Bookman International Journal of Accounts, Economics & Business Management, Vol. 1 No. 2, October-November-December 2012 / 69 ISSN No. 2319-426X © Bookman International Journals : www.bookmanjournals.com

RESEARCH ARTICLE

STUDY ON SHIFTING CONSUMER PREFERENCES FROM UN-ORGANIZED RETAILING VIS-A VIS TO ORGANIZED

RETAILING IN NOIDA 1Arun Kumar Singh* and 2P.K. Agarwal

1Research Scholar, Department of Management, Mewar University, Chittorgarh, Rajasthan, INDIA. 2Management Professional & Consultant, Meerut, Uttar Pradesh, INDIA.

*Corresponding Author : aksr27@gmail.com

ABSTRACT The changing consumer taste and preference, increasing disposable income and the propensity to spend are some of the factors affecting the changes in the retail scenario in India The retailing sector in India have undergone significant transformation in the past 10 years. The retail business, in India, is estimated to grow at the rate of 13 per cent per annum to US$ 620 billion in 2012-13. The unorganized retail sector is expected to grow at the rate of 10 per cent per annum to US$ 516 billion in 2012-13. Organized retail which now constitutes a small three to four per cent of retail sector is likely to grow at 45-50 per cent per annum and quadruple its share of total retail trade to 16 per cent by 2014-15.

For the current generation of consumers, the meaning of shopping has changed. It is not just a mere necessity, as it was earlier, but much more than that. The factors that affect store choice and draw customers to the shopping centre include space, ambience, and convenience and moreover an array of choice under one roof. The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behaviour being favourable to the growing organized segment of the business. Space, ambience and convenience are beginning to play an important role in drawing customers. Decision making is more complex and even more important for consumers today than in the past.

This paper tries to explore the way organized retail has dramatically changed not only the Indian traditional retailing structure and also the consumption behavior. The consumption behavior was examined with the help of a structured questionnaire.

Keywords : Organized Retail, Kirana Store, Unorganized Retail, Consumer Behaviour, Buying Behaviour.

1. INTRODUCTION Retailer is bulk breaker. Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producer’s goods and is involved in the act of selling it to the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. Retailing is the single largest component of the services sector in terms of contribution to GDP. Its massive share of 14% is double the figure of the next largest broad economic activity in the sector.

India is the ‘second most attractive retail destination’ globally from among thirty emergent markets. It has made India the cause of a good deal of excitement and the cynosure of many foreign eyes. With a contribution of 14% to the national GDP and employing 8% of the total workforce (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy.

Growing in tandem with the economy is the Indian retail sector. The sector is on a high growth trajectory and is expected to grow by more than 27 per cent over the next 5 to 6 years. Indian retail business promises to be one of the core sectors of the Indian economy, with organized retail sector estimated to grow by 400 per cent of its current size by 2014-15.

Income, technology and life styles of consumers are changing, even from whom they buy are changing. The location or the place where they buy is changing; the shops are opened closed according to the convenience of the buyers. The buying process has changed due to Internet buying, which brings new and better deals and also saves time. Population growth rate, increasing literacy rate and increasing family income has an effect on consumer spending. Changing social attitudes towards work, home and leisure affect the retail strategies. Political decisions relating to the environment, shopping locations and fair trade affect, where and how retailers can trade. Changes in technology bring new attitudes to buying products and services and to better organization of the supply chain.

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 70

Evolution of Retail Market in India

In the beginning there were only kirana stores called Mom and Pop Stores, the friendly neighborhood stores selling every day needs. In the 1980s manufacturer’s retail chains like DCM, Gwalior Suiting’s, Bombay Dying, Calico, Titan etc started making its appearance in Metros and small towns. Multi brand retailers came into the picture in the 1990s. In the food and FMCG sectors retailers like Food world, Subhiksha, Nilgris are some of the examples. In music Segment Planet M, Music world and in books Crossword and Fountainhead are some others. Shopping Centers began to be established from 1995 onwards. A unique example was the Establishment of margin free markets in Kerala. The millennium year saw the emergence of super markets and hypermarkets. Now big players like Reliance, Bharti, Tatas, HUL, and ITC have entered into the organized retail segment. The big international retail bigwigs are waiting in the wings, as the present FDI guidelines limit them to own retail outlets in the country. Walmart is testing the waters by agreeing to provide back end and logistic support to Bharti for establishment of retail chains with a view to study the market for future entry as the FDI have guidelines have been changed and is establishing a backbone for future supply chain.

India has the highest shop density in the world and the present retail market in India. India has been ranked second in the global retail development index out of 30 by AT Kearney. The figure below shows the comparative penetration of organized retail in India.

The retail industry is divided into two: organized retailing & un-organized retailing; Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.

Organised retail is still in the stages of finding its feet in India even now. Though organised trade makes up over 70-80% of total trade in developed economies, India’s figure is low even in comparison with other Asian developing economies like China, Thailand, South Korea and Philippines, all of whom have figures hovering around the 20-25% mark.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Part of unorganized sector in Indian retail is as follows:

1) Unorganized retailing is by far the prevalent form of trade in India constituting 98% of total trade, while organised trade accounts only for the remaining 2%. Estimates vary widely about the true size of the retail business in India. AT Kearney estimated it to be Rs. 4,00,000 crores and poised to double in 2013.

2) On the other hand, if one used the Government’s figures the retail trade in 2002-03 amounted to Rs. 3,82,000 crores. One thing all consultants are agreed upon is that the total size of the corporate owned retail business was Rs. 15,000 crores in 1999 and poised to grow to Rs.65,000 crores by 2013 and keep growing at a rate of 40% per annum.

3) FICCI has estimated the total retail business to be Rs. 11,00,000 crores or 44% of GDP4. According to this report, sales now account for 44% of the total GDP and food sales account for 63%of the total retail sales, increasing to Rs.138 billion from just Rs. 38.1 billion in 1996.

Journey of Organized Retail in India Year Growth Function

2000 First Phase Entry, Growth, Expansion, Top line focus

2005 Second Phase Range, Portfolio, Former options

2008 Third Phase End to end supply chain management, Backend operation, Technology, Process

2011 Fourth Phase M&A, Shakeout, Consolidation, High investment

Organized retailing is spreading and making its presence felt in different parts of the country. The trend in grocery retailing, however, has been slightly different with a growth

0%

20%

40%

60%

80%

100%

120%

US TaiwanMalaysiaThailandIndonesiaChina India

Comparitive penitration of organized retailTraditi…Organi…

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 71

concentration in the South. Though there were traditional family owned retail chains in South India such as Nilgiri’s as early as 1904, the retail revolution happened with various major business houses foraying into the starting of chains of food retail outlets in South India with focus on Chennai, Hyderabad and Bangalore markets, preliminarily. In the Indian context, a countrywide chain in food retailing is yet to be established as lots of Supply Chain issues need to be answered due to the vast expanse of the country and also diverse cultures that are present. Unorganized market: Rs. 583,000 crores Organized market: Rs.5, 000 crores 5X growth in

organized retailing between 2000-2005 Over 4,000 new modern Outlets in the last 3 years Over 5,000,000 sq. ft. of mall space under development

The Organized Retail Pie of Daily Need items

(Category wise share in organized retail

Source CII Kearney Report)

However, kiranas still continue to score over modern formats primarily due to the convenience factor. The organized segment typically comprises of a large number of retailers, greater enforcement of taxation mechanisms and better labour law monitoring system. It's no longer about just stocking and selling but about efficient supply chain management, developing vendor relationship quality customer service, efficient merchandising and timely promotional campaigns. The modern retail formats are encouraging development of well-established and efficient supply chains in each segment ensuring efficient movement of goods from farms to kitchens, which will result in huge savings for the farmers as well as for the nation. The Government also stands to gain through more efficient collection of tax revenues. Along with the modern retail formats, the non-store retailing channels are also witnessing action with HUL initiating Sangam Direct, a direct to home service. Network marketing has been growing quite fast and has a few large players today. Gas stations are seeing action in the form of convenience stores, ATMs, food courts and pharmacies appearing in many outlets.

In the coming years it can be said that the hypermarket route will emerge as the most preferred format for

international retailers stepping into the country. At present, there are 50 hypermarkets operated by four to five large retailers spread across 67 cities catering to a population of half-a-million or more. Estimates indicate that this sector will have the potential to absorb many more hypermarkets in the next four to five years.

Different Forms of Retailing: 1. Store Retailing 2. Non store Retailing 3. Other popular format

Store Retailing

1. Popular Formats in store retailing Hypermarts Large supermarkets, typically (3,500 - 5,000 sq. ft) Mini supermarkets, typically (1,000 - 2,000 sq. ft) Convenience store, typically (7,50 - 1,000 sq. ft) Discount/shopping list grocer Traditional retailers trying to reinvent by introducing

self-service formats as well as value-added services such as credit, free home delivery etc.

Format Description The Value Proposition

Branded Stores

Exclusive showrooms either owned or franchised out by a manufacturer.

Complete range available for a given brand, Certified product quality.

Specialty Stores

Focus on a specific consumer need; carry most of the brands available.

Greater choice to the consumer, comparison between brands possible

Department Stores

Large stores having a wide variety of products, organized into different departments, such as clothing, house wares, furniture, appliances,

One stop shop catering to varied consumer needs.

The Organised Retail Pie

2%

3%

7%

7%

9%

13%

19%

40%

Beauty Products

Books, Music &Gifts

Home Decore

Jewellery &watches

Footwear

Durables

Food & Grocery

Cloathing, Textiles& FashionAccessories

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 72

toys, etc. Supermarkets

Extremely large self-services retail outlets.

One stop shop catering to varied consumer needs

Discount Stores

Stores offering discounts on the retail price through selling high volumes and reaping the economies of scale.

Low prices.

Hyper-mart

Larger than a Supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city

Low prices, vast choice available including services as cafeterias

Convenience Stores

Small self-service formats located in crowded urban areas.

Convenient location and extended operating hours.

Shopping Malls

An enclosure having different formats of in-store retailers, all under one roof.

Variety of shops available close to each other.

2. NON-STORE RETAILING It is another type of retail Business. Different types of non-store retailing are given below:

Direct Selling : Direct selling which started centuries ago with itinerant peddlers has burgeoned into a $9 billion industry, with over 600 companies selling door to door, office to office, or at home sales parties. A variant of direct selling is called multilevel Business, whereby companies such as Amway recruit independent businesspeople who act as distributors for their products, who in turn recruit and sell to sub distributors, who eventually recruit others to sell their products, usually in customer homes.

Direct Business : Direct Business has its roots in mail-order Business but today includes reaching people in other ways than visiting their homes or offices, including tale Business, television direct response Business, and electronic shopping.

Automatic Vending : Automatic vending has been applied to a considerable variety of merchandise, including impulse goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot beverages) and other products (hosiery, cosmetics, food snacks, hot soups and food, paperbacks, record albums, film, T-shirts, insurance policies, and even fishing worms).

Online Retailing : When a firm uses its website to offer products for sale and then individuals or organizations use their computers to make purchases from this company, the

parties have engaged in electronic transactions (also called on line selling or internet marketing).

Many electronic transactions involve two businesses which focus on sales by firms to ultimate consumers. Thus online retailing is one which consists of electronic transactions in which the purchaser is an ultimate consumer.

E-Retailing : Internet Retailing or e-retailing as is usually referred to as covers retailing using a variety of different technologies or media. It may be broadly be a combination of two elements. Combining new technologies with elements of traditional stores and direct mail models using new technologies to replace elements of stores or direct mail retails. Internet retail also has some elements in common with direct mail retailing. For example, e-mail messages can replace mail messages and the telephone, that are used in the direct mail model as means of providing information, communication and transactions while on-line catalogues can replace printed catalogues.

3. SOME OTHER POPULAR FORMATS Region Specific Formats : With organized retail penetrating in to class II towns, retailers have started differentiating and experimenting with store sizes and formats. For example, in departmental store format, while most class cities and metros have large stores of 50,000+ square foot in size, stores in Class II towns have stabilized in the 25,000-35,000 square foot range.

Development of Discount Formats : Large discounts formats, or hypermarkets, aiming at retail consolidation by providing a single point of contact between brand-owners and customers, are now emerging as major competitors to both unorganized and organized retailers. Penetration of organized retailing in to the lower income brackets and consumers demand for increased value-for-money has improved the prospects of these formats. Big Bazaar, Promoted by Pantaloon, and Giant, promoted by RPG group, provide two examples of this trend.

Convenience Stores at Gas Station : India is now showing signs of aligning with global trend in petro-retailing with increasing sales coming from non-fuel related products. With deregulation, private players entering this sector force existing petro-retailers to review their business models. Dealer and company owned convenience stores at service station are on the rise. State run oil giants have entered into joint venture with FMCG companies and food retailers to sell food and groceries select markets.

Classification of Indian Retail Sector Food Retailers : There are large number and variety of retailers in the food-retailing sector. Traditional types of retailers, who operate small single-outlet businesses mainly using family labor, dominate this sector .In comparison, super markets account for a small proportion of food sales in India. However the growth rate of super market sales has

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 73

being significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience.

Health & Beauty Products : With growth in income levels, Indians have started spending more on health and beauty products .Here also small, single-outlet retailers dominate the market .However in recent years, a few retail chains specializing in these products have come into the market. Although these retail chains account for only a small share of the total market , their business is expected to grow significantly in the future due to the growing quality consciousness of buyers for these products.

Clothing & Footwear : Numerous clothing and footwear shops in shopping centers and markets operate all over India. Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and footwear stores have modern products and attractive displays to lure customers. However, with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely that the traditional outlets will survive the test of time.

Home Furniture & Household Goods : Small retailers again dominate this sector. Despite the large size of this market, very few large and modern retailers have established specialized stores for these products. However there is considerable potential for the entry or expansion of specialized retail chains in the country.

Durable Goods : The Indian durable goods sector has seen the entry of a large number of foreign companies during the post liberalization period. A greater variety of consumer electronic items and household appliances became available to the Indian customer. Intense competition among companies to sell their brands provided a strong impetus to the growth for retailers doing business in this sector.

Leisure & Personal Goods : Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. There are specialized retailers for each category of products (books, music products, etc.) in this sector. Another prominent feature of this sector is popularity of franchising agreements between established manufacturers and retailers.

Consumer Behavior and Retailing Decisions : Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or service. Consumer behavior involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, socio-psychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general. Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process

that may involve the interplay of a number of complex variables not visible to anyone.

Factors Affecting Consumer Buying Behavior: Consumer buying behavior is influenced by the major three factors: Social Factors Psychological Factors Personal Factors.

A. Social Factors : Social factors refer to forces that other people exert and which affect consumers’ purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups.

B. Psychological Factors : These are internal to an individual and generate forces within that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality.

C. Personal Factors : These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and situational factors.

4. CONSUMER DECISION-MAKING PROCESS GENERALLY INVOLVES FIVE STAGES

Information Search

↓

Problem Recognition

↓

Purchase Action

↓

Alternative Evaluation

↓

Post Purchase Actions

Consumer Attribute affecting choice of format between organized and unorganized Retail

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 74

Retail Outlet Selection And Brand Selection : There are three fundamental patterns, which a consumer can follow and they could be: (i) Brand first, retail outlet second (ii) Retail outlet first, brand second (iii) Brand and retail outlet simultaneously.

A consumer wanting to buy a car may collect information on brands and purchase it from a retail outlet based on his perception of price offered or after sales service provided by the outlet (typically, search for information on brands is followed by retail outlet selection in durables). In certain product categories, especially where `category killers' exist, consumers may think of the retail outlet initially and then the brands (television, refrigerator and audio products retailed through outlets like Vivek and Co. in the South, could be an example).

One more dimension may be to compare brands in the evoked set at retail outlets which also exist in an evoked set of their own. This is highly possible, especially in the Indian context where dealers develop a social relationship with consumers, especially in semi-urban and rural areas. Primary research could be used to discover the specific sequence involved in a situation of this kind. A `brand first' dimension may need feature-based advertising and a `retail outlet first' dimension may require a set of point-of-purchase (POP) materials and special training to sales personnel to recognize the needs of consumers.

Brand First And Outlet Second : The brand was probably thought of by the consumers because : (i) The consumers may not have developed a relationship with any retailer which is strong enough to get into the `evoked retail set' or (ii) The brand has got into the evoked set because of advertising or positive word of mouth. Local advertising with the mention of brand names which have already got into the evoked set would enable consumers to be `pulled' to the outlet. Primary research may be required to identify the brands in the evoked set.

5. PURPOSE AND SIGNIFICANCE OF THE STUDY

Organized retail has started to spread its roots in the Indian market since past one decade and is gradually making mark among all sections of the society. 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 paper tries to explore the way organized retail has dramatically changed not only the Indian traditional retailing structure by also the consumption behavior. The consumption behavior was examined with the help of a structured questionnaire.

This study will contributes to the understanding that consumers and retailers in most cases have different perceptions in relation to store image and shopping habits, justifying the need for consumer marketing research, which is important in helping retailers, implement in a real marketing orientation. The study will examines the choice of format the consumer has when he or she decides to buy a particular product and 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 is used. Three questions were formulated in order to capture the overall purpose or objective of this section of the research: 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?

This paper is an attempt to find out the change in consumer’s purchasing behavior, which is shifting towards organized retailing like malls, shopping complexes etc from traditional kirana stores.

Why Noida: The malls and shopping complexes are building here at a high rate and a large number of population shifted towards this format of retailing so for the study Noida is the appropriate places to go for the research analysis.

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 75

6. LITERATURE REVIEW Shopping, buying and utilizing are three activities which constitutes the consumer behavior in a holistic manner (Tauber, 1972). Myriad number of literatures is available which have identified various dimensions and concepts of customers‟ buying and consumption behavior. However, very few literatures are available which have described about the various constructs of shopping behavior and even fewer numbers of researchers have focused on Indian Consumers.

According to Assael (1987), shopping behavior is the most unique for behavior which the consumers exhibit. Gifts, clothing, groceries, gifts and household items are some of the most common type of shopping which consumers indulge in a highly frequent manner. But according to Dholakia (1999), occasion and motives are also some crucial points which influence the consumers shopping behavior. For example, for some consumers, shopping is all about getting the best deal out of bargaining, for some (especially teenagers or the young crowd) shopping is a means of getting acquainted and interact more with others in a social context and for some it is a way of breaking out from the regular monotonous professional and personal routine (Reid and Brown, 1996).

It is also possible, that the motives behind two consumers shopping at the same store could be same or different. Same motives may arise as when the customers look for convenience, shopping experience etc, whereas motives mat vary as a result of compulsion or by free choice. Compulsion shopping happens when the customer is forced to indulge in shopping and for him/her it could be a great deal of burden, in this case he/she will try to finish of the work in minimum time that too with minimum effort. While for the other customer who see shopping as a mean of enjoyment, may consider shopping as a form of sport, in this case he/she will not mind sparing extra time and effort while searching and evaluating various alternatives available to him.

The study done by Underhill (1999) revealed that, shopping is very distinctive in nature, its more to just purchasing what one wants but it also includes the customer's acceptance of the product, brand or stores as well, using multiple senses like- seeing, smelling, tasting, hearing and

even tasting (at times).

Solomon (1994), proposed five types of shoppers which he identified from his study on customers of western countries. The following are the five types:

The economic shopper: A balanced and more coherent kind of customer who tries to get the best deal so as to utilize his/her money efficiently and effectively.

The personalized shopper: Customer who will only shop at a store with which he/ she has formed a strong attachment.

The ethical shopper: Customer is very conscious and concerned about the local stores and will prefer them over the big retail giants.

The apathetic store: Customer who doesn't like to do shopping but does it because he/she consider as a necessary evil.

The recreational shopper: For this customer, shopping is a means of socializing, spending leisure time and for him/her shopping is fun.

Reid and Brown(1996), proposes that the customer's orientation towards shopping may shed light into the way he/she indulge in shopping and it may also tell the reason why he/she chooses a particular retail store (including shopping malls). This would be of great help to marketers to design the malls in a way so as to increase the shopping experiences of the customers and cooping up with the expectations and needs of the mall customers; as Underhill (1999), observed that nowadays, upon entering a mall the environment is so vibrant.

Sen-2000: 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. 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 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

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 76

relationship between the type of store and the type of products. These studies show that, while specialized and traditional stores are preferred for fresh products, hypermarkets are preferred for shopping in general, and also for frozen food, groceries and beverages. The purchase of perishables in hypermarkets is reduced.

Radhakrishnan, 2003: 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.

Mathew Joseph and Manisha Gupta_September 2008: The Indian retail sector is booming and modernizing rapidly in line with India’s economic growth. In this review the author talked about the impact of organized retailing on traditional retailing. With the increase in number of various formats for shopping like malls, departmental stores, hypermarkets etc the Indian consumer’s preferences are changing towards and that’s the reason foreign investors like the king of retail Wal-Mart also came into the Indian retail ground in collaboration with Bharti. There is a huge untapped market is present in India right now which contains a number of opportunities for retailers.

Increasing trend of organized retailing will drive the growth of convenience-store industry in the world. By 2014, Asia remains the fastest growing convenience store market in the world as the major Asian retail markets registered explosive growth in opening up of new convenience store. Changing consumer preferences, lifestyle and rising income level, which is heavily influenced by economic growth, remains the major driving force for c-store industry in the Asian region.

Available literatures focus mostly on Western customers or some of the selected Asian counties only. An appealing question is whether the theories and concepts postulated by the available literatures also hold true for the Indian Customers (Particularly Noida Region). Therefore the current study in hand, has the primary focus in understanding the Indian customers‟ shopping behavior.

7. RESERCH METHODOLOGY As this study is of descriptive type, the primary data has been collected through Questionnaire.

Data Type : Data type collected for analysis is Primary i.e. data has been observed and recorded by the researchers for

the first time to their knowledge. Data collected through journals, newspapers & internet is Secondary type.

Sampling Design Sampling unit Respondents of Shopping Mall (Great

India Place Mall, Spice Mall, Centre Stage Mall, Ansal Plaza)

Size of sample 100 respondents Simple Method Random Sampling Types of questionnaire Close ended

Method of Data Collection : This study is a research which utilizes interrogation and observation method for data collection. Secondary data was obtained from intensive analysis & observation. The primary data are those, which are collected afresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. Method employed to collect data is Questionnaire. This is a simple survey conducted by filling in questionnaire from the people who visit malls.

8. RESULTS Data collected through questionnaire is being processed .The processed data is:

a. Age wise distribution: A) <25 [ 12 Respondents ] B) 25-35 [ 45 Respondents ] C) 35-45 [25 Respondents] D) >45 [18 Respondents] On the basis of above respondents the figures shows that maximum respondents i.e. 45 out of 100 are young age people. It means maximum no of customers belongs to young age group.

b. Gender wise distribution: A) Male [ 58 Respondents ] B) Female [ 42 Respondents ] On the basis of above respondents the figures shows that maximum respondents i.e. 58 out of 100 are males. It means maximum no of customers are male in malls due to family responsibility.

c. Education wise distribution: A) High School [ 08 Respondents] B) Less than Graduation [ 12 Respondents ] C) Graduation [ 32 Respondents ] D) Post Graduation [ 32 Respondents] E) Professional Qualification [ 16 Respondents] On the basis of above respondents the figures shows that maximum respondents i.e. 32 out of 100 are graduates and 32 out of 100 are post graduate. It means maximum no of customers are educated and aware about retail store.

d. Income wise distribution: A) Less than Rs 15,000 [ 28 Respondents ]

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 77

B) Between Rs 15,000 TO 25,000 [ 48 Respondents ] C) Between Rs 25,000 TO 50,000 [ 20 Respondents ] D) More than Rs 50,000 [ 12 Respondents ] On the basis of above respondents the figures shows that maximum respondents i.e. 48 out of 100 are having monthly income between Rs 15,000 TO 25,000 it means maximum no of customers are belonging to upper middle class.

1) Which type of place do you visit frequently for your shopping needs? a) Supermarket [ 80 Respondents] b) Wholesaler [ 8 Respondents] c) Local Stores [ 12 Respondents] On the basis of above respondents the figures shows that maximum respondents i.e. 80 out of 100 are agree that they frequently visit shopping mall for their shopping needs. It means maximum no of customer are preferred Shopping Malls for purchasing.

2) From where would you prefer to buy products? a) Single brand store [ 24 Respondents] b) Multi brand store [ 60 Respondents] c) Factory outlets [ 4 Respondents] d) Local Big Retail Store [ 12 Respondents] i.e. 60 out of 100 are preferred multi branded store for shopping. It means maximum no of customers are time conscious and desire for many brand under one roof.

3) Which one from malls/ Local Stores (kirana store) is more convenient for all your shopping needs? a) Malls [ 72 Respondents] b) Kirana stores [ 28 Respondents] i.e. 72 out of 100 are preferred shopping in malls for all their shopping needs. It means maximum no of customers are feels good in shopping for their needs in malls because they can get everything from there under one roof.

4) What are the prime factors for shopping in malls? a) Variety in product. [ 42 Respondents] b) Serviceability [ 16 Respondents] c) Discounts [ 34 Respondents] d) Mode of payment [ 8 Respondents] i.e. 100 out of 100 are preferred shopping in malls because of the various factors which make the whole shopping experience good.

5) What are the prime factors for shopping in kirana stores? a) Convenience [ 36 Respondents] b) For grocery items only [35 Respondents] d) Serviceability [ 29 Respondents] i.e. People preferred shopping from kirana stores just when they need something urgent and grocery items only. It shows the limited shopping experience one customer have with these stores.

6) What influences your buying selections? a) Availability of range b) Reasonable price c) Availability of size e) Customer service

f) Brand name

1st OPTION 30 20 30 8 10 2nd OPTION 22 32 25 10 13 3rd OPTION 20 18 15 14 33 4th OPTION 16 17 19 32 16 5th OPTION 12 13 11 36 28 On the basis of above respondents the figures shows that maximum respondents are attracted towards the Store due to this ranking- CUSTOMER SERVICE, BRAND, PRICE, RANGE, SIZE

It means maximum no of customers are prefer to the Malls for customer service.

7) What do you look for in a product during your purchase? a) Price [60 Respondents] b) Brand Name [ 12 Respondents] c) Customer Service [ 16 Respondents] d) Variety available [12 Respondents] i.e. 60 out of 100 preferred price during their purchasing. It means maximum no of customers are price conscious so maximum customers belongs to middle class.

8) When do you prefer to shop Most in Store? a) During Sale [ 18 Respondents] b) During Fresh season stock [54 Respondents] c) During Discount [ 24 Respondents] d) When required [4 Respondents] On the basis of above respondents the figures shows that maximum respondents i.e. 60 out of 100 are prefer shopping during fresh season stock. It means maximum no of customers did not compromise quality with discount and offers.

9) How frequently you visit the Store (wherever you go for the shopping)? a) <1 month [ 60 Respondents] b) 1-3 month [ 28 Respondents] c) 1-6 month [ 4 Respondents] d) 1 year [ 8 Respondents] On the basis of above respondents the figures shows that maximum respondents i.e. 60 out of 100 are visited the store within one month. It means maximum no of customers are visiting the store monthly.

10) What more fascinates you at shopping in malls? a) Membership Card [ 28 Respondents] b) Discount Mailers [ 20 Respondents] c) Parking Facility [ 30 Respondents] d) Lucky draw offer [ 22 Respondents] On the basis of above respondents the figures shows that there are almost same numbers of respondents agrees for all the facilities provided by malls. It means every respondent is inclined towards the facilities provided by malls.

9. FINDINGS Customer’s preferences for grocery shopping are

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 78

gradually shifting from local kirana stores to organized convenience stores.

Age is one of the most important factors responsible for the changing preference of customers.

Payment through credit cards is increasing purchases from organized retail store..

Brand Choice of customers is changing and this is also influencing shift from kirana to organized retail.

Maximum no of customers belongs to young age group.

Maximum no of customers are male in malls due to family responsibility.

It means maximum no of customers are having nuclear family.

Maximum no of customers are educated and aware about retail store.

Maximum no of customers are belonging to upper middle class.

Maximum no of customer are preferring organized retail for Shopping.

Maximum no of customers are time conscious and desire for many brand under one roof.

Maximum no of customers are price conscious so maximum customers belongs to middle class.

Maximum no of customers did not compromise quality with discount and offers.

The changes in the consumer behavior, is bringing about change in retail industry, as India migrates from the unorganized to organized retail. The overall picture that emerges from large manufacturers is largely positive regarding the likely impact of organized retail in India. Manufacturers believe that organized retail would benefit society at large, more so the end consumers -- in terms of better product choices and price – and farmers because of higher and more stable price realization for their produce. More employment opportunities will be generated. Present systems, IT and processes will improve because of investments in infrastructure that are likely to be made by organized retailers. The robust sourcing and distribution network of large retailers would certainly help make the supply chain more efficient .Manufacturers, however, are more guarded in their assessment of the likely impact of organized retail on their own businesses. They anticipate that they will be subject to price and competitive pressures as organized retail grows in importance. They are gearing up to counter these pressures by strengthening their own brands, enhancing their retail presence and collaborating with traditional retailers. They believe, however, that both modern and traditional retailers will co-exist in India for some time to come, as both of them have their own competitive advantages. The kirana has a low- cost structure, convenient location, and customer intimacy. Modern retail offers product width and depth and a better shopping experience. With the Indian economy currently growing at 8-9 per cent annually, rising consumption and the low per capita availability of retail space in India,

organized retailing is here to stay, though it will never replace the existing kirana stores.

10. LIMITATIONS OF STUDY The present study is a study of sample. Alternatively, we could have studied the universe. This has not been done because of two reasons. First, it was not possible to study the entire universe with the limited resources and time available at hand. Secondly, it is well-established fact that the study of universe and representative sample would provide similar results. It is in this background that a sample study was opted. It is hoped that the results obtained would be appropriate for the universe. The study is based on the primary data collected from the respondents assuming that they have given their genuine preferences without hiding anything. However, it is seen that differences do exist between how consumers say they behave and what they actually do.

11. CONCLUSION The changes in the consumer behavior, is bringing about change in retail industry, as India migrates from the unorganized to organized retail. The past 4-5 years have seen increasing activity in retailing. And, various business houses have already made investments in this sector years. And though the retailers will have to face increasingly demanding customers, and intensely competitive rivals, more investments will keep flow in. And the share of organized sector will grow rapidly. Retailing in India is surely poised for a takeoff and will provide many opportunities both to existing players as well as new entrants.. The country is witnessing a period of boom in retail trade, mainly on account of a gradual increase in the disposable incomes of the middle and upper-middle class households. More and more corporate houses including large real estate companies are coming into the retail business, directly or indirectly, in the form of mall and shopping center builders and managers.

New formats like super markets and large discount and department stores have started influencing the traditional looks of bookstores, furnishing stores and chemist shops. The retail revolution, apart from bringing in sweeping, positive changes in the quality of life in the metros and bigger towns, is also bringing in slow changes in lifestyle in the smaller towns of India. Increase in literacy, exposure to media, greater availability and penetration of a variety of consumer goods into the interiors of the country, have all resulted in narrowing down the spending differences between the consumers of larger metros and those of smaller towns. Lastly I want to conclude my project in some points : The customers are attracting towards shopping malls &

retail outlets. The shopping malls & retail outlets are targeting to

middle class customers because the purchasing power of this class is rapidly growing as well as the class is

Arun Kumar Singh and P.K.Agarwal BKMNIJAEBM, Vol. I (II), 2012 / 79

also growing. The young generation is fashion & show-off conscious

so retail outlets are mainly focused on them. Most of the family wants to purchase from big

showrooms and malls because there are no bargaining system so they have a trust that there is no cheating.

The main strength of most of the retail outlets are providing attractive offers to attract customers.

Big retail stores are running customer loyalty programmes which has increased profits and no. of customers, and increase their switching costs.

12. REFERENCES [1] Amin Mohammad, (2010), “Challenges of Retailing in

India”, Enterprise Surveys World Bank Group Publication. [2] Banga, Rashmi, (2005), “Critical Issues in India’s Services-

Led Growth”, Working Paper (171) Indian Council for Research on International Economic Relations.

[3] Barry Berman, Joel R. Evans (9th Edition) Retailing Management A Strategic Approach Prentice Hall 2007.

[4] Berman, B. and Evans, J.R. (2008), Retail Management: A Strategic Approach, 9th Ed, Prentice Hall Publications, pp. 68-74.

[5] Bitner, M. J. (1992). Servicescapes: The impact of physical surroundings on consumers and employees. Journal of Marketing, 56(2), 57-71.

[6] Bloemer, J. and de Ruyter, K. (1998) On the relationship between store image, store satisfaction and store loyalty. European Journal of Marketing 32:5-6 , pp. 499-513.

[7] Darden, W. R., & Dorsch, M. J. (1990). An action strategy approach to examining shopping behavior. Journal of Business Research, 21, 289-308.

[8] Del. I. Hawkins, Roger J Best. (9th Edition)Consumer Behavior Building Marketing Strategy Tata Mc Graw-Hill Companies 2007.

[9] Dotson, M., & Patton, W. E. (1992). Consumer perceptions of department store service: A lesson for retailers. Journal of Services Marketing, 6(2), 15-27.

[10] Frank R. Kardes (5th Edition) Consumer Behavior Managerial Decision Prentice Hall 2006.

[11] Gröppel-Klein, A., Thelen, E. and Antretter, C. (Duboise, B. ., Lowrey, T. ., Shrum, L. . and Vanhuelle, M. . eds.) (1999) The impact of shopping motives on store-assessment. European Advances in Consumer Research pp. 63-76. 175.

[12] Greengard, Samuel, (2002), “The Evolution of Retail”, IQ, March/April 2002, pp. 43-49.

[13] Gupta, S.L. (2007), “A Study on Trends in Retailing Industry in India - A Case Study on

[14] Shopping Malls,” BVIMR-Management Edge Journal of Bharati Vidyapeeth University,

[15] January-June 2007. [16] ICRIER study, “Impact of Organized Retailing on the

Unorganized Sector” May 2008 fromhttp://siadipp.nic.in/policy/icrier_report_27052008.pd.

[17] Knight Frank, (2010), India Organized Retail Market - Diagnosis & Outlook. 2010.

[18] Martineau, P. (1969). The personality of the retail store. Harvard Business Review, 36(1), 47-55.

[19] Meyer-Waarden, Lars and Christopher Benavent (2006). “The impact of loyalty programs on repeat purchase behaviour,” Journal of Marketing Management, 22(1–2).

[20] Michael Levy (5th Edition) Retailing Management Tata Mc

Graw-Hill Companies 2007. [21] Morgan, R. and Hunt, S. (1994) The commitment-trust theory

of relationship marketing. Journal of Marketing 58 , pp. 20-38.

[22] Santosh Ranganath N., Atchyuta Rao K., (2010), Retail Industry in India: Emerging Opportunities and Challenges, International Journal of Development Studies, Varanasi, pp. 196-204.

[23] Santosh Ranganath N., Prakash Babu B., (2011), Emerging Trends in Indian Retail Sector, International Journal of Management Research and Review, Volume 1, Issue 3, pp. 40-47.

[24] Srivastava, R.K., (2008), "Changing retail scene in India”, International Journal of Retail &Distribution Management, Vol. 36 (9), pp.714 –721.

[25] Vedmani G. Gibson (2nd Edition) Retail Management Functional Principles & Practices Jaico publishing House 2005.