final book 2011

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Chapter One

An Analysis of Indian Automobile Exports

Dr. R.K.Sharma, Professor, Prestige Institute of Management and Research, Indore | Abhishek

Singh Rajput, StudentPrestige Institute of Management and Research, Indore | Naman Jain,

StudentPrestige Institute of Management and Research, Indore | Abhinav Shandilya,

StudentPrestige Institute of Management and Research, Indore

Abstract:

The automobile industry has been growing at a phenomenal pace and markets are attracting investments of all kinds. The eagerness of market entry can be seen from the fact that all natures of collaborations, joint ventures and possibly all market entry strategies have been applied by foreign companies and can been seen and sighted in India. All this is for the sake of having a share in the pie of the hottest market among all the major emerging economies. The automobile sector was not always like this and has changed recently this call in for enquiry of its current status and future trend. The paper attempts to analyze the sector and put forth a platform for developing future course of action.

INTRODUCTION

India is among the top two-wheeler exporter in the world and it has emerged as a key

manufacturing hub for two-wheeler in the world. Two-wheeler exports are driving the

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automotive industries‘ export in India apart from auto component. In the automobiles

exports, two-wheeler constitutes over 60% of the exports.

The two-wheeler industry consists of three segments mopeds, scooters and

motorcycles. The high demand for Japanese-designed Indian motorcycles is the main

factor propelling the export of the two wheeler industry. In addition to these three

segments there is a segment called step-thrust. Step-thrust are small motorcycles

driven and gears. Step-thrust start from 49cc and can go up to 90cc. Both 2 stroke and

4 stroke step-thrust are manufactured. The global two-wheeler industry is currently at

more than 40 million units per year. By 2017 the size of the industry is expected to

touch 60 million units. China is the largest producer with more than 17 million units,

and India is in the second place with 7.7 million units. The Japanese brands of Honda,

Suzuki, Yamaha, and Kawasaki dominate the world market. Though Japan itself

produces only 7 million units its brand control 50 percent of the two wheelers

produced in the world. This is because its brand dominates in the low cost countries

like china, India, Indonesia and Thailand. Honda has 30% of the world market while

Yamaha and Suzuki have another 20% between them. Till recently Japan was

dominating the global two-wheeler markets. In 1983 Japan was exporting 2.6 million

motorcycles. The majority of Japans two-wheeler exports were expo exported to

North America and Europe. In terms of size the major portion of around 1 million units

was in the above 250 cc segment. In the 51-125 cc segments Japan exported only

124,335 units and in the 125-250 cc its exports were 183,980.Currently China exports

more than 2 million units per year. The biggest Chinese manufacturers are Zongshen

group, Qingqi, Jialing and Hangzhou Lifang. In comparison, exports of Indian two-

wheelers are 0.63 million but growing at around 31 per cent. China and India are

expected to dominate the global two-wheeler market in the future. Recently, Indian

motorcycle manufacturers have built a slight edge over the Chinese manufacturers in

the exports markets, especially in Sri Lanka and other countries like Africa and Latin


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America. This is due to the high quality and performance of Indian motorcycles. It is

reported that in Sri Lanka the ratio of Chinese motorcycles to Indian motorcycles has

shifted from 90:10 to 15:85.

From a very modest beginning, the Indian passenger car industry has come a long way.

The industry has the presence of global players like General Motors, Ford, Suzuki,

Toyota, Mitsubishi, Honda, Fiat, Hyundai, Daimler Chrysler, Skoda, Nissan, BMW

and Renault. MNCs are widening their product portfolio, which will further intensify

competition. This also marks the next phase of the Indian auto industry after the

sector was opened up.

Looking back, the passenger car industry in India has marked five phases:

Phase I (upto 1984) Regulated and restrained

market

Phase II (1985 to 1992) Exploring new technology

Phase III (1995 to 2000) Hurried entry of world players

Phase IV (2001-04) Market maturing with intense

competition

Phase V (2005 and after) Globalisation.

The Indian automotive sector has come a long way and has tasted, globalization and

its effects. It is very necessary to understand the future for creating policy and

strategies to enhance global market share and to eventually achieve a global

competitive advantage. An attempt has been made to describe the current trend and to

analyse the future.

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Review of Literature

Indian Automobile industry has been growing rapidly over the years, both in the

domestic market as well as in the export market. Starting in 1940s, it has come a long

way, particularly after the liberalization, and now making aggressive inroads in the

global market, with acquisitions, green fields and exports. Nearly all OEMs and Tier 1

suppliers have established operations in India and are buying from Indian auto

components manufacturers, not only for Indian operations but also for evolution. The

industry has a great future potential and ACMA, SIAM, and the Government of India

have come up with automotive Mission Plan, 2016, for the sector. However, it needs

heavy investment in research and development, for meeting the challenges of the

global automobile sector (Pillani 2008). For Indian-owned automobile companies,

since the mid-1990s the R&D efforts got a major push due to the imposition of

stringent Euro norms requiring a quick up gradation of engine, and the intense market

competition. After 1991 with FDI liberalization many global tier-1suppliers started

operations in India. In the mid-1990s many global OEMs entered India; besides, they

have encouraged their existing preferred suppliers to establish facilities here. Since

around 2000 in the Indian automobile sector the improvements in safety features and

pollution norms, and the introduction of telematics, etc., have involved technological

improvements and imports (SIAM officials, quoted in Singh, 2007). At present, almost

all the prominent firms in the Indian auto component industry have links with at least

one international player - operating as a subsidiary/JV or in a technical tie-up (Singh,

2007). McKinsey & Company (2006) found that in India and China the large auto

component suppliers have improved their operational performance over 2002–04 in

terms of the rejection rates and productivity. The quality maturity is the most critical

differentiator, being strongly related to both the domestic and exports growth rates.

The best performers‘ quality levels are comparable with their TRIAD counterparts.

Although there have been increasing incidents of global OEMs shifting more and more


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of the product development responsibilities to developing countries, in India R&D

intensity of foreign affiliates has been relatively low in the vehicle sector (Narayanan

and Vashisht, 2008; Singh, 2007). For the auto component firms (Rasiah and Kumar,

2008) in an econometric analysis found similar R&D intensity—average of R&D

expenses to sales and R&D employment intensity—for foreign and local firms. In the

auto sector the R&D is still primarily oriented towards process development. The

government should particularly facilitate the strategic-asset seeking OFDI, as is being

done in China. While the OFDI regulations have been liberalized in India, a focused

policy is required to strengthen the multinational operations of Indian firms, with

targeted national champions being supported through information, finance and other

support services (Pradhan, 2008).

Objectives:

The major objective of the research is to analyze the course of Indian automobile

industry with special reference to two wheeler and passenger car segment and forecast

the future ahead.

Hypothesis:

Ho1 : The course of Indian Automobile sector with reference to two wheeler and passenger car

segment has been positive.

Ho2 : The future is positive.

Research Methodology:

The universe of research shall confine to passenger car segment and two wheelers. The

research is descriptive in nature and shall be based on secondary data. The data is

purchased from the library of IIM Indore and NASDOC, ICSSR,New Delhi. The source

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of tables has been stared questions in lok sabha and other government agencies

supplied through India Stat and CMIE Business Beacon. The well tabulated data was

administered with descriptive statistics and results were generated.

Results

a) Passenger Car:

With about 13 existing players in the passenger car segment, the total installed

capacity is of the order of over a million and a half vehicles. The capacity utilization

was as high as over 85% in 2006-07. Total investment by the car companies is

estimated at around Rs 175 bn with related component makers chipping in another Rs

50 to 60 bn. The scale of operations of Indian car plants is now beginning to match

with the world standards. The average capacity of a typical Indian car producer

exceeds 100,000 units a year. It is 250,000 in Japan and the US; 125,000 in Brazil and

175,000 in South Korea. Volumes of 100,000 to 150,000 are considered viable. There

was a noticeable slowdown in demand towards the end of 1990s. The beginnings of

the new century witnessed a revival in demand. The quinquennium 2002-2007, in fact

witnessed on an average a CAGR of 17.8%, much above the Indian industry. Total

market of passenger cars was estimated at Rs 476 bn. in 2007-08 which means an

increase of 12% over that of the preceding year. The car sales in 2007-08 including

exports was 1.5 mn vehicles, about 18% increase on the preceding year's car sales of

some 1.25 mn units.

A new trend in the passenger car market is the exchange schemes launched by car

makers. Besides there is the emergence of pre-owned cars market. In 2006-07, an

estimated 12.5% of all car sales were achieved through exchange of old models on the

back of brand loyalty. Maruti has been a major beneficiary selling reportedly 76,500


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cars under the scheme. Others benefiting include Hyundai (16%), GM (8 to 10%) and

Honda (6%).

The sale of pre-owned (or second hand) cars has caught on. Not only Maruti which

sold 84,500 cars through its 'True Value' chain of marketing outlets, even global majors

like Porsche (40 cars) and Bentley have also joined the bandwagon. Nearly 20% of the

pre-owned market is organized. Some 60% are sold by individuals through word of

mouth, while 20% of the market is controlled by brokers.

The passenger car market was segmented in mid 2008-09 as against 2006-07 as

follows:

Table 01

2006-07 Mid-2008-09

Premium and luxury 0.40% 0.80%

Executive segment 3.20% 2.60%

Mid-size 17.20% 20.30%

Small and compact 79.20% 76.30%

Source: India Stat.Com

It is obvious that the market continues to be overwhelmingly skewed in favor of low-

end (priced) cars. The share of the executive segment, however, has nearly doubled in

the last few years, thereby cutting into the market share of other segments.

Luxury car market segment, which clocked sales of 2500 units in 2006-07, aims to sell

4000 to 5000 units in 2007-08. Besides the vehicles manufactured in India, Bentley,

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Rolls Royce, Lamborghini and Audi are in the Indian market through imports, albeit in

small numbers. Audi, however, has created an assembly facility at Skoda plant at

Aurangabad in Maharashtra, which was to be fully operational by September 2007.

Individual buyers, mostly small entrepreneurs, outnumbered corporate to form a

significant chunk of the car buying population. Several car buyers come from

information and service companies. Individual buyers constitute over 70% of the total

demand today, overtaking corporate buyers, who traditionally represented around

60% of total demand some years back.

Against all the boost that marked the growth of the passenger cars segment, the

economic slowdown, leading to a stagnation and recessionary conditions in the USA

and other developed countries caused a gloom in the industry not only in India but

world over. Against the growth of 14% in 2007-08, the first half of 2008-09 witnessed a

slowdown with only 5.30% growth against nearly 13% in the first half of the preceding

year. The segment received a severe setback with the sales registering a decline in

October 2008. In November 2008, the decline was more than 19%.

The industry is now hoping that the measures undertaken by the Government to offset

the effects of economic meltdown worldwide might salvage the falling trend. The signs

at least in the short-term are not propitious.

There is a surfeit of new models and new innovations. Leading brands of cars in India

now include: Maruti 800, Esteem, Omni, Zen Estillo, Swift, SX4, Alto Wagon R, Opel

Astra, Opel Corsa, Chevrolet Optra, Aveo, Aveo UVA, Spark, Mercedez, City, Civic,

Accent, Accord, Sonata, Santro, Indica, Fiat Palio, Sienna, Lancer, Ford Ikon. Ford

tried with Mondeo, while GM's Swing made some healthy waves in its segment.

Skoda introduced Octavia, and has followed with Superb and Fabia to strengthen its

presence.


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Volvo is entering with its passenger cars on the back of Ford India, whose US parent

owns the Swedish company's car business, globally. It plans to introduce high-end

Volvo cars in India, such as a its C30 and C70 cars which have a common platform

with Ford's Focus, slated for an Indian launch next year (2008). However, it is to make

its debut in India with its S80 Sedan and SUV XC90 later in 2007 itself. These are

priced Rs 4 mn and Rs 6 mn, respectively, and would be wholly imported.

Incidentally, platform sharing is common in the premium and executive segments of

passenger cars. This segment grew by around 50% in 2006-07 to over 44000 units. The

segment among others is targetted by DaimlerChrysler, BMW, Audi and Porsche.

Others like GM, Honda and Hyundai, besides, Toyota have a very significant presence

in the segment.

The mid-sized segment with a share of over 17%, witnessed a lot of activity in 2007.

Renault-Mahindra's Logan, Maruti's SX4 were both introduced in April-May.

Hyundai is to roll out a new sedan in second quarter of 2007, besides its Getz Prime

already in the market and Honda in late 2008. Of the 50 new launches expected, nearly

half are expected in the mid-sized segment to take on Esteem, Indigo, Honda City,

Hyundai Accent and Verna, Ford Ikon and Fiesta and Chevrolet Aveo. Most of these

are priced between Rs 5 & 8 lakh. Fiat has also launched Fiat Stile, the maiden offering

from its new plant.

Given the potential, most players in this sector are introducing new models to lure

buyers. As the players multiply, the Indian consumer has a plenty of variety and choice

in the mid-size and small segment. Although small car category continues to be

dominated by Alto, Santro and, Indica, the segment would offer the consumer the

choice of pick and choose with new offerings.

The entire car market was likely to witness a fair amount of churning following the

Tata Motors 100,000 rupee car slated for a 2008 foray. As the project got delayed, the

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change was yet to unfold itself. With nearly 20 more new compact models likely to

flood the market by 2010, the market will be more crowded than ever before. Besides

GM's Spark, Honda's Jazz, Tata-Fiat's Gravede Punto and Volkwagen's Polo are likely

to be a part of these new forays. This is likely to impact two-wheeler's market. It is

expected that 10-15% of the two-wheeler market will switch over to four-wheelers.

The size of the entry-car market is likely to increase by 2 to 3 times, which will ensure

that both Maruti and Tata Motors could co-exist along with new entrants.

Honda Motor Company (HMC) was planning to launch a small car through its

subsidiary Honda Seil Cars India (HSCI), by 2010. The car is expected to take on

Maruti Swift, Hyundai Getz, Fiat Palio, General Motors UV-A and when launched,

Volkswagen Polo. Honda is planning to launch new version of premium sedan Accord

following a planned facelift in 2007. The company has plans to increase the production

capacity to 100,000 units by the end 2007, from the existing 60,000 at its Greater

Noida facility. The plant produces City, Civic and Accord brands of cars. Rajasthan

state is the likely site for its second car-making facility to take on the production of its

proposed range of hatchback models, including the small car offering Jazz.

Tata Motors and Fiat had agreed on entering into a joint venture to make cars and

engines at a proposed investment of Rs 40 bn. While the annual capacity for cars

would exceed 100,000, the plant will also have a manufacturing capacity for 200,000

engines. The production was slated to start towards the beginning of 2008. The

venture located at the Fiat plant at Rajnangaon in Maharashtra, will also produce Fiat

Grande Punto and the Linea for Indian and overseas markets. As a follow up to the

introduction of the entire Mercedes Benz line to India, DaimlerChrysler is

contemplating to bring in its Chrysler range of vehicles as well.

Hyundai as well is eyeing the sub-compact car market in India by bringing in the

800cc model produced by its sister concern, Kia Motors Corporation of South Korea.


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This small car is likely to be priced below Rs 200,000 and possibly as low as Rs

160,000 to 170,000, slated to be rolled out in 2008-09.

Maruti launched its Zen Estilo, priced about Rs 10,000 lower than the entry level of its

older version of Zen. The company continues to be a leader in the segment. Maruti

launched SX4 Sedan in May 2007. It is a replacement vehicle for its Baleno which was

phased out in early 2007. SX4 is the second of Suzuki's global models after Swift. The

third, the grand Vitara, a SUV, would make its debut in the next few months. Maruti

has a 14.8% share in A-3 segment where SX4 is grouped. However, it is much lower

than its share in A-1 and A-2 segments at 100% and 58%. The company launched A-

Star towards end of 2008-09 and Ritz in the middle of 2009-10. Both have been

received well in the market. It had earlier introduced diesel version â€œDzire' of its

Swift as a Sedan, which is also doing well.

Volkswagen had been planning to assemble Passat as its maiden offering at its

subsidiary, Skoda Auto India's plant at Aurangabad mid -2007. The car maker has also

finalised plans to set up a manufacturing facility at Pune with an investment of Rs

2,450 mn (USD 530 million). While Skoda is best-known in India for its Octavia,

Fabia, Superb and Laura, other brands for which it has marketing arrangements in

India, include Bentley, Bugatti, and Lamborghini.

BMW make an entry with its top-of-the-line 7 series stables into the Indian market.

The debut marked the introduction of two 3-Series cars â€― 320i and 320d, with price

tags in the Rs 25 mn range. Additionally, it has four models from its 7-Series stables

â€― 730ld, 74li, 750li, 760li for sale through direct import route to be imported as fully

built units and sold in India in the Rs 8 mn range. BMW group is investing Rs 11000

mn to build an assembly plant in Chennai. It is targeting an annual sale of 150,000

units of BMW, Mini and Rolls Royce cars in the Asian markets by 2008.

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Diesel cars have increased their market share to over 30% from the earlier 20% in the

two years. Hyundai Verna, Maruti's Swift (which remains the most sought after diesel

car), Chevrolet Aveo and Hyundai's Getz and Sonata which will have diesel variants

shortly, are in the forefront of the diesel push. Of the cars sold under Fiesta and Verna

brands, 70% to 80% are said to be diesel versions.

GM was planning a diesel version of Optra after the success of its CNG variant, along

Fabia from Skoda Auto, while Tata Motors, has introduced CRDi version of its Indigo

Sedan. Likewise, M&M Renault's maiden offering Logan is also a diesel variant.

The government, which had a major stake in this industry, has divested from Maruti

Udyog. A public issue was very successfully made. Suzuki is now in full control,

although very little has changed in the management style and systems.

Since mid-2006, the D segment has been marked by great launches by all those who

matter in the Industry, not only in India but globally. Honda Civic entered into Indian

market in July 2006. With its entry, the highly competitive entry-level D-segment has

got revamped. Honda City in premium C-segment and Honda Accord in Upper D-

segment along Civic, present a very impressive range from the car maker. The launch of

a new variant of Corolla in Japan, which would find its way to the Indian market, may

improve on Toyota's performance in the market in respect of passenger cars, as earlier

the sales were 20% down. Skoda's Octavia in the segment is going high on its diesel

variant.

As indicated, Volkswagen is entering into the premium segment Passat to be

assembled at Skoda Plant slated for mid 2007. A new plant is coming up at Pune which

would roll out Polo hatchback and notchback in 2009. Its plans cover production of

mid-sized Jetta in India. It is however, building market on imported cars like Touareg

and Phaeton in India.


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GM launched Chevrolet Spark (April 2007) to take on Alto, Zen Estilo, Wagon R and

Santro. The car is based on Daewoo's Matiz platform adequately modified to give a

different look. Earlier, it had launched Aveo UVA. The company aims to capture 10%

market share by 2010. It has set a target for sale of 40,000 small cars in 2007-08. In

2003, following listless performance of its Opal series, it came with Chevrolet brands

(Tavera-SUV, Optra). Spark now being made at Halol, would eventually be

manufactured at GM's Talegaon (Maharashtra) plant which is coming up with a

capacity of 140,000 units to take GM's overall Indian capacity to 225,000. GM also

launched Optra Magmun in June 2007. It is a product from GM-Daewoo in Korea.

Nissan Motor India, which had launched its SUV X-Trail in 2004, is into the

passenger cars segment with Teana launched in early 2007 and is to compete with

Honda Accord and Toyota Camry. Teana is expected to register sales of 350 units a

year. It is a 2.3 litre capacity passenger car. The company has plans to foray into small

and compact car segment following the entry of GM's Spark. It is setting up a plant

facility at Chennai jointly with Renault and Mahindra & Mahindra and the facility is

expected to be operational in two years.

Total market of passenger cars was estimated at Rs 476 bn in 2007-08, which meant

an increase of 12% over that of the preceding year.

b) Two Wheelers

The Indian two-wheeler has witnessed steady growth over the years. On an average

Indian two-wheeler exports have increased by about 1, 00,000 units every year since

2001-02. But the growth rate from 1995-2001 in not quite impressive. Due to the joint

venture agreements between Indian motorcycle manufacturers and Japanese

manufacturers exports of motorcycles from these joint ventures were low. During this

period the average number of two-wheelers exported was just over 1, 00,000 units.

Motorcycles are the major contributor to the total two-wheelers exports. Table 2 gives

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details about the growth of exports of two-wheelers in India over the period 2001-02

to 2010-11. From 2001-02 to 2005-06 all three segments registered a significant growth

rate. Among the three segments motorcycles have witnessed tremendous growth. In

the financial year 2001-02 motorcycles accounted for about 50% of the total number of

two-wheeler industries exports and now in have increased to a mammoth 88%. In the

year 2005-06 most of the exports were accounted for by the smaller engine capacity

bikes of between 75 cc to 125 cc. This segment accounted for 70 per cent of motorcycle

exports in the last fiscal followed by the 125 cc to 250 cc segments, which accounted

for 29 per cent of sales. in the year 2005-06 Bajaj Auto exported 165,288 units with

Hero Honda exporting 92,266 units. TVS Motors Ltd exported 54,078 motorbikes and

Yamaha 55,063 motorcycles.

In the financial year 2006-2007 the Indian two-wheeler industry exported 6, 19,138

units as compared to the previous year‘s 5, 13,169 units. In the financial year 2006-07

motorcycles alone contributed 88% of the total exports in the tow-wheeler industry.

Within the motorcycle segment, the 75-125 cc segments are a major contributor to

motorcycle exports. 125-150 cc segments have also contributed significantly. Mopeds

and scooters exports have declined drastically. Overall exports share of production for

two-wheelers has increased from 5.6% in 2005 to 6.8% for the financial year 2006-07.

Even though exports of mopeds and scooters have declined in the 2006-07 period their

exports share from production has increased. Currently export sales of two-wheeler

account for 6% of the total two-wheeler sales. In terms of value the export of Indian

two-wheelers is still. As indicated above, EEPC figures indicate that 2 and 3 wheelers

exports grew from Rs. 336.07 cores in 2000-01 to Rs. 1085.12 cores in 2004-05. Since

two-wheeler exports in 2006-2007 were 619138 units from 366407 in 2004-05 it is

expected that the total two and three wheeler exports in 2006-07 would cross Rs.2000

crores. (The minimum price of an Indian motorcycle is US$ 600). The growth in

exports of two-wheelers in India has a very close correlation with the growth of


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production of two-wheelers in India. The companies who have crossed 1, 00,000 units

in production usually take to exports. This serves two purposes. A company can

export when there is a fall in domestic sales and maintain its production. Secondly,

companies are using exports to build scale and thus reduce the overall cost of

production. The motorcycles production has increased astonishingly while production

of scooters and mopeds has declined. This is partly due to the consumers‘ preference

for a fuel efficient two-wheeler which is also macho and sleek. Another reason is the

growth in rural demand. The rural customer wants a two-wheeler which is sturdy and

fuel efficient. The only vehicle which meets this demand is the motorcycle and hence

the growth in sales of motorcycles. In terms of growth the production of the two-

wheeler industry has been growing at the rate of 9% to 18%. Motorcycle exports are

showing continuous improvement and the year-to-year growth is around 40 percent.

The scooters and mopeds segment did not show much growth in exports. This is

primarily due to the fact that in most countries the only form of two-wheeler used is

the motorcycle. Even though motorcycles exports have risen to around 0.55 million

they are much smaller than the exports of China which are around 2 million. Japan is

the second biggest exporter of motorcycles and exports around 1.5 million

motorcycles. However, Japan exports motorcycles in the above 250 cc capacity. India

does not export motorcycles in the above 250 cc segment and most of the motorcycles

exported from India are in the 100-125 cc capacity.

Different countries require different types of motorcycles. Indonesia uses only step

thrus and probably most of the countries in the ASEAN region also use only step

thrus. The Western World especially Europe and US use sports bikes which are in the

above 250 cc category. Countries like Pakistan use motorcycles in the 70 cc capacities.

Hence, if India wants to be a major exporter it has to manufacture motorcycles

especially for the exports market. Most probably it will have to manufacture

motorcycles in the country of sale. This is the plan in TVS Motors setting up a plant in

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Indonesia to manufacture step-thrus. Indonesia has a market for 4 million

motorcycles. This plant will help in tapping the Indonesian market and also enable it

to export to other ASEAN countries. Bajaj is also in the process of putting up a plant in

Indonesia to manufacture motorcycles and assembly plants in Nigeria and Iran to

manufacture motorcycles.

Indian motorcycles are in the midrange. Quality wise they are good but are not costly.

Chinese motorcycles on the other hand are much cheaper than Indian motorcycles.

The Chinese motorcycles range from US$225 – 270 for 50cc, US$600. There are some

markets where Indian motorcycles may not be able to compete with the Chinese

because of the price. Quality wise Indian motorcycles are better than Chinese

motorcycles. Japanese motorcycles are technologically superior to Indian motorcycles.

Currently, these two do not compete with each other.

Conclusion

In brief, the car market in India was in a highly surcharged stage in which cut-throat

competition was heating up with the introduction of varied product improvements

and models. The producers have been doing well in the passenger car segment, thanks

to the introduction of new models, but due to the meltdown of 2008 triggered by the

US financial crisis, the automobile industry has been facing a major setback. The

commercial vehicles segment is still facing a critical position. It appears that the

recovery could take a fairly long time despite the very huge bailout and support by the

governments worldwide.

The export of two-wheelers from India has a lot of bearing on the two-wheeler

industry in India. The Indian two-wheeler industry is around 8.5 million and is

growing at nine per cent. This means that for the industry to reach 15 million it will

take another eight years. By that time the global market would have crossed 60


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million. Some of the Indian companies like Bajaj Auto and TVS Motors want a piece of

the global market. Hence it means that the Indian two-wheelers will have to globalize

their business. Similar to what Japanese companies did in the 1980s Indian companies

will have to have operations probably in all continents.

The Indian two-wheeler exports are mainly targeted in the 100-125 cc

motorcycles. However, its main competitors China and Japan are exporting a lot of

above 250 cc motorcycles. The above 250 cc motorbikes have an export potential of

over one million motorcycles. Indian companies should work aggressively by buying

technology, establishing technological collaboration with leading players to tap this

market. Overall the Indian two-wheeler industry is placed between the Japanese and

Chinese motorcycles. Indian motorcycles are of better quality than Chinese

motorcycles but they are costlier than Chinese motorcycles. Indian motorcycles do not

have the sleekness of Japanese motorcycles but are almost as good in terms of quality.

Hence it is possible that Indian motorcycle manufacturers may be able to eat in to

some of the export market of the Chinese and Japanese motorcycle manufacturers.

Export of two-wheelers from India is expected to continue increasing in the next five

years. However, this means that Indian manufacturers will have to globalize at a faster

pace and also improve their product mix and product mix and technology to meet the

increasing the demand for two- wheelers in developing countries.

Limitations:

The costly secondary data which needs to be purchased from CMIE and India stats is

the primary limitation of the research. The research can be conducted on wider strata

and in all segments‘ of the automobile industry to produce more comprehensive results

and forecasting. Even a model can be developed.

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Narayanan, B.G. and P. Vashisht (2008), Determinants of Competitiveness of the Indian Auto

Industry, ICRIER Working Paper, No. 201, January.

Pillania, Rajesh K., Indian Automobile Components Industry: A Global Perspective (July 13, 2008).

Journal of Business, Vol. 3, No. 2, pp. 34-46, 2008. Available at SSRN:

http://ssrn.com/abstract=1159390.

Pradhan, J. P. (2008), Indian Multinationals in the World Economy: Implications for Development,

Bookwell Publisher, New Delhi.

Rasiah, R. and A. Kumar (2008), ‗Foreign Ownership, Technological Intensities and Economic

Performance of Automotive Parts Firms in India‘, Asia Pacific Business Review, 14(1), pp. 85–102.

Singh, Neelam (2007), ‗Automotive Industry‘ in N. Kumar and K.J. Joseph (eds.) International

Competitiveness & Knowledge‐based Industries in India, pp. 233–279, New Delhi: Oxford University

Press.

http://www.acmainfo.com/

http://ssrn.com/abstract=1159390


19 | P a g e

Annexure:

Table 02: Growth in Exports

Year Scooters Motorcycles Mopeds Total Growth in

Exports

2001-02 28,332 56,880 18,971 1,04,183 -

2002-03 32,566 1,23,725 23,391 1,79,682 72.47

2003-04 53,687 1,87,287 24,078 2,65,052 47.51

2004-05 60,699 2,77,123 28,585 3,66,407 38.24

2005-06 83,934 3,86,054 43,181 5,13,169 40.05

2006-07 35,685 5,45,887 37,566 6,19,138 20.65

2007-08 68,939 5,95,012 44,981 7,08,931 12.67

2008-09 74,592 6,89,922 49,462 8,13,976 12.91

2009-10 80,246 7,84,832 53,944 9,19,022 11.43

20010-11 85,900 8,79,742 58,425 10,24,067 10.26

Source: CMIE

Gravity

Table 3: Growth in Exports of Two-Wheelers – Global Market


Produc.

1994-95 879759 647521 516936 2044216 -

1995-96 1259408 809097 623114 2691619 -

1996-97 1315055 988709 668666 2972430 -

1997-98 1279549 1125958 667242 3072749 -

1998-99 1322928 1387276 671699 3381903 -

1999-2000 1225895 1794093 724510 3744498 -

2000-2001 1030803 2183430 694974 3909207 -

2001-02 937506 2906323 427498 4271327 9.26

2002-03 849434 3876175 351612 5077221 18.87

2003-04 935279 4355168 332294 5622741 10.74

0.00

20.00

40.00

60.00

80.00

1 2 3 4 5 6 7 8 9

Growth in Exports -

Growth in Exports -


21 | P a g e

2004-05 987498 5193894 348437 6529829 16.13

2005-06 1021013 6207690 379994 7608697 9.32

2006-07 943974 7112225 379987 8444168 10.9

2007-08 907350.08 6752104.04 319757.15 8067391.83 11.03

2008-09 883256.12 7292651.22 290854.74 8573575.33 10.60

2009-10 859162.16 7833198.40 261952.32 9079758.83 10.17

2010-11 835068.21 8373745.58 233049.90 9585942.33 9.74

Growth in Exports

0

2000000

4000000

6000000

8000000

10000000

12000000

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

Axi

s Ti

tle

Axis Title

Table 5: Growth in Exports of Two-Wheelers – Global Market Scooters 879759 1259408 1315055 1279549 1322928 1225895 1030803

Gravity

Table 4: Percentage of Vehicles Exported of Total Production


Percentage of

Vehicles Exported

2001-02 3.02 1.93 4.44 2.44 -

2002-03 3.79 3.28 6.45 3.54 45.08

2003-04 5.66 4.3 7.26 4.71 33.05

2004-05 6.15 5.34 8.2 5.61 19.11

2005-06 8.22 6.22 11.36 6.74 20.14

2006-07 3.78 7.68 9.89 7.33 8.75

Source: India Stat

Table 05: Demand : Past & Future Year th nos 1990-91 182 1991-92 166 1996-97 448 1997-98 448 1998-99 435 1999-00 577 2000-01 513 2001-02 558 2002-03 612 2003-04 821 2004-05 981 2005-06 1110 2006-07 1260 2007-08 1450 2008-09 1530 2009-10 1637 2010-11 1853 2011-12 2010 2012-13 2182 2013-14 2367 2014-15 2568 2019-20 3859


23 | P a g e

Table 06

Market Segmentation Segment Share(%)

North 43

East 8

West 26

South 23

Over Rs 1.0 mn 0.8

Rs 501,000 to Rs 1.0 mn 3.2

Rs 301,000 to Rs 500,000 49

Under Rs 300,000 47

Source: Inescos - CIER

Table 07

Market Growth Rates 1990-91-1996-97 16.20%

1996-97-2001-02 4.50%

2001-02-2006-07 17.70%

2006-07-2011-12 9.80%

2011-12 - 2019-20 8.50%

Source: Inescos - CIER

1990-

91

1991-

92

1996-

97

1997-

98

1998-

99

1999-

00

2000-

01

2001-

02

2002-

03

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

2013-

14

2014-

15

2019-

20

th nos 18 16 44 44 43 57 51 55 61 82 98 11 12 14 15 16 18 20 21 23 25 38

0500

10001500200025003000350040004500

Axi

s Ti

tle

24 | P a g e

Chapter Two

An Empirical Analysis on Consumers perception of Selected

Malls in Indore City of Madhya Pradesh

Kanika Shrama, StudentPrestige Institute of Management and Research, Indore Naina Pancholi,

StudentPrestige Institute of Management and Research, Indore | Anupam Dubey, StudentPrestige Institute

of Management and Research, Indore | Nishant Joshi, Assistant Professor Prestige Institute of Management

and Research, Indore

Abstract:

Consumer perception is centred around the buyer of product and consumer of a service, who gets influenced by the value created by marketers in their products and services (Laura). Consumers act and react on the basis of their perceptions, not on the basis of objective reality. For each individual, reality is a totally personal phenomenon, based on that person‘s needs, wants, values, and personal experiences. Thus, to the marketer, consumers‘ perceptions are much more important than their knowledge of objective reality. For if one thinks about it, it‘s not what actually is so, but what consumers think is so, that affects their actions and their buying habits. And, because individuals make decisions and take actions based on what they perceive to be reality, it is important that marketers understand the notion of perception and its related concepts to determine more readily what factors influence consumers to buy (Schiffman, Kanuk and Kumar).Indore city in the state of Madhya Pradesh has been reffered to as financial capital of the state being so it also has attracted real estate developers to develop both residential and commercial properties. In the past 5 years Indore has seen some very big malls either operational or about to start their operations. With the population of around 35lacs and primarily being an agrarian economy, Indore has also become an educational hub thus, attracting a huge number of young professionals. Indore has also been able to retain these professionals in the city post completion of their professional education. Thus, the city has created a niche demand for malls which have been defined by Pearson Publications as, mercantile establishment consisting of a carefully landscaped complex of shops representing leading merchandisers; usually includes restaurants and a convenient parking area; a modern version of the traditional marketplace. This brings us to the

An Empirical Analysis on Consumers perception of Selected Malls in Indore City of Madhya Pradesh

25 | P a g e

problem of what kind of perceptions do consumer have for a few selected malls, in Indore city. The study shall attempt to benefit real estate developers to make good design, shall benefit marketers and managers of industry to create an ambiance of ease at malls and shall be a pivotal guideline for future researchers. The nature of the study is exploratory based on primary data collected by a well structured schedule.

INTODUCTION

Consumer perception is centred around the buyer of product and consumer of a

service, who gets influenced by the value created by marketers in their products and

services (Laura). Consumers act and react on the basis of their perceptions, not on the

basis of objective reality. For each individual, reality is a totally personal phenomenon,

based on that person‘s needs, wants, values, and personal experiences. Thus, to the

marketer, consumers‘ perceptions are much more important than their knowledge of

objective reality. For if one thinks about it, it‘s not what actually is so, but what

consumers think is so, that affects their actions and their buying habits. And, because

individuals make decisions and take actions based on what they perceive to be reality,

it is important that marketers understand the notion of perception and its related

concepts to determine more readily what factors influence consumers to buy

(Schiffman, Kanuk and Kumar).

Madhya Pradesh often called the heart of India, is a state in central India. Its capital is

Bhopal. Indore is the largest city and is the commercial capital of the state. It is 190

kilometres, west of the state capital Bhopal. It has the population of 32.7 lakes (2011

census). It is surrounded by two major industrial areas namely- Pithampur and Dewas.

It is also turning into a educational hub having both IIM and IIT which is unique and

exists only in Indore in India. The city is also surrounded by rich agricultural belt,

which is one of the best in India. All the above causes high flow of money in the

markets making Indore one of the key and favourable destinations for big retailers,

Gravity

mall developers and realators. Thus, the city has created a niche demand for malls

which have been defined by Pearson Publications as, mercantile establishment

consisting of a carefully landscaped complex of shops representing leading

merchandisers; usually includes restaurants and a convenient parking area; a modern

version of the traditional marketplace. This also brings in the challenges of a strategic

model that matches consumer perception and tastes for attracting him to select a

specific mall for his shopping visits.

Review of Literature:

As the economy and society have changed, so retailers have responded and shopping as

an activity has altered enormously (Dawson and Boroadbridge, 1988). 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 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 90‘s have seen this market share halve by 1995 to

just over 40%.

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. This paper

explored the way organized retail has dramatically changed not only the Indian

traditional retailing structure by also the consumption behaviour. The consumption

behaviour was examined and results showed that, for consumers, the shopping mall or

variant of organized retail format is the preferred type of retail store, due to

convenience and variety,Mridula (2007). Nisa (2007) argued that India is one of the


27 | P a g e

largest emerging markets, with a population of over one billion. India is one of the

largest economies in the world in terms of purchasing power and has a strong middle

class base of 300 million. Around 70 per cent of the total households in India (188

million) reside in the rural areas, where mostly traditional retail outlets, commonly

called kirana stores exist. These are unorganized, operated by single person and runs

on the basis of consumer familiarity with the owner. However, recently organized

retailing has become more popular in big cities in India and most of the metropolitan

cities and other big cities are flooded by modern organized retail stores. Many semi-

urban areas also witnesses entry of such organized retail outlets. Till now, entry of

foreign retailers was restricted in Indian retail market because of the ban on Foreign

Direct Investment in Indian Retail Sector. But recently, as government has changed its

policy and the cabinet has allowed 51 per cent FDI in single-brand retail, the prospects

of foreign players entering India became high. But there is also a powerful counter-

argument: each sector that has been opened to private investment, such as insurance,

banking, civil aviation etc. has grown. And the consumer has benefited every time. A

study by Luis Guasch (2002), Clive Harris (2003), and the McKinsey Global Institute

(2003) have shown that in almost all cases FDI had a largely positive impact on

productivity (the key criterion for assessing long-term economic performance) and on

the coverage of services. But ill-designed privatization processes, contracts, and

regulations have often led to poor returns on investments or, in some cases, to

excessive returns. The financial and infrastructure sectors are tricky to regulate as

quasinatural monopolies, but FDI is not to blame for government shortcomings. In

sectors where competition is stronger, FDI has had a much more obvious positive

impact. Shaw, Dawson and Blair (1992) 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.

Gravity

Although store choice has been researched extensively in literature, the format choice

has been a relatively limited area of work. The format choices have been studied for

Retail format evolution by Rousey and Morganosky (1996); Price format sensitivity of

shoppers and its impact on Shopping Basket Size by Bell and Lattin (1998); Bell,

Bucklin et al. (2000); Stability of Format Choices through comparison of inter and

intra format switching behavior and role of market conditions by Benito and Galego

(2005); Galata and Bucklin (1999); Perceived shopping utility of different Price

formats by Bell, Tang and Ho (2001), Effects of exogenous variables and pricing

formats on store choice by Fotheringham (1988), Kahn and Schmittlein (1989);

Timmermans (1997); Retail format competition by Bhatnagar and Ratchford (2004).

The concept of consumer perception, 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 (Martineau, 1958, Doyle and Fenwick, 1974-1975,

Amirani and Gates, 1993). Therefore, the consumer perception 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.

Research Methodology:-

The research is exploratory in nature and the data used for the analysis is primary in

nature. The data was collected using a schedule based upon 5 point likert scale having

19 questions divided in 4 sections. Initially a pilot test was conducted on 80

respondents for checking the questionnaire. A total of 183 respondents were


29 | P a g e

administered with the schedule and responses thus generated. The data collected was

tested for reliability using the Cronbach's α test.

The data was then administered with descriptive statistics for initial understanding.

The data was then test for Kaiser-Meyer-Olkin Measure of sampling adequacy for

finding weather factor analysis is applicable or not. Upon test KMO the data was

tested with factor analysis and thus factors were generated which were then used for

model generation.

Results:

Upon initially applying descriptive statistics it was observed that 70 percent people in

Indore city are preferring malls over small retail stores. A majority of them are

purchasing from malls. It is also observed that 67 percent people feel alleviation in

their social status when they purchase from malls and big retail stores. They get

influenced by family members and close friends in selecting a mall which they wish to

visit. People do not mind whether brands available in these malls are Indian or foreign.

Location of a mall is a very important aspect and 72 percent people feel that it helps

them in selecting malls for shopping visits; they are hardly interested in the ownership

pattern. 71 percent people feel that amenities and convenience facilities available in a

mall influences them towards their selection of the mall for the shopping visit. This

also influences their repeat visits.

The data collected using a schedule was test for reliability using alpha test and the

reliability was found to be 0.674 which is reliable. The data was then tested with

Gravity

Kaiser-Meyer-Olkin and Bartlett‘s test. The Kaiser-Meyer-Olkin measure of sampling

adequacy tests whether the partial correlations among variables are small. Bartlett's

test of sphericity tests whether the correlation matrix is an identity matrix, which

would indicate that the factor model is inappropriate. Upon testing for Kaiser-Meyer-

Olkin the value of KMO came to be 0.7 (approx. after rounding off) this enables us to

finally decide that we can conduct factor analysis. Upon conducting explanatory

factor analysis we reduce 19 statements in 7 key factors namely Frequency Visits,

Preference of malls , Influence of Family, Influence of Friends, Owner Ship Pattern,

Seamless Malls and Free facilities to Kids of visitors.

The model that can be visualised out of the results generated by the analysis of data

could be as follows:

With the basic assumption that mall owners and retailers wish to increase foot fall a

possible model could be


31 | P a g e

Conclusion

The research has brought us to the conclusion that malls and big retail stores are

finding space amongst consumers of Indore city. The recent burst of Malls trying to

open in the city makes us think that in coming time consumer shall have more options

and thus, creating a Perfect Market. The challenge now lies on mall owners who wish

to increase the popularity of their malls. Focussing on these future challenges we have

come to a conclusion where we have identified 7 Key Factors which show dynamism

in such a fashion that six of them namely Preference of Malls, Family Influence,

Influence created by friends, Ownership Pattern, Seamless Environment and Free

Amenities and Facilities provided to kids of visitors act as independent Variables and

put effect on the Frequency of consumers visiting the mall on any given period of time

INCREASE THE FOOTFALL & RETENTION OF OLD CONSUMERS

Figure:01 Source: Conceptualised by authors

CREATE A SEAMLESS

ENVIRONMENT

Providing them, their families and Friends discounts, offers and

extra facilities

IDENTIFICATION OF

FREQUENT VISITORS

Gravity

we have formed a qualitative preliminary model to increase the footfall and retention

of old consumers which is as follows:-

The mall owner/Developer/Builders should continuously carryout surveys to identify

frequent visitors in their malls it is proposed that these identified visitors should be

contacted and a database of their family members and friends who are close to them

should be collected. Our Research resulted that around 70% of people are influenced

by Family and Friends thus, creating a database and targeting these family members

and friends shall help influencing the existing customer to revisit the mall and shall

attract new consumers because we can use the technique to create a snowballing

database where each new consumer can possibly attract some more consumers. We

can further provide these frequent visitors their families and friends discounts offers

and Extra facility About 72 percent of people who are part of our respondents felt

comfortable with a seamless environment in malls, which if created along with the

other two activities namely Frequent Visitors identification requiring extra facilities

to family and friends of these visitors shall certainly put an effect in the increase in

footfall and retention of old customers.

Limitation:

The research has been conducted with a small sample and should be conducted at a

larger scale for more conclusive and comprehensive results. The model generated is

still qualitative and a more quantitative and advanced version of the model along with

its testing needs to be generated.

References

Bell, David R., Randolph E. Bucklin and Catarina Sismeiro (2000), "Consumer Shopping Behaviors

and In-Store Expenditure Decisions," Working Paper, Anderson School at UCLA


33 | P a g e

Benito, O., Muñoz-Gallego, P. A., & Kopalle, P. K. (2005). Asymmetric competition in retail store

formats: evaluating inter- and intra-format spatial effects. Journal of Retailing, 81(1), 65–79.

Bentler, P. M., and Speckart, G. (1977). Models of attitude-behavior relations. Psychological Review,

86, 452–464.

Bhatnagar, A., & Ratchford, B. T. (2004). A model of retail format competition for non-durable goods.

International Journal of Research in Marketing, 21(1), 39–59.

Fotheringham, Stewart (1988), ―Market Share Analysis Techniques : A Review and Illustration of

Current US Practice‖ in Neil Wrigley, Store choice, Store Location and Market Analysis, London,

Routledge, 120-159

Kahn, Barbara E. Schmittlein, David C (1989), ―Shopping Trip Behavior: An Empirical Investigation‖,

Marketing Letters, Dec, Vol. 1 Issue 1, pp. 55 – 69.

Mishra, Mridula S., The Consumption Pattern of Indian Consumers: Choice between Traditional and

Organized Retail (June 15, 2007). Available at SSRN: http://ssrn.com/abstract=994238

Nisa, Syeedun, FDI in Indian Retail Industry (April 1, 2007). Available at SSRN:


Rousey, Sarah P.; Morganosky, Michelle A (1996), ―Retail format change in US markets,

International Journal of Retail & Distribution Management, Vol. 24 Issue 3, pp. 8 – 16.

Schiffman L S and Kanuk L L (2007), ―Consumer Behaviour‖ 9th Edition, Pearson Prentice Hall, pp.

187 – 189.

Tang, Christopher S. Bell, David R. Ho, Teck-Hua. (2001), ―Store Choice and Shopping Behavior: How

Price Format Works‖, California Management Review, Winter, Vol. 43 Issue 2, pp. 56 – 74.



Gravity

Annexure

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

VAR00001 183 1 5 3.54 1.199

VAR00002 183 1.00 5.00 3.5519 1.12234

VAR00003 183 1.00 5.00 3.3934 1.16183

VAR00004 182 1.00 5.00 3.5385 1.22864

VAR00005 183 1.00 5.00 3.1530 1.18534

VAR00006 183 1.00 5.00 3.4481 1.26937

VAR00007 183 1.00 5.00 3.3060 1.21994

VAR00008 183 1.00 5.00 3.2186 1.17963

VAR00009 183 1.00 5.00 3.6885 1.27367

VAR00010 183 1.00 5.00 3.3388 1.28173

VAR00011 183 1.00 5.00 3.0765 1.24240

VAR00012 183 1.00 5.00 3.6230 1.29450

VAR00013 183 1.00 5.00 3.5902 1.22757

VAR00014 183 1.00 5.00 3.7760 1.11881

VAR00015 183 1.00 5.00 3.5355 1.37385

VAR00016 183 1.00 5.00 3.7869 1.14998

VAR00017 183 1.00 5.00 3.8142 1.20822

VAR00018 183 1.00 5.00 3.5410 1.30393

VAR00019 183 1.00 5.00 3.0000 1.30510

Valid N (listwise) 182


35 | P a g e

Reliability Statistics

Cronbach's Alpha N of Items

.674 19

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .688

Bartlett's Test of Sphericity Approx. Chi-Square 519.543

df 171

Sig. .000

Gravity

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of

Squared Loadings

Rotation Sums of Squared

Loadings

Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

%

1 3.231 17.007 17.007 3.231 17.007 17.007 2.257 11.879 11.879

2 2.023 10.647 27.654 2.023 10.647 27.654 1.863 9.805 21.684

3 1.447 7.617 35.271 1.447 7.617 35.271 1.672 8.802 30.486

4 1.311 6.903 42.173 1.311 6.903 42.173 1.615 8.502 38.987

5 1.208 6.357 48.531 1.208 6.357 48.531 1.515 7.975 46.962

6 1.079 5.678 54.209 1.079 5.678 54.209 1.272 6.695 53.657

7 1.028 5.411 59.620 1.028 5.411 59.620 1.133 5.963 59.620

8 .894 4.707 64.327

9 .841 4.427 68.753

10 .820 4.314 73.068

11 .753 3.964 77.032

12 .750 3.947 80.979

13 .663 3.492 84.471

14 .576 3.031 87.502

15 .559 2.940 90.442

16 .544 2.862 93.303

17 .478 2.517 95.821

18 .427 2.249 98.070

19 .367 1.930 100.000

Extraction Method: Principal Component Analysis.


37 | P a g e

Gravity

Component Matrixa

Component

1 2 3 4 5 6 7

VAR00001 .406 .203 -.098 .329 -.105 .547 -.003

VAR00002 .416 -.163 -.047 .566 -.070 -.329 .133

VAR00003 .376 .138 -.237 .393 .159 -.069 -.374

VAR00004 .405 .202 -.441 .186 .003 .274 -.021

VAR00005 .242 .556 -.073 -.078 .396 -.165 .128

VAR00006 .203 .545 -.183 -.364 .146 -.078 .107

VAR00007 .521 .475 -.114 .021 .097 -.172 -.110

VAR00008 .001 .624 .360 -.128 -.297 .169 .012

VAR00009 .451 .047 -.172 .097 -.461 .041 .344

VAR00010 -.099 .433 .428 .023 -.498 .048 .053

VAR00011 .026 .188 .638 .254 .293 -.157 -.238

VAR00012 .600 .068 .009 -.437 -.051 -.284 -.080

VAR00013 .707 -.133 .167 -.162 -.095 .074 -.138

VAR00014 .414 -.272 -.100 -.439 .200 .301 .035

VAR00015 .578 -.054 .299 .078 .044 .117 -.181

VAR00016 .503 -.214 .050 -.013 -.252 -.442 .129

VAR00017 .368 -.339 .308 -.103 .056 .238 -.300

VAR00018 .477 -.430 .210 -.058 .024 .003 .302

VAR00019 .148 .068 .337 .185 .473 .168 .629


a. 7 components extracted.

39 | P a g e

Chapter Three

Gauging Service Loyalty among Banking Consumers of Indore

City

An Exploratory Research

Sonam Motwani, StudentPrestige Institute of Management and Research, Indore | Mehek

Malhotra, StudentPrestige Institute of Management and Research, Indore | Sandeep Gehi,

StudentPrestige Institute of Management and Research, Indore |Nishant Joshi, Assistant

Professor, Prestige Institute of Management and Research, Indore

Abstract:

Indore is one of the fastest developing cities in India.The development brings in lot of investment and money which calls for good banking services. This can also be seen as an opportunity for banks and bankers to grow there size and operation by increasing loyalty among consumers. There has been a gap between bankers‘ perception and consumer expectations. Historians are divided on the derivation of the word ‗bank‘. One school of thought believed that the word bank was derived from the word ‗babcus‘ or ‗banque‘ which meant a bench. During the ancient period early bankers and Jews in Lombardy transacted their business on benches (known as ‗banco‘ in local parlance) in the market places. They were accepting deposits and lending money (Shridharan and Mathews). Section 5 (3) (b) of the banking regulations Act, 1949, defines banking as the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. Thus banking has characteristics such as; Intangibility, catalyst, is a link between lender and borrowers and does distribution of risk which basically fall in the preview of service. In words of Berry service are deeds, processes and performance which are intangible but may have a tangible component these are produced and consumed at the same time. The study attempts to explore this gap using the service loyalty scale developed by Clement, Sudhahar, Duraipandian Israel, Britto & Selvam,so that a normative research can be conducted in order to provide benefits to consumer, bankers, researchers and policy makers. The research is exploratory in nature. Primary data is collected from the field using a schedule and appropriate statistical analysis is conducted to test various hypotheses

Gravity

Introduction

Indian banking has been divided in three eras namely; pre-nationalisation,

nationalisation and post liberalisation. The first known systematic banking practice

was started in 18th & 19th century by east India Company in Calcutta and Bombay.

Over the three eras Indian banking consumers have always felt the need of good

quality services. Till the post liberalisation era the services were not playing a major

role since the choice of banks were limited with consumers. With liberalisation

coming into all sectors and private banks coming into the scene services became a very

important factor for customer retention and addition of new customers.

Madhya Pradesh is a central Indian state popularly known as the heart of India.

Primarily and agrarian state, the economy of states has both the facets of agriculture

and industry .still it won‘t be wrong to state that Madhya Pradesh is a largely agrarian

economy. about 197 kilometres from west of Bhopal which happens to be the capital of

Madhya Pradesh lies Indore a city which is a perfect blend of high quality agriculture

surrounded by two very big industrial areas namely Pithampur and Dewas . Indore is

the commercial capital of Madhya Pradesh and one of the fastest developing cities in

India .The development brings in lot of investment and money which calls for good

banking services. This can also be seen as a opportunity for banks and bankers to grow

their size and operations by increasing loyalty among consumers.

There has been an observed gap between bankers perception and consumers

expectation. To bridge this gap there is a requirement of studying key factors that

influence banking services. Indore being the commercial capital of Madhya Pradesh

provides laboratory like conditions where a comprehensive research can be conducted

to generate a generic model for creating and sustaining service loyalty.

Gauging Service Loyalty among Banking Consumers of Indore City:An Exploratory Research

41 | P a g e

Review of Literature

R.K Uppal (2010) analysed the trends and growth of the retail portfolio of various

bank groups between 2007-2008 and found the need of more customer oriented

service and suggested that advance technologies could be used to capture remote area

customers, skilled manpower, market research in intelligent ways, credit quality

techniques, universal banking and human factors delivering banking service to

customers. All the above strategies were felt because of gap between perceived services

and services provided existence. Bell (2001) the banking industry has shown

tremendous growth in volume in complexities during the last few decades. Despite

making significant improvement in all areas relating to financial viability, profitability

and competitiveness, there are concerns that banks have not been able to include vast

segment of the population, specially the under-privileged sections of the society into

the fold of basic banking services. Internationally also efforts are being made to study

the causes of financial exclusion and designing strategies to ensure financial inclusion

of the poor and disadvantaged. The reason may vary from country to country and

hence the strategy could also vary but all out efforts are being made as financial

inclusion can truly lift the financial condition and standards of life of the poor and

disadvantaged. Benvensite, Busaba, and Wilhelm (2001) proposed that proper flow of

information shall enable banks to become closer to their consumers which shall the

volume and return of these institutions, the same been approved by Barth, James,

Gerard Caprio and Ross Levine, 2001.Before 1983, the definition of quality was defined

primarily based on the concept of quality control with corresponding standards

focused completely on achieving quality. While Juran defined quality as "suitable use",

Crosby defined it as "consistent with needs", and assumed the existence of

correspondence between quality and operational standards. Later, it was realized that

the service industry requires a broader definition of quality than that used by the

manufacturing industry. In the concept of Parasuraman, Zeithml, and Berry (1985),

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which was further expanded by Zeithaml (1988), consumers‘ assessment of service

quality by employing both interior and exterior attributes of low-level production

quality or service quality were emphasized. Such process passes through an internal

united comparison, and proceeding to establish a higher level of perceived service

quality among the consumers. In the recent years, service researches have revealed a

variety of customer-based improvement strategies based on the specific service

elements, suggesting action plans for different service requirements that demand

managerial action. Results of these studies have facilitated in competitive positioning

of those service components which are directly tied to the organization's success. The

present study is an endeavor to evolve a truly customer-centric service system based

on customers‘ assessment of service quality.

From the customers‘ perspective, service quality significantly influences customer

satisfaction and customer satisfaction has direct influences on purchase intentions.

Research findings indicate that service quality influences purchase intentions more

than does customer satisfaction. It is therefore imperative on the part of bankers to

stress upon both service quality and customer satisfaction, in order to raise the

purchase intentions of customers. The empirical results of the present study may

therefore provide improved insights on banking service as it seeks to simultaneously

analyze service quality and customer satisfaction.

The customer satisfaction paradigm posits that confirmed standards lead to moderate

satisfaction; positively disconfirmed (exceeded) standards lead to high satisfaction,

and negatively disconfirmed (underachieved) standards lead to dissatisfaction. The

subject of continued (and considerable) debate in the marketing literature, the

distinction and association between service quality and customer satisfaction remains

at the forefront of many academic- and practitioner-oriented research endeavors

(Spreng and Mackoy, 1995). Many studies of consumer satisfaction have been

conducted in service settings, and, generally, researchers agree that the two constructs


43 | P a g e

are conceptually distinct (Bitner, 1990). However, based on the findings of the past

research (e.g. Oliver, 1989), an attempt has been made in this paper to explore the

contention that service quality influences, among other things, levels of customer

satisfaction. The study seeks to maintain the position that service quality - as

determined by its various components - is a partial determinant of satisfaction

(Parsuraman et al., 1985, 1988).

There exist numerous empirical works to support the quality/satisfaction causal order.

In a study, Cronin and Taylor (1992) tested, among other things, the casual

relationship between service quality and customer satisfaction. This study emphasized

that marketing researchers are not in agreement in terms of the causal order of these

constructs, and suggested that empirical justification is necessary to determine the

true nature of this relationship. The findings of this study revealed that perceived

service quality leads to satisfaction (as opposed to the reverse).

In a study addressing the relationship between service quality and satisfaction, Spreng

and Mackoy (1996) suggested that perceived service quality was an antecedent to

satisfaction. Although the direction of the quality/satisfaction relationship (i.e. quality

leads to satisfaction) is fairly well understood for services, the question of whether or

not (and how) this relationship varies depending on particular settings and/or

situations is not.

Service quality and customer satisfaction do exhibit independence and are indeed

different constructs from the customer‘s point of view. A small step in unearthing and

understanding the constructs of service quality and customer satisfaction and their

implications on competitive fruition has been put forward in a study on banking

services (Sureshchandar et al., 2002).

In another study (Regasamy and Kumar, 2005), the comparative analysis on the

services among three major banking segments revealed that the foreign banks have

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topped the list in terms of delivering qualitative customer service. The study also

revealed that the private sector banks compete successfully with foreign banks and

make efforts to provide better banking services in tune with the changing global

competitive scenario.

In an attempt to study the service gap, Dash and Kumar (2007) revealed that

customer‘s expectations exceeded their perceptions, with regards to various

dimensions of service quality. They further claimed that perception of either positive

or negative service quality was related to the customer‘s future behavioral intentions.

Therefore, if a positive quality gap exists, the customers would tend to comment

positively about the service. On the contrary, a negative quality gap would result in

customers complaining, switching to other service providers, commenting negatively

about the provider or just decreasing the usage of the service. Hence it is

recommended that the banks should continuously monitor the service quality levels so

as to avoid erosion of service quality and migration or switching by customers to

another bank.

Identification of customer segment is also vital for service development and delivery in

banks. For example, Jham and Khan (2008) implied that Indian banks should take

care of the needs of customers when introducing various services to them. Their study

revealed that customers of banks such as ICICI, IDBI, HDFC, PNB and SBI were either

in service or self employed. Many customers of SBI and PNB were found to be retired

from their respective profession. Thus they recommended that banks should envisage

a strategy to serve customers with different occupations & educational backgrounds.

Banks must also advance their customer-centric strategies by providing satisfaction

through services leading to better relationship building and earning profits for the

banks. Sudesh (2007) revealed that poor service quality in public sector banks is

mainly because of deficiency in tangibility, lack of responsiveness and empathy.

Private sector banks, on the other hand, were found to be more reformed in this


45 | P a g e

regards. Above all, the foreign banks were relatively close to the expectations of their

customers with regard to various dimensions of service quality. Further, the study

revealed that there existed service quality variation across demographic variables, and

suggested that management of banks should pay attention to potential failure points

and should be responsive to customer problems. While studying on development of

service quality, Amudha and Banu (2007) revealed the necessity of employee contacts

and evaluation of service experiences. Parikh (2006) found the problem of reliability in

various measures of service quality, and concluded that perception responses have

high reliability as compared to expectation responses. The five factor structure of

service quality developed by Dabholkar, Thorpe and Rentz (1996) indeed had a major

impact on the business and academic communities. Although this study shows that

the data collected do not support their five-factor structure, the five dimensions are

still useful as a foundation for discussion and determination of areas for improvement

in the service quality of retail stores. Service quality in banking implies consistently

anticipating and satisfying the needs and expectations of customers. However,

evaluating service quality sometimes is not an easy task due to the intangible nature of

services. Hence, the present study seeks to develop a common understanding of service

quality in the banking industry across different customer segments of public, private

and MNC banks in India. There are many reasons for poor service quality across

industries. One reason may be an inability to collect or use collected data. For

example, in direct opposition to consumer opinion, bank executives perceive

themselves and their companies to be doing an excellent job. This apparent

discrepancy of opinion creates questions about banking service information-gathering

effectiveness.

Because perceived quality is conceptualized as the customer's overall attitude towards

the excellence of service, many researchers have relied on a single overall quality

question, measured on a scale ranging from poor to excellent (Rust and Oliver, 1994).

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More generally, however, service quality perception is thought to be based on several

quality attributes

(Gronroos, 1990). Parasuraman et al. (1985, 1988) and Zeithaml et al. (1990) developed

a multi-item scale (SERVQUAL) where they have integrated the most important of

the criteria contributing to the formation of customer perceptions of service and

which signal quality to the customer. These are: reliability - reflecting the technical

quality of the outcome of the service encounter, i.e. what is received by the customer;

and tangibles, responsiveness, assurance and empathy - reflecting the functional

quality of the process itself, i.e. how the service is provided. Quantification is obtained

by measuring expectations and perceptions of performance for each one of these

dimensions (Cronin and Taylor, 1992; Parasuraman et al., 1988; 1991; Zeithaml et al.,

1990). SERVQUAL was deemed "to be applicable to retail and business services and

relevant for banking services".

Research Methodology

The research has been exploratory in nature as predetermined factors and dimensions

were not available. For conducting the research we formulated a questionnaire having

3 sections and 15 statements. The questionnaire was based on five point likert scale.

We collected responses from 150 respondents based upon judgmental sampling. The

data thus collected is primary in nature.

The collected data was first tested for reliability using Cronbach‘s Alpha test and then

descriptive statistics were drawn upon favorable results we tested for Kaiser-Meyer-

Olkin Measure of Sampling Adequacy to check whether explanatory factor analysis

could be administrated or not. We then upon satisfactory results conducted factor

analysis with rotated varimax method. On the basis of these result a qualitative model

was created.


47 | P a g e

Results

On the application of Cronbach‘s Alpha for testing reliability the results were 0.8

which is good enough to proceed further.

Upon the application of descriptive statistics we observe that 88% of banking

consumers in Indore feel that banking services provided by their banks are prompt.

75% of respondents felt that employees in their bank were courteous to them. About

80% felt that knowledge towards various banking products and services is available

with these banking employees. 76% of the respondents felt that the banking hours are

convenient and they are provided attention and help. About 81% of the respondents

felt that the bank staff is responsive but only 73% of respondents felt that officials have

understanding towards problems and requirements of consumers.77% of respondents

felt that the service mix available in their bank is appropriate and dependable. Only

76% of respondents felt that their bank branch is safe. About 75% of respondents were

satisfied with their branch location, ATM network and promotional material of the

bank.

The value for KMO was equal to 0.9(approximately after rounding off) which is high

and indicates that factor analysis can be conducted. 15 statements after the application

of factor analysis with Vermax Rotated Method produced 4 factors namely; 1)

Courtesy extended by bank employees, 2) Knowledge of product and services by bank

employees, 3) Banking hours and 4) ATM networks. These broad factors had highest

factor loads and were explanatory to the statement of problem.

Conclusion:

The description present here simply betokens the need for development of

SERVLOYAL for use in the service marketing research. The robustness of the

measurement of items in terms of relationship among latent variables can always stand

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improvement. Therefore, future research is caller for to continuously refine this

measurement scale and corroborate the findings of this empirical study. The effect of

psychological and genetic predispositions to Service Loyalty has yet to be investigated

and the same could also be attempted as a future study. The Dimensionality has been

conducted to only take further the study and delimit the existing research material.

This also indicates that the Impact of the four dimensions is very high in the universe

of the research and banking organizations working in the area can really build and

retain more number of customers. The act of maintaining long-term relationship with

customers has been proving to be beneficial for the corporate of any rung, be it

profitability or loyalty, irrespective of the sectors they belong to. In today‘s highly

competitive environment, organizations should protect the long-term interest of the

customers and hence should seek the ways through which the customer loyalty

toward the organizations will be forged.

References

Uppal, R. K., Business Retail Banking Strategies in the Liberalized and Globalized Era (January 6, 2010). The IUP Journal of Business Strategy, Vol. VI, Nos. 3 & 4, pp. 95-106, September & December 2009. Available at SSRN: http://ssrn.com/abstract=1532101

Bell, C and P. Rousseau (2001), ―Post Independence India: A Case of Finance-led Industrialization?‖, Journal of Development Economics, 65, 153-175.

Benveniste, Busaba, and Wilhelm (2001)Barth, James, Gerard Caprio and Ross Levine, 2001a.

―Banking systems around the globe: doregulation and ownership affect performance and stability‖? Forthcoming in Frederic Mishkin, ed., Prudential Regulation and Supervision: Why it is Important and what are the Issues (Cambridge, Mass., National Bureau of Economic Research).


49 | P a g e

Annexure

Case Processing Summary

N %

Cases Valid 136 100.0

Excludeda 0 .0

Total 136 100.0

a. Listwise deletion based on all variables in the

procedure.

Reliability Statistics

Cronbach's

Alpha N of Items

.780 15

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .855

Bartlett's Test of Sphericity Approx. Chi-Square 633.944

df 105

Sig. .000

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Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of

Squared Loadings

Rotation Sums of Squared

Loadings

Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

%

1 5.297 35.316 35.316 5.297 35.316 35.316 3.391 22.607 22.607

2 1.309 8.727 44.043 1.309 8.727 44.043 2.631 17.537 40.144

3 1.134 7.562 51.605 1.134 7.562 51.605 1.616 10.776 50.920

4 1.030 6.864 58.469 1.030 6.864 58.469 1.132 7.549 58.469

5 .953 6.351 64.819

6 .818 5.452 70.271

7 .766 5.109 75.380

8 .661 4.405 79.785

9 .555 3.702 83.487

10 .508 3.388 86.875

11 .505 3.369 90.244

12 .487 3.246 93.491

13 .394 2.626 96.116

14 .308 2.056 98.172

15 .274 1.828 100.000



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Gravity

Component Matrixa

Component

1 2 3 4

VAR00001 .643 -.372 .100 .121

VAR00002 .722 -.222 -.257 .173

VAR00003 .601 -.495 -.005 -.132

VAR00004 .144 -.050 .861 .147

VAR00005 .643 -.264 .144 .164

VAR00006 .677 .207 -.331 .065

VAR00007 .676 -.292 .029 -.056

VAR00008 .615 .297 .033 .055

VAR00009 .537 .084 -.217 .434

VAR00010 .610 .313 .316 -.251

VAR00011 .567 -.127 .083 -.189

VAR00012 .700 .075 -.096 -.012

VAR00013 .508 .464 .010 -.181

VAR00014 .674 .249 -.018 -.499

VAR00015 .298 .429 .144 .583


a. 4 components extracted.

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Chapter Four

A Descriptive Analysis of Indian Agriculture Exports

Anubhi Khanna, StudentPrestige Institute of Management and Research, Indore |Ruchi Jain,

StudentPrestige Institute of Management and Research, Indore | Priya Shrivastava, StudentPrestige

Institute of Management and Research, Indore | Vinod Kumar Mishra, Assistant Professor Prestige

Institute of Management and Research, Indore

Abstract:

The Indian agriculture export had been the leading product in the Indian export basket and the

position from late 1970‘s has been slipping causing frustration in the sector. Government even though

has been making proactive steps the control has yet to be established. Many researches have been

conducted on Individual products but no comprehensive and concrete research and comprehensive

research has been conducted to monitor the course of action. The current study attempts to study the

trend of the Indian agriculture using serious statistical tools by using data collected by reputed

agencies over the years.

INTRODUCTION

Till the end of the 19th century, India and China occupied prime positions in the

world‘s economies. After the industrial revolution in United Kingdom and invention of

steam engine and power looms, the economic situation of these two economies has

undergone gradual changes in the terms of their contribution to the global economy.

While these two countries accounted for more than 80% of the world‘s GDP at the

beginning of the 20th century, their trade share has come down to nearly 40% over a

period of time. Even now, while India‘s trade share is hardly 0.7%.At the beginning of

the 20th century India‘s exports were primarily cotton and spices. The trade was

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moving towards British colonies. However, in the post independence era, nearly 50%

of the GDP originated from the agricultural sector, which has now drastically come

down to 20%.Initially, the governmental policies centered around supply and demand.

The supply side took care of the land reforms, land reforms, land use, creation of

infrastructure facilities, use of technology in the farming activities, and encouraging

massive investment in irrigation and agricultural price supports on certain crops like

paddy, wheat & sugarcane. On the demand side, the government was fully active in

the management of distribution channel and creation of Food Corporation of India to

meet public distribution requirement. After the Green Revolution in the mid- 60‘s

several high yielding varieties of wheat and rice were introduced. More funds were

allocated for agricultural research, launching major and minor irrigation facilities,

financing support from the nationalized banks on the priority sector basis to meet the

short- term and long- term needs of the farming community and setting up of

agricultural market committees to ensure fair prices for the producers. As a result, the

rate of the growth of productivity per hectare of all crops increased from 2.07% in 1986

to 2.51% in 1994-95.Investment in irrigation and rural development has been declining

since the early 1990s. Rural development expenditure inclusive of rural infrastructure

and irrigation decreased from 14.5% of GDP on 2.59% in 2001. Capital formation in

agriculture has also increased from 1.6% to 1.3% of GDP in the three years ending 2001-

02. Since agriculture forms nearly 20% of the country‘s GDP, its capital formation

should be at least 25% of the Gross Capital formation. Gross capital formation in

agriculture has remained between 7% and 2.2% of the GDP, which in absolute terms

was around Rs43, 125 crore. Of these over 70% is the private sector investment by the

farmers investing in their field on the bore wells and other inputs, while public

investment for the irrigation project came from the government and the government

and other agencies. Employment growth rate in the rural India has fallen from an

average of 2.03% to just 0.58% in the seven years ending 1999-2000. The average farm

size is getting smaller each year; the cost –return of agricultural activity is adverse to


55 | P a g e

the farmers resulting in increased debt. Salient feature of national policy for the

farmers to be finalized by mid- 2007 calls for sweeping changes in mindset which will

favor greatly landless agricultural labourers, share croppers small and marginal

farmers, farmers with large holding, fisheries, dairy and poultry project owners,

plantation workers, etc. the draft policy took note of the fact that while 65% of the

country‘s population depends on the farming activity, farm population is growing by

1.84% per annum, while the farm size is getting reduced. The erratic monsoon rainfall

and agricultural pricing policy also had impact on the crop sowing trend. The planting

of the rain- fed crops of coarse cereals, pulses, oilseed, for which prices have remained

unchanged has tended to slow down during the current season in 2006 with a

comparison to the previous year is graphically shown here, which reveals the

distortion in the pattern.

Source: Conceptualized by the authors

FARMING COMMISSIONING

CONTRACT

FARMING Packed

Products

SEMI PROCESSED

FOOD/ Ready to Cook READY TO EAT

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Farming is the first step of the value chain in agriculture sector. It includes

ploughing the field, sowing the seeds in the soil, nourishing the seeds with fertilizers,

manures and applying pesticides and going for irrigation. The crops produced are then

taken to the mandi (i.e. local whole sale market formed by the association of farmers)

and are sold. In the process of selling the crop from the fields to the mandi arbitrage is

incurred. These brokers charge commission for their job. Recently some industries

have contracted farmer to grow a specific crop or crops which eventually shall be

purchased by these companies on a predetermined rate. Currently in India some big

retailers in purchase the food products(Raw) in bulk from the mandis and sell them in

well sorted and packeted form to the consumers at competitive pricing by virtue of

purchasing in bulk. The food products are even preserved and refrigerated. The Indian

retailers are largely heding towards highest profit margin. The semi processed/ready to

cook segment is now largely being targeted by most Indian food processors. Currently

such industries are scarce in India in comparison to the population. These semi

processed food are available across all the segments of retail stores. Even though there

has been no major inroads created by Indian food processing industry into the ready to

eat segment still it is very well known that this segment has the highest margin of

profit sometimes ranging upto 400%. But it is the matter of interest that many eating

joints and hotels/restaurants are opening across India. The problem that exists is the

absence of major industrial leaders into this segment.


Syeeda Khatoon (2005) Indian agricultural has been hit hard during post WTO

period (1995 - 2003). The share of agro goods in India's global export has declined

during this period. During post WTO period, agricultural subsidies of developed

countries have been rather increased. Therefore it is very difficult for India to face

global agricultural competitiveness. In this scenario, the global agricultural trade

would likely to become oligopolistic. The returns of various crops have declined due to


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increase in cost of production, slow growth of agricultural productivity, weak

marketing mechanism, increase in input intensity and fall of water table. As a result

farmers have become highly indebted and are resorting to suicides. In the near future

also the total quantum of exports particularly agriculture and light manufacturing

goods can not be raised significantly in the global market in the near future because of

limited and uncertain domestic export surplus and particularly their inelastic demand

at world market. In other words, Indian exports were considered to be supply

constrained and also were not responsive to relative price changes at the global level.

Raising the level of productivity and quality standards to internationally competitive

levels is one of the major challenges following the dismantling of quantitative

restrictions on imports, as per the WTO Agreement on Agriculture.

Siddhartha Mitra (2007) Given the slow growth of Indian agriculture in the recent

past, this paper contends that increased provision for agricultural infrastructure is an

essential prerequisite not only for inclusive growth but also for sustained growth of

the Indian economy. Agricultural growth is essential as the associated reduction in the

propensity to import food will imply that more earned incomes are ploughed back into

the economy and subjected to the multiplier. Second, agricultural growth will have a

positive effect on the current account deficit, a high level of which might lead to the

nation incurring growth impeding debt. Third, such agricultural growth, which is

powered by agricultural infrastructure investments financed by the export boom, will

stimulate domestic demand for export oriented sectors. Thus, it will help the national

economy to prepare for a future in which exports assume diminished importance as a

driver of growth and complementarities between various sectors in the economy

become much more important for growth. The paper submits that mere budgeting for

agricultural infrastructure and associated essential public services is not enough.

Government servants who get only a tiny proportion of total benefits from such

services if they use the budget to provide these, often find embezzlement of funds to be

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a more lucrative or utility enhancing option. It is therefore necessary to link successful

provision of the public service to security of tenure and viability of the provider.

Contracts for government workers or outsourcing to the private sector might be the

answer.

Zhu and Dellenbarger (2006) The US is cutting back on agricultural subsidies and

signing various free trade agreements, which will reduce the size and scope of

agriculture in the United States. As the US population grows there will be a need for

an increase in agricultural food products and that will originate from imports as

quotas are changed. The US keeps changing the quota on sugar and more sugar is now

being imported than before. With the Free Trade Agreement with Central America

even more sugar should come into the United States since sugar cane production in

many areas of the US is not cost effective and the farmers are going bankrupt. The

European Union will also need to increase their food imports as they expand into

other countries and their population grows. Asia could become the next ―Bread

Basket‖ of the world.

Kumbhar (2007) Agriculture is the main occupation of the Indian peoples.

Performance of Indian economy is dependent upon the growth of Agriculture sector. It

contributes nearly 16% of India‘s Gross Domestic Product (GDP) & 13% of total

exports. It provides employment to 52% of the country‘s work force and livelihood

security to more than 620 million people. Agriculture plays an important role in

economic development, such as provision of food to the nation, enlarging exports,

transfer of manpower to non-agricultural sectors, contribution to capital formation,

and securing markets for industrialisation. Agriculture forms the backbone of Indian

economy and even though large industrialisation in last 60 years, agriculture still

occupies a place of pleasure.


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Ahmed and Rustagi(2004) Liberalization of Indian economy has opened immense

opportunities for export of agricultural products. GCC countries are heavily

dependent on import of agricultural commodities to fulfill the needs of their rapidly

growing population. Due to geographical proximity to GCC countries and natural

comparative advantages to Indian farmers there is a large scope for exports of

agricultural commodities to GCC. Recognizing this, the paper makes an attempt to

analyze India's agro exports to GCC covering traditional and non -traditional agro

exports. The absolute value of exports of the Indian agricultural and food products has

increased significantly since the initiation of trade liberalization. However, the relative

share of India's agro and food products to GCC countries has declined during 1991-

2001. This share was 30% in .2000-01 in India's agro export, which constitutes a major

part in India's agro export indicating the importance of GCC in Indian exports. The

compound growth rate of export of other processed food was the highest as compared

to the export of other commodities to GCC. It can be concluded that Indian farmers

are relatively better placed to exploit the emerging opportunities if proper policy

support is provided to them. Thus, there exists plenty of scope for Indian agricultural

exports in the new economic environment.

Chowdhury and Kumar (2008) The SPS Agreement in the WTO gives legal validity

to the CODEX standards. Since the developed countries have been at the forefront of

setting the food standards in the CODEX, the developing countries have been

increasingly engaged in the CODEX, and also in the WTO, with an objective to

increase their exports of the agricultural and food products. But such objective and

desire have often been stymied by the lack of institutions which can sustain the

intense technical negotiations at the CODEX. If these participations are not

qualitatively satisfactory, the very objective of such participations is not fulfilled. But

since most of the developing countries are lacking in such high technical capacity, they

are unable to influence or qualitatively shape the negotiations in the CODEX. This also

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impacts their exports of agricultural and food products. India has been an active

member of the WTO. But whether it has been able to influence or respond to the play

of events internationally and concomitantly balance it with the domestic imperatives

that are embedded in the international legal and technological regimes, institutional

capacity constraints and other social issues. This paper examines such issues, and also

examines some bilateral trade agreements which demonstrate the mounting pressure

on the developing countries to conform to the food standards of the developed

countries.

Mitra and Ghosh (2008) Agricultural exports from developing countries are facing

stringent barriers in the form of sanitary and phytosanitary measures as well as

technical barriers: the need of the hour, therefore, is to develop robust Agricultural

Exporting Zones (AEZs) to promote organic cultivation of exportable produce. The

analysis of the future growth potential of AEZs in India is based on two planks: a

theoretical cost benefit analysis and a case study approach. The theoretical cost

benefit analysis highlights the trade-off between factors that enhance profitability on

the one hand and others that lead to a reduction in profitability. The case study

approach complements this theoretical analysis by looking at the ground reality of

AEZs in the Indian state of West Bengal. The case study shows that practical

considerations such as the lack of marketing alternatives; the monopoly enjoyed by

agricultural exporters; lack of market information and institutionalised

communication channels between exporters and farmers; the scarcity of suitable

variable inputs such as organic manure as well as the absence of storage infrastructure

adversely impact the bargaining power of farmers in negotiating prices for their

produce. The study therefore implies that the theoretically plausible trade-off often

does not exist in reality.


61 | P a g e

From the point of view of profitability, cultivation of organic crops is often clearly

unattractive compared to non-organic cultivation, given the institutional ground

reality prevalent in India. This important conclusion in turn leads to the policy

recommendation that for a take-off in agricultural exports, which are becoming

increasingly organic in composition, the following have to be effected - improvement

in marketing information channels (computerised information, radio and television

bulletins etc.), development of storage infrastructure (cold storages, warehouses etc.)

and greater and cheaper availability of inputs needed for organic agriculture.

OBJECTIVE:

1. To study the trend of Indian agriculture sector.

2. To understand the trend

3. To understand the Impact.

HYPOTHESIS:-

The major hypothesis of the research is:

1. The performance of Indian agriculture export is not significant compared to

the total world trade of agricultural products.

RESEARCH METHODOLOGY:-

The universe of research shall be Indian agricultural exports compared to the overall

world exports. The proposed period of study is since 2004 to 20010 spanning 07 years.

The study is descriptive in nature and is based upon secondary data. The data is

collected from various published sources like books, journals, CMIE journals, India‘s

stats, etc. descriptive statistics along with trend and regression has been used for

forecasting. The trend has been calculated using ARIMA modelling and simple linear

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regression using step wise method has been applied, post calculating the probabilistic

significance and the Durban- Watson test for values.

Results:

Upon the application o f time series analysis using ARIMA we do not get a very health

forecasting of the Indian agricultural exports for the past two years they have been

consistently dropping, the possible cause could be the overall situation of food

shortage in the world in general and also India in particular. The country for the past

few years has seen unseasonal rains causing crop damage. Upon the Inspection of the

Import data we find that India has imported large amount of raw agricultural products

from various countries. The Graph generated as a result of ARIMA time series analysis

show a very steep downward curve. Which is a sign of trouble?

Upon testing for Karl Pearson‘s coefficient of correlation the values come out to be

r = 0.712 which shows high degree of positive correlation and a together moving trend.

This also indicates that regression can be applied. Upon the application of Durbin

Watson test:

Here T is the number of observations. Since d is approximately equal to 2(1-r), where r

is the sample autocorrelation of the residuals, d = 2 indicates no autocorrelation. The

value of d always lies between 0 and 4. If the Durbin–Watson statistic is substantially

less than 2, there is evidence of positive serial correlation. As a rough rule of thumb, if

Durbin–Watson is less than 1.0, there may be cause for alarm. Small values of d

indicate successive error terms are, on average, close in value to one another, or

positively correlated. If d > 2 successive error terms are, on average, much different in


63 | P a g e

value to one another, i.e., negatively correlated. In regressions, this can imply an

underestimation of the level of statistical significance.

On the basis of the above test and the forecasting results generated above we can apply

regression.

The model thus generated is:

World Agricultural Exports = -236643.549+ (1966.611*Indian Agricultural Exports)

Conclusions:

The Indian agricultural exports are dropping at a very high pace which could produce

very serious repercussions as this also indicates growing dependencies on Imports.

The results also show that the farm sector not performing shall cause 65% of Indian

population tough times ahead and shall impact markets of tier 3 and beyond heavily.

The model generated above show high degree of Impact. It clearly indicates that the

Markets even though showing high demand India is not ready to take on the demand.

It alarms us on the under preparedness of ours for the coming challenges. Further it is

evident that India has become stagnant in the value chain and moving ahead again will

require the farm sector exports to perform.

Reference

Ahmed, Shahid and Rustagi, Puja, India's Export of Agro and Food Products to Gulf

Co-operation Council (GCC): A Study for the Period of 1991-2001 (2004). Indian

Journal of Social and Economic Policy, Vol. 1. No. 1., pp. 127-135, June 2004. Available

at SSRN: http://ssrn.com/abstract=1701565

Chowdhury, Nupur and Kumar, Sanjay, Technical Capacity, Policymaking and Food

Standards: An Overview of Indian Experience (November 10, 2008). Asian

Biotechnology and Development Review, Vol. 11, No. 1, pp. 21-41, 2008. Available at

SSRN: http://ssrn.com/abstract=1299343


Gravity

Khatoon, Syeeda,(2005), Impact of Economic Liberalization in Rural India. Available

at SSRN: http://ssrn.com/abstract=670542

Kumbhar, Vijay Maruti (2011), Performance of Agriculture Sector in India: Special

Reference to Post Reform Period. Available at SSRN: http://ssrn.com/abstract=1748246

Mitra, Siddhartha and Ghosh, Keya, Do India's AEZs Need a Fresh Start? (March 15,

2008). Available at SSRN: http://ssrn.com/abstract=1139068

Mitra, Siddhartha, (2007), Inclusive Growth in India: Budgeting and Monitoring.

Available at SSRN: http://ssrn.com/abstract=987762

Zhu, Lihong and Dellenbarger, Lynn E., (2006), Possible Implications of China Signing

Various Agricultural Trade Agreements. Available at SSRN:


Annexure:

Time Series Modeler

Model Description

Model Type

Model ID VAR00001 Model_1 ARIMA(0,0,0)

Model Fit

Fit Statistic

Mean SE Minimum Maximum







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Stationary R-squared -4.180E-14 . -4.180E-14 -4.180E-14

R-squared -4.180E-14 . -4.180E-14 -4.180E-14

RMSE 29.658 . 29.658 29.658

MAPE 7.138 . 7.138 7.138

MaxAPE 12.995 . 12.995 12.995

MAE 22.971 . 22.971 22.971

MaxAE 41.803 . 41.803 41.803

Normalized BIC 7.078 . 7.078 7.078

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Model Fit

Fit Statistic

Percentile

90 95

Stationary R-squared -4.180E-14 -4.180E-14

R-squared -4.180E-14 -4.180E-14

RMSE 29.658 29.658

MAPE 7.138 7.138

MaxAPE 12.995 12.995

MAE 22.971 22.971

MaxAE 41.803 41.803

Normalized BIC 7.078 7.078


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Model Statistics

Model

Model Fit statistics

Number of

Predictors

Stationary R-

squared R-squared RMSE

VAR00001-Model_1 0 -4.180E-14 -4.180E-14 29.658

Model Statistics

Model

Ljung-Box Q(18)

Statistics DF Sig.

Number of

Outliers

VAR00001-Model_1 . 0 . 0

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69 | P a g e

Regression

REGRESSION /MISSING LISTWISE /STATISTICS COEFF OUTS R ANOVA

/CRITERIA=PIN (.05) POUT (.10) /NOORIGIN /DEPENDENT World

/METHOD=ENTER India /RESIDUALS DURBIN.

Variables Entered/Removedb

Model

Variables

Entered

Variables

Removed Method

1 Indiaa . Enter

a. All requested variables entered.

b. Dependent Variable: World

Model Summaryb

Model R R Square Adjusted R

Square

Std. Error of the

Estimate Durbin-Watson

1 .712a .506 .383 64379.66398 1.649

a. Predictors: (Constant), India

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Variables Entered/Removedb

Model

Variables

Entered

Variables

Removed Method

1 Indiaa . Enter

a. All requested variables entered.


ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.701E10 1 1.701E10 4.104 .113a

Residual 1.658E10 4 4.145E9

Total 3.359E10 5

a. Predictors: (Constant), India



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Coefficientsa

Model

Unstandardized Coefficients Standardized

Coefficients

B Std. Error Beta t Sig.

1

(Constant) -236643.549 312863.296 -.756 .492

India 1966.611 970.779 .712 2.026 .113

a. Dependent Variable: World

Residuals Statisticsa

Minimum Maximum Mean Std. Deviation N

Predicted Value 322284.6875 477126.4688 394916.4000 58325.91619 6

Residual -56818.99219 1.08322E5 .00000 57582.92201 6

Std. Predicted

Value -1.245 1.409 .000 1.000 6

Std. Residual -.883 1.683 .000 .894 6

a. Dependent Variable: World

Page | 72

Chapter Five

Organised V/s Unorganised Retail Market

A Comparative Study

Sharda Haryani Assistant Professor, Prestige Institute of Management and Research, Indore|

Bharti Motwani, Assistant Professor, Prestige Institute of Management and Research, Indore|

Nitesh Daga StudentPrestige Institute of Management and Research, Indore | Ravi Jain

StudentPrestige Institute of Management and Research, Indore | Satyam Sharma, StudentPrestige


ABSTRACT

An important aspect of India‘s current economic scenario is the emergence of organised retail market. There has been a considerable growth in this business in recent years and is poised to grow much faster in near future. Traditionally, the Indian retail industry was largely unorganised mainly comprising of kirana stores, small grocery shops etc. The growth in the Indian organized retail market is mainly due to the changing lifestyle, high disposable income coupled with great affordability and surge in advertising of the consumer behaviour pattern. This study is an attempt to explore the way organised retail has dramatically changed not only the Indian traditional retailing structure but, also the customer‘s consumption behaviour. This study compares the relationship between gender, organised retail store and an unorganised retail store. It will also contribute in understanding that consumers and retailers have different perceptions in relation to store image and shopping habits which truly justifies the need for the consumer marketing research. This study will help the retailers to implement the results in a real marketing orientation. A survey of 250 consumers was done by administering a specifically designed questionnaire.

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INTRODUCTION

Retail industry is one of the fastest growing industries in India, especially over the last

few years. Though initially, the retail industry in India was mostly unorganized,

however with the change of tastes and preferences of the consumers, the industry is

getting more popular these days and getting organized as well. With growing market

demand, the industry is expected to grow at a pace of 25-30% annually. The India

retail industry is expected to grow from 35,000 crores in 2004-05 to 109,000 crores by

the year 2010.

India is the only one country having the highest shop density in the world, with 11

outlets per 1000 people (12 million retail shops for about 209 million households).

Rather we can see the democratic scenario in Indian Retail (because of low level of

centralization, low capital input and due to a good number of self organized retail).

Retail Format in India:

Hyper marts/supermarkets: large self-servicing outlets offering products from

a variety of categories.

Mom-and-pop stores: They are family owned business catering to small

sections; they are individually handled retail outlets and have a personal touch.

Departmental stores: These are general retail merchandisers offering quality

products and services.

Convenience stores: They are located in residential areas with slightly higher

prices goods due to the convenience offered.

Shopping malls: These are the biggest form of retail in India, malls offers

customers a mix of all types of products and services including entertainment

Organised V/s Unorganised Retail Market: A Comparative Study

and food under a single roof.

E-trailers: These are retailers providing online buying and selling of products

and services.

Discount stores: These are factory outlets that give discount on the MRP.

Vending: it is a relatively new entry, in the retail sector. Here beverages,

snacks and other small items can be bought via vending machine.

Category killers: These small specialty stores that offer a variety of categories.

They are known as category killers as they focus on specific categories, such as

electronics and sporting goods. This is also known as Multi Brand Outlets or

MBO's.

Specialty stores: They are retail chains dealing in specific categories and

provide deep assortment. Shoppers Stop Crossword Book Store and RPG's

Music World are couple of examples.

The retail industry is divided into organised and unorganised sectors. Over 12 million

outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2)

in size. Organised 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. Unorganised 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. In India, a shopkeeper of such kind of shops is usually known as a dukandar.

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/Hypermarkets

http://en.wikipedia.org/wiki/Kirana

http://en.wikipedia.org/wiki/Paan

http://en.wikipedia.org/wiki/Shopkeeper

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75 | P a g e

Organised versus unorganised

In a sharp contrast to the retail sector in developed economies, retailing in India -

though large in terms of size - is highly fragmented and unorganised. With close to 12

million retail outlets the country has one of the highest retail densities worldwide.

Retailers include street vendors, supermarkets, department stores, restaurants, hotels

and even two-wheeler and car showrooms. Counter stores, kiosks, street markets and

vendors, where the ownership and management rest with one person are classified as

traditional or unorganised retail outlets. These formats typically require employees

with low skills and account for around two-thirds of the sector's output. These are

highly competitive outlets, with minimal rental costs (unregistered kiosks or

traditional property), cheap labour (work is shared by family members) and negligible

overheads and taxes.

However, unorganised retailers suffer due to poor shopping experience and inability to

offer a wide range of products and value-addition due to lack of sourcing capabilities.

The modern Indian consumer is seeking more value in terms of improved availability

and quality, pleasant shopping environment, financing options, trial rooms for

clothing products, return and exchange policies and competitive prices. This has

created a rapidly growing opportunity for organised, modern retail formats to emerge

in recent years and grow at a fast pace. Inefficiency in the existing supply chains

presents further opportunity for organised players to draw on this large market even

as lack of consumer culture and low purchasing power restricted the development of

modern formats. Migration from unorganised to organised retail has been visible with

economic development in most countries.


LITERATURE REVIEW

Mathew Joseph and Manisha Gupta (September 2008) states that 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. There is a huge untapped market is present in India right now which

contains a number of opportunities for retailer.

Sharma, S.R., Tiwari, Prakash & Verma, Hemraj (2008) did an Empirical Study on

Customer Perceptions about Vishal Mega Mart and its Impact on Shopping Behavior

in Dehradun City (2008). They proposed that a big parking lot, a centralized Air-

Conditioned (AC) environment covering spacious floors, soothing music, a tempting

visual display of products with self selection facility and a variety of products priced

with occasional heavy discounts are some of the features which affect the choice

of selection of store.

A study by Ergin Akagan Elif (2007) compare the influence of quality, price

sensitivity and brand knowledge factors on brand loyalty for national versus stores

brands. The results reveal that the consumers brand loyalty for national brands are

quiet strong as compared to store brands.

Sinha and Banerjee (2004) the investigation of the shopping orientation by the

researchers indicates that the Indian shoppers seek more of hedonic pleasure than the

functional value of shopping (Sinha and Banerjee, 2004). Many consider shopping as a

task and want to finish as soon as possible where as others derive entertainment value

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77 | P a g e

out of their shopping.

Radhakrishnan (2003): Traditional Retailers Perceptions about Organized Retail:

The study reveals that 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. It is

reported that there is significant difference in organized retail on other types of retail,

namely toys, stationery goods and household appliance

Ergeneli & Ankan (2002) studied the effect of some demographic factors like age and

income etc on ethical behaviour and revealed that there was no significant difference

in ethical perceptions based on gender. However, female salespeople had more ethical

score than their male counterparts at two age groups viz. less than 20 years of age and

age group of 40-49 years. Similarly, regarding the effect of income, the results

indicated that the only significance between male and female salespeople was the

income level of 200-300 millions at which female salespeople had higher ethical scores

than male salespeople

Chandrasekhar (2001) several investigations emphasize the possible coexistence of

different store formats and others point out the 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.

Leszczyc and Timmermans (2001) found that consumers generally preferred to shop

at specialty stores and were found to select a store for its neatness, low prices, low

parking costs and wider assortments.


A study by Forsythe and Bailey (1996) found that customer‘s characteristics such as

age, gender, marital status, occupational status and customer shopping enjoyment

determine the amount of time spent by a customer for shopping. The more customers

ensure shopping enjoyment, the more time is spent on shopping. A negative

association was found between age and time spent on shopping for females. Further

income was not identified as significant variable, consumers with professional careers

spent less time shopping than non professional consumers.

SCOPE AND DESIGN OF THE STUDY

The study is exploratory in nature and focuses basically on primary data about impact

of organized and unorganized retail on male and female customers of Indore region of

MP (India). The study is based on survey method. The sample size consisted of 250

respondents. The respondents were selected through non probability convenience

sampling method. The respondents were given self structured questionnaire with five

point likert scale. The Questionnaire adopted in this study consists of 30 statements.

Five point likert scales was drawn on left hand side and right hand side of each

statement to record the responses for both the sectors separately. The respondents

were asked to give response for both the sectors. Statistical package for social

sciences (SPSS 18.0) and MSExcel 2007 were used for analysis .One way ANOVA and

post hoc test were used to analyze the data.

OBJECTIVES

The main objective of the study is to compare the perception of male and female on

organized and unorganized retail store.

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79 | P a g e

RELIABILITY OF THE MEASURES

Reliability of the measures was assessed with the use of Cronbach‘s Alpha. Cronbach‘s

Alpha allows us to measure the reliability of different variables. As a general rule a

coefficient greater than or equal to 0.7 is considered acceptable and is a good indicator

of reliability. The Cronbach‘s Alpha for the questionnaire is 0.9078.Hence it is reliable

and can be used for analysis.

HYPOTHESES

H01: There is no significant difference between perception of male and female for

organised and unorganised retail sector

H02: There is no significant difference between the perception of male for organized

sector and female for organized sector.


sector and male for unorganized sector.


sector and female for unorganized sector.

H05: There is no significant difference between the perception of female for

organized sector and male for organized sector.


organized sector and male for unorganized sector.



organized sector and female for unorganized sector.

H08: There is no significant difference between the perception of male for

unorganized sector and male for organized sector.


unorganized sector and female for organized sector.


unorganized sector and female for unorganized sector.


unorganized sector and male for organized sector.


unorganized sector and female for organized sector.


unorganized sector male for unorganized sector.

RESULTS AND DISCUSSION

Result of Annova in table 1 depicts that p value is .000 therefore the null hypothesis

H01 is rejected at 5% level of significance i.e. there is significant difference between

perception of male and female for organised and unorganised retail sector

In order to find significant difference between perception of male and female on

organised and unorganised retail sector multiple comparison are done using Tukey

test.

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81 | P a g e

Results of Tukey test In table 2 depicts p value between the groups is 0.982 therefore

the null hypothesis H02 is accepted at 5% level of significance i.e. there is no difference

between the perception of male for organized sector and female for organized sector.

The p value between other group is 0.000 therefore the null hypothesis H03 is rejected

at 5% level of significance i.e. there is no significant difference between the perception

of male for organized sector and male for unorganized sector. The p value between

male for organized sector and female for unorganized sector is 0.000 therefore the null

hypothesis H04 is rejected at 5% level of significance i.e. There is significant difference

between the perception of male for organized sector and female for unorganized

sector.

In table 2 the p value between female for organized sector and male for unorganized

sector is0.982 therefore the null hypothesis H05 is accepted at 5% level of significant

i.e. there is no significant difference between the perception of female for organized

sector and male for organized sector. The p value between other group is 0.000,

therefore the null hypothesis H06 is rejected at 5% level of significance i.e. there is

significant difference between the perception of female for organized sector and male

for unorganized sector. The p value between another group is 0.000 therefore the null

hypothesis H07 is rejected at 5% level of significance i.e. there is significant difference

between the perception of female for organized sector and female for unorganized

sector.

In table 2 the p value between male for unorganized sector and female for organized

sector is 0.000 therefore the null hypothesis H08 is rejected at 5% level of significant

i.e. there is significant difference between the perception of male for unorganized

sector and male for organized sector. The p value between other group is 0.000

therefore the null hypothesis H09 is rejected at 5% level of significant i.e. there is

significant difference between the perception of male for unorganized sector and

female for organized sector. The p value between male for unorganized sector and


female for unorganized sector is 0.871 therefore the null hypothesis H010 is accepted at

5% level of significant i.e. there is no significant difference between the perception of

male for unorganized sector and female for unorganized sector.

In table 2 the p value for other group is 0.000 therefore the null hypothesis H011 is

rejected at 5% level of significant i.e. there is significant difference between the

perception of female for unorganized sector and male for organized sector. The p value

between female for unorganized sector and female for organized sector is 0.000

therefore the null hypothesis H012 is rejected at 5% level of significant i.e. there is

significant difference between the perceptions of female for unorganized sector and

female for organized sector. The p value between other group is 0.871 therefore the null

hypothesis H013 is accepted at 5% level of significant i.e. there is no significant

difference between the perception of female for unorganized sector and male for

unorganized sector.

Findings reveal that in most of the cases there is significant difference in the

perception of male and female for organized and unorganized stores. The study

reported that there are no differences in the perception of male and female when either

organized or unorganized sector is compared .But there is significant difference if both

the sectors are compared together. Gender wise significant difference is found

between the customers perception about organized and unorganized retail stores on

various attributes. The organized retail stores 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".

CONCLUSION AND LIMITATIONS

Globalization and liberalization have opened new vistas in the retail outlet. It is

estimated that organized stores are going to give a tough competition to unorganized

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83 | P a g e

stores Findings also confirm the perception that the new wave towards shopping in

organized retail sector has emerged among consumers .This research is limited to the

demographic profile as gender and is restricted to the people of Indore city. Similar

kind of research with extended version can be conducted on large sample with

different demographic profiles . This study can be extended to people of different

cities for exploring the different perceptions of organised and unorganised retail

stores for the clearer picture.

REFERENCES

Elif Ergin Akagan (2007),‖analysis of consumers brand loyalty on national versus

store brands‖, EABR (business) and ETLC (teaching) conference proceedings..

Ergeneli, Azize and Semra Ankan (2000), Gender Difference in Ethical Perceptions

of Salespeople: An Empirical Examination in Turkey, Journal of Business Ethics,

Vol. 40, 247-260.

Forsythe, S.M., Bailey, A.W. (1996). ―Shopping enjoyment perceived time poverty,

and time spent shopping‖ Clothing and textiles research journal, volume 14 No.1 pp.

185-91.

Joseph, M., Gupta, M., Soundararajan, N., Sahu, S. (2008), ―Impact of Organized

Retailing on the Unorganized Sector‖

http://www.eSocialSciences.com/data/articles/Document12392008160.7534143.

Leszczyc, P.T.L.P., Timmermans, H. (2001) ―Experimental choice analysis of

shopping strategies‖, Journal of retailing, volume 77 no.4 pp. 493-509.

Radhakrishnan, K. (2003). Organised retail: Forging ahead, Praxis, 4 (1) 47-51.

http://www.esocialsciences.com/data/articles/Document12392008160.7534143


Sharma, S.R., Tiwari, Prakash & Verma, Hemraj(2008).An Empirical Study on

Customer Perceptions about Vishal Mega Mart and its Impact on Shopping

Behavior in Dehradun City. SSRN eLibrary.

Sinha Piyush Kumar, Banerjee Arindam (2004), ―Shopping Orientation in the

evolving Indian Market‖, International Journal of Retail and Distribution

Management, Vol 32, No. 10, pp 482-493, Emerald Group Publishing Company.

Annexure:

RESULT ANOVA

Sum of Squares

df Mean Square

F

Sig.

Between Groups

126231 3 42077.1 359.386 0

484

Within Groups

56667 117.081

Total 182898 487

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Multiple Comparisons ;Dependent Variable: TOTAL; Turkey HSD

Mean Difference (I-J)

95%

Std. Error

Sig. Confidence Interval

(I) GENDER (J)

GENDER Lower Bound

Upper Bound

Male Organised

Female

Organised -0.52 1.388 0.98 -4.09 3.06

Male Unorganised

32.41 1.347 0 28.94 35.9

Female

Unorganised

31.35 1.388 0 27.78 34.9

Female Organised

Male

Organised 0.52 1.388 0.98 -3.06 4.09

Male

Unorganised

32.93 1.388 0 29.35 36.5

Female Unorganised

31.87 1.427 0 28.19 35.6

Male Unorganised

Male

Organised -32.41 1.347 0 -35.88 -28.9

Female

Organised -32.93 1.388 0 -36.51 -29.4

Female

Unorganised -1.06 1.388 0.87 -4.64 2.52

Female Unorganized

Male

Organised -31.35 1.388 0 -34.93 -27.8

Female

Organised -31.87 1.427 0 -35.55 -28.2

Male

Unorganised 1.06 1.388 0.87 -2.52 4.64

* The mean difference is significant at the .05 level.

Page | 86

Chapter Six

Preferences and barriers of usage of ICT tools in the modern

education system:

A student’s perception

Sharda Haryani Assistant Professor, Prestige Institute of Management and Research, Indore|


Jaspreet Kaur Sawhney StudentPrestige Institute of Management and Research, Indore |

Deepika Maheshwari StudentPrestige Institute of Management and Research, Indore | Jyoti

Thapar, StudentPrestige Institute of Management and Research, Indore

ABSTRACT

Creative and innovative applications of information and communication technologies (ICTs) are important potential tools in enabling educational reform processes thereby, improving both access to education and the quality of education. ICT is regarded as an enabler, which facilitates productivity and enhances quality of learning . It also enhances other aspects of student activities in the information era. ICT has influenced the education in various ways which is potentially a key instrument for students to think creatively, effectively communicate, identify and analyze existing information and create knowledge. But, Most initial programs focused largely on the technology itself, placing very little emphasis on the practical implications of the use of ICTs to meet broad educational objectives. Hence, this paper is a step to explore the various factors affecting the of use of ICT in education system. This will help the people in the education system to effectively use the ICT tools thereby, enhancing its importance in the modern scenario. A survey of 250 students of different colleges was done by administering a specifically designed questionnaire.

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87 | P a g e

INTRODUCTION

Information and communication technologies(ICT) ,has emerged as an inevitable

phenomenon influencing every walk of life of people in all the sections of society with

the ease of availability of enormous computing power and convenient access to large

volume and variety of data and information. Due to fast growth of information

technology and emerging role of digital media and information, the role ICT in

education is becoming more and more important.

The use of ICT can helps to light up learning and education system and transformative

advancements on a national level. It has created unmatched opportunities in education

sector and has enabled the students and teachers to increase there knowledge by using

advances in ICT. Thus, internet, multimedia, video conferencing, computer added

designs, animation and graphic user interface are all tools which enhance imperative

learning in a simpler way and supports the schools and universities on technological

edge.

ICT can be used as a tool in the process of education in the following ways:

Informative tool: It provides vast amount of data in various formats such as

Audio, video, documents.

Situating tool: It creates situations, which the student experiences in real life.

Thus,simulation and virtual reality is possible.

Constructive tool: To manipulate the data and generate analysis.

Communicative tool: It can be used to remove communication barriers such

as that of space and time (Lim and Chai, 2004).

Preferences and barriers of usage of ICT tools in the modern education system::A student’s

perception

Education is transforming its way from teacher centric forms of delivery to student

centric forms. The use of ICT helps the students to visualize material that would be

more difficult to assess in traditional forms of education. It enables students to learn

and review and teachers to analyze the students‘ behavior and work. India has a large

network of open universities which impart education through distance learning more

or providing online course material to the students. Digitization of education is also a

significant result of ICT. ICT is also being used to help in teaching through television

and teleconferencing. Thus ICT stands for a diverse set of tactical tools and recourses

that can be used to promote education on a large scale.

In the current Information society, there is an emergence of lifelong learners as the

shelf life of knowledge and information decreases. People have to access knowledge

through ICT to keep pace with the latest developments (Plomp, Pelgrum & Law,

2007). In such a scenario, education, which always plays a critical role in any economic

and social growth of a country, becomes even more important. The various kinds of

ICT products available and having relevance to education, such as teleconferencing,

email, audio conferencing, television lessons, radio broadcasts, interactive radio

counseling, interactive voice response system, audiocassettes and CD ROMs etc have

been used in education for different purposes (Sharma, 2003; Sanyal, 2001;

Bhattacharya and Sharma, 2007). This paper tries to explore the various factors that

influence potential usages of ICT and to study emerging challenges in the use of ICT in

education sector

. LITERATURE REVIEW

Casal (2007) mentions that ICTs also provide a platform for sharing information and

knowledge. This can be used for the betterment of program delivery in terms of

replication of best practices. It also helps researchers by provision of information,

networking, online journals,libraries and data.

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Muhammad Z.M.Zain et.al.(2004)studied the impact of Information and

Communication Technology (ICT) on the management practices in the Malaysian

Smart Schools and revealed that the impact of ICT has resulted in changes that include

the enrichment of the ICT culture among students and teachers, more efficient student

and teacher administration , better accessibility to information and a higher utilization

of school resources. This analysis revealed that time constraints ,higher administrative

costs ,problems related to imposed rigid procedural requirements are among the

challenges encountered by the schools.

Bottino(2003) and Sharma (2003) mention that the use of ICT can improve

performance, teaching, administration, and develop relevant skills in the

disadvantaged communities. It also improves the quality of education by facilitating

learning by doing, real time conversation, delayed time conversation, directed

instruction, self-learning, problem solving, information seeking and analysis, and

critical thinking, as well as the ability to communicate, collaborate and learn (Yuenet

al, 2003).

According to Sanyal and Bikas (2001), the ICTS can support education through

various ways such as supporting education in school. Providing distance education

and in-service professional development for the teachers, providing non-formal

education for out of school children and adults, and enhancing the management of

schools. The possibility of real time interaction in all the different aspects of the

education system like teaching, collaboration, debates etc hold great promise for the

future (Mason, 2000)

A key development in the use of ICT in higher education has been the increased use of

the Internet and e-mail communications: in some instances this has led to the adoption

of virtual learning environments (HEFCE, 2000a). Some educational policy-makers

have become quite excited by the potential of the technology to deliver online learning,


perception

where ‗many of our universities are developing imaginative responses to the

opportunities, sometimes individually, sometimes in groups‘ (HEFCE, 2000b, p. 6),

but how are these developments likely to be received by students?

High prices of computers and low penetration of internet and telephones are the main

obstacles in the growth of e- learning in developing countries. Ehrmann (Ehrmann

1994),identified four distinct approaches of quality education which can be supported

by ICT i.e. real time conversion, learning by doing, delayed time conversation and

directed instruction.

Hawkridge (Hawkridge,et.al.,1990)suggested that the use of ICT can support

developing relevant skills in the disadvantaged communities helping in liberating and

transformation in addition to improve performance ,teaching and administration,

positive impact on the education as a whole. Thomas,(1987), pointed out four major

economic consideration that could effect the adoption of ICT in a country are

:Financial strength of the society ;attitude of policy makers ;Cost –efficency of the

technology and budget allocation for the technology.

Thomas,(1987),also identified that the cultural element of languages is one of the most

significant factor in the implementation of ICT in developing countries . The elements

of human factors like language barriers ;cultural differences ;gender issues and nature

of society must be addressed to meet the challenge. The success of any ICT and its

widespread usage rests mainly on its ability to fullfill socio –cultural needs of its

citizens and providing gains in commercial terms ;like in India where internet is being

used for personnel and socio-communication reasons. These socio –cultural factors

will lead the developing countries going to the main ICT users

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OBJECTIVE OF THE STUDY

To explore the potential usages of ICT and emerging challenges in education sector.

METHODOLOGY

The study: The study is exploratory in nature carried out to investigate factors

influencing students‘ perception towards use of ICTs.

The Sample: Non probability convenience sampling technique was used for data

collection . The sample of the study was constituted of 244 respondents from various

management colleges of Indore city.

Tools for data collection: Primary data for the study was collected through a self

structured questionnaire. The questionnaire consisted of 34 statements with 5-point

Likert scale

Tools for data analysis: The analysis of collected data was done by statistical package

for social sciences (SPSS 11.0) and MS Excel 2007.Item total correlation and factor

analysis were used to analyze the data.

Reliability of the measures: Reliability of the measures was assessed with the use of

Cronbach Alpha. Cronbach Alpha allows us to measure the reliability different

variables. As a general rule a coefficient greater than or equal to 0.7 is considered

acceptable and is a good indicator of reliability. The Cronbach Alpha for the

questionnaire is 0.88.Hence it is reliable and can be used for analysis.

FINDINGS


perception

Items total Correlation was conducted to identify non significant items and this

resulted in dropping of 3 items out of 34 items .The factor analysis was carried out on

31 significant items that resulted into 9 factors that influence students‘ perception

towards the use of ICT in education system .These factors are tabularized with their

items, eigen values and percent of variances in annexure 1.The discussion of each factor

is as follows:

Modernization has evolved as the first major factor. It comprises of four items that are-

Modern approach(0.784),Increased the accessibility of information (0.768) ,Improved

speed and style of learning( 0.665),user friendly (0.425).The total factor load is 2.845

with 9.202 % of variance. Plomp et al, (2007)said that There is a worldwide need felt

for integrating ICT into education in order to improve the pedagogy to reflect the

societal change .

Effective Learning: This factor comprised of five items namely superior over traditional

method of learning (0.706) ,clarity of thoughts (0.682), updating knowledge(

0.644),visual impact(0.591),mobility and compatibility(0.477). Total factor load is

3.1and 8.996 % of variance. According to Bhattacharya and Sharma,( 2007) e- Learning

allows higher participation and greater interaction. It challenges the concept that face-

to-face traditional education is superior to it.

Economical: It has constituted of three items Reduces manpower (0.746) ,Save trees

and paper (0.725), Enhanced the teaching through digital medium(0.446). The total

factor load is 1.817 and 7.247 % of variance. The study by McGorry (2002) also reveals

that ICT can be used as a tool to overcome the issues of cost, less number of teachers,

and poor quality of education

Increased competency comprises of five items namely improved working environment

(0.687) increased national competitiveness (0.665), systematized work (0.523)

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technological up gradation (0.479), facility of teleconferencing and audio conferencing

(0.665).Total factor load is 2.792 and 7.046 % of variance. According to McGorrry

(2002) education system also being driven by technological advances, competitive

pressures and the positive experiences of many early adopters.

Effective communication comprises of four items i.e effective communication

(0.594).Safety and precautions (0.561) effective delivery of lectures/presentations

(0.536) available anytime anywhere (0.447) The total load is 2.138 and 6.359 % of

variance .The study (Sanyal, 2001;Mooij, 2007; Cross and Adam, 2007; UNESCO, 2002;

Bhattacharya and Sharma, 2007); confirms the ICT eliminates geographical and time

barriers as learners can log on from any place and at any time.

Interpersonal skills comprises of three items i.e. increased dependency (0.808)

adversely affects the interpersonal skills (0.804) loss of communication skills and

interactive abilities between teachers and students (0.665) .The total load is 2.277and

6.163% of variance. According to Mason (2000) It can affect the bonding process

between the teacher and the student as ICT becomes a communication tool rather

than face to face conversation and thus the transactional distance is increased.

Accuracy Four items are associated with this factor; World has come closer (0.629),

reduces the chances of human error (0.628). Ample amount of information in less time

through various links (0.628) technological development of a country (0.486) Total

Load is 2.371and 5.999% of variance. Education is the driving force of economic and

social development in any country (Cholin, 2005; Mehta and Kalra, 2006).

Considering this, it is necessary to find ways to make education of good quality,

accessible and affordable to all, using the latest technology available.

Trustworthiness: Two items are associated with this factor. They are no technical

problem (0.735), trust worthy(0.616) total load 1.351and 5.565% of variance. Mooij

(2007) states that differentiated ICT based education can be expected to provide


perception

greater reliability, validity, and efficiency of data collection and greater ease of analysis,

evaluation, and interpretation at any educational level. In absence of ICT, most of the

responsibility of teaching and learning lies on the teachers.

Health hazards: Only single item is associated with this factor i.e. adverse affect on

health with total load 0.749 and 4.034% of variance.

Future challenges

Though ICT offers a whole lot of benefits, there are great challenges which hamper

the use ICT in education. ICT in education program require large capital investments.

Also, since not all the teachers are experts with ICT they may lack in updating the

course content online which can slow down the learning among students. . It can

affect the bonding process between the teacher and the student as ICT becomes a

communication tool rather than face to face conversation and thus negatively effects

the interpersonal skill. The potential of plagiarism is high as student can copy

information rather than learning and developing their own skills. Findings in this

paper also confirm that use ICT can effect communication skill and it is cost effective

also . It can be impersonal, superficial, misdirected, and potentially dehumanizing and

depressing and that they can disrupt the interactions that create a learning community

(Rovai, 2003). . Another major problem which hampers the growth of ICT in

education and development process in Indian economy is poverty and illiteracy. The

need is to solve these problems and hence effective implementation of ICT takes

place.

Suggestions

Information and Communication Technology has the potential to remove the barriers

that are causing the problems of low rate of education in any country.

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It mean that adopting the new technologies in education system can result in

effective learning which is the most important goal of any educational institute.

Although there is availability of resources for ICT but the working environment is

perhaps not immediately tangible. Extensive training programme for educators should

be conducted by the government and the private Institutions. Students should be

encouraged to use latest technologies in their presentations and assignments.

Curriculum should be planned such that maximum usage of ICT takes place.

CONCLUSION

ICT provide wider range of best practices and best course material in education,

which can foster better teaching. ICT also allows the academic institutions to reach

new international educational markets. Thus, ICT enabled education will ultimately

lead to the democratization of education.

ICT increases the flexibility of delivery of education so that learners can access

knowledge anytime and from anywhere. It can improve the quality of learning and

thus contribute to the economy. It provides several tangible and intangible benefits for

all stakeholders involved in the economic growth of the country. However, integration

of ICT in education is a complex process and it can only be possible with tactical

support, trained teachers and infrastructures.

References:

Bhattacharya, I. & Sharma, K. (2007), 'India in the knowledge economy – an electronic

paradigm', International Journal of Educational Management Vol. 21 No. 6, pp. 543-568.

Bottino, R. M. (2003),'ICT, national policies, and impact on schools and teachers'

development''CRPIT '03: Proceedings of the 3.1 and 3.3 working groups conference on


perception

Internationalfederation for information processing', Australian Computer Society, Inc.,

Darlinghurst,Australia, Australia, 3-6.

Casal, C. R. (2007), 'ICT for education and development', info ISSN: 1463-6697 Volume: 9

Issue: 4, 3 - 9.

Chandra, S. & Patkar, V. (2007), 'ICTS: A catalyst for enriching the learning process and

library services in India', The International Information & Library Review 39(1), 1-11.

Cholin, V. S. (2005), 'Study of the application of information technology for effective access

toresources in Indian university libraries', The International Information & Library Review

37(3),189-197.

Cross, M. & Adam, F. (2007), 'ICT Policies and Strategies in Higher Education in South

Africa:National and Institutional Pathways', Higher Education Policy 20(1), 73-95.

Ehrmann, Stephen C, (1994), responds to the triple challenge facing post secondary education:

access, quality, costs. Report prepared for the OECD, international conference.

Hawkride, D., jawoski , J., and MC mohan , H. (1990), computers in the third world schools :

examples. Experiences and issues, London, Macmillan.

Lim, C. P. & Chai, C. S. 2004. An activity-theoretical approach to research of ICT integration

in Singapore schools: Orienting activities and learner autonomy. Computers & Education

43(3): 215-236.

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Mason, R. (2000), 'From distance education to online education', The Internet and Higher

Education 3(1-2), 63-74.

McGorry, S. Y. (2003), 'Measuring quality in online programs', The Internet and Higher

Education 6(2), 159-177.

McGorry, S. Y. (2002), 'Online, but on target? Internet-based MBA courses: A case study', The

Internet and Higher Education 5(2), 167-175.

Mehta, S. & Kalra, M. (2006), 'Information and Communication Technologies: A bridge for

social equity and sustainable development in India', The International Information & Library

Review 38(3), 147--160.

Mooij, T. (2007), 'Design of educational and ICT conditions to integrate differences in

learning:Contextual learning theory and a first transformation step in early education',

Computers inHuman Behavior 23(3), 1499--1530.

Muhammad Z.M. Zain , Atan H. Idrus R. (2004) the impact of information and

communication technology (ICT) on the management practices of Malaysian smart schools.

International generals of educational development , 24(2), 201-211

Plomp, T.; Pelgrum, W. J. & Law, N. (2007), 'SITES2006—International comparative survey

of pedagogical practices and ICT in education', Education and Information Technologies

12(2), 83-92.

Rovai, A. P. (2003), 'A practical framework for evaluating online distance education

programs',The Internet and Higher Education 6(2), 109-124.


perception

Sachdeva , sameer (2003) , E-Readiness assessment. E-commerce, 2(12), 50

Sanyal, B. C. (2001), 'New functions of higher education and ICT to achieve education for

all',Paper prepared for the Expert Roundtable on University and Technology-for- Literacy

and Education Partnership in Developing Countries, International Institute for

EducationalPlanning, UNESCO, September 10 to 12, Paris

Sharma, R. (2003), 'Barriers in Using Technology for Education in Developing Countries',

IEEE0-7803-7724-9103.

Sida (1999) , IT in Swedish development co_operation : suggestions for raise of including the

low income countries , finance and corporate development department , sida , swedan

Thomas , T.M. (1987) , growth of communication technology , the nature of educational

technology , educational technology , 4 as cited in INGOU . communication technology for

distance education , FS-318, 34

UNESCO, (2002), 'Open And Distance Learning Trends, Policy And Strategy

Considerations',14 UNESCO.

Yuen, A.; Law, N. & Wong, K. (2003), 'ICT implementation and school leadership Case

studies of ICT integration in teaching and learning', Journal of Educational Administration

Vol. 41 No. 2, 158-170.

HEFCE (2000a) HEFCE launches e-University business model, press release,

October,http://www.hefce.ac.uk/News/HEFCE/2000/euniv2.htm

http://www.hefce.ac.uk/News/HEFCE/2000/euniv2.htm

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HEFCE (2000b) Business model for the e-University, PricewaterhouseCoopers Report,

00/44, p. 6,http://www.hefce.ac.uk/pubs/hefce/2000/00_44.htm

Annexure

Factors Items Item load Factor load %variance

ICT is a modern

approach. 0.784

The use of ICT has increased the

accessibility of information.

0.768

Modernization The use of ICT has improved the speed

and style of learning. 0.665 2.645

ICT is user friendly. 0.428

9.202

It leads to visual impact which helps in

memorizing things easily.

0.591

ICT is more attractive than the traditional method of learning.

0.706


perception

ICT improves the

clarity of thoughts. 0.682

ICT is a significant method of updating

knowledge. 0.644 3.1 8.996

Effective Learning

ICT provides the facility of mobility and compatibility.

0.477

This system helps to save trees and paper.

0.725

Economical ICT requires less 0.746

1.917

manpower for its

conduction. 7.247

It has enhanced the

teaching 0.446

through digital

medium.

ICT provides the

facility of 0.438

teleconferencing and audio conferencing.

ICT has lead to

0.479

Increased competency

technological up gradation.

7.046

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ICT has improved

0.687 2.792

working environment.

ICT has increased national

competitiveness. 0.665

ICT helps in

systematic work. 0.523

ICT helps in effective delivery of

lectures/presentations. 0.594

Effective communication

ICT needs special safety and

precautions. 0.561

ICT helps in effective

communication. 0.536 2.138

ICT‘s services are available anytime

anywhere. 0.447

6.359

ICT has increased dependency

0.804

Interpersonal skills

ICT adversely affects the interpersonal

skills. 0.808 2.277

ICT results in loss of communication skills

and interactive abilities between

teachers and students.

0.665

6.163


perception

ICT reflects the technological

development of a country.

0.486

Accuracy ICT reduces the

chances of human error.

0.628

ICT gives ample amount of information

in less time through various links.

0.628 2.371

World has come closer with the use of

ICT. 0.629

5.999

Use of ICT is trust

worthy. 0.616

Trustworthiness No technical problem is associated with the

use of ICT. 0.735 1.351 5.565

Health hazards Use of ICT has

adverse affect on health.

0.749 0.749 4.034

Page | 103

Chapter Seven

A study on Hookah Addiction amongst undergraduate students:

With special reference to Indore city

Sukhjeet Matharu Assistant Professor, Prestige Institute of Management and Research, Indore|

Manvi Sharma StudentPrestige Institute of Management and Research, Indore Mayank

Chhabra StudentPrestige Institute of Management and Research, Indore | Mohil Tiwari,


Abstract:

Hookah with or without tobacco is highly addictive product which is injurious to health causing

diseases such as lung infections. The main aim of present study is to determine the prevalence of hookah

addiction amongst the undergraduates in Indore City. Now a day Hookah Smoking is becoming more

popular amongst undergraduates. The study will be conducted in month of March 2011 on 3-4 hookah

lounges. A sample of hundred respondents will be considered. A structured questionnaire will be used

for the purpose of data collection. Major factors that motivate students to go for this addiction will be

identified on the basis of responses of the sample respondents. Through this paper an attempt has been

made to highlight the adverse effects of hookah smoking and create awareness amongst the

undergraduate students.

INTRODUCTION

Hookahs also known as water pipes are beautiful and exotic pieces of artwork

generally made up of metal or glass scrollwork or multicolored hoses and bowls.

Hookahs come in varying sizes and can have either a single or multiple hose hook-up.

The Hookah or the water pipe usually consists of four parts. The base, a smoke

A study on Hookah Addiction amongst undergraduate students: With special reference to Indore city

chamber partially filled with water. The bowl holds both the shisha and the heating

source usually charcoal. There is an internal pipe dipped in to the water, it connects

the bowl and the base. A tube connects to the pipe and the air inside the base allows

the user to inhale the smoke. While smoking a hookah, the user inhales through the

mouthpiece that is connected to the tubing. This creates a pressure difference that

forces the air past the charcoal or heating source and heats up the shisha which creates

smoke. This smoke is then cooled as it passes through the water chamber. Thus we

can say that the hookah operates with indirect heat and water nitration. The hookah

culture in India started from South Asian Countries. Mostly it is used for smoking

fruit flavored tobacco.

'Shisha', western version of hookah, a well known local smoking tool, has captured the

youngsters belonging to higher class while the Shisha bars are doing immense

business. The name 'Shisha' may seem orient to the readers, but the local "hookah" is

well known as a smoking tool and has come to the generation with a new decoration,

named, Shisha, already welcomed in the western countries. In the hookah parlors there

is common sight of youngsters sitting in clusters munching on the bar food, relaxing

and taking long drags of flavored smoke while kidding around. According to tobacco

trade magazines and retailers throughout the nation, the hookahs have been growing

in popularity over the past seven years. The entire credit for its popularity amongst

undergraduates goes to its extensive marketing and easy availability. A number of

hookah parlors have cropped up in the city in the recent few years especially around

the higher education institutes. The young crowd is attracted towards it without

being aware of its harmful effects or just by ignoring its adverse effects.

Literature review

Hookahs, also known as water pipes, originated about 400 years ago in Persia

and India. They are packed with tobacco cured with an array of flavors, often

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fruits like bananas, strawberries and pineapple. In the United States, hookahs

were rarely seen outside a handful of ethnic bars and restaurants until a few

years ago. It is often said that if hookah is addictive, it‘s more addictive as a

social thing than as a chemical thing. (Cox and Jeramy)

The hookah bar operators charge a relatively small fee for providing the shisha

and charcoal flavored hookah apparatus. The earlier in age people begin

smoking, the more likely they are to become strongly addicted to nicotine, and

physical addiction to nicotine can develop extremely rapidly. (Wakefield et al,

1998) These facts are likely true whether the nicotine is delivered via cigarette

or hookah. Cigarette smoking in the United States is at its lowest level in 55

years, with proportionate decreases among adolescents. (Johnston et al, 2005)

An anonymous quote from www.theshisha.com states, "Smoking shisha is

nothing like smoking a cigarette. Cigarettes are for nervous people, competitive

people, and people on the run. When you smoke shisha, you have time to think.

It teaches you patience and tolerance, and gives you an appreciation of good

company. Shisha smokers have a much more balanced approach to life than

cigarette smokers."

The biggest myth surrounding the hookah is that it is safer than smoking

cigarettes. It is true that filtering the tobacco through water removes some of

the dangerous toxins. However, according to a World Health Organization

Advisory, even after passing through water, the tobacco smoke still contains

high levels of carcinogens, including carbon monoxide. The smoke itself

transports considerable levels of nicotine - nearly three times that of smoking

cigarettes, increasing the risk of addiction. Typically, a hookah session lasts 3 0

http://www.the/


minutes to an hour. This amount of time exposes the user to 100 to 200times

the smoke volume inhaled by a single cigarette.(Jaecks Swanson, 2008).

Objectives

(1)To explore factors that affect undergraduates‘ perception about hookah smoking.

(2) To create an awareness about the ill effects of hookah smoking

Methodology

The study is exploratory in nature and based on primary survey. It was conducted in

the month of March 2011. The sample of the study constituted of 100 respondents from

Indore city. The respondents were selected on the basis of regularity of visits to the

hookah parlors. The data was collected through a self structured five point likert scale.

For data analysis item-total-correlation was calculated on the data collected for 25

items to find out which items significantly contribute towards measuring the

perception of undergraduates for hookah smoking. The data was finally subjected to

Principal Component Method of Factor Analysis.

Results and Discussions

On applying statistical package for social science (SPSS) on our data having 25

questions which further in rotated component matrix there are seven factors which

came out.

Factor 1 Trendy is constituted of 7 items i.e it has become a necessity in my life.

Hookah smoking was opted by me to show off & act like adults. I feel it is in fashion

& trend. It acts as a stress reliever for my family problems. I feel restless if I am not

able to smoke hookah. On seeing my friends smoking hookah creates a desire in me

too. Total load of this factor is 3.967.Queston number 3 i.e It has become a necessity in

my life has the highest factor load of .744. Eissenberg et al., in a cross-sectional study

conducted at a large public university, found that students who were current water

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pipe users were more likely than students with no history of water pipe use to have

smoked cigarettes, cigars, or cigarillos in the preceding 30 days; to believe that water

pipe use makes their peers look cool; and to believe that water pipe use is socially

acceptable among their peers. They also found, in general, that water pipe users were

younger, that they were less likely to be African American, that they report lower

perceived harmfulness or addictiveness of water pipe use compared with cigarette use,

and that they report lower perceived social acceptability Many hookah smokers feel

smoking hookah is trend in society and acts as a stress reliever from their problems it

has become a status symbol.

Factor 2 Appeal are constituted of 7 items i.e I never stay behind in trying new things.

I am delighted by the flavor of hookah. I have recently acquired this habit. Hookah

smoking makes me feel elated & happy. I can afford smoking hookah. Hookah is

environment friendly? Hookah smoking is good for health. Total load of this factor is

4.015. Question number 12 i.e I never stay behind in trying new things has the highest

factor load of .711 For young adults already in that developmental place of believing no

harm will befall them, the message of risk goes largely unheard. Though hookah

smoking is a social fun and does not result in staining of teeth, does not smell like a

cigarette, there is no hangover, the dangerous tar is filtered out through water, aids in

relaxation and stress relief (Jaeks & Swanson, 2008).

Factor 3 Awareness are constituted of 4 items i.e Hookah parlors are easily accessible.

I am aware of the ingredients used in the hookah. I am aware of the warning signals

displayed in the hookah parlors. I take my own decisions. Total load of this factor is

2.655. Question number 13 i.e Hookah parlors are easily accessible has the highest

factor load of .797 For young adults already in that developmental place of believing no

harm will befall them, the message of risk goes largely unheard. The hookah parlors

have cropped up in places near their educational institutes and thus are easily

accessible. Though hookah smoking is a social fun and does not result in staining of

teeth, does not smell like a cigarette, there is no hangover, the dangerous tar is filtered


out through water. It aids in relaxation and stress relief. It has certain implications

such as increased exposure to smoke (Jaeks & Swanson, 2008)

Factor 4 Prohibition are constituted of 3 items i.e I am aware that hookah smoking is

addictive and injurious to health. If given a chance I would give up this habit. Hookah

parlors should be banned. Total load of this factor is 2.144. Question number 20 i.e If

given a chance I would give up this habit has the highest factor load of .759. Hookah

parlors are on a rise in the city. The media has always played a persuasive role in the

sense of highlighting the problem for attracting the attention of the responsible high

authorities to take some serious action with regard to issue of license to such parlors.

But a mass effort will prove helpful in banning the hookah parlors cropping up at an

alarming rate in the city. In addition to the dangers of the heated tobacco and

accompanying toxins, the sharing of water pipes may lead to an increase in orally

transmitted infectious diseases.

Factor 5 Ill effects are constituted of 2 items i.e. I am aware that hookah kills one

human being every six seconds. I am aware of harmful effects of hookah smoking.

Total load of this factor is 1.436. Question number 6 i.e. I am aware of harmful effects

of hookah smoking has the highest factor load of .720. Smoking becomes such an

integral part of the smoker's life that the rapid emergence of many withdrawal

symptoms, when trying to kick the habit, such as headaches and sleep disorders, are

extremely troublesome. Added to this are frustration, a general sense of dissatisfaction,

tendency to isolation and depression, as well as the continual craving for

nicotine.(Ramkumar 2010)

Factor 6 Persuasion is constituted of 2 items i.e. I have been an average performer in

studies. For the first time I was pressurized by my friends to taste it. Total load of this

factor is 1.198.Question number 23 I have been an average performer in studies has the

highest factor load of .645. Most of the respondents were of the opinion that they

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never had been excellent performer in academics. In case of hookah addiction it is

interesting to note that peer group pressurizing plays a major role.

Factor 7 Counselling is constituted of 1 item i.e. I have been counselled by my

teachers/parents to quit this habit. Total load of this factor is .675. Today it is strongly

required that parents and teachers should play a motivational role in dispensing moral

and ethical values to their wards. This will definitely help the youngsters to have

strong determination to stay away from such addictions and thus move their career

and lives in positive direction.

Conclusion

Since a number of hookah parlours have cropped up in the city especially around

colleges and high schools. It is imperative for the higher authorities to restrict them.

Media and other means of mass communication have always tried to attract the

attention of public towards the growth of these hookah parlours at an alarming rate.

Though the warnings that hookah contains tobacco and may be injurious to health are

displayed in the parlours, but still the students are unaware of its harmful effects.

Many previous studies suggest that water pipe tobacco smoking is prevalent among

high school students as well. Self motivation and determination is required for the

adolescents to get rid of this habit. There is a need for further research and education

in the area of hookah addiction amongst the youngsters, and public health personnel

can play an important role in enhancing knowledge in this area.


References

Cox&Jeremy .Despite Warnings, hookah bars, restaurants on rise: Public Health experts say

that hookah aficionados should worry about health ramifications.

Eissenberg T, Ward KD, Smith-Simone S, Maziak W. Waterpipe tobacco smoking on a U.S.college

campus: prevalence and correlates. J Adolesc Health. 2008;42: 526-529.

Johnston L, O'Malley P, Bachman J, Schulenberg J. Monitoring the Future: National Survey

Results on Drug Use, 1975-2004. Volume II: College Students & Adults Ages 19-45,

2004.

Jackson D, Aveyard P. Waterpipe smoking in students: prevalence, risk factors, symptoms of addiction,

and smoke intake. Evidence from one British university. BMC Public Health. 2008;8:174.

Jaecks, Keilli Swanson,Smoking the Hookah 2008,Medical Sciences Dentistry, pp 38-39, 43-44

http://search.proquest.com/docview/225017638?accountid=135227 assessed on April 2,2011 at

11:00 a.m.

Primack BA, Sidani J, Agarwal AA, Shadel WG, Donny EC, Eissenberg TE. Prevalence of and

associations with waterpipe tobacco smoking among U.S. university students. Ann Behav Med.

2008;36:81-86.

Ramkumar K.S. Mc.Clatchy. Hubble-bubble Trouble: Shisha smoking popular for relaxation, but not

without health risks.–Tribune Business News, Journal of Business and Economics, United States,

Published on Sep2010. .http://search.proquest.com/docview/749160558?accountid=135227

Wakefield MA, Terry-McElrath YM, Chaloupka FJ, et al. Tobacco industry marketing at

point of purchase after the 1998 MSA billboard advertising baa AmJ Public Health.

2002;92:937-940.

http://www.theshisha.com accessed on April 2,2011 at 11:00 a.m.

http://search.proquest.com/docview/225017638?accountid=135227

http://www.theshisha.com/

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Annexure

Factor Item Item

Load

Factor

Load

Eigen

Value

Percentage

of Variance

Trendy

It has become a necessity in my life. 0.744

3.967 6.549 26.197

Hookah smoking was opted by me to

show off & act like adults. 0.687

I feel it is in fashion & trend. 0.685

It acts as a stress reliever for my

family problems. 0.626

I feel restless if I am not able to

smoke hookah. 0.621

On seeing my friends smoking

hookah creates a desire in me too. 0.604

Appeal

I never stay behind in trying new

things. 0.711

4.015 2.997 11.989 I am delighted by the flavor of

hookah. 0.629

Hookah smoking makes me feel

elated & happy. 0.592

I have recently acquired this habit. 0.568

I can afford smoking hookah. 0.554

Hookah is environment friendly? 0.49


Hookah smoking is good for health. 0.471

Awareness

Hookah parlors are easily accessible. 0.797

2.655

1.648

6.591

I take my own decisions. 0.711

I am aware of the ingredients used in

the hookah. 0.612

I am aware of the warning signals

displayed in the hookah parlors. 0.535

Prohibition

If given a chance I would give up this

habit. 0.759

2.144 1.513 6.051 Hookah parlors should be banned. 0.706

I am aware that hookah smoking is

addictive and injurious to health. 0.679

Ill effects

I am aware of harmful effects of

hookah smoking 0.72

1.436 1.301 5.204 I am aware that hookah kills one

human being every six seconds. 0.716

Persuasion I have been an average performer in

studies. 0.645 1.198 1.183 4.731

For the first time I was pressurized

by my friends to taste it. 0.553

Counseling I have been counseled by my

teachers/parents to quit this habit. 0.675 0.675 1.061 4.244

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Chapter Eight

Youngsters’ perception of Social Networking Site:

An Empirical Study

Sukhjeet Matharu Assistant Professor, Prestige Institute of Management and Research, Indore|


Swapnil Pisal StudentPrestige Institute of Management and Research, Indore | Shantanu Dev

StudentPrestige Institute of Management and Research, Indore | Pallavi Shivhare, StudentPrestige


Abstract Today youngsters are spending a great deal of time using Social Networking Sites like Facebook,orkut, twitter, blog, linkedin,myspace,hi5, yahoo messenger to access public life. These social networking sites are easily accessible to the youngsters with the help of electronic gadgets like cell phones, laptops, and palmtops. These sites exert a great influence on the youngsters mind and even their life schedule is affected by it. The present paper examines the differences of the perception of a cohort of youngsters of 16- 24 years old on the basis of gender. This paper also tries to determine different sites used for social networking, membership availed, information shared and various tools for using them. Perception of security issues and time spent by youngsters are also focused in this research paper for providing better view of youngsters in usage of social networking sites. Introduction


Social networking refers to the use of a specific type of website focused on the creation

of online social networks which allow its users to interact. These are web-based

services that allow individuals to construct a public or semi-public profile within a

bounded system, to articulate a list of other users with whom they share a connection,

to view and traverse their list of connections and those made by others within the

system. The nature and nomenclature of these connections may vary from site to site.

.It is a web site that provides a virtual community for people interested in a particular

subject, to simply "hang out" together or to increase their circle of acquaintances.

There are dating sites, friendship sites, sites with a business purpose and hybrids that

offer a combination of these. Globally, hundreds of millions have joined one or more

social sites such as Facebook, MySpace, Twitter and LinkedIn are highly popular

among the youngsters. These sites help them in communicating with other people

including their friends, classmates, family, relatives and other persons with similar

interests.

Social Networking sites have gained popularity among the youngsters as these are

extremely helpful in developing interpersonal relationships. Human beings are societal

and in order to survive in this society they develop relationships with other humans.

SNS have enhanced relationship with family and friends especially those that people

have not seen or heard from in a long time. Youngsters make use of these sites to

reconnect with each other and also to keep in touch with everyone. Youngsters prefer

to log on to these sites on a regular basis. It has become a sort of addiction to be logged

on to these sites. These sites are freely accessible with the help of a computer

connected to the internet and with the help of mobile phones that enable internet

browsing. Users of social networking sites can view profile of other persons which

includes their details, photos, videos, applications used by them and comments posted

by other persons.

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Social networking sites help interaction with others very easy whether you know

them or not. On one hand these sites promote friendship among users without face to

face interaction. Such sorts of friendships are not always reliable but to some extent

suspicion is involved in it. Youngsters are able to maintain their identity, interact with

their peers. Social games offered such as Farmville, teen Patti, mafia war are a great

source of entertainment.

Facebook : was launched in 2004 as a service meant for students enrolled at Harvard

University. Soon after, it opened its doors to students at other colleges, first to

members of prestigious institutions then gradually a more diverse set of schools (boyd

and Ellison, 2007). In 2005, it provided limited access to teenagers from specific high

schools and members of certain companies. Finally, in 2006, the service became

accessible to the public.

Orkut: is a social networking site and is owned and operated by Google Inc. It is

designed to help users meet new friends and maintain existing relationships. The

website is named after its creator, Google employee Orkut Buyukkokten. It is one of

the most visited websites in India and Brazil. As of April 2010, 48.0% of Orkut's users

are from Brazil, followed by India with 39.2% and United States with 2.2%. As of

March 2011.The website currently has more than 100 million active users worldwide.

Anyone 18 years old or older can join Orkut.

LinkedIn: is a business-oriented social networking site. It was founded in December

2002 and launched in May 2003 it is mainly used for professional networking. As on

22 March 2011, LinkedIn reports more than 100 million registered users, spanning

more than 200 countries and territories worldwide. The site is available in English,

French, German, Italian, Portuguese and Spanish.


Twitter: is a social networking and micro blogging website, based in San Francisco,

California, also having servers and offices in San Antonio, Texas and Boston. Twitter,

Inc. was originally incorporated in California, but has been incorporated in the

jurisdiction of Delaware since 2007. Since being created in March 2006 by Jack

Dorsey and launching that July, the website has gained popularity worldwide and is

estimated to have more than 200 million active users, generating 65 million tweets a

day and handling over 800,000 search queries per day. It is sometimes described as the

―SMS of the Internet‖. Twitter enables users to send and read text-based posts

composed of up to 140 characters, called tweets, which are displayed on the

user's profile page. Users can subscribe to other users' tweets – this is known

as following and subscribers are known as followers or tweets ('Twitter' + ―peeps‖ '). By

default, tweets are publicly visible, though senders can restrict message delivery to just

their followers. Users can tweet via the Twitter website, compatible external

applications (such as for smart phones), or by Short Message Service (SMS) available

in certain countries. While the service is free, accessing it through SMS may incur

phone service provider fees.

Literature review

A recent study found that college students use Facebook, a popular social networking

site, to maintain their social capital . They use Facebook to stay linked with people

with whom they used to be more closely involved, e.g., former classmates (Ellison,

et.al. 2007). A related study investigated whether college students use Facebook for

―social searching‖ or ―social browsing‖. Social searching occurs when a Facebook user

looks up particular individuals he or she already knows or has become aware of via an

offline connection in order to learn more about them. Social browsing, on the other

hand, occurs when users try to find strangers online whom they would like to meet

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offline. Overwhelmingly, college students are using Facebook for social searching

(Lampe et.al. 2006).

The results of the study by Coyle and Vaughn, 2008 shows that the main purpose of

social networking is to keep in touch with friends. Our findings also indicate that

social networking sites are used for trivial communications (i.e., unimportant message

content) with friends, both close and non close, and that they are used to maintain

friendships, but as a non central form of socializing. Social networking may be

convenient for retaining contact when time and distance are issues, but it does not

replace voice calls and face-to face communication. Not a single respondent of the 68

people we surveyed answered that he or she used social networking sites to meet new

people.

SNWs have become most popular among younger users such as university students.

One reason they may have become so popular among younger individuals is that they

have an equalizing effect in that individuals often feel the freedom to express

themselves in ways not possible through other outlets. SNWs have even been

identified as increasing self-esteem among younger people. University students access

SNWs from various locations: home, school, and other locations, such as libraries,

coffee shops, and even Internet cafes. Each location has varying amounts of privacy and

concurrent offline social involvement with others. We believe that home locations

allow maximum privacy and freedom of self-expression; thus, we expect that SNW

users who primarily access their SNWs at school or elsewhere are less likely to make

friends online. ( Peter cardon et al, 2009)

As with any type of excessive Internet use, overuse of SNWs has the potential to

negatively affect an individual‘s study, work, health, and personal relationships. Young

adults are more likely than any other age group to have an SNW and engage in higher


levels of use (almost 3 hr=day). Despite the increasing popularity of SNWs, however,

there is still little known about the psychosocial variables that predict people‘s level of

use.

Objectives

1. To comparatively analyse the perception of youngsters about social

networking sites on the basis of gender.

2. To determine the extent of usage and popularity of social networking sites.

3. To determine the different purposes and tools associated with the usage of

social networking sites.

4. To determine the various information provided by the users on social

networking sites.

Hypotheses

H01: There is no significant difference between male and female youngsters in their

perception of the social networking sites.

Methodology

The Study: The study is exploratory in nature and based on primary survey. It was

conducted in the month of March 2011.

The Sample: The sample of the study constituted of 150 respondents from Indore city.

The respondents were selected on the random basis and mainly belonged to the age

group of 17-25 years.

Tools for Data Collection: The data was collected through a self structured

questionnaire which was divided in 3 sections. The first section had general

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information while the second section had questions regarding usage and purposes of

social networking sites and the third section constituted of five point likert scale.

Tools for Data Analysis: For data analysis, percentage analysis was applied on some

questions and MS-Excel was used for calculating item-total-correlation for 24 items to

find out significant items contributing for measuring the perception of youngsters

towards the use of social networking sites. Since, all the item correlation was found to

be greater than 0.196 so all the items were subjected to further analysis. Statistical

analysis was done using SPSS 18.0 and independent t-test was used to compare the

perceptions of different genders.

Results and Discussions

Hypotheses Testing:

Mean perception score of male respondents is 47.65476 and of female respondents is

51.81818. The results of H01 reveal that there is no significant difference in the

perception of male and female youngsters in their perception of the social networking

sites. As t= 0.0812 > 0.05, therefore hypothesis H01 is accepted. The outcome was in

contrast to the findings of the study by Morahan et al. 2003. In his study the results of

chi-square analysis indicated that there was a significant difference in the extent of

sharing of opinions among males and females (p value <.05, hypothesis rejected). The

reason for this could be that women in India are still cautious about using SNWs for

various reasons. Many factors, like demographic characteristics (Whitty, 2002) and

psychological characteristics (Morahan-Martin & Schumacher, 2003), affect an

individual‘s online social behavior. The results of this study indicate that there are

significant differences in the usage of SNWs based on demographic characteristics like

age, usage of the Internet, and gender. Morahan-Martin, J., & Schumacher, P. (2003).


Other Parameters used in usage of Social Networking sites:

Membership of social networking sites: As depicted in figure 1, maximum youngsters

were the members of Facebook, Orkut was also preferred by many users but twitter,

Hi5, MySpace and LinkedIn were least preferred sites by youngsters for social

networking.

Figure 01: Member of the social networking sites

Purposes : Out of 150 respondents , 94 respondent‘s main purpose for using social

networking sites was Connectivity with friends, 38 users used for General awareness,

29 users were concerned because they wanted to move with trends, 75 preferred

because they wanted to chat , 45 were interested just for leisure and fun and 21 people

were interested for establishing network (fig 2)

0

50

100

150127

84

30 12 9 8

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Figure 02: Purpose of using social networking sites

Trust on social networking site: out of 150 respondents, 91 respondents trusted that

their site will not use their information in a wrong way while 59 did not had trust on

the sites as far as their personal information was concerned.

020406080

10094

38 29

75

40 21


Figure 03: Trust on the social networking site

Tools to use social networking sites: The different tools used by people for accessing

networking sites are PC, laptop, Smartphone etc. Out of 150 respondents, 95 used

their individual laptops for social networking sites, 75 used PC for social networking

sites, 35 used smart phone while only 10 used other means for social networking sites.

91

59

trust site

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Figure 04: Tools to use social networking sites.

Extent of usage of social networking sites: 95 of 150 respondents spend time less

than 2 hrs for social networking sites, while 28 users used to spend more than 5 hrs for

social networking and only 27 users spend between 2 to 5 hrs for social networking

sites.

Figure 05: Extent of usage of social networking sites.

Information provided on sites: As depicted by figure 6, 100 respondents provided their

e-mail ID on the site, while everybody provided their mobile no on the site. Only 80

users disclosed their real names on the sites, while only 77 people actually inserted

their photographs on the site.

0

10

20

30

40

50

60

70

80

90

100

PC laptop smartphone others

75

95

35

10

95 27

28

usage < 2yrs

5 yrs>usage > 2yrs


Figure 06: Information provided on social networking sites

Conclusion

The present study shows that there are no gender differences in the perception of

users regarding social networking sites. The study revealed that Facebook was the

most popular social networking site in the view of the youngsters. A great proportion

of the students lacked trust on the website as far as the personal information was

concerned. Connectivity with the friends emerged as the main reason behind the

usage of social networking site while other prominent reasons were meeting with

trends, chatting, leisure and fun etc. To better evaluate the impact on SNW usage on

youngsters, we suggest that future research is needed to assess the differential use of

social networking sites across the world. Furthermore, this study relied on group

samples of university students in Indore city and was thus not necessarily

representative of the cultures at large; therefore, future studies that include

representative samples of national cultures could contribute further to research about

offline and online social ties across cultures.

100 101

150

80 64

77 73

0

20

40

60

80

100

120

140

160

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References

C. Lampe, N. Ellison, and C. Steinfield, ―A Face(book) in the Crowd: Social Searching vs. Social

Browsing,‖ Proc. 20th Anniv. Conf. on Comput. Supported Cooperative Work (CSCW ‗06) (Banff,

Alberta, Can., 2006), pp. 167–170.

Caplan S. Problematic Internet use and psychosocial wellbeing: development of a theory-based

cognitive-behavioral measurement instrument. Computers in Human Behavior 2002; 18:553–75.

Cardon, Peter W. et al. Online and Offline Social Ties of Social Network Website Users: An

Exploratory Study in Eleven Societies.(Journal of computer information systems, pp. 54- 64 Fall 2009,

University of South Carolina, Columbia, SC 29208

Cheryl L. Coyle and Heather Vaughn, Social Networking: Communication Revolution or Evolution?

Bell Labs Technical Journal 13(2), 13-18 (2008) Alcatel-Lucent, Published by Wiley Periodicals, Inc.

Published online in Wiley Interscience (www.interscience.wiley.com)

Morahan-Martin, J., & Schumacher, P. (2003). Loneliness and social uses of the Internet. Computers in

Human Behavior, 19, 659–671.

Murnan C. Expanding communication mechanisms: they‘re not just e-mailing anymore. Special

Interest Group on University and College Computer Services 2002; 5:267–72.

N. B. Ellison, C. Steinfield, and C. Lampe, ―The Benefits of Facebook ‗Friends‘: Social Capitaland

College Students‘ Use of Online Social Network Sites,‖ J. Comput.-Mediated Commun., 12:4 (2007),

1143–1168.

Raacke J, Bonds-Raacke J. MySpace and Facebook: applying the uses and gratifications theory to

exploring friend- 758 Pelling and White networking sites. CyberPsychology & Behavior 2008; 11: 169–

74.Volume 12, Number 6,2009.

S. Henderson, ―The Social Network, Support and Neurosis: The Function of Attachment in Adult Life,‖

British J. Psychiatry, 131 (1977), 185–191.

Whitty, M. T. (2002). Liar, liar! An examination of how open, supportive and honest people are in chat

rooms. Computers in Human Behavior, 18, 343–352.


Annexure

Group Statistics

GENDER N Mean Std. Deviation Std. Error Mean

TOTAL 1 84 47.655 15.077 1.645025364

2 66 51.818 13.533 1.665767929

F Sig. t df Sig. (2-tailed)Mean DifferenceStd. Error Difference95% Confidence Interval

Lower Upper

TOTAL Equal variances assumed2.104336 0.148998 -1.75541 148 0.081259 -4.16342 2.37177 -8.85033 0.523488

Equal variances not assumed -1.77838 145.345 0.077432 -4.16342 2.34113 -8.79048 0.463637

Levene's Test for Equality of Variances

Page | 127

Chapter Nine

A Study on the Export Potential of Soya, Leather and Textile

from Madhya Pradesh

Manish Joshi, Assistant Professor, Prestige Institute of Management and Research, Indore|

Anshul Diwakar, StudentPrestige Institute of Management and Research, Indore | Rohit Maal,

Student Prestige Institute of Management and Research, Indore

| Rahul Kabra, Student Prestige Institute of Management and Research, Indore

ABSTRACT

The Madhya Pradesh has immense potential for growth of exports in various sectors. The purpose of this research is to determine the export potential of Soya, Leather and Textile sectors from Madhya Pradesh on the basis of their recent export performance from the state. Statistical data that is used for our research, provided by several organizations like DGFT, SEZ, which helped us to validate our results to determine the contribution of the state in the international trade & in Indian economy. We assume and hope that this will enable to produce efficient and useful results for the entrepreneurs, government and who so ever it may concern. In our study we collected secondary data from reliable sources like government websites, business magazines etc. as per it was required. Our emphasis will be primarily on identifying the export growth for recent decade of the mentioned sectors Soya, Leather and Textile. For the same we applied the Trend-Analysis method on the available statistical data of above mentioned sectors to derive the export potential from the Madhya Pradesh. This study inculcates the information regarding the export potential of our state: Madhya Pradesh. It will encourage stake-holders to initiate the exports of concerning sectors along with the sustainable growth and that will not only lead to promotion of exports of our state but also this will give the pace to growth of emerging Indian economy.

A Study on the Export Potential of Soya, Leather and Textile from Madhya Pradesh

INTRODUCTION

Madhya Pradesh exports a variety of products and services to both developed and

developing countries. The details of exports of products surveyed by IIFT which do

not include iron, steel, cotton yarn are furnished below:

Products Exports *

Export Markets

Soybean Extractions 1344 Indonesia, South Korea, Japan, Singapore, Malaysia, China, Iran, Thailand.

Soya Products

Leather Products

Silk Goods

Readymade Garments

20

170

10

40

Saudi Arabia, Turkey, Malaysia, Russia

U.K., Germany

U.S.A, Germany

U.S.A, France, Germany, Kuwait, U.A.E.

Castings 98 USA, UK, Italy, Middle East

Auto Parts 30 USA, Iran, UK, Italy, Middle East

Pharmaceuticals 10 Australia, Sri Lanka, USA, UK, Germany, Middle East

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Cement 116 Nepal, Bangladesh, Bhutan

Computer Software 34 USA, Europe

Handicrafts 8 USA, Europe

Medicinal Plants 5 USA, Canada, West Europe, Japan, Indonesia

Tendu Leaves/Bidi 17 Pakistan, Sri Lanka, UAE, USA

Diamond 1000 USA, Western Europe

Manganese Ore 30 Japan, China

Total 2,927

* Export values in Rs. in Crores

Exports performance of these various indicates in the above table covering 22 products

valued at Rs.2, 927 crore, represent around 75 per cent of the total exports from the

State of the year 2001-2002. It may be seen that soybean extractions, contributing 44

per cent of the total exports, dominate the external sector of the State.

(http://www.sezindore.com/exports.html dated: 23rd April 2011 at 2.18 pm)

Export Scenario of SOYA in Madhya Pradesh

The Majority of all the soybeans in India are grown in the province of Madhya

Pradesh. Alone, this province produces 81 percent of all the soybeans grown in India.

The remaining growing areas are centered on Madhya Pradesh, which lies in the center

http://www.sezindore.com/exports.html


of the nation. In most of India, soybeans are planted from the first of June through the

end of August. Soybeans will then begin to flower and develop pods during the time

span of mid-July through mid-October. The harvest will then take place from mid-

September through the end of December.

In India Madhya Pradesh, Maharashtra, Rajasthan and Andhra Pradesh are the major

producers of soybeans. Madhya Pradesh tops the list. Nearly 88% of soybean is

produced in the state. During 1997-98 total soybean production in the state was 49.19

metric tons which was about 84.2% of the total produce.

SOPA

The Soybean Processors Association of India, popularly known as SOPA. Is the only

national level body representing the soybean processors, famers, exporters and brokers

in India working towards the aim to strengthen soybeans as a viable crop? The main

objective of SOPA is to encourage the development and promotion of soy-bean

products in the interest of the farmers as well as the processors. SOPA was established

in 1979 with its headquarters at Indore in the state of Madhya Pradesh, the main

soybean- growing region of India. Soya bean has been used as a source of protein for

many years in human diets Soya bean mean is the byproduct of soya bean, obtained

after the oil is extracted from soya bean.

The protein content in soya bean meal is 65% M.P. soya bean processing plants are

well equipped with modern processing technology, testing facilities and material

handling systems. The combination of all these results into production of quality soya

bean meal DOC, which has the inherent higher protein compare to other soya bean

meal .M.P. Producing the soya bean meal, which have good growth potential in the

domestic consumption and have high demanding export market? The soya bean mean

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has its users in the poultry and livestock industry (12 lake tones), dairy, cattle feed (1.2

lake tons) & aqua feed segment. The demand for soya bean meal in the poultry and

cattle feed segment is growing consistently in the recent years. (http://www.sopa.org

dated 26th March 2011 at 5.38pm)

Export Scenario of Leather in Madhya Pradesh

The Leather Industry holds a prominent place in the Indian economy. This sector is

known for its consistency in high export earnings and it is among the top ten foreign

exchange earners for the country. With an annual turnover of over US$ 7 billion, the

export of leather and leather products increased manifold over the past decades and

touched US$ 3.40 billion in 2009-10, recording a cumulative annual growth rate of

about 5.43% (5 years).The Leather industry is bestowed with an affluence of raw

materials as India is endowed with 21% of world cattle & buffalo and 11% of world

goat & sheep population. Added to this are the strengths of skilled manpower,

innovative technology, increasing industry compliance to international environmental

standards, and the dedicated support of the allied industries. The leather industry is an

employment intensive sector, providing job to about 2.5 million people, mostly from

the weaker sections of the society. Women employment is predominant in leather

products sector with about 30% share.

Though India is the second largest producer of footwear and leather garments in the

world, India accounts for a share of close to 3% in the global leather import trade of

US$ 137 billion (2008). The major production centers for leather and leather products

are located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul ;

West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra & Noida ; Madhya Pradesh –

Dewas ; Maharashtra – Mumbai ; Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra

Pradesh - Hyderabad ; Haryana - Ambala, Gurgaon, Panchkula and Karnal; Delhi

Indian Leather Footwear Industry

http://www.sopa.org/


India is the world's second largest producer of footwear; its production estimated over

700 million pairs per annum. At about US $ 300 million per year, footwear accounts

for 18 percent share of total exports of leather exports. Various types of shoes

produced and exported from India include dress shoes, casuals, moccasins, sports

shoes, huaraches, sandals, ballerinas, and booties. Major production centres are

Chennai (Madras), Delhi, Agra, Kanpur, Mumbai, Calcutta and Jallandhar.

Indian Saddlers Industry

India is one of the largest producers of saddler and harness goods in the world. The

saddler industry was established in the 19th century primarily to cater to the needs of

military and police. From then on initiatives were taken to develop, the industry and

today there are over 150 units in the organized sector, out of which approximately 105

are 100% export oriented units.

Kanpur, in the state of Uttar Pradesh, is a major production centre for saddler goods in

India accounting for more than 95% of the total exports of saddler items from India.

Kanpur, because of its specialization in tanning and finishing of buffalo hides is the

only centre in the country where harness leather, which is major, input for saddler

industry, is manufactured.

Indian Leather Garments Industry

The Leather Garment Industry occupies a place of prominence in the Indian leather

sector. The product classification of leather garments comprise of jackets, long coats,

waist coats, shirts, pant/short, children garments, motorbike jackets, aprons and

industrial leather garments.

Indian leather garments, which entered the world market only in the mid-eighties

with exports of Rs. 15 crores in 1997-98, account for about Rs. 1530 crore in 1997-98.

The major export destination of leather garments from India is Germany. In 1997,

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German imports of leather garments aggregated DM 1786 million of which DM 304

million worth of imports went from India. India, China and Turkey were the major

suppliers of leather garments for the German market, as they accounted for about 78%

of the market share.

Major Markets:

The major markets for Indian leather products are Germany with a share of 14.45%,

UK 13.41%, Italy 11.72%, USA 8.71%, Hong Kong 7.35%, France 7.53%, Spain 6.43%,

Netherlands 4.03%, Belgium 1.92%, U.A.E.2.03% and Australia 1.58% These 11

countries together accounts for nearly 79.16% of India‘s total leather products export.

Indian Leather Exports – Some important Facts & Figures

India is the largest livestock holding country - 21% large animals and 11% small

animals

A source for 10% world leather requirement

About 2.50 million workforce (30% women)

Annual production value is over U$ 4 billion

Annual export value is over U$ 2 billion

Export growth CAGR 8.20% (2000-04)

Promising technology inflow and FDI

High priority to occupational safety and work environment

Compliance to environmental standards


Immense potential for future growth (domestic as well as export) ( World

Statistics, ITC, Geneva India's export, DGCI & Shttp://www.india-

exports.com/leather.htmlDated 01 April, 2011 at

7:00pm,http://www.leatherindia.org/Dated 01 April, 2011 at 7:30pm).

Export Scenario of Textile in Madhya Pradesh

The industrial history of M.P. dates back to the later part of 19th Century when in

1866, a cotton textile unit was established by the then Maharaja Holkars Indore. It had

the pride of owning some of the largest mills of yester-years like the Hukumchand

Mills, Bhandari Mills, JC mills etc.The textiles of Madhya Pradesh are a part of the rich

heritage of India. The weaving, printing and coloring of textiles of Madhya Pradesh

have been influenced by the bordering States of Orissa, Gujarat, Maharashtra,

Rajasthan and Uttar Pradesh. Hand block printing is one of the important crafts of

Madhya Pradesh. The Malwa and Nimar regions are renowned for their hand block-

printed cotton textiles. The art of tying and dyeing fabric is known as Bandhanior

Bandhejin Madhya Pradesh. Mandsaur produces excellent bandhanis. The craftsmen

of Ujjain& Indore produce exquisite samples of tie and dye.

Textile Infrastructure in MP

–One of the highest cotton producing State in India – 14.50 lac bales of production in

2009-10

–Country‘s 6% cotton produced in MP

–More than 55 Textile mills in the State

–Textiles exports from Madhya Pradesh worth US$325 million per annum

–Rich tradition of weaving and knitting

http://www.india-exports.com/leather.html

http://www.india-exports.com/leather.html

http://www.leatherindia.org/

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135 | P a g e

Madhya Pradesh contributes approximately 6% of the total cotton yarn produced in

the Country. Sixty textile mills already exist in Madhya Pradesh, out of which 20 mills

are composite, 6 units are weaving and 12 of them are export oriented units. The

installed capacity of spindles in Spinning Mills in the State as on early 2010 is 15,

11,000.Present Textile exports from Madhya Pradesh are approx. `1800 crore per

annum.Pratibha Syntex, STI Phoenix, Maral Overseas is major players in apparel

manufacturing. State has approximately 43290 power looms and 47000 handlooms at

present. State produces approximately 20 lakh bales of cotton every year. Burhanpur,

Chanderi, Maheshwar and various other parts of Malwa region are renowned textile

clusters which are best known for quality cotton weaving and fabrics. Textiles mills in

the State are producing world class Denim and export quality apparels. Largest

producer of staple fibre-yarn is in the State at Nagda. Indore and Jabalpur are

renowned ready-made garment and apparel clusters in the State. One textile park is

proposed in district Chhindwara under SITP Scheme. Two apparel parks one each at

Indore and Jabalpur are proposed to be established. An Apparel Park for integrated

textile units is being built up within the SEZ in Indore. This will have State of the Art

Common Effluent Treatment Plant (CETP).Separately a ready-made garment complex

is being developed in Pardesipura in Indore. A ready-made garment Complex is

coming up in Jabalpur. Textile specific ITI‘s are being developed on PPP mode.

(GLOBAL INVESTOR MEET-II) and (- www.texmin.nic.in , IBEF Dated:- 30th March

2011 at 6:18 pm).

LITERATURE REVIEW

Literature review of Soya

In the early 1970s, prices of edible oil on the domestic market rose sharply. Beginning

in 1976/77, India had to increase the import of edible oil and from 1977/78 to 1987/88,

imports constituted about 30 percent of the total availability of edible oils in the

http://www.texmin.nic.in/


country. Between 1981/82 and 1987/88, India imported on average 1377 million tons of

edible oil, which corresponded to about 44 percent of the domestic production of

edible oil. At this time soybean cultivation was being launched in India. (N.K. Mishra

October-December, 2004) soybean has grown in importance and is next only to

groundnut in terms of the output of oilseeds in India. With an annual production of

around 6-7 million tons, soybeans constitutes about 25% of total oilseed production of

the country in 2004. Between 1981 and 2004, the output of soybeans grew at about

10% per annum although the growth seems to be tapering off in the last 4-5 years. The

de trended series is remarkably stable with its coefficient of variation around 8%.

Soybean production is concentrated in the state of Madhya Pradesh that accounts for

nearly 75% of the country‘s output. The crop year is October-September and 60% of

the crop marketing‘s occur in the period from November – January. Soybean prices

exhibit a typical pattern of seasonality where the low price occurs in the harvest

months of October-November after which prices rise till June when they level off.

(Bharat Rama Swami, Jatinder Bir, May, 2007)

India is one of the major exporters of soy meal to the Asian countries and in 2008-09 ,

India is estimated that the production, export and domestic consumption of soy meal

was about 5955, 3750 and 2212 MT. South Korea, Thailand, Philippines, Japan are

some of the major importers of soy meal from the country. India, does not import soy

meal to meet the requirements of the domestic feed industry, as the price equation

inclusive of transports does not work in favour of imports. Soy oil imports accounts for

approximately 37%. It is estimated that the total production, imports and domestic

consumption in 2008-09 was around 1335, 900 and 2230 Million tons, respectively.

(Dilip Reddy, July, 2008)In India Madhya Pradesh, Maharashtra, Rajasthan and

Andhra Pradesh are the major producers of soybeans. Madhya Pradesh tops the list.

Nearly 88% of soybean is produced in the state. During 1997-98 total soybean

production in the state was 49.19 metric tons which was about 84.2% of the total

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137 | P a g e

produce. The protein content in soya bean meal is 65% M.P. soya bean processing

plants are well equipped with modern processing technology, testing facilities and

material handling systems. The combination of all these results into production of

quality soya bean meal DOC, which has the inherent higher protein compare to other

soya bean Meal. (The Soybean Processor Association of India Report 2010)

Those getting 10 percent of their energy from black soya had gained half as much

weight as those in the control group. Total blood cholesterol fell by 25 percent and

LDL (the so-called 'bad') hole sterol fell by 60 percent in the rats in the 10 percent

group, the study published in the in the journal of the Science of Food and Agriculture

showed.(IANS/India news 2010)Two of India‘s first agricultural universities, in the

states of Uttar Pradesh and Madhya Pradesh, working closely with soybean specialists

for the University of Illinois, are developing modern, scientific soybean production and

utilization programs. Outstanding varieties and excellent results are soon achieved.

Within 1-2 years it is clearly realized that soybean production has great potential in

India. But there is, as yet, almost no market for the soybeans which are produced.

(Soya Info Centre Report, 2010)

Literature review of Leather

Export growth in India has been much faster than GDP growth over the past few

decades (Kishore Sharma, 2000).Diversification of export is a high priority area in the

government‘s development strategy. It is increasingly recognized that accelerated

development and diversification of country‘s exports is needed for easing the pressure

on balance of payment situation and for the growth of more viable and efficient

agricultural and industrial sectors for balanced development (Economic Policy Paper

on Export Diversification Tools, 2004) Indian leather industry has massive potential

for generating employment and achieving high export-oriented growth. However, the

on-going global economic slowdown and the wide erratic behavior of the overall


weather condition particularly in the Europe pose both threat (of market loss) and

opportunity (to gain some unanticipated demand in the market) before it. On the

other hand, its economic performance has not been assessed much till date (Anup

Kumar Bhandari, March2010). India has the largest number of livestock, an abundant

supply of cheap and skilled labour and an ever-increasing demand for leather goods.

Inspite of all these factors the Indian leather goods industry has barely 2.5% of the

global market share (Anamika Singh, 2003).

The past years Foreign Trade Policy identified leather and leather products as a thrust

sector for export promotion because of its significant export prospects coupled with

employment generation. The policy goal is to double the share in the world export by

2008-09. With the Indian share in the global exports at 2.5 percent in 2003-04 and the

world export growing at a CAGR of 4.0 percent, to achieve the 5 percent share in the

world export in 2008-09, our export must grow at a CAGR of 19.3 percent. The share

of domestic sales in the value of leather production in 2003-04 is estimated at 43

percent. If we assume a CAGR in the domestic demand of 6.0 percent, then the value

of production in 2008-09 must be 91.2 percent(Growth prospects for exports of Indian

Leather and leather products: What needs to be done?,2004) .In 2004-05, the industry

recorded a satisfactory 5.8% export growth to reach a level of US$ 2.3 billion.

Although, leather exports have increased in absolute terms, its share in total exports

have declined in percentage terms from a high of 7.99% in 1990-91 to 2.89% in 2004-

05(EXIM bank, 2006). The scope for export of Indian leather products especially

leather goods, leather garments, saddler & harness is pretty good as there is no

significant manufacturing base. Tanneries can tie-up for regular supply of cow hides or

setting up tanneries for processing of leather up to wet blue stage for finishing in India

(council for leather export2007). The leather industry occupies a place of prominence

in the Indian economy in view of its massive potential for employment, growth and

exports (Anup Kumar Bhandari, March 2010). The structure of the Indian leather

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139 | P a g e

industry is quite interesting. It is spread in different segments namely tanning and

finishing, footwear and footwear components, leather garments, leather goods

including saddler and harness etc (Anup Kumar Bhandari, March 2010). Leather

Industry occupies a significant place in Indian economy in view of its great potential

for growth, export and employment. It has been declared as a thrust sector and Govt.

is taking pro-active role in boosting its export. Main features of Leather Sector in India

are enumerated below.

Leather sector of India is endowed with abundant supply of skilled work-force, huge

raw material base as India ranks first among the major livestock holding countries. It

is one of India‘s top export earners (D GHOSH, ASST. DIRECTOR (L/F) & CLUSTER

DEVELOPMENT EXECUTIVE, 2006). Accelerated growth through efficiency

improvements in India, especially in their high-tech industries, will intensify

competition in global markets leading to contraction of the manufacturing sectors in

many countries. Improvement in the range and quality of exports from China and

India has the potential to create substantial growth (Betina Dimaranan Elena

Ianchovichina Will Martinr, August2007). The global leather industry is valued at

about US$ 85 billion. Most of the producing countries are developing countries like

India, while developed markets such as the US are major consumers of leather

products. The industry is buyer-driven, with producing countries manufacturing in

line with specifications, guidelines and technical advice provided by the buyer

countries. China and Italy are the leading producing and exporting nations in the

world with exports worth US$ 19 billion and US$ 13 billion respectively. India, with

an output of US$ 4 billion and exports of US$ 2.4 billion, is placed third. The industry

provides employment to about 2.5 million people, of which 30 per cent are women

(IBEF, 2007). The leather industry is one the oldest industries known to mankind.

Because of the economical and environmental issues the leather industry pushed into

scientifically based approach and should be ready for the new technological


developments (Gonca Telli Yamamoto, Bekir Yilmaz, and Eser Eke Bayramoglu and

Özgür _ekero_lu, May2010). India‘s role in world trade and India‘s export performance

have been relatively neglected areas in recent research. Even less well understood is

the performance of large Indian firms and their role in overseas markets (Abhijit

Sharma and Michael Dietrich May 2004).

Literature review of Textile

The state has around 1,800 companies and 19 industrial growth centres, which are

close to major cities. This makes good social infrastructure accessible to industrial

units. There are around 171,000 SSI units that contribute significantly to the economy.

These companies not only meet local requirements, but also export a variety of

products and services .A large number of cotton textile mills are clustered around

Indore, Ujjain and Burhanpur. Major textile players are Bhilwaras, Indo-Rama,

Bhaskar, Oswals, Parasrampuria, Maikal and S Kumar‘s. The state government has also

created Apparel Parks to support the industry.(IBEF_Madhya Pradesh_130608).

Domestic demand accounts for most Indian cotton consumption; growth in textiles

and clothing exports is outpacing domestic demand and is an increasingly important

determinant of overall cotton and fiber demand in India. Cotton-based exports

accounted for about 42 percent of mill use of cotton in 2000 and about 80 percent of

the growth in Indian consumption of cotton fiber between 1992 and 2000. (Maurice

Landes, Stephen MacDonald, Santosh K. Singh, and Thomas Vollrath, 2005)

Textiles and garments make up the second fastest-growing product category of global

exports, second only to office and telecommunications equipment; both sectors are

central to the process of global integration (GATT, 1994). (Vijaya Ramachandran,

2005)The Indian textile industry holds a lot of significance for the country in terms of

output, investment and employment. It constitutes 14% of the industrial production,

4% of GPD and 17% of its export earnings. The industry consists of organized mills as

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well as unorganized small scale enterprises. The organized mill sector consists of

composite (InFocus-October 20 2010.)More than 50% of the export earnings come

from garments which are almost entirely made up from cotton fabrics. Of the 243 Lakh

bales produced during 2005-06 season, 46 lakh bales have been exported. Of the 270

lakh bales and above production expected during present season, more than 50 lakh.

(Dr. R.P.Nachane 2010)

OBJECTIVE OF THE STUDY

To explore the export potential of the Madhya Pradesh for the top three industrial

sectors of Soya, Leather and Textile

RESEARCH METHODOLOGY

Type of the study:

The study is an empirical one where export performance are being tested to prove the

potential of exports from the Madhya Pradesh‘s top sectors Soya, leather and textile. It

is a study to know the export potential of different product from Madhya Pradesh to

various countries. The study is exploratory in nature and it is essential to analyze the

potential outside India.

Importance of Exploratory Study-

For establishing priorities for further research and Gathering information about the

practical problems for carrying out research on particular conjectural statements

Type of data and data sources-

Data required for the present study is secondary in nature. The yearly export reports of

the Madhya Pradesh state have been used. The data were gathered from various


websites such as, www. commerce.nic.in,

www.soya.org.in,www.councilofleatherindia.com,www.texmin.in

Tools for the analysis

Statistical Tool:

Trend Analysis (Least Square Method) was applied to predict the trend of the export

figures.

(Formula enclosed)

ANALYSIS AND INTERPRETATION

1. Soya

It has been observed that the export grew from the year 2006 of Rs 1364.01 Crores to

2010 of Rs 2889.96 crores. There is the consistency in the growth has been observed.

The expected export value in the year 2011 is Rs.3579.44 Crores. The percentage

growth expected from the year 2010 to the 2011 is 23.86%.This growth is appreciable

and it follows the past five year‘s growth. (Table 1)

2. Leather-

It has been observed that the export grew from the year 2006 of Rs 170.15 Crores to

2010 of Rs. 204.99 crores. There is the consistency in the growth has been observed.

The expected export value in the year 2011 is Rs. 225.96 Crores. The percentage

growth expected from the year 2010 to the 2011 is 10.23% .This growth is appreciable

and it follows the past five year‘s growth. (Table 1)

3. Textile

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143 | P a g e

It has been observed that the export grew from the year 2006 of Rs.50.83 Crores to

2010 of Rs 78.01 Crores. There is the consistency in the growth has been observed. The

expected export value in the year 2011 is Rs.159.16 Crores. The percentage growth

expected from the year 2010 to the 2011 is 104.02 %.This growth is appreciable and it

follows the past five year‘s growth. (Table 1)

CONCLUSIONS AND DISCUSSION

The contribution to the total export of the India is 75.06% (PIE CHART 01) from the

state of Madhya Pradesh which can be further increased and the state may become the

leading contributor to the nation. The strengths of the state lies in skilled manpower,

favourable soil and climate, government support, centrally located, low set-up costs

(land, building etc), easy availability of manpower, low operating cost and supportive

labour unions.

The result of the study shows that there is a remarkable growth potential in the

sectors of Soya, Leather and Textile in the state of Madhya Pradesh. If the government

policies invite and motivate Foreign Direct Investments (FDI) in the sector we may

predict that the growth can be exponential and may by pass the trends which has been

predicted.

IMPLICATIONS

Every study should be of some benefit to the people living in the society, without its

implication to the readers as well as the users of the study should derive some

application.

The study would have implication for the following groups:


For Exporters from India: - This study will help them to find out export potential in

Madhya Pradesh. It will also help them to know the current situation of export

industry and the export potential lies in the sectors like Soya, Leather and Textile.

For Researchers: - The study being exploratory in nature highlights the areas where

researchers can carry out further studies to understand export industry.

For Government: - This research study is helpful to government bodies as it would

help them to identify the sectors in which exporters should be given some incentives

so that the export can be increased and in which sectors Foreign Direct Investments

can be made available.

For Students: - This study is also useful for the students who want to explore the

Madhya Pradesh market. This report would provide a good stepping stone to carry out

their study.

SCOPE AND LIMITATIONS OF THE RESEARCH

1. The yearly data were taken for last five years i.e. 2005 to 2010.

2. Findings are applicable in the situations which prevailed during the five

calendar years ending on year 2010; hence, these should be read in the light of

prevailing situations in the economy.

SCOPE FOR FURTHER RESEARCH

Research can be further conducted and statistical tool correlation can be applied to

test the different correlation between Soya, Leather and Textile .Also all the sectors

who are exporting from Madhya Pradesh can be studied with their correlation.

Further, sector, industry and product wise, country wise research can also be

conducted.

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145 | P a g e

BIBLIOGRAPHY

A. P. Gandhi (2008). Production of soy nuts using hazard analysis critical control point (HACCP).

ISSN 1906-3040

Abhijit Sharma,and Michael Dietrich.(2004) The Indian Economy Since Liberalization: the Structure

and Composition of Exports and Industrial Transformation (1980 – 2000). SERP Number: 2004004,

JEL codes: F14, L6

Adam Brinker, Joe Parcell, Chris Boessen(2008). An Assessment of the India Soy Protein Market.

Anamika Singh.(2003).Strategies for Enhancing the Competitiveness of Leather Industry in India.

Anup Kumar Bhandari.(2010) Global crises, environmental volatility and expansion of the Indian

Leather industry. JEL Classification No: D24, L67, R38.

Betina Dimaranan, Elena Ianchovichina and Will Martin.(2007).China, India, and the Future of the

World Economy: Fierce Competition or Shared Growth?. JEL: F11, F12, F43, WPS4304

Bharat Ramaswami, Jatinder Bir Singh(2007). Hedging and the Emergence of Commodity Futures:

The Soya Oil Exchange in India. JEL classification: G13; Q13.

Chandra,P.(2004).Competitiveness of Indian textile & garment industry:Some perspectives.

Gonca Telli Yamamoto, Bekir Yilmaz, Eser Eke Bayramoglu2 and Özgür _ekero_lu.(2010).An

analysis and a solution for the existence of Turkish leather industry. ISSN 1993-8233

Growth prospects for exports of Indian Leather and leather products: What needs to be done?.(2004)

Kishor Sharma.(2000). Export growth in India: Has FDI played a role? JEL Classification Codes: F1,

F13, F14 and F21.


Maurice Landes, Stephen MacDonald, Santosh K. Singh, and Thomas Vollrath (2005).Growth

Prospects for India‘s Cotton and Textile Industries.United states department of griculture,CWS-05d-

01.

WEBLIOGRAPHY

www.indiastat.com/membership.aspx Visited on March, 15th 2011.

www.texmin.nic.in Visited on March, 19th 2011.

www.synthetictextiles.org Visited on March, 21th 2011.

www.fiber2fashion.com Visited on March, 15th 2011.

www.apparelindia.com Visited on March, 17th 2011.

www.commercemin.nic.in Visited on March, 18th 2011.

www.cmai.info.com Visited on March, 14th 2011.

www.srtepc.nic.in Visited on March, 21th 2011.

www.pdexcil.org Visited on March, 19th 2011.

www.khoj.com Visited on March, 21th 2011.

www.iasoyabean.com Visited on March, 26th 2011.

www.soyatec.com Visited on March, 22th 2011.

www.fciweb.nic.in Visited on March, 15th 2011.

http://dspace.iimk.ac.in/bitstream/2259/442/1/79-86+.pdf Visited on March, 22nd 2011.

http://www.indiastat.com/membership.aspx

http://www.texmin.nic.in/

http://www.synthetictextiles.org/

http://www.fiber2fashion.com/

http://www.apparelindia.com/

http://www.commercemin.nic.in/

http://www.cmai.info.com/

http://www.srtepc.nic.in/

http://www.pdexcil.org/

http://www.khoj.com/

http://www.iasoyabean.com/

http://www.soyatec.com/

http://www.fciweb.nic.in/

http://dspace.iimk.ac.in/bitstream/2259/442/1/79-86+.pdf

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147 | P a g e

http://agmarknet.nic.in/octdec2004.pdf Visited on March, 15th 2011.

http://www.isid.ac.in/~bharat/Doc/JBsingh_rfm.pdf Visited on March, 28th 2011.

http://etd.uasd.edu/ft/th9669.pdf Visited on March, 18th 2011.

http://www.sopa.org Visited on March, 20th 2011.

http://www.indiaenews.com/pdf/40945.pdf Visited on March, 27th 2011.

www.ajofai.info Visited on March, 23th 2011.

http://ageconsearch.umn.edu/bitstream/6796/2/sp08br07.pdf Visited on March, 30th 2011.

http://www.dhakachamber.com/cipe/EPPs%20&%20Studies/Export%20diversification%20tools.pdf

Visited on April.1st 2011.

http://www.mse.ac.in/trade/pdf/Growth%20Prospects.pdf Visited on March,21st 2011.

http://www.eximbankindia.com/leather.pdf Visited on March,27th 2011

http://www.dsir.gov.in/reports/techexp/reports1.pdf Visited on April,3rd 2011.

www.ers.usda.gov Visited on March,25th 2011.

www.dhunbank.com/pdf/reports/infocus-october%2020%202010.pdf Visited on April,29th 2011.

www.ibef.org Visited on April,5th 2011.

www.careratings.com Visited on March,24th 2011.

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http://www.mse.ac.in/trade/pdf/Growth%20Prospects.pdf

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Annexure:

1. Formula for the linear square method(Trend Analysis)

X = No. of years

a & b = Constant

y = Forecast value (Trend)

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2. Department of Commerce

Department of Commerce

Export Import Data Bank

Export:: Commodity-wise 2 digit level

Dated: 9/4/2011

Values in Rs. Lakhs

* ITC HS Code of the Commodity is either dropped or re-allocated from April 2003

Dated:9/4/2011

Values in Rs. Lakhs

S. No. HS Code Commodity 2005-2006 %Share 2006-2007 %Share %Growth

HS Code

digit

level

option

12 12

OIL SEEDS AND OLEA.

FRUITS; MISC. GRAINS,

SEEDS AND FRUIT;

INDUSTRIAL OR

MEDICINAL PLANTS;

STRAW AND FODDER. 186,546.61 0.4087 241,254.04 0.4219 29.33 4 6 8

41 41

RAW HIDES AND SKINS

(OTHER THAN FURSKINS)

AND LEATHER 285,131.38 0.6247 335,817.68 0.5873 17.78 4 6 8

42 42

ARTICLES OF LEATHER,

SADDLERY AND HARNESS;

TRAVEL GOODS,

HANDBAGS AND SIMILAR

CONT.ARTICLES OF

ANIMAL GUT(OTHR THN 536,811.59 1.1761 550,219.56 0.9623 2.5 4 6 8

43 43

FURSKINS AND ARTIFICIAL

FUR, MANUFACTURES

THEREOF. 48.95 0.0001 79.43 0.0001 62.28 4 6 8

50 50 SILK 173,742.38 0.3807 175,312.13 0.3066 0.9 4 6 8

52 52 COTTON. 1,321,222.47 2.8948 1,775,550.54 3.1053 34.39 4 6 8

TOTAL 2503503.38 3078233.38


* ITC HS Code of the Commodity is either dropped or re-allocated from April 2003

S. No. HS Code Commodity 2006-2007 %Share 2007-2008 %Share

%Growt

h

HS

Code

digit

level

option

12 12

OIL SEEDS AND OLEA.

FRUITS; MISC. GRAINS,

SEEDS AND FRUIT;

INDUSTRIAL OR

MEDICINAL PLANTS;

STRAW AND FODDER. 241,254.04 0.4219 360,422.49 0.5495 49.4 4 6 8

41 41

RAW HIDES AND SKINS

(OTHER THAN 335,817.68 0.5873 338,330.58 0.5159 0.75 4 6 8

42 42

ARTICLES OF

LEATHER,SADDLERY

AND HARNESS;TRAVEL

GOODS, HANDBAGS

AND SIMILAR

CONT.ARTICLES OF

ANIMAL GUT(OTHR THN

SILK-WRM)GUT. 550,219.56 0.9623 570,481.23 0.8698 3.68 4 6 8

43 43

FURSKINS AND

ARTIFICIAL FUR, 79.43 0.0001 94.49 0.0001 18.96 4 6 8

50 50 SILK 175,312.13 0.3066 139,386.36 0.2125 -20.49 4 6 8

4 6 8

TOTAL 3078233.38 3480145.23

3.1583 16.6652 52 COTTON. 1,775,550.54 3.1053 2,071,430.08

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Export :: Commodity-wise 2 digit level

Dated: 9/4/2011

Values in Rs. Lakhs

* ITC HS Code of the Commodity is either dropped or re-allocated from April

2003

S. No. HS Code Commodity 2007-2008 %Share 2008-2009 %Share

%Growt

h

HS Code

digit

level

option

12 12

OIL SEEDS AND OLEA. FRUITS; MISC.

GRAINS, SEEDS AND FRUIT;

INDUSTRIAL OR MEDICINAL PLANTS;

STRAW AND FODDER. 360,422.49 0.5495 399,524.20 0.4752 10.85 4 6 8

41 41

RAW HIDES AND SKINS (OTHER THAN

FURSKINS) AND LEATHER 338,330.58 0.5159 333,632.87 0.3968 -1.39 4 6 8

42 42

ARTICLES OF LEATHER,SADDLERY

AND HARNESS;TRAVEL GOODS,

HANDBAGS AND SIMILAR

CONT.ARTICLES OF ANIMAL

GUT(OTHR THN SILK-WRM)GUT. 570,481.23 0.8698 729,698.89 0.8679 27.91 4 6 8

43 43

FURSKINS AND ARTIFICIAL FUR,

MANUFACTURES THEREOF. 94.49 0.0001 104.95 0.0001 11.06 4 6 8

50 50 SILK 139,386.36 0.2125 152,205.12 0.181 9.2 4 6 8

52 52 COTTON. 2,071,430.08 3.1583 1,422,430.57 1.6918 -31.33 4 6 8

TOTAL 3480145.23 3037596.6




Export :: Commodity-wise 2 digit level

Values in Rs. Lakhs

* ITC HS Code of the Commodity is either dropped or re-allocated from April

2003

S. No. HS Code Commodity 2009-2010 %Share

2010-2011(Apr-

Sep) %Share %Growth

HS Code

digit level

option

12 12

OIL SEEDS AND OLEA. FRUITS;

MISC. GRAINS, SEEDS AND

FRUIT; INDUSTRIAL OR

MEDICINAL PLANTS; STRAW AND

FODDER. 394,858.09 0.467 215,980.69 0.4464 4 6 8

41 41

RAW HIDES AND SKINS (OTHER

THAN FURSKINS) AND LEATHER 304,303.31 0.3599 189,482.44 0.3916 4 6 8

42 42

ARTICLES OF LEATHER,

SADDLERY AND HARNESS;

TRAVEL GOODS, HANDBAGS AND

SIMILAR CONT.ARTICLES OF

ANIMAL GUT(OTHR THN SILK-

WRM)GUT. 681,161.98 0.8056 333,919.03 0.6901 4 6 8

43 43

FURSKINS AND ARTIFICIAL FUR,

MANUFACTURES THEREOF. 48.6 0.0001 24.5 0.0001 4 6 8

50 SILK 131,922.78 0.156 67,600.94 0.1397 4 6 8

52 52 COTTON. 2,162,296.47 2.5573 1,012,715.64 2.093 4 6 8

TOTAL 3674591.23 1819723.24

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2Graphical representation of export trend (exported and predicted)

Madhya P's Total Export value*of particular sectors in Rs. (In Crores.)

Export Sector 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Soya 1,364.01 1,765.74 2,637.93 2,924.12 2,889.96

Leather 170.15 184.31 189.06 221.2 204.99

Textile 50.83 66.33 75.17 53.54 78.01

Table no.1: Actual exported value

Madhya Pradesh’s Expected Export value*of particular sectors in Rs. (In Crores.)

Export Sector 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Soya 3,579.44 4,000.70 4,421.50 4,842.53 5,266.26

Leather 225.96 236.58 247.24 257.9 268.56

Textile 159.16 190.66 222.08 253.54 285

Table no.2 Predicted export value


0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

1 2 3 4 5 6 7 8 9 10

Soya

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 10

Leather

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0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 10

Textile

Page | 156

Chapter Ten

Factors Affecting Selection of Mobile Brands

Nidhi Sharma Assistant Professor, Prestige Institute of Management and Research, Indore| Sunil

Chichra, Student Prestige Institute of Management and Research, Indore| Anshumaan Bakshi,

Student Prestige Institute of Management and Research, Indore | Raj Kumar Ranjan


ABSTRACT:

Mobile phone is an electronic device used to make telephone calls across a wide geographic area. Mobile phone is defined as a handheld phone with a built in antenna that transmits signals through the air without any physical connection. They have become an important aspect of living in the 21st century. Majority of adults already own a mobile phone and the minimum age for operating a mobile phone is reducing every year. Consumers are constantly looking for the best possible network, plan and handset. So many people closely analyze every aspect of their mobile phone. Over 1 billion cell phones are sold annually in the country. Today the market is flooded with different types of mobile phones. Marketing managers have sleepless nights to explore the diverse factors behind the purchase decision of a particular mobile phone brand. The present study focuses on finding out the factors which affect the selection of mobile phones brands. The study is exploratory in nature and a self designed structured questionnaire is used to survey the mobile phone users in Indore city. The results are analyzed with the help of suitable statistical tools and then interpreted to give valuable suggestions.

INTRODUCTION:

India is one of the fastest growing mobile markets in the world and that brings

immense mobile marketing opportunities for branded consumer companies. According

to a newspaper article in DNA on Sept 22, 2009, there were around 441 million

wireless users in India by the end of August, 2009. It is now the 2nd largest subscriber

market in the world. Mobile as a medium is gaining popularity with cheaper

multimedia handsets getting into the mix.

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A mobile phone or mobile (also called cellphone and hand phone) is an electronic

device used for mobile telecommunications (mobile telephony, text messaging or data

transmission) over a cellular network of specialized base stations known as cell sites.

Mobile phones differ from cordless telephones, which only offer telephony service

within a limited range, e.g. within a home or an office, through a fixed line and a base

station owned by the subscriber and also from satellite phones and radio telephones.

Mobile phone is a smart communication media. It is not a one-way communication

like pager. Cellular communication basically gives the power of an advanced telephone

system card. Cellular communication works like the radio set which is normally used.

The handset or Mobile Phone is in fact an own private radio transmitter and receiver,

very similar to the Walkie-talkies used by Police and Security Personnel. The key

difference is that a cellular phone network is connected to the fixed line or

conventional telephone system allowing additional access to the telephone world.

Mobile Phone can be used to make and receive STD and ISD calls. Now e-mailing

message is also possible. Some cellular phones have the capacity to send and receive

faxes and data when attached to a personal computer. The Indian market is flooded

with mobile phones manufactured by diverse brands. They are offering diverse

features, services and other attractive offers to the customers. Mobile phones have

changed the way we communicate; they have also spawned new forms of bad behavior.

Mobile phone is a fashion statement for some and a must have tool to others, it

attracts the Youth, it attracts the Old, it is truly a magnificent devices to have/own, it

takes pictures, it records videos, it plays music, it performs video calling, it sends e

mails on the move.


Literature Review

Whitworth Brain, Yang Chieh Chun and Jones Beatrix mention that the rapid

evolution of the mobile phone has produced a proliferation of models and features.

Selecting a mobile phone is now a complex multi- Criteria problem. The authors found

that the customers may find online decision support useful. So 105 mobile phone

models with 59 technical features were organized by external features like color, and

perceived criteria like reliability. The study simulated three forms of online support.

Significant differences were found between the support types and the features and

criteria used, with some gender differences. The results suggest that web-based

support systems can increase customer satisfaction with mobile phone selection

process.

Wei R. and Leung L (2000) suggested that Mobile phones are powerful technologies

that do more than mobile telephony with features like multi-media messaging, e-mail,

web-browsing, TV streaming, fax and navigational maps. These developments match

the rapid growth of mobile phone use, e.g. while in 1999 only 34% of young people

owned mobile phones by 2002 this percentage was 90%.

Isiklar g. and Buyukozkan G. (2005) researched that the side-effect of rapid growth

has been a proliferation of phone models as manufacturers worldwide compete with

some features quite technical in nature, like Bluetooth, TFT LCD, WAP and MMS.

Choosing a mobile phone has become a complex multi-criteria decision problem.

Davis D.F. (1996) ; Venkatesh V. (1996) ; Whitworth B. (2008) ; Sylla C. (2008)

studied that Selecting a mobile phone is a form of technology acceptance. The authors

used the Technology Acceptance Model (TAM), with traditional TAM criteria

expanded by Web of System Performance (WOSP) criteria like security, functionality,

connectivity, privacy, usability and reliability. The scenario envisioned is computer-

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based support for technology selection; criteria that derive from definable product

features are needed.

(Figure 1. Technology selection framework)

Wilska A.T. (2004); Katz E.J. (2005); Sugiyama S. (2005) and Fortunati L. (2005)

suggest that while young people prefer cell phones that are ―trendy‖ or ―fashionable‖,

and mostly students agree that fashion is important when selecting a mobile phone.

The authors have given a model where customers form perceptions of criteria like

usability from the product‘s external features, which then affect the decision to buy. It

distinguishes the external features of the phone, and the perceived criteria deduced from

those features. There is evidence that users are more concerned with user-related

criteria like functionality and ease of use than product-related features like size and

color.

Gi oug, Oh (2006); Dooyeon, Kim (2006) and Sungyul, Rhew (2006) surveyed that

commercial activities based on information technology have used electronic data

Behavioral

Intention

Actual

Usage

Perceived

Criteria

Functionality

Connectivity

Usability

Security

Reliability

Flexibility

Privacy

External

Features


interchange between computers, but with the development of Internet technology,

they evolved into e-commerce. In the 1990s, mobile commerce was recognized as a part

of e-commerce. With the increase of mobile devices, the use of mobile commerce,

which accesses and use desired information at any time while moving (Anywhere,

Anytime), was popularized. In the late 1990s, over 3.5 million devices were used, but

entering the 2000s, the number exceeded a trillion. The market size also has already

gone beyond 200 trillion won in 2004.

Jones Beatrix , Whitworth Brian and Yang Chieh Chun mentioned that the Top

Factor in selecting a mobile phone is the capability, flexibility, and usability with

connectivity the least important. Again there were gender differences, with males

significantly more concerned with capability, connectivity and usability than females.

Both genders saw reliability as the most important criteria.

Arshad Rehan Saeed Aitzaz researched that the role of corporate branding in mobile

phone telecommunication along with different influencing factors involved in the

purchase of mobile telephone connections. It investigates the relative importance of

the corporate branding to the customers in mobile phone telecommunication industry

while making purchase decision. The finding of this study provided useful information

which is helpful not only for the students but also for the brand managers of mobile

telecom operators that how they can improve their company‘s strategic position for

longer period of time through corporate branding to trigger more customers and for a

good brand.

According to Rossi Matti: Helsinki School of Economics, Demand and usage of mobile

phones might increase, if there were more utility services available. For instance, in

some Finnish cities, both public and private dental clinics send a SMS to inform a

customer about new possible appointments. Also libraries may send a notification

about a reserved book that is ready to be collected.

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White, Jules; Schmidt C. Doulas studied the increasing popularity and abundance of

mobile and embedded devices is bringing the promise of pervasive computing closer to

reality. A recent trend in mobile devices that makes pervasive computing more

realistic is the proliferation of services that allow mobile devices to download software

on-demand. Mobile phones, for example, can now access web based applications, such

as Google mail, or download custom applications from services, such as Verizon‘s ―Get

It Now.‖ Google delivers both a web-based interface to Google mail and an application

that can be downloaded to a mobile phone.


The present study is empirical in nature and tows to explore the factors affecting the

selection of mobile phones. Data for the study was collected through a self- designed

structured questionnaire. The sample of the study constituted of 124 respondents from

various management colleges of Indore city. The analysis of collected Data was done by

statistical Package for social sciences (SPSS11.0) And MS Excel 2007. Item total

correlation and factor analysis were used to analyze the data. It was assessed with the

use of Crombach Alpha. Crombach Alpha allows us to measure the reliability of

different variables. As a general rule, a coefficient greater than or equal to 0.7 is

considered acceptable and is a good indicator of reliability. The Crombach Alpha for

Questionnaire is 0.75. Hence it is reliable and can be used for analysis.

Results and Findings

The factor analysis was carried on 15 significant items that resulted into 5 factors that

influences the purchasing pattern of mobile phones. The factors are tabularized with

their items in annexure 1. The discussion of each factor is as follows:

EFFECTIVE PROMOTIONAL ACTIVITIES has evolved as the first dimension it

consists of 6 items that are providing accessories and gifts to customers (0.709), active


advertising (0.646), and Touch screen technology (0.640), after sales services (0.580),

status symbol (0.530) and mobile phone as a fashion statement (0.160). Total load is

2.222 with 14.813% of variance.

PERFORMANCE: This factor comprised of 2 items namely mobile phone brand with

good battery backup (0.708) and multimedia features (0.608). The total load is 2.147

and 14.313 % of variance.

VALUE FOR MONEY has consists 3 items which is Shape of Mobile (0.706), Price

(0.615) and Brand of the mobile phone (0.567). Total load is1.762 with 11.746% of

variance.

NETWORKING comprises 2 items i.e. CDMA & GSM (0.842) and Internet Services

(0.509). Total load is 1.639 and 10.927% of variance.

CONVENIENCE has single Item i.e. easy availability of mobile phone in the market

(0.772) it has total load of 1.171 and 7.809 5of variance

Conclusion

Finally we would like to conclude that five major factors play a significant role when

the buyers think of purchasing a mobile phone. The most important factor is

promotional activities that persuade the most in selection of mobile phones. Mobile

phone also acts as a status symbol and it act as a fashion statement. Performance of the

mobile phone like battery backup, advanced multimedia features enhances its

popularity. E.g., Apple I-Phone have low battery backup that‘s why people don‘t prefer

to buy that, people easily buy Nokia mobiles because they have very good battery

backup. In India, people look for the Value of their Money. So whether the mobile

phone handset is reasonably priced or priced high, it must provide value to the

customer. Good Networking also affect the selection of mobile phones as nowadays

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many youngsters want to operate social networking sites through their mobile phones.

Convenience that is the availability of mobile phones in the nearby markets is the least

important factor given by our respondents.

Suggestions

The study aimed is to understand the diverse factors that consumers look for while

selecting a Mobile Phone. Marketing managers are having sleepless nights to discover

what will make a particular mobile phone brand more preferred by the buyers as

compared to the others. On the basis of the results a few suggestions are mentioned

below:

1. The marketing managers must focus more on the promotional activities like

advertising their mobile phones through different media like Television,

internet etc to increase their awareness, providing accessories, gifts

occasionally, and providing better after sales services to enhance the sales.

2. For Youth, more emphasis can be given in the upcoming promotional media

like social networking sites where they spend majority of their time.

3. The elderly are an often neglected group in product development and

marketing, but they are the only growing age group in most developed

societies. So some mobile phones must be creates with features catering to the

needs of elderly people.

REFERENCES

Whitworth, Brian ; Yang Chieh Chun and Jones,Beatrix : Web Based Decision Support For Mobile

Phone Selection


Leung, L., Wei, R., 2000, More than just talk on the move: Uses and gratifications of the cellular phone,

Journalism and Mass Communication Quarterly vol. 77, pp. 308-320.

Isiklar g. and Buyukozkan G. (2005) "Using a multi-criteria decision making approach to evaluate

mobile phone alternatives," Computer Standards & Interfaces 29, pp.265-274

B. Whitworth, V. Bañuls, C. Sylla, and E. Mahinda, (2008) "Expanding the Criteria for Evaluating

Socio-Technical Software," IEEE Transaction on Systems Man & Cybernetics, Part A.

T. A. Wilska (2005), "Mobile Phone Use as Part of Young People's Consumption Styles," Journal of

Consumer Policy, vol. 26, pp. 441-463, (2004); L. Fortunati, "Mobile phones and fashion in

postmodernity," Telektronikk, vol. 4, pp. 35-48.

Whitworth Brian ; Yang Chieh Chun ; Jones Beatrix :web based Decision Support for Mobile Phone

Selection

Kurvilla Jose Shelja, D‘mello Larrisa, Pandey Ajay (2010): ―M- marketing: An Empirical Study on

Factors Affecting the Acceptance of Mobile Marketing‖ Managing in the New World order, pp. 468-

484.

Lawrence Elaine ; Pernici Barbara ; and Krogstie John(2004) : Mobile Information System

MMA Team (2007). Introduction Of Mobile Coupons, Mobile Marketing Application, Version 3

Gi oug, Oh ; Dooyeon, Kim and Sungyul, Rhew (2006) : Selection Of the Success Factors Of Mobile

Commerce and Evaluation Using AHP : IJCSNS International Journal of Computer Science and

Network Security, VOL.6 No.7B, pp(127 – 134)

Rossi, Matti ; Tuunainen Kristiina Virpi : Helsinki School Of Economics : Factors Affecting the

Adoption and Use of Mobile Devices and Services By Elderly People

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White, Jules and Schmidt, C.Doulas : Automating Product Line Variant Selection For Mobile

Devices : Vanderbilt University,Department of Electrical Engineering and Computer Science

Email:{jules, schmidt}@dre.vanderbilt.edu

Bouwman, Harry ; Carlsson, Christer ; Walden, Pirkko ; Castillo, Molina Jose Franscisco (2010) :

Factor Affecting the present and future Use Of Mobile Data Services : (www.inderscience.com)

Rahman, Sabbir ;Haque, Ahasanul and Ahmad, Mohd Ismail Sayyed Ahmad (2010) : Exploring

Influencing Factors For the Selection Of Mobile Phone Service Providers : African Journal of Business

Management Vol.4 (13), pp. 2885-2898

mailto:schmidt%[email protected]

http://www.inderscience.com/

Page | 166

Chapter Eleven

Scrutinizing the Brunt of Economic Growth on CO2 Emissions

in India

Manish Joshi, Assistant Professor Prestige Institute of Management and Research, Indore| Divya

Sharma, StudentPrestige Institute of Management and Research, Indore | Shweta Ghanshani,

StudentPrestige Institute of Management and Research, Indore | Harshita Kankane,


Abstract:

Emerging economies currently face a very difficult target of controlling their environment in general and climate change in particular. Many national and international discussions and deliberations are being held across the world to discuss the effects of climate change, but it is well understood that the greed for economic growth and casual approach towards environment has lead to the problem of emissions. GDP has been referred to as an important representative factor of economic growth, it is thus sometimes even referred to as a synonym for economic growth. The research conducted shall be confined to India and would enquire the causal relationship of CO2 emissions and GDP of the country, to do so, econometric analysis has been applied to regress a model portraying current status and develop a possible model where CO2 emissions can be controlled while letting the GDP grow.

Introduction:

The rush for rapid economic growth led by industrialization in emerging economies

like India is having a negative impact on the ecological management. It is evident that

rapidly growing economies are causing severe pollution problems in the form of

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emissions of various forms of gases like the CO2. The higher emissions in these

countries are a resultant of higher energy consumption. Higher rate of growth of

population, rapid industrialization, industrial trade, increase in number of vehicles as a

result of a very high economic growth are acting as major driving forces towards

higher energy consumption. The economic growth exhibited in the countries like

India is exuberant. The higher growth levels have placed such economies in the

different League of Nations altogether. China and India together contributed world‘s

30% of GDP in US $ constant PPP in 2002-03 (World Bank, 2004). The GDP of India

between 1950 and 1980 was around 3% and annual growth of per capita income was

just 1.5%. For a country like India which is world‘s second largest populous nation,

this growth rate was found to be inadequate to make any significant impact on overall

progress of the nation. Some initiation was taken up during the 1980s by the

government of India to set things right. Though they were half hearted, it improved

the per capita income growth to 3.0% as poverty levels fell from over 45% to 35% by

the end of 1980. Thus, India realized that only strong economic growth rate could

increase the per capita income levels of the people which in turn help in bringing

down the poverty levels and improve the socioeconomic conditions of the poor. This

further encouraged the government to make some serious corrections in its economic

policies. Thus, the foundation for a strong economic growth was laid in the form of

economic reforms in 1991 which is popularly known as Structural Adjustment

Program (SAP). This program was a result of a ―closed economic policy‖ which India

followed over the decades which resulted in a severe macroeconomic crisis by early

1990s. The reforms focused on strengthening the economic growth which should

translate into reduction of poverty levels, improving poor socio-economic conditions

and better standard of living for the people of India. The reforms started yielding

results by mid-1990s as India posted a growth rate of over 7% for three consecutive

years followed by a low growth rate which was a result of worldwide recession. On

the other hand, the governments kept changing, but the reforms program continued.

Analysis Potential of Internet Advertising on College going Youth of Indore City

More reforms brought a much higher growth rate and this was evident during the

early 2000 as the growth rate for the first seven years of 2000 was over 7.5% per

annum. Thus, many argue that the higher growth rate is the only panacea for the ills

poor socio economic conditions prevailing in the developing countries.

But the rapid growth in industry, industrial trade and transportation sector is driving

the economy. This being so, on the other hand another set of experts speak against this

rapid rate of growth which emerging economies are exhibiting. They opine that there

are environmental costs and damages associated with rapid economic growth which

results in expanding of economic activities. This ever increasing consumption demand

would have global side effects such as high emissions leading to global warming,

greenhouse effects and destruction of forests. Added to the above, the environmental

degradation can also add to the problems of imposing higher costs on the poor by

increasing the expenditure of health related issues. According to UN report, world‘s

poorest 20% of population take this burden which is a resultant of environment

degradation. It is also said to have responsible for world‘s 80% of the diseases due to

pollution in the form of water, air and land due to rapid industrialization (United

Nations Report, 1998).

The problem associated in the case of India, China and Brazil is that these nations are

in the stage of rapid industrialization. This stage is a resultant of high economic

growth led by change in the structure of economic activities, higher industrial exports,

lower industrial imports, higher production and industrial activity and high rate of

growth in population. This is better explained by the Environmental Kuznet Curve

(EKC).

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The Environmental Kuznets Curve (EKC) hypothesis states that pollution levels

increase as the country develops, but begin to decrease as rising incomes pass beyond a

turning point. This is reflected as inverted-U curve, expressing the relationship

between pollution levels and income. Exhibit – 1 better explains this scenario. This

hypothesis was first proposed by Grossman and Krueger in 1992, and restated by them

again in 1995.As seen from exhibit – 1, there are many forces which are driving the

relationship between environment degradation and economic growth. The upward

movement of the curve captures the developing countries that move from

agriculturally based economy to industrialization phase. In the next phase, the

economy transforms into developed economy and then starts the downward

movement of the curve with a shift towards services growth, increase in imports of

industrial goods and stabilization of growth rates. India‘s in the first phase where

experiencing the structural shifts from agriculture to industrial growth. The share of

agriculture for India has considerably declined from over 80% in 1950s to around 25%

by 2007. During the same period of time the levels of energy consumption and CO2

emissions have also drastically increased in these economies, exhibiting a relationship

between economic growth led by industrialization and environment degradation.


Thus it brings us to a point where a realisation has been achieved where some

relationship exists between economic growth and carbon emission. It is important to

describe the relationship and generate a pragmatic solution to the problem.


The role of industries is specified in the study by Low and Yeats, (1992) who show

that pollution intensive industries accounts for a large share of exports from some

developing countries. They also found a reversal trend for developed economies.

Kolstad and Krautkraemer (1993) point out the fact that there is a dynamic link

between the environment, resource use and economic activity. They argue that while

resource use (especially energy sources) yield immediate economic benefits, its

negative impact on the environment may be observed in the long run. Selecting the

period of 1971-1991, Tucker, (1995) looked at changes in CO2 versus income in yearly

cross-sectional analyses. The study found that the changes in CO2 emissions are

clearly related to changes in oil prices, but does not incorporate them into the analysis.

The study by Jean Agras & Duane Chapman, (1998), takes into account the price of

energy. This study highlights the importance of prices and then includes it in an

econometric EKC framework testing energy-income and CO2-income relationships.

These long-run price-income models find that income is no longer the most relevant

indicator of environmental quality or energy demand. In a study by Suri & Chapman,

(1998), examined the sources of commercial energy consumption, which is the root

cause of serious environmental problems. It was found in the study that while both

industrializing and industrialized countries have added to their energy requirements

by exporting manufactured goods, the growth has been substantially higher in the

former. At the same time, industrialized countries have been able to reduce their

energy requirements by importing manufactured goods. The Exports of manufactured

goods by industrialized countries has thus been an important factor in generating the

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upward sloping portion of the EKC and imports by industrialized countries have

contributed to downward slope.

Joy O Kadnar, (2004) in his research based on the energy consumption patterns, a

model to predict the future short-term fossil fuel energy needs, using the relationship

between consumption, population growth and real gross domestic. product (GDP) for

two situations (zero or no growth and a 5% sustained economic growth), was

developed for Central Asian economies and obtained mixed results. In a study

conducted by Wietze Lise & Kees Van Montfort, (2006), tries to unfold the linkage

between energy consumption and GDP by undertaking a co integration analysis for

Turkey with annual data over the period 1970–2003. The analysis shows that energy

consumption and GDP are co integrated. This means that there is a (possibly bi-

directional) causality relationship between the two.

The study organized Ugur Soytas and Ramazan Sari, (2007) investigates the

long run Granger causality relationship between economic growth, CO2

emissions and energy consumption in Turkey, controlling for gross fixed capital

formation and labor. The most interesting result obtained in the study is that

carbon emissions seem to Granger cause energy consumption, but the reverse is

not true. The lack of a long run causal link between income and emissions may

be implying that to reduce carbon emissions, Turkey does not have to forgo

economic growth.

When it comes to similar studies by Antonio Focacci (2005), which proposes an

empirical analysis concerning the environmental and energy policies in Brazil,

China and India. The study includes ratio analysis using two key ratios namely,

emission intensity ratio and energy-intensity ratio to relate to EKC model. The

study results show mixed results with respect to application of Environmental


Kuznets Curve model for these three economies. It shows that resulting trends

in these three countries are different from the other developing countries. All

the research studies suggest that the ever increasing

Objectives:

The objectives of the research are as follows:

1. To study the related literature to develop a conceptual framework.

2. To study the Impact of Economic Growth on the carbon emission levels.

Hypothesis:

Ho: The major hypothesis of the research is that GDP growth has impact on CO2

emissions in India.

Research Methodology:

The research is descriptive in nature and is forming a positive frame work. Data used is

secondary and has been purchased from CMIE via NASDOC, New Delhi. To assess the

movement and impact regression with enter method has been applied. The data has

been tested for Durban- Watson test also to affirm the use of regression.

Results:

Upon calculating correlation between the variables using Karl Pearson‘s coefficient of

correlation the values

The value of r came out to be +0.80 which is highly correlated and show interrelation

among the variables. This means that with the rapid industrialisation and growth in

per capita income the carbon emissions are also

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growing. This is sometimes evident from the fact that automobile market of India is

currently one of the biggest markets and Industrial growth of India just second to

china which is also facing the same issues.

Upon the application of Durbin Watson test:

The value of d came to be 2(approximately), Here T is the number of observations.

Since d is approximately equal to 2(1-r), where r is the sample autocorrelation of the

residuals, d = 2 indicates no autocorrelation. The value of d always lies between 0 and

4. If the Durbin–Watson statistic is substantially less than 2, there is evidence of

positive serial correlation. As a rough rule of thumb, if Durbin–Watson is less than 1.0,

there may be cause for alarm. Small values of d indicate successive error terms are, on

average, close in value to one another, or positively correlated. If d > 2 successive error

terms are, on average, much different in value to one another, i.e., negatively correlated.

In regressions, this can imply an underestimation of the level of statistical significance,

the value of d is satisfactory and it is reliable to conduct regression

On the applying regression by enter method

The model thus generated is:

Percentage Change in Carbon Emissions Per Capita= 0.02+0.22*

Percentage Change In GDP

Conclusions:


The high correlation among variables shows that GDP and CO2 emissions are moving

hand to hand. It also means that the EKC hypothesis to a very large extent can be

accepted. This is very alarming and India might have to face serious repercussions. It is

very urgent to develop a control over the proposed variables. The model suggested is

very preliminary and an advanced model keeping into mind various other variables

should be developed. Similar studies in china showed similar results and delay in

action has caused china serious ecological issues in some of its provinces. This could

cause more pressure to environment of the country which would ultimately put

impact on agriculture which happens to be the main work generation sector and major

contributor to the economy.

References:

Low, P., Yeats, A., 1992. Do dirty industries migrate? In: Low, P. (Ed.), International Trade and the

Environment. World Bank Discussion Papers No. 159, Washington, DC.

Tucker, M., 1995. Carbon dioxide emissions & global GDP. Ecol. Econ. 15 (3), 215–23.

Jean Agras & Duane Chapman, 1998, A dynamic approach to the Environmental Kuznets Curve

Hypothesis, Ecological Economics 28 (1999) 267–277.

Suri, V., Chapman, D., 1998. Economic Growth, Trade and Energy: Implications for the Environmental

Kuznets Curve. Ecological Economics, Special Issue on the Environmental Kuznets Curve, 25 (1998)

195–208.

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Needs Forecast, Business Brefings: The Oil & Gas Review, 2004, 1-5.

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integration relationship?, Energy Economics August (2006), pp. 1 – 13.

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Emissions: Challenges Faced by an EU Candidate Member, MARC Working Paper Series Working

Paper No. 2007-02

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Focacci, Antonio. (2005), ―Empirical analysis of the environmental and energy policies in some

developing countries using widely employed macroeconomic indicators: the cases of Brazil, China and

India‖, Energy Policy 33, pp. 543–554

Annexure:

Model Summary

Model R R Square Adjusted

R Square

Std. Error of

the Estimate

Durbin-

Watson

1 0.80 0.09 0.06 0.02 2.06

a Predictors: (Constant),

VAR00001

b Dependent Variable:

VAR00002

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

Model B Std.

Error

Beta

1 (Constant) 0.02 0.01 2.24 0.03

Percentage

Change

In GDP

0.22 0.13 0.30 1.68 0.10


Year Percentage Change

in GDP

Percentage Change in CO2

Emissions 1981 13.51% 0.532875 0.05 1982 7.95% 0.55412 0.04 1983 8.12% 0.588454 0.06 1984 6.19% 0.595916 0.01 1985 5.71% 0.640483 0.07 1986 4.88% 0.672 0.05 1987 4.89% 0.702536 0.04 1988 9.61% 0.742778 0.05 1989 8.52% 0.795647 0.07 1990 7.43% 0.812242 0.02 1991 3.59% 0.850805 0.05 1992 4.69% 0.886922 0.04 1993 5.12% 0.90471 0.02 1994 6.32% 0.943788 0.04 1995 7.50% 0.986176 0.04 1996 7.57% 1.055489 0.07 1997 10.24% 1.080439 0.02 1998 4.59% 1.090464 0.01 1999 2.97% 1.14458 0.05 2000 4.88% 1.167109 0.02 2001 4.45% 1.165026 0.00 2002 4.50% 1.16893 0.00 2003 7.39% 1.20337 0.03 2004 9.13% 1.24615 0.03 2005 10.89% 1.288137 0.03 2006 11.54% 1.354389 0.05 2007 11.45% 1.432309 0.05 2008 7.15% 1.486428 0.04 2009 5.13% 1.548901 0.04 2010 9.13% 1.611374 0.04

Page | 177

Chapter Twelve

Analysis Potential of Internet Advertising on College going

Youth of Indore City

Nidhi Sharma Assistant Professor, Prestige Institute of Management and Research, Indore|

Gaurav Singh Chouhan Student Prestige Institute of Management and Research, Indore| Shesh

Raman Sharma, Student Prestige Institute of Management and Research, Indore | Jashndeep

Singh Bagga, Student Prestige Institute of Management and Research, Indore

Abstract:

As one of the fastest growing economies in the world, India presents a lucrative market to companies all over the globe. The Indian advertising industry has evolved from being a small scale business to a full-fledged industry. Rapid developments in the technology and growing base of empowered customers have redefined how advertising is created, sold, consumed and evaluated. Advertising on internet is emerging niche medium with some peculiar creative capabilities and constraints. India has got the highest youth population in the world. It‘s the youth who is tech savvy and is spending time on internet especially on the social networking sites. The purpose of the study is to analyse the potential of Internet Advertising on College going youth of Indore city. It is an empirical study where self structured questionnaires have been used to collect the primary data. The survey was conducted on 100 people falling in the age bracket of 17-22 years.

Introduction:

As being incorporated or associated with the marketing process, advertising finds its

position in every organization. Advertising can be defined as another strategy as an

approach towards competitive advantage. Various advertising concepts are in the


stream of the media and papers but still there is a little evidence that advertising can

significantly help the organization boosts its performance. In terms of sales, it is true

that the application of the marketing and its associate strategies can gain the

consumers‘ trust and loyalty, and in return, can enjoy the benefits of the market share.

Advertising is the mechanism used to create a desire for different products in the

minds of the customers. Jhally (1987) considers advertising is working to create a false

need among the consumers and in fact such needs are of the manufacturers rather than

the consumers. However this view is refuted by the advertising professionals by

pointing out that the purpose of advertising is to inform the public about the

availability of the products in the market. On the contrary Campbell (2000) the

consumers do not merely act on the basis of advertising but use their discretion makes

their decisions on a purposeful manner. Just like the consumption of material items,

advertising has the ability to solve the problems being encountered by the consumers

with respect to the products and it also guarantees the consumers that emotional

happiness and well-being within the act of consumption (schlosser et al. 1999)

The Internet as a marketing medium offers many unique challenges to marketers. To

assist marketers in their venture on-line, comparisons and contrasts to existing

marketing theory have been used to build a conceptual understanding of the current

state of the Internet and its implications for consumer transactions (cf., Hoffman and

Novak, 1996a; Hoffman, Novak and Chatterjee, 1995; Schlosser and Kanfer,

forthcoming). Despite the limited understanding of how consumers judge Internet

Advertising, there has been substantial commercial growth on the Internet of many

forms of advertising, resulting in estimated revenue of $301 million, with a projected

growth to $7.7 billion by 2002. Indeed, spending on IA totalled an estimated $129

million in the first quarter of 1997, with an estimated 92% increase in IA spending for

top 25 industries during the first quarter of 1998. In addition to anticipating the

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monetary growth of the Internet, the majority of on-line businesses believe the

Internet is here to stay and will generate sales in the future.(Schlosser et al., 1999)

According to consumers, Internet Advertising includes many forms of commercial

content—from electronic advertisements that are similar to traditional advertisements

(e.g., billboards, banner ads) to formats that are different from traditional

advertisements, such as corporate Web sites (Ducoffe,1996). Most of the direct-

response measures administered to consumers have assessed consumers‘ perceptions

and usage of the Internet and its services. Mehta and Shivdas in 1995 assessed Internet

user‘s attitudes toward advertising on newsgroups and through e-mail. The study

revealed that consumers held negative attitudes toward newsgroup and e-mail

advertising, even when the message was directly relevant to the special interests of the

group. However, their sample was limited to those who posted messages to the group.

Those who merely read messages were not included in the sample. As a result, it is

possible that these unfavourable attitudes are due to this vocal sample‘s perception

that they are competing with electronic advertisements for the group‘s attention.

In addition, attitudes toward newsgroup/ e-mail advertising may not generalize to all

forms of Internet Advertising, including less intrusive ads (such as Web sites).

Consequently, it is unclear whether the results would generalize to the entire Internet

population‘s attitudes toward IA in its many forms. The interactive nature of Internet

advertising is useful to advertisers only when consumers are willing to interact with

an advertising message. Consumers‘ willingness is often manifested by their search

behaviour in terms of selection of certainicons, breadth and depth of search, and the

amount of search time. Thanks to the multi-layer tree-like structure of Internet

advertising, consumers can search product information easily and

interactively.(Schlosser et al. 1999)


Online advertising is steadily seeing growth in India. Though broadband Internet

penetration is growing at snail‘s pace, Mobile internet figures are rising at breakneck

speed, which augurs well for online advertising growth in India. Internet & Mobile

Association in India (IAMAI), recently released a report which pegs text and display

advertising growth at Rupees 993 crores in the financial year 2010-2011 from Rs 785

crores in the financial year 2009-2010. Online Display advertising grew at about 28

percent, while online text advertising registered 26 percent growth. It is interesting to

note that display advertising is currently at growth stage in India, while globally

display advertising growth is on a decline after hitting a peak few years earlier. It is

quite surprising that pop-up and pop-under are still doing very well in India, whereas

globally one rarely sees them. Mature Internet markets like U.S and UK are relying

more on Video Ads and Social interactive kind of advertising models where ROI is

more robust and leads are far more qualified.(Prabhudesai n.d.)

Just four years from now Display advertising will be witnessing a sea-change – Half of

all theads that you will see will be Video Ads. This is one of the predictions that

Google has made during the keynote address at the Interactive Advertising Bureau‘s

MIXX Conference in New York, entitled ―Display 2015: Smart and Sexy.‖

The rise of Social Media will also have great impact on the future of Online Display

advertising – Google predicts that 75 percent of all ads will contain some sort of social

element in it.

Google Predictions on Display Advertising in 2015 that 50 percent of ad campaigns

will include video ads bought on a cost-per-view basis (that means that user will have

choice whether to watch it or not).Today, advertisers are starting to deliver ads that

are tailored to particular audiences. Many are using real-time bidding technology; so

that they can bid on the ad space that they think is most valuable. In 2015, 50 percent

of these ads will be bought using this real-time technology. Mobile is going be the

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number one screen through which users engage with advertisers‘ digital brands. By

2015, there will be five metrics that advertisers commonly regard as more important

than the click. In 2015, 75 percent of ads on the web will be ―social‖ in nature—across

dozens of formats, sites and social communities. In 5 years‘ time more than 50 percent

ads will be in Rich media formats which currently stand at mere 6 percent of total

display ad impressions. This will enable far greater creativity and interaction between

users and advertisers. Display advertising will grow to a $50 billion industry in five

years.(Prabhudesai 2010)

Literature Review

Advertisements today are considered as one of the best tool to reach the consumers.

Business professionals try hard to beat the competition and meet their long term goals

with the help of Advertising. The use of advertising within an organisation is

interestingly growing and various researchers value its importance as an important

factor that can influence the buying behaviour of the consumers. The researchers have

tried to understand the role of advertising within the organisation and as part of the

marketing. They have also tried to find the level of influence that the advertisements

can create to manipulate or influence the buying behaviour of the consumers. The role

of advertising changes unto what the organisation wants them to do. There were times

that an organisation used the advertising to help them survive from the impact of

economies trends, still the economies believe that advertising plays a significant role

on the consumer behaviour. Anon (2011)

Using a model adapted from the research of Pollay and Mittal (1993) which details the

primary structure of beliefs and attitudes about advertising in general. It focuses on

advertising messages delivered in an electronic marketplace. Thus, advertising

attitudes have been defined herein as either macro-level societal beliefs about

advertising, or micro-level personal beliefs about advertising. These dimensions are


defined in the research by the following functions of Internet advertising: product

information, social role and image, hedonic and pleasure, and good of advertising for

the Internet economy. Internet users overall attitudes to advertising in general are also

examined. The Internet originated as a communication channel, evolving from

communication needs, where distributed computer networks provided the

infrastructure to share information for work, or educational purposes. Nevertheless,

electronic commerce emerged in the early 1990s, impacting on the previously ‗free‘

channels of communication on the Internet. Current Internet market research is

dominated by online demographic research. However, given the increasing commercial

‗push‘ of Internet technologies, there have been limited research published detailing

Internet users‘ attitudes to commercial, or business activity. To date, research about

the impact of new technology on marketing paradigms lacks a consumer-based

perspective. The research undertaken in this study will begin to bridge this gap and

investigate how Internet consumers perceive the practice of traditional commercial

techniques in electronic media. In this research it was found that the information or

the advertisements on the Internet provides the users about product information and

keeps them up to date (60% users). According to this paper Internet advertising had a

negative effect on the internet users. Only 20% of the users saw advertising as

essential.(Previte n.d.)

According to byeong –Joon Moon The model that they prepared in their research

which was ―consumer adoption to the internet as an information search and product

purchase channel‖ tried to understand the factors that influence consumers to adopt

the internet instead of traditional channels for information search and product

purchase. The authors reviewed previous established theories on consumer decision

making in offline environments and research findings regarding consumer decision

making in online environment. The authors embraced the contingent consumer

decision making model provided by bettman et al. and classified the factors that

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influence consumers to use online channels instead of traditional channels into three

groups – person, problem, and context.(Joon moon 2004)

Josephine Previte in their empirical research has tried to explore internet consumers‘

attitude to the rise of commercialisation and specifically, the increase in advertising on

the internet. Their paper investigates consumers‘ attitudes to commercialisation of the

internet, and specifically focuses on internet user‘s belief and attitudes about internet

advertising. Is there a relationship between internet advertising consumers‘ attitudes

to advertising on the internet and their online experience with new technology? The

major findings from the research identified the existence of relationships between

attitudes towards advertising and online experience. Internet users with ‗one year or

less‘ experience (newer users) have a less negative attitude to advertising on the

Internet than users with four or more years experience (older users).Differences are

apparent between new and older users on issues concerning advertising‘s function and

role in providing product information, social role and image of advertising, and like or

dislike of Internet advertising. Internet users have strong negative attitudes toward

advertising in general and the societal effects of advertising, in particular.(Previte n.d.)

According to Ann E. Schlosser, Sharon Shavitt and Alaina Kanfer, despite the lack of

consistency across reports of the Internet population‘s demographic profile, there

appears to be consensus that the Internet population is predominantly male, young,

well educated, and affluent. Such demographic characteristics also appear to affect

attitudes toward advertising. That is, previous research has demonstrated that gender,

age, education and income impact consumers‘ judgments of and beliefs about

advertising. For instance, according to a recent survey, better-educated, wealthier

consumers hold less favourable attitudes toward advertising than less-educated,

lower-income consumers do. Based on demographics alone, this would suggest that

the Internet population would judge advertising (in general and on the Internet)

relatively unfavourably. In order to gauge whether attitudes toward IA can be


attributed to the unique demographic profile of Internet users rather than advertising

on the Internet. Internet advertising judgments has been compared to General

Advertising judgments of a sample weighted to match the demographics of the

Internet respondents. The results are due to the demographic composition of Internet

users rather than how IA is uniquely perceived relative to traditional advertising. It is

observed that Internet advertising may be rejected add times then General

Advertising. (schlosser et al. 1999)

Kenneth C.C. Yang has learned from various studies in the past that consumer

motives affect how they will use media and media contents. The study by the authors

explores effect of consumer motives on their search behaviour using internet

advertising. The study employed a 2 by 2 between subjects factorial experiment

design. A total of 120 subjects were assigned to an experiment condition that contains

an internet advertisement varying by advertising appeals(i.e., rational v/s emotional)

and product involvement levels (high vs. low). Consumer search behaviour (measured

by the depth, breadth, total amount of search), demographics, and motives were

collected by post experiment questionnaires. Because all three dependent variable

measuring search behaviour were conceptually related to each other, MANCOVA

procedures were employed to examine the moderating effects of consumer motives on

the dependent variables in four product involvement advertising appeal conditions.

Results indicated that main effects for product involvements and advertising appeals

were statically significant. Univariate ANOVA also showed that advertising appeals

and product involvement levels influenced the total amount of search. Three way

interactions among advertising appeal, product involvement levels, and information

motive were also statistically significant results indicated that consumer motives

influenced their total amount of search using the test advertisements.(Yang 2004)

For the majority of people exposure to advertising is as normal as breathing, eating or

sleeping. It is a bit like living near a main road eventually you learn to block out the

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noise. The same applies to advertising except that it is not only noise, but a constant

visual reminder of how we should look, feel and live. For example we are now exposed

to an estimated 3500 advertising images a day. We tend to block out the majority of

images because they become background noise – but they still have an impact on us

(zoubkov, et al 2004)‖Electronic media has catapulted advertising and consumerism

to new levels, and the explosion of the internet brings a threat of further

advertisements over exposure. From pollution, to loss of local culture, to a surge in

mental health issues, advertisements and consumerism have laid a path of destructions

for humankind. Business and the mass media will not stop using sophisticated

psychological advertising; the question is; will humankind be able to

survive.(Robertson 2008)

The Indian advertising industry is in a phase of transition. Rapid advances in

technology and an ever growing base empowered customer have redefined how

advertising is created, sold, consumed and evaluated. At this juncture advertisers are

experimenting with a number of emerging platforms including internet which has

been acknowledged as an interactive medium with a lot of advertising potential.

Advertising on the internet offers many unique opportunities that are not possible

with conventional media. It provides a better understanding of the consumers in a

more realistic way so that the advertisers employ personalisation in their promotion

campaign on individual basis. As a result, media planners include internet as the most

preferable medium to reach target audience with the appealing messages. At present

advertisement on the internet has become the most significant development within

the industry. Internet advertising leads to active participation of consumers by

sending a clear message to consumers. It also turns potential consumers into actual

consumers by promoting materialism and stimulating consumer needs. The present

study is an attempt to measure the impact of occupation on consumer demand of

internet advertising. (Nagar et al. n.d.)


Objectives of the Study:

1. To study the variables affecting Internet Advertising.

2. To develop a model for analysing the potential of Internet Advertising

among College going Youth.


This Research has adapted questions to convey information about the Impact on

Internet users of Advertising via Internet and its effect on their purchasing

behaviour. A quantitative social survey approach is utilised and questionnaires

have been distributed to students of few colleges in traditional paper format.

The research type which is used is exploratory in nature .This genre of research

simply allows the marketer or a researcher to gain a greater understanding of

something that he/she doesn’t know enough about. In the research we are trying

to find out the potential of Internet Advertising on College Youth of Indore

City. Primary data is collected through self-structured and close ended

questionnaire. The sample of the study was constituted of 100 respondents from

various management colleges of Indore city.

Tool for data analysis

The analysis of collected data was done by a software statistical package for

social sciences (SPSS) version 17.0 for windows and MS excel 2010. We have

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used multiple regression method to analyse the hypothesis. We have tested the

following hypotheses.

Ho: Potential for internet Advertising exists.

Reliability of measures

Reliability of the measures was assessed with the use of cronbach alpha.

Cronbach alpha allows us to measure the reliability with different variables .as a

general rule a coefficient greater than or equal to 0.7 is considered acceptable

and is a good indicator of reliability. The cronbach alpha for the questionnaire

is 0.78. Hence it is reliable and can be used for the analysis.

Findings:

After applying multiple regression taking into consideration that CSE (Credible

Sales Enhancement) is dependent. We found that R=.453 which is low but also

show that the potential exists. On the application of Durbin-Watson test, we got

a result of 1.74 which is very favourable and process our hypothesis that

‘potential for internet advertising exists’.


Model Summary

Model R

R Square

Adjusted R Square

Std. Error of the Estimate

Durbin-Watson

1 0.45347 0.205636 0.126199 0.8841

1.73956746

a Predictors: (Constant), VAR00011, VAR00005, VAR00006, VAR00007, VAR00004, VAR00001, VAR00008, VAR00003, VAR00002

b Dependent Variable: VAR00009

ANOVA

Model

Sum of Squares df

Mean Square F

1 Regression 18.21111 9 2.02345711

8 2.58

9

Residual 70.34889 90

0.781654288

Total 88.56 99

a Predictors: (Constant), VAR00011, VAR00005, VAR00006, VAR00007,

VAR00004, VAR00001, VAR00008, VAR00003, VAR00002

b Dependent Variable: VAR00009

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Residuals Statistics

Minimum Maximum Mean Std. Deviation N

Predicted Value 1.822127 3.976511 3.12 0.428894681 100

Residual -2.51813 2.064232 -1E-

16 0.842967857 100

Std. Predicted Value -3.02609 1.99702 1E-16 1 100

Std. Residual -2.8482 2.334808 -2E-

16 0.953462589 100

a Dependent Variable: VAR00009


Unstandardized Coefficients

Standardized Coefficients

t Sig.

Model B Std. Error

Beta

1 (Constant) 1.24 0.57 2.19 0.03

VAR00001 0.01 0.10 0.01 0.07 0.95

VAR00002 -0.03 0.12 -0.03 -0.30 0.80

VAR00003 0.28 0.11 0.29 2.55 0.01

VAR00004 -0.15 0.10 -0.16 -1.50 0.14

VAR00005 0.18 0.10 0.19 1.85 0.07

VAR00006 0.00 0.11 0.00 0.00 0.97

VAR00007 0.15 0.09 0.20 1.73 0.09

VAR00008 0.00 0.09 0.01 0.06 0.96

VAR00011 0.12 0.10 0.13 1.28 0.20

Dependent Variable: VAR00009

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The variable have good degree of explanation and the model is generated after

the application of stepwise linear multiple regression.

CSE = 1.245 + 0.6596*v1 + (-0.312 * v2) + (0.281*v3) + (-

0.147*v4) + (0.182*v5) + (-0.396*v6) + (0 .151*v7) +

(4.95*v8) + (0.122*v11)

Upon the examination of the model we find that var1 and var8 needs special focus

while var2, var4 and var6 need controlled management decisions. Same way var3, var5,

var7 and var11need an enhanced approach so as to achieve controllable and sustainable

CSE since the objective of the advertising is to achieve credibility along with sales

enhancement.

Scope and limitations

This report has taken into account the importance of internet as a method of

advertising which has scope of further research. Marketers must focus on various

different factors as discussed earlier to enhance the effectiveness of Internet

advertising on the college going youth. The aim of the research was to analyse the

potential of Internet Advertising on College going youth in Indore city. The limitation

of the study is the model prepared is preliminary and quantitative. Hence indepth

study is required for enhanced model that can be used for various managerial

decisions.

Conclusion

To date, limited empirical research has been undertaken to explore the Internet

consumers‘ attitudes to the rise of commercialisation and specifically, the increase in


advertising on the Internet. In this study various college going students have been

surveyed to find out the potential of internet advertising. The study reveals that

college going youth is not very attentive to the advertisements poping up on the

internet. But at the same time, it implies that there is huge potential in this field and

hence the marketing managers must exploit this opportunity to induce more creativity

in the advertisements and make them more interesting and appealing to the youth.

The model developed in this paper will be studied vigorously to produce an enhanced

model that will provide both academic and practical benefits to the advertising

industry, marketing academics and practitioners by contributing to a better

understanding of the emerging digital consumer.

REFERENCES:

Anon, Impact of advertising on consumer buying behaviour research proposal paper. Available at: http://www.essaythesis.net/2011/04/impact-of-advertisement-on-consumer.html.

Prabhudesai, Arun, Indian Online Advertising market to grow at 26.5% – BFSI

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market-growth/ [Accessed March 16, 2011].

Prabhudesai, Arun, 2010. online display advertising 2015: google predictions. Available

at: http://trak.in/tags/business/2010/09/29/online-display-advertising-future/

[Accessed March 16, 2011].

Schlosser, Ann, Shavitt, Sharon & Kanfer, Alaina eds., 1999. survey of internet users

attitude towards internet advertising. journal of interactivemarketing, vol. 13(3).

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Available at: http://www.essaythesis.net/2011/04/impact-of-advertisement-on-

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consumer demand: a study of internet advertising. impact of occupation on consumer

deamnd.

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Approaches‖, RESEARCH METHODS FOR BUSINESS STUDENTS ,Prentice Hall ,4th

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publishing, 9th edition, pp.402

final book 2011

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