MRP 2 Chapter 1,2 &3 Roll No.1&41

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COMPARATIVE ANALYSIS OF BUYING

BEHAVIOR

“RETAIL PURCHASING OF COMMONMAN”

Group members:

Name Roll No.

Akhani Ronak 1

Prajapti Chandrakant 41

CHAPTER !

ABSTRACT:

T"e #us$omer%s per#ep$&o' &s (our re)*&$(!

Retailing is one of the largest sectors in the global economy and is going through an

evolutionary stage in ndia. Retail is currently a flourishing sector of the ndian economy. !he

ndian Retail industry has gro"n at a 14.#$ CA%R during &'()*1+. !his gro"th can be

directly credited to the emergent ndian economy as "ell as increase in Private &inal

Consumption ,-penditure P&C,/ and bring revolution in ndian peoples consumption‟

pattern. !his tendency is e-pected to continue for at least the ne-t t"o*three decades0

magnetiing huge attention from entrepreneurs0 business heads0 investors as "ell as real

estate o"ners and builders segments of the economy. 2espite this gro"th0 the ndian retail

industry is highly fragmented0 "ith the organied retailing still at a nascent stage "hich

accounts for far less percentage than the unorganied retailing of the total ndian retail

market. t is estimated that organied retailing accounts for less than 3$ of todays market0

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but is e-pected to develop bet"een14$ to 15$ by +(13. 2uring &'()* 1+0 the organied

retailing in ndia has gro"n at a CA%R of +#.4$6 higher that the total gro"th of ndian

retailing. !he sector is the largest source of employment after agriculture0 and has deep

access into rural ndia generating more than 1( per cent of ndias %2P.

!his study aims to identify the factors influencing the perception to"ards organied

retailing from unorganied retailers. !he primary data "as gathered by administering a

prearranged 7uestionnaire "ith 1(( customers selected purposively from 8daipur 2istrict.

!he data analysis of customer attitude to"ards unorganied and organied retailers sho"s

that there is a difference bet"een the consumers perception to"ards both organied retailers

and unorganied retailers regarding their store image0 range of products0 brand choices0 price0

store atmosphere0 credit availability0 and shop pro-imity. !he data has been collected "ith the

help of structured 7uestionnaire containing close and open ended 7uestions. 9tatistical

soft"are and :9 e-cel "ere e-tensively used for analying the data collected. !he rationale

of the study is t"ofold; &irst0 to e-amine the shift in perception in the retail sector taking

place due to organied form of retailing.

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INTRO+UCTION:

Retailing means Re*tailing to the customers so that they come back to"ards them.‟

Retailing consists of all activities involved in selling goods and services to consumers for

their personal0 family0 or household use. n +((40 !he <igh Court of 2elhi defined the term

=retail as a sale for final consumption in contrast to a sale for further sale or processing i.e.‟

"holesale/. ndia is the +nd fastest gro"ing in the "orld. t is >rd largest economy in the

"orld in terms of %2P and fourth largest economy in terms of Purchasing Po"er Parity. ndia

presents a huge opportunity to be used as a hub to the "orld. ndia is the ?promised land@ for

global brands and ndian retailers A ?ibrant ,conomy@. Retailing in ndia is progressively

moving to"ards becoming the ne-t fastest gro"ing industry.

According to A.!. Bearney0 retailing accounts for 41( billion and organied retailing

accounts for only 3$ of the above market. According to the %lobal Retail 2evelopment

nde- +(1+0 ndia ranks on 3th among the top >( emerging retail markets. !he recent

announcement by the ndian government "ith &oreign 2irect nvestment &2/ in retail0

especially allo"ing 1(($ &2 in single brands and multi*brand &2 has created positive

attitudes in this sector.

Retail industry in ndia has a huge gro"th potential and opportunities e-isting in

multiple sectors and segments. &or a long time0 the corner grocery stores kirana stores/ "ere

the single choice available to the consumers. Dut "ith the EP% policy in 1FF1 the

international formats of retailing paved their "ay in ndia. As the time passes0 organied

retailing especially has been creating curiosity amongst ndian consumers to sketching them

into malls for shopping in huge numbers.

<o"ever the gro"th in organied retailing has been limited primarily to the urbanmarkets in the country. ,ven the large chunks of unorganied retail have not fell depressed

from this nominal gro"th in organied retailing and have tried to restructure and redefine

themselves by introducing self* service formats0 and value*added services0 such as credit and

home delivery. !o safeguard the position in the market retailers have made an attempt to

attract customers by offering ne"er service dimensions and creating uni7ue shopping

e-periences for the customers.

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Perceptions about these retailers are largely determined by tangible characteristics of

stores0 such as format or sie0 pro-imity0 varieties available as "ell as intangible factors like

the store atmosphere0 complaint handling0 etc.

Deginning "ith the turn of the century and continuing for many years0 retailers and

buyers for retail stores retail purchasing/ concentrated all of their buying efforts on the

selection of merchandise items they thought their customers "ould like and "ould purchase.

!hese buyers "ere product*orientated. t "as called subjective retailing because the buyer

based the buying decision on a personal vie" of the likes and dislikes of customers.

Githin recent years the consumer movement consumerism/ has forced a change in the

retailerHs buying efforts from a subjective attitude to that of an objective one. !he retailer no"

has to measure the likes and dislikes of the customers before a buying decision can be made.

!he buyer has to be consumer*orientated. Retailing has entered into the ne" era of the

marketing of merchandise.

!he :arketing Approach it "as no" necessary to obtain the ans"ers0 through research

and study0 to the "here0 "ho0 "hat0 "hen and "hy of the consumerHs buying habits and

choices. !he I"hereI refers to the trading area from "hich the retailer attracts its customersJ

!he I"hoI refers to the demographic descriptions of these customers "hich provide a profileof the potential customersJ

!he I"hatI refers to the types of merchandise these potential customers "ant to buy and0

therefore0 "ant the retailer to stockJ !he I"henI refers to the part of the year "hen the

customers make their purchasesJ !he I"hyI refers to the psycho*graphics of the customers

"hich reflect their varied life*styles and the projection of these life styles into purchasing

habits. As a result of this consumerism0 the small retailer and the buyer for the larger store has

had to learn the significance of a ne" vocabulary to successfully effect this marketing of the

merchandise approach.

!he ne" vocabulary includes such phrases as; target group0 an understanding of the

"ants and needs of the consumers the retailer has selected to serve6 the marketing

positioning0 the merchandising policies the retailer has established upon "hich to develop a

reputation as a price0 value0 7uality0 assortment0 and fashion leader6 market penetration0 the

e-tent to "hich the retailer has succeeded in interpreting and satisfying the merchandise

"ants and needs of the target group6 the ne" tools0 the ne" approach of marketing the

merchandise re7uires a kno"ledge and understanding of the tools necessary to effectively

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buy for retail stores6 and0 the merchandise plan0 see belo"/ "hich is a timetable of

merchandising objectives to be achieved "ithin a stated time frame to ensure that your

planned market positioning and market penetration are realied.

Re$)&*&',

n an ideal business "orld0 most marketers "ould prefer to handle all their distribution

activities by "ay of the corporate channel arrangement "e discussed in the 2istribution

2ecisions tutorial. 9uch an arrangement provides the marketer "ith t"o important benefits.

&irst0 being responsible for all distribution means the marketing organiation need only "orry

about making decisions concerning their product. Ghen others0 such as resellers0 are involved

in distribution attention is not given to a single supplier but is stretched across all products thereseller carries. 9econd0 having control on all distribution means the marketer is al"ays in

direct contact "ith buyers of their products0 "hich can make it easier to build strong0 long*

term relationships "ith customers.

8nfortunately0 as "e sa" in the last tutorial0 for many marketing organiations a

corporate channel arrangement is not feasible. Ghether due to high cost or lack of e-perience

needed to run a channel efficiently0 the majority of marketing organiations rely on third

parties to get their products into the hands of customers.

n the ne-t t"o sections of the Principles of :arketing !utorials "e e-amine the key

parties through "hich marketers seek distribution assistance. Choosing "hich parties to aid in

product distribution is important since a distributors actions can affect ho" customers vie"

the marketer and the products they offer. As "e discussed in the !argeting :arkets tutorial0 a

customers perception of a product affects ho" they mentally position the product in relation

to competitive products. <o" a product is distributed0 including "here it is located e.g.0reputation of resellers from "hom they purchase/ and customer e-perience "ith the

purchasing process e.g.0 ho" long to receive0 condition "hen received/0 "ill impact a

customers feelings about the product "hich in turn affects ho" a customer positions the

product in their mind.

n this tutorial "e e-amine retailers as resellers of a marketers products. n terms of

sales volume and number of employees0 retailing is one of the largest sectors of most

economies. Ge "ill see that retailing is 7uite diverse and marketers0 "ho "ant to distribute

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through retailers0 must be familiar "ith the differences that e-ist among different retail

options.

What is Retailing?

Retailing is a distribution channel function "here one organiation buys products

from supplying firms or manufactures the product themselves0 and then sells these directly to

consumers. A retailer is a reseller i.e.0 obtains product from one party in order to sell to

another/ from "hich a consumer purchases products. n the 89 alone there are over

101((0((( retailers according to the +((+ 89 Census of Retail !rade.

n the majority of retail situations0 the organiation from "hich a consumer makes

purchases is a reseller of products obtained from others and not the product manufacturer. Dut

as "e discussed in the 2istribution 2ecisions tutorial0 some manufacturers also operate their

o"n retail outlets in a corporate channel arrangement. Ghile consumers are the retailers

buyers0 a consumer does not al"ays buy from retailers. &or instance0 "hen a consumer

purchases from another consumer e.g.0 eDay/ the consumer purchase "ould not be classified

as a retail purchase. !his distinction can get confusing but in the 89 and other countries the

dividing line is "hether the one selling to consumers is classified as a business e.g.0 legal

and ta- purposes/ or is selling as a hobby "ithout a legal business standing.

As a reseller0 retailers offer many benefits to suppliers and customers as "e discussed

in the 2istribution 2ecisions tutorial. &or consumers the most important benefits relate to the

ability to purchase small 7uantities of a "ide assortment of products at prices that are

considered reasonably affordable. &or suppliers the most important benefits relate to offering

opportunities to reach their target market0 build product demand through retail promotions0

and provide consumer feedback to the product marketer.

Benefts o Retailers

As a reseller0 retailers offer many benefits to suppliers and customers as "e discussed in

the 2istribution 2ecision !utorial. !he major benefits for each include;

• A##ess $o Cus$omers K &or suppliers0 the most valuable benefits provided by retailers

are the opportunities they offer for reaching the suppliers target market0 building productdemand through retail promotions0 and providing consumer feedback. !he kno"ledge

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and skills offered by retailers are key for generating sales0 profits0 and customer loyalty

for suppliers.

• A##ess $o Pro-u#$ K &or consumers0 the most significant benefits offered by retailers

relate to the ability to purchase products that may not other"ise be easily available if the

consumers had to deal directly "ith product suppliers. n particular0 retailers provide

consumers "ith the ability to purchase small 7uantities of a "ide assortment of products

at prices that are considered reasonably affordable. Additionally0 "hen it comes to

retailers "ith physical locations e.g.0 retail store/0 these are likely to be located near the

retailers target market6 thereby0 enabling consumers to make purchases and take home

the product much more conveniently than if they had to visit a product suppliers facility

or purchase via the nternet.

Ways to Categorize Retailers

!here are many "ays retailers can be categoried depending on the characteristics being

evaluated. &or our purposes "e "ill separate retailers based on si- factors directly related to

major marketing decisions;

• !arget :arkets 9erved

• Product Lfferings

• Pricing 9tructure

• Promotional ,mphasis

• 2istribution :ethod

• 9ervice Eevel and one operational factor;L"nership 9tructure

<o"ever0 these groups are not meant to be mutually e-clusive. n fact0 as "e "ill see in

some "ay all retailers can placed into each category.

Retail Categories: Target Markets er!e"

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!he first classification looks at the type of markets a retailer intends to target. !hese

categories are identical to the classification scheme "e sa" in the 2ecisions tutorial "hen "e

discussed the levels of distribution coverage.

• M)ss M)r.e$ K :ass market retailers appeal to the largest market possible by selling

products of interest to nearly all consumers. Gith such a large market from "hich to dra"

customers0 the competition among these retailers is often fierce.

• Spe#&)*$( M)r.e$ K Retailers categoried as servicing the specialty market are likely

to target buyers looking for products having certain features that go beyond mass

marketed products0 such as customers "ho re7uire more advanced product options or

higher level of customer service. Ghile not as large as the mass market0 the target market

serviced by specialty retailers can be siable.

• E/#*us&0e M)r.et K Appealing to this market means appealing to discriminating

customers "ho are often "illing to pay a premium for features found in very fe"

products and for highly personalied services. 9ince this target market is small0 the

number of retailers addressing this market "ithin a given geographic area may also be

small.

Retail Categories: $ro"%&t '(erings

8nder this classification retailers are divided based on the "idth i.e.0 number of different

product lines/ and depth i.e.0 number of different products "ithin a product line/ of the

products they carry.

• Ge'er)* Mer#")'-&sers K !hese retailers carry a "ide range of product categories

i.e.0 broad "idth/ though the number of different items "ithin a particular product line is

generally limited i.e.0 shallo" depth/.

• Mu*$&p*e L&'es Spe#&)*$( Mer#")'-&sers * Retailers classified in this category stock

a limited number of product lines i.e.0 narro" "idth/ but "ithin the categories they

handle they often offer a greater selection i.e.0 e-tended depth/ than are offered by

general merchandisers. &or e-ample0 a consumer electronics retailer "ould fall into this

category.

)



• S&',*e L&'e Spe#&)*$( Mer#")'-&sers K 9ome retailers limit their offerings to just

one product line i.e.0 very narro" "idth/0 and sometimes only one product i.e.0 very

shallo" depth/. !his can be seen online "here a relatively small "ebsite may sell a single

product such as computer gaming soft"are. Another e-ample may be a small je"elrystore that only handles "atches.

Retail Categories: $ri&ing trategy

Retailers can be classified based on their general pricing strategy. Retailers must decide

"hether their approach is to use price as a competitive advantage or to seek competitive

advantage in non*price "ays.

• +&s#ou'$ Pr&#&', K 2iscount retailers are best kno"n for selling lo" priced products

that have a lo" profit margin i.e.0 price minus cost/. !o make profits these retailers look

to sell in high volume. !ypically discount retailers operate "ith lo" overhead costs by

vigorously controlling operational spending on such things as real estate0 design issues

e.g.0 store layout0 "ebsite presentation/0 and by offering fe"er services to their

customers.

• Compe$&$&0e Pr&#&', K !he objective of some retailers is not to compete on price but

alternatively not to be seen as charging the highest price. !hese retailers0 "ho often

operate in specialty markets0 aggressively monitor the market to insure their pricing is

competitive but they do not desire to get into price "ars "ith discount retailers. !hus0

other elements of the marketing mi- e.g.0 higher 7uality products0 nicer store setting/ are

used to create higher value for "hich the customer "ill pay more.

•Fu** Pr&#e Pr&#&', K Retailers targeting e-clusive markets find such markets are far

less price sensitive than mass or specialty markets. n these cases the additional value

added through increased operational spending e.g.0 e-pensive locations0 more attractive

design0 more services/ justify higher retail prices. Ghile these retailers are likely to sell in

lo"er volume than discount or competitive pricing retailers0 the profit margins for each

product are much higher.

Retail Categories: $ro*otional +o&%s

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Retailers generate customer interest using a variety of promotional techni7ue0 yet some

retailers rely on certain methods more than others as their principle promotional approach.

• A-0er$&s&', K :any retailers find traditional mass promotional methods of

advertising0 such as through ne"spapers or television0 continue to be their best means for

creating customer interest. Retailers selling online rely mostly on nternet advertising as

their promotional method of choice.

• +&re#$ M)&* K A particular form of advertising that many retailers use for the bulk of

their promotion is direct mail K advertising through postal mail. 8sing direct mail for

promotion is the primary "ay catalog retailers distribute their materials and is often

utilied by smaller local companies "ho promote using postcard mailings.

• Perso')* Se**&', K Retailers selling e-pensive or high*end products find a

considerable amount of their promotional effort is spent in person*to*person contact "ith

customers. Ghile many of these retailers use other promotional methods0 in particular

advertising0 the consumer*salesperson relationship is key to persuading consumers to

make purchase decisions.

Retail Categories: -istri.%tion Metho"

Retailers sell in many different formats "ith some re7uiring consumers visit a physical

location "hile others sell to customers in a virtual space. t should be noted that many

retailers are not tied to a single distribution method but operate using multiple methods.

• S$ore1B)se- Se**ers K Dy far the predominant method consumers use to obtain

products is to ac7uire these by physically visiting retail outlets a.k.a. brick*and*mortar/.

9tore outlets can be further divided into several categories. Lne key characteristic that

distinguishes categories is "hether retail outlets are physically connected to one or more

others stores;

o 9tand*Alone K !hese are retail outlets that do not have other retail outlets

connected.

o

9trip*9hopping Center K A retail arrangement "ith t"o or more outlets physically connected or that share physical resources e.g.0 share parking lot/.

1/



o 9hopping Area K A local center of retail operations containing many retail

outlets that may or may not be physically connected but are in close pro-imity to each

other such as a city shopping district.

o Regional 9hopping :all K Consists of a large self*contained shopping area

"ith many connected outlets.

• No'1S$ore Se**ers K A fast gro"ing method used by retailers to sell products is

through methods that do not have customers physically visiting a retail outlet. n fact0 in

many cases customers make their purchase from "ithin their o"n homes.

o

Lnline 9ellers K !he fastest gro"ing retail distribution method allo"sconsumer to purchase products via the nternet. n most cases delivery is then handled

by a third*party shipping service.

o 2irect :arketers K Retailers that are principally selling via direct methods

may have a primary location that receives orders but does not host shopping visits.

Rather0 orders are received via mail or phone.

o ending K Ghile purchasing through vending machines does re7uire the

consumer to physically visit a location0 this type of retailing is considered as non*

store retailing as the vending operations are not located at the vending companys

place of business.

Retail Categories: er!i&e 0e!el

Retailers attract customers not only "ith desirable products and affordable prices0 but

also by offering services that enhance the purchase e-perience. !here are at least three levels

of retail service;

• Se*21Ser0&#e K !his service level allo"s consumers to perform most or all of the

services associated "ith retail purchasing. &or some consumers self*service is considered

a benefit "hile others may vie" it as an inconvenience. 9elf*service can be seen "ith; 1/

self*selection services0 such as online purchasing and vending machine purchases0 and +/

self*checkout services "here the consumer may get help selecting the product but theyuse self*checkout stations to process the purchase including scanning and payment.

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• Assor$e-1Ser0&#e K !he majority of retailers offer some level of service to

consumers. 9ervice includes handling the point*of*purchase transaction6 product selection

assistance6 arrange payment plans6 offer delivery6 and many more.

• Fu**1Ser0&#e K !he full*service retailer attempts to handle nearly all aspects of the

purchase to the point "here all the consumer does is select the item they "ish to

purchase. Retailers that follo" a full*price strategy often follo" the full*service approach

as a "ay of adding value to a customers purchase.

Retail Categories: 'nershi tr%&t%re

&inally0 "e can categorie retailers based on the o"nership structure of the business.

• I'-&0&-u)**( O3'e- )'- Oper)$e- K 8nder this o"nership structure an individual

or corporate entity o"ns and operates one or a very small number of outlets. 9ingle

o"nership of retail outlets most fre7uently occurs "ith small retail stores0 though there

are some cases0 for instance in the automotive or furniture industries0 "here single

o"nership involves very large outlets.

• Corpor)$e C")&' K A retail chain consists of multiple retail outlets o"ned and

operated by a single entity all performing similar retail activities. Ghile the number of

retail outlets re7uired to be classified as a chain has never been specified0 "e "ill assume

that anyone o"ning more than five retail locations "ould be considered a chain.

• Corpor)$e S$ru#$ure K !his classification covers large retailers predominantly

operating in the non*store retail arena such as online0 catalog and vending.

• Co'$r)#$u)**( L&#e'se- )'- I'-&0&-u)**( Oper)$e- K !he contractual channel

arrangement discussed in the 2istribution 2ecisions tutorial has lead to a retail o"nership

structure in "hich operators of the retail outlet are not the out*right o"ners of the

business. nstead0 the arrangement often involves a legal agreement in "hich the o"ner of

the retail concept allo"s the operator to run the o"ners business concept in e-change for

financial considerations such as a percentage of revenue. !his structure is most often seen

in retail franchising.

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Retail +or*ats: $art 1

No" that "e have presented "ays in "hich retailers can be classified0 "e no" use

these categories to distinguish general formats or business models that best describes a retail

operation. !hese categories are designed to identify the primary format a retailer follo"s. n

some cases0 particularly "ith the advent of the nternet0 a retailer "ill be involved in more

than one format.

Mom1)'-1Pop

Represent the small0 individually o"ned and operated retail outlet. n many cases

these are family*run businesses catering to the local community often "ith a high level of

service but relatively small product selection..

M)ss +&s#ou'$ers

!hese retailers can be either general or specialty merchandisers but either "ay their

main focus is on offering discount pricing. Compared to department stores0 mass discounters

offer fe"er services and lo"er 7uality products.

4)re"ouse S$ores

!his is a form of mass discounter that often provides even lo"er prices than

traditional mass discounters. n addition0 they often re7uire buyers to make purchases in

7uantities that are greater than "hat can be purchased at mass discount stores. !hese retail

outlets provide fe" services and product selection can be limited. &urthermore0 the retail

design and layout is as the name suggests0 "arehouse style0 "ith consumers often selecting

products off the ground from the shipping package. 9ome forms of "arehouse stores0 called"arehouse clubs0 re7uire customers purchase memberships in order to gain access to the

outlet.

C)$e,or( 5&**ers

:any major retail chains have taken "hat "ere previously narro"ly focused0 smallspecialty store concepts and have e-panded them to create large specialty stores. !hese so*

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called ?category killers@ have been found in such specialty areas as electronic e.g.0 Dest

Duy/0 office supplies e.g.0 9taples/ and sporting goods e.g.0 9port Authority/.

+ep)r$me'$ S$ores

!hese retailers are general merchandisers offering mid*to*high 7uality products and

strong level of services0 though in most cases these retailers "ould not fall into the full*

service category. Ghile department stores are classified as general merchandisers some carry

a more selective product line. &or instance0 "hile 9ears carries a "ide range of products from

hard"are to cosmetics0 Nordstrom focuses their products on clothing and personal care

products.

Bou$&6ue

!his retail format is best represented by a small store carrying very specialied and

often high*end merchandise. n many cases a bouti7ue is a full*service retailer follo"ing a

full*pricing strategy.

C)$)*o, Re$)&*ers

Retailers such as Eands ,nd and EE Dean have built their business by having

customers place orders after seeing products that appear in a mailed catalog. Lrders are then

delivered by a third*party shipper.

E1$)&*ers

Possibly the most publicied retail model to evolve in the last 3( years is the retailer

that principally sells via the nternet. !here are thousands of online*only retail sellers of

"hich Amaon.com is the most famous. !hese retailers offer shopping convenience including

being open for business all day0 every day. ,lectronic retailers or e*tailers also have the ability

to offer a "ide selection of product since all they really need in order to attract orders is a

picture and description of the product. !hat is0 they may not need to have the product on*hand

the "ay physical stores do. nstead an e*tailer can "ait until an order is received from their

customers before placing their o"n order "ith their suppliers. !his cuts do"n significantly on

the cost of maintaining products in*stock.

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Fr)'#"&se

As noted in the 2istribution 2ecisions tutorial0 a franchise is a form of contractual

channel in "hich one party0 the franchisor0 controls the business activities of another party0

the franchisee. 8nder these arrangements0 an eligible franchisee agrees to pay for the right to

use the franchisors business methods and other important business aspects0 such as the

franchise name. &or instance0 :c2onaldHs is a "ell*kno"n franchisor that allo"s individuals

to use the :c2onaldHs name and methods to deliver food to consumers. Payment is usually in

the form of a one*time0 upfront franchise fee and also on*going percentage of revenue. Ghile

the cost to the franchisee may be 7uite high0 this form of retailing offers several advantages

including; 1/ allo"ing the franchisee to open a retail outlet that may already be kno"n to

local customers0 and +/ being trained in ho" to operate the business0 "hich may allo" the

franchisee to be successful much faster than if they attempted to start a business on their o"n.

&or the franchisor0 in addition to added revenue0 the franchise model allo"s for faster

e-pansion since funds needed to e-pand the business e.g.0 ac7uiring retail space0 local

advertising/ are often supported by the franchisees up*front franchise fee.

Co'0e'&e'#e S$ore

As the name implies these general merchandise retailers cater to offering customers

an easy purchase e-perience. Convenience is offered in many "ays including through easily

accessible store locations0 small store sie that allo"s for 7uick shopping0 and fast checkout.

!he product selection offered by these retailers is very limited and pricing can be high.

Ve'-&',

Githin this category are automated methods for allo"ing consumers to make

purchases and 7uickly ac7uire products. Ghile most consumers are "ell a"are of vending

machines allo"ing customers to purchase smaller items0 such as beverages and snack food0

ne"er devices are entering the market containing more e-pensive and bulkier products. !hese

systems re7uire the vending machine have either nternet or telecommunications access to

permit purchase using credit cards.

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Retailer %**ary Chart

Delo" "e summarie each retail format by using the seven categoriation

characteristics. !he characteristics identified for each format should be vie"ed as the ?most

likely@ case for that format and are not necessarily representative of all retailers that fall into

this format.

&or e-ample0 under distribution0 clearly most retailers today have an online presence0

ho"ever0 for many the predominant distribution methods is still selling through retail stores .

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Con&erns o Retailers

Ghile much of the discussion in this tutorial deals "ith the role of retailers in the

marketing strategy for consumer products companies0 it is necessary to understand that

retailers face their o"n marketing challenges. Among the marketing issues facing retailers

are;

• Cus$omer S)$&s2)#$&o' K Retailers kno" that satisfied customers are loyal customers.

Conse7uently0 retailers must develop strategies intended to build relationships that result

in customers returning to make more purchases.

• Ab&*&$( $o A#6u&re $"e R&,"$ Pro-u#$s K A customer "ill only be satisfied if they can

purchase the right products to satisfy their needs. 9ince a large percentage of retailers do

not manufacture their o"n products0 they must seek suppliers "ho "ill supply products

demanded by customers. !hus0 an important objective for retailers is to identify the

products customers "ill demand and negotiate "ith suppliers to obtain these products.

• Pro-u#$ Prese'$)$&o' K Lnce obtained products must be presented or merchandised

to customers in a "ay that generates interest. Retail merchandising often re7uires hiring

creative people "ho understand and can relate to the market.

• Tr)22&# Bu&*-&', K Eike any marketer0 retailers must use promotional methods to

build customer interest. &or retailers a key measure of interest is the number of people

visiting a retail location or "ebsite. Duilding ?traffic@ is accomplished "ith a variety of

promotional techni7ues such as advertising0 including local ne"spapers or nternet0 and

specialied promotional activities0 such as coupons.

• L)(ou$ K &or store*based retailers a stores physical layout is an important component

in creating a retail e-perience that "ill attract customers. !he physical layout is more than

just deciding in "hat part of the store to locate products. &or many retailers designing the

right shopping atmosphere e.g.0 objects0 light0 sound/ can add to the appeal of a store.

Eayout is also important in the online "orld "here site navigation and usability may be

deciding factors in "hether of a retail "ebsite is successful.

1#



• Lo#)$&o' K Ghere to physically locate a retail store may help or hinder store traffic.

Gell placed stores "ith high visibility and easy access0 "hile possibly commanding

higher land usage fees0 may hold significantly more value than lo"er cost sites that yield

less traffic. 8nderstanding the trade*off bet"een costs and benefits of locations is animportant retail decision.

• 5eep&', P)#e 4&$" Te#"'o*o,( K !echnology has invaded all areas of retailing

including customer kno"ledge e.g.0 customer relationship management soft"are/0

product movement e.g.0 use of R&2 tags for tracking/0 point*of*purchase e.g.0 scanners0

kiosks0 self*serve checkout/0 "eb technologies e.g.0 online shopping carts0 purchase

recommendations/ and many more.

ndia started its Retail Mourney since ancient time.n Ancient ndia there "as a concept of

"eekly <AA!0 "here all the buyers and sellers gather in a big market for bartering. t takes a

pretty long times to step to shape the modern retail. n bet"een these t"o concepts i.e.0

bet"een ancient retail concept and the modern one there e-ist modern %rocerymom and pop

shops or Daniyaki2ukan. 9till it is predominating in ndia 9o the ndian retail industry is

divided into t"o sectorsOorganied and unorganied. !he ndian retail industry is no" beginning to evolve transformation that has s"ept other large economies. !here is a vast

change in ndian retail0 the liberaliation of the consumer goods industry initiated in the mid

1F5(s and accelerated through the 1FF(s has begun to impact the structure and conduct of

the retail industry. !he concept retail0 "hich includes the shopkeeper to customer interaction0

has taken many forms and dimensions0 from the traditional retail outlet and street local

market shops to upscale multi brand outlets0 especially stores or departmental stores. <ence0

focusing on t"o aspects of retail marketing0 i.e.0 store retailing and non*store retailing. 9tore

Retailing as the departmental store0 "hich is a store or multi brand outlet0 offering an array of

products in various categories under one roof0 trying to cater to not one or t"o but many

segments of the society and Non store retailing as the direct selling0 direct marketing0

automatic vending.

!he most important debate concerning the implications for the e-pansion of the

organied retailing in ndia revolves around "hether it is going to have positive impacts on

the economy as a "hole as compared to the traditional unorganied form of retailing.

According to one camp0 it has overall positive impacts in terms of generating more number of

1)



employments0 ne" diversified forms of employments0 and improving the nature of retail

employment higher salary0 more job benefits0 security of job0 employability0 etc./. !his form

of retail sector is also looked upon as a huge sector having immense business opportunities

for entrepreneurs and capital investors. :oreover0 organied retailing is considered to be

efficient and apt to cater to the diversified and changing nature of the consumer demands in

gro"ing economies like ndia. !he general benefits of organied retail also include improved

supply*chain0 improved marketability of farmers produce and it is also e-pected that it "ill

contribute to heightened economic activity.

!he e-tensive research brought me to conclude that departmental stores are soon

emerging on the top priority lists0 amongst the shopping spree in 2elhi0 as they seem to

derive immense pleasure as shopping is considered as an e-perience no" rather than a task

and e-posure to variety under one roof in their e-tremely busy lives0 "hen they dont have

time for things.

!he organied retail food and grocery stores make constant efforts to induce

customers to visit the store by discount offers. :ost of these stores believe in creating not just

a marketing activity "ith its customers0 but rather favor relationship building "ith him so as

to convert first time customers into a client. !hey provide better parking facilities to

customers and the facility to e-amine the product. !hey also offer a "ide range of payment

options to customers. ndia is currently the t"elfth largest consumer market in the "orld.

According to a study by :cBinsey %lobal nstitute0 ndia is likely to join the premier league

of the "orlds consumer markets by +(+3 improving its position to the fifth. Dut this gro"th

is not going to happen is smooth "ay. Any change al"ays comes up "ith some friction and

ndian retail sector is and "ill be "itnessing the same friction. ndian retail sector is still in its

nascent form if "e consider its full potential.

Ghile most of the developed market of 89 and ,urope and also some 9, Asian

emerging market economies have reaped the benefits of modern retail0 ndia has not yet

entered into advanced phase of modern retail forms. 8norganied retailing0 on the other hand0

refers to the traditional formats of lo"*cost retailing0 for e-ample0 hand cart and payment

vendors0 and mobile vendors0 the local %rocery shops0 o"ner manned general stores0 paan

beedi shops0 convenience stores0 hard"are shop at the corner of your street selling everything

from bathroom fittings to paints and small construction tools6 or the slightly more organied

medical store and a host of other small retail businesses in apparel0 electronics0 food0 etc.

9mall*store retailing has been one of the easiest "ays to generate self*employment0 as

it re7uires limited investment in land0 capital and labor. t is generally family run business0

1,



lack of standardiation and the retailers "ho are running this store they are lacking of

education0 e-perience and e-posure. !his is one of the reasons "hy productivity of this sector

is appro-imately 4$ that of the 89 retail industry. 8norganied retail sector is still

predominating over organied sector in ndia0 unorganied retail sector constituting F5$ 1+

million/ of total trade0 "hile organied trade accounts only for +$. !he road side ha"kers

and the mobile pushcart variety/ retailers.

!he grocery stores the ndian e7uivalent of the mom and*pop stores of the 89/0

"ithin "hich are; i/ Lpen format more organied outlets0 ii/ 9mall to medium food retail

outlets. :odern trade or organied retailers "ithin modern trade0 "e have; i/ the discounter

9ubhiksha0 Apna Daaar0 :argin &ree/6 ii/ !he value for money store Nilgiris/0 iii/ !he

e-perience shop &ood "orld0 !rinethra/0 v/ !he home delivery &abmart/ !ug of "ar;

Or,)'&7e- Vs! U'or,)'&7e- Se#$or

&uture of retail sector in ndia is s"erving*on one side organied retail is marching

into life of urban consumers0 "hile on the other our o"n neighborhood %rocery stores are

resistingfiercely "ith their e-isting strong foothold. ndia today is at the crossroads "ith

regard to the retail sector. A shift bet"een organied and unorganied retail sector is evident0

"hich hasled to a number of speculations on the fate of ndian retail. 8norganied sector

cannot ignore. n any ne"spaper or television channel0 "e find hordes of ne"s about

happening in organied retail sectors0 "hich is indeed fairly real situation. Ghile the role of

organied retail sector in gro"th of economy cannot be denied0 but one thing is also of

e-treme importance that unorganied retail format is a support to a large chunk of

populationprovidingdirect employment to >F03((0((( individuals. 9o there is no "ay that

governmentor anyone can discount these foundation stone of ndian economy.

C")',&', L)'-s#)pe o2 I'-&)'

Co'sumer&sm

!he face of ndian consumerism is changing; not ndian consumerism is evolving

from Dajaj 9cooter family man to Dajaj Pulsar trendy youngster. !his changing consumers

taste and lifestyle0 some"here automatically give some advantage to organied sector. !his

makes imperative for unorganied retail sector to restructure itself in order to "ithstand the

increasing competition and to meet consumer e-pectations by moving "ith trends. Ghat they

can do and "hat they are doing0 some of these issues "ill be discussed in future parts of

article.

Re$)&* Tre'-s &' P)s$ Fe3 Ye)rs

2/



Defore the decade of eighties0 ndia "ith hundreds of to"ns and cities "as a nation

striving for development. !he evolution "as being "itnessed at various levels and the people

of the nation "ere learning to play different roles as businessmen and consumers. !he

foundation for a strong economy "ere being laid0 youth "ere beckoning ne" a"areness in all

spheres. And this brought in an opportunity for retail industry to flourish. &irst in the metros

and major cities later to impact sub urban and rural market as "ell. Retailing in ndia at this

stage "as completely unorganied and it thrived as separate entities operated by small and

medium entrepreneurs in their o"n territories. !here "as lack of international e-posure and

only a fe" ndian companies e-plored the retail platform on a larger scale. &rom overseas

only companies like Eevis0 Pepe0 :arks and 9pencer0 etc.0 had entered targeting upper

middle and rich classes of ndians.

<o"ever as more than 3( $ population "as formed by lo"er and lo"er middle class

people0 the market "as not completely captured. !his "as later realied by brands like Dig

Daaar and Pantaloons "ho made their products and services accessible to all classes of

people and today the success of these brands proves the potential of ndian retail market. A

great shift that ushered in the ndian Retail Revolution "as the eruption of :alls across all

regional markets.

No" at its peak0 the mall culture actually brought in the organied format for retailing

in ndia "hich "as absent earlier. !hough malls "ere also initially planned for the higher

strata0 they successfully adapted to cater to the larger population of ndia. And it no "onder0

today malls are changing the "ay common ndians have their shopping e-perience. <o"ever

there is still great scope for enhancing ndian mall culture as other than ambience and

branding many other aspects of Retail 9ervice remains to be developed on international

standards. t is surprise that there

"as not a single mall in ndia a decade before and just a fe" years ago only a handful of them

"ere striving0 today there are more than 3( malls across different cities and + years from no"

around 3(( malls are predicted to come up. ndeed this sho"s a very promising trend ahead0

ho"ever before taking a leap into the future of Retail in ndia0 lets see "hat the ndian retail

ndustry is currently occupied "ith.

T"e Mer#")'-&se P*)':

!he plan is applicable to all forms of retailing at all sales levels. t is most often a si-*monthmerchandise plan but there can be time frame variations depending upon the merchandise. !he

21



first si-*month plan includes &ebruary* :arch*April spring/ and :ay*Mune*Muly summer/. !his

plan is prepared and finalied in the previous August to permit early buying of imports and other

merchandise. !he second si-* month plan includes August*9eptember*Lctober fall/ and

November*2ecember*Manuary "inter/.

!his plan is prepared and finalied in the previous &ebruary for the same reasons stated

above. !he important items to be considered monthly "hen developing your si-*month

:erchandise Plan are;

Ne$ S)*es 1 !his figure represents a realistic dollar estimate of your monthly merchandise sales.

!hese sales estimates are based on past e-perience and on future considerations including6

business conditions0 competition0 inflation0 promotional plans0 merchandising opportunities0 and

merchandise availability.

S$o#. 1 n order to achieve your estimated planned/ sales figure you must provide sufficient

stock to permit a satisfactory selection for your customers. !his stock figure can be determined

by calculating your inventory turnover rate or your sales*stock ratio0 or by estimating the

ma-imum 7uantity for each item or the stock re7uirements based on e-pected "eekly sales.

Re-u#$&o's 1 Reductions refer to the lo"ering of retail value of your inventory and are caused by

planned markdo"ns0 shrinkage stock shortage/ and discounts to employees or other special

groups. 9ince these are the only three things that can cause the retail value of the inventory at the

end of a period to have a lo"er valuation than it had at the beginning of the period0 they are to be

included in the plan.

Pur#")ses 1 !his figure represents the dollar value of merchandise the buyer must purchase to

replenish the stock likely to be sold to your retail customers. t is calculated by subtracting the

dollar value of the stock*on*hand at the beginning of the month from the total dollar value of the

planned net sales0 shrinkage0 and reduction for the month.

!he result is the planned purchases for the month..

Ope'1To1Bu( 1 !o arrive at the open*to*buy figure for the month0 it is necessary to subtract

from the above planned purchases figure/ the dollar value of the commitments already placed for

delivery during the same month. 9ince each month is an entity by itself0 it is not possible to carry

any unspent open*to*buy commitments over to the ne-t month. Bno"ledgeable buyers generally

commit about 3( percent of the planned purchase figure in order to allo" funds for reorders0 fill*

ins0 and to take advantage of une-pected marketing opportunities. n addition to the above items

22



and depending upon the retail operation0 the follo"ing elements may also be included in your si-*

month plan; turnover0 markon0 payroll0 advertising0 gross margin0 number of transactions0 and

average sale. t should be noted that the si-*month plan is fle-ible and can be adjusted at any time

to meet changing business conditions.

T"e S$o#. P*)':

After determining the broad categories of merchandise the store is to stock menHs clothing0

stationary0 costume je"elry0 etc./0 the retailer divides the broad categories into smaller categories

called classifications menHs suits0 tu-edos0 raincoats0 etc./. n turn0 the classifications are divided

into sub*classification single*breasted0 double*breasted0 etc./. A unit stock plan of the number of

items to be stocked in each by price0 style0 color and sie is then prepared. !he purpose of this

approach is to ensure that the stock "ill present an assortment of items that "ill satisfy the "ants

and needs of the broad section of targeted consumers. Lne element of the stock plan approach is

the model stock or basic stock list. !his list "ill contain those items that the customer e-pects to

find in stock at all times. !hese are the musts or never*out items "hich are sometimes referred to

as the bread*and*butter items.

!he number of items in all stock plans is multiplied by the price line to arrive at the dollar

value of the planned inventory. Adjustments in the stock plan may be necessary if the financial

constraints preclude an ambitious stock assortment.

T"e Bu(&', P*)':

Lne of the most important aspects of market penetration is to have the items in stock

"hen the customers "ant to buy them. !his implies going into the market to buy the goods early

enough to ensure delivery to the store at the proper time. &or e-ample0 to ensure on*time delivery

of childrenHs ,aster clothes0 you must place the orders and commit the resources in the previous

9eptember. 9o buying for a retail store re7uires advance planning to determine the merchandise

needs for each month and then placing the commitments "ithout procrastination.

9ince retailers offer for sale the ne" items months before the actual calendar date for the

beginning of the ne" season0 it is imperative that buying plans be formulated early enough to

allo" for intelligent buying "ithout any last minute panic purchases. !he main reason for this

early offering for sale of ne" items is that the retailer regards the calendar date for the beginning

of the ne" season as the merchandise date for the end of the old season. &or e-ample0 :arch

+1st0 from a merchandising vie"point0 is the end of spring "hile Mune +1st is the end of summer

and 2ecember +1st the end of "inter.

23



!he period follo"ing the calendar date for the beginning of the season is used by the retailer

to sell closeouts0 job lots0 imperfects0 irregulars0 seconds0 distress merchandise0 off*price

purchases and markdo"ns from regular stock.

n summary the Duying Plan should detail; Ghen the market should be visited to see0

e-amine0 and study the ne" offerings for the coming season6

Ghen commitments should be placed6 and Ghen the first delivery should be received at the

store.

T"e Se**&', P*)':

!he 9elling Plan is closely allied to the buying plan. Lnce the merchandise has been

purchased0 plans must be formulated to ensure the sale of the greatest number of units during

the period of customer acceptance. !he 9elling Plan should detail;

a/ Ghen the items should be promoted through advertising0 "indo" and interior displays0

etc.6

b/ Ghen the inventory should be peaked6

c/ Ghen reorders should no longer be placed6

d/ Ghen markdo"ns from regular stock should be taken6 and

e/ Ghen the item should no longer be in stock.

!he buyer for the retail store must determine at the time the merchandise is purchased

"hen the item should be introduced0 "hen it should be reordered0 "hen it should be marked

do"n0 and "hen it should be removed from stock. !his procedure can be compared to the

tides * lo" and high. n merchandising terms it is referred to as the ebb and flo" of

merchandise. !he old must go and the ne" must take its place.

T"e U'&$ Co'$ro* P*)':

!o maintain an in*stock position of "anted items and to dispose of un"anted items0 it is

necessary to establish an ade7uate form of control over the merchandise on order and the

merchandise in stock. &or the small retailer there are many simple0 ine-pensive forms of unit

control. !hey are;

24



Q isual or eyeball control enabling the retailer to e-amine the inventory visually to determine

if additional inventory is re7uired6 !ickler control enables the retailer to physically count

a small portion of the inventory each day so that each segment of the inventory is counted

every so many days on a regular basis6 9tub control enables the retailer to retain a portion

of the price ticket "hen the item is sold. !he retailer can then use the stub to record the

items that "ere sold6 and finally0 a Click sheet control enables the retailer to record the

item sold at the cash register/ on a sheet of paper0 such information is then used for

reorder purposes.

&or the large retailer more technical and sophisticated forms of unit control are used. !hey

include;

Q Point*of*sale terminals "hich relay to the computer the information of the item sold. !he

buyer receives information printouts at regular intervals for revie" and action6

Q Lff*line point*of*sale terminals relay information directly to the supplierHs computer "hich

uses the information to ship additional merchandise automatically to the retailer6 and a

manufacturerHs representative visits the large retailer on a scheduled basis and takes the

stock count and "rites the reorder.

8n"anted merchandise is removed from stock and returned to the manufacturer through the

procedure of an authoried level. A sound unit control must include control over open orders so

that delivery dates are adhered to and to ensure that stores do no receive goods they did not order.

Gro3$" +r&0ers o2 $"e Re$)&* Se#$or

!he ndian retailing sector is at an infle-ion point "here the gro"th of organied

retailing and consumption by the ndian population is going to take a higher gro"th

trajectory. !he ndian population is observing a note"orthy demographics change. An

increasing young "orking population under age of +4 years0 sharp rise in the per capita

income0 an increase of dual income nuclear families in the urban areas0 along "ith increasing

"orking "omen population0 internet revolution and emerging opportunities in the services

sector are going to be the key gro"th drivers of the organied retail sector in ndia. !he

"hole model of shopping has altered in terms of format and consumer shopping behavior

pattern0 "hich ultimately could lead to a shopping revolution in ndia.

25



MA8OR PLAYERS OF RETAILING:

UNORGANI9E+ RETAIL STORES:

• Eocal Birana stores

• %eneral or provisions stores

• 9mall shops• Carts

ORGANI9E+ RETAIL STORES:

• 9hopping malls;

o Dig baaar

o 9tar baaar

o 9ubhiksha mart

o

marto <imalya malls

o Reliance marts

o Gal*:art

o Lther shopping malls

• Lnline shopping "ebsites;

o flipkart.com

o snapdeal.com

o amaon.com

o ebay.in

26



CHAPTER !

LITERATURE REVIE4

!hough significant "ork has been done to study the impact of organied retailing on

unorganied retailing at the national level0 but not much has been studied in the North

%ujarat0 probably due to late entry of organied retailing in North %ujarat. 9ome related

studies undertaken in the past and revie"ed are;

• L)"&r&; Is&$) )'- S)m)'$); Pr)-eep 5um)r <==/;

n their paper titled &actors influencing purchase of apparels from organied retail outlets

mentioned that apparel takes a hefty share in organied retail because people are more 7uality

conscious and comparatively less price sensitive. !hey also highlighted the distinct features

of organied retail outlets like discount offers0 pick and choice etc.0 "hich are considered to

be more appealing by the buyers.

• R)m)')$")' > ")r&<=?

Ramanathan hari+(11/observed from their study that due to the recent changes in the

demographic system of consumers0 and the a"areness of 7uality conscious consumption0

consumers preferred to buy different products both from the organied and unorganied

retailers. 8osep"; Sou'-)r)r)@)'; Gup$); > S)"u; <==? concluded that unorganied

retailers in the locality of organied retailers "ere adversely affected in terms of their volume

of business and profit. According to him "ith the emergence of organied outlets consumersgained through the availability of better 7uality products0 lo"er prices0 one*stop shopping0

choice of additional brands and products0 family shopping0 and fresh stocks. According to

report of ICRIER ?organied and unorganied retail not only coe-ist but also gro"

substantially. ?!he reason behind that the retail sector is gradually gro"ing on an overall

basis hence the benefit of this gro"th goes to both the sectors. 5e)r'e(; <==? found that

traditional markets are transforming themselves in ne" formats such as departmental stores0

hypermarkets0 supermarkets and specialty stores. M)r$&'e)u; <D? first time used theconcept of store image. !his store image "as partly based on functional attributes and partly

2#



on psychological attributes. n functional attributes he included variety of commodities0

layout0 location0 price value relation0 and service that consumers could independently

compare "ith other stores. Ghereas in psychological attributes attractiveness and lavishness

symbolied special attributes of that store. Mu'@)*; 5um)r; > N)r3)*; <=? through their

research concluded that the kirana shops being affected by malls is only a myth. <e further ‟

concluded that in spite of the available opportunities to the organied retail to gro" in ndia

these kirana shops also "ere benefited from this gro"ing economy. S&0)r)m)'!P; <=?

from his study concluded that the impact of organied retailers "as clearly visible on the

business of unorganied retailers in terms of sales0 profit and employment. 2ue to their

financial infirmity these small retailers continuously struggled to introduce changes in their

e-isting retail practices. 9ome kind of intervention "as re7uired for their future e-istence.

• Another study by A*&; 5)poor!; > Moor$"(; <==? in their study indicated that

consumers shopping behavior "as influenced by their income and educational level "hile

gender and age had no significant impact on their behavior. Ghile 2odge0 Robert0

Summer; > H)rr(; <? and A).er; 8o'es; +)0&-; > Mor,)'; <? concluded that

consumers socio economic background0 their personality0 and past purchase e-perience‟

"ere those factors upon "hich the customers decision lied.‟ N)&r > N)&r; <=? in their

study revealed that the perception of service 7uality "as influenced by various natures

among various customers and some of the general factors like personal interaction0

physical aspects on "hich customer perception remained constant and common. Dut

S&'," > A,)r3)*; <=? revealed that customers preferences for grocery shopping

"ere gradually shifting from local kirana stores to organied convenience stores. Drand

choice and credit card facilities "ere the main determinants "hich influenced preferences

from kirana to organied retail. Payment through credit cards increased purchases from

organied retail store. S&'") > B)'er@ee; <==? in their study concluded that storeconvenience and customer services positively influenced consumers store selection.

Gup$) ; <=? concluded in her study that store attributes like convenient operating

hours and accessibility "ere the factors "hich lead to customer loyalty and not store

appearance. 9imilarly0 product attributes like freshness of the product and availability of

products range according to the pocket "ere major determinant of loyalty. t "as also

evident that even today Biranas are preferred by customers because of various reasons

vi. convenient location0 home delivery0 personal relations "ith shopkeeper0 giving

products on credit0 payment in installments. Sr&0)s$)0); <=? in his study sho"ed that

2)



the overall customers perception across urban and suburban "as not varied. !he‟

customers "ere ready to pay higher prices for branded goods across the urban and

suburban areas. !hey gave priority to purchase grocery from nearby shops "hile for

purchasing of apparel they liked to travel some distance. !he outcomes of the study

sho"ed that the e-posure of marketing strategy through electronic and print media made

the customers more choosey and kno"ledgeable. Ghereas So*),))r- > H)'se'; <==?

identified several store attributes that "ere considered important for the consumers

evaluation of stores. !hese attributes "ere merchandise0 assortment0 merchandise 7uality0

personnel0 store layout0 accessibility0 cleanliness and atmosphere.

• Puro"&$ )'- 5)0&$) according to their studies that the traditional retailers are not very

much clear about the conse7uences of the modern retailing the traditional retailers are

neutral or undecided0 modern retailing "ill cut the profit margin of the traditional

retailers6 the modern retailing "ill lead healthy competition in the market0 modern

retailing "ill reduce the sales volume of the traditional retailers and traditional retailers

should improve customer care services in the era of modern retailing.

• S")o'& S")b')m; t is important to highlight that in organied retail0 the status of

employment is much better than that in unorganied retail. <ence it is definitely desirable

that more and more labor gets absorbed in this sector of retail. n the current conte-t0 the

labor employed in unorganied retailstands unfit for finding employment in organiedretail. f appropriate training and skills could be imparted to them0 it is possibly feasible

to offerbetter forms of employment to them in the organied retail sector. !he status of

employment is much better than that in unorganied retail. <ence it is definitely desirable

that more and more labor gets absorbed in this sector of retail. n the current conte-t0 the

labor employed in unorganied retail stands unfit for finding employment in organied

retail. f appropriate training and skills could be imparted to them0 it is possibly feasible

to offer better forms of employment to them in the organied retail sector.

• Mee$)

Pu'@)b&: According to their study theysuggest that the development efforts in this

area are based on three grounds; &irst0 farmersassociated "ith the modern value chains

earn higher returns than selling to the traditional markets. 9econd0 the modern supply

chains have specific 7uality re7uirements "hich are easier to meet by the large and

medium farmers and the small farmers tend to get left out of these markets. !hird0 there

are several successful e-amples of linking small farmers to these modern valuechains

"ith effort from government agencies0 N%Ls and development agencies. !his kno"ledge

presents strong grounds for a closer look at the emerging sector in ndia.

2,



• M)$"e3 8osep": 8norganied retailers in the vicinity of organied retailers e-perienced

adecline in their volume of business and profit in the initial years after the entry of large

organied retailers. !he adverse impact on sales and profit "eakens over time. !here "as

no evidence of a decline in overall employment in the unorganied sector as a result of the entry of organied retailers. !here is some decline in employment in the North and

Gest regions "hich0 ho"ever0 also "eakens over time. !he rate of closure of unorganied

retail shops in gross terms is found to be 4.+$ per annum "hich is much lo"er than the

international rate of closure of small businesses. !he rate of closure on account of

competition from organied retail is lo"er still at 1.)$ per annum. !here is competitive

response from traditional retailers through improved business practices and technology up

gradation. A majority of unorganied retailers is keen to stay in the business and compete0

"hilealso "anting the ne-t generation to continue like"ise. 9mall retailers have been

e-tending more credit to attract and retain customers. <o"ever0 only 1+$ of unorganied

retailers have access to institutional credit and >)$ felt the need for better access to

commercial bank credit. :ost unorganied retailers are committed to remaining

independent and barely 1($ preferred to become franchisees of organied retailers.

3/



CHAPTER 1 RESEARCH METHO+OLOGY

OB8ECTIVES OF THE STU+Y:

• !o study the factors influencing the consumers to buy from organied

retailersunorganied retailers.

• !o study the influence of demographic factors on buying decisions from organied

and unorganied retailers.

• !o study the perception of customers to"ards organied and unorganied retailers.

SUB1OB8ECTIVES OF THE STU+Y:

• !o kno" the significance and limitations of organied retailing in North %ujarat.• !o kno" the significance and limitations of unorganied retailing in North %ujarat.

• !o study the impact of organied retailing on unorganied retailing in North %ujarat.

• !o study the different factors that affect consumer behavior "ith regards to buying

from a organied retail outlet or unorganied retail outlet.

• !o study the future prospects of organied retailing and unorganied retailing in North

%ujarat.

HYPOTHESIS:

• !here is no significant difference bet"een the choices of retailers format across‟

shopping items.

• !here is no significant difference in the choices of retailers formats across the family‟

income level.

• !here is no significant difference bet"een the choices of retailers format across‟

various shopping factors.

• !here is no significant difference bet"een the choices of retailers format across the‟

respondents age.‟

• !here is no significant difference bet"een the choices of retailers format across the‟

respondents gender.‟

RESEARCH +ESIGN: 2escriptive Research

+ATA COLLECTION METHO+S:

PRIMARY +ATA:

31



Primary data "ill be collected through personal one*to*one intervie" from the

respondents by stratified random sampling techni7ue.

SECON+ARY +ATA:

9econdary data "ill be collected from "ebsites available on nternet0 especially thatof the organied and unorganied retail enterprises. Desides0 the cyber forums also serve as

source of secondary data0 "herein the forum members provide the relevant secondary data

available "ith them. !he research study is more of a behavioral study and so it is 7ualitative

as "ell as 7uantitative in nature. <o"ever0 7uantification of the subjective data "ill be done

using techni7ues like the rating scale techni7ue. t "ill include a descriptive and e-ploratory

research of the relationship bet"een the purchase behavior of a buyer and the socio*cultural0

economic0 technological0 personal0 psychological and other factors around the consumer0

"hich influence hisher purchase behavior.

TYPE OF SCHE+ULE

9tructured Suestionnaire "ith suitable scaling.

TYPE OF UESTIONS:

Eikert scale0 Close ended and multiple choice 7uestions.

STATISTICAL TOOL USE+:

Chi s7uare test0 Geighted Average

RESEARCH INSTRUMENT

• Research instruments0 for the purpose of primary data collection "ere Suestionnaires.

!he 7uestionnaire "as divided into > parts.

• Part*A had 7uestions related to demographic information of respondents.

• Part*D "as related to some basic information regarding respondents choice to visit

particular retailers for purchasing an item.• Part*C contained semantic differential scale to measure customer perceptions

regarding store attributes related to its image.

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MRP 2 Chapter 1,2 &3 Roll No.1&41

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