Mall mania

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  • 1.Mall Mania in India Changing Consumer Shopping HabitsMall Mania in India Changing Consumer Shopping HabitsA dissertation submitted to The University ofNottingham for the degree of Ma inManagement Kanika TanejaBusiness School, University of NottinghamSeptember, 2007

2. Mall Mania in India Changing Consumer Shopping HabitsACKNOWLEDGMENTI deeply thank God and my family for showing me the way, no matter how difficult thetime was.For his aspiring and invaluable guidance, I wish to express my heartfelt gratitude to mySupervisor, Dr. Andrew Smith, without whose support this dissertation could not havebeen successfully realized.My sincere gratitude to the interviewees and all respondents for their invaluable time,acknowledging that, this study would not have been possible without their assistance andsupport.Finally, special thanks to all my friends for their constant support and encouragement,and making this year in Nottingham memorable. 1 3. Mall Mania in India Changing Consumer Shopping HabitsAbstractFor the current generation of consumers, the meaning of shopping has changed.It is not just a mere necessity, as it was earlier, but much more than that. Thefactors that affect store choice and draw customers to the shopping centreinclude space, ambience, and convenience and moreover an array of choiceunder one roof. The growth of integrated shopping malls, retail chains andmulti-brand outlets is evidence of consumer behaviour being favourable to thegrowing organized segment of the business. Space, ambience and convenienceare beginning to play an important role in drawing customers. Malls, which arenow anchored by large outlets such as Westside and Lifestyle and are resided bya lot of Indian and international brands, are also being seen as image benchmarksfor communities.Thus, this dissertation aims at studying the changing shopping trends ofconsumers in the Indian economy. For doing this, semi structured interviewsfrom the Indian retailers as well as consumers have been used as a tool. Variousfactors on which the Indian consumers base their choice of going to the shoppingmall or the unorganized markets have been analyzed in this research.2 4. Mall Mania in India Changing Consumer Shopping Habits Table of contentsACKNOWLEDGEMENTPage 1Abstract Page 2List of Tables and Figures Page 7Chapter OneIntroductionPage 81.1 Background of the Study............................................................81.2 Research Objectives ..................................................................101.3 Chapter Summary .........................................................11Chapter Two Literature ReviewPage 152.1 Introduction................................................................................152.2 Definition of Shopping .............................................................152.3 Types of Shoppers..................................................................... 182.4 Consumer Buying Behaviour ..................................................212.5 Organization of the Retail Industry ........................................25 3 5. Mall Mania in India Changing Consumer Shopping Habits2.6 Types of Retail Formats .............................................................262.7 Shopping Malls ...........................................................................302.8 Determinants for Choice of Shopping Malls...............312.8.1 Number of Stores and the Tenant Mix..........342.8.2 Location of the Shopping Mall ..................................372.8.3 Shopping Experience...........................382.8.4 Shopping Mall Image...................................................402.9 Conclusion............41Chapter Three MethodologyPage 423.1 Introduction..................................................................................423.2 Research Objectives.....................................................................433.3 Qualitative vs. Quantitative Research ......................................443.4 Data Collection.............................................................463.4.1 Secondary and Primary Data.......................................463.4.2 Interviews ......................................................................483.4.2.1 Interview Sample............................................503.5 Research Procedure .....................................................................52Chapter Four The Indian Scenario Page 55 4 6. Mall Mania in India Changing Consumer Shopping Habits4.1 Introduction ................................554.2 Past Trends of Shopping in India .............................................564.3 Conclusion ...58Chapter Five Findings and Analysis Page 605.1 Retailers Perspective ..................................................................605.2Consumers Perspective ...................................................68Chapter SixDiscussionPage 806.1 Introduction ...................................................................................806.2 Choice Variables for Shopping Malls.................................816.2.1 Anchor Stores .816.2.2 Location836.2.3 Shopping Experience ....846.2.4 Image ...856.2.5 Price Sensitivity ..866.3 Interdependence of the Retail and Real Estate Industry..........88Chapter SevenConclusionPage 89 5 7. Mall Mania in India Changing Consumer Shopping Habits7.1 Introduction...................................................................................897.2 Recommendations........................................................................907.2.1 Recommendations for the Government.907.2.2 Recommendations for the Developers927.2.3 Recommendations for the Retailers.937.3 Limitations..................................................................................937.4 Conclusion ..................................................................................95ReferencesPage 96AppendicesPage 130 6 8. Mall Mania in India Changing Consumer Shopping HabitsList of Tables and FiguresTable 1 - Motives of Shopping By Tauber (1972) ......................................17Table 2 Store Based Retail Formats..29Table 3 Profile of Retailers Interviewed..51Table 4 Retailers Perspective...60Figure 1 - Framework to Understand Shopping Behaviour22Figure 2 A Two Dimensional Matrix of Consumer Buying..................24Figure 3 Process of Format Selection....................27Figure 4 Store Choice Model for Evolving Markets...............................32Figure 5 Experience Realms and Shopper Preferences..........................39Figure 6 Shopping Malls Choice Variables.877 9. Mall Mania in India Changing Consumer Shopping HabitsChapter OneIntroduction1.1 Background of the StudyThe real estate market in India continues to be on its buoyant growth trend. Theentry of global players and international equity management firms into the sectorpoints to the abundance of enthusiasm and confidence that the investors havetowards the potential and prospects of the sector in the years to come. Thedemand for commercial space for organized retailing is expected to reach 200million sq. ft. by 2010 (Times Property, July 13, 2007). The retail sector in India,which is dominated by small and unorganized entrepreneurs consisting ofstandalone stores, boutiques and kirana stores, is radically changing its face.There has been a massive development of new retail formats such as malls,hypermarkets, supermarkets and lifestyle stores. The organised sector representsa mere 2 per cent share of this market (Business Today, 1999). It is very low ascompared to other developed economies of the world (Sinha and Banerjee,2004). However, as the spending power in the economy is growing fast, thisdevelopment has gained importance not only in the metropolitan cities but alsoin the Tier II and III towns. These upcoming formats are giving 8 10. Mall Mania in India Changing Consumer Shopping Habitsconsumers a lot to spend on, especially with existing players such as Pantaloon,Shoppers Stop and the Tata and RPG Group Scaling up fast and the new playerssuch as Birlas and Sunil Mittal investing a lot in the retail market (HindustanTimes, New Delhi, July 22, 2007). With this transition taking place, the shoppingbehaviour of consumers is likely to change as these formats were not in existencein the country until recently.In these circumstances, in which these new retail formats are growing at a rapidpace in India, there remains a need among Indian businesses to understand thechanging behaviour of consumers towards shopping in these organized retailoutlets. Also, due to the limited success of these outlets, it is necessary forretailers to be aware of shoppers motivations and to understand ways ofattracting the consumers (Sinha and Banerjee, 2004). Till date, there has beenvery limited research on the shopping habits of consumers in the less developedeconomies of the world, India being one of them.In this research paper, Iattempt to fill these gaps, thereby investigating the shopping behaviour of theIndian consumers, particularly with the new retail formats emerging. This studywould concentrate on the behaviour the consumer exhibits while visiting ormaking purchases in the newly opened malls. It would explore the purpose andmotive behind the Indian consumers visit to these newly established shopping9 11. Mall Mania in India Changing Consumer Shopping Habitsmalls, the values they derive from the shopping trip and their shoppingbahaviour in terms of impulse purchases, time and money spent at the shoppingmall, etc. A final objective is to establish a baseline for examining changingbehaviour in future as developments continue (Millan and Howard, 2007).1.2 Research ObjectivesThere have been many motivations for me to choose this topic for mydissertation. Firstly, there have been massive changes in the demographic factorsof the Indian consumer. Some of the factors include income and consumptiongrowth, increasing literacy levels, changes in family struc

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