store shelves which is because of not following
a proper replenishment schedule. She expects such
out of stock incidents should not occur because of
operational inefficiency.
7. Retailers are trying to push pre packaged fruits and
vegetables into the stores but consumers prefer that
these are available loose in the shelves. This helps
consumers in evaluating the quality as well as
buying the exact quantity that she needs rather than
buying in a pre determined units decided by the
store where she cannot touch and feel the item and
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ascertain the quality. Further the Indian consumer is
sensitive to the price and has a belief that this pre-
packaged items are not fresh, will incur additional
cost which does not add any value and she is
reluctant to pay for the same.
8. Some customers interviewed during the survey were
not very enthusiastic about the loyalty programs of
the store. Their remarks were, ‗I do not understand
the scheme and the real benefit accrued to me‘, ‗I am
loaded with gifts that i do not need‘, ‗redemption is
time consuming‘ , ‗there is no ready feedback on the
point accrued‘ etc.
Thus consumer does not perceive the loyalty card
scheme in a positive light.
9. Customers appreciate those retailers who readily
accepts and exchange a below par quality product in
food items, it generates a positive feeling about the
outlet in their mind and leads to customer loyalty.
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10. It was observed that most of the convenience and
mid size stores have free home delivery system
catering to customers from nearby areas. Stores
have a dedicated desk for taking the orders on
telephone and scheduling the delivery. This is
appreciated by consumers as it is convenient, saves
time, efforts and transportation.
7.3 Proposed Model Based On Hypothesis Result :
As mentioned in the Analysis, Researcher could develop a
predictive mathematical model from regression equation for
Hypothesis 1 and the same is given below.
Y=a+bX
Where Y is the predicted value of consumer satisfaction
(CST), a is the intercept which is constant and b is the value
of the slope of the regression line. Thus by putting any
value of supply chain score as X we can predict the value of
consumer satisfaction equal to Y.
Although this model is postulated by the researcher on the
data collected from different retail outlets , this concept
may be adopted and used by any retail chain .They can
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collect data on the specific parameters of supply chain
and customer satisfaction as relevant to the organization
and by doing the analysis they can determine the value of a
and b as applicable to their store data.
They can then decide on which specific area of supply
chain that they should focus which will achieve the
desired improvement in the store performance in terms of
higher customer satisfaction and increase in sales.
This can become an important tool for predicting the impact
of any element of supply chain on the customer satisfaction
and increase in sales.
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CHAPTER 8
CONCLUSION
Page 202
8. Conclusion :
Last couple of years has been packed with several
significant developments for Indian Retail industry,
including the entry of many large corporate houses and
growing acceptance of modern formats. Though modern
retail is relatively new in India. It is heartening to note that
they have quickly adopted required processes in their
operations.
Given the industry‘s changing landscape and emerging
challenges, the focus of retail industry players too is
changing. They are concentrating on strengthening the
existing operations and assessing options for profitable
growth through enhancing efficiency in Supply chain,
embracing appropriate technology, upgrading skills of
employees and are moving towards consolidation and
innovation of processes.
In today‘s world of Internet and wide media reach and
connectivity, consumers are well informed and are able to
exercise their option in deciding their preferred store for
shopping. One of the major challenge modern retail outlets
are facing is in attracting and retaining new customers.
This explains the reason why all store formats be it
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convenience store, mid sized store and hypermarket are
working on improving supply chain alignment with
consumer demand. This is a right focus for the retailer as
can clearly be concluded from the research that supply
chain alignment has important bearing on achieving
customer satisfaction which is the only way to remain
viable and ensure sustainable growth. Only happy
customers come back for repeat and regularly buying and
help in consolidating base of loyal customers.
Further the study reveals that retailers are focusing on
enhancing employee productivity and operational efficiency
and outsourcing of logistics to improve delivery of goods
and services and managing inventory to remain profitable.
However, the focus differs among different formats and mid
sized stores in general barring few exceptions have still a
lot of ground to cover in adapting to their processes
modern retail practices.
Further, all the processes in the retail industry right from
logistics, supply chain, store management, POS (Point of
Sale) etc are likely to get impacted positively with the usage
of technology. Although Indian Retail chains have started
deploying these technologies, there still exists a challenge
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to implement them simultaneously across the entire retail
chain and make the process more relevant and efficient.
Further the study revealed that there is a high level of
enthusiasm and commitment among executives and
employees of retail chain in implementing the technology.
They all feel that technology helps them in their work and
also improves efficiency. This augurs well for the organised
retail industry.
The study also showed that though a lot of data is collected
on items like wastage, slow moving items, customer
complaints, there is no structured approach in processing
this data and comparing it with any set target. Retailers
have to move to the next phase and make use of this
information in achieving measurable targets for operational
efficiency improvement.
The study reveals that still complete outsourcing of inwards
logistics is not being significantly practiced by retailers in
any format be it Hypermarkets, Mid sized stores and
convenience stores. Most of the stores are optimizing this
process by partially outsourcing. This could be because
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there is still no large dependable logistics service providers
for retailers whose services these retailer can avail. This is
a big business opportunity and large retail chains are
themselves planning to enter into this area. Once this is
implemented it is expected to have a major impact on
procurement of food items for the organised retailers.
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CHAPTER 9
RECOMMENDATIONS
Page 207
9. RECOMMENDATIONS :
9.1 Upgrading technology to improve efficiency :
There is a scope to upgrade the application of
technology to improve operational efficiency. For this it
is recommended that retailers should hire the services
of reputed technology solution providers to optimize
their processes for Improving forecasting accuracy,
reducing stock outs, increasing sourcing efficiency and
product movement, reducing lead time and optimizing
transportation.
9.2 Data Tracking :
At present there is hardly any effective system in place
at the retail outlets which generates data to track
individual customer spends and their buying
preferences. This data is extremely important for stores
as it has to be integrated into sourcing design to ensure
that customer‘s aspirations are met and he gets the
goods that he needs and prefers. It is recommended
that a system like customer loyalty cards need to be
effectively implemented using appropriate technology.
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Data generated from this must be regularly monitored
and used for sourcing.
Similarly, it is recommended that retailers explore new
tracking and identification system like RFID. Online
information on stock availability will give accurate
feedback on stock as this system will capture the sales.
This will help a great deal in planning, procurement and
avoiding stock outs.
9.3 Manpower Skill Upgradation :
With sudden increase in modern retail, acute shortage of
skilled and trained manpower is already being felt. Since
trained manpower is scarce it is recommended that
retailers have a proper training module which ensures
that all new employees are exposed to orientation
program before being deployed for the operations. Also
properly designed regular skill upgrading and refresher
courses for the employees to be implemented. Retailers
must focus on ensuring that their employee separation
rate is at manageable level by providing them with
working environment which has opportunities for career
growth.
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9.4 Manpower Deployment :
Retail operation involves long working hours and
fluctuating quantum of work both during the day and during
the week. Thus it is necessary to find innovative solutions
for optimizing manpower deployment. One of the
suggestion in this regard is to have a minimum number of
permanent employees which are required for the normal
operation and to meet the requirements of peaking during
rush hours, promotional days, weekends have a pool of
trained manpower who can be employed temporarily on
part time basis for this work as an when required. Such
temporary resource will be cost effective and can consist of
housewives who have spare time and want to supplement
their income, students in Retail who want to have exposure
to and experience of outlet management from this. The
retailer can benefit from their fresh ideas.
9.5 Customer feedback and complaint redressing system :
A proper customer feedback and complaint redressing
system goes a long way in ensuring customer loyalty and
improving the image of the store. It is recommended that
retailers have a range of options for the customers to give
feedback. It could be through a Toll free number, online
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website, customers feedback box placed in the store or
even store manager periodically mingling with the
customers and asking them relevant questions to get
feedback on their shopping experience. However this
feedback must be seriously deliberated and proper in time
action must be taken so that customer feels that the store is
responsive to their feedback which will enhance his image
of the store.
9.6 Sharing of Facilities :
In Indian organised retail scenario it appears that all three
formats viz Hypermarket, Midsized Store and convenience
store are here to stay. Hence in order to make each of these
format‘s commercially viable, some innovative business
models specifically valid to Indian situations will have to be
developed. This will entail particularly back end of supply
chain. Thus, it is recommended that retailers should
consider sharing of facilities like logistics service provider
for inward logistics and godown space. This would help in
reducing the operational cost and make the enterprise
viable business proposition.
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9.7 Optimum Illumination :
It was observed during the study that better lit store give a
good feel to customer while shopping. It is recommended
that stores should engage experts in the field of lighting
who can provide energy conserving and cost effective
solutions to the over all lighting requirement of the store.
9.8 Placard for price display :
It was observed during the study that price display
particularly for vegetables and fruits is not streamlined and
unsatisfactory. It is a major source of irritant to the
customer. It is recommended that properly designed
placard displaying facilities should be installed which
should show the correct price of the item in the shelves.
Many times shopper drops the item from his list resulting in
the loss of sale when he is not able to know the exact price
of the item that he wants to buy.
By implementing this recommendation the retailers will be
able to resolve this problem. Also promotional offers which
are displayed on the shelves should be valid. Sometimes
the offer is still displayed when the Sales promotional
scheme is over and offer is no more valid.
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9.9 Payment Counters :
One of the important associations of the customer about
their shopping experience at an outlet is with the time taken
at the billing counter. Hence a lot of thought has to go while
deciding the number of payment counters and its location
in the store keeping the convenience of the customers in
mind. It appears that facilities provided are based on
average customers per unit of time without taking into
consideration rush hour. Further it was observed during the
survey that there was chaos during specific promotional
day of the week. It is recommended that they should have
provision for additional counters temporarily activated
during the expected peaking time to clear the rush. Also
there is a need to train the staff so that they are able to
efficiently operate cash counter and their increased
productivity will help in resolving this problem.
9.10 Stock Replenishment schedule :
All formats of the store have separate storage space for
vegetables and fruits which is used for replenishing the
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stock in the shelves. However, in the absence of any
system and limited manpower, there are occasions of stock
outs in the shelves when the items are actually available in
the back end storage room and customers have to wait or
ask for refilling the shelves. It is recommended that this
operation is streamlined by assigning specific
responsibility for in time replenishment of stock to avoid
this problem.
9.11 Weighing facility :
Many convenient stores in order to avoid the operation of
weighing of vegetables and fruits keep only pre-weighed
items. This is a routine practice internationally which is
mostly to improve hygiene as perceived by the customer.
However this is not so much appreciated in the Indian
context. Here the consumer wants to feel and select the
product and wants to buy the quantity that she needs which
is not possible in case of having only pre weighed packs of
items. It is recommended that weighing facilities are
provided in every outlet so that consumer‘s needs and
expectations are met.
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9.12 Efficiency Targets :
At present most retail outlets collect data on wastage of
food items, stock outs, inventory turn around but they don‘t
have quantified targets for each of these important
parameters. It is recommended that each retail store must
have target for all these parameters against which they
should measure the actual score, find the gap and make
action plan to bridge the gap. Once this structured
approach to improve efficiency is implemented, it will
positively reflect in the overall performance and profitability
of the enterprise. In the fiercely competitive environment in
which organised retail is operating, there is no substitute to
continually improve operational efficiency for achieving
sustainable growth.
9.13 Range of Products :
Many of the convenience and mid sized store in order to
emulate large format are keeping products like apparels,
books, stationery, music etc which are not related to food
and grocery and eats into already limited shelf space.
Display of these items give a cluttered look to the store and
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downgrade its image as perceived by customers. While
care is taken to display them in periphery or corners, it is
recommended that the space is better utilized for displaying
premium products, promotional offers or useful
communication to the shopper. This will make the store
look neat and organised and will enhance positively overall
shopping experience.
9.14 Price stability :
Currently price fluctuations in food items particularly in
fruits and vegetables are common phenomenon more so
because vegetables are perishable commodities and cannot
be stored. Organised retail can contribute to reducing this
fluctuation. For this the retailers must have an agreement
with the suppliers to deliver to them for a period of time at
the pre negotiated price and quantity. This can give
organised retail an edge over street vendor who is affected
by fluctuation in the wholesale market.
9.15 Midsized stores :
Midsized stores have consistently scored low on measuring
of important efficiency measuring parameters. If they do not
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take urgent steps in refurbishing their outlets and
improving control in operations it will be difficult for this
format to remain viable. It is recommended that they
develop a new business model where they can use their
strength of availability of space in increasing the range of
product, have better displays and offer to companies space
for promotional offers . This will lead to higher customer
satisfaction and consolidation of their customer base.
9.16 Loyalty Programs :
During the survey, it was observed that customers were
finding it difficult to understand loyalty and reward points
programs. It is recommended that these programs are made
simple where the customer is able to understand the points
he earns per unit spend, minimum number of points he
needs to accumulate for redemption and value of each
point in terms of money.
There is potential to increase sales and consolidate the
base of high spending customers by customer
differentiation and customizing promotional activities.
In this regard, the retailers can use the data collected from
loyalty cards for categorizing customers and then
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specifically design promotional programs for those
customers who spend a certain minimum amount regularly
every month. Thus by focusing on few high spenders they
can consolidate the loyal customer base and have a
significant improvement in the sales of the store.
It must be borne in mind that any loyalty program can only
work effectively if it is supported by appropriate and
specifically developed software and there should be trained
manpower to operate the same. It was observed during the
survey that many retailers are collecting the data and do
not meaningfully process the same to get knowledge about
customer shopping at their outlet as they lack the required
skilled manpower for analyzing for doing the same.
Many stores offer gift items to the customer who spends a
certain minimum amount during a specified period. The
items on offer should be such that they are perceived by
the consumer as useful for household and he is motivated
to spend extra amount in collecting the gift on offer. Thus
the objective of achieving higher sale is achieved and the
consumer is also happy in participating in the scheme.
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9.17 Collaboration with suppliers :
While looking at the issue of stock outs, delayed deliveries
and freshness , the researcher understood the significance
of the retailers‘ need to work closely with suppliers in order
to develop their own, and their supplier‘s competence to
provide a supply and delivery system which is meeting the
requirements of modern retail.
A transparent, collaborative, long term relationship focused
on joint development of supply should be pursued by the
retailers.
It is recommended that supply chains systems are re-
engineered by moving away from push strategy to demand
driven supply systems. This will optimize stocks and help
both in avoiding stock outs and reducing wastage of
vegetables and food categories.
9.18 Store design :
It emerged during the research that while Consumers like
to select from a wide range of products but not if it amounts
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to sacrificing comfort while shopping. The researcher found
out that in some outlets little thought was given to store
layout and design and it was a copy paste of the design of
international outlets. The mistake the retailers made here
was that unlike in USA where mostly one member of the
family comes to shop for the entire household because
other members are at work etc, here in India, it is not
uncommon that more than one member of the family like to
go for shopping. Therefore it is recommended that the
organised food and grocery stores should be designed to
allow adequate space between aisles and keep walkways
free of merchandise. Cramped spaces can ruin a shopping
experience.
9.19 Minimum Mandatory standards :
Although ISO 22000:2005 has been introduced in 2005 in
western countries, it is yet not being implemented in the
evolving organised food and grocery retail in India. It is
recommended that retailers association should develop a
minimum mandatory standard covering items like hygiene,
Page 220
product safety, storage condition etc and form an
independent body for certifying outlets who are following
these minimum mandatory standards.
This will motivate the retailers in improving operations as
the accreditation will enhance the brand image of the chain.
It will differentiate retailers and will attract customers to the
certified outlets.
Page 221
CHAPTER 10
LIMITATIONS OF STUDY
Page 222
10. LIMITATION OF THE STUDY :
10.1. This study was conducted in the city of Mumbai
which is considered to be representative of the
consumer behavior across the country and the sample
frame was determined accordingly at the time of
deciding the research design. However, this research
does not cover other metros and hence might not have
captured regional factors affecting supply chain and
consumer behavior.
10.2 Researcher has assumed that the information
provided by the retail executives and managers is
transparent and accurate. However there can be
constraints while sharing information by the retailers for
general and academic survey. Hence more accurate
information can be gathered only if such survey is
commissioned by large retailers for their own use.
10.3 The literature search and review was dependent
upon the availability and access to research information
Page 223
on the subject in India. It must be acknowledged that as
organised retail is in fledgling state and hence not many
research projects in this field has been conducted and
consequently only limited authentic published work is
available and a source for secondary data.
10.4 It must be mentioned that in an academic research
work of this nature only illustrative factors affecting
supply chain alignment and customer satisfaction to test
the research hypothesis could be included in the survey.
To get deeper insight about the holistic picture of
organised retail many more specific parameters needs
to be included.
10.5 The Indian Food and grocery organised retail
scenario is evolving and is in dynamic state with all
retail chains expanding aggressively. However many
of them could not sustain this growth because of
liquidity problems and debt related issues. Therefore
care has been taken to include only those retailers
who have stabilized operations. The scenario can
change in the future. Thus this research work can
only be used as a reference for conducting a similar
study on organised retail. But the sampling frame
Page 224
will have to be decided as appropriate at the time of
conducting any future study.
10.6 When the researcher started work on the thesis,
organised food and grocery retailers in India with the
exception of one or two retailers were not focusing
much on In-house and private labels. Thus this
important aspect has not been included in the study.
Page 225
CHAPTER 11
FUTURE SCOPE OF STUDY
Page 226
11 Future Scope of the Study :
11.1 This research was undertaken mainly to find out the
impact of supply chain alignment and use of technology
on consumer satisfaction and this was confined to the
city of Mumbai. Similar research can be conducted with
wider and different target respondents covering diverse
geographical locations. The findings from a large survey
of this nature will be generalized and applicable to over
all operations of retailers in India. Similarly studies can
be mounted on newer formats which have recently been
introduced in India like B-2-B.
11.2 As the retail chains are now trying to penetrate Tier
1 and Tier 2 cities a similar survey in these cities will
give useful information in identifying the differences in
the retail operations between large and medium size
cities and they may have to formulate their supply chain
strategies differently as appropriate for these locations.
Page 227
11.3 While consumer preference on the product can be
found out from the sales data. It actually means what he
prefers from the goods and items that retailer offers to
him; However his actual aspirations and needs may be
different. Hence a separate study on consumer
aspiration and need for the range of product and his
preferred brand should be undertaken. This will help in
capturing whether consumer wants to purchase only
premium or mid range products from these stores or he
is willing to buy value for money products if they meet a
certain minimum standard of quality and packaging.
This information can be useful in knowing whether the
Indian Retail market is ready for the in-house or private
labels.
Page 228
CHAPTER 12
IMPLICATIONS OF RESEARCH
Page 229
12. Implication Of The Research :
12.1 Using this study as a reference model, large retail
chains can undertake an extensive study on stock
availability, stock display and its impact on overall
consumer perception about his shopping experience.
12.2 This research has clearly established the role of
stock availability and stock display in increasing
consumer satisfaction. It was observed that some time
in spite of stock being available in storage room it is not
replenished on time on the shelves, which amounts to
stock out as far as consumer is concerned. These
insights could be useful for the retailers and they can
integrate this information into their supply chain
process
12.3 As mentioned in the thesis, the researcher has
postulated a predictive mathematical model from the
regression equation of Hypothesis 1 as given below:
CST=a+ bx SCT
Where CST =consumer satisfaction
SCT= SUPPLY CHAIN TOTAL measured as stock
availability and stock display
Page 230
a=Intercept (constant)
b=slope
Though this model is based on the data collected for the
study, this concept can be adopted and used by any retail
chain deciding on their own factors for supply chain and
consumer satisfaction.
12.4 The findings of the study will encourage the retailers to
re-engineer their supply chain to move from traditional
push strategy to aligning it with consumer demand.
This research study can be used by the retailers in
developing and implementing a structured approach to
measuring important efficiency parameters, reviewing the
same against set targets and making action plans to bridge
the gap and improving operational efficiency.
Page 231
CHAPTER -13
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Page 232
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Page 263
13.2 Questionnaire :
Dear Sir/Madam,
The following is a questionnaire which attempts to study customer satisfaction in
organised food retail outlets In Mumbai. There is no right or wrong answer. Your
response will remain confidential. However you are requested to write down your
name and correct contact details as is the requirement of conducting this academic
research. The details would be required in case the examiner wants to cross check
the authenticity of this questionnaire.
Name
Address
Phone number :A B) Mobile
Age group.
Below 25
years
26-30
years
31-35 36-40 41-
45years
46 and
above
Gender
Male Female
Marital Status:
Married Unmarried
Education Level:
Matriculate HSC Graduate Post graduate Others
Employment
Govt Non Govt Selfemployed retired Non-working
No. Of Family members
1 2 3 4 5 &above
Questionnaire Filled by:
Place Date
Page 264
Questionnaire:
1. Do you get all the food items that you expect from the store during
your visit for shopping?
Stock of my requirement is always there
Stock of my requirement is mostly there
Stock of my requirement is sometimes not there
Stock of my requirement is mostly not there
2.Do you find the complete range of vegetables available in the store?
Always
Mostly
Sometimes
Never
3. Do you find the complete range of fruits available in the store?
Always
Mostly
Sometimes
Never
4. Do you find all the food brands that you require?
Always
Mostly
Sometimes
Never
Page 265
5.Do you find it easy to locate the brand that you want to buy?
Very easy
Have to put a little effort but no major problem
For some items have to take help of shop Assistant
Haphazard display
6.How do you rate the quantity of goods in each shelf?
Very satisfied
Satisfied
Just adequate
Dissatisfied
7.Do you find vegetables/food items, fresh
Always fresh and of good quality
Mostly fresh and of good quality
End of the day, sometimes it is not fresh
Stock is mixed between fresh and old
8.Are you happy with your food shopping experience during festivals,
promotional days, weekends etc
Very satisfied
Satisfied
Just adequate
Dissatisfied
Page 266
9. Do you find price of food items fluctuating within a week?
No fluctuation
Once a week fluctuation
Twice a week fluctuation
Everyday fluctuation
10. Do you buy your grocery from this store regularly
Always
Mostly
Not very particular
Small quantities and not full requirement
11. Do you recommend this store to your friends, social circle etc?
Have recommended to more than 10 people in last 3 months
Have recommended to about 5 people in last three months
Recommended if someone asks and that too about few items
Not recommend to any one in last three months
12. Similar product that are available in the store you also buy from
street vendor
No
Rarely
Sometimes
Always check at both the places and decide
Page 267
Questionnaire to Retailer:
Dear Sir/Madam,
The following is a questionnaire which attempts to study the operational efficiency in
organised food retail outlets In Mumbai. There is no right or wrong answer. Your
response will remain confidential. However you are requested to write down your
name and correct contact details as is the requirement of conducting this academic
research. The details would be required in case the examiner wants to cross check
the authenticity of this questionnaire.
Name:
Retail Outlet:
Location:
Designation
1. How do you plan and order your goods
Fully Automated
Most of the process is automated
Some of it is automated
Not automated
2.Are you happy with the use of technology
Yes No
3.If yes, rate your level of satisfaction on a scale of 1-4 with 4 being
highest and 1 being least:
Very satisfied
Satisfied
Just adequate
Dissatisfied
Page 268
4. Do you feel that Application of Technology has given a competitive
edge
Yes No
If yes, How?
1)
2)
3)
5.Do you have a structured monitoring model for measuring the
efficiency of supply chain?
Y N
6.Do you regularly calculate the inventory turn around to compute
return on Investment
Y N
If Yes, what you feel should be ROI on a turnover of 100 crore
_______________
7 .Do you keep records to analyze stock outs
Y N
If Yes, what could be approximate % of sales lost due to stock out-----
-------------------
8.Do you have a mechanism like membership card to know a % of
regular v/s floating customers.
Y N
a)If yes, what is % of regular customers
Page 269
b)What could be % of regular customers coming to you on
Weekly
Fortnightly
Monthly basis
9.What could be reasons for the consumers’ repeat visits
1
2
3
4
10. Do you keep a record of wastage of food items due to damage
while handling, overstocking etc
Yes No
If Yes, what could be % of wastage in food items?
1)
2)
3)
11.Any shelf space utilization index(eg. Actual stock v/s available
space)
Y N
12. Do you collect data to analyse the increase in sales during sales
promotion/ offers v/s targets
Y N
If Yes, according to you what target achievement you achieve on an
average
______________
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13. Do you collect data on manpower utilization?
Y N
14.Any information gathered to know consumer preference to
decide product range
Y N
15.Any mechanism to trace slow moving items
Y N
16. Any record maintained of customer complaints
Y N
17.Do you periodically reconcile stock, wastage and sales to ensure
commercial controls ?
Y N
18.Any method of monitoring of house keeping
Y N
19.Do you outsource logistic function for the food item?
Completely
Partly
Self handled
Page 271