8/7/2019 Impact of branded stores on kiranas
1/67
BUSINESS RESEARCH METHODOLOGY
IMPACT OF BRANDED RETAIL CHAINS ON SMALL RETAIL SHOPS
FINAL REPORT
CHIRANJITH BASU (09BSHYD0234) 39HARSIMRAN (09BSHYD0313) - 61ISHWARYA.B (09BSHYD0326) 59ROHITH (09BSHYD0539) 60SNEHA MEGHANI (09BSHYD0830) - 71
GROUP 8
Submitted toProf. SashikalaBRM faculty
IBS, HYDERABAD
11, January, 2010
I.N.D.E.X
8/7/2019 Impact of branded stores on kiranas
2/67
INTRODUCTION.1
LITERATURE
REVIEW7a) ConceptualFramework.9
b) Attributes identified in theliterature.14
c) Store Image and Consumer Shopping Habits: IndianContext..17
d) Traditional Retailers Perceptions About OrganizedRetail.19
EXECUTIVE SUMMARY
22
PROBLEM DISCOVERY24
METHODOLOGY26
a) Perceived importance of store attributes27b) Exploratory
research.28c) Experience
survey.29i) Diagnosing a situation29ii) Depth Review.30
d) Secondary Data Analysis32i) Qualitative Fact Finding...32ii) Problem Definition..34iii) Questionnaire Formation.35iv) Questionnaire..36
SAMPLING..
43a) Sample planning43b) Sampling Generation....44c) Scales.4
6d) Survery Method.47
SPSS SCREEN SHOTS
8/7/2019 Impact of branded stores on kiranas
3/67
a) Factor Analysis49
b) Regression....53
ANALYSIS OF THE CONSUMER CHOICE OFFORMAT..55
CONCLUSION.59
REFERENCES
60
INTRODUCTION:
As economic figures suggest that consumers are slowing returning to the
high street and big flagship stores such as M& S report an increase in sales,
is the high street back in business?
The world of retail has the customary high and lows of a theme park roller
coaster and as one big high street name makes an attempt at a comeback
another sinks into despair and is deserted by its previously loyal following.
Marks and Spencers seems to have made inroads on its rather disastrous
past couple of years but in a high street saturated with stores, consumers
are presented with an increasing amount of choice and competition, we
wanted to discover how retail behavior changed in 2005 and the implications
and consumer trends for 2006.
8/7/2019 Impact of branded stores on kiranas
4/67
Consumers, who are as news aware as marketers, were conscious of the
much-reported down turn in consumer spending. News shows and
newspapers were not shy in telling us about the slump in high street
spending and the drop in profits at major retailers across Britain. And it did
not go unnoticed, either through personal experience or the media, that
Britain is a nation in a growing amount of debt, factors that have unarguably
shaped retail spending in 2005. While the boom might not be back, there is
increase in consumer spending this quarter. Why is this and how are
consumers behaving in the light of increased technological usage and more
sophisticated in store media and trendy environments?
The shift from one designated retail location, to the popularisation of out of
town retail centres and the move by supermarkets into non- food markets
has significantly altered our ideas of retail experiences. Time poor young
professionals and those working traditional working hours are able to
purchase many items at the supermarket rather than visiting the high street
at weekends. The internet has also led to a collapse in static shopping hours
and predictable times for certain sales.
Consumers wants are no longer restricted by opening hours or store location
and as such we are becoming much more fussy about where we spend our
money, making marketing increasing difficult as consumer spending patterns
become more erratic and are less dependent on whats on offer and instead
8/7/2019 Impact of branded stores on kiranas
5/67
becoming increasingly customer led. The range and number of sales of
random products on Ebay is testament to this. So while marketers might
seem to know what consumers want, it seems that want we want needs no
marketing at all. What consumers want is, in large numbers, items that just
arent available on the high street at bargain prices.
Ebay offers consumers the convenience to browse and compare a large
number of products from the comfort of their own homes and the ability to
determine or influence the selling price themselves, an experience that they
do not have on the high street and one which perhaps explains the
popularity of going to markets for the over 50s we interviewed as part of our
research. So taking part and feeling like they have some sway in the
purchasing process is one of the key elements we picked up on in our study
and something that is clearly lacking in the monotonous retail experiences
we are now presented with on the high street.
Online shopping of course offers considerable savings, which has played a
big part in its success and price deflation and the exponential growth of
discount stores are other factors that have shaped retail spending and
behaviour in 2005.
Though we may have become wealthier, we have also become more
watchful of the purse strings as the ability to shop around for a bargain
becomes easier. Price runner and 99p stores offer an avenue for acquiring
8/7/2019 Impact of branded stores on kiranas
6/67
goods at the best value and brand loyalty has been eroded by the saturation
of similar goods for less money. Why pay more indeed. Purchasing an item
for considerably less than someone else became a new form of pulling social
rank, inverting the traditional Keeping up with the Jones spending agenda;
Primark is enjoying its heyday, as consumers rush to snap up the latest
fashion bargains for next to nothing.
Brands themselves are becoming less important and more diluted by the
international competition and the increased volume of competition meaning
mediocre brands are finding it increasing difficult to stay afloat. We would
rather buy on brand at a cheaper price than a half decent branded version
that costs more.
In order to compete with financial savings stores have turned to making their
in store environment an superior experience, with interiors that are more
exciting and inviting with the increased use of in-store media and
technology. Deploying the latest gadgetry has been successful in luring back
customers, especially when it echoes internet capabilities. Consumers told us
that in store entertainment and machines no only makes a shop seem more
trendy, it can make they stay longer too. This is because they can act as a
source of distraction for bored boyfriends and partners and also because
they allow consumers to view more of the stores products without having to
8/7/2019 Impact of branded stores on kiranas
7/67
trawl the store. Product finders are popular because they ease the customer
experience.
In store media must never impose on store design though and layout is the
single biggest determining factor after price for high street store
preferences. Consumers want bright open spaces that are easy to navigate
and have products that are well-presented, especially older consumers that
find over stocked stores particularly annoying. Consumers are prepared to
sacrifice space and order, but only for significant reductions and value.
Improving in store environment seems essential for continual success and
our respondents demand air conditioning, better seating and displays and
more access to refreshments, suggesting an attraction towards stores that
provide food and drink dispensing.
Staffing is also an area that can make or break consumers retail
experiences. Obtaining the right balance between being overbearing and
non-existent staff is difficult but vital to creating a good store image and
something that consumers believe is still not being got right. Personal
service and not being held in a queue is something that we have gotten used
to on the internet. Self-service options, which are becoming standard in
many of the major supermarkets, go somewhere towards achieving this.
8/7/2019 Impact of branded stores on kiranas
8/67
Further initiatives for improvement suggested by our responses however,
hint that more interactive devices would be welcomed, including machines
that display information on stock in clothes and electrical shops. These again
point towards shopping experience that is almost completely dictated and
carried out by the customers themselves, not the staff.
Consumers with increasing amounts of disposable income are the over 50s
and tweens and we investigated their spending habits. The over 50s are
family orientated and much of their money is spent on family and friends
while the tweens spend their money on ensuring and impressing friends. And
while the two demographics have very different attitudes towards money,
brand awareness and desirability can be tracked in these age groups. We
discovered that from the age of eight strong brand associations have been
formed that can last into adulthood. Many of the over 50s we interviewed
admitted that the brands they still buy today are a hangover from their
childhood, the brands they were brought up on. Brands can be trusted
friends or representations of emotional stages and family ties.
Top stores for over 50s are Marks & Spencers, John Lewis and Next but
catalogue shopping is still a popular option of acquiring goods and as afore
mentioned shopping at markets or car boots sales are still a big part of this
demographics shopping experience, suggesting that value for money and
8/7/2019 Impact of branded stores on kiranas
9/67
involvement in the sales process are requirement that are missing from high
street shopping.
Our research showed that todays savvy consumers demand increasingly
creative and more importantly interactive strategies, to entice them into
stores. Discovering what makes consumers tick and buy from certain stores
can perhaps be achieved by returning to more traditional retail methods that
allow the consumer to participate or interactive with the seller on a more
personal level or implement new technology that streamlines the purchasing
process as smooth and painless as possible.
8/7/2019 Impact of branded stores on kiranas
10/67
LITERATURE REVIEW:
The Indian market has seen vast changes in political, economical and social
environment, which has a great impact on consumption. With the Indian as
well as international corporate entering into the Indian retail scenario the
market has been divided between the traditional and the organized sector.
The Indian retail scenario is presently facing the similar situations as the
mom and pop stores in the developing nations faced at the emergence big
box retailers. There are various issues that need to be addressed, like what
would be future patterns of consumption, which formats of retail would be
preferred by consumers and will the rise of organized retail affect the
traditional retailers.
This research was developed to overcome this gap. The first part of the
paper deals with a historical analysis of the Indian retailing structure followed
by the review of literature on store image reviewed and finally the last part
deals with the results of empirical studies in Indian metros is discussed.
This study contributes to the understanding that consumers and retailers in
most cases have different perceptions in relation to store image and
8/7/2019 Impact of branded stores on kiranas
11/67
shopping habits, justifying the need for consumer marketing research, which
is important in helping retailers, implement in a real marketing orientation.
The paper examines the choice of format the consumer has when he or she
decides to buy a particular product. The paper also describes the
development of organized retail in the future, focusing on aspects with
potential effect on purchasing behavior among the consumers. The focus is
on consumer expectations. The questions were formulated to capture the
overall behavior of the consumers and with the help of the survey
questionnaire the analyses was done.
An attempt has been made to explore the way organized retail has
dramatically changed not only the Indian traditional retailing structure but
also the consumption behavior. To understand the impact and choice of retail
format by the consumers a questionnaire was used, and the results show
that, for consumers, the shopping mall or variant of organized retail format is
the preferred type of retail store, due to convenience and variety.
Three questions were formulated in order to capture the overall purpose or
objective of this section of the research:
8/7/2019 Impact of branded stores on kiranas
12/67
1.What are the most favored retail attributes by consumers and how will
they change in future?
2. How are the conventional and organized retailers perceived?
3. What external forces influence the choice of consumers and how can
these
forces be accounted for in future?
A) Conceptual Framework:
This research enquiry begins with a description of a conceptual framework of
purchasing decision behavior. The framework captures purchasing behavior
in
general and was used as a guideline in the research and specific aspects of
the
framework were emphasized.
Product or service requirements refer to the buying motives and their
associated
purchase criteria. Retailer accessibility is the evoked set of product/supplier
options available to the consumer to satisfy his product requirements. The
model indicates that the competitive structure of the retail sector, the
corporate image of the retailer and marketing activities influence the retailer
accessibility.
8/7/2019 Impact of branded stores on kiranas
13/67
8/7/2019 Impact of branded stores on kiranas
14/67
Based on the consumers requirements and product/retailer accessibility,
competing offers are evaluated by the consumer. We found that most
consumers buy many products, and they operate in a pressured work
environment with little time available to evaluate, in formal way, detailed
and subtle criteria. They therefore argued that buyers use only a subset of
product requirements (i.e., evaluative criteria) to decide between different
products and retailers when making actual purchasing decision.
The framework, briefly described above provided some guidance in framing
this
research and making the questionnaire to study the purchasing behavior of
Indian buyers while deciding the format to chose to shop from.
As the economy and society have changed, so retailers have responded and
shopping as an activity has altered enormously. Retailing is one of the most
dynamic and rapidly changing sectors of Indian industry bearing little
comparison with the business that operated 50 years ago. Multiple retail
companies now dominate the sector, to the threat and decline of small
independent business. These independent stores face increased pressure
from the multiple retailers, superstores, small store format (such as high
street stores), petrol forecourts and many are being squeezed out of
8/7/2019 Impact of branded stores on kiranas
15/67
existence altogether. Even the wholesale symbol groups have been
developing their own store portfolio. Independents who enjoyed over 80
percent of the market share till early 90s have seen this market share halve
by 1995 to just over 40%.
The decline in the number of small shops has different implications upon its
existing customers depending upon locations and alternative options to
shop. The closure of a local neighborhood shop with a superstore nearby
would affect the residents of a local neighborhood differently compared to
the closure of the only shop in a small locality without a superstore nearby.
Various arguments have been made in support to the only shop in a locality,
arguing that they play an important vital role in the community and work as
a support network of the locality. However People may have warm feelings
towards the ideal of a small shop, but unless that warm feeling converts to
hard cash, were all going to be in the nostalgia business.
If conventional retailers are to survive, it will be vitally important to
understand what the residents in a particular community want from their
retailers. Only those stores with a clear understanding of their customers
wants and the changes that are occurring within the market place can hope
to survive by identifying and then satisfying some of those needs more
effectively than their competitors. Independent retailers have increasingly
8/7/2019 Impact of branded stores on kiranas
16/67
been under threat with the growth of major multiple retailers in the
organized retail scene, but independent small
shops operating in local community locations do serve a function whether it
be a social or a community one, or providing a vital service to certain groups
of consumers. This might be through the provision of their total shopping
requirements or via top-up or emergency products. Although independent
small conventional shops comprise the majority of all retail businesses in
India, and have always provided a social as well as economic function to the
communities they serve, their share of retail sales has been eroding in favor
of the major
organized retail stores since the mid 1990s.
8/7/2019 Impact of branded stores on kiranas
17/67
B) Main Attributes Identified in the Literature:
The concept of store image, considered as the way consumers see the store
in their minds, based on tangible and intangible attributes, deserved a great
deal of academic and empirical attention, during the last four decades. The
importance of studying the image is based on the assumption that the store
possessing the most congruent attributes with the image desired by
consumer will have better chance of being selected and patronized.
Therefore, the store image can be used as a marketing tool (Engel et al.,
1995), or as a competition tool providing useful indications to managers
about the most and the least appellative attributes to consumers, and
therefore, the insights for the marketing mix conception.
In spite of the importance and the long history of academic research into
store image the relation between image/attitude and store
patronage/choice/preference is complex and polemic. In fact, even though
8/7/2019 Impact of branded stores on kiranas
18/67
the executives relate attitude and patronage, there are few studies that
support that relationship (Monroe and Guiltinan, 1975). The concept of
relative attitude reinforces the complexity of that relationship (Dick and
Basu, 1994). The authors conceptualize consumer loyalty as the relationship
between the relative attitude towards an entity (brand/service/store/vendor)
and patronage behavior. Two dimensions, the degree of attitudinal strength
(weak or strong) and the degree of attitudinal differentiation (existent or not)
seem to underlie an individuals relative attitude towards an entity.
Therefore, a weak but positively differentiated attitude may be more likely to
lead to loyalty than a very positive but undifferentiated one; however, it is
also important to consider the influence of normative and situational factors.
Besides being relative, the store patronage behavior is also dynamic, and
that is more explicit in buying situations of involvement, risk, evaluation of
alternatives and information search (Monroe and Guiltinan, 1975, Darden
and Dorsch,1999). This dynamism is crucial in order to understand the
changes in consumer behavior.
The literature refers to a great diversity of methodologies, to varying
temporal and spatial contexts, and to different store types, which make both
generalizations and typology construction difficult. Contradicting Martineaus
(1958) emotional and affective perspective of store patronage, empirical
evidences show a number of functional and objective attributes as the most
8/7/2019 Impact of branded stores on kiranas
19/67
important, such as price (Doyle and Fenwick, 1974-1975;Bearden, 1977;
Arnold et al., 1983; Hortman et al., 1990; Finn and Louviere, 1996); product
quality (Doyle and Fenwick, 1974-1975; Bearden, 1977; Hortman et al.,
1990); assortment (Stephenson, 1969; Doyle and Fenwick, 1974-1975;
Schiffman et al., 1977; Bearden, 1977; Finn and Louviere, 1996) and
location (Stephenson, 1969; Schiffman et al., 1977; Arnold et al., 1983;
Hortman et al., 1990).
Concerning intangible and emotional attributes, the most indicated are
the atmosphere and
store characteristics (Martineau, 1958; Stephenson, 1969); sales
personnel (Martineau, 1958; Stephenson, 1969; Schiffman et al., 1977) and
advertising (Martineau, 1958; Stephenson, 1969).
8/7/2019 Impact of branded stores on kiranas
20/67
C) Store Image and Consumer Shopping Habits: Indian
Context:
In India, some empirical studies provide important information about
consumer
behavior and its responses to the development of organized retail.
Economical
and social changes are major contributors for a growing fragmentation of
consumers into multiple segments with different values and buying priorities.
8/7/2019 Impact of branded stores on kiranas
21/67
Consumers have become more pragmatic, educated and demanding,
learning
how to manage money and time more efficiently. The focus on low prices
was
gradually replaced by a value for money perspective. The study developed
by
ETIG (Economic Times Intelligence Group, 2002) confirms these tendencies.
Concerning food, the most important attribute mentioned was quality,
followed
by price. Indian consumer has different reasons for preferring different store.
The formats, either modern or traditional; Sen (2000) confirms this in the
study
undertaken in Indian context. He confirms that in the case of hypermarkets,
the
main motives for preferences, in decreasing order are low prices, the
possibility
of buying everything in the same place and the general appearance of the
store. Several investigations emphasize the possible coexistence of different
store formats (Chandrasekhar, 2001) and others point out the relationship
between the type of store and the type of products (Sen, 2000; Bhatnagar,
2002). These studies show that, while specialized and traditional stores are
preferred for fresh products, hypermarkets are preferred for shopping in
8/7/2019 Impact of branded stores on kiranas
22/67
general, and also for frozen food, groceries and beverages. The purchase of
perishables in hypermarkets is reduced.
8/7/2019 Impact of branded stores on kiranas
23/67
D) Traditional Retailers Perceptions About Organized
Retail:
As already mentioned, organized retail has deeply changed the Indian
commercial structure. However, it is not exclusively responsible, as other
changes (economical, social and cultural ones) have occurred
simultaneously. Concerning the more direct effects of organized retail on
different types of commerce, it is possible to verify that the major impact is
felt on traditional retail and, in particular, on the food sector. The impact of
organized retail is also significant on other types of retail, namely toys,
stationery goods and household appliances; moreover, it is probable that
competition gets more intense in other sectors, such as clothing and
furniture.
A French study shows that the impact of organized malls and supermarkets
is especially strong over non-specialized stores; stores that use normalized
sales methods; generalist stores; very small stores operating on their
survival limits; stores located near hypermarkets and with no alternative
goods. In India, a study (Radhakrishnan, 2003) verified that, in the food
sector, the most affected stores are precisely the smaller stores (small areas,
few employees and low sales
volume) and the isolated stores (stores that do not develop partnerships with
other retailers).
8/7/2019 Impact of branded stores on kiranas
24/67
Concerning retailer's perceptions about problems in commerce, studies
developed in India show that the most mentioned motives for crisis are, in
the first place, related to political decisions. Retailers agree that their own
competitive attitude and behavior are among the causes for problems
associated with commerce. However, in their opinion, these are not the
major causes. In terms of the most important competitive factors of
organized retailers, traditional retailers mention lower prices, schedules,
products assortment and better adaptation to consumer shopping habits.
Concerning the way they analyze themselves, they identify the attendance
and the close relation with customers as their main advantages; in terms of
their main weakness, they mention the small dimension.
Hypermarkets is considerably superior, going from 8000 to 120,000 square
meter;
one of them is Spencer Plaza amongst the largest in the country. The review
of literature identified a number of studies focusing on buying behavior of
Indian consumers from organized retailers. The reviewed studies may
uncover important dimensions that purchasers use in their purchasing
process and will be used in our study of purchasing criteria and format
selection
of consumers.
8/7/2019 Impact of branded stores on kiranas
25/67
Shopping in the organized retail outlet is generally done on a regular basis
(around 40% buy once or twice per week), which goes against the decreasing
tendency and the systemization of visiting malls reported by Retail Biz (Sep
2003). This might be related to the fact that organized retail stores in Indian
cities are not far from large resident areas. In terms of period of the day, the
preferred ones are the morning and the afternoon, that is, the hours chosen
by the consumers to buy in malls and supermarkets match the schedules
practiced by the majority of traditional retail stores. This result may be
justified by the fact that a considerable part of the
sample is composed of housewives and retired people. Regarding goods
bought in the different kinds of stores, the results show that detergents,
household and personal cleaning products, groceries, beverages and dairy
products are, clearly goods that consumers buy in supermarkets (66, 66, 61,
63 and 61%, respectively), in detriment of traditional retail stores (21, 19,
23, 21
and 22% respectively). Besides these goods, fruit, frozen foods, toys,
plants/gardening and tools are also purchased with greater regularity in
malls and supermarkets than from traditional retailers, in spite of the small
differences. The retailers' and consumers' attitudes match in terms of
considering that hypermarkets offer more advantages than traditional retail
regarding prices, promotions, assortment, novelties and schedules.
8/7/2019 Impact of branded stores on kiranas
26/67
EXECUTIVE SUMMARY:
In the current world of globalization a constant adaptation and reinvention of
marketing strategies is needed to satisfy the local customers in the global
markets. The retail sector of India is currently witnessing tremendous
growth, but there has been a growing concern for the future of the traditional
small scale retail shops because of this all-pervading presence of branded
retail stores. In a country like India, there are huge differences across the
consumers in terms of their demographic orientation like culture, economic
condition, purchase attitude and so on. In this project we intend to find out
8/7/2019 Impact of branded stores on kiranas
27/67
the impact of the branded retail chains on small traditional retail shops. FICCI
has projected that the Retail Industry in India is likely to cross Rs. 10,000
billion by 2010 and the share of the organized sector in it is likely to exceed
20% which presently is at around 3% mark.
Branded Retail Chains: Chain stores are retail outlets that share a
brand and central management, and usually have standardized
business methods and practices. These characteristics also apply to
chain restaurants and some service-oriented chain businesses. The
displacement of independent businesses by chains has generated
controversy in many countries, and has sparked increased
collaboration among independent businesses and communities to
prevent chain proliferation. In India the retail chain sector consists of
roughly 14 Lifestyle stores, 6 Home Centre stores and 1 babyshop-
store across Chennai, Hyderabad, Bangalore, Gurgaon, Delhi, Noida,
Jaipur,Kolkata,Mumbai and other tier-2 cities. The Retail Industry in
India has come a long way from the traditional unorganized retail
sector consisting of petty shop-owners selling a wide variety of articles
both individually and collectively to the modern organized retail sector
consisting of Retail Chains and other departmental stores providing
everything under a single roof.
http://en.wikipedia.org/wiki/Retailinghttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Retailinghttp://en.wikipedia.org/wiki/Brand8/7/2019 Impact of branded stores on kiranas
28/67
Mall traditional retail stores: this is the smallest unit of retail
spectrum. Usually owned by family, retail shops are run from
residential or commercial streets or from shopping centers. Such
a retailer buys goods or products in moderate quantity from local
stockist, manufacturers or importers, either directly or through a
wholesaler, and then sells individual items in small quantities to
consumers who are general public or end user customers.
PROBLEM DISCOVERY:
The Indian retailing industry is poised to grow from USD 322 billion in 2006-
07 to USD 590 billion in 2011-12(Source: According to CII(Confederation of
Indian Industry) National Committee on retail). It is set to enter a new growth
trajectory owing to rising household consumption and a host of factors.
Indian organized retail market has grown by 10% on an average for the past
8/7/2019 Impact of branded stores on kiranas
29/67
5 years. The fact can be traced from the below Global Retail Development
Index.
From the above facts, it is clear that the unorganized retail sector in India
is going to face hard times in the coming years due to the advent of more
number of corporate retail giants. Hence there exists Uncertainty about
the future of the Indian Kiranawala. Our project focuses on the impact how
the local retailer faces in terms of sales, his attitude towards his future
corporate retail competitors(Does he ready to face competition?).
8/7/2019 Impact of branded stores on kiranas
30/67
METHODOLOGY:
Before explaining the methodology, two issues need to be discussed: the
commercial structure of India and the concepts of traditional retail and
organized retail to avoid possible ambiguities in terms of terminology.
8/7/2019 Impact of branded stores on kiranas
31/67
The Commercial structure of India has faced deep changes over the last few
years, which is greatly related to the development of organized retail.
Currently India boasts to contain 12 million retail outlets together in
conventional and organized formats with major aggregation of organized
formats in the cities like Delhi, Chennai, Kolkata, Hyderabad, Ahmedabad,
Bhubaneswar and Mumbai. Simultaneously, these cities have a large number
of grocery stores, a typical format of traditional food retail.
The concept of conventional retail is used as encompassing small-sized
commerce, i.e., groceries, minimarkets, pure food stores, specialized food
and non-food stores and bazaars. Regarding specialized stores, clothing
stores are considered as specialized ones. As for the concept of organized
retail, there is some confusion, Levy and Weitz define organized retail as a
multi-format retail stores offering low prices, and combines a discount store
and super store, while A.C. Nielsen, gives a different definition, considering
the organized retail as a commercial retailing establishment with a sales
surface superior to 2500 square meter, explored in free-service system and
commercializing a great variety of products. As data provided by Nielsen are
widely used in India and in the rest of the world, it was decided to adopt
them.
A) Perceived Importance of the Store Attributes:
8/7/2019 Impact of branded stores on kiranas
32/67
The respondents were asked to rank the attributes listed in the section two
of the questionnaire. There were no restrictions on the ranking system; the
respondent was allowed to give any rank from 1 to 7 for a particular
attribute. There were 23 store attributes listed in the questionnaire, these
attributes were studied in order to gauge the importance of organized sector
over the unorganized sector. All the attributes listed here are specific to the
organized sector and the assumption here is that if the consumers attach
much importance to these attributes then their preferred format is the
organized retail stores. In case the respondent felt that a particular attribute
was not of any importance, its presence or absence, did not
make any difference then they were asked to put a zero against it, the
blanks were also considered as zero importance and these cases were taken
as unanswered response.
8/7/2019 Impact of branded stores on kiranas
33/67
B) Exploratory Research:
To clarify the above Uncertainty, we conducted exploratory research to gain
better understanding of the dimensions of the problem. The purpose of
exploratory research is intertwined with the need for a clear and precise
statement of the recognized problem. There are three interrelated purposes
for exploratory research:
Diagnosing a situation.
Screening alternatives.
Discovering new ideas.
The methods we used for exploratory research are Secondary Data Analysis,
Experience Surveys, Case Study.
8/7/2019 Impact of branded stores on kiranas
34/67
C) Experience Survey:
I) Diagnosing the Situation:
To get the broader scope of the problem, we selected a few set of people
who are knowledgeable and working in the retail sector. As a part of the
study, we discussed the questions with few constraints to those set of
people. One of them was an MBA pass out who settled in his ancestral retail
business from the past 5 years. He was explaining the hindrances he is
facing because of the advent of theMore (Aditya Birla Group) to the city. He
Pointed out some reasons such as Target group constraints, Location
Constraints, increase in the disposal incomes with the people(especially 35%
hike in salaries with central government employees). He said that, because
of the salary hike with the central government and state government
employees, those people prefer Malls to Mom and pop shops. He also shared
that his revenue mainly comes from those employees. He proudly said that
before the advent of The More and some hypermarkets in the city, even the
district collector used to come to his shop to purchase the items. He also
expressed his idea that, he is ready to tie-up with the Corporate giants such
as Wal Mart and Reliance Fresh as a franchisee to run the business, if he
gets the chance.
8/7/2019 Impact of branded stores on kiranas
35/67
II) Depth Interview:
We had an depth interview with a women who is running retail business in
her locality from the past 20 years. She shared lots of intricacies involved in
the retail sector. We started our interview with a basic question:
Do you feel the corporate giants of retail sector such as Reliance
Fresh and More as your competitors?
She said that she is not feeling them as her competitors. She is not scared of
them even if a Big Bazar or any hyper market comes and start adjacent to
her shop. She had given the fact that during the recession times its not Big
malls resisted to global recession, small pop and shops resisted to the
recession. Their sales were not at all effected by global recession stating the
fact from the regional newspaper she read.
To get more clarity to the situation, I asked a probing question which gave us
clear understanding of the problem.
Can you tell more about the above facts by giving an example?
She has given a nice example how they take the advantage of those malls at
the time of inflation/recession. At times, when the price of the sugar in the
8/7/2019 Impact of branded stores on kiranas
36/67
market rises, instead of buying the sugar from the local wholesaler, they buy
from the big stores as these people have their own suppliers and get large
discounts on bulk purchases. Hence, we could sell the same product with
less price during the inflation times, taking the advantage of those stores.
Can you tell me the advantages you get over the big stores?
She smiled at me and gave a good example. She told that the countries like
India faces many Strikes(or bandhs) apart from various conventional
Holidays(such as holidays, festivals etc.,) because of diversified nature of the
country. During those times, we can take the advantage of opening the shop
for a period of 3-4 hours in the evening for the emergency needs of the
customer. Hence, we can make sales during those times also.
The facts we could find out from Experience surveys is that any average
retailer can earn a minimum of Rs.10,000 per month on an average in a year
in any part of our country even though he faces stiff competition from his
peer local shops.(N.B: this fact is not a conclusive figure, it is based on our
estimation of our subjects).
So far our exploratory research provided only qualitative evidence, which we
are trying to get conclusive evidence based on our subjective research. To
get more insight about the qualitative evidence, we have done secondary
data analysis. We have reviewed several published articles and books
discussing about this topic.
8/7/2019 Impact of branded stores on kiranas
37/67
D) Secondary Data Analysis:
I) Qualitative Fact-Finding:
One article we found on the Bharti Walmart entering into India. Walmart
opened its first wholesaler shop in Amritsar.
An inside view of the Walmart_bharti store on Amritsar-Jalandhar highway
Ironically, it is the local kirana store-owners who have welcomed the
international cash-and-carry' chain. Offering low-priced wholesale products,
8/7/2019 Impact of branded stores on kiranas
38/67
Best Price Modern Wholesale' Bharti Wal-Mart's store has enabled kirana
store-owners increase their profit margins significantly. the mega store has
quickly begun to cater to more than 35,000 kirana store owners in Amritsar
alone. According to the company, the store has seen an average footfall of
75,000 kirana owners a month.
Shop-owners in the Ranjit Avenue area of Amritsar, some 10 km from the
Bharti Wal-Mart store, said, Our profit keeps increasing if we buy products in
bulk. The prices offered at the store enable us to sell it at lower prices than
our competition and still make a profit. For example, after buying products
from Bharti Wal-Mart for about Rs 10,000, we can easily make a profit of
about Rs 3,000 and still offer better prices to the customer. A Bharti Wal-
Mart spokesperson pointed out that the chain caters to the local mom and
pop stores as well as electronics retailers. In fact, some of our electronics
items offer retailers amazing profit margins, he said.
The local people also seem inclined towards the modern wholesale store
concept. Kirana stores which get their supplies from Wal-Mart offer better
prices, said by Aman Preet singh a resident from amritsar. The main reason
for the support of the local kiranas to Wal-Mart is, it offers massive range of
products under one roof spread over close to 50,000 sq. ft. The store has
6,000 SKUs(Stock Keeping Units) ranging from raw food to consumer
electronics. Hence, from the story of Wal-mart, it is being proved that Local
8/7/2019 Impact of branded stores on kiranas
39/67
Mom-and-Pop shops support Big Stores as they are gaining edge over the
prices from the bulk discounts.
But in the nascent stages people are ready to accept them. If the corporate
giants start their full-fledged operations , does a retailer ready to accept
him? Hence our paper focused on finding the changes in the behavioral
component of the retailer(especially in Rural India) to get conclusive
Evidence.
II) Problem definition:
Our research objective is to find the how the corporate retailer would
onslaught traditional retailer and how the behavioral component of the
retailer effects if he finds him as a near competitor.
To find out the above objectives, We adopted a survey method. In the survey
method we are using questionnaire method.
8/7/2019 Impact of branded stores on kiranas
40/67
III) Questionnaire Design:
Relevancy and accuracy are two important basic criteria a questionnaire
must meet. As our subjects are retailers of India, many of them were not
well educated, we used simple and Conversational language. In phrasing the
Questions we were as much specific as possible avoiding ambiguity. Even
though some of the retailers were well educated, they were not comfortable
with the words like Loyal, Corporate retailers. So we explained them about
the questions when we were taking survey to avoid ambiguity in responses.
To eliminate the major source of bias in question wording we tried to avoid
leading and loading questions which suggest or imply certain answers.
8/7/2019 Impact of branded stores on kiranas
41/67
IV) Questionnaire for Retailer
Name:
Age:
Year of Establishment of shop:
Place:
8/7/2019 Impact of branded stores on kiranas
42/67
1. Are you satisfied with the present system of handling your business?
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
e) Strongly Disagree
2. Who are your major customers?
a) Local people staying around the shop
b) Housewives
c) People from the other localities if their nearby Kirana shops are closed
d) Students
e) if others, specify ---------
3. How many customers pay a visit to your shop every day?
a) 400
8/7/2019 Impact of branded stores on kiranas
43/67
4. How satisfied are you with your present customer base and with your
current operations and profits?
a) Very satisfied
b) Somewhat satisfied
c) Dont know exactly
d) Somewhat dissatisfied
e) Very dissatisfied
5. Do you feel that your customers are loyal to your store?
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
e) Strongly Disagree
6. How many hours per day you operate your shop?
a) 5 7
b) 8-10
c) 11-12
d)>12
8/7/2019 Impact of branded stores on kiranas
44/67
7. Do you give your current customers goods on credit basis?
a) Yes
b) No
c) Sometimes
If yes/sometimes, Please specify any of the choices
(i)Depends on the credit worthiness of the customers
(ii)Depends on how frequently the customers visit the shop
8. Would you prefer to home deliver the goods to your customers house, if
your customer calls you even for items worth small amounts?
a) Frequently
b) Occasionally
c) Not at all
d) All the time
9. Can you provide various products and make your shop a one stop shop
destination for your customers?
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
8/7/2019 Impact of branded stores on kiranas
45/67
e) Strongly Disagree
10. How often does your shop stay closed on Sundays and on other public
holidays like the big players?
a) Always
b) Almost always
c) Most of the times
d) Part of the time
e) Hardly ever
11. Will you give discounts on bulk purchases as the big stores are already
selling below the prevailing market price?
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
e) Strongly Disagree
12. do you think that the rise in Income levels of the people is a threat to
your business?
a) Strongly agree
b) Agree
8/7/2019 Impact of branded stores on kiranas
46/67
c) Uncertain
d) Disagree
e) Strongly Disagree
13. Your customers opt for your shop because your shop opens earlier than
the mall.
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
e) Strongly Disagree
14. Do you think that the big stores should not be allowed to take up Retail
business as its a loss to your business?
a) Strongly agree
b) Agree
c) Uncertain
8/7/2019 Impact of branded stores on kiranas
47/67
d) Disagree
e) Strongly Disagree
15. Do you maintain an appropriate level of all the goods especially those
required by the customers at any time?
a) All the time
b) very often
c) often
d) Sometimes
e) Hardly Ever
16. If I have to change the way your business operates, I would go for the
change?
a) Strongly agree
b) Agree
c) Uncertain
d) Disagree
e) Strongly Disagree
17. There has been an increasing threat to your business in the recent times
due to the appearance of big retail houses. How are you taking it?
8/7/2019 Impact of branded stores on kiranas
48/67
a) Very seriously
b) Somewhat seriously
c) Not so seriously
d) Not at all seriously
e) Dont know
18. What is the average sales you generate per month?
A)below 20,000
B)20,000-50000
C)50000-1lac
D)>1LAC
19. Did you made changes to your business from the year of establishment?
A)yes
B)No
8/7/2019 Impact of branded stores on kiranas
49/67
20) If any changes, Please specify the major changes you made:
Note: The Research done is purely for Academic purpose. The Analysis of the
research is not used for commercial Purposes.
The last open ended question is being asked for the reference of the
research to get more insights about the business. It is not asked for the
analysis purpose.
The Questionnaire also includes Questions about the Demographic
information such as Name, Age, year of Establishment of the Shop and Place.
SAMPLING:
A) Sampling Planning:
As our objective is to find Are the Mom and Pop shops in Rural India will face
cutthroat competition from the Corporate retailers, we planned our samples
to take from the secondary cities and towns. Since most of the traditional
retailers are not well educated(we found that most of the traditional retailers
are not comfortable with English), we preferred young retailers as our
subjects though they lack experience. Rather than selecting subjects from
8/7/2019 Impact of branded stores on kiranas
50/67
one place, we selected different respondents with different backgrounds
from different places of Andhra Pradesh and some parts of Punjab.
B) Sampling Generation:
There are two sampling techniques:
Probability Sampling
Non-Probability Sampling
Here in our project, we used our judgment and also convenience to select the
subjects. Hence we used Non-probability sampling technique. The subjects
we selected are most of them from small towns and some secondary cities Of
8/7/2019 Impact of branded stores on kiranas
51/67
Andhra Pradesh. The samples we selected are Local Kiranas, Small Retail
Cloth Showrooms and Wholesalers too(Considering Walmart entering India in
the wholesale sector).
Types Of Non-probability sampling we used are:
i) Convenience, Haphazard or Accidental Sampling:
Members of the population are selected based on the ease of access. To
sample friends, Co-workers, or shoppers at a single mall are all the examples
of Convenience Sampling.
Convenience sampling is conventionally used in exploratory research where
the researcher is interested in getting an inexpensive approximation of the
truth. As the name implies, the sample is selected because they are
convenient. This nonprobability method is often used during preliminary
research efforts to get a gross estimate of the results, without incurring the
cost or time required to select a random sample.
ii) Judgmental Or Purposive Sampling:
A purposive sample is one which is selected by the researcher subjectively.
The researcher attempts to obtain sample that appears to him/her to be
representative of the population and will usually try to ensure that a range
from one extreme to the other is included. This is usually and extension of
convenience sampling. For example, a researcher may decide to draw the
8/7/2019 Impact of branded stores on kiranas
52/67
entire sample from one "representative" city, even though the population
includes all cities. When using this method, the researcher must be confident
that the chosen sample is truly representative of the entire population.
In the project we used both judgmental and convenience sampling to select a
sample which represent the whole population. Most of the subjects we are
selected are from nearby town and most of the samples are our friends who
had experience and acquaintance with their own kiranas from their
childhood. We also used our judgement when selecting the specified
subjects. The subjects we selected also include Experienced retailers who
has experience of around 15 years. This provided lot of insights and
intricacies of the Retail Business in India.
The advantages of Non-probabilty sampling are:
Cheap
Fast
C) SCALES:
The scales we are using in the project is Likert scale and simple attitude
scale.
8/7/2019 Impact of branded stores on kiranas
53/67
i) Likert Scale:
The Likert scale is extremely popular and easy to administer for measuring
the attitudes. It allows respondents to indicate how strongly they agree or
disagree with carefully constructed statements that range from very positive
to very negative toward an attitudinal object. It is Balanced Rating Scale
which measures fixed alternative scale that has an equal number of positive
and negative categories; a neutral or indifference point is at the center sacle.
Most of the Questions in our Questionnaire are based on the Likert Scale.
ii) Simple attitude Scale:
We also used simple attitude scale which mainly used are Yes/No type
Questions. In the Questionnaire, we asked some simple questions such as
Did you made changes to your business from the year of establishment?
are based on the simple attitude scale. This measures are the retailers we
selected are customer-centric.
D) SURVERY METHOD:
The data in the Research comes from two ways.
8/7/2019 Impact of branded stores on kiranas
54/67
Personal Survey
Telephonic Survey
i) Personal Survey:
Since our subjects are local retailers, instead of giving Questionnaire directly
to them, we explained each question and options in local language Telugu to
get the responses from them. This is because most of the retailers we
selected are not well educated.
ii)Telephonic Survey:
8/7/2019 Impact of branded stores on kiranas
55/67
Telephonic survey has been a mainstay of commercial survey research. The
quality of data obtained by telephone is comparable to the personal data
collection. When we were conducting a personal survey, we found
reluctance from many local retailers. Even we found difficulty in explaining
them about the Research. To overcome this problem, we switched from
personal survey to Telephonic survey for most of the subjects in the sample.
To conduct Telephonic survey, the subjects we selected are well educated,
Experienced and young retailers. This survey helped us to get responses
from distant places like Nizamabad, Warangal, Medak in Andhra Pradesh and
even from some parts of Punjab. The advantages we found in the Telephonic
survey during the Research are:
Speed
Cost
Precise Information
Respondents Cooperation.
SPSS SCREENSHOTS:
8/7/2019 Impact of branded stores on kiranas
56/67
A) FACTOR ANALYSIS
KMO Bartletts Test:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of
Sampling Adequacy..475
Bartlett's Test
of Sphericity
Approx. Chi-
Square87.371
df 66Sig. .040
Eventhough we got Kaiser-Meyer-Olkin Measure of Sampling Adequacy as .
475 which is approximated to 0.5. Hence we are going for factor analysis.
Our Rotated component matrix is:
Rotated Component Matrix(a)
8/7/2019 Impact of branded stores on kiranas
57/67
Component
1 2 3 4q1 .027 -.248 .726 .138q4 .112 .141 .829 -.102q5 -.093 -.021 -.054 -.800
q9 .768 .454 .085 .020q10 -.653 .078 -.408 .164q11 -.108 .908 .037 .018q12 .136 .478 -.450 -.380q13 .732 -.100 -.340 -.020q14 .562 -.141 -.066 .377q15 .675 .161 .372 .267q16 .364 .498 -.404 .199q17 .060 .613 -.103 .642
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 9 iterations.
Component Transformation Matrix
Compon
ent 1 2 3 41 .800 .500 -.009 .3312 -.302 .506 -.806 -.0563 -.517 .512 .481 .4904 .036 .482 .345 -.805
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
8/7/2019 Impact of branded stores on kiranas
58/67
Factors(1):(Factor loading values>0.6).
Q9,q10,q15,q13,(q14)
Factors(2):(Factor loading values>0.6).
Q11,q17
Factors(3):(Factor loading values>0.6).
Q11,Q4
Factors(4):(Factor loading values>0.6).
Q5,q17.
B) REGRESSION:
(1)Predictor Variable:Sales
Output:
Variables Entered/Removed(a)
Model
Variables
Entered
Variables
Removed Method
8/7/2019 Impact of branded stores on kiranas
59/67
1
q7a .
Stepwise
(Criteria:
Probability-
of-F-to-
enter = .100).
a Dependent Variable: q18
Model Summary
Mod
el R
R
Square
Adjuste
d R
Square
Std. Error
of the
Estimate
Change Statistics
R
Square
Change
F
Change df1 df2
Sig. F
Change
1.453(a) .205 .168 .726 .205 5.428 1 21 0.30
a Predictors: (Constant), q7a
8/7/2019 Impact of branded stores on kiranas
60/67
ANOVA(b)
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 2.857 1 2.857 5.428 .030(a)
Residual 11.056 21 .526
Total 13.913 22
a Predictors: (Constant), q7a
b Dependent Variable: q18
ANALYSIS OF THE CONSUMER CHOICE OF FORMAT:
Preferred choice of shopping format for buying various products for Indian
Consumer in percentages in most households (84.2%), women are mainly
responsible for the shopping. The majority of respondents (50.4%) have a
considerably good educational level (mainly with only 15 years of studies
(40.7%) over 35 years old. Most respondents are married (80.23%),
belonging to households of more than four elements (54.3%), with a family
income in which several members contribute to the household income. Given
8/7/2019 Impact of branded stores on kiranas
61/67
the fact that it was not possible to directly obtain any data about the income.
Most part of the respondents (62.3%) frequently make their purchases in
supermarkets and malls, although it was also found that there is a high
percentage of consumers that buy in specialized food stores (78.3%), and
groceries/minimarkets (33.1%). These results emphasize the tendency that
there is the coexistence of several retailing formats. Malls and Supermarkets,
in the same way, the kind of commercial space in which, clearly, most people
enjoy purchasing (62.3%), which leads to the conclusion that buying in this
type of store has, in a way, an element of pleasure in it.
On the other hand, most of the respondents prefer to buy
goldsmith/jewellery (95%), books (84%), footwear (84%), clothing (82%),
furniture/decoration (93%) and household appliances (78%) in traditional
retail stores. Some perishable goods as meat, fish and vegetables are also
purchased more from traditional retailers (60, 58 and 41%, respectively),
than in supermarkets or malls (28, 26 and 35%, respectively). Nevertheless,
the difference compared to supermarket, especially regarding vegetables, is
small. The fact that the perishable goods are, bought from traditional
8/7/2019 Impact of branded stores on kiranas
62/67
retailers more than they are from organized retailers is an evidence that
emphasizes the results of other studies done by various research agencies.
However, this study shows that the purchase of some perishable goods
(vegetables and mostly
fruits) in hypermarkets is becoming considerable.
Another interesting result is that the consumers' responses suggest is their
almost exclusive preference for traditional retail shops when buying high
involvement goods (e.g. household appliances). On the contrary, the most
purchased goods in malls and supermarkets are essentially convenience
products and, consequently, of low involvement. As it is widely advocated in
literature, the involvement and risk have strong implications in the buying
behavior, so it is important for retailers to know how to influence these
variables.
Concerning the motivations that lead people not to buy goods in traditional
retail or only in traditional retail, the two main motives are: first, it is more
practical to buy all the goods at the same time in
hypermarkets/supermarkets and, second, the price in traditional retail shops
8/7/2019 Impact of branded stores on kiranas
63/67
is higher. That is, convenience and price are factors that determine why
consumers do not buy in traditional retail; and prefer one kind of store to the
other.
These results suggest a consumer is more pragmatic in his choices, and
more concerned with the management of his money and time. Even though
the answers refer to motivations why people do not buy some given products
in traditional retail, the results correspond to other studies, Sen (2000) which
highlights low prices and the possibility of buying everything in the same
place as main reasons for consumers to buy in hypermarkets, malls or
supermarkets.
The traditional retail offers more advantages than hypermarkets in relation
with the spent on shopping. Nonetheless, there is also a great difference
between retailers and consumers, especially, at the level of perception of the
quality of products, attendance, how easily the consumer can present
complaints and how they will be attended, and payment terms, in both kinds
of commerce.
Concerning these specific aspects, traditional retailers have a much more
positive opinion about themselves than consumers have about them. These
differences suggest a certain lack of realism by traditional retailers, which
8/7/2019 Impact of branded stores on kiranas
64/67
can be detrimental for their future viability, and, as such, needs to be
corrected.
However, the divergence in the perceptions does not imply that the
consumers' opinion about traditional retail is negative. The essential matter
is that, in spite of not having an unfavourable opinion towards traditional
retail, the opinion towards organized retail is much more favorable, which
may result in preferring hypermarkets or malls in detriment of traditional
retail.
As literature suggests, in order to understand the consumer behavior in
terms of store choice, it is essential to understand his relative attitude also.
8/7/2019 Impact of branded stores on kiranas
65/67
CONCLUSION:
The hypermarket/mall/supermarket is the preferred kind of store by
consumers, even though the consumers buy in several establishments and
not exclusively in the organized retail outlet, which indicates that there is no
"single loyalty". While in organized outlets, consumers buy essentially
convenience goods with low level of risk; in traditional retail, they buy
essentially products of more involvement, which requires a more complex
buying behavior. The results also show that consumers evoke price and
convenience for not buying certain goods in traditional retail, which reveals
an attempt to optimize their time and money.
8/7/2019 Impact of branded stores on kiranas
66/67
REFERNCES:
o BUSSINESS RESEARCH METHODS BY WILLIAM G.ZIKMUND
o ESSENTIALS OF MARKET RESEARCH BY WILLIAM G.ZIKMUND
o STATISTICS FOR MANAGEMENT BY RICHARD I. LEVIN, DAVID
S.RUBIN
o Would Kiranas in Urban India Survive the Modern Trade
Onslaught Insight from Efficiency Perspective, A Research Paper
by Paromita Goswami, Xavier
Institute of Management Bhubaneswar, India
o An Introspective Study of Local Diversities in Retail Purchase
Behaviour to formulate Retail Strategy for the Global Players A
research Paper by Mrs. Mahua Datta, Lecturer , Institute Of
Business Management, Jadavpur University
8/7/2019 Impact of branded stores on kiranas
67/67
o www.ssrn.com
http://www.ssrn.com/http://www.ssrn.com/