impact of advertisement on brand...
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Volume 5, Number 1, January – March’ 2016
ISSN (Print): 2279-0934, (Online): 2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996, SJIF (2015): 6.622
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1957 |P a g e
IMPACT OF ADVERTISEMENT ON BRAND PREFERENCE OF BEER PRODUCTS
WITH REFERENCE TO HAWASSA CITY
Dr. Brehanu Borji1 Shimeles Nega Amele2
ABSTRACT
Measuring the impact of advertisement on consumers’ brand preference is very essential for every marketer. If advertisement
does not create any positive change in consumers’ brand preference, all resources such as money, time, and effort spent on
advertisement will be lost in vain. Most marketers use advertisement as a tool to attract substantially new customers and to
retain the existing ones. The purpose of this study is to examine the impact of advertisement on consumers brand preference in
the beer market in Hawassa city. Every brand in this market uses advertisement as a major weapon to overcome the fierce
competition. In order to study the impact of advertisement in consumer brand preference, three main variables were
considered with appropriate dimensions. They are advertising media, source of advertisement, and characteristics of
advertising messages as independent variables, and brand preference as dependent variable. The structured questionnaires
were distributed to 384 respondents, which are selected using stratified sampling technique. However, only 346 duly filled in
valid questionnaires were collected. The collected data were analyzed using descriptive statistics (frequency, percentage) and
inferential statistics like correlation and multiple regressions. The finding revealed that there are positive and significant
relationships between advertising media, source of advertisement, characteristics of advertising messages and brand
preference of beer. Even though it has high influence on overall view, among advertising media, TV is the most influential
media, where as internet advertisement has low influence in brand preference of beer in Hawassa City context. Moreover, the
result of qualitative analysis indicates that the need for celebrity-product and celebrity- target audience match. This
congruence might influence the celebrity endorsement effectiveness through the process of consumer attributions of the
celebrity's motive for associating him /herself with the particular product. The personalities of celebrities are also very strong
and they can rapidly change perceptions of a brand. Eventually, the study recommended appropriate actions for companies in
refining their advertising strategies as a means of overcoming the intense competition that exist in the market. So doing, they
can increase their sales volume and market share.
KEYWORDS
Advertisement, Brand Preference, Advertising, Advertising Media, Advertising Message etc.
INTRODUCTION
Advertising plays a crucial role for any business to boost up its performance because it is a powerful promotional tool to attract
consumers towards the product. In today’s competitive environment, the use of advertising becomes mandatory for manufacturers,
suppliers, marketers and others who are directly or indirectly related to business. Advertising is a dominant and leading weapon in
all marketing tools due to its positive impact on consumers’ buying behavior. It is an attractive way to communicate and convey
the message to the audience. Advertising today is no longer a mere tool of marketing. It is a business, a creative process, a social
phenomenon, and a fundamental ingredient of a free enterprise system.
The use of advertising to promote the product to its users is not new phenomena. Different historical records inform us that it was
in use since the olden days. According to Kotler and Armstrong (2008), advertising could be traced back to the very beginning of
recorded history. Archaeologists working in the countries around the Mediterranean Sea dug up signs announcing various events
and offers. The Romans painted walls to announce gladiator fights and the Phoenicians painted pictures, on large rocks along
parade routes, promoting their wars. During the Golden Age in Greece, town criers announced the sale of cattle, crafted items and
even cosmetics. However, now-a-days the way advertising is used more complicated because of long-term changes such as the
increase of larger and more diverse range of media as well as the arrival of new and advanced technologies.
According to Arens et.al. (1996), “Advertising is the non personal communication of information, usually paid for and usually
persuasive in nature about products (goods and services) or ideas by identified sponsors through various media.” This definition
clearly emphasizes the fact that all kinds of advertising – be it for products, services or ideas is usually aimed at a particular
segment of the population that is called the target audience, which could be either the consumers or business houses. Advertising
presents the company and its products to the market helps in the organization to achieve the marketing goal and hence there is a
need to understand the relationship between marketing and the way consumers behave. This research mainly investigates the
1Associate Professor (Marketing Management), School of Management and Accounting, College of Business and Economics,
Hawassa University, Ethiopia, [email protected] Hawassa, Ethiopia, [email protected]
Volume 5, Number 1, January – March’ 2016
ISSN (Print): 2279-0934, (Online): 2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996, SJIF (2015): 6.622
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1958 |P a g e
impact of advertising on brand preference of consumers’. Different factors such as advertising media, source of advertisement,
and characteristics of advertising messages and others which influence brand preference of consumers’ are considered in this
study to examine their impact on beer brand preference.
LITERATURE REVIEW
Conceptual Literature
According to Tolani (2012), the first advertisement may have been a sign painted on a wall of a building. The early outdoor-
advertising competitors were town criers employed by merchants to praise their goods. Gutenberg’s invention of the moveable-
type printing press in 1450 resulted in the mass production of posters and circulars. According to Pope (2013) over a century ago,
Harper’s Weekly commented that advertisements were “a true mirror of life, a sort of fossil history from which the future
chronicler, if all other historical monuments were to be lost, might fully and graphically rewrite the history of our time.” Few if
any historians today would claim that they could compose a complete history of an era from its advertisements, but in recent
year’s scholars have creatively probed advertisements for clues about the society and the business environment that produced
them. The presences of many excellent online collections of advertisements provide learners as well as established scholars the
opportunity to examine these sources in new ways. The experience can be tantalizing and frustrating, since advertisements do not
readily proclaim their intent or display the social and cultural context of their creation. Yet studying advertisements as historical
sources can also be fascinating and revealing.
Belch and Belch (2003) stated that in the modern world nearly everyone is influenced to some degree by advertising and other
forms of promotion. Organizations in both the private and public sectors have learned that the ability to communicate effectively
and efficiently with their target audiences is critical to their success. Advertising and other types of promotional messages are used
to sell products and services as well as to promote causes, market political candidates, and deal with societal problems such as
alcohol and drug abuse.
Kotler, Keller, and Koshy (2009) stated that, advertising is the best known and most widely used form of promotion because of its
persuasiveness; it can create brand images and instill preferences among consumers. Advertising can result in creating strong
positioning of brands thereby creating loyal consumers. Morden (1991) also corroborates the views given by Kotler et. al., (2009)
stating that advertising is used to establish a basic awareness of the product or service in the minds of the potential customers and
to build up knowledge about the brand.
According to Agrawal (2012), advertising is a relatively low-cost method of conveying selling messages to numerous prospective
customers; it can secure leads for salesmen and middlemen by convincing readers to request more information and by identifying
outlets handling the product. It also can force middlemen to stock the product by building consumer interest. Advertising is to
stimulate market demand. While sometimes advertising alone may succeed in achieving buyer acceptance, preference, or even
demand for the product, it is seldom relied upon. Advertising is efficiently used with at least one of other sales methods, such as
personal selling or point-of-purchase display, that directly move customers to buying action. Advertising builds a corporate image
for a company. It increases sales of the product or service thereby creating and maintaining a brand identity or brand image (David
et al., 2009).
According to Macrae (1994) ``Brand benchmarking applied to global branding processes'' consumer buyers usually approach the
marketplace with a well-established set of tastes and preferences. The vast majority of times, even their unplanned and
unanticipated purchases are strongly influenced by pre-existing tastes and preferences. In a very real sense, marketing and
promotion constitute a battle for the minds of consumers. While direct competitors strive to outdo one another to winning greater
brand preference and loyalty, there is also rivalry between producers and marketers in very different industries, promoting very
different kinds of goods and services (Knox, 1997). Almost every one grows up in the world which is flooded with the mass
media e.g. television, advertising, films, videos, billboards, magazines, movies, music, newspapers, and internet (Latif and
Abideen, 2011).
According to Thompson (2005), source of advertising, are groups that people refer to when evaluating their own qualities,
circumstances, attitudes, values and behaviors? Source of advertising act as a frame of reference to which people always refer to
evaluate their achievements, their role performance, aspirations and ambitions. A source of advertisement can be from either a
membership group or non-membership group; it can also
Empirical Literature
Michael (2012) conducted his study with the title of “Impact of Media on Consumers’ Brand Preference” undertaken on
Carbonated Beverage Market with Reference to Coca-Cola. The collected data from the survey shows that brand preference exists
in the carbonated beverage Market and the media efforts affect consumer preferences and their brand choice. Out of eight different
Volume 5, Number 1, January – March’ 2016
ISSN (Print): 2279-0934, (Online): 2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996, SJIF (2015): 6.622
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1959 |P a g e
carbonated beverage brands, which featured in the study, Coca-Cola topped the brand Preference table in carbonated beverage
industry. Hence, it is clear that Coca-Cola is the favorite carbonated beverage among consumers. Based on this study,
advertisement and taste was the major factors responsible for the success of Coca Cola. The implication is that other variables do
not influence much when brand is supported by heavy advertisements and appeals to consumers’ taste buds, which persuades
them to continue buying. Majority of the respondents claimed to have known Coca-Cola over 15 years and Coca-Cola having
been in existence for more than 20 years remain the delight of many consumers of carbonated beverage. It is evident that the
brand has enjoyed a relatively prolonged life cycle. The study also showed that advertisement is the major source of awareness of
Coca-Cola and Television is the most effective medium as cited by most of the respondents. Vivekananthan (2010) studied
“Influence of advertisement in consumer brand preference with reference to soft drinks” .The research was conducted by taking
three variables, namely Information, communication, and comprehension. Findings of this research revealed that the variable
information has high influence in advertisement on consumers’ brand preference. This has the mean value of 3.62 and standard
deviation of 0.39. Here three dimensions measure the variable information: attractiveness, attention, and awareness. These three
dimensions account for about 56 percent of respondents that are highly influenced by information in advertisement.
The next variable is communication; the influence of communication in advertisement indicates the high influence in consumers
brand preference mean value 3.73 with standard deviation of 0.52. From 200 respondents 66 percent expressed their high
influence, 28 percent expressed their moderate influence and 6 percent expressed their low influence in brand preference.
Message, source and media considered as main dimensions of communication to measure the influence of advertisement in
consumer brand preference of soft drinks. The final variable is comprehension. The comprehension in advertisement indicates the
high influence in the brand preference of consumer. Mean value 3.67, standard deviation 0.52. From 200 respondents 63 percent
expressed their high influence, 33 percent expressed the moderate influence and 4 percent expressed low influence in consumer
brand preference. It is measured through the three dimensions: recall, link, and attitude. Recall had 71% of high influence in
comprehension with the mean value of 3.83. Link indicated 49% modern influence and attitude showed 73% of high influence.
Although the three variables showed high influence in overall view, the researcher wanted to consider indictors, which have low
and moderate influence in their future developments to maintain its position in the market in the long run.
Gezachew (2012) assessed the influence of advertisement on consumers brand preference with reference to electronics products in
Hawassa City. In the study, he used four variables, namely, advertising media, features of advertisement, contents of advertising
messages and reference group. The findings of the study revealed that from advertising media perspective television advertising is
the most preferred by consumers to have awareness about the product and chose alternative brand. 72.5% of respondents
expressed that television advertising is most preferable. Mother Tang language is also the most preferable language by audiences.
To convey advertising message experts, celebrities, and common person were preferred by consumers to get reliable information
of the brand. Statistically celebrities account for the mean value of 4.58 and standard deviation of 0.804.and experts have the mean
value of 4.37 and standard deviation of 0.876. Common person, family and friends accounted the mean value of 3.73 and 4.29
respectively and the standard deviation of 1.486 and 1.081 respectively.
Chandrima (2009) conducted the research on “The impact of electronic and print media on consumers brand preference.” The
results of this study found out that people notice advertisements and the awareness level of the brand is increased showing
intention of purchasing and being loyal to the brand. This is only because of advertisements. Based on this study he concluded
television advertisements have more access to the people. Customers prefer television in comparison to other media since they get
both the audio and visual effects .This also proved that customers rely on advertisements shown in media.
Tendon (2011) assessed the “Impact of advertising on the brand preference of tea.” variables of the study are advertising, sales
promotion, they are source of awareness and income, age, gender, and education are also independent variables. The study
revealed with the perspective of source of awareness of tea brand, advertising accounts for 72.4%of the respondents while 2.2%
respondents feel that sales promotion schemes create awareness of the brands. In the side of parameters for the parameters of tea
brand, 63.8% of respondents considered quality of the product (tea) as the most important parameter and only 12.9% of
respondents considered advertising as the most important reason for the preference of tea followed by availability 4.4% and
packaging accounts for 2.2%.from this finding he interpreted that consumers nowadays are quality conscious and want to spend
their money on quality matters Again the study revealed that age, income, and education have great impact on the brand
preference of tea whereas gender has no impact on the brand preference of consumers, its F value is 0.246 and P value of 0.62.
The result of ANOVA table shows that Age has F value of 11.029 and p value is <0.000. In addition, Income has F value 3.83 and
P value of 0.010. Finally, education has the F value of 4.038 and P value of 0.008, which was significant.
Singh et al.(2012) “Impact of advertisement on the brand preference of aerated drinks.” The study is conducted by taking two
major variables such as celebrity endorsement and types of advertising media. The finding revealed that celebrity endorsement has
positive impact on attention and exposure of consumers and from different types of media, television advertisement became the
most effective and popular media and liked by consumers followed by internet and outdoor media. MacKenzie and Lutz (2000)
identify advertising credibility as consumers’ general perception towards the truthfulness, reliability, trustworthiness and
believability of an advertisement. The study of Goldsmith, Lafferty and Newell (2000) also indicated that credibility of an
Volume 5, Number 1, January – March’ 2016
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advertisement is affected by various factors, particularly by the company’s credibility and the person who brings a message.
Studies such as Ramaprasad and Thurwanger (1998); Haghirian and Madlberger (2005) lend support that there is a strong and
positive relationship between informative and consumers’ attitude towards advertising.
STATEMENT OF THE PROBLEM
According to Vivekananthan (2010), marketers’ main objectives are getting new consumers and retaining the existing ones to
increase their market share and sales volume. The cost of getting new customers is five times greater than the cost of retaining the
current customer (Reicheld & Sasser, 1990). To do so, marketers are spending huge amount of money, energy, and time for
advertising their products, services and ideas. As it is stated in Wikipedia free encyclopedia, in 2010 spending on advertising was
estimated at more than $300 billion in the United States and $500 billion worldwide. Form this TV ads covers between thousands
and millions of dollars for a 30-second advertisement. For instance, in USA about $50,000-$750,000 costs for set up of
advertising, and for media it costs about $35,000 to $2 million per 30 second spot. It is so expensive than other types of ad media.
Companies allocate a considerable part of their resources to advertising activities in the hope that advertising dollars are earning
the best return on investment.
Marketers do advertisement in order to inform the availability of the product, to persuade that their product is of high quality, fair
price, durable etc. and to remind about existing product. Advertising plays an important role in today's competitive world by
which organizations communicate with their customers. If advertisement does not create any positive change in consumers’ brand
preference, all the resources such as money, time and efforts spent on advertisement will go in vain.
In Hawassa, there are a number of beer products in the market such as BGI products (St. George Beer, Amber Beer, and Castle
Beer), Harar Beer, Bedele Beer, Dashen Beer, Meta Beer and other foreign and local brands. The producers of these brands have
been striving to increase their market share through varying marketing strategies. They do use sales promotion, advertisement,
personal selling, and also provision of point -of -sale materials like, T-shirts, cups, posters, shelf strips etc., to their target
consumers and tables, chairs, and umbrellas in which their trade mark is labeled on it to sellers of their products in order to stir,
attract, and retain the existing consumers towards their product. This research study was mainly focused on assessing the impact
of advertising on brand preference of consumers and different factors, which do have influence in brand preference of consumers
that directly or indirectly contributes to the increase of market share and sales volume in the industry. In other words, the study
made hard effort to see whether the advertising has brought about any significant change on sales volume or market share of beer
beverages.
OBJECTIVES OF STUDY
General Objective
The general objective of the study is to explore the impact of advertisement on consumers’ beer brand preference.
Specific Objectives
To examine the relationships between advertising and consumers’ brand preference of beer.
To figure out the consumer perception regarding the most effective media for Advertisements.
To examine the impact of celebrities on consumers brand preference.
To investigate the influence of language of advertising on consumers brand preference
To explore the relative impact of each independent variable (advertising media, source of advertising, and
characteristics of advertising message) that significantly influences consumers’ brand preference of beer.
To assess the impact of income level of consumers on beer brand preference.
To examine the age difference of consumers in brand preference of beer through advertising.
HYPOTHESIS OF STUDY
Ho1: There is no positive relationship between advertisement and consumers’ brand preference.
Ho2: Components of Advertisement have no positive impact on consumers’ brand preference.
Ho3: Each advertising media has no positive impact on consumers’ brand preference.
Ho4: Each reference groups has no positive impact on consumers’ brand preference.
Ho5: Each characteristic of advertising messages has no positive impact on consumers brand preference.
Ho6: Celebrities have no positive impact on consumers brand preference.
Ho7: The impact of advertising on brand preference of beer is not dependent on income level.
Ho8: The impact of advertising on brand preference of beer is not varied by age.
Volume 5, Number 1, January – March’ 2016
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SIGNIFICANCE OF STUDY
There are number of beer manufacturing and marketing companies in the City of Hawassa. All of them are employing
advertising campaign in order to increase their sales volume and market share by attracting more users of their brands.
This study, therefore, is conducted to see whether advertising strategy has brought and helped them to increase the
desired sales volume and market share.
The finding of the study benefits the marketers, manufacturers and suppliers by positively influencing consumers to
make purchase decision. In addition, it helps in developing the integrated marketing communications program, through
setting new advertising program by developing message and media strategy (determining which communication
channels will be used to deliver the advertising message to the target audience). Besides, the research will help them to
understand the types of media, which are more relevant for advertisement, the language that best fits the advertising
campaign.
Moreover, it helps them in realizing the importance of advertising endorsers like: celebrities and experts.
In addition, this research benefits companies to target their audiences by income level and age. The result of this
research helps companies in creating awareness about their products and to getting more market share and increasing
sales volume. This can make them to earn more revenue and profit. In other words, it helps them in evaluating the return
on investment (ROI) of advertising campaign.
This research benefits consumers in providing information about the brand’s availability, product modality, quality, etc.
This research can be used as a source of reference and benchmark for new researchers who have intention to make
further study in this area.
Finally, it will help to construct suitable recommendations about advertising in attracting consumers to the brand choice.
SCOPE OF STUDY
The study was conducted on assessing the impacts of advertising on consumers’ beer brand preference in Southern Nations,
Nationalities and Peoples Region (SNNPR), Hawassa city. The study was primarily focused on why consumers prefer one brand
to the other and which factors were more influential through advertisement of beer brands. It was also focused on the factors of
advertisement such as types of media, source of advertising, and characteristics of advertising messages and languages of
advertisement. It was conducted by taking beer products as only reference to the study. The study was conducted by taking data
from September 2014 to January 2015. In this study, both quantitative and qualitative methods were used.
LIMITATIONS OF STUDY
There were several limitations regarding this research study. Primarily, it was difficult to investigate a broad topic that requires
deep investigation, associated with large number of factors within the budgeted time, and allocated fund. Secondly, the research
was confined to the viewpoints of consumers, managers and salesmen only. It did not include the viewpoints of manufacturers,
whole sellers and distributers. Thirdly, this research relied mainly on the primary data. It was also difficult to find the exact
number of beer consumers in Hawassa city due to various natures and behavior of people. The result was also limited as the target
group was restricted to people who were located in Hawassa and took beer products in the selected area. Moreover, the result
obtained in this research may not represent the whole country (Ethiopia), since it was confined only in Hawassa city urban area.
Other cities of the country also require the conduction of the same investigation in order to know the beer brand preference by the
users of beer product.
RESEARCH METHODOLOGY
The study was conducted aiming to assess the impact of advertisement on consumers’ brand preference with reference to beer
products in Hawassa city. In this research, both quantitative and qualitative data were used. However, more emphasis was given to
quantitative data. The researcher also made use of qualitative data in order to triangulate the data collected through the
quantitative method. The study employed both primary and secondary data. The primary data were collected directly from the
sample respondents such as the consumers of beer, sales personnel and managers in selected groceries, restaurants and hotels
using structured questionnaire. Interview method was also used to substantiate the data obtained through questionnaire method.
The secondary data were collected from such sources as books, journals, articles, research papers, and the internet.
Businessmen, traders, employees and other dwellers in Hawassa City, aged above 18 and consume branded beer products, and
who frequently visit hotels, restaurants and groceries in all Sub-Cities were taken as the target population of the study. To draw
the required sample size, eight sub-cities were selected by the researcher. To draw a proportional size that constitutes a sample of
the study, the researcher used stratified sampling technique, which provides equal chance of being considered to each stratum, and
then items were selected from each stratum to constitute a sample. To this effect, the study used sample size determination
formula provided by Malhotra (2011) as follows:
Volume 5, Number 1, January – March’ 2016
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N = 𝟐𝟓𝟎𝟎𝒙𝟐𝟏𝟎,𝟔𝟕𝟗𝒙𝟏.𝟗𝟔𝟐
[𝟐𝟓(𝟐𝟏𝟎,𝟔𝟕𝟗−𝟏)]+[𝟐𝟓𝟎𝟎𝒙𝟏.𝟗𝟔𝟐] 𝐧 = 𝟑𝟖𝟑. 𝟓𝟎 ≈ 𝟑𝟖𝟒
n: The minimum required sample size.
N: Population size of Hawassa city urban area
Z: The value for Z is found in statistical tables which contain the area under the normal curve (z =1.96) with 95% confidence
level.
After determining the sample size, to determine the size each stratum constitutes, the following formula is used from Kothari
(2004).
Sample Size = Total Sample Size x Sub-city Population
Total Population
Table-1: Population Distribution by Sub-Cities and the Number of Sample Size Proportion
Sources: Computed by the researcher based on the population of housing report (CSA, 2007).
As a mentioned of it has been made earlier, the primary data were collected using questionnaires and interview methods. A total
of 384 sets of questionnaires were administered and distributed to the potential respondents that are believed to frequently use
beer in the selected sample area. However, only 346 duly filled in questionnaires were returned representing the rate of 90.1
percent. Structured interview was prepared and the responses were collected from sales personnel and managers of the targeted
hotels, restaurants and groceries. Each question in the questionnaire was designed properly to easily meet research objectives. The
questionnaire consisted of three parts: Part one was prepared to gather general information about the respondents’ demographic
aspects (characteristics), part two consisted of multiple choice questions related to the study variables and the third part, on the
other hand, consisted of questions about major factors related to advertising and can influence consumers brand preferences.
The items of the questionnaire were adopted from different sources of the extant literature. The items for the independent
variables such as advertising media and sources of advertising were adopted from Gezachew (2012), Adeolu et al. (2005) and
Ling et al. (2010).The items for Characteristics of advertising message were adopted from MacKenzie and Lutz (2000); Haghirian
and Madlberger (2005); Vivekananthan and Ling et al.(2010). Lastly, the items for dependent variable brand preference were
adopted from Gezachew (2012). More over the researcher added some elements of factors from theoretical literatures. Likert scale
format was applied, as the scale was suitable for self-administered survey method Hair, Bush and Ortinau (2004). A 5-point Likert
scale anchored by “strongly agree” (5) to “strongly disagree” (1) was adopted as the attitude measurement for the independent and
dependent variables. Before distributing the questionnaire to the sample respondents, the validity and reliability of it was tested by
conducting a pilot survey in order to see the strength of internal consistence. To this effect, Cronbach’s Alpha is used to test the
internal consistence between the items in the category. Accordingly, the test result of pilot questionnaire was found to be between
0.815 and 0.875 which is greater than 0.70 (See Table 12, Appendix A for Cronbach’s Alpha computations). After test is
completed, the questionnaire is accepted and distributed to the respondents. After collecting the required data, proper tools and
techniques were used for classification and analysis. The study employed both descriptive and inferential analysis. To this effect,
the software called Statistical package for the social science (SPSS) version -20 was used for the processes of analysis. As the
study involved more than two independent and dependent variables, ANOVA test is used to prove and disprove the set
hypotheses.
n = 𝟐𝟓𝟎𝟎𝒙𝑵𝒙𝒁𝟐
[𝟐𝟓(𝑵−𝟏)]+[𝟐𝟓𝟎𝟎𝒙𝒁𝟐]
S/N Sub-cities Population Percent (%) Sample Size
1 Hawella-tulla 978 0.46 2
2 Mehal Ketema 19,685 9.34 36
3 Bahile Adarash 19,964 9.47 36
4 Hayek Dar 23,367 11.09 42
5 Addis Ketema 23,965 11.38 44
6 Misrak 31,191 14.80 57
7 Meneharia 32,945 15.64 60
8 Tabor 58,584 27.81 107
Total 210,679 100 384
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ISSN (Print): 2279-0934, (Online): 2279-0942
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DATA ANALYSIS AND RESULT DISCUSION
Demographic Characteristics
As far as the sex of respondents is concerned, the male respondents constituted 256 (74%) of the total respondents and female
respondents represented 90 (26%) of the total sample respondents. This shows that men are more consumers of beer than women.
The results obtained through interview from sales personnel and managers also revealed that majority of beer consumers in the
study area were males. This implies that gender difference has influence on consumers brand preference on different brands of
beer.
As far as the age of the respondents is concerned, 167(48.3%) of respondents were categorized in the age range of 26-35, 125
(36.1%) of the respondents were in between 18-25, 37(10.7%) of respondents lied in between 36-45 years, 15 (4.3%) of the
respondents were above 55, whereas 2(0.6%) of the respondents were in the age range of 46-55 years. This implies that the
majority of beer consumers in the study area were in the age range from 18-35 years old. In other words, the young and adult
consumers were found to be frequent users than other age groups.
As far as the educational status of the respondents is concerned, 236(68.2%) of the respondents were Degree holders, 37(10.7%)
respondents completed secondary school, 31(9%) of the respondents were diploma graduates, 22(6.4%) of the respondents
completed primary school, and the remaining 20(5.8%) respondents were certificate holders. From this, it can be implied that the
majority of respondents were first-degree holders and have access to work and earn money they consume for beer. There were no
illiterate respondents in the study area consuming beer when this study was conducted.
As far as the marital status is concerned, the study revealed that 213 (61.6%) of the respondents were unmarried or single and the
rest 133(38.4%) of the respondents were married. This implies that the majority of respondents who frequently consume beer were
single. As a result, they are not shouldering responsibility of their families and they use their earnings for the consumption of beer.
As far as the monthly income is concerned, the study revealed that 157 (45.4%) of the respondents earn monthly salary between
1001 and 3000 Birr; 100 (28.9%) of the respondents earn between 3001 and 5000 Birr; 31 (9%) of the respondents earn monthly
income more than 7000 birr; 24 (6.9%) of the respondents have no income at all as they are dependent on their parents. The
respondents having monthly salary less than 1000 Birr were 23(6.6%) whereas the remaining 11 (3.2%) of the respondents earn
monthly salary between 5001-7000. As shown in the same figure, the majority of the respondents earn the monthly salary between
1001-5000 birr. This implies that the level of income, in some extent, determines the demand and consumption of beer product.
Affluent respondents are consuming beer frequently because of their income. However, the study found that some respondents
who do not have any income and dependent on their parents are also addicted to using beer brands.
As far as the working condition of the respondents is concerned, the study revealed that 194(56.1%) of the respondents were
employed while 47(13.6%) of the respondents were unemployed and 74 (21.4%) were students and the remaining 31(9%) of the
respondents were others. Majority of the respondents (56.1%) were employed and are earning income that might be used for
consumption of beer. This implies that employed consumers could afford paying more for beer than unemployed ones because the
later are dependent on the income of their parents.
Table-2: The Role of Advertisement on Purchase Decision
Response Frequency Percent
Do you rely on advertisement to make purchase decision? Yes 236 68.2
No 81 23.4
Some times 29 8.4
Total 346 100.0
Sources: Survey, 2014
According to Table-2 here above, 236 (68.2 percent) of the respondents replied that advertising has influenced them to make
purchase decisions and 81 (23.4 percent) of the respondents replied that they are only sometimes relying on advertising .This
implies that most consumers focus on advertising before making purchase decision regarding the purchase of beer brands.
According to table-3 below, 165(47.7%) of the respondents replied that they preferred mother tang language to other languages
and 70(20.2%) of the respondents replied that they would prefer both national and mother tang languages to other languages. Still
57(16.5%) of the respondents responded that they would prefer official language and the rest 54(15.6) of the respondents replied
that they would prefer international language in advertisement. From the above table it can be concluded that mother tang
language is the most popular one by consumers when advertisement is placed.
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Table-3: Type of Language Customers Prefer in Advertisement
Question Responses Frequency Percent
Which language do you prefer
when you watch an advertising?
International language 54 15.6
National language 57 16.5
Mother tang language 165 47.7
Both national and mother tang 70 20.2
Total 346 100.0
Sources: Survey, 2014
Figure-1: Types of Beer Brands Preferred By Respondents
Sources: Survey, 2014
In figure 7, the study revealed that the most popular beer is St. George beer 120(34.7%) of the total followed by Meta beer
78(22.5%) which is also followed by Harar beer 51(14.7%) respectively. This implies that St. George, Meta, and Harar beer had
relatively higher brand equity and market share than others in the market. These companies are found that they are practicing
advertising strategy properly in order to increase sales volume and market share by maximizing brand equity.
Figure-2: Types of Media Preferred by Consumers
Sources: Survey, 2014
0
50
100
150
St.George
beer
Bedelebeer
Hararbeer
Metabeer
Castlebeer
Amberbeer
Dashenbeer
Others
120
3651
78
933
181
34.7
10.4 14.7 22.52.6 9.5 5.2 0.3
Frequency Percent
Television113(32.7%)
Radio73(21.1%)
News paper49(14.2%)
Magazine41(11.8%)
Internet13(3.8%)
Out door57(16.5%)
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As it can be seen in figure 8, different advertising media are used as a vehicle to communicate their products to different users.
According to figure 8, most of the respondents 113(32.7%) replied that they would prefer television advertising to other kinds of
advertising media. They reasoned out that pictures support what they hear when TV advertising is employed.
Hypothesis testing
Ho1: There is no positive relationship between advertisement (advertising media, source of advertisement, and characteristics
of advertising messages) and consumers’ brand preference.
Table-4: Correlations between Independent Variables (Advertising Media, Source of Advertising, Characteristics of
Advertising Messages) and Dependent Variable (Brand Preference)
Note: ** Correlation is significant at the 0.01 level (2-tailed).
Sources: Survey, 2014
The study revealed that there was positive and strong relationship between brand preference and advertising media, because the
value of “r”=0.876 and “p” = 0.000 which means the correlation was significant at 0.05 significant level (2-tailed). The study was
supported by the findings of Jain and Sharma (2012). There was also positive and strong relationship between source of
advertising and brand preference with “r” value of 0.850 and “p” value of 0.000.Furthermore, there was strong correlation
between characteristics of advertising message and brand preference having “r” value 0.891 and “p” value 0.000.Hence it could be
concluded that all independent variables were positively and strongly correlated with brand preference (dependent variable).
Therefore, the null hypothesis is rejected and alternative hypothesis is accepted.
Ho2: Components of Advertisement (advertising media, source of advertisement, characteristics of advertising messages) have
no positive impact on consumers’ brand preference.
Table-5: Results of Regression Analysis for Components of Advertisement
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig. B Std. error Beta
(Constant) -.191 .092 - -2.075 .039
Advertising media .361 .037 .330 9.831 .000
Source of advertisement message .259 .030 .273 8.715 .000
Characteristics of advertisement message .450 .037 .412 12.261 .000
Note: a) Dependent Variable: Brand Preference
Sources: Survey, 2014
Table-5 shows the results of multiple regression analysis between independent variables (Advertising media, source of ad
messages and characteristics of ad messages) and dependent variable (brand preference). As it can be seen from the same table
here above, the study revealed that all independent variables have significant level below 0.05 (p<0.05). Beta values also showed
independent variables’ influence on dependent variable. This means independent variable has the strong influence on dependent
variable with beta value 0.412. It explains that 41.2% variation in Consumer brand preference is caused due to characteristics of
advertising Messages, which is significant at 0.000. Consequently, the study concluded that source of advertising message is
Brand
Preference
Advertising
Media
Source of
Advertising
Characteristics
of Advertising
Messages
Brand
Preference
Person Correlation 1
Sig. (2-Tailed)
Advertising
Media
N 346
Person Correlation .876** 1
Sig. (2-Tailed) .000
Source of
Advertising
N 346 346
Person Correlation .850** .778** 1
Sig. (2-Tailed) .000 .000
Characteristics
of Advertising
Messages
N 346 346 346
Person Correlation .891** .810** .777** 1
Sig. (2-Tailed) .000 .000 .000
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positively related to consumers brand preference. Different studies conducted by Gezachew, et. al., (2012) and Ghafoor, et al.,
(2013) suggested that source of advertising message positively influences consumers brand preference.
Based on the result similarly advertising media and source of ad message have strong influence on brand preference, with beta
value 0.330 and 0.273 respectively, which is significant at 0.000. That means, they have impact on consumers brand preferences
of beer products. Results of different literatures also suggests that source of ad messages positively influence consumers brand
preference (Yang et al., 2007; Bearden, and Michael, 2001). Thus, the finding from the current study is supported by the extant
literature. Besides, the result of table 5 revealed that all variables of advertisement had equal impact or contribution on consumers
brand preference. Therefore, the hypothesis is rejected and alternative hypothesis is accepted.
Equation Formulation
y= b0 + b1x1+b2x2+…bnxn + E
Where, y= Dependent variable b0, b1, b2,… bn= coefficients
x1, x2,…xn = Independent Variable e= error terms
Taking into consideration the results from table 4.6 the regression equation for the study becomes.
y= -0.191+ 0.361 x1 + 0.259x2 + 0.450x3
Where, y= Brand preference x1= Advertising media
x2 = Source of advertising x3= Characteristics of ad message
As it is shown in the above equation, the degree of influence exerted on customers’ brand preference differs from variable to
variable. When advertising media increased by one percent, brand preference would increase by 36.1%, when Source of
advertising increased by one percent, brand preference would increase by 25.9%, and when Characteristics of ad message
increased by one percent, brand preference would increase by 45.0%. Even-though, the highest influence (45%) on consumers’
brand preference is exerted by characteristics of ad messages, each independent variable has positive and significant impact on
dependent variable (brand preference) of consumers’.
Ho3: All advertising media have no positive impact on consumers’ beer brand preference.
Table-6: Result of Regression Analysis for Advertising Media
Advertising Media
Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) .185 .119 - 1.553 .121
Television .341 .046 .357 7.332 .000
Radio .239 .033 .262 7.356 .000
Internet .008 .026 .010 .298 .766
Newspaper .061 .023 .080 2.628 .009
Magazines .117 .028 .136 4.235 .000
Out door .199 .034 .215 5.867 .000
Note: a. Dependent Variable: Brand Preference
Sources: Survey, 2014
Table-6 reveals the result of multiple regression analysis between dependent variable (brand preference) and independent
variables (television, radio, internet, magazine, newspaper, and outdoor advertising). As shown in the table, the study revealed that
all independent variables such as television, radio, newspaper, magazines, and outdoor advertising media have significant level
when α = 0.05 (p<0.05) except the internet advertising having “p” value 0.766 which is greater than α = 0.05. That means all
advertising media have no equal impact on consumers brand preferences of beer products since the internet advertising has not
significant impact on consumers brand preference of beer products. Accordingly, the hypothesis is accepted and it can be
concluded that all advertising media have no positive impact on consumers’ beer brand preference.
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H4: Each source of advertisement has no positive impact on consumers’ beer band preference.
Table-7: The Result of Regression Analysis on Source of Advertising
Coefficients
Source of Advertisement
Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) .842 .112 7.504 .000
Advertising under taken by trained experts .198 .032 .243 6.113 .000
Advertising under taken by celebrities .488 .032 .566 15.096 .000
Peer groups and family influence .140 .025 .182 5.519 .000
Note: a. Dependent Variable: Brand Preference
Sources: Survey, 2014
Table-7 reveals the result of multiple regression analysis between dependent variable (brand preference) and independent
variables (peer, family, experts and celebrities). As shown in the table, the study revealed that all reference groups have significant
level when α = 0.05 (p<0.05) which means all sources of advertisements have significant impact on consumers’ brand preferences
of beer products. Therefore, the hypothesis was rejected. The research conducted by Yang, et al., (2007; Bearden, and Michael
(2001), and Gezachew (2012) corroborated this finding.
Ho5: Characteristics of advertisement messages have no positive impact on consumers’ brand preference.
Table-8: Result of Regression Analysis on Characteristics of Advertising Message
Model Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) .056 .113 - .495 .621
Using back ground music during advertisement .106 .024 .127 4.326 .000
Developing stories and documentaries .063 .017 .099 3.714 .000
Advertising with quality of the product .401 .033 .407 12.055 .000
Credibility of advertiser & the company .085 .021 .110 3.998 .000
Fulfilling both the company and the consumers’ interest .185 .023 .233 7.928 .000
Frequency of advertisement .089 022 .125 4.013 .000
Advertising tells me which brands have the features
I am looking for (Informative) .082 .020 .109 4.142 .000
Note: a. Dependent Variable: Brand Preference
Sources: Survey, 2014
Table-8 reveals the result of multiple regression analysis between dependent variable (brand preference) and independent
variables (messages of advertisement). As shown in the table, the study has shown that all independent variables have significant
level when α = 0.05 (p<0.05). That means, they have impact on consumers brand preferences of beer products. According to the
result, all variables of messages of advertisement have equal impact or contribution on consumers brand preference. Therefore, the
hypothesis was rejected and alternative hypothesis was accepted. The research conducted by Vivekananthan (2010) supported this
finding.
Ho6: Celebrities have no positive impact on consumers’ beer brand preference.
Table-9: Result of Regression Analysis on Celebrity Endorsement
Coefficients
Model Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 1.352 .120 11.240 .000
Advertising under taken by celebrities .709 .027 .820 26.549 .000
Note: a. Dependent Variable: Brand Preference
Sources: Survey, 2014
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Table-9 here above revealed the result of multiple regression analysis between dependent variable (brand preference) and
independent variable (celebrities). The table revealed that the advertising undertaken by celebrities has significant level when α =
0.05 (p<0.05). That means, celebrities have significant impact on consumers brand preferences of beer products. The research
conducted by Ling, K.C et al., (2010) supported this finding. Therefore, the hypothesis was rejected.
Ho7: The Income level has no significant impact on brand preference of beer.
Table-10: ANOVA of Brand Preference of Beer by Income Level
Sum of Squares d.f. Mean Square F Sig.
Between Groups 17.049 5 3.410 11.439 .000
Within Groups 101.347 340 .298
Total 118.396 345
Note: a. Dependent Variable: Brand Preference
Sources: Survey, 2014
Table-10 shows brand preference of beer by income level. The result of the study indicated that there is a difference on brand
preference of beer based on income level. F-value is 11.439 which is significant at p=0.000. Therefore, the hypothesis is rejected
and concluded that the income level has a significant impact on brand preferences of beer. The research conducted by Tondon R.,
(2007) supported this finding.
Ho8: The impact of advertising on beer brand preference is similar for all age.
Table-11: ANOVA of Brand Preference of Beer by Age
Sum of Squares d.f. Mean Square F Sig.
Between Groups 13.387 4 3.347 10.868 .000
Within Groups 105.009 341 .308
Total 118.396 345
Sources: Survey, 2014
Table 11 shows beer brand preference by age. The F-value is 10.868 which is significant at p=0.000. Therefore, the hypothesis is
rejected and it can be concluded that the impact of advertising on beer brand preferences varies by age. The research conducted by
Tondon R., (2007) supported this finding.
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RELEVANCE OF UNDERUTILIZED FRUIT CROPS FOR SUSTAINABLE FARM INCOME
IN TRIBAL AREAS OF WESTERN INDIA
Dr. D. K. Sharma3
ABSTRACT
Agriculture and horticulture plays a pivotal role in the rural economy, it not only contributes to overall farm income but also
reduces poverty by providing employment, food and nutritional security to the majority of tribal population, and thus it is the
most inclusive growth sectors of the rural economy. In last few decades, this sector is at crossroad and one of the major
challenges is to reverse deceleration in agricultural growth. On the other hand, many neglected and underutilized fruit
species are nutritionally rich and are adapted to low input agriculture. The use of these species, whether wild, managed or
cultivated, can have immediate consequences on the food security and well-being of the poor tribal. This paper aims at
exploring the relevance of Underutilized fruits for sustainable farm income in tribal areas of western India
KEYWORDS
Underutilized Fruit, Tribal, Farm Income, Food and Nutritional Security etc.
INTRODUCTION
Western part of India includes the states of Rajasthan, Gujarat, Maharastra, Goa and union territories of Dadra Nagar Haveli and
Daman & Diu, have 29.1 million tribal (ST) population out of which about 90 per cent resides in villages according to the census
of 2011. They are mainly depend on agriculture for their livelihoods and using plant biodiversity as primary source for food, feed,
shelter, medicines and many other products. Increased reliance on external inputs, pressure of industrialization and urbanization,
climate change and many other factors, adversely affected the productivity of land accompanied by a shrinking of the food basket
which humankind has been relying upon for generations. However, the shrinking of agricultural biodiversity has reduced both the
intra and interspecific diversity of crops, increasing the level of vulnerability among users, particularly the poorer sections, for
whom diversity in crops is a necessity for survival rather than a choice. The Indian agriculture sector is currently going through a
tough time. The agricultural activities are increasingly becoming vulnerable due to variety of reasons. The adverse impact of this
on the farming community, which is mostly living in rural areas, has started realizing in the form of poverty, unemployment, death
due to malnutrition etc. Tribal farmers having small land holding are becoming victims of such pathetic situation. The
underutilized fruits like Aonla, Tamarind, Karonda, Citron, Jackfruit, etc. are the main sources of livelihood for the poor and play
an important role in overcoming the problem of malnutrition. A large number of these fruits can grow under adverse conditions,
are also known for their therapeutic and nutritive value, and can satisfy the demands of the health-conscious consumers. However,
some of these fruits are not acceptable in the market in fresh form due to their acidic nature and astringent taste. Hence, there is a
need to concentrate on research efforts in diversification and popularization of such underutilized fruit crops. To achieve this,
there is a need to create demand for such fruit crops in the domestic and international markets. This, to some extent, can be
achieved through developing suitable processing and marketing strategies for these underutilized fruits.
REVIEW OF LITERATURE
Recent literature considers that the effect of agricultural progress on poverty alleviation is highly positive. Mellor (2001) argues
that it is not economic growth in general that reduces poverty in developing countries, but the direct and indirect effects of growth
in agriculture. In the study of poverty in India over 35 year periods, Datt and Ravallion (1998) find that higher farm productivity
reduces both absolute as well as relative poverty. This is partly due to direct channels of higher farm household income operating
in a short run and partly due to indirect channels, such as higher wages and lower food prices, in the longer run. Similarly, Loayza
and Raddatz (2010) 4 shows for a cross section of developing countries that growth in more labour intensive sectors, such as
agriculture, has a large impact on poverty reduction. Christian and Demery (2007) estimate that 1 per cent per capita agricultural
growth reduces poverty 1.6 times more than the same growth in the industry and three times more than same growth in service
sector. A change in attitude is noticed over the last 5-10 years among policy makers and the public with regard to the quality of
life as related to the quality of food as well as diverse sources of food. Vitamins and other micronutrients are for instance being
searched in crops and plant species with greater emphasis than in the past in recognition of their role in combating diet
imbalances. Although ‘hidden hunger’ affects mainly developing countries, particularly children and older people (FAO, 1997), it
is increasingly being recorded also among the more vulnerable social groups in developed nations.
3 Associate Research Scientist (Horticulture), Agri. Expt. Station, Navsari Agriculture University, Gujarat, India,
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Leading international research organizations such as the Consultative Group on International Agricultural Research (CGIAR) are
also among those taking a keen interest in strengthening the work on underutilized species (Swaminathan, 1999). This global
“opening” towards underutilized species is the result of a gradual change of attitude towards biodiversity and plant genetic
resources by many countries. Instrumental in this awareness raising process have been the 1992 Convention on Biological
Diversity and the FAO IV International Technical Conference on Plant Genetic Resources for Food and Agriculture held in
Germany in 1996.The Global Forum on Agricultural Research (GFAR) in 1999 emphasized the role of underutilized species in
raising income of the rural poor.
Why Underutilized Fruits?
Food Security and Better Nutrition: Many neglected and underutilized species are nutritionally rich and are adapted to low
input agriculture. The use of these species, whether wild, managed or cultivated, can have immediate consequences on the food
security and well-being of the poor.
Increased Incomes for the Rural Poor: Growing demand from consumers in developed and developing countries for diversity
and novelty in foods is creating new market niches for neglected and underutilized species. These market opportunities can
generate additional income.
Ecosystem Stability: Climate change and the degradation of land and water resources have led to a growing interest in crops and
species that are adapted to difficult environments such as poor soil, degraded vegetation, drought and desert margins.
Cultural Diversity: The use of plants has long been an intimate part of local cultures and traditions. Many neglected and
underutilized species play a role in keeping cultural diversity alive.
Status of Underutilized Fruits
India is the second largest producer of fruits after China, with a production of 74.8 million tons of fruits from an area of 6.38
million hectares. A large variety of fruits is grown in India, of which mango, banana, citrus, guava, grape, pineapple and apple are
the major ones. In human nutrition, fruits and vegetables play an important role towards the making of a balanced diet. The term
“underutilized fruits” is applied, in the general sense, to a group of fruits presently growing in a scattered and unattended way on
roadsides, homestead land, wasteland etc. in spite of their potential for intensive exploitation. The plants belonging to this group
are hardy and grow well even in fragile soil and climate. Since the area under each of these is insignificant, they are popularly
known as “minor fruits”. Relevant information regarding area, production and commercial utility of different minor fruits required
designing R&D and marketing strategy for this group of crop is very much lacking.
Many of the fruits, which were not known before, have moved from rural confine, and have been commercialized. To name the
few are, Aonla, Tamrind, and Custard apple, Ber, Fig, Jackfruit and Jamun. This has been possible due to development of
cultivars and new technology. Bael (Aegle marmelos), Kamrakh (Averrhoa carambola), Phalsa, Wood apple, Mulberry, Lasora
are some of the fruits, which have potential to be commercialized. These fruits would fit into the system to utilize the climatic
variability. The consumers for its taste or nutritive values are demanding a number of tropical and sub-tropical fruits and nuts, like
Avocado, Rambutan, Mangosteen, Garcinia and Pummelos. Therefore, there is need to harness the potential of less known fruit,
which are indigenous to the country.
Table-1: The Major Underutilized Fruits of Different Ecological Regions
Ecological Region Fruit Crop
Tropical
and
Subtropical
Aegle marmelos (Bael), Buchanania lanzan (Chironji), Carissa species (Karonda), Cordia species
(Lasora), Diospyros melanoxylon (Tendu)
Garcinia species (Kokam, Malabar tamarind and Mysore gamboge)
Madhuca indica (Mahua), Manilkara hexandra (Khirni), Syzygium cumini (Jamun), Tamarindus
indica (Tamarind), Spondias pinnata (Amra), Averrhoea carambola (Carambola), Artocarpus
heterphyllus (Jackfruit), Morus species (Mulberry), Ficus carica (Fig), Physalis peruviana (Cape
gooseberry), Artocarpus lakoocha (Barhal or monkey jack), Cicca acida (Star gooseberry), Borassus
flabellifer (Palmyra palm), Syzyzium jambos (Rose apple), Annona species etc.
Arid and
semi-arid
Capparis decidua (Ker), Carissa species (Karonda), Cordia species (Lasora),
Emblica officinalis (Aonla), Grewia subinaequalis (Phalsa), Pithecellobium dulce (Manila tamarind),
Salvadora species (Pilu and Miswak), Tamarindus indica (Tamarind), Accacia Senegal (Kumat),
Feronia limonia (Wood apple), Prosopis senareria (Khejari), Apuntia ficus indica (Cactus pear),
Ziziphus species (Ber) etc.
Sources: Authors Compilation
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Issues
In spite of better prospects in term of nutritional, health and ecological security, the underutilized fruits are neither popular nor
adopted as commercial fruit crop. The main reasons are as follows:
Little awareness about nutritional, medicinal and economic benefits of underutilized fruits among the urban population,
which are major consumer of horticultural products.
Poor taste, aroma and flesh content, besides unavailability of these products in the market in attractive and labeled
packages are other limiting factors.
Plantation of underutilized fruit crops are mostly on degraded lands with little care.
Non-availability of quality planting materials for establishment of new orchard of underutilized fruit crops.
Little standardization of agro techniques particularly, vegetative propagation, varietal development, nutrient and water
management, plant protection measures etc.
Inadequate marketing support and infrastructural facility for transportation, storage and processing.
Inadequate institutional support and least attention of financial institutions in setting up of small-scale industries in the
rural areas/ growing sites.
Measures to Promote Underutilized Fruit Crops
Underutilized fruit are nutritionally rich with high medicinal properties and are hardy in nature and adapted to low input
agriculture. Thus, better research and development efforts will add substantially to nutritional and health security.
Genetic erosion is a serious problem. A systematic conservation strategy is required for all distinct underutilized fruits at
national level, even if some are not seems to be important at the movement.
In phased manner, underutilized fruit crops should be prioritized and potential species should be included in detailed
institutional research programmer.
Yield and quality of underutilized fruit crops are generally poor, thereby hampering area expansion; thus systematic
crop improvement programmed is essentially required with high budgetary support.
Immense efforts are required for multiplication of desired quality planting materials and transportation, storage and
market access of perishable produce.
Organic food and health food are emerging as a global trend in the food and food-processing sector, which creates an
opportunity for underutilized fruits. Emphasis should be given for development of processing units. It would provide
better income and employment opportunity to the people.
Documentation of indigenous knowledge through ethno botanical is essentially required to tap the potential of their
multiple uses, medicinal properties and processed products.
Proper Human Resource Development at different level and institutional support is also required to promote
commercialized of underutilized fruits.
CONCLUSION
In developing countries, agricultural growth has a huge capacity to reduce poverty. Due to this potential, improving productivity
in the agricultural sector is essential. Underutilized fruit are nutritionally rich with high medicinal properties, are hardy in nature,
and adapted to low input agriculture, can assist the farm income to great extent along with nutritional security. Government will
need to play an important role for including Underutilized fruit in rural development and community-driven development
programmes for overall development of tribal population.
REFERENCES
1. Cristian, L. J., & Domery, L. (2007). Down to Earth. Agriculture and Poverty in Africa. Washington DC: World Bank.
2. (1997). Human Nutrition in the Developing World. FAO Food and Nutrition Series No. 29. Food and Agricultural
Organization of the United Nations, Rome, Italy.
3. Loayza, N. V., & Raddatz, C. (2010). The composition of growth matters for poverty alleviation. Journal of
Development Economics.
4. Mellor, J. W. (2001). Faster more equitable growth – agriculture, employment multipliers and poverty reduction.
Agricultural Policy Development project Research report 4, Cambridge, MA
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5. Swaminathan, M. S. (1999, February 17-19). Enlarging the Basis of Food Security: the Role of Underutilized Species.
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ICT FOR AGRICULTURE AND RURAL DEVELOPMENT IN INDIA
Dr. Satyanarayan K. Kothe4
ABSTRACT
The digitalization can transform the agriculture sector and so the rural development can be accomplished in a short span of
time that would reduce the cost and enhance the productivity of both labour and land. In the wake of the National Food
Security Act, 2013, demand for food in India is going to increase and the fact is that India’s agriculture is highly depending
upon monsoon. In addition, Indian farmers have inclined heavily towards the cash crops, floriculture and horticulture and to
earn dollars by exporting high protein agriculture products to the foreign nationals in recent period. With the increasing and
persistent trade deficit it would not be advisable to fulfill the domestic demand for food, India should import heavily.
Therefore there is need to increase the domestic production of agricultural products. The government realized the importance
of ICT in agricultural and rural development and prepared a Policy Framework for Agricultural Extension, 2000 that cites
the benefits of ICT in agricultural extension and proposes the policy initiatives for agricultural development through ICT
innovations. The paper discusses the possibilities and policy implications of ICT for agriculture and rural development.
KEYWORDS
ICT, Agriculture, Rural Development, ICT strategies for Agriculture etc.
INTRODUCTION
The digitalization can transform the agriculture sector and so the rural economy that would reduce the cost and enhance the
productivity of both labour and land. In the wake of the National Food Security Act, 2013, demand for food in India is going to
increase and the fact is that India’s agriculture is highly depending upon monsoon. In addition, Indian farmers have inclined
heavily towards the cash crops, floriculture and horticulture and to earn dollars by exporting high protein agriculture products to
the foreign nationals in recent period. With the increasing and persistent trade deficit it would not be advisable to fulfill the
domestic demand for food, India should import heavily. Therefore there is need to increase the domestic production of agricultural
products.
Serious challenges must be addressed in order to achieve faster productivity growth, including infrastructure constraints, supply
chain inefficiencies and significant problems in the diffusion of and access to information. Small and marginal farmers, who make
up the vast majority of Indian farmers, are often unable to access information that could increase yields and lead to better prices
for their crops (Gandhi, Mittal, & Tripathi, 2009).
India experienced, like green revolution in agriculture, services revolution mainly dominated by Information and Communication
Technology (ICT) revolution and have got accelerated growth rate that is led by services sector which can best be viewed in terms
of its contribution to GDP, employment, capital formation and also FDI, trade, change in domestic demand for services and
world’s demand for India’s services (Kothe & Sawant, 2010; Kothe, 2012a, 2012b, 2013, 2014b, 2015). India produces ICT
output, with large pool of IT professionals that acquired IT education in recent years, which is one of the main inputs in
production in most of the sectors (Kothe, 2014a). In addition, the government realized the importance of ICT in agricultural and
rural development and prepared a Policy Framework for Agricultural Extension, 2000 that cites the benefits of ICT in agricultural
extension and proposes the policy initiatives for agricultural development through ICT innovations. The paper discusses the
possibilities and policy implications of ICT for agriculture and rural development.
ICT for Agriculture and Rural Development in India
Information and Communication Technology revolution is unfolding, and has very high visibility. However, its benefits have
remained confined primarily to the urban areas. Rural communities have not been able to gain to the same extent from IT. As a
means of agricultural technology transfer to farmers, information technology, has had a limited impact. Even the vast potential of
the broadcasting network has been tapped only minimally for extension. Policy Framework for Agricultural Extension, 2000
features Increasing Use of Information Technologies, IT Application in Agriculture Marketing, Wider Use of Electronic Mass
Media for Agricultural Extension, Farmer Participation in IT Programmes, and Support to States for Information Technology,
Private Information Shops/ Kiosks and Capacity Building for use of IT. The policy framework has been very fruitful to develop
the tools and systems through various pilot projects that could help the agriculture to sustain its growth momentum by enabling
4Assistant Professor, Department of Economics, University of Mumbai, Maharashtra, India, [email protected]
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the sector information efficient and more productive. Since information as an input in agriculture sector, which has great
importance and if it is timely and reliable, it would rip the success in terms of increased productivity and low volatility of output.
The timely information on weather, agricultural extension, market information like demand, supply and prices, credit and
insurance is reaching farmers very quickly through the ICT platforms. India is not the exception for such a technological
innovation in information dissemination. As noted earlier mobile telephony in the rural India have expanded immensely, that have
connected the rural economy with the mainstream economy. Reddy and Ankaiah (2005) proposed a cost-effective agricultural
information dissemination system (AgrIDS), to disseminate expert agricultural knowledge to the farming community in order to
improve crop productivity. AgrIDS is a scalable system, which can be incrementally developed and extended to cover all the
farmers (crops) of India in a cost-effective manner. It enables the farmer to cultivate a crop with expertise, as that of an
agricultural expert, by disseminating both crop and location-specific expert advice in a personalized and timely manner.
In the Vidarbha region of India, Reuters Market Light (RML) provides customized mobile alerts to farmers on various aspects –
from sowing seeds to marketing agricultural produce. This has revolutionized the decision-making process resulting in improved
productivity and augmented incomes of the agricultural households (Hardikar, 2010).
RML is not the only model, being executed in India’s agriculture and rural sector. A few other area-specific parallels such as
IKSL are non-commercial and do not provide countrywide service. IKSL, run in partnership with Bharti Airtel by the Indian
Farmers Fertilizers Co-operative Ltd (IFFCO), requires the farmers to purchase a special SIM card to receive free voice-mails on
agricultural information at Rs 1 per minute. IKSL empowers farmers and people living in rural India with pertinent and high
quality information and services, through affordable communication network, in a sustainable manner. In addition, IKSL also
works concertedly to develop content and services, which will improve informed decision making by people living in Indian
villages. Individual success stories reveal that the farmers could earn more profits due to IKSL intervention that ranges 21 per cent
to 50 per cent.
Fisher Friend Mobile Advisory (FFMA) application in the Indian state of Tamil Nadu offers fishing related vital information to
fisher folk through mobiles for a safer and more profitable venture into the sea. The 2004 Tsunami brought to the forefront the
plight of the fisher community in India - a sector that has long been neglected from mainstream policy. The natural disaster
revealed the lack of access to fishing-related information, which adversely affects the livelihoods of fisher folk, often putting them
at great risks. Fisher folk use traditional techniques to predict weather and wave conditions. Information within the communities
typically travels through word of mouth. The Fisher Friend Mobile Advisory (FFMA) application by the M.S. Swaminathan
Research Foundation (MSSRF) in Tamil Nadu and Puducherry in collaboration with telecom and software companies uses mobile
technology to bridge this information gap, enabling the fishing communities to pursue their livelihoods in a safe and proactive
manner. The application enables a system of information flows whereby fishermen can gain access to fishing related information
such as weather forecasts, emergency contact information, details of high potential fishing zones (PFZ) and market prices to
enhance their productivity and ensure their safety. Upon sending a single-button-click request from an icon-based software
application on their mobile phone, fishermen access vital updates on wave height, wind speed and direction, potential fishing
zones, news alerts, government schemes and latest market prices in their local language (Tamil). This unique application is
helping fisher folk make better choices - to avoid hazardous situations and increase their incomes through efficient fishery. In
other words, it is enabling them to conduct their livelihood operations in a safe and profitable manner.
The Indian Meteorological Department having improved its weather forecasting has extended farming updates by text messages to
farmers through its Agromet Advisory Service. The nation as witnessed a significant rise in the contribution of its primary sector
to its GDP due to the advancement. According to a National Council of Applied Economic Research (NCAER) report, roughly 24
percent of farmers in over 550 districts are either aware or using the Agromet services, while two million farmers are availing the
mobile SMS service which started over a year ago. The report says the Rs 50,000 crore figure could rise to Rs 211,000 crore if the
entire farming community in the country was to judiciously use the Agromet information and apply it to agricultural activities.
Further report supplemented that the fishery advisory by the Met office has added Rs. 34,000 crore to the GDP.
According to Sailesh Nayak, secretary of the ministry of earth sciences, “The IMD (India Meteorological Department) has been
providing very accurate forecast at micro level, focused on small areas. The Agromet Advisory Service of IMD then translates this
information into information relevant for farmers’ use. The advances in the weather forecasting system have made the predictions
more accurate than ever before. The Agromet service even gives advice on what the farmer should do. For example, if a farmer
sprays pesticides and the rain comes, the pesticides will be washed away. Therefore, the Agromet will advise them not to spray the
pesticide. This way, resources are saved and so are the crops. "Also, while sowing seeds, the seeding can be done according to the
forecast of rain. If farmers sow and there is no rain in time, the seed spoils. Similarly, at the time of cutting, the rain can spoil the
crop. Fishery advisories entail offering information to fishermen cooperatives about the areas in the ocean where the fish catch is
likely to be high on a particular day. This, coupled with the information on the ocean state, enables fishermen to plan fishing
operations in an economically effective manner in the least time. The forecasts for natural disasters like tsunamis and cyclones
have also become more accurate. This translates into economic benefits as preparedness saves life and property.”
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Similarly, agribusiness company ITC also operates several models of a rural internet kiosk programme, the ‘e-choupal’, serving
farmers across rural India. The version investigated for this report was anchored upon an internet kiosk manned by a local farmer
who acts as an agent for ITC called ‘sanchalak’.
A recent research carried out by ICRIER on the ‘Impact of Mobile Phones on Agriculture Productivity’ found evidence that
mobiles are being used in ways which contribute to productivity. When compared to other models, the ICRIER researchers found
the RML model most suitable to the farmers because of its customized nature and easy access.
Qiang, Kuek, Dymond, & Esselaar (2011) report the evolution and success of m-ARD (mobile applications for agriculture and
rural development. They stated that m-ARD could provide the most affordable ways for millions of people to access information,
markets, finance, and governance systems previously unavailable to them. Since m-ARD are, the software designed to take
advantage of mobile technology and can be developed for technology besides mobile phones. However, mobile phones have many
key advantages: affordability, wide ownership, voice communications, and instant and convenient service delivery.
The report entices that most m-ARD apps focus on improving agriculture supply chain integration and have a wide range of
functions, such as providing market information, increasing access to extension services, and facilitating market links. Users are
also diverse, including farmers, produce buyers, cooperatives, input suppliers, content providers, and other stakeholders who
demand useful, affordable services. These supply chain integration applications could provide significant economic and social
benefits—among them, creating jobs, adding value, reducing product losses, and making developing countries more globally
competitive. However, the potential development impact of m-ARD apps mainly lies in their ability to provide access to useful,
relevant information and services.
Quantitatively, the most widely used m-ARD apps provide access to valuable information—a crucial function because
asymmetrical access to information is a weakness of rural markets in developing countries (Qiang et al., 2011). Kenyan farmers
who use the app DrumNet, for example, have seen their incomes rise by a third due to the service’s comprehensive system of price
negotiation, contracting, and other value chain support. Farmers, forever at the mercy of the weather, insects and crop blights,
suffered from ‘informational asymmetry’ in the marketplace: the buyers have always known more than the sellers, using that
information to their advantage. Hyper connectivity has disrupted that informational arbitrage: farmers in Kenya use DrumNet, a
mobile service that allows them to check the current market prices for their produce at a range of locations. When a farmer readies
his crop for sale, he sends a text message to DrumNet, using the response to choose the market, which will give him the best
return for his efforts. Just as Kerala fishermen phone around for the best price for their catch, a Kenyan farmer can quickly learn
where he will get the best price for his vegetables. Hyper connectivity makes informational asymmetries a thing of the past; every
party to a transaction can negotiate a sale fully informed. With DrumNet, Kenyan farmers have been earning as much as 40 per
cent more for their crops – a rate of return which makes the service a very good investment (Pesce, 2012).
M-ARD apps also provide farmers and rural residents with timely access to extension services, such as advice on agricultural
production, marketing, and technology, food security, and nutrition. Sri Lanka’s e-Dairy helps farmers earn up to $262 more a
year for each of their calves by providing veterinary and extension services delivered by mobile phones. Such applications also
strengthen market links when used to improve production distribution and traceability. Tea growers in Kenya have reported
average income growth of 9 percent - about $300 a year - by using Virtual City’s production measuring, recording, and
traceability functions (Qiang et al., 2011).
In addition, m-ARD apps have expanded access to finance and insurance products in rural areas. Applications like M-PESA in
Kenya and SMART Money and G-Cash in the Philippines have gained acceptance as safe, easy ways to receive payments and
store money. Also in Kenya, users of Kilimo Salama’s agricultural insurance products have seen their production increase by an
average of more than 50 percent, or about $150 a year (Qiang et al., 2011).
M-ARD apps also have significant qualitative impact, though such benefits are harder to assess objectively and largely depend on
the local context. For example, Ushahidi, developed in Kenya and now used in other countries, uses a crowdsourcing approach to
increase government transparency, provide information about domestic events (including social unrest), and support timely
interventions in disaster-hit areas, such as in in Haiti after its disastrous 2010 earthquake (Qiang et al., 2011).
In India there are number of websites that help farmers by dissemination of information on agricultural and extension. The
aAQUA, KISSAN Kerala, TNAU AGRITECH Portal, AGRISNET, DACNET, e-Krishi, ASHA, India Development Gateway
(InDG) portal, Rice Knowledge Management Portal (RKMP) and Agropedia are few web based information systems that render
the service to provide customized information on agriculture that help farmers to get the latest information on various agricultural
products, processes and technologies.
There are few agribusiness firms to help the farmers to get the latest information about market changes and help in selling their
products in the market as well few companies like - ITC buys from farmers through web portals. These web portals include
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AGMARKNET, ITC’s e-Choupal, EID Parry’s Indiagriline, Indiancommodities.com, Mahindra Kisan Mitra, IFFCO Agri-Portal,
Agrowatch Portal and iKissan that provide the information on processes in agriculture, agricultural marketing and extension.
A few ICT enables services like 101 Village Knowledge Centres (VKCs) by M.S. Swaminathan Research Foundation (MSSRF)
in Tamil Nadu, Puducherry, Maharashtra, Orissa, Andhra Pradesh and Kerala state of India. VRCs and VKCs work with 315
partners for implementation and location specific content generation. Demand driven information and knowledge with support
services, social inclusion, community ownership and partnership proved critical for the success and sustainability. 473 Village
Resource Centres (VRCs) by Indian Space Research Organization (ISRO) have been set up in 22 States / Union Territories in
India. The VRCs are connected to Knowledge / Expert Centres (ECs) like Agricultural Universities and Skill Development
Institutes (SDI). Over 6500 programmes have been conducted by the VRCs in the areas of agriculture / horticulture, fisheries,
livestock, water resources, tele- health care, awareness programmes, women empowerment, supplementary education, computer
literacy, Micro credit, micro finance, skill development/ vocational training for livelihood support etc. So far, over 500000 people
have availed VRC services. Community Information Centres (CICs) take efforts in North-East India e-Infrastructure for accessing
rural information needs of farmers and others. There are 96163 Common Service Centres (CSCs) which provide web based e-
governance services, including agriculture information to rural areas.
There are few ICT services for agricultural extension based on telephoney and mobile telephoney. The Farmers Call Centre
(Kissan Call Centre) answer various queries asked by farmer’s relation to agricultural extension. There are 32 Farmers Call
Centres, which answered 2043636 farmers calls’ during 2010-11, total calls answered during last five years (2005-2010) were
6247911. Lifelines India renders extension activity through connectivity by innovative mix of internet and telephony. In addition,
it reaches to 2 lakh farmers in three States of India. IFFCO Kisan Sanchar Limited (IKSL) serves through voice messages in local
languages. IKSL delivered 95,000 voice messages and 81000 Q&A repository with 5000 feedback messages from the farmers. 10
Lakh active farmers are benefiting from IKSL's Value Added Services and IKSL enrollment crosses 4 million and 40000
cooperative societies as IKSL Retailers. As stated earlier Fisher Friend, a consortium of QUALCOMM, MSSRF, Tata teleservices
and Asute system technology, jointly implemented mobile based advisory services (instant access to helpful information such as
weather conditions, where they can and cannot fish and market prices) to fishing communities of costal Tamil Nadu since 2007.
As discussed earlier Reuters Market Light (RML) designed micro-information services specifically for the farming community,
which was launched by RML in 2009. Currently RML covers over 440 crops and varieties with more than 1400 markets and 2800
weather locations of 15000 villages in 13 States of India. Timely and personalized information and individual farmers have reaped
significant return on their investment. Mobile Advisory Services by Krishi Vigyan Kendras (KVKs) of Indian Council of
Agricultural Research (ICAR) renders the agricultural extension services to the farmers through the Krishi Vigyan Kendras (Farm
Science Centres) have been operational in India since 2010.
Besides the above ICT practices for agricultural and rural development, there have been few hybrid initiatives which involves the
product mix of ICT, infomediaries and traditional methods of information dissemination which includes e-Arik, e-Sagu, Digital
Green and Knowledge Share Centres. E-Arik is a mix of Internet, Offline CDs and farmer-to-farmer communication, conventional
extension methods. A study among 300 farmers indicated that an average Rs. 5252 was increased among 73 e-Arik registered
farmers who were growing Khasi mandarin. Similarly, an average Rs. 1611 was increased among 258 paddy farmers who were
registered with e-Arik initiative. Comparing traditional extension system and e- Arik project, the cost and time indicators shown
sixteen fold reduction in cost and three fold less time were required to the clientele availing and extension system delivering
extension services. e-Sagu provides agro-advisory services by digital photographs and coordinators for 3035 farmers (4130 ha).
Digital Green renders farmer participatory videos for agricultural extension. Digital Green produced 1681 videos involving 60313
farmers. Knowledge Share Centres shares information through touch screen kiosks, IVRS, bilingual web portal and creates
awareness by screening films & CDs by the Central Research Institute for Dryland Agriculture (CRIDA), Hyderabad. This project
covered 51 villages in eight districts of Andhra Pradesh State in 2011.
CONCLUSION
Among all the attempts, most of the initiatives are pilot projects and had faced many impediments. All such limitations are listed
by Saravanan (2012) that includes pilot project syndrome, unsustainable large investments, users not willing to pay, small scale of
operations, knowledge middle men with less permanency, information alone in not sufficient for development, difficulty in
localization of contents, generic information, one way information flow, islands of learning, lack of systemic evaluation and lack
of co-ordination.
Saravanan (2012) has suggested national and state level e-agriculture policy, human resource development in ICT context,
strengthening ICT infrastructure, localization and customization of contents, integration of ICTs with public-private extension
systems, collaboration of agricultural research and development institutions, convergence of modern and conventional
communication methods and ICTs, integration of ICTs and Information and Communication Managements (ICMs) for
agricultural extension, promotion of social networks and open source materials and promote leadership and champions.
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All the ICT attempts in India for agriculture extension and rural development suggest that rural India is becoming more and more
ICT literate. In addition, in coming years India would be the largest mobile subscribing and internet using country. Despite of PPP
projects at micro level, government should prioritize customized ICT extension services for all the farmers in all states. The study
proposes a separate institutional set up for conducting all sort of agricultural extension services at national level in association
with the private players. Moreover, the states should be under the national umbrella to customize the extension activities. All the
agricultural research institutions and universities need to be involved in the umbrella project. There is also need for compulsory
ICT literacy that includes mobile and internet literacy among the farmers like Adult Literacy Programme and all the required ICT
hardware and equipment’s be made available to the farmers at subsidized rates like BSNL provides special SIM card for farmers
and also connects the farmers at special rates. The initiatives could enhance the productivity in agriculture and support the
economic growth to sustain its momentum.
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Bhartiya Arthvyavasthetil Sthityantare, pp. 197–202. Udgir; Gudsur: Principal, Shivaji College; Mayur Publications.
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*****
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A STUDY OF REGIONAL DISPARITIES IN WHEAT AND RICE PRODUCTION IN INDIA
Rameez Ahmad5 Md. Tarique6
ABSTRACT
Almost six decades have passed since India got independence and during this period, Indian agriculture has passed through
tremendous changes. The responsible factors for these changes were different in different periods. The decades of 1950s and
1960s were marked by institutional reforms in the form of mainly land reforms and development of irrigation and other
infrastructure played a major role in output growth. Technological breakthrough has been the prime mover during 1970s and
spread of technological changes to wider areas and crops have been the main factor during 1980s. The next phase of 1990
onwards is known as the phase of liberalization, privatization and globalization. From mid-1990s, the period is also termed as
post WTO period. In this phase, the gains to agriculture will not only be confined to domestic policies but also to the
integration of the economy with the rest of the world. The pattern of agricultural growth is very uneven across regions.
Regional disparity in India is a matter of great concern. Proper information regarding the level of agricultural development
on the regional basis is requisite to design policies for the development of backward and laggard regions of India. The present
research paper is an attempt to analyses the disparities in the production of wheat and rice across Indian states in the post
WTO period. The study has also tried to find the degree of convergence/divergence in the production of both the crops over
the period.
KEYWORDS
Agricultural Production, Disparities, Convergence / Divergence, Institutional Reforms, WTO etc.
INTRODUCTION
Agriculture, in most developing economies, is the core sector-providing livelihood to a larger part of the population, especially in
rural areas. Since this sector faces the largest brunt of underemployment, unemployment and poverty, a growing agriculture sector
has expected to contribute vastly to overall growth and poverty alleviation. Increasing the productive capacity of agriculture
through higher productivity has been an important goal of developing countries. The growth of agriculture has a direct impact on
poverty alleviation. An important sector generates employment to large population of a country. In the words of David Metacalf,
“agriculture makes six contributions to economic growth, increased food supplies; release of labour to industry; resources for
industrial development; market creation; export earning; and overseas aid” (Metacalf) Agriculture, therefore, is one of the oldest
form of economic activity undertaken by people of the world and central to all planned socio-economic development of
economies.
Almost six decades have passed since India got independence and during this period, Indian agriculture has passed through
tremendous changes. The responsible factors for these changes were different in different periods. The decades of 1950s and
1960s were marked by institutional reforms in the form of mainly land reforms and development of irrigation and other
infrastructure played a major role in output growth. Technological breakthrough has been the prime mover during 1970s and
spread of technological changes to wider areas and crops have been the main factor during 1980s. The decades of 1960s and
1970s also witnessed high growth in public investments in agriculture, which improved infrastructural base for growth of
agricultural output in the country in the following decade. The next phase in Indian agriculture began in the early 1980s. There
was a considerable increase in subsidies and support to the agricultural sector during this period, while public sector spending in
agriculture for infrastructure development started showing a decline in real terms, but investments by farmers remained
increasing. The marketing facilities were also given due importance. The next phase of 1990 onwards is known as the phase of
liberalization, privatization and globalization. From mid-1990s, the period is also termed as post WTO period. In this phase, the
gains to agriculture will not only be confined to domestic policies but also to the integration of the economy with the rest of the
world.
During the last two decades Indian agriculture has been facing major challenges like deceleration in growth rate, inter-sectoral and
inter-regional inequality, declining input efficiency, degradation of natural resources, etc. with consequent adverse effects on food
and nutritional security, food inflation and poverty reduction. Not only the overall growth scenario is very poor, but also its
regional scenario is also very dim. Indian economy is one of the world’s largest economies with the existence of diverse region
with different resource base. The pattern of agricultural growth is very uneven across regions. Regional disparity in India is a
matter of great concern. Regional inequality does not only exist in India as unbalanced development and regional disparities are
inherent phenomenon of both developed and developing countries. China, USA and other countries also faces this problem, which
5Research Scholar, Department of Economics, Aligarh Muslim University, Uttar Pradesh, India, [email protected] 6Professor, Department of Economics, Aligarh Muslim University, Uttar Pradesh, India, [email protected]
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is very dangerous in the context of world food security and in the changing scenario of demand for food of high value. Therefore,
proper information regarding the level of agricultural development on the regional basis is requisite to design policies for the
development of backward and laggard regions of India. The states in India are marked with wide disparities in socio-economic
development. The present research paper is an attempt to analyses the disparities in the production of wheat and rice across Indian
states in the post WTO period. The study has also tried to find the degree of convergence/divergence in the production of both the
crops over the period.
OBJECTIVES OF STUDY
The main objectives of the present study are as follows:
To examine the inter-state disparities in the production of Wheat and Rice in Indian states.
To study the convergence/divergence in the production of Wheat and Rice across Indian states.
Hypotheses: Keeping in view of the objectives, the whole study is based on the following hypotheses:
The inter-state disparity in production of Wheat and Rice in India has decreased in the post liberalization period.
Database: The study is mainly based on the secondary data collected from various sources. This study covers 15 major wheat and
rice producing states of India, namely, Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh,
Maharashtra, Orissa, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal. We have used food grains production of
rice and wheat for our analysis. The time period covered is 2000-01 to 2012-13. The data on state wise annual food grains (rice
and wheat) production for the period 2000-2013 have been collected from ‘Data Base for the Indian Economy (DBIE)’ published
by the Reserve Bank of India (www.rbi.org), Ministry of agriculture Government of India and www.indiastat.com.
Methodology: The simple measure of convergence is to compute the standard deviation (SD) or coefficient of variation (CV) of
the log of per capita income over time to see whether the dispersion rises or falls. This is the test for σ-convergence.
The standard deviation measures dispersion in variables i.e. production of rice and wheat in every states over a period. Standard
deviation is defined as average of square root of deviation from their mean. It is an average index of inequality for all regions.
S. D =√(X−X)
2
N
Where,
SD = Standard deviation
X = Values of Production
X = Mean of Production
N = number of years
Coefficient of Variation: The coefficient of variation is a relative measure of dispersion. It measure as a ratio of standard
deviation to mean value. The method is used to measure variability in production of rice and wheat between the states during the
period.
C.V. = (S.D./Mean) *100
Where, C.V. = coefficient of variation
S.D. = standard deviation
Mean = average of Production of wheat and rice
Coppock’s Instability Index: Coppock (1962) measured international instability in exports and imports through log variance
method. This method like, coefficient of variation also measures variation in production of Wheat and Rice food grains. As the
Coppock instability index is estimated, higher numerical value represents greater instability. The present study has used this
method to estimate instability in production of Wheat and Rice in major states of India and compared whether instability is also
high in those states where variability in production is high.
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Estimation of Extent of Instability: The Coppock’s instability index (CII) is defined as follows: CII is the close approximation
of the average year-to-year percentage variation adjusted for trend.
C.I.I. = [Anti log √ log V – 1]*100 and
Log V =Σ [log (Xt + 1 / Xt )-m ]2
N-1
Where, Xt = Area/production/Yield in the year’s‘t’
N = Number of years
m = Arithmetic mean of the difference between the logs of Xt+1, Xt etc.
V = Logarithmic variance of the series.
REVIEW OF LITERATURE
A large number of studies have examined regional economic growth and disparity in India. We make a brief review of the
findings of the earlier studies to compare them with the present one.
Sawant S. D. and Achutan C. V.(1995) in their research paper titled ‘Agricultural Growth Across Crops and Regions’ studied and
conclude that, state or regions which lagged in behind considerably during the period 1968-69 to 1981-82 were able to push up
their share considerably during the period 1981-82 to 1990-91. Thus, they have shown regional disparities in agricultural growth
tended to decline in the period 1980s. They have computed CAGRs of State Domestic and found that excepting western region
(Gujarat, Maharashtra) and Andhra Pradesh from Southern region the process of acceleration in agricultural growth was almost
universal across the states in period 1981- 82 to 1990-91. Moreover, the northwestern region, which spear headed. India’s green
revolution continued to be the high growth region even during period II (1981-82 to 1990-91).
Das and Barua (1996) in their paper titled ‘Regional Inequalities, Economic Growth and Liberalization: A Study of Indian
Economy’ examined several dimensions of regional economic disparities among twenty three states over the period of 1970-92 by
Computing Thiele’s index, a measure of inequality. They showed trends (linear and non-linear) in regional disparities in terms of
SDP (state domestic product) due to agriculture, manufacturing and service sector and found that interstate disparities increased in
almost all the sectors. They also explained non-linear relationship between regional inequality and per capita income. A very
important conclusion of this study was related to radical policy reforms (radical departure from the previous policies of
concentrating the efforts of green revolution only in a few regions of northern India and adopting policies towards horizontal
expansion across all the regions) which could give priority to agriculture, services and unregistered manufacturing for the
reduction of inter-regional inequality.
Somra (2000) in his paper ‘Regional Disparities: An Analytical View’ attempted to find out the irregular spatial development of
the Indian economy and sectoral disparities and made an assessment of regional disparities in terms of per capita net state
domestic product data at factor cost. Results revealed increase in regional disparity as coefficient of variation increased in the post
liberalization period compared to the pre liberalization period. The paper also examined trends of growth rate among the states
and found fluctuation among the states in terms of growth rate. He showed his concern about the existence of regional disparities
under the economic reforms and showed insensitiveness of the Planning.
Dadibhavi, R.K. and Bagalkoti, S.T. (2006) in their paper titled ‘Reforms and Regional Inequality in India’ estimated the trends in
inequalities in the levels of income and growth of the major seventeen states of India during the post-reform period by using the
coefficient of variation method. The estimation revealed disparity in the level of state incomes especially in the reform period and
these income inequalities have increased. The study emphasized on attracting more resources, creating an enabling environment
such as overall investment, investment in agriculture, improvement in basic infrastructural facilities like transport in backward
states and upgraded governance.
Chand Ramesh and Raju S. (2007) have studied about the instability in Andhra Pradesh agriculture. They argued that, instability
in farm product is causing series shocks to supply and farm income and there is a growing concern about increased volatility in
farm production, prices and farm income. Their study estimated instability in major crops in Andhra Pradesh before and after the
initiation of economic reforms. Instability was associated with selected crops was estimated by using the instability index. Their
study revealed that, in a large state like Andhra Pradesh, and which is the case for most of the states in India, the instability states
as perceived through the state level data may be vastly different from that experienced at the disaggregate level. They concluded
that the state level analysis does not reflect complete picture of shocks in agricultural production and further shocks in production
under estimates shocks in farm income. At the end, they suggest that, the need for addressing risks in farm income by devising
area-specific crop insurance or other suitable machines.
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IDENTIFIED GAP IN LITERATURE
In spite of considerable research made on the subject, much more remains to be done to explore the extent of differences in
growth among states in order to calibrate appropriate policies to achieve balanced regional economic growth. While going through
the review of literature on the concerned topic we came across several gaps:
Most of the studies have used only GSDP, NSDP of production of states to study the growth pattern across states.
However, to study the pattern of regional economic growth in real sense it becomes necessary to use the actual data of
production and productivity of different states. The present study will use the data of foodgrain (wheat and rice) to find
out inter-state disparity in agriculture.
There are limited studies on regional disparity in Indian agriculture after 2000. Therefore, there is a need to update the
study. The study is also important as WTO quantitative restriction on agriculture export and import was fully abolished
in the year 2000-01.
ANALYSING PRODUCTION
Wheat Production in Major States
During independence, the country was dependent on wheat import to meet the food demand of the country. Due to low yielding
nature of Indian wheat under high fertility conditions, there remained a continuous need for a breakthrough in wheat production. It
was finally the dream of Dr. Norman E. Borlaug, the father of green revolution during mid-sixties that came true to materialize the
spurt of the Green Revolution in the Indo Gangetic plains by which India became a wheat surplus country from a deficient one.
The production level of Wheat in India had a quantum jump from 6.46 million tonnes from an area of 9.75 million ha in 1950-51
to 105.3 million tons from an area of about 30 million hectares during 2011-12. India has become the world’s largest producer
across a range of commodities due to its favorable agro-climatic conditions and availability of rich natural resource base.
Currently, India is the second largest producer of wheat in the world after China with about 12 percent share in the world. Wheat
is grown in India in an area of about 30 Million hectare with a production of 105.3 Million tons. The normal National productivity
is about 2.98 tons/ha. The major Wheat producing States are Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar,
Maharashtra, Gujarat, Karnataka, West Bengal, Uttarakhand, Himachal Pradesh and Jammu & Kashmir. These States contribute
about 99.5% of total Wheat production in the country. Remaining States, namely, Jharkhand, Assam, Chhattisgarh, Delhi and
other North Eastern States contribute only about 0.5 % of the total Wheat production in the country.
Table-1: Production Trend of Wheat in Major States of India
Production in (‘000 tonnes)
Sources: Database on Indian Economy, RBI report 2013-14
STATES AP ASS BIH CHAT GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB INDIA
2000-01 8 86 4438 80 649 9669 244 4869 948 12.90 15551 5547 25168 715 1059 69820
2001-02 9 85 4391 104 1145 9437 199 6001 1077 10.60 15499 6389 25498 735 962 72912
2002-03 14 78 4041 99 857 9192 147 4923 984 5.80 14175 4878 23612 750 887 65760
2003-04 7 73 3689 109 2037 9114 96 7365 778 7.50 14489 5876 25567 745 986 72300
2004-05 5 68 3263 82 1806 9058 179 7177 1016 5.00 14698 5707 22514 803 842 68637
2005-06 9 54 3239 91 2473 8857 217 5958 1300 4.50 14493 5865 24074 645 774 69355
2006-07 9 67 3911 92 3000 10055 205 7326 1631 5.80 14596 7056 25031 801 800 75807
2007-08 8 71 4450 99 3838 10236 261 6033 2078 8.70 15720 7125 25679 814 917 78570
2008-09 16 55 4410 93 2593 10808 247 6522 1516 7.40 15733 7287 28554 797 765 80679
2009-10 9 64 4975 93 2739 10870 222 7214 1846 6.50 15540 6327 28279 831 901 80804
2010-11 10 64 4670 127 3854 11040 245 7627 2292 4.70 15828 7215 30001 887 842 86870
2011-12 8 59 4787 133 4100 12686 194 10580 1313 2.70 17207 9320 30293 878 884 93904
2012-13 7 57 5375 133 3135 11117 172 13133 875 2.10 16106 8954 30302 838 907 92458
MEAN 9 68 4280 103 2479 10165 202 7287 1358 6.48 15357 6734 26506 788 886 77529
SD 2.91 10.68 634.69 18.04 1138.65 1107.43 46.07 2276.28 483.68 3.01 840.60 1293.89 2662.59 67.92 84.57 9107.88
CV 31.80 15.78 14.83 17.60 45.94 10.90 22.79 31.24 35.62 46.46 5.47 19.21 10.05 8.62 9.54 11.75
CAGR -1.1% -3.4% 1.6% 4.3% 13.1% 1.2% -2.9% 8.3% -0.7% -15.1% 0.3% 4.0% 1.5% 1.3% -1.3% 2.3%
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Table-1 shows that major wheat producing states in India are the states of Uttar Pradesh, Punjab, Madhya Pradesh, Haryana and
Rajasthan. These five states together contribute more than 70 percent of the total wheat production in India. In the state of Uttar
Pradesh the production of wheat rose to 30301.9 thousand tons in the year 2012-13 from 25168.3 in 2000-01. About 30 percent of
wheat is produced in state of Uttar Pradesh due to its large area under wheat production. Wheat is produced in almost every part of
Uttar Pradesh but the greatest concentration is in western Uttar Pradesh. From the year 2000-01 to 2009-10 the production of
wheat has remained same but it was in the year 2010-11 that the production of wheat rose to 30001 thousand tons. Punjab is the
second largest wheat producer in India after Uttar Pradesh. It contributes about 20 percent of the total wheat produced in India. In
the state of Rajasthan the production of wheat rose to 8953.5 thousand tons in 2012-13 from 5547 thousand tons in the year 2000-
01. The highest increase in the production of wheat was registered in the state of Madhya Pradesh where wheat production rose to
13133.4 thousand tons in the year 2012-13 from the production of 4869.4 thousand tons during 2000-01. The main reasons for the
increase in wheat production are assured canal irrigation, covering fellow land under cultivation, warehousing and infrastructure,
credit management, agriculture extension and technology, fertilizer supply management and regular electricity supply. It is
expected that if conditions remain favourable, then MP will be able to surpass Punjab in the coming year.
During the period under study, the average production of wheat has differed from state to state. From all states, Uttar Pradesh has
registered the highest average production of wheat, while Orissa has the lowest average production of wheat. Punjab occupies the
second place in case of average production of wheat in India. The average production of wheat in Uttar Pradesh is 26505.51
thousand tons during the period 2000-01 to 2012-13, while in the state of Orissa the average production of wheat is registered at
6.48 thousand tons during the same period.
The growth rate in production during 2000-01 to 2012-13 is found to be negative in the states of Andhra Pradesh, Assam,
Karnataka, Maharashtra, Orissa and West Bengal, and positive in the states of Bihar, Chhattisgarh, Gujarat, Haryana, Madhya
Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand. At all India level, the growth rate in the production of wheat is also
positive. The growth rate in the production of wheat is highest in Gujarat; here the production of wheat grew at the rate of 13.12
percent during the period of 2000-01 to 2012-13. The growth rate in the production of wheat in Gujarat is mainly because of
increase in the area of cultivation for wheat. There is highest decline in the production of wheat in Orissa; the negative growth rate
is 15.13 percent. This has been due to the fall in area of wheat production.
The coefficient of variation shows fluctuations in the production of wheat in all states during the period. From the table it has to be
seen that there is high variability in the production of wheat in all states except the states of Punjab, Uttarakhand and West Bengal.
The variability in the production of wheat is highest in the state of Orissa and Gujarat i.e. 46 and 45 percent respectively. The high
variability in Orissa is because of decrease in the production of wheat due to fall in the area under wheat production. The farmers
have shifted their pattern from wheat cultivation to the cultivation of rice due to the climatic condition of Orissa, rise in the cost of
production or unavailability of fertilizers, due to wrong government policies.
Table-2: Production of Wheat in Major States of India
Production in (‘000 tons)
Sources: Database on Indian Economy, RBI report 2013-14
Table-3: Mean and Coefficient of Variation of Production of Wheat
States Bihar Gujarat Haryana Madhya
Pradesh Maharashtra Punjab Rajasthan
Uttar
Pradesh
Mean 4280 2479 10165 7287 1358 15357 6734 26506
C.V. 14.83 45.94 10.90 31.24 35.62 5.47 19.21 10.05
Sources: Author’s Calculation
Production of Rice in Indian States
Rice is the most important crop in India, which played a key role in the food security. It is the important staple food for more than
half of the world population and provides 60-70 per cent body calorie intake to the consumers. Rice is a supreme commodity to
STATES 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
HAR 9669 9437 9192 9114 9058 8857 10055 10236 10808 10870 11040 12686 11117
MP 4869 6001 4923 7365 7177 5958 7326 6033 6522 7214 7627 10580 13133
PUN 15551 15499 14175 14489 14698 14493 14596 15720 15733 15540 15828 17207 16106
RAJ 5547 6389 4878 5876 5707 5865 7056 7125 7287 6327 7215 9320 8954
UP 25168 25498 23612 25567 22514 24074 25031 25679 28554 28279 30001 30293 30302
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humankind, because rice is truly life, culture, tradition and a means of livelihood to millions. In recognition to these important
qualities of rice, the United Nations General Assembly, in a resolution declared the year 2004 as the International Year of Rice.
Rice is one of the most important food crops of India in term of area, production and consumer preference. India is the second
largest producer and consumer of rice in the world. Rice production in India crossed the mark of 100 million tons in 2011-12
accounting for 22.81% of global production in that year. The productivity of rice has increased from 1984 kg per hectare in 2004-
05 to 2372 kg per hectare in 2011-12. Indian share in global rice production has been hanging in the range of 19.50 to 24.52 %.
Indian share dipped below 20 percent only in 2009-10.Rice is produced in almost every state but the major rice producing states
which contribute higher share in India are Andhra Pradesh, Assam, Bihar, Chhattisgarh, Orissa, Punjab, Uttar Pradesh and West
Bengal. These eight states together contribute more than 70 percent of total rice production in India.
Table-4: Production Trend of Rice in Major States of India
Production in (‘000 tons)
Sources: Database on Indian Economy, RBI Report 2013-14
From the table-4, it has to be seen that rice is produced in every state but the major states where the production of rice is high are
Andhra Pradesh, Assam, Bihar, Chhattisgarh, Orissa, Punjab, Uttar Pradesh and West Bengal. West Bengal is at the first position
in the production of rice followed by Uttar Pradesh, Andhra Pradesh and Punjab. In the state of West Bengal, rice is produced in
both summers as well as in winter season. Production trend of rice has been increasing in all states and at all India level. The
production of rice is highest in West Bengal which produced 15023 thousand tons in the year 2012-13. From the year 2000-01
there is constant increase in the production of rice in West Bengal, the growth rate during the period is 1.58 percent in West
Bengal. Uttar Pradesh is at second place where the production of rice is high. In the year 2012-13, Uttar Pradesh produced 14413
thousand tons of rice whereas in the year 2000-01 it produced 11679 thousand tons of rice. The rate of growth of production of
rice in Uttar Pradesh during the period is 1.75 percent. Andhra Pradesh and Punjab are the other states where the production of
rice is high. At all India level rice is produced in almost every state but the larger share came from West Bengal, Uttar Pradesh,
Punjab, Tamil Nadu and Andhra Pradesh, Chhattisgarh and Bihar.
During the concerned period, West Bengal has registered the highest average production of rice followed by Uttar Pradesh and
Andhra Pradesh. The average production of rice in West Bengal is 14419.3 thousand tons and in Uttar Pradesh and Andhra
Pradesh the average production of rice is 11930.4 and 11556.2 thousand tons respectively while the growth rate is negative in
Andhra Pradesh. The growth rate is found to be the highest in the state of Gujarat, Chhattisgarh and Madhya Pradesh at 9.85, 8.55,
8.66 percent respectively, and negative in the state of Karnataka and Uttarakhand. The rise in the growth rate in Gujarat and
Madhya Pradesh is because of improvement in the irrigation facilities and availability of fertilizer and use of high yielding variety
seeds.
STATES AP ASS BIH CHAT GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB INDIA
2000-01 12458 3998.5 5442.6 2369.3 472.7 2695 3846.7 982.1 1929.2 4614 9154 155.7 11679 621.5 12428 84977
2001-02 11390 3854 5202.9 5073.7 1040.1 2726 3234 1692.7 2651.4 7148 8816 180 12856 614.4 15257 93340
2002-03 7327 3738 5085.5 2634.9 541.7 2468 2390.1 1031.8 1854 3276.7 8880 67.9 9594.9 483 14389 71820
2003-04 8953 3880 5447.8 5567.6 1277 2790 2550.3 1750.3 2835 6733.7 9656 164.8 13019 569 14662 88526
2004-05 9601 3470.7 2472.2 4383.3 1238.2 3023 3547 1169 2164 6466 10437 150.4 9555.6 572 14885 83132
2005-06 11704 3552.5 3495.5 5011.6 1298 3210 5744 1656.3 2695 6859 10193 153 11134 590 14511 91793
2006-07 11872 2916 4989.3 5041.4 1390 3371 3446 1368.4 2569 6824.7 10138 169.8 11124 556 14746 93355.3
2007-08 13324 3319 4418.1 5426.6 1474 3613 3717 1461.9 2996 7540.7 10489 259.6 11780 593 14719.5 96692.9
2008-09 14241 4008.5 5590.3 4391.8 1303 3298 3802 1559.7 2284 6812.7 11000 241.1 13097 582 15037.3 99182.5
2009-10 10538 4335.9 3599.3 4110.4 1300 3625 3536 1260.6 2243 6960 11236 228.3 10807.1 608 14606.8 89092.9
2010-11 14418 4736.6 3320 6159 1523 3472 4188 1772.1 2696 6558 10837 265.5 12014 545 12332.7 95979.8
2011-12 12895 5399.3 7201 6028.4 1764 3759 4038 1838.2 2806 5812 10542 253.4 14022 599 14853 104322
2012-13 11510 5128 7529.3 6608.8 1541 3976 3364 2775 3057 7295 11374 222.5 14413 581 15023 105241
MEAN 11556.2 4025.9 4907.2 4831.3 1243.3 3232.8 3646.4 1562.9 2521.5 6377.0 10211.7 193.2 11930.4 578.0 14419.3 92111.9
SD 2057.56 713.02 1463.43 1264.46 370.92 463.66 816.89 462.19 390.40 1188.87 856.54 57.54 1518.61 36.13 934.19 9017.74
CV 17.80 17.71 29.82 26.17 29.83 14.34 22.40 29.57 15.48 18.64 8.39 29.78 12.73 6.25 6.48 9.79
CAGR -0.66% 2.07% 2.70% 8.55% 9.85% 3.24% -1.12% 8.66% 3.84% 3.82% 1.81% 2.97% 1.75% -0.56% 1.58% 1.78%
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The coefficient of variation shows variability in the production of rice in Indian states. There is more fluctuation in the production
of rice in all states, which increases variability in their production. During the concerned period maximum variation is recorded in
Gujarat (29.83), Bihar (29.82), Rajasthan (29.78) and Madhya Pradesh with (29.57) percent, while low variation is recorded in
Uttarakhand (6.25), West Bengal (6.48) and Punjab (8.39) percent. The variability in production of rice shows that rice production
has not been stable in all states during the concerned period. The variability in the production of rice was high in the states of
Gujarat, Bihar, Rajasthan and Madhya Pradesh due to fluctuation in production of rice. The main reason for the fluctuation in
production of rice was instability in the area used for cultivation of rice in these states. In the state of Bihar area used for
cultivation of rice decreased to 3298 hectares in the year 2012-13 from 3656 thousand hectares in the year 2000-01. In the states
of Gujarat and Madhya Pradesh the main reason for variation in production of rice is increase in the production of rice due to rise
in area used for cultivation and various initiatives taken by the government such as introduction of better crop varieties, intensive
application of inputs, irrigation and price support and procurement operation taken by the government. The production of rice in
Gujarat rose to 1541 thousand tons in the year 2012-13 from 472.7 thousand tons in 2000-01.
Table-5: Production of Rice in Major States
Production in (000 tons)
Sources: Database on Indian Economy, RBI Report 2013-14
Table-6: Mean and CV of Rice Production
States Andhra Pradesh Bihar Chhattisgarh Orissa Punjab Uttar Pradesh West Bengal
Mean 11556 4907 4831 6377 10212 11930 14419
CV 18 30 26 19 8 13 6
Sources: Database on Indian Economy, RBI Report 2013-14
Convergence in Production of Wheat and Rice
For measuring convergence/divergence in production of wheat and rice in Indian states, we have used method sigma (σ)
convergence. Here we have calculated sigma (σ) convergence to find whether disparity in production of rice and wheat has
decreased or not over time in Indian states.
Sigma (σ) - Convergence for Production of Wheat
In order to test sigma convergence, the coefficient of variation of log of production of wheat for each year across the states has
been computed for the 2000-01 to 2012-13 and the estimated log CV of Wheat production regress on time period t for all states
shows the following results:
CV of production of Wheat = 155.6 – 1.12 t R2 = 0.629
(75.86) (-4.32) F= 18.66
The result of equation shows a negative relationship between CV and time period. The coefficient bears a negative sign and the
value of t statistic for intercept and negative coefficient is statistically significant. The result shows that disparity in the production
of wheat during the period has decreased across states. As poorer states have adopted the HYV technology, improved the
irrigation facilities and used more fertilizers, their production has increased. The production of wheat increased rapidly in MP,
Bihar, Chhattisgarh and Gujarat, while the production of wheat in states like Punjab, Haryana and Uttar Pradesh increased at
constant rate as these states had already utilized the New Technology. Therefore, our hypothesis that inter-states disparity in the
production of wheat has decreased across Indian states is accepted.
STATES 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
AP 12458 11390 7327 8953 9601 11704 11872 13324 14241 10538 14418 12895 11510
BIH 5443 5203 5086 5448 2472 3496 4989 4418 5590 3599 3320 7201 7529
CHAT 2369 5074 2635 5568 4383 5012 5041 5427 4392 4110 6159 6028 6609
ORI 4614 7148 3277 6734 6466 6859 6825 7541 6813 6960 6558 5812 7295
PUN 9154 8816 8880 9656 10437 10193 10138 10489 11000 11236 10837 10542 11374
UP 11679 12856 9595 13019 9556 11134 11124 11780 13097 10807 12014 14022 14413
WB 12428 15257 14389 14662 14885 14511 14746 14720 15037 14607 12333 14853 15023
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Table-7: Production of Wheat in Major States
Sources: Database on Indian Economy, RBI Report, 2013-14
Figure-1: Time Trend Coefficient of Variation of Wheat Production
Sources: Authors Compilation
The result is also clear from the figure 4.4 that coefficient of variation has decreased over time across the states. The CV of
production of wheat was 156.6 in the year 2000-01, which declined to 141 percent in the year 2012-13. In 2007-08, CV showed a
rising trend but after 2008, it again started declining. The result explains that the low performing states improved their production
level by introducing new technology, using new high yielding varieties of seeds, improved irrigation facilities and providing
fertilizers to the farmers.
4.5 Sigma (σ) - Convergence for Production of Rice
In order to measure the dispersion in the production of rice we compute the coefficient of variation of production of rice across the
states for each year during the period. The estimated result of CV of production of rice on time t shows the following result:
CV of production of Rice = 92.21 – 0.98 t R2 = 0.558
(44.03) (-3.72) F= 13.89
The estimates of the equation show negative relationship between coefficient of variation and time t. The t value for the intercept
as well as slope coefficient is significant and the value of R2 is high. Therefore, during the concerned period Indian states have
STATES AP ASS BIH
CHA
T GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB MEAN SD CV
2000-01 8 85.7 4438 80 649 9669 244 4869 948 12.9 15551 5547.1 25168.3 714.6 1058.6 4602.87 7211.95 156.68
2001-02 9 85.3 4391.1 104 1144.7 9437 198.8 6001 1077 10.6 15499 6389 25498 734.8 962 4769.35 7262.08 152.27
2002-03 14 78 4040.6 99 857 9192 147 4923 984 5.8 14175 4878 23612.4 750 887 4309.52 6717.99 155.89
2003-04 7 73 3688.9 109 2036.5 9114 96.2 7365 778 7.5 14489 5875.8 25566.7 745 986 4729.10 7170.69 151.63
2004-05 5 68.1 3263.4 82 1805.5 9058 179 7177 1016 5 14698 5706.6 22513.9 803 842 4481.47 6568.91 146.58
2005-06 9 53.7 3239 91 2473 8857 217 5958 1300 4.5 14493 5865.3 24073.8 645 774 4536.81 6806.33 150.02
2006-07 9 67 3911.4 92 3000 10055 205 7326 1631 5.8 14596 7055.8 25031 801 800 4972.37 7079.04 142.37
2007-08 8 71 4450 99 3838 10236 261 6033 2078 8.7 15720 7125 25679 814 917 5155.82 7271.09 141.03
2008-09 16 54.6 4410 93 2593 10808.2 247 6522 1516 7.4 15733 7287 28554 797 765 5293.47 7949.67 150.18
2009-10 9 63.5 4974.6 93 2739 10869.6 222 7214 1846 6.5 15540 6326.5 28279 831 901 5327.67 7850.71 147.36
2010-11 10 64 4670 127 3854 11040 245 7627 2292 4.7 15828 7214.5 30001 887 842 5647.07 8228.17 145.71
2011-12 8 59 4787.3 133 4100 12685.7 194 10580 1313 2.7 17206.7 9319.6 30292.6 878 884 6162.93 8646.94 140.31
2012-13 7 57 5375.1 133 3135 11117 172 13133 875 2.1 16106.1 8953.5 30301.9 838 907 6074.21 8625.01 141.99
GR -0.011 -0.034 0.016 0.043 0.131 0.012 -0.029 0.083 -0.007 -0.151 0.003 0.040 0.015 0.013 -0.013
lnYt-1 2.08 4.45 8.40 4.38 6.48 9.18 5.50 8.49 6.85 2.56 9.65 8.62 10.13 6.57 6.96
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shown σ- convergence in terms of production of rice. The production of rice increased more rapidly in the states like Madhya
Pradesh, Maharashtra, Orissa and other states where the production of rice was low. While the productions of rice in states like
Punjab, West Bengal and Uttar Pradesh increased at a steady rate. This has reduced the disparity in the production among states.
Thus, our hypothesis is accepted that inter-state disparity in the production of rice has decreased in Indian states in the post
liberalization period.
Table-8: Production of Rice in Indian States
Sources: Database on Indian Economy, RBI Report, 2013-14
Figure-2: Time Trend Coefficient of Variation of Rice Production
Sources: Authors Compilation
The estimated coefficient of variation of the production of rice across the states is plotted against time in figure. The coefficient of
variation during the period shows a decreasing trend. The presence of σ- convergence shows that disparity in the production of
rice across the states has decreased over time during the period, that is, the growth rate in the production of rice has increased in
the states where production was low. This has reduced the disparity in the production of rice across states.
STATES AP ASS BIH CHAT GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB MEAN SD CV
2000-01 12458 3999 5443 2369 473 2695 3847 982 1929 4614 9154 156 11679 622 12428 4856.42 4439.85 91.42
2001-02 11390 3854 5203 5074 1040 2726 3234 1693 2651 7148 8816 180 12856 614 15257 5449.08 4691.60 86.10
2002-03 7327 3738 5086 2635 542 2468 2390 1032 1854 3277 8880 68 9595 483 14389 4250.83 4096.62 96.37
2003-04 8953 3880 5448 5568 1277 2790 2550 1750 2835 6734 9656 165 13019 569 14662 5323.70 4481.56 84.18
2004-05 9601 3471 2472 4383 1238 3023 3547 1169 2164 6466 10437 150 9556 572 14885 4875.63 4360.86 89.44
2005-06 11704 3553 3496 5012 1298 3210 5744 1656 2695 6859 10193 153 11134 590 14511 5453.79 4485.05 82.24
2006-07 11872 2916 4989 5041 1390 3371 3446 1368 2569 6825 10138 170 11124 556 14746 5368.11 4567.21 85.08
2007-08 13324 3319 4418 5427 1474 3613 3717 1462 2996 7541 10489 260 11780 593 14720 5675.43 4760.28 83.88
2008-09 14241 4009 5590 4392 1303 3298 3802 1560 2284 6813 11000 241 13097 582 15037 5816.56 5085.47 87.43
2009-10 10538 4336 3599 4110 1300 3625 3536 1261 2243 6960 11236 228 10807 608 14607 5266.29 4495.31 85.36
2010-11 14418 4737 3320 6159 1523 3472 4188 1772 2696 6558 10837 266 12014 545 12333 5655.79 4621.53 81.71
2011-12 12895 5399 7201 6028 1764 3759 4038 1838 2806 5812 10542 253 14022 599 14853 6120.69 4848.06 79.21
2012-13 11510 5128 7529 6609 1541 3976 3364 2775 3057 7295 11374 223 14413 581 15023 6293.17 4840.49 76.92
GR -0.007 0.021 0.027 0.085 0.098 0.032 -0.011 0.087 0.038 0.038 0.018 0.030 0.018 -0.006 0.016
lnYt-1 9.43 8.29 8.60 7.77 6.16 7.90 8.25 6.89 7.56 8.44 9.12 5.05 9.37 6.43 9.43
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Estimation of Extent of Instability
Table-9: Instability in the Production of Wheat in Major States
Sources: Authors Compilation
The instability in the production of wheat during the period 2000-01 to 2012-13 is highest in the states of Andhra Pradesh (55.62
percent), Gujarat (50.93 percent) and Orissa (49.98 percent), while instability has been registered lowest in Punjab (38.54),
Haryana (39.4) and in Uttar Pradesh (39.17) percent. The study shows that there is a relationship between Coppock instability and
Coefficient of variation of production of wheat in major states. The instability is also high in the states where coefficient of
variation is high.
Table-10: Instability in the Production of Rice in Major States
Sources: Authors Compilation
From the table it is observed that instability is high in the states where coefficient of variation is high. The instability in the
production of rice is high in the states of Rajasthan (55.32), Gujarat (53.9), Bihar (53.84) and Chhattisgarh (54.09) percent,
whereas instability is low in Punjab (8.3), West Bengal (6.4) and Uttar Pradesh (12.73) percent. The instability index also
measures variability of production across states. It is analyzed from Coppock instability and coefficient of variation that there is
some relation between two measures of variability, the Coppock instability is high in those states where coefficient of variation is
high and low where coefficient of variation is low.
CONCLUSION
For the development of an economy, the development of agricultural sector is an important pre-condition. However, it is not as
easy to increase the growth rate in agricultural sector in all the regions of a country, as there is a wide variation in the resource
endowment, climate condition, irrigation facilities and other economic conditions. In order to increase the productivity in
agricultural sector specially to increase production of food grains Indian government adopted green revolution technology on a
large scale in the regions where resources were available like in Punjab, Haryana and some parts of Western Uttar Pradesh.
Consequently, growth rate in agriculture or production of food grains increased but it also increased disparity in agricultural
growth in other states or regions.
The variation in the production of wheat is high in the states of Gujarat and Orissa due to high fluctuation in area used for
cultivation of wheat and low variability in states of Punjab, Uttar Pradesh and Haryana. In case of the production of rice,
variability is found in all states but highest variation is found in Gujarat, Madhya Pradesh and Rajasthan and low variation is
found in Punjab, West Bengal and Uttarakhand region. The variability in production has also been measured by Coppock
Instability index, which shows that there is some relationship in coefficient of variation, and instability index. The instability in
production of rice and wheat is high in all those states where coefficient of variation in production is high.
The inter-states disparity in production of rice and wheat crops declined during the period. These results suggest that there has
been a tendency of σ-convergence in agricultural development across the states. The result shows that disparity in production of
wheat and rice has decreased over time. This shows that there is a clear σ-convergence in agricultural development across Indian
states.
REFERENCES
1. Sawant, S. D., & Achutan. (1995, March 25). Agriculture Growth across Crops and Regions. Economic and Political
Weekly, pp A-2 to A13. Mumbai.
2. Somra, S. S. (2000). Regional Disparity in India: An Analytical View. New Delhi: Atlantic Publishers and Distributors.
STATES AP ASS BIH CHAT GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB
CV 31.8 15.78 14.83 17.6 45.94 10.9 22.79 31.24 35.62 46.46 5.47 19.21 10.05 8.62 9.54
CII 55.62 42.01 40.52 42.52 52.45 39.4 50.93 44.66 48.97 49.98 38.54 42.48 39.17 40.46 41.15
STATES AP ASS BIH CHAT GUJ HAR KAR MP MAH ORI PUN RAJ UP UK WB
CV 17.8 17.71 29.82 26.17 29.83 14.34 22.4 29.57 15.48 18.64 8.39 29.78 12.73 6.25 6.48
CII 45.29 40.93 53.84 54.09 53.94 39.44 47.63 51.71 46.47 51.74 38.43 55.32 44.06 40.82 40.46
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3. Das, S. K., & Barua, A. (1996). Regional inequalities, economic growth and liberalization: A study of the Indian
economy. The Journal of Development Studies, 32(3), 364-390.
4. Bhalla, G. S., & Singh, G. (1997). Recent developments in Indian agriculture: A state level analysis. Economic and
Political Weekly, A2-A18.
5. Ahluwalia, Montek S. (2000). Economic Performance of States in Post-Reforms Period. Economic and Political
Weekly, 35(14-26).
6. Ghosh, Madhusudan. (2006, October-December). Regional Convergence in Indian Agriculture. Indian Journal of
Agricultural Economics, 61(4).
7. Dadibhavi, R. K., & Bagalkoti, S. T. (2006). Reforms and Regional Inequality in India. The Indian Economic Journal,
54(2).
8. Chand, Ramesh, & Raju, S. (2007, July- December). Instability in Andhra Pradesh Agriculture- A Disaggregate
Analysis. Agricultural Economics Research Review, 21, 283-288.
9. A., Narayanmurthy. (2007, June 23). Deceleration in Agricultural Growth. Economic and Political Weekly, pp. 2375-
2379. Mumbai.
10. Chand, Ramesh, S., S. Raju, S., Garg, & L., M. Pandey. (2011, June). Instability and Regional Variation in Indian
Agriculture (Policy Paper 26). New Delhi: National Centre for Agricultural Economics and Policy Research (NCAP).
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Pradesh. Journal of Regional Development and Planning, 1(2), 71-90.
12. Chaterjee, T. (2014, September). Spatial Convergence and Growth in Indian Agriculture (WP-2014-035). Mumbai:
Indira Gandhi Institute of Development and Research.
13. Retrieved from http://farmer.gov.in/imagedefault/pestanddiseasescrops/wheat.pdf
14. Retrieved from http://www.academia.edu/177966/Globalising_Indian_Agriculture_A_shift_in_the_positive_direction
15. Retrieved from http://www.farmingquest.com/wheat/
16. Retrieved from https://ideas.repec.org/p/iim/iimawp/10681.html
*****
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GROCERY RETAILING IN INDIAN MARKET
Dr. N. Venkateswaran7
ABSTRACT
Liberalization of the Indian economy and rationalization of business procedures have ensured a high economic growth with a
rapidly expanding base for the manufacturing and hi-end services sectors. Fresh avenues for gainful employment to a
predominantly young and talented population have created high disposable incomes that translate into higher consumption
and thus better opportunities for all verticals of retail to flourish.
The paper examines the changing paradigm in the Indian retailing industry at the turn of the 21st century, mainly driven by
the growth of organized retailing sector and increased personal consumption of customers because of rising incomes,
increased nuclear families and double income families. This paper focuses on emerging paradigms in the grocery retail
industry in selected retailing sectors across India.
The food and grocery industry in India is now worth $383 billion and is expected to touch $1 trillion by 2020. The country's
dynamic retail landscape presents a unique opportunity to investors from across the globe, to use India as a strategic business
hub. However, this modern retail segment grew at the rate of 42.4 percent in 2007, and is expected to maintain a faster
growth rate over the next three years, especially in view of the fact that major global players and Indian corporate houses are
seen entering the fray in a big way. Even at the going rate, organized retail is expected to touch US $57.5 billion (Rs. 2,300
crores) by 2010, constituting roughly 13 percent of the total retail market.
KEYWORDS
Globalization, Database Retailing, Order Processing, Hypermarkets etc.
INTRODUCTION
Since the mid 1990s, India’s grocery sector has started to evolve from a traditional to a modern retail market. Currently, Foreign
Direct Investment (FDI) up to 51% is allowed only in single-brand retail with government approval. However, in the wholesale
cash-and-carry segment, up to 100% FDI is allowed. The Indian government wants to promote FDI at the back-end of retail
activity such as logistics, cold chain and technology so that it also helps traditional retailers. However, FDI in retail continues to
be a politically sensitive issue.
India is the sixth largest grocery market in the world and one of the fastest growing markets for online groceries. According to
industry estimates, of the $500 billion-plus retail market in the country, food and groceries account for the biggest chunk with
around 70% market share. Of this, organized food and groceries is estimated to be around $12 billion and growing at a compound
annual growth rate of around 30%.
By 2016, the Indian grocery market would have overtaken Japan to become the third largest. Meanwhile, India’s online grocery
market, which is estimated to be less than $100 million at present, is expected to be worth billions in the coming years.
The emergence of mall culture coincided with a great interest in the retail sector from foreign institutional investors. In fact, many
malls, high streets and food based retail concepts today are international partnerships. This major step in the evolution of modern,
global retail in India also coincided with the emergence of the internet as more than just a means of communications. Amongst the
first ‘desi’ players in the online retail, space was Indiaplaza.com; the now defunct store was targeted at NRIs and for the duration
of its operation did pretty well for itself.
The Indian retail market, currently estimated at $490 billion, is project to grow at a compounded annual growth rate of 6 per cent
to reach $865 billion by 2023. The traditional channel consists of 'mom-and-pop' stores known as 'kirana' stores, owner-manned
general stores, paan/beedi shops, convenience stores, handcart and pavement vendors, wet markets and employs about 40 to 50
million people. Of the 12 million traditional retail outlets in India, some 7.3 million sell FMCG and 41% of these are in urban
India.
7 Professor, Department of Business Administration, Panimalar Engineering College, Tamil Nadu, India,
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The grocery industry consists of food retailers in supermarkets, hypermarkets, cooperatives, discounters, convenience stores,
independent grocers, bakers, butchers, fishmongers and all other retailers of food and drink for off-the-premises consumption. The
industry is relatively fragmented with a few large global players. In facing the fierce competition against foreign giant players, a
relatively large numbers of domestic retailers were consolidated with localized operations. Globalization effects have also
accelerated and altered the cross-border trade, linking new suppliers and retailers across geographical boundaries. The competitive
landscape has made it very hard for local small retailers to manage the market.
Suddenly the brick and mortar shops, saw a definite fall in customer traffic, and faced the first major challenge to what had once
been their almost exclusive purvey. However, as the old adage goes, necessity is the mother of invention, and this challenge, gave
rise to a newer solution, where traditional retail powerhouses could finally meet the young Turks on a more level playing field.
The potential for new entrants in this segment is enormous, particularly in untapped markets like rural and semi-urban areas. Retailing, one of the largest sectors in the global economy, is going through a transition phase in not only India but also the world
over.
Factors driving growth within the Indian grocery retail market include, changing consumer preferences due to increased
disposable income, gradual increasing cosmopolitization of the Indian population due to western influences, and new types of
packaged and convenience foods such as processed meat and meat products requiring refrigerated storage and transportation.
FOOD AND GROCERY MARKET
The food and grocery market in India is currently valued at $236 billion, making it the sixth largest grocery market in the world. It
is expected to grow to $482 billion in 2020, with an overall growth rate of 104 per cent. The modern formats account for just 1 per
cent of the total food and grocery market and are characterized by cash and carry stores, hypermarkets, supermarkets, discount
supermarkets and convenience stores. Some important expectations of customers shopping at modern formats are staff politeness,
freshness of stock and the availability of latest brands.
Online food and grocery retailing outlets have increased from 14 in 2013 to 44 as of September 2014. Growth in online retail use
has been greatest among younger and professional population segments. The number of online grocery retail outlets is expected to
rise in future with total Internet users increasing from 120 million to 213 million in the past year as well as a fall in mobile handset
prices and a rise in smartphone penetration.
The food business in India is largely unorganized adding up to barely Rs. 40,000 Crore, with other large players adding another
50% to that. The All India food consumption is close to Rs. 900,000 Crore, with the total urban consumption being around Rs.
330,000 Crore. This means that aggregate revenues of large food players is currently only 5% of the total Indian market, and
around 15-20% of total urban food consumption. Most food is sold in the local `wet' market, vendors, roadside pushcart sellers or
tiny kirana stores. According to McKinsey report, the share of an Indian household's spending on food is one of the highest in the
world, with 48% of income being spent on food and beverages.
At the heart of the India growth story is its population, the generators of wealth, as both producers and consumers. With the
largest young population in the world - over 890 million people below 45 years of age, India indeed makes a resplendent market.
The country has more English-speaking people than in the whole of Europe taken together. Its 300 million-odd middle class, the
'real' consumers, has attracted the attention of the world, and as the economy grows so does India's middle class. It is estimated
that 70 million Indians earn a salary of over US $19,500 a year, a figure that is set to rise to 140 million by 2011. The number of
effective consumers is expected to swell to over 600 million by this time - sufficient to establish India as one of the largest
consumer markets of the world.
Take FoodWorld, which came in first in the food and grocery-retailing sector. The chain has no plans to venture beyond the
Southern region just yet. FoodWorld current plan is to focus on the Southern markets and achieve saturation. Maybe by 2005, it
could look at the other regions, but there are no plans yet. FoodWorld and Subhiksha indicate that larger companies like HLL and
Nestle will soon begin direct supplies to retailers. Thus, retailer margins are likely to rise, but not at the cost of the manufacturer’s
margins.
Retailers are developing more profitable in-house brands through a large-scale sourcing base. For instance, when FoodWorld got
into the jam business, its major threat was HLL, which had a market share of 70 per cent. Today FoodWorld makes and sells more
jams than HLL. Contrary to popular beliefs, private labels exist not just in staples like flour and rice, but they are also rapidly
growing in categories that are relatively higher value-added, such as detergents.
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FoodWorld has now launched its own brand of tea, detergents and surface cleaners. In an era of lower income growth and slowing
consumer demands, increasing competition from new industry players, like retailers, further adds to the problems of FMCG
companies.
But as the retail chains grow, FMCG majors will find it more economical to eliminate the distributor and supply goods directly to
the retailer - that way some distributor margins can be passed on to the retailer. FoodWorld and Subhiksha indicate that larger
companies like HLL and Nestle will soon begin direct supplies to retailers. Thus, retailer margins are likely to rise, but not at the
cost of the manufacturer’s margins.
COFFEE MARKET IN INDIA
Barista entered the Indian coffee retailing market in 2000 and decided to position itself as a lifestyle brand. The company targeted
the premium segment youth, as it realized that it wasn't only coffee that its target segment was looking form, but also for a place
to hang around comfortably, where they could be themselves and do whatever they wanted, such as reading a book, writing a
letter, or simply chilling out. Hence, it recreated the ambience and experience of the typical Italian neighborhood espresso bars in
India, with bright, trendy and comfortable interiors. It promoted a social and interactive environment, where one can play games
like chess and scrabble, read books, listen to music, enjoy arts, surf the Net and sip an Espresso Italiano, or Iced Café Mocha. Fun
posters, message boards and TV screens with music videos, all set the right mood. An open kitchen behind the bar enables one to
watch the coffee actually being made.
GROCERY EMERGING SECTORS
The top five grocery retailers in India are all domestic players. Future Group-owned Future Value Retail (FVR), holds the top
spot. Its Big Bazaar hypermarket format is its most popular and benefited from a revamp last year, which involved a new look,
more billing counters, and a change in software tools for billing. FVR also announced plans last year to merge with Future's
smaller retail group Pantaloons.
Reliance Retail is the second largest grocery retailer in India. It has managed to maintain its position due to the low prices of its
grocery items. Its primary source of profit is from its 'value and other' segment, which comprises its Reliance Fresh, Reliance
Super and Reliance Hyper chains.
Behind these two retailers are Mother Dairy Fruit & Vegetable, Aditya Birla Retail and Spencer's, respectively. That FVR's share
of the total Indian grocery retail market stands at 0.5% demonstrates the dominance of traditional outlets still persists in the
country. Supermarkets witnessed growth of around 16% and 15% in terms of value sales and selling space, respectively.
The traditional grocers, by introducing self-service formats as well as value-added services such as credit and home delivery, have
tried to redefine themselves. However, the boom in retailing has been confined primarily to the urban markets in the country.
GROCERY'S POTENTIAL FOR LARGE PLAYERS
Grocery retail in India is highly fragmented with very little change over the last decade, says the McKinsey report. However, a
number of players are beginning to build significant positions of late, especially in South India, and the industry appears poised
for a marked transformation.
Grocery constitutes over 50 per cent of the Indian retail market and has an annual turnover of over $80 billion. Though it is a huge
market, the organized sector's share is very small. Grocery has three components: branded products, including packaged foods,
soaps and detergents, toiletries and household items; dry unprocessed products including grains and cereals; and fresh grocery
such as fruits and vegetables, meat, dairy and deli products.
In India, supermarkets are likely to be the key format in crowded urban areas. However, there is scope for the development of
larger formats and hypermarkets and warehouse clubs. It is not difficult to see successful large formats like supermarkets or
hypermarkets retailing grocery. The club warehouse format is expected to emerge in the near future but convenience stores are
least likely to succeed in India.
Grocery is the largest retail sector worldwide and the largest global retailers, with sales of $450 billion are in the U.S. The market
is highly concentrated and evolved, with the organized sector accounting for over 70 per cent of the market and the formats
tailored to specified shopping occasions and customer groups.
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TECHNOLOGY IMPACT ON INDIAN GROCERY RETAILING
In India, the penetration of internet is still quite low. Only 12% of the population uses the internet, so internet grocery retailing in
India is still extremely small; close to negligible. The other important aspect of retailing relates to technology. It is widely felt that
the key differentiator between the successful and not so successful retailers is primarily in the area of technology. Simultaneously,
it will be technology that will help the organized retailer score over the unorganized players, giving both cost and service
advantages.
Several internet grocery retailers have launched over the past few years and there is a growing presence for consumers in major
cities like Mumbai and Delhi with firms such as Ekstop.com, Localbanya.com, and Eemli.com all having a presence. In addition,
an increase of 24% in internet users last year suggests this could potentially be an increasingly popular channel in the longer term.
However, for now, competition with more traditional stores that offer quick home delivery and credit to neighbourhood
consumers, long delivery times due to poor infrastructure and traffic issues, still present a barrier to growth.
Traditional outlets still account for 80% of sales in India but the retail sector is undergoing a transition with the rise of modern
retailing. High economic growth, increasing incomes, the proliferation of brands, and the introduction and improvements in card
payment technology have all contributed to this growth.
Today, online systems link point-of-sales terminals to the main office where detailed analyses on sales by item, classification,
stores or vendor are carried out online. Besides vendors, the focus of the retailing sector is to develop the link with the consumer.
`Data Warehousing' is an established concept in the advanced nations. With the help of `database retailing', information on
existing and potential customers is tracked. Besides knowing what was purchased and who capture information on softer issues
such as demographics and psychographics.
Current Grocery practice in India adopts a value chain based approach, blending domain knowledge, technology expertise, and
delivery excellence best practices, to provide innovative and customized industry specific solutions. All the company’s
competencies lies in the areas of Order Processing, Product Information Management, Inventory Planning, Item Management,
Pricing, Promotions Execution, Online Retailing & Content Management, POS/Checkout Management, Kiosks deployment, Store
Analytics, Global Data Synchronization, RFID Implementation, Enterprise Security, to name a few.
Though, many retailers are still showing laggardness towards adapting the new technology, leaders are adapting to newer
solutions that are continuously helping the stores in empowering store associates and ensuring faster and cost-effective responses
to operational changes.
GROCERY SHOPPING IN FUTURE
Grocery segment in India is experiencing a boom currently. With many grocery delivery startups being funded, E-
commerce biggies are also entering the segment envisaging a promising future in this area.
The Indian retail market, currently estimated at $490 billion, is project to grow at a compounded annual growth rate of 6
per cent to reach $865 billion by 2023.
Flipkart Announced its own grocery app called Flipkart nearby which will for now will only provide service in
Bangalore. It will also supply personal care and household products.
Amazon has already made its entry in Indian grocery market with its Kirana in March 2015. Snapdeal also tied up with
Godrej’s nature’s basket in January 2015.
In September 2015, Snapdeal made a strategic investment of $36 million in Peppertap to grow its foothold in the
grocery segment. Like Flipkart, Paytm also had announced its dedicated app for groceries, Paytm Zip.
It looks like the Indian grocery market has a promising future ahead with advancement in technology and ease of
mobility.
The growing middle class is an important factor contributing to the growth of retail in India. By 2030, it is estimated
that 91 million households will be ‘middle class’, up from 21 million today.
OPPORTUNITY IN INDIAN RETAIL
Favourable demographic and psychographic changes relating to India’s consumer class, international exposure, availability of
quality retail space, wider availability of products and brand communication are some of the factors that are driving the retail in
India. Over the last few years, many international retailers have entered the Indian market on the strength of rising affluence levels
of the young Indian population along with the heightened awareness of global brands, international shopping experiences and the
increased availability of retail real estate space.
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Development of India as a sourcing hub shall further make India as an attractive retail opportunity for the global retailers.
Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M, Karstadt-Quelle, Sears (Kmart) etc., stepping up their sourcing
requirements from India and moving from third-party buying offices to establishing their own wholly owned / wholly managed
sourcing & buying offices shall further make India an attractive retail opportunity for the global players.
Manufacturers in industries such as FMCG, consumer durables, paints etc., are waking up to the growing clout of the retailers as a
shift in bargaining power from the former to the latter becomes more discernible. Already, a number of manufacturers in India, in
line with trends in developed markets, have set up dedicated units to service the retail channel. Also, instead of viewing retailers
with suspicion, or as a ‘necessary evil’ as was the case earlier, manufacturers are beginning to acknowledge them as channel
members to be partnered with for providing solutions to the end-consumer more effectively.
Though lucrative opportunities exist across product categories, food and grocery, nevertheless, presents the most significant
potential in the Indian context as consumer spending is highest on food. Further, ‘wet groceries’ i.e. fresh fruits and vegetables is
the most promising segment within food and grocery though initially all retailers foraying in to this segment had to face had wide
spread protest from traders, small shop keepers.
The next level of opportunities in terms of product retail expansion lies in categories such as apparel, jewellery and accessories,
consumer durables, catering services and home improvement. These sectors have already witnessed the emergence of organized
formats though more players are expected to join the bandwagon. Some of the niche categories like Leisure and entertainment
(Books, Music and Gifts in particular) offer interesting opportunities for the retail players.
Currently the fashion sector in India commands a lion’s share in the organized retail pie. This is in line with the retail evolution in
other parts of the world, where fashion led the retail development in the early stages of evolution and was followed by other
categories like Food & Grocery, Durables etc. Fashion across lifestyle categories makes up for over 50 per cent of organized retail
and with the kind of retail space growth that India is witnessing we can certainly foresee a very healthy prospect for the fashion
industry.
CONCLUSION
The paper concludes by surmising what lessons other countries' experiences in the supermarket revolution have for India, which is
on the threshold of a major structural change in retailing. The expectations and concerns are high. Accordingly, India must form
its own model of retail development to meet its priorities, learn from challenges that others have faced, and successful examples of
strategies for "competitiveness with inclusiveness" among traditional retailers, wholesaler, and farmers entering an era of rapid
retail transformation and concomitant food system change.
India has an estimated population of 1.24bn and has become one of the most attractive emerging markets. The country's retail
scene is still dominated by smaller, traditional outlets but with incomes rising, Western-style modern chains are growing. Indian
grocers lead that segment, with recent changes to rules on foreign investment so far failing to attract overseas companies.
India is among the largest retail markets in the world. In 2012, the Indian retail market was valued at $500bn and is expected to
grow at a CAGR of over 10% until 2016. Organized retail which was valued at $35bn in 2012, is expected to grow at a CAGR of
over 20%, offering significant potential for retailers across all formats and categories".
Going by the current growth trends, the organized retail in India has indeed gained top speed and is now on the verge of take-off.
However, it is believed that the Indian format of retailing is going to retain its own touch, with numerous small retailers and other
traders being located in the city centers and the large organized retailers coming up in the suburbs of the metropolitan cities. In
other words, small retailers would continue to occupy a niche position as corner-side shops, because with personalized services
and convenient walking distance they are able to provide a special kind of service, which will always be demanded.
Some years down the line, food and grocery stores in India will become dominating trade partners for the food industry, which, in
turn, will be forced to offer special discounts and trade terms for them to get the shelf space in such stores. Also, once established,
in-store label brands will become a real threat to the industry, as manufacturers will have to compete with the store label brands,
which are generally very price-competitive.
Though with excellent potential, India poses a complex situation for the retailers, as this is a country where each state is mini-
country by itself. The demographics of a region vary quite distinctly from others. In order to reach to all classes of society. In
India, organized retail formats should design a comprehensive and prospective business model that offers the quality products and
service at affordable price and generate more socially balanced business.
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Thus, with tremendous potential and huge population, India is set for high growth in consumer expenditure. With India's large
‘young’ population and high domestic consumption, the macro trends for the sector look favorable.
REFERENCES
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8. Radhakrishnan, K. (2003, January). Organized Retailing. Praxis-Business Line, pp. 44-49.
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*****
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RETAIL INDUSTRY IN INDIA
P. Hima Jagathi8 Dr. S. Rajani9
ABSTRACT
The Indian retail market, which is the fifth largest retail destination globally, has been ranked the second most attractive
emerging market for investment. The retail landscape of the country is changing at a rapid pace with malls and multiplexes
mushrooming in all major cities. Both organized and unorganized retail companies have to work together to ensure better
prospects for the overall retail industry, while generating new benefits for their customers. Nevertheless, the long-term
outlook for the industry is positive, supported by rising incomes, favourable demographics, entry of foreign players, and
increasing urbanization. This paper is attempted to explain the evolution of retail industry, retailing penetration in India and
included SWOT analysis of modern retail outlets.
KEYWORDS
Retail Stores, Organized Sector, Unorganized Sector, SWOT Analysis etc.
INTRODUCTION
The word “Retail” originates from a French – Italian word. Someone, which cuts off or sheds a small piece from something.
Retailing is the set of activities that makes products or services to final consumers for their own personal or household use. It does
this by organizing their availability on a relatively large scale and selling them to customers on a relatively small scale. Retailer is
a person, agent, agency company, or organization who is the instrumental in reaching the goods, merchandise, or services to the
end users or ultimate customer. A Retailer is typically one, who does not affect any significant change in the product he is only the
final stock point who makes products or services available to the consumer whenever require. The retailer offers to a consumer is
easy availabilities of the desired product in the desired sizes at the desired times.
HOW RETAIL DEVELOPED
Early Trade: When man started to cultivate and harvest the land, he would occasionally find himself with a surplus of goods.
Once the needs of his family and local community were met, he would attempt to trade his goods produced elsewhere. Thus
markets were formed. These early efforts to swap goods developed into gatherings that are more formal. When a producer who
had a surplus could not find another producer with suitable products to swap, he may have allowed others to owe him goods. Thus
early credit terms would have been developed. This would have led to symbolic representations of such debts in the form of
valuable items such as gems tones or beads etc., eventually money. The evolution of retail sector had been taken place through
certain stages.
Peddlers and Producers: The retail trade rooted in two groups, the peddlers and producers. Peddlers tended to be opportunistic in
their choice of stock and customer. They would purchase any goods that they thought they could sell for a profit. Producers were
interested selling goods that they had produced.
General Stores: This division continues to this day with some shops specializing in specific areas, reflecting their origins as
outlets for producers such as pacific Concord of Hong Kong others providing a brand mix known as general store. Although
specialist shops are still with us, over time, the general store has increasingly taken on specialist products. Customers have found
this to be more convenient than having to visit many shops. Thus, the term “convenient store” has also been applied to these
shops. As popularity of general stores has grown, so has their size. This combined with the advent of self-service has led to the
super market or superstore.
Early Markets: Over time, producers would have seen value in deliberately over-producing in order to make profit from selling
these goods. Merchants would also have begun to appear. They would travel from village to village. Purchasing these goods and
selling them for a profit. Over time, both producers and merchants would regularly take their goods to one selling place in the
centre of the community. Thus, regular markets appeared. The first shop: Eventually, markets would become permanent fixtures
i.e. shops. These shops along with the logistics required to get the goods to them were, the start of retail trade.
8Associate Professor, MBA Department, Aurora’s P.G. College, Telangana, India, [email protected] 9Director and Professor, Department of Management Studies, Gayatri Vidya Parishad College for P.G. Courses, Andhra Pradesh,
India, [email protected]
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ORIGINS OF RETAIL1
There are four great inventions in retail sector:
C.200 BC: Creation of first chain of stores (China)
17th Century: Catalogue - based mail order (Europe)
1852: The first true department store (France)
1915/16: The first self-service store (US)
The creation of First Chain of Stores (China)
The earliest reasonable claim to first retail chain can be found in china over 2200 ago and belongs to a retailer called Lo kass.
There is possibility that roman shopkeepers have a prior claim but only Lo Kass is actually documented. Lo Kass’s innovation, the
thing that allowed him to extend his business, and that he was the first recorded retailer who employ shop managers from outside
of his family.
The First Catalogue - Based Mail Order (Europe)
A mail order catalogue is a publication containing a list of general merchandise from a company. Companies who publish and
operate mail order catalogues are referred to as cataloguers within the industry. Cataloguers buy or manufacture goods then
market those goods to prospects. The Welsh entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861.
Figure-1: The Cover Page of First Catalog
Sources: Authors Compilation
The First True Department Store (France)
Until 1852, shops were all small and specialist. The first ever-modern department store founded in 1852 by Aristide Boucicault
and wife Marguerite expanded their Parisian drapery store and began sell house wares and bed linen. They called their store le
Bon Marche. The store lunched on the back of innovations such as promise to deliver as far a horse can travel in Paris and the first
time anywhere the store featured prices clearly written on all labels. They are even credited with the invention of modern stock
management, where rotating merchandise and the staging of summer sales, winter sales, blue-cross sales created constant change
and excitement in the store.
Figure-2: The Le Bon Marche store at Paris
Sources: Authors Compilation
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The First Self- Service Store (US)
Piggly Wiggly is a supermarket chain operating in the Midwestern and Southern regions of the United States, run by Piggly
Wiggly, LLC, an affiliate of C&S Wholesale Grocers. Its first outlet opened in 1916 in Memphis, Tennessee, which is notable for
having been the first true self-service grocery store, and the originator of various familiar supermarket features such as checkout
stands, individual item price marking and shopping carts.
Figure-3: The first Self-Service Store Piggly Wiggly in US
Sources: Authors Compilation
RETAILING IN INDIA
The Indian retail market, which is the fifth largest retail destination globally, has been ranked the second most attractive emerging
market for investment after Vietnam in the retail sector2. The retail landscape of the country is changing at a rapid pace with malls
and multiplexes mushrooming in all major cities. In fact, having reached a substantial capacity at Tier-1 locations, the organized
retail revolution is now percolating to Tier II and III cities.
Retail has clearly been witnessing a transformation from neighborhood shopping to the concept of malls and family entertainment
centers. Entertainment and experience are becoming integral parts of shopping. Global industry analysts have often confirmed the
country's potential as one of the most attractive emerging retail destinations in the world. This growth has meant an empowerment
of the consumer. The transition from a protected economy to market driven regime is apparent as suspicions regarding
competition from global players dissipate progressively. With domestic industries gaining confidence in their abilities,
competition is no longer the deterrent that it had been.
Indian retail industry is especially owner manned small shops account for more than 90%3. This industry is generally divided into
organized and unorganized retailing:
Organized Retailing: Organized retailing refers to the trading activity undertaken by the licensed retailer, who have
registered for sales tax, income tax etc. these include corporate- backed hyper markets and retail chains and also
privately owned large retail businesses. Various estimates put the share of organized retails to up to 20% by 2020.
Unorganized Retailing: Unorganized retailing refers to the traditional forms of low-cost retailing, example, local kirana
shops, pan/beedi shops, convenience stores, handcarts and street vendors. The growth of unorganized retail sector is
pegged at 6%.
Retailing in India is one of the business enterprises of its economy accounts for 14 155 of its GDP. The Indian retail market,
currently estimated at around US $490 billion, and projected to grow at a compounding annual growth rate (CAGR) of 6 % to
reach US$ 865 billion by 2023.
GROWTH IN INDIAN RETAIL SECTOR
The Indian retail industry has experienced tremendous growth over the last decade with a significant shift towards organized
retailing format and development taking place not just in major cities and metros, but also in Tier II and Tier III cities. The overall
retail market in India is likely to reach Rs 47 trillion (US$ 792.84 billion) by FY 174.
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Investment Scenario
The Indian retail industry in the single-brand segment has received Foreign Direct Investment (FDI) equity inflows totaling US$
344.9 million during April 2000–September 2015, according to the Department of Industrial Policies and Promotion (DIPP)5.
With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many
companies have invested in the Indian retail space in the past few months:
Amazon India expanded its logistics footprint three times to more than 2,100 cities and towns in 2015, as Amazon.com
invested more than US$ 700 million in its India operations since July 2014.
Adidas AG, renowned for its Adidas and Reebok sports brands, has become the first foreign sports company to get
government approval to open 100 percent foreign-owned stores in India.
Walmart India plans to add 50 more cash-and-carry stores in India over the next four to five years.
Aeropostale, an American teen fashion retailer, has chosen to enter India over China, and expects India to be among its
top three markets over the next four years with revenue target of Rs 500 crore (US$ 75 million).
Opinio, a hyperlocal delivery start-up, has raised US$ 7 million in a Series-A funding from Gurgaon-based e-commerce
fulfilment service firm Delivery along with investment from Sands Capital and Accel Partners.
Textile major Arvind Limited has announced a partnership with Sephora, owned by LVMH Moet Hennessy Louis
Vuitton, a French luxury conglomerate, in order to enter into the beauty and cosmetics segment.
Mobile wallet company MobiKwik has collaborated with Jabong.com to provide mobile payment services to Jabong’s
customers.
DataWind collaborated with HomeShop18 to expand its retail footprint in the country. Under the partnership,
HomeShop18 and DataWind would jointly launch special sales programmes across broadcast, mobile and internet
media to provide greater access to the latter is tablet range.
FashionAndYou has opened three distribution hubs in Surat, Mumbai and Bengaluru to accelerate deliveries.
Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375 million) in a fruit and vegetable processing unit,
an integrated meat processing unit, and a modern shopping mall in Hyderabad, Telangana.
Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and the fourth-largest supermarket retailer in the
country, acquired Total hypermarkets owned by Jubilant Retail.
With an aim to strengthen its advertising segment, Flipkart acquired mobile ad network AdiQuity, which has a history
of mobile innovations and valuable experience in the ad space.
US-based Pizza chain Sbarro plans an almost threefold increase in its store count from the current 17 to 50 over the next
two years through multiple business models.
Government Initiatives
The Government of India has taken various initiatives to improve the retail industry in India6:
The Ministry of Urban Development has come out with a Smart National Common Mobility Card (NCMC) model to
enable seamless travel by metros and other transport systems across the country, as well as retail purchases.
IKEA, the world’s largest furniture retailer, bought its first piece of land in India in Hyderabad, the joint capital of
Telangana and Andhra Pradesh, for building a retail store. IKEA’s retail outlets have a standard design and each
location entails an investment of around Rs 500–600 crore (US$ 75–90 million).
The Government of India has accepted the changes proposed by Rajya Sabha select committee to the bill introducing
Goods and Services Tax (GST). Implementation of GST is expected to enable easier movement of goods across the
country, thereby improving retail operations for pan-India retailers.
The Government has approved a proposal to scrap the distinctions among different types of overseas investments by
shifting to a single composite limit, which means portfolio investment up to 49 per cent will not require government
approval nor will it have to comply with sectoral conditions as long as it does not result in a transfer of ownership
and/or control of Indian entities to foreigners. As a result, foreign investments are expected to be increase, especially in
the attractive retail sector.
THE ROAD AHEAD
E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of products at the lowest rates. E-
commerce is probably creating the biggest revolution in the retail industry, and this trend would continue in the years to come.
Retailers should leverage the digital retail channels (e-commerce), which would enable them to spend less money on real estate
while reaching out to more customers in tier-2 and tier-3 cities. India has about one million online retailers – small and large,
which sell their products through various e-commerce portals. The online retail industry in the country touched US$ 12.6 billion
in 20137.
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Both organized and unorganized retail companies have to work together to ensure better prospects for the overall retail industry,
while generating new benefits for their customers. Nevertheless, the long-term outlook for the industry is positive, supported by
rising incomes, favourable demographics, entry of foreign players, and increasing urbanization.
Exchange Rate Used - INR 1 = US$ 0.015 as on December 17, 2015
RETAIL BRANDS IN INDIA
There are a large number of outlets of several famous national as well as international retail brands. Day by day, the increasingly
organized lifestyle of Indian people is leading to the setting up of more retail outlets in the country. However, Indian retail market
is said to be a bit unorganized. Much more stress on selling brands is required from retailers. With involvement of some of the
renowned business tycoons like Goenka, Piramal, Raheja and Tata, several supermarkets, stores for office equipment’s, self-
service stores and many such stores have been set up in the country. In a very short period, the Indian retail industry has witnessed
the establishment of numerous retail outlets. In this present competitive market, all the retail brands try hard to compete with each
other in terms of core competencies as well as branding strategies. Characterized by consistency, popularity and value addition,
various retail brands available in India aim at establishing a long-lasting relationship with customers, thus doing one-to-one
marketing.
LIST OF TOP RETAIL BRANDS IN INDIA
The top retail companies/brands in terms of their market capitalization in India are as follows:
Table-1
S. No. Name of the Retail Brand Market Capitalization (Rs. Crore)
1 Future Retail 4,770.27
2 Trent 4,213.76
3 Shoppers Stop 3,252.07
4 Kewal Kiran 2,754.65
5 Pantaloons Fashion & Retail 1,761.22
6 Future Life 1,490.46
7 V-Mart Retail 958.29
8 Prozone Intu 526.48
9 Cantabil Retail 88.99
10 Provogue 65.76
Sources: www.business.mapsofindia.com/top-brands-india/retail
Future Retail is an Indian retail giant with a prodigious presence in the Indian market. The company was
founded under the name 'Manz Wear Private Ltd.' in 1987 and came to be known as 'Pantaloons Fashion
(India) Ltd.' in 1991. Future Retail is the flagship unit of the Future Group headquartered in Mumbai,
Maharashtra. Popular retail supermarket chains like Food Bazaar, Big Bazaar, Food Hall and eZone belong to
the Future Group. The market capitalization of Future Retail was valued at Rs. 4,770.27 crore in May 2015
Trent is the retail wing of the Tata Group that handles some of the most popular retail outlets in India such as
Westside, Landmark and Star Bazaar to name a few. Trent was founded in 1998 and is headquartered in
Mumbai, Maharashtra. The Westside retail chain has become so familiar and popular amongst Indian people
that Trent is often referred to as Westside. In May 2015, the market capitalization of Trent amounted to Rs.
4,213.76 crore.
Shoppers Stop is an Indian retail company founded in 1991. It opened its first store in Andheri, Mumbai, and
Maharashtra. The company is promoted by the K. Raheja Group and operates a chain of retail hypermarket
stores, departmental stores and an online retail store that was launched in 2008. The name ‘Shoppers Stop’ is
famous for both domestic and international brands like Tommy Hilfiger, FCUK, Mustang, United Colors Of
Benetton, GAS, U S Polo, Celio, Levis, Jack and Jones, Haute Curry, Biba, Kraus, Vero Moda, Global Desi,
W, Maybelline, Casio, Titan, Collectabillia, Reebok, Nike and Guess. The market capitalization of Shoppers
Stop was estimated around Rs. 3,252.07 crore in May 2015.
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Kewal Kiran is one of the largest manufacturers of branded apparel in India and was established in 1992. It
started as a manufacture of men's wear for reputed brands. Kewal Kiran, also known as KKCL, is involved
in designing, marketing, manufacturing of casual and semi-formal men's wear and branded jeans. In May
2015, the market capitalization of KKCL amounted to Rs. 2,754.65 crore.
Founded in 1997, Pantaloons Fashion & Retail is one of the most popular and largest clothing retail chains
in India. The company has its headquarters in Mumbai, Maharashtra. Initially, Pantaloons Fashion & Retail
belonged to the Future Group; however, at present, it is owned by Aditya Birla Nuvo Limited. The
Pantaloons stores across the country sell branded clothing and accessories. Pantaloons Fashion & Retail’s
market capitalization was valued at Rs. 1,761.22 crore in May 2015
Future Life is an Indian manufacturer, exporter and supplier of a wide range of bio magnetic products like
bio energy cards, scalar energy pendant, bio magnetic bracelets, home appliances, induction cookers, health
care equipment’s and so on and so forth. It was founded in 2010 and is headquartered in New Delhi. The
market capitalization of Future Life was worth Rs. 1,490.46 in May 2015.
V-Mart Retail is also one of the leading retail clothing chains in India that promises its customers ‘Value for
Money’. The company was established in 2002 and was known as Varin Commercial Private Limited. It is a
complete family fashion retail outlet offering a wide range of products under one roof. The V-Mart retail
outlets cater to all the shopping needs from a family perspective. In May 2015, the market capitalization of
V-Mart Retail amounted to Rs. 958.29 crore.
Prozone Intu is an Indian retail mixed-use real estate major. The businesses of the company include
developing, designing, buying, selling and operating residential and commercial premises and shopping
malls. It operates mainly in two segments; namely, outright sales and leasing. The market capitalization of
Prozone Intu was valued at Rs. 526.48 crore in May 2015.
Cantabil Retail India Limited trades in readymade clothing. Cantabil India provides a whole range of
readymade garments for casual, formal and corporate segments. Lafanso, Cantabil and Kaneston are the
names of the brands under which the company does its business. In May 2015, Cantabil Retail's market
capitalization was worth Rs. 88.99 crore.
Provogue is one of the leading and most popular retail clothing and accessories manufacturers in India. It was
founded in 1997 and is based in Mumbai, Maharashtra. It has grown to be one of the most favorite fashion
outlets for Indian men and women alike as it caters to all their daily styling requirements. Provogue outlets
store latest fashion apparels, shoes, bags and other accessories. The company has added a wide range of
stylish and branded sunglasses, watches and unisex deodorants to its already rich collection of late. The
market capitalization of Provogue amounted to Rs. 65.76 crore in May 2015.
SWOT ANALYSIS OF MODERN RETAIL MODELS
With a growth rate of 25-30% p.a., the Indian retail sector has propelled into a fast-paced growth trajectory. Increased job
creation, high spending power and a pervasive economic climate have provided further momentum to the growth of this sector.
Organized retailing formats (malls) have found an overwhelming acceptance and made in–roads throughout the length and breadth
of the country. Retailing is now being heralded as the next sunrise sector after IT, with the potential to contribute significantly to
the country’s GDP and create new and exciting job opportunities. Now, it would be imperative to examine the SWOT analysis of
organized models, which is key component of Strategic development. The focus of modern models can built on their strengths,
correct their weaknesses and protect themselves against internal vulnerabilities and external threats.
Table-2
Strengths
Mall space supply.
Demography.
Rising affluence levels.
Rising young population with high disposable
income.
Availability of brand and merchandise.
Weaknesses
Real estate growth.
Distribution costs.
Improperly developed malls.
Regulatory aspects.
Lack of skilled personnel.
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Opportunities
Rising retail finance and consumer credit leading to
increased affordability.
Changing consumer requirements and lifestyles.
Modern retailing formats providing different value
propositions.
Foreign direct investment.
VAT implementation to reduce cost and complexity.
Threats
Difficulty in acclimatizing to Indian consumer.
Real estate: availability and high cost.
Underdeveloped sully chain.
Policy and taxation hurdles.
Inadequate human resources.
Sources: Sita Mishra. (2008). “New Retail Models In India: Strategic Perspective Analysis”, Journal of Marketing and
Communication, Vol. 4, Issue 2, September-December.
India’s Retailing Boom has acquired further momentum, dynamism and vibrancy with international players experimenting in the
Indian market and the country’s existing giants taking bold innovative steps to woo the consumer8. At the same time, the early
entrants are redefining their strategies to stay competitive and suit the new market landscape. The next few years are liking to
witness rapid growth in the organized retailing sector with several leading international players establishing their presence in India
by adjusting their formats to suit local tastes and buying behavior while regional players have stepped up their defenses and are
striving to gain edge over global players by using their knowledge of local markets. Clearly, the next wave of the retail boom is
upon us.
CONCLUSION
As India’s retail industry aggressively expands itself, great demand for real estate is being created. Further, with the online
medium of retail gaining more and more acceptance, there is a tremendous growth opportunity for retail companies, both domestic
and international. Favourable demographics, increasing urbanization, nuclear families, rising affluence amid consumers, growing
preference for branded products and higher aspirations are other factors, which will drive retail consumption in India. Both
organized and unorganized retail are bound to not only coexist but also achieve rapid and sustained growth in the coming years.
REFERENCES
1. Richard, Hammaond. (2012). Smart Retail (3rd Edition). Pearson’s.
2. A. T. Kearney. (2008). Seventh Annual Global Retail Development Index (GRDI).
3. (2014). KPMG, Indian Retail Next Growth Story, TechSci Research.
4. (2014, April). Sectoral Report.
5. (2015–16). Media Reports, Press Releases, Deloitte report, Department of Industrial Policy and Promotion website,
Union Budget.
6. Retrieved from www.ibef.org/industry/retail-india.
7. (2013). Report by the Internet and Mobile Association of India (IAMAI).
8. Sunita, Sikri, & Dipti, Wadhwa. (2012, September). Growth and Challenges of Retail Industry in India: An Analysis
Asia Pacific Journal of Marketing and Management Review, 1(1).
9. Sita, Mishra. (2008, September-December). New Retail Models in India: Strategic Perspective Analysis. Journal of
Marketing and Communication, 4(2).
10. Retrieved from www.business.mapsofindia.com/top-brands-india/retail
11. Retrieved from www.iamai.in
12. Retrieved from http://www.ibef.org/industry/retail-india.aspx
13. Retrieved from http://www.businesszoom.in/8-top-retail-brands-of-india/
14. Retrieved from http://www.indianresearchjournals.com/pdf/APJMMR/2012/September/1.pdf
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International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 2004 |P a g e
15. Retrieved from http://cii.in/Sectors.aspx?SectorID=S000000033
16. Retrieved from http://www.charsonadvisory.com/retail.php
17. Retrieved from http://iosrjournals.org/iosr-jbm/papers/Vol6-issue3/D0632630.pdf
18. Retrieved from http://shodh.inflibnet.ac.in/jspui/bitstream/123456789/1509/2/synopsis.pdf
19. Retrieved from http://www.proteam.co.in/index.php/industries/retail
20. Retrieved from http://www.proteam.co.in/index.php/retail
21. Retrieved from http://info.shine.com/industry/retail/7.html
22. Retrieved from http://www.yourarticlelibrary.com/marketing/retail-marketing-meaning-and-types-of-major-retail-outle...
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GREEN GROWTH FOR DEVELOPMENT:
PROSPECTS & CHALLENGES FOR DEVELOPING NATIONS
Dr. Mohd Saif Alam10
ABSTRACT
In the last few years, there has been considerable increase in income in developing countries but this increased economic
growth has not resulted in the inclusive growth and there have been growing income inequalities. To meet the growing
economic and environmental challenges new concept of green growth has been evolved. This can help to accelerate progress
towards sustainable development and poverty reduction through more sustainable use of natural resources, efficiencies in the
use of energy, and valuation of ecosystem services. Green growth will result in inclusive economic growth needed by
developing countries to reduce poverty and improve wellbeing and improved environmental management needed to tackle
resource scarcities and climate change.
The green growth policy recommendations, with their emphasis on low-carbon and high technology, do not obviously tackle
equity problems at either the national or the global level, notably the problem of the lack of inclusion of many poor countries
and people within the informal economy in economic decision-making and in major economic opportunities. Not enough
attention has been paid to the potential of more efficient use of natural capital. In light of the above-discussed facts, this paper
will try to find out the reason for taking up the concept of green growth. Secondly, the progress that developing nations with
respect to inclusive and sustainable development. Thirdly, what objectives will be met by adopting the green growth i.e.
economic, environmental and social? Fourthly, what policies and programmes have been formulated and implemented all
over the world with special reference to developing countries and more specifically by India? Finally, what are the challenges
that developing countries will have to face for achieving inclusive growth and sustainable development?
KEYWORDS
Inclusive Growth, Sustainability, Environmental Management, Inequality etc.
INTRODUCTION
With the degradation of environment and natural resources there has been rising concern all over the world for sustainable growth
and development. Environmental challenges not only results in the degradation of the natural resources but are also viewed as a
threat to human development in the face of the risk that are associated with it. Depletion of natural resources in the inefficient
ways may results in the disbalance of ecosystem and affect the human directly. It is argued that the growth has to be such that not
only results in higher growth but also meet the sustainable needs of the nations.
In view of the economic and environmental challenges, there is a need to promote “Green Growth” as a new source of growth.
This will not only results in the way for sustainable development but will also help the nations to meet the MDG-6 of reducing the
number of poor by 2015. In achieving the green growth, it is expected that developing countries will play a lead role because of its
contribution to the world population.
These investments and policy reforms provide the mechanisms and the financing for the reconfiguration of businesses,
infrastructure and institutions. Such reconfiguration could lead to a higher share of green sectors in GDP, greener jobs, lower
energy and resource-intensive production, lower waste and pollution, and significantly lower greenhouse gas emissions. It can
also assist in the reduction of persistent poverty through targeted wealth transfers, new employment, as well as improved access to
the flow of ecosystem goods and services to the bottom of the economic pyramid.
Theoretical Framework
Protection of environment and sustainable use of natural resources has now been at the centre of the discussion not from the point
of view of the developed economies but also developing economies of the world and India is no exception to it. Unsustainable use
of natural resources often leads to environmental degradation and which in turn have the effect on the health, production, etc.
Developing countries are being affected by increased stress on natural resources and the new policy action to manage
environmental risks, an additional 1 billion people are expected to live in severely water‑stressed areas by 2050, with developing
countries particularly hard hit. Demand for water is projected to grow significantly in developing countries by 2050, while it is
10Post Doctoral Fellow, Department of Commerce, University of Lucknow, Uttar Pradesh, India, [email protected]
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expected to decrease in OECD countries. Global terrestrial biodiversity is expected to decline by an additional 10%, leading to a
loss of essential ecosystem services (e.g. to support food production). With growing levels of dangerous emissions from transport
and industry, the global number of premature deaths linked to airborne particulate matter is projected to more than double from
today’s levels to 3.6 million a year by 2050, widely surpassing malaria as a global killer (OECD, 2012a). Most of the
consequences of deadly air pollution will occur in emerging economies like China, India and Indonesia, where premature deaths
from particulate matter are expected to grow from 0.6 million in 2000 and 1.6 million by 2050 (OECD, 2012a). Continuing with
this business as usual growth path could also lock economics into emission intensive development, land use and infrastructure.
The consequence could be a 50% increase in global greenhouse gas emissions by 2050 and an increase in global mean
temperatures of 3‑6°C by the end of the century. Failing to limit climate change will lead to more severe and frequent natural
disasters, and will hit developing countries particularly hard. This will further threaten water security, the livelihoods of poor
people and agricultural productivity. The Intergovernmental Panel on Climate Change (IPCC) warns that projected reductions in
crop yield in some African countries could be as much as 50% by 2020 and crop net revenues could fall by as much as 90% by
2100 due to changes in climate patterns and associated extreme weather events. Environmental vulnerability in developing
countries is heightened by inequality, poverty, and rapid population growth.
Graph-1
Sources: Authors Compilation
Graph-2
Sources: Authors Compilation
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Graph-3
Sources: Authors Compilation
OBJECTIVES
In light of the above-discussed facts about the risk that is associated with environment degradation and depletion of natural
resources, this paper will discuss the following:
The progress that developing nations has with respect to inclusive and sustainable development.
What objectives will be met by adopting the green growth i.e. economic, environmental and social?
What policies and programmes have been formulated and implemented all over the world with special reference to
developing countries and more specifically by India?
What are the challenges that developing countries will have to face for achieving inclusive growth and sustainable
development?
GREEN GROWTH AND DEVELOPING NATIONS
Developing countries are the key to achieving global green growth in two major ways Firstly, the potential economic and social
impacts of environmental degradation are particularly important for developing countries They are the most vulnerable to climate
change and tend to be more dependent than advanced economies on the exploitation of natural resources for economic growth In
addition many developing countries face severe economic, social and ecological threats from energy, food and water insecurity to
climate change and extreme weather risks They also face risks from premature deaths due to pollution, poor water quality and
diseases associated with a changing climate.
In order to tackle many of the growth and development challenges mentioned above without compromising future growth and
poverty reduction goals, the concept of green growth has emerged as a new approach to reframe the conventional growth model
and to re-assess many of the investment decisions in meeting energy, agriculture, water needs and the resource demands of
economic growth , defines green growth as a means to foster economic growth and development while ensuring that natural assets
continue to provide the resources and environmental services on which our well-being relies (OECD, 2011b). However,
developing countries will likely interpret green growth in different ways and the concept has generated some concerns.
GREEN GROWTH & DEVELOPING NATIONS: ISSUES
The concept of green growth is generating a diversity of political positions, from enthusiastic to cautious, reflecting variously a
lack of clarity and experience, differential opportunities apparent to specific countries, and the risks of international green growth
policy regimes disfavoring a given country. For example, emerging economies describe the opportunities offered by green growth
in the most enthusiastic terms, and many of them have access to relevant funds and technologies that can realize these
opportunities.
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The high initial costs for the transition to green growth appear to be beyond the reach of many developing countries, e.g. solar
power for rural communities Even basic technologies are still lacking in most developing countries, particularly in the fields of
wastewater treatment, household and hazardous waste management, energy efficiency and integrated water resource management
In addition there is a concern that developing countries’ own technologies, including indigenous approaches, will not be able to
compete, and they will need to import technologies from other countries: exchange of scientific and technical knowledge and
removing the barriers constituted by intellectual property rights are of great importance if a genuine transfer of green technologies
is to take place between developed and developing countries
The majority of developing country governments have recently embarked on domestic processes to identify and develop particular
areas of opportunity and comparative advantage These domestic actions include carbon taxes, green energy funds, payment for
ecosystem services schemes, renewable energy initiatives, sustainable public procurement initiatives and natural resource
management initiatives However there are few holistic or system-wide “green growth” policies, strategies and institutional
systems in place Some developing country strategies stand out, including Cambodia’s Green Growth Road Map and Ethiopia’s
National Development Plans For most countries, however, national sustainable development strategies go some way to forming an
integrated green growth policy framework, though green growth has rarely been addressed in mainstream economic, budget and
fiscal policies.
GREEN GROWTH: ADVANTAGES
Economic
Increased and more equitably distributed GDP – production of conventional goods and services.
Increased production of unpriced ecosystem services (or their reduction prevented).
Economic diversification, i.e. improved management of economic risks.
Innovation, access and uptake of green technologies, i.e. improved market confidence.
Environmental
Increased productivity and efficiency of natural resource use.
Natural capital used within ecological limits.
Other types of capital increased through use of non-renewable natural capital.
Reduced adverse environmental impact and improved natural hazard/risk management.
Social
Increased livelihood opportunities, income and/or quality of life, notably of the poor.
Decent jobs that benefit poor people created and sustained.
Enhanced social, human and knowledge capital.
Reduced inequality.
POLICIES FOR GREEN GROWTH IN SPECIFIC ENERGY SECTORS
A window of opportunity now exists to establish policies that will deliver a cleaner and more efficient generation portfolio that
will have significant impact on the energy sector and the environment for the next 40-50 years. However, the many uncertainties
now inherent in the power sector create risks for investors, risks that may lead to under-investment – too little, too late, in the
wrong location and with the wrong technology.
One of the most difficult decisions for investors is the choice of technology, which obviously has implications for the environment
and security of supply. Thus, the choice for investors depends on many factors and is always made with an eye on the potential for
profit. Small changes in the key cost factors, e.g. investment costs, fuel costs, CO2 emission costs and utilization rates, can
significantly change the relative ranking of technologies in terms of total generation costs liveliest over the lifetime of the plant.
Well-functioning markets for electricity, fuel and CO2 emissions provide strong incentives for investors to diversify and to opt for
clean technologies although diversification is, obviously, limited to the technology options actually available. Government
policies play a critical role in keeping as many options open as possible by supporting R&DD of new technologies and through
effective policies and regulation, including those that govern market competition, network access and rates.
Transport is a critical and difficult sector in the transition to green growth. Transport accounts for about 19% of global energy use
and almost one-quarter of energy-related CO2 emissions. With current trends these factors increase by more than 80% by 2050.
Cars and trucks are the biggest contributors, but aviation and shipping are also growing rapidly.
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The first priority should be policies for fuel efficiency improvements that employ technologies and practices that are already cost-
effective. A 50% reduction in fuel use per kilometer for average new light- duty vehicles around the world, from incremental
technology improvements and hybridization, is possible by 2030 and is likely to be cost effective even at relatively low oil prices.
Policies are needed both to ensure maximum uptake of efficiency technologies and to translate their benefits into fuel economy
improvement. Fuel economy standards complemented by emissions-based vehicle registration fees can, and in fact already do,
play an important role in OECD countries. Other countries, especially those with robust growth in vehicle use, need to adopt
similar policies. All countries need to update these standards over time, rather than letting measures expire or stagnate. The Global
Fuel Economy Initiative is focused on helping to achieve such outcomes (FIA Foundation, 2011).
Ethanol from sugar cane can already provide low-cost biofuels (depending on feedstock prices). Advanced (second-generation)
biofuels, such as biofuels from waste and residues, ligno-cellulosic ethanol and biodiesel derived from biomass (biomass-to-
liquids), appear to have the best long-term potential to provide sustainable, low life-cycle greenhouse gas fuels, but more RD&D
is needed, as well as policy measures reducing the investment risk associated with commercial-scale plants.
Beyond changes to future vehicles and fuels, shifts in some passenger travel and freight transport to more efficient modes can also
play an important role in greening transport and should be a policy focus. Certainly, from the point of view of cities around the
world, developing in a manner that minimizes reliance on private motorized travel should be a high priority given the strong co-
benefits in terms of reduced traffic congestion, lower pollutant emissions and general livability.
Shifting passenger travel to more efficient modes such as urban rail and advanced bus systems can play an important role. Policies
need to focus on better urban design to cut the need for motorized travel, improving mass transit systems to make them much
more attractive, and improving infrastructure to make it easier to walk and cycle for short trips.
RECOMMENDATIONS
Policy Framework for Greening Growth in Developing Countries
Green growth is understood by many countries to be about mainstreaming inclusive economic development in ways that
incorporate, create and sustain environmental and social values. It entails changing and improving the performance of
government, formal and informal economic actors and consumers and will require systematic adjustments to mainstream policy
and governance systems – in other words, getting economic governance right for sustainable development:
A national green growth plan to create enabling conditions;
Green growth mainstreaming mechanisms to ensure opportunities are explored through existing economic activities;
Green growth policy instruments to tap specific opportunities within spatial and resource systems;
Government expenditure to shift away from activities that waste, overuse or degrade environmental assets – because
such a “disabling” environment makes green investments less competitive;
More effective enforcement of legislation, in part as a driver of green investment – because weak enforcement reduces
long-term investor and market confidence and gives little incentive for most businesses to improve;
Shifting science, research, educational and training priorities to support the transition to a green economy – because new
knowledge and skills will be needed for government decision makers, professionals and workers, down to local levels;
the structural employment and institutional changes required may also warrant support for the fair transitional costs of
organisations and their employees;
Resource and land rights regimes that safeguard the interests of those with informal rights – because too many regimes
favour powerful actors who are able to claim rights and/or emphasize technical efficiency of resource allocation, and do
not sup- port inclusion and equity for those who have a special dependence on the resource in question; this is especially
critical in assuring rights to water or traditional lands;
Facilitating businesses to fully integrate sustainability and equity concerns, through provision of information and
coordinating research on potential opportunities, especially to adopt best available technologies and meet standards,
enabling technology access – through reducing trade barriers where necessary, providing finance – or public private
partnerships that share risk and cover upfront costs, and improving accountability – widening reporting requirements.
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Creating enabling conditions for psychological and behaviour change – framing green growth as a social goal,
narrowing choices towards greener approaches, “nudge” techniques to help people make better decisions on those
choices, and tailoring information to match with stakeholder incentives and approaches to learning;
REFERENCES
1. (2011). Towards Green Growth. Paris: OECD.
2. (2012). Policies and Practices for Low-Carbon Green Growth in Asia: Highlights. ADB, Manila and ADBI, Tokyo.
Retrieved from www.adb.org/publications/policies-and-practices-low-carbon-green-growthasia-highlights.
3. Bowen, A., & Fankhauser, S. (2011). The green growth narrative: Paradigm shift or just spin? Global Environmental
Change, 21(4), 1157–1159.
4. (1987). Report of the World Commission on Environment and Development: Our Common Future. UN: New York.
5. (2012). Inclusive Green Growth: The Pathway to Sustainable Development. Washington D.C.: World Bank.
6. (2012). Green Growth, Resources and Resilience: Environmental Sustainability in Asia and the Pacific. Bangkok:
ESCAP, ADB and UNEP Regional Office for Asia and the Pacific.
7. Daly, H. E. (1990). Toward some operational principles of sustainable development. Ecological Economics, 2(1), 1–6.
8. Jackson, T. (2009). Prosperity without Growth: Economics for a Finite Planet. London: Earthscan.
9. (2001). Globalization, Growth and Poverty: Building an Inclusive World Economy. Washington D.C.: World Bank.
New York: Oxford University Press.
10. Adams, R. H. (2004) Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty. World
Development, 32(12), 1989–2014.
11. Collier, P. (2008). The Bottom Billion: Why the Poorest Countries are failing and what can be done about It. Oxford:
Oxford University Press.
12. Retrieved from http://img.scoop.co.nz/media/pdfs/1210/CTA%20Briefing%20Vanuatu.pdf
13. Retrieved from http://oecdinsights.org/2012/06/12/not-just-for-the-rich-green-growth-and-developing-countries/
14. Retrieved from https://www.researchgate.net/profile/Tadeusz_Skoczkowski/publications
15. Retrieved from http://www.greengrowthknowledge.org/about-us
16. Retrieved from http://www.oecd.org/general/whatisgreengrowthandhowcanithelpdeliversustainabledevelopment.htm
17. Retrieved from http://www.cccep.ac.uk/publication/low-carbon-green-growth-in-asia-policies-and-practices/
*****
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VISUAL MERCHANDISING: A KEY ELEMENT IN RETAIL INDUSTRY
Dr. Mrinal Verma11
ABSTRACT
With the upcoming mall culture & paradigm shift in organized retail sector, a new concept of Visual Merchandising is also
coming into picture. Visual merchandising is one of the ultimate phases in trying to place out a retail store in a manner that
the potential customers will find eye-catching and pleasing and it should pursue and replicate the principles that strengthen
the store’s image. It is the way one exhibit products for sale' in the most striking manner with the end purpose of making a
sale. "If it does not sell, it is not visual merchandising."
Especially in today’s challenging economy, retails store managers may avoid designers / visual merchandisers because they
fear uncontrollable costs. However, in reality, visual merchandisers can help cut down by avoiding costly error. With
guidance of a professional, retailer can eliminate mistakes, saving time and money. It is important to understand that the
visual merchandiser is there, not to impose ideas, but to help clients articulate their own personal style.
KEYWORDS
Visual Merchandising, Retail etc.
INTRODUCTION
Visual Merchandising is the activity of promoting the sale of goods, especially by their presentation in retail outlets. This
includes combining product, environment, and space into a stimulating and engaging display to encourage the sale of a product or
service.
Visual merchandisers in creating displays, including colour, lighting, space, product information, sensory inputs such as smell,
touch, and sound as well as technologies such as digital displays and interactive installations, can use many elements.
The main principle of visual merchandising is that it is intended to increase sales.
Visual merchandising is one of the final stages in trying to set out a store in a way that customers will find attractive and appealing
and it should follow and reflect the principles that underpin the store’s image. Visual merchandising is the way one displays
'goods for sale' in the most attractive manner with the end purpose of making a sale. "If it does not sell, it is not visual
merchandising."
Especially in today’s challenging economy, people may avoid designers/ visual merchandisers because they fear unmanageable
costs. However, in reality, visual merchandisers can help economize by avoiding costly mistakes. With guidance of a professional,
retailer can eliminate errors, saving time and money. It is important to understand that the visual merchandiser is there, not to
impose ideas, but to help clients articulate their own personal style.
Visual merchandising is the art of implementing effective design ideas to increase store traffic and sales volume. It is an art and
science of displaying merchandise to enable maximum sale. It is a tool to achieve sales and targets, a tool to enhance merchandise
on the floor, and a mechanism to communicate to a customer and influence his decision to buy. It uses season based displays to
introduce new arrivals to customers, and thus increase conversions through a planned and systematic approach by displaying
stocks available.
Recently visual merchandising has gained in importance as a quick and cost effective way to revamp retail stores.
Features
Specific shop facings attract different customer segments,
Post modern style attracts younger consumer groups with higher incomes,
Traditional and basic style attracts purists,
Luxury presentation style attracts consumer groups with higher incomes,
Colorful attractive presentation style attracts a broad spectrum of quality oriented consumer groups,
11Assistant Professor, Krishna Institute of Engineering & Technology, Uttar Pradesh, India, [email protected]
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Elegant but distanced presentation style attracts modern lifestyle oriented consumer groups,
Simple presentation style attracts altruistic consumer groups.
Purpose
Retail professionals display to make the shopping experience more comfortable, convenient and customer friendly by:
Making it easier for the shopper to locate the desired category and merchandise.
Making it easier for the shopper to self-select.
Making it possible for the shopper to co-ordinate & accessorize.
Providing information on sizes, colors & prices.
Informing about the latest fashion trends by highlighting them at strategic locations.
Merchandise presentation refers to most basic ways of presenting merchandise in an orderly, understandable, ’easy to shop’ and
‘find the product’ format.
Typical Activities
Conducting research based on lifestyle concepts and trends, as well as store and/or regional attributes,
Sketching designs,
Developing floor plans,
Sourcing materials,
Maximizing the space and layout of the store,
Using available space to the best advantage,
Dressing mannequins and making use of creative lighting for window displays,
Preparing for promotional events and dismantling displays at the end of promotional periods,
Giving feedback to head office and the other teams (such as buyers),
Visiting other stores in the area, working with in-store sales staff and helping to develop their understanding of
presentation,
Setting up a 'model' store according to the company's latest design directives photographing the store's windows, each
wall and every display, in order to create a visual merchandising pack to send out to other stores (to ensure that all stores
are consistent with the company brand and image),
Implementing the designs and plans created by the visual merchandising manager and the creative director, which may
involve manual work including lifting, carrying and climbing ladders.
Role of Visual Merchandisers in Retailing
Visual Merchandisers play a major role in enhancing sales and the customer experience. Depending on where they work, visual
merchandisers’ duties include:
Planning the VM theme and creating displays.
Arranging props for displays.
Arranging display fixtures and lighting.
Setting up stores before openings.
Working with floor plans and store requirements.
Training personnel on the sales floor to create displays.
Organizing merchandising units such as racks and shelves.
Important Attributes for Preferred Shopping Places
Pleasant atmosphere,
Frequent special price offers,
Able to touch products,
Friendly sales people,
Shopping fast and effective,
Broad assortment,
No stress factors,
Extension offers,
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Low distance to shop,
Enjoy shopping,
Sufficient parking areas.
Critical Competition Areas for Retailers
Price image: too expensive,
Less favored locations,
Shopping slow and less effective,
Less shopping comfort,
Needed conventional items has to be bought on separate markets?
Potentials for Retailers
Better appearance,
Better care of assortment,
Broader assortment,
Better possibilities to position with regional messages,
Sales people are able to steer purchase activities,
More trustful in consumer’s eyes.
LITERATURE REVIEW
Visual Merchandising is the art of displaying merchandise in a manner that is appealing to the eyes of the customer. It sets the
context of the merchandise in an aesthetically pleasing fashion, presenting them in a way that would convert the window shoppers
into prospects and ultimately buyers of the product. A creative and talented retailer can use this upcoming art to breathe in new
life into his store products.
Jerry Gelsomino wrote in his article in Babyshop Magazine.com, The Business Magazine for Independent Juvenile Product
Retailers that Great store presentation and product merchandising is like a good book. It has an alluring cover to entice, an
interesting first chapter to tell the reader they have made the right choice, and a satisfying conclusion to get the audience to want
more. The tools used to achieve these attributes are based on creating the most satisfying experience for the shopper, turning
browsers into buyers.
Gibson G. Vedamani stated that Visual Merchandising enhances the shopping experience by providing the right ambience, besides
creating an image of the store in the minds of the customers.
OBJECTIVE OF STUDY
To study the effect of visual merchandising in retail.
To study the factors of visual merchandising influencing the shopping style of the customers.
To study the extent of effect of visual merchandising in different categories of retail.
SCOPE
The scope of this research work is for the Retailers & their potential clients.
RATIONALE OF STUDY
The study has been conducted to find out the effect of visual merchandising in the retail sector to see how the customers have an
impact of this concept. The study also focuses on the factors of visual merchandising that affect the shopping style of the
customers.
METHODOLOGY OF RESEARCH
Research Design: Descriptive
Sampling Design: Convenient Sampling
Research Instrument: Structured questionnaire
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Data Sources: Primary & Secondary
Secondary: Magazines, Journals, Books and Internet
Primary: Customers feedback from market survey
Mode of Survey: Personal Interview
Sample Size: 100
DATA ANALYSIS AND INTERPRETATION
Graph-1: Weightage of Factors Effecting Shopping Style
Sources: Authors Compilation
It clearly shows that ambience plays a very vital role in shopping.
Graph-2: Role of Visual Merchandising for Commodity
Sources: Authors Compilation
The calculated means from the responses from the buyers clearly shows that apparel section demands the maximum of Visual
Merchandising. At the same time electronic goods requires least. Customers are not very attentive towards the Visuals in the
electronic goods section.
Table-1: Ranking of the Preferences for these Factors from 1- 5 for the Reasons that a Customer will Visit a Retail Outlet
Factors Variables
Prestige / Status Var1
Promotion / Advertisement Var2
Value for money Var3
Satisfaction Var4
Fun Var5
Sources: Authors Compilation
10
12
4
8
20
1423
15
10
Display Color
Angles Motion
Simplicity Repetition
Décor Ambience
Lighting Cleanliness
2.8752.625
2.25 2.125
1.375 1.25
0.625 0.5
00.5
11.5
22.5
33.5
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Factor Analysis
Table-2: Correlation Matrix (a)
VAR00001 VAR00002 VAR00003 VAR00004 VAR00005
Correlation VAR00001 1.000 -.899 -1.000 1.000 .566
VAR00002 -.899 1.000 .899 -.899 -.869
VAR00003 -1.000 .899 1.000 -1.000 -.566
VAR00004 1.000 -.899 -1.000 1.000 .566
VAR00005 .566 -.869 -.566 .566 1.000
Sources: Authors Compilation
Table-3: Communalities
Initial Extraction
VAR00001 1.000 .942
VAR00002 1.000 .957
VAR00003 1.000 .942
VAR00004 1.000 .942
VAR00005 1.000 .559
Note: Extraction Method: Principal Component Analysis
Sources: Authors Compilation
Correlations
Table-4: Descriptive Statistics
Mean Std. Deviation N
VAR00001 1.4706 .50160 100
VAR00002 3.7941 .83652 100
VAR00003 1.5294 .50160 100
VAR00004 3.4706 .50160 100
VAR00005 4.7353 .44336 100
Sources: Authors Compilation
Table-5: Correlations
VAR00001 VAR00002 VAR00003 VAR00004 VAR00005
VAR00001 Pearson Correlation 1 -.899(**) -1.000(**) 1.000(**) .566(**)
Sig. (2-tailed) .000 .000 .000 .000
Sum of Squares and Cross-products 25.412 -38.118 -25.412 25.412 12.706
Covariance .252 -.377 -.252 .252 .126
N 102 102 102 102 102
VAR00002 Pearson Correlation -.899(**) 1 .899(**) -.899(**) -.869(**)
Sig. (2-tailed) .000 .000 .000 .000
Sum of Squares and Cross-products -38.118 70.676 38.118 -38.118 -32.559
Covariance -.377 .700 .377 -.377 -.322
N 102 102 102 102 102
VAR00003 Pearson Correlation -1.000(**) .899(**) 1 -1.000(**) -.566(**)
Sig. (2-tailed) .000 .000 .000 .000
Sum of Squares and Cross-products -25.412 38.118 25.412 -25.412 -12.706
Covariance -.252 .377 .252 -.252 -.126
N 102 102 102 102 102
VAR00004 Pearson Correlation 1.000(**) -.899(**) -1.000(**) 1 .566(**)
Sig. (2-tailed) .000 .000 .000 .000
Sum of Squares and Cross-products 25.412 -38.118 -25.412 25.412 12.706
Covariance .252 -.377 -.252 .252 .126
N 102 102 102 102 102
VAR00005 Pearson Correlation .566(**) -.869(**) -.566(**) .566(**) 1
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Sig. (2-tailed) .000 .000 .000 .000
Sum of Squares and Cross-products 12.706 -32.559 -12.706 12.706 19.853
Covariance .126 -.322 -.126 .126 .197
N 102 102 102 102 102
Note: ** Correlation is significant at the 0.01 level (2-tailed).
Sources: Authors Compilation
Outcome
The study shows that the respondents give most emphasis on Ambience & later on lighting, color, cleanliness etc. They are least
interested in repetition, simplicity, angles etc. Visual merchandising plays a vital role in their buying behavior. The major chunk
responded that, they go for Apparels on top, accessories on second, followed by jewellery & footwear & least for groceries &
electronic gadgets.
Using the factor analysis, we can infer that there are two factors, which affect the customer to visit any retail store. They are:
variable 2, i.e. Promotion / Advertising & the other is Variable 3 i.e. value for money. They are the major contributor for any retail
outlet to attract the customer, in terms of visual merchandising. Other factors like prestige, fun etc., are secondary and ranked after
the above two, as per the survey & the responses by the by the sample population.
Using the correlation analysis, it can be assumed from the research & survey, it shows an inclination of the respondent towards the
variable two i.e. Promotion & Advertising which is affecting them to shop in retail store. It means if we can rank them in
accordance with the output table, we can say that promotion is on top, second is Value for money & last is fun, taking into
consideration the above mentioned five factors.
To be successful in the retail management, companies are more focusing into the visual merchandising the entire business adopted
based on the dynamics of the market trends. As the market scenario has to be taken into account, strategies have to be moved from
the emerging to the emerged; a change in approach is necessary. In order to have good market performance, customer awareness
about Visual Merchandising should be enhanced.
Visual merchandising is the way one displays 'goods for sale' in the most attractive manner with the end purpose of making a sale.
"If it does not sell, it is not visual merchandising. “It is an upcoming choice by the retailer as well as considered by the consumers.
The consumers get attracted by these kinds of visual used by the retailers like color, display, ambience, lightning, cleanliness,
décor, motion, angle etc.
The influence of Visual Merchandising affects all categories of retail store positively.
The research shows that apparels, accessories, jewellery, & footwear are the main category, which is mostly affected, & attracting
the customers to the stores, because of good Visuals Merchandising & its factors.
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*****
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A STUDY ON ROLE OF GRAMA PANCHAYATHS IN VILLAGE DEVELOPMENT
IN MANGALORE TALUK: RESEARCH AGENDA
Dr. Parameshwara12
ABSTRACT
Rural development has been massively a government supported process rather than the people-led process in India. To
formulate and implement rural development programs an appropriate institutional structure is required. The establishment of
Panchayat Raj Institution (PRIs) in India met this need. Further, the PRIs, being local self-governing bodies ensure, the
opportunity for people's participation and involvement in the formulation and implementation of rural development programs.
Thus, the PRIs are entrusted with the task of promoting rural development in India. The implementation of rural development
programs through the Panchayat Raj institutions has to make drastic change in the socio economic conditions of the rural
people. The implementation of rural development programs will affect even the social and political affairs of the people of the
selected area. In the economic front of the rural development, programs have to create an improvement in economic position
of the villages. Government of India and government of Karnataka have been spending crores of rupees for the overall
development of the villages. The study is needed for evaluating the role of panchayat and the impact of the same on the
development of study area.
KEYWORDS
Panchayat’s, Rural Development, GOI etc.
INTRODUCTION
The Panchayats are expected to play an important role in rural development in India, particularly after independence. Plan
documents of both the central and state governments and various committees have emphasized the importance of these bodies in
the polity. Five-year plans, especially the second five-year plan, laid special emphasis on the role of Panchayats in rural
developments. Second five-year plan envisaged a panchayat as responsible for village development keeping transformation of
social and economic life of rural areas as its goal of development. It says that, the rural progress depends entirely on the existence
of an active organization in the village, which can bring all the people, including the weaker sections, in to common programmes
to be carried out with the assistance of administration. To achieve this objective the second Five-year Plan entailed the Panchayats
to perform civic, developmental, land management, land reform and judicial functions. Subsequent plans and policy
pronouncements of national leader to emphasized the role of Panchayats in village development
The role of panchayat Raj institutions as instruments of rural reconstruction and development needs no emphasis. They have been
reorganized with wider powers and financial resources not merely as institutions of political participation, but institutions of social
and economic development. Panchayat Raj has come to be associated with two broad images. First, it is a government by itself
and second it is an agency of the state government. In the integrated exercise of planning for social and economic development,
co-ordinate roles, the present set up is a three-tier representative structure of government where the administrators, elected leaders
and local population participate in the developmental effort. In fact the elected representatives play the key role in the decision
making process, leaders are regarded as facilities of the process of development. Since the emphasis of rural development policies
is bringing about people's participation in the development programmes, it is possible to achieve this through the leaders
Rural development has been massively a government supported process rather than the people-led process in India. To formulate
and implement rural development programs an appropriate institutional structure is required. This need was met by the
establishment of Panchayat Raj Institution (PRIs) in India. Further, the PRIs, being local self-governing bodies ensure, the
opportunity for people's participation and involvement in the formulation and implementation of rural development programs.
Thus, the PRIs are entrusted with the task of promoting rural development in India. Since Independence, greater emphasis has
been laid on the social, economic and planning policy of our country for creating an appropriate rural, economic and social
infrastructure and promoting overall development. The planning policy of our county accorded the highest priority to agriculture
and rural development. The measures envisaged from first five-year plan had considerable bearing for the growth of rural
economy. The first five-year plan laid down that "development of agriculture, based on the utilization of man power resources of
the countryside and the maximum use of local resources, holds a key to the rapid development of the country". In the words of
Committee on Plan Projects, "so long as we do not discover or create a representative and democratic institution which will supply
the local interest, supervision and care necessary to ensure that expenditure of money upon local objects conforms with the needs
and wishes of the locality, invest it with never be able to evoke local interest and excite local initiative in the field of
12Assistant Professor, Department of Commerce, Mangalore University, Karnataka, India, [email protected]
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development" (Committee on Plan Projects Report, 1957, Vol. I, p-5) and the team recommended a three-tier model of Panchayat
Raj to serve as instrument of rural development in India. Panchayats have been in existence for a long period. The present set-up
clearly marks itself off from the past in respect of powers, functions and financial resources. The four main aspects of the present
system are (1) democratization of the constitution and universal establishment of Panchayats. (ii) transfer of more powers from the
state to these bodies, (iii) expansion of the scope of and transfer of more functions to the panchayats in regard to agriculture and
allied activities, health and welfare and education and (iv) strengthening of the resource position of these bodies. (Muttayya.B.C.,
1979, p-1).
Table-1: Total Villages in Mangalore Taluk and Population
S. No. Village Population S. No. Village Population S. No. Village Population
1 Adyapady 2,089 26 Kellaputhige 1,364 51 Padumarnadu 4,553
2 Aikala 2,332 27 Kemral 2,813 52 Padupanamboor 1,326
3 Amblamogru 4,941 28 Kilenjur 658 53 Paduperar 3,905
4 Athikari Bettu 2,219 29 Killenjaru 3,225 54 Paladka 2,543
5 Attur 1,478 30 Kilpady 3,389 55 Panapila 1,625
6 Badagayedapadavu 4,220 31 Kinnya 4,788 56 Panja 418
7 Badagayekkaru 2,467 32 Koikude 2,029 57 Pavanje 1,737
8 Badagumijaru 3,430 33 Kolavooru 2,491 58 Pavoor 5,987
9 Balkunje 1,551 34 Kollur 778 59 Permude 2,242
10 Bellairu 2,141 35 Kompadavu 2,582 60 Puchhamoguru 2,108
11 Beluvai 10,220 36 Kondemula 2,378 61 Puthige 8,279
12 Boliyar 5,753 37 Madya 1,624 62 Sasihithlu 2,228
13 Daregudde 1,804 38 Malavoor 3,468 63 Shimanthur 1,607
14 Delanthabettu 1,464 39 Mallur 3,601 64 Shirthadi 2,655
15 Elathur 889 40 Mantrady 1,744 65 Surinje 3,098
16 Elinje 1,951 41 Menna Bettu 4,374 66 Tankaulipady 2,188
17 Ervuailu 2,931 42 Mogaru 2,797 67 Tenkamijar 5,050
18 Haleangady 4,563 43 Moodukonaje 1,929 68 Tenkayedapadavu 6,228
19 Hosabettu 2,260 44 Moodumarnadu 2,611 69 Tenkayekkar 3,445
20 Kadandale 3,760 45 Muchur 2,294 70 Thodaru 3,031
21 Kalavar 1,115 46 Muthuru 1,875 71 Thokur- 2,898
22 Kallamundkooru 4,065 47 Nadugodu 1,454 72 Ulaibettu 4,162
23 Kandavara 3,347 48 Nellikaru 3,030 73 Ulipady 1,032
24 Karnire 920 49 Niddodi 2,120 74 Valpadi 3,520
25 Kavathar 1,529 50 Padukonaje 1,313
Sources: (2011 Censes)
Dakshina Kannada is a coastal district in the state of Karnataka in India. Sheltered by the Western Ghats on the east and
surrounded by the Arabian Sea on the west, Dakshina Kannada receives abundant rainfall during the monsoon. It is bordered by
Udupi District to the north, Chikkamagaluru district to the northeast, Hassan District to the east, Kodagu to the southeast, and
Kasaragod District in Kerala to the south. Mangalore city is the district headquarters of Dakshina Kannada. The district is divided
into five taluks namely Mangalore, Bantwal, Puttur, Sullia, and Belthangady. It used to include 4 northern taluks, Udupi,
Kundapur, Karkalaand Byndoor, but these were separated in August 1997 to form Udupi district. Dakshina Kannada, Udupi and
Kasaragod Taluk are often called Tulu Nadu, as Tulu is the majority language in the region.
REVIEW OF LITERATURE
Bhargava. B. S., and Venkitakrislman (l997) in their study “Panchayati Raj Movement: An Analysis of its Phases” gives wider
dimension for the concept of participation. Peoples’ participation at local level tends to be confined to receiving benefits by those
for whom they are meant or stipulated and in other stages; the participatory thrust in the conscious act of restructuring the society
is either absent or nominal. They observed that a major shift in the strategies has been occurred around 1970, in view of the fact
that benefits or gains of development had not reached the weaker sections, but cornered by the well-off sections of rural
community. The efforts for proper institution building and to change the “value system” had been the common strategies, thus
apparently resulted in the experiment of new form of local self-governance with a democratic power mechanism and development
mechanism. Sundaram K. V. (1997), community participation takes three forms such as mobilization, mediation and
empowerment. In the first instant mobilization is seen as facilitator or a desired plan output. The concept, mediation refers to the
role of peoples’ representatives or institutions that should act as the mediators between the government and the people. The
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government and people are involved in the task of planning and implementation and the action should be done through a
dialectical process. The concept “empowerment” impregnates a wider meaning that people have to capacitate and their institutions
built up and is strengthened and this is considered the highest form of participation. Empowerment imbues the Communities’
autonomy to decide the goals, plans, programmes and projects affecting their development. Autonomy of mobilizing and
controlling their own resources urges the former. Chadha. K. M (1996) observed that rural poverty is inextricably linked up with
rural productivity and unemployment including under employment. The study asserted that participation of rural poor could be
guaranteed by way of active co-operative institutions. Cooperation is aimed at promoting self-reliance, self-help and self-
governance among members, implying equitable sharing of gains and losses. Co-operative institutions empower the weaker
sections of society and help them to allocate their meagre resources to avoid being exploited by outsiders. Robert Klitgaard
(1997) in his paper "Unanticipated Consequences” in Anti-poverty programmes “argues about the fact “why so many well-
intentioned efforts to reduce poverty results in unanticipated outcomes? The most important typology evolved is concerned with
information and incentive, and how they affect the institutions through which anti-poverty efforts are implemented. The study
found various reasons for the unanticipated negative consequences, such as dependence on a wrong model and therefore a failure,
the tendency to overlook statistical phenomena or incentive effects, and most important of all, the insufficient attention to the
economics of the institutions that implement anti-poverty programmes. Much attention needs to be given to the ‘institutional I0
adjustment’, so that the markets and government institutions through which anti-poverty programmes are implemented have the
information and incentives to make them work. Gaiha (1996) points to the wrong targeting of the Employment Guarantee Scheme
(EGS). He found that there was a marked deterioration in it over the period 1979 89 reflected in not just a larger concentration of
the more affluent among the EGS participants, but also their much larger gains from participating in this scheme. A large segment
of the poor depended heavily on EGS as an additional source of income, with significant welfare gains during 1979-84. Apart
from this, a large subset, especially of relatively low-income participants also withdrew from EGS when overall economic
conditions improved. Hemalata Rao and Devendra Babu (1994) studied the involvement of rural poor, focusing on scheduled
castes and scheduled tribes, in the socio-economic empowerment programmes. The study based in Karnataka found that the mode
of selection of beneficiaries was more or less without any proper basis. Though the guidelines of the schemes specified certain
procedures to be followed in the selection of beneficiaries, many such procedures were not followed strictly. Major concentration
of the selected beneficiaries was in the productive age (18 to 65) but as the age group went up the number of beneficiaries
declined. The study revealed the inadequacy of technical supervision and guidance needed for the effective implementation of
schemes. Due to the lack of follow-up actions of schemes, rampant misuse of funds took place. Thus, the schemes intended to
alleviate poverty did not attain the target. Yogendra Nath Das (1994), states that the history of rural development in India started
with the launching of Community Development Programmes in October 1952. The objective was to bring all-round socio-
economic development of the villages with the cooperation and participation of the rural people. To enhance participation of local
people in the decision-making process, Panchayat Raj System was introduced in 1961 and a three-tier system of Gram Panchayat,
Block Samitis and Zila Parishad was established. However, this programme failed in increasing the agricultural production, in
removing illiteracy and unemployment, in improving health and hygiene condition because of the fact that it gave much attention
on basic amenities than on economic development, and people did not participate equally, adequately, mostly officers were not
rural-oriented. Firstly, the scheme was financed by the Central Government later on in 1966 responsibility shifted to the State
Governments so it was isolated. Chathukulam J., et al (2002) in their study on Participation of rural poor in rural development
programmes and social welfare schemes made a case study in a selected village panchayat to examine (i) the process of
identification of the rural poor for selecting beneficiaries of various development and welfare schemes; (ii) whether the assistance
received have had sustainable impact on the levels of living of the beneficiaries; and (iii) the administrative and organizational
efficiency of the local level institutions for programme implementation. The study came out with the following findings: (i) the
poor in the panchayat were identified based on the below poverty line list prepared by Block Panchayats; (ii) most of the
beneficiaries belonged to very low income categories; (iii) IRDP which constituted the major scheme of development at the micro
level and 34 per cent of the beneficiaries of which was poor, has helped some of the beneficiaries to move upwards to above the
poverty line; (iv) in more than 75 per cent of the cases, repayment was prompt, particularly so, in the case of women beneficiaries;
(v) credit-absorption capacity was higher in the case of artisanal schemes and relatively low for cottage industry schemes; (vi) the
rural poor do not participate actively in decision-making in the Grama Sabhas; and (vii) the role of contractors continues to be
strong in the implementation of panchayat level projects. G. Gopikuttan (1990) has attempted to examine this issue in three
panchayats in Pathanamthitta district. The specific objectives of his study are to examine (i) the nature of housing demand for
different groups of the rural poor and the mismatch between supply (in terms of public provision) and demand; (ii) whether the
public provision has helped to achieve the desired goals; (iii) the extent to which ongoing housing schemes make use of the
capabilities of the rural poor, locally available resources, and cost-effective technologies; (iv) the share of gross investment in
public scheme houses as a proportion of gross residential construction in selected panchayats; (v) the changes in rural housing
quality taking place over the time; and (vi) the scope for integrating the public housing schemes with the ongoing local level
planning process. Gopinathan Nair (2004) attempted to examine (i) the making of the Plan, its size and dimensions, programme
contents and programme quality; (ii) the actual implementation of the Plans and related issues such as selection of beneficiaries,
utilization of funds, and generation of additional income; and (iii) assessment of the role of party politics in panchayat level
planning, and the extent of public participation. Seema. (2001) The Integrated Child Development Scheme is a scheme of the
Government of India implemented through the State Governments to meet the health, nutritional, and educational needs of the
poor, poor infants, and pre-schoolchildren, and women in their childbearing years. The scheme seeks to meet these basic
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objectives by delivering an appropriate combination of basic services namely, supplementary nutrition and health education,
immunization, health checkup, referral services, and non-formal pre-school education. Srikumar Chattopadhyay (1999) and his
team have attempted to make an assessment of the PRM methodology with the objectives of (i) assessing the technical and
organizational aspects of PRM; (ii) comparing the action plans of panchayats covered by PRM with those not covered by PRM;
(iii) studying how PRM is being translated into planning at the panchayat level; and (iv) analyzing the scope of integrating PRM
with other activities of the panchayat. B. Ramesh, (2004) in his project located at Kalady grama panchayat in Ernakulam district,
has attempted to utilize participatory research methods for data collection with the objective of (i) preparing a master plan for the
panchayat, and (ii) getting the involvement of the panchayat in Plan implementation in a limited way. The project has completed
resource-mapping, socio-economic analysis and sector-specific studies and on that basis a draft master plan for the panchayat has
been prepared. Attempts have also been made to develop low-cost techniques for the large-scale application of tissue culture in
ornamental and medicinal plants and technological up gradation of handicrafts. Unlike in Nenmeni panchayat, in Kalady the
attitude of political parties towards the project has been discouraging. There has been instability in the administration of the
panchayat because of the shift of political power from LDF to UDF. Because of this, the inputs supplied by the project could not
be utilized in the planning, as the entire planning process in the panchayat is at a very low key. R. P. Nair (2004) aims at
examining the potentials and feasibilities for mobilization of resources by panchayats with the following objectives (i) to estimate
the fiscal potential of village panchayats; (ii) to compare the fiscal potential with actual efforts made during the past few years;
and (iii) to identify the constraints faced by the village panchayats in resource mobilization. To achieve the above objectives,
information is gathered primarily at three levels viz. panchayats, units engaged in non-agricultural activities, and households.
Separate questionnaires have been designed for each unit of study taking into account the data requirements for improving the
resource base of the panchayats. Baltiwala (1997) has observed, “Empowerment is a process which exchange existing power
relation by addressing itself to three dimensions material, human and intellectual resources. It is a process which must challenge
and change ideology, the set of ideas, attitudes, beliefs and practice in which gender bias or social bias like caste, class,
regionalism and communalism are embedded”. Sharada Muraleedharan (2003) has noted that decentralized planning offers
democracy in place of domination, empowerment in place of submission, environment and community in place of profit, and in
place of passivity. The reality is that the women’s movement is weak, in its capacity to obstruct unsatisfactory policy outcomes.
Various reports present contrasting pictures about women’s participation in decentralization process. Government efforts to
participate more marginalized groups and weaker sections have been a tremendous success in rural areas, whereas it seems that it
has suffered a slight set back in the case of urban women, as there has been a retreat of urban women from the arena of
development activities. Majumdar and Bhawar Singh (1997) attempt a critical study of conceptual and historical evolution of
the panchayat raj institutions in India. They shed light on various phases of theoretical developments and practical implementation
of the system of panchayat raj in Indian societies. In their views, panchayat raj institutions are to be remodeled in such a way that
to integrate them with remunerative organizations operating in the rural areas so that their functional efficiency can be enhanced.
Joshi (2000) discusses the role of panchayat raj institutions in the alleviation of rural poverty. The study infers that the
functionaries at the grass root level have inadequate knowledge of the rules and procedures of various transactions and that
physical capacity to undertake development plan are very poor. Acharya et all (2002) examine the issues of second generation
panchayats and traces out some of the problems of PRIs like bureaucratic and institutional barriers, lack of cooperation from the
departments in the devolution of functions and powers, reluctance among the departments to transfer their schemes, growing
tendency among the centre and state to introduce programmes to be implemented by parallel organizations’, etc., Sudhakar
(2002) discusses the role of new panchayat in the rural development. In his view, the new panchayat system will enable the public
to discharge their functions in a responsible manner and thereby it enhances the effectiveness of the developmental programmes.
He concludes that the panchayat raj system encourages local initiatives, local technologies, local skills and local entrepreneurial
abilities. Vyasulu (2003) explains that the process of democratic decentralization enables to bridge the gap between decision-
making centers and centers of action. It also increases the effectiveness of democratic system and the implementation of rural
development programmes. From the literature review, it can be inferred that the most of the studies are macro in nature focusing
on evolution, growth and the significance of panchayat raj institutions. Hence, a micro study on role of gram panchayats in village
development is of much significance
THE OBJECTIVE OF PROPOSED STUDY
To study the various schemes introduced by the government.
To study the role of panchayats in implementation of various schemes.
To study the impact of various schemes on socio economic development of the villages.
To suggest policy measures based on the study.
NEED AND IMPORTANCE OF PROPOSED STUDY
The Panchayat Raj System is playing important role in rural development. Gram panchayats has to take the responsibility of
implementing various rural development programmes of both state and central governments. There are 74 villages in Mangalore
Taluk with the local elected bodies representing different political party. Government of India and government of Karnataka have
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been spending crores of rupees for the overall development of the villages. The study is needed for evaluating the role of
panchayat and the impact of the same on the development of study area.
METHODOLOGY USED
The proposed study is empirical in nature. It will be carried in sample villages of Mangalore Taluk of Dakshina Kannada district.
The proposed study will be the combination of methodologies for data collection including questionnaire surveys, semi-structured
interviews, focus group discussions, and participant observation. All the secondary data available with the panchayats relating to
various dimensions of planning will be collected. For the purpose of data analysis statistical tools like chi square, trend analysis,
correlation will be used.
CONCLUSION
The implementation of rural development programs through the Panchayat Raj institutions has to make drastic change in the socio
economic conditions of the rural people. The implementation of rural development programs will affect even the social and
political affairs of the people of the selected area. In the economic front of the rural development, programs have to create an
improvement in economic position of the villages. Because of implementation of rural development programs most of the people
must gain additional income. From the created assets which has resulted into deprivation in selected areas. After the
implementation of rural developments programs, efforts have be made to strengthen villages, this will bring vigorous change in
socio economic setup of the Gram Panchayat. The implemented rural programs like SJGSY, housing schemes and power schemes
have to be studied to find out gainful activities for poor in selected area and its impact on bringing people above the poverty line.
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27. Retrieved from http://www.slideshare.net/basavarajbn/2-44983019
28. Retrieved from http://www.cds.ac.in/krpcds/Local%20Level%20Planning.htm
29. Retrieved from
https://www.researchgate.net/publication/261613833_DEVELOPMENT...6https://www.researchgate.net/publication/26
1613833_DEVELOPMENT_EXPENDITURE_ON_WOMEN_EMPOWERMENT_UNDE...
30. Retrieved from
http://www.researchgate.net/profile/Jayasree_Paul/publication/261613833_DEVELOPMENT_EXPENDITURE_ON_
W...
31. Retrieved from
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32. Retrieved from http://www.tandfonline.com/doi/pdf/10.1080/00220389608422435
33. Retrieved from
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34. Retrieved from http://www.cds.ac.in/krpcds/publication/downloads/chatto.pdf
35. Retrieved from https://mpra.ub.uni-muenchen.de/9691/index.html
36. Retrieved from https://en.wikipedia.org/wiki/Dakshina_Kannada
37. Retrieved from https://en.wikipedia.org/wiki/Dakshina_Kannada#History
38. Retrieved from https://en.wikipedia.org/wiki/Dakshina_Kannada#Demographics
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A STUDY ON “BRAND AWARENESS IN CUSTOMER”
WITH SPECIAL REFERENCE TO FMCG PRODUCTS
Prashant Bhat13 Soumyashree H. Bhat14 Nishmitha D. Shetty15 Chiathra Shetty16
INTRODUCTION
The most valuable asset in any business is considered its “Brand”. Branding and brand equity has been the topic of interest for the
researchers in the area of Marketing, because of the significant intangible value of brand building and managing brand equity has
become a priority for companies of all sizes in a wide variety of industries and markets. Brands are at the heart of marketing and
business strategy.
Marketing of FMCGs plays a pivotal role in the growth and development of a country irrespective of the size and population. It is
a fact that the development of FMCG marketing has always kept pace with the economic growth of India. Although the literature
identifies several dimensions of brand equity from different other industries, existing research on brand equity in the FMCG
industry is still spare. Despite the growing importance of the Indian FMCG industry, the topic of how the different FMCG
products builds brand equity appears to be under-researched. The results of this research also lead to a deeper understanding of a
FMCG brand equity concept as well as some implications for practitioners working in the FMCG industry.
Apart from the implications in the FMCG industry, the content and meaning of brand equity have been debated in different ways
and for a number of different purposes, so far no common viewpoint has been emerged. Although a great amount of research has
been conducted regarding the concept of customer-based brand equity, research on the association of customer with the brands of
FMCG companies is under researched. Thus, the objective of this paper is to test the most popularly FMCG Company and brand
awareness in the customers. This study also aims to establish a relationship between cost, quality, and brand image within the
context of FMCG industry in India.
NEED OF THE STUDY
FMCG industry is one of the booming industries in the economy. Customer’s awareness and association with the company and its
products is an important aspect that needs to be studied under FMCG industry:
To know the FMCG Industry profile with respect to brand equity.
To analyze the marketing strategies for FMCG products.
OBJECTIVE OF STUDY
The research has the following specific objectives:
To know brand awareness in the customers for FMCG products.
Does the brand affect the customer’s choice for purchase?
To study relationship between brand, quality and price of FMCG products.
SCOPE OF STUDY
The study will help us to know the importance of brand image in FMCG industry. This study also shed light on awareness in
customer about the FMCG products in present scenario and suggests the measure to increase the awareness and use this awareness
as marketing strategy for promotion of the products. Thus, this research focuses on the aspect, which is under researched.
RESEARCH METHODOLOGY
The data source used in this research paper is as follows:
Secondary Data: The paper also took help of secondary data like various research papers, journals, newspapers, books
and online database.
13Assistant Professor, P.G. Department of Commerce, Alva’s College, Karnataka, India, [email protected] 14II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected] 15II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected] 16II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected]
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Primary Data: Collected by the method of questionnaire given to random population. The sample space used for this
filed work is 100. Simple statistical tool such as average and percentage and Spearman’s Rank Correlation is used to
analyze the data.
LIMITATION OF THE STUDY
The limitations of this research paper are as follows:
The primary data is collected by questionnaire method thus, non-respondents has an effect on interpretation.
The samples are only taken from people who dwell in and around Mangalore.
ANALYSIS AND INTERPRETATION
Chart-1: Demographic Information
Sources: Authors Compilation
Interpretation: The population collected for this research work consists of 100 respondents. These respondents include 22 male
and 78 female respondents of different age group ranging from 15 years to 40 years approximately.
Chart-2: Familiarity with FMCG Products
Sources: Authors Compilation
Interpretation: The above chart represents the percentage of customer who are familiar with the FMCG products that they buy.
Around 38% of people are very familiar, 33% are familiar, 17% are slightly familiar. Very few percentages of people are
extremely familiar or not familiar at all that is 8% and 4% respectively.
15-20 years 20-25 years 25-30 years 30-35 years 35 & above Total
411
2 4 1
2219
51
2 5 1
78
Male Female
Extremely
Familiar
Very Familiar Moderately
Familiar
Slightly Familiar Not at all
Familiar
8%
38%
33%
17%
4%
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Chart-3: Frequency of Purchase
Sources: Authors Compilation
Interpretation: The above chart prominently shows that around 42 % i.e. the majority of the population purchases FMCG goods
every month. The remaining purchase FMCG in the duration of a week, 2 months or 3 months
Chart-4: Brands Currently Used by Customers
Sources: Authors Compilation
Interpretation: We have found that customers currently use FMCG products of more than one company. Thus on an average
49% of people use Nestle company products, 41% use ITC, 40% use HUL, 27% use Dabur, 19% use P&G and 16% use Godrej.
Chart-5: Role of brand in Purchase Decision
Sources: Authors Compilation
Every week Every Month Every 2 Months Every 3 Months Total
17%
42%
22%17%
100%
HUL ITC P&G Nestle Dabour Godrej
40% 41%
19%
49%
27%
16%
Important Not Important Total
83%
17%
100%
Percentage
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Interpretation: Brand image plays an important role in purchase decision of customers. Majority i.e. around 83% of people voted
that brand plays an important role in their purchase decision on the customers.
Chart-6: Brand Awareness
Sources: Authors Compilation
Interpretation: The chart shows the awareness in the customer and association of them with the products and companies to
which the products belongs. As per the chart it clearly show that only 5% and extremely aware whereas 44% are moderately
aware, 36% are slightly aware and 15% are not aware at all.
Chart-7: Association of Product with its Company
Sources: Authors Compilation
Interpretation: The chart displays the association of products with its company. It can be observed that Nestle Company has a
strong association with its product. The remaining companies are moderately associated with the percentage ranging from 35 % to
50%.
Chart-8: Frequent Change in Purchase Decision
Sources: Authors Compilation
Slightly Aware Moderately
Aware
Very Aware Extremely Aware
15
36 44
5
No of repondents
HUL ITC Dabour Nestle P & .G Godrej
41.33% 43.33%48.66%
76%
44.33%37.66%
YES NO Total
55%45%
100%
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Interpretation: In the above chart 55% of population, agree to the fact that they frequently change purchase decision when they
buy and FMCG products. Only 45% of population disagrees to this.
Chart-9: Basis for Purchase
Sources: Authors Compilation
Interpretation: The purchase decision of the customer depends on different basis. On an average, 80% of respondents purchase
the product based on the quality; 15% on cost of the product, 14% on the brand image and 10% on offers and discount.
Chart-10: Loyalty of Customer towards FMCG Brands
Sources: Authors Compilation
Interpretation: The above chart shows the loyalty of customer towards FMCG products. Majority of population that is 61
respondents stated that they are moderately loyal. Remaining 12 respondents stated that they are disloyal and only 27 respondents
stated that they are extremely loyal.
Chart-11: Association of Customer with the Product Tag Lines
Sources: Authors Compilation
Cost effectiveness Quality Brand Image Offers And
Discount
15%
80%
14%10%
Disloyal Moderately Loyal Very Loyal Total
12
61
27
100
No of repondents
Cadbury Fair &
Handsome
Surf
Excel
Bingo Gems Bru Classmate
75
26
7285 87
6988
25
74
28 15 1331
12
Correct Ans. Wrong Ans.
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Interpretation: We can clearly see that majority respondents can associate the products with its tagline.
Chart-12: Advertisement Plays an Important Role in Purchase Decision
Sources: Authors Compilation
Interpretation: Majority of population that is around 52% agree to the statement that advertisement play an important role in
purchase decision for FMCG goods. Only 35% of population strong agrees and 2% strongly disagree. 11% of population neither
agree nor disagree.
Chart-13: Competition from Local Products
Sources: Authors Compilation
Interpretation: Majority of population that is 70% believe that branded FMCG product do have a tough competition from the
local products. Only remaining 30% population thinks that there is no competition at all
Chart-14: A branded Product Increases your Reputation
Sources: Authors Compilation
Strongly Agree Agree Neither Agree
nor Disagree
Disagree Strongly
Disagree
35%
52%
11%
0% 2%
Tough Competition No Competition
70%
30%
Strongly Agree Agree Neither Agree nor
Disagree
Disagree Strongly Disagree
19%
48%
23%
7%3%
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Interpretation: “A branded product increases the reputation of the customer” this statement is agreed by 48% of population.
Remaining 19% strongly agree, 23% neither agree nor disagree, 7% disagree, and 3% strongly disagree.
Table-1: Recognition of FMCG Brands (HUL, ITC, P&G, Nestle, Dabur, Godrej)
Number of Brands Known Number of Respondent Percentage
1 19 19%
2 14 14%
3 12 12%
4 6 6%
5 13 13%
6 36 36%
Total 100 100
Sources: Authors Compilation
Interpretation: The above chart shows the number of top FMCG brands in India which the customers have heard of. Around
36% of the population has heard all the brands given above. 19% have only heard of 1 brand, 14% have heard about 2 brands,
12% have heard about 3 brands, 6% have heard of 4 brands and 13% have heard of 5 brands.
Table-2: Ranking for FMCG Companies
Company Ranking
Cost Effective Quality Brand Image
HUL 1 1 1
ITC 3.5 5 2
P&G 6 2 3.5
Godrej 2 7 3.5
Dabur 3.5 3.5 6
Nestle 5 6 5
Britannia 7 3.5 7
Sources: Authors Compilation
Interpretation: The above chart show the rank given to these top FMCG companies based on cost, quality, and brand image.
These ranks have been assigned based on average of ranks given to them by 100 respondents. In this, we can clearly observe that
HUL stand in place of 1st rank with respect to all the aspects.
With the help of above chart relationship between cost, quality, brand image can be established. Using Spearman’s rank
correlation we determined that there is high positive correlation between all the factor that is cost and quality, quality and brand
and brand and cost. The coefficient of correlation between cost and quality is 0.09, quality and brand image is 0.21, and that of
brand image and cost is 0.69
FINDINGS
The analysis and interpretation process has leaded us to some significant and interesting finding which are as follows:
The respondents in this research majorly belong to the age group ranging from 20 to 25 years. In addition, the number of
female respondent is higher when compared to male respondents.
It was observed that majority of the respondents are very familiar with the brand of FMCG goods they purchase.
However, at the same time they agree to the fact that they are not extremely familiar about the products.
Majority of the respondents have heard at least the names of the top FMCG companies that operate in India.
FMCG is prominently featured frequently purchased goods. The analysis of data has found that majority of the
population buys an FMCG product within the duration of a month.
The analysis showed that population use more than one company’s products presently and they have difference
preference for company for different FMCG products.
Brand plays a vital role in the purchase decision of the customer. Here brand refers to the image of the product or the
company present in the minds of the customers.
The results of the test taken related to the awareness in customer of the FMCG products and the companies it belongs to
shows that majority are moderately aware. Only 5% of total population is completely aware about the most of the
products.
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It was also found that population are more aware about products of Nestle Company and least about Godrej company.
This is because Nestle Company promote all its products associating the product with the company name. Whereas the
other FMCG companies only promote the products and does not given any importance on promoting companies name.
It was also found that majority of the customers change their preference in brand of FMCG products they use more often
due to the reasons such as change in taste, effect of advertisement on their purchase decision and also sometime on
offer and discounts provided by a particular company.
Quality plays a major basis for the purchase of FMCG products according to majority of the respondents.
Respondents have rated themselves as moderately loyal customer with respect to FMCG products.
After analyzing the data, we can say that people association with tag lines of the product is very strong. Majority of the
respondent can positively relate products with their respective tag lines as they are advertised in that manner.
An advertisement of the FMCG product plays a vital role in changing the mindset of customer and has a valuable effect
on the purchase decision.
HUL has secured 1st rank in all the aspect such as cost, quality and brand image. Surprisingly, brand awareness emerged
as a not so important factor indicating that having a brand name alone is not a guarantee of a successful brand in the
FMCG industry.
By further analyzing, the data a relationship between cost, quality and brand image was successfully established. It was
found that there is a high degree of positive correlation between cost and quality, quality and brand image, cost and
brand image.
A local FMCG producer gives tough competition to branded products.
Majority of the population agree to the fact that purchasing a branded FMCG product increase their reputation and gives
them a sense of pride.
SUGGESTIONS
Building a brand image and proper positioning of the product plays an important role in marketing of the FMCG
products as this industry witness a lot of competition.
As local producers also give a tough competition to the top FMCG companies, these companies must come up with
innovative features, with reasonable cost to attract customers.
It is agreed by the respondent’s hat usage of branded products increases their reputation, thus this must be used as a
marketing strategy and promotion on the brand must be done in such a way that depicts the increase in reputation to the
customers.
Customer has lowest association with Godrej company products thus the company must put a great effort in promoting
in FMCG products. In addition, majority of the people have an opinion that Godrej Company products are not quality
products, thus this image cannot be removed by proper product positioning in the minds of the people and bringing
innovative changes in products to attract them.
CONCLUSION
Building brand equity is crucial for FMCG products where consumers heavily depend on the brand for the product category in a
highly competitive and brand conscious market. Researchers found that brand awareness, brand loyalty, perceived quality and
brand associations had a significant effect on band equity. Brand association demonstrated the strongest impact, indicating the
essential role of developing feels and thoughts with the brand in building brand equity in the Indian FMCG industry. This means
that, consistent with previous studies, strong associations that support a competitively attractive and distinct brand position could
create a favorable feeling and behavior toward the FMCG brands.
The results also portrayed the significant influence of brand loyalty to the development of brand equity. The empirical data and
statistical tests in the study provided support for the positive and direct relationship between perceived quality, cost and brand
equity. Surprisingly, brand awareness emerged as a not so important factor indicating that having a brand name alone is not a
guarantee of a successful brand in the FMCG industry.
Thus, we can conclude that in FMCG industry should create a valuable brand equity and proper positioning of the product
importantly to fight the tough competition that is present in this industry.
REFERENCES
1. Retrieved from http://www.theijm.com/vol1issue4/2.pdf
*****
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IMPACT OF SHOPPING MALLS ON LIFE STYLE OF PEOPLE WITH REFERENCE TO
DAKSHINA KANNADA DISTRICT
Zeeval Khan I.17 Sandhya18 Divya19 Akshatha Shetty20
ABSTRACT
The retail sector in India is emerging as one of the largest sectors in the economy. The retail industry in India has come forth
as one of the most dynamic and fast paced industries with several players entering the market. The India retail industry is
gradually inching its way towards becoming the next boom industry. Modern retailing has entered into the retail market in
India as is observed in the form of bustling shopping centers, multi-stored malls and the huge complexes that offer shopping,
entertainment and food all under one roof. Living an urban life is overcrowded cities, lack of time and problems associated
with metropolitan life style, have altered lives of people all around the globe and considerable changes in different categories
and aspects of life have occurred, for example in buying habits of people. Emergence and growth of shopping malls are
products of such alterations.
This research mainly concentrates on the frequency of visits to shopping malls and to find out influence of shopping malls on
life style of people. The research is done through primary and secondary information. To make data more reliable
questionnaire was developed and 100 respondents opinion is collected. In addition, information is collected through various
journals, research Article and through Internet. This study help to know the current situation of shopping malls and its impact
on the life style of the people and it also helps to evaluate the performance of shopping malls in current trend and to
understand the customer preference for different malls.
KEYWORDS
Shopping Mall, Life Style, Customer Preference, Current Situation etc.
INTRODUCTION
Retail is the process of selling consumer goods and/or services to customers through multiple channels of distribution to earn a
profit. Demand is created through diverse target markets and promotional tactics, satisfying consumers' wants and needs through a
lean supply chain. Retailing is a distribution channel function, where one organisations buys products from supplying firms or
manufactures products themselves, and then sells these directly to consumers. In majority of retail situations, the organisations,
from whom a consumer buys, is a reseller of products obtained from others, and not the product manufacturer. However, some
manufacturers do operate their own retail outlets in a corporate channel arrangement.
A shopping mall is a building or group of buildings that contains stores. The stores are connected by walkways so that consumers
can easily walk between the stores. Malls can be built in an enclosed or open-air format. Malls can be located everywhere
throughout the world and are travel destinations for tourists who love to shop. A typical one houses department stores, boutiques,
movie theaters, photography studios, and other specialty stores. Other features of a shopping mall include kiosks, food courts, and
arcades. Kiosks are booths located in pedestrian areas of the mall where small products or services are sold. Food courts are areas
within the mall that contain fast-food restaurants and a seating area. Arcades are popular destinations for some teens because they
are entertainment rooms where people can play coin-operated arcade games. As a part of globalization as well as privatization in
the economy, the shopping plays very important role. Earlier people had to buy different things at different places and there were
separate markets for various things. People used to visit general stores for purchasing daily-required household materials. Now,
the things have been changed completely and almost everything is available under one roof. The shopping malls have made
shopping an easy activity for people now, everything is available at fingertips. The malls also help in enhancing the need of
consumable items with national and international fame different brands, which were not available in retail market. Each mall has
its own marketing strategies that make it a great crowd puller. Even in the remotest areas of any big city, mall is available. In
India, local shopping malls have been around since late nineties, although they are still concentrated in large urban centers.
Foreign-brand shopping malls began entering the market in late 2000s.
The increased competition has resulted in shopping malls reaching smaller cities in their efforts to find new consumers and wage
price wars. Hence, while Indian shopping malls catered only to the upper class in the last decade and early this decade, their
17Assistant Professor, P.G. Department of Commerce (M.Com), Alva’s College, Karnataka, India, [email protected] 18II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected] 19II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected] 20II Year M.Com (Insurance & Bank Management), Alva’s College, Karnataka, India, [email protected]
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mushrooming in smaller cities and predatory pricing practices mean that consumers from the lower classes now have easy access
to shopping malls.
NEED OF THE STUDY
To study the current situation of shopping malls and its impact on the life style of the people.
To evaluate the performance of shopping malls in current trend.
To understand the customer preference for the different malls.
OBJECTIVE OF RESEARCH
To find out the frequency of visits to shopping malls.
To find out influence of shopping malls on life style of people.
RESEARCH DESIGN
Primary Data: The research is done through primary information. To make data more reliable questionnaire was
developed and 100 respondents opinion is collected.
Secondary Data: information collected through various journals, research Article and through Internet.
LIMITATION OF STUDY
The samples are taken only from people who dwell in an around Mangalore.
The collected information subject to bias as the study also includes secondary information.
RETAIL IN INDIA: INDUSTRY STRUCTURE
The retail industry in India is highly fragmented and unorganized. Earlier on retailing in India was mostly done through family-
owned small stores with limited merchandise, popularly known as kirana or mom-and-pop stores. In those times, food and grocery
were shopped from clusters of open kiosks and stalls called mandis. There were also occasional fairs and festivals where people
went to shop. In the twentieth century, infusion of western concepts brought about changes in the structure of retailing. There
were some traditional retail chains like Nilgiri and Akbarallys that were set up on the lines of western retail concepts of
supermarkets. The government set up the public distribution system (PDS) outlets to sell subsidized food and started the Khadi
Gram Udyog to sell clothes made of cotton fabric. Since liberalization in early 1990s, many Indian players like Shoppers Stop,
Pantaloon Retail India Ltd (PRIL), Spencer Retail ventured into the organized retail sector and have grown by many folds since
then. These were the pioneers of the organized Indian retail formats. With the opening up of foreign direct investment in single-
brand retail and cash–and-carry formats, a new chapter unfolded in the retail space. Many single-brand retailers took advantage of
this opportunity. The cash-and-carry format has proved to be an entry route for global multichannel retailing giants like Metro,
Wal-Mart and Tesco.
Retailers offer many benefits to suppliers and customers as resellers. Consumers, for instance, are able to purchase small
quantities of an assortment of products at a reasonably affordable price. Similarly, suppliers get an opportunity to reach their
target market, build product demand through retail promotions, and provide consumer feedback to the product marketer. During
the last few years, the Indian retail market has seen considerable growth in the organized segment. Major domestic players have
entered the retail arena and have ambitious plans to expand in the future years across verticals, formats, and cities. For example,
companies like Reliance, Tata, Bharti, Adani Enterprise, have been investing considerably in the booming Indian retail sector.
Besides, a number of transnational corporations have also set up retail chains in collaboration with big Indian companies.
IMPORTANCE OF RETAIL INDUSTRY
Retail involves the selling of goods to customers. While meeting the needs of customers, following are some of the functions
performed by a retailer:
Customer Convenience
Perhaps the most important role of bringing the ready to be consumed goods to the doorstep of the consumer is performed by the
retail community. Consumers benefit from retailing as retailers perform marketing functions that makes it possible for customers
to have access to a broad variety of products and services. Retailing also helps to create place, time and possession utilities. A
retailer's service also helps to enhance a product's image. Retailers stock goods and ensure the availability of products and services
just when the customer needs them. Convenience Stores operate over extended hours through the week and give customers greater
flexibility and choice.
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Accessibility
Products and services have no value for consumers until they are acquired and used by the customers. Retailers acquire products
and services from different places and. assort them at a single point as per the needs of the consumers and thus facilitate
customers' access.
Convenience of Size
Retailers break bulk and serve the products in quantities and sizes as desired by the customer. For example, shampoo is available
in small sachets. The retailer helps consumer by providing appropriate products, service and advice in the packing and quantities
desired by them.
Associated Services
A vibrant retail sector benefits the consumers by providing range of products and services efficiently. Retailing can be done either
in fixed locations or online. Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a
service provider services the needs of a large number of individuals, such as a public utility, like electric power. Retailing also
helps to increase the living standards and enable the consumers to possess various goods, services and utilities.
Supply Chain
Retailers are part of an integrated system called the supply-chain. A retailer purchases goods or products in large quantities from
manufacturers or directly through a wholesaler, and then sells smaller quantities to the consumer for a profit. Retailers participate
in the sorting process by collecting an assortment of goods and services from a wide variety of suppliers and offering them for
sale. The width and depth of assortment depend upon the individual retailer's strategy. Retailers provide the vital link between
producers and ultimate consumers.
Value Chain
When consumers purchase goods, retailers must order more goods to replenish their stock. In turn, factories must manufacture the
goods for the retailers. The factories then purchase more raw materials to use to manufacture more goods. This is how consumer
spending is able to drive much of the economy.
Research & Information
The retailer provides useful information across the supply chain. He informs and educates customers about product features and
benefits. They provide information to consumers through advertising, displays and signs and sales personnel. Marketing research
support is given to other channels, members. Retailing in a way, is the final stage in marketing channels for consumer products.
He also provides feedback about consumer requirements to the manufacturers and wholesalers, which help them in planning
production and supply.
Mobilizing Finance
Retailing industry mobilize the investment and savings of people, as a small shop can be set up with minimal investment. They
store merchandise, mark prices on it, place items on the selling floor and otherwise handle products; usually they pay suppliers for
items before selling them to final customers. They complete transactions by using appropriate locations, and timings, credit
policies, and other services e.g. delivery. They influence life style of consumers and help people to build their identity in a social
setting.
Economic Development
Retailing has great impact on economic development of a nation. Retailing has become an intrinsic part of our daily lives.
Consumer spending on retail goods drives much of the global economy, and the retail industry employs a large number of people.
Nations that have enjoyed the greatest economic and social progress have a vibrant retail sector. Retailing is one of the most
important industries in the world and plays a predominant role in economic development of the country. A healthy retail sector
growth and speeds up economic development.
Employment
There are a large number of people and companies involved in the production, distribution, and retail of goods. Globally, retailing
is the largest revenue generator and employment provider next only to agriculture. It provides opportunities to the poorest and
unskilled along with the educated and skilled. As a major source of employment, retailing offers a wide range of career
opportunities including; store management, merchandising and owning a retail business.
Social Responsibility
Successful retailers also recognize that people want to see the improvements in the general level of consumption and social
cohesion over time. Retailers have to enhance their perceived value to the community by acting as a focal point and through
effective public relations and promotional campaign including sponsorships. This encourages social responsibility behavior by the
corporates where public welfare programs are funded by a certain percentage of purchase prices of company's products.
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RETAILING FORMAT IN INDIA
Malls
The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000
sq. ft. to 7,00,000 sq. ft. and above. They lend an ideal shopping experience with an amalgamation of product, service and
entertainment, all under a common roof. Examples include Shoppers Stop, Pyramid, and Pantaloons.
Specialty Stores
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times
Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.
Discount Stores
As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies
of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non-perishable goods.
Department Stores
Large stores ranging from 20000-50000 sq. ft., catering to a variety of consumer needs. Further classified into localized
departments such as clothing, toys, home, groceries, etc. Departmental Stores are expected to take over the apparel business from
exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai, now has
more than seven large stores (over 30,000 sq. ft.) across India, and even has its own in store brand for clothes called Stop.
Hypermarts / Supermarkets
Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential
high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be
classified in to mini supermarkets typically 1,000 sq. ft. to 2,000 sq. ft. and large supermarkets ranging from of 3,500 sq. ft. to
5,000 sq. ft. having a strong focus on food & grocery and personal sales.
Convenience Stores
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due
to the convenience premium.
COMPANY PROFILE
Big Bazaar: Big bazaar the flagship retail chain of the Future Group is on the verge of achieving a unique milestone in the
History of World Retail by being the first hypermarket format in the globe to rollout fastest 101 stores in a short span of seven
years. Currently, Big Bazaar has 98 stores in the country. Big Bazaars journey began in October 2001, when the young, first
generation entrepreneur Kishore Biyani opened the country’s first hypermarket retail outlet in Kolkata. Big Bazaar, with its wide
range of products and service offering, reflects the aspirations of millions of Indians.
City Center, Mangalore: City center is the fifth largest mall in Karnataka, located at the K S Rao road in Mangalore. It provides
shopping, dining, entertainment and leisure activities. City Centre, Mangalore, first opened its doors on April 25, 2010 land
marking Mangalore's retail sector, and becoming one of the leading retail and leisure destinations in the city. At the time, it
virtually redefined the concept of "malls" for the region. As the first large-scale, mixed-use shopping destination, complete with
retail outlets, restaurants, entertainment facilities, City Centre created an international dimension for one-stop shopping and
entertainment for the city of Mangalore, bringing it to an entirely new level. City Centre encompasses over 8, 50,000 sq. ft. of
retail space. The mall boasts a wide diversity of outlets spreading across five floors with over 149 retail stores and services. Key
anchor stores include Lifestyle, Westside, Max, Reliance Trends, Reliance Digitals, Reliance Jewels, Reliance Time Out, Reliance
Footprint, and Fashion at Big Bazaar & Spar hypermarket. Its entertainment facilities include Fun City that is a complete family
entertainment zone offering fun activities like with arcade games, children’s shooting games, all coin operated games, bumper
cars, and many more in a single place. Fun City also has an exclusive birthday party hall and offers the best birthday party ever for
parents and kids looking to have an out-of-home party experience.
Forum Mall: The forum mall is one of the largest shopping mall in the country. The forum is s place one can go to for almost
anything one wants to buy. The mall has everything from shoes to exercise equipment, from home furnishings to electronic goods.
The Forum was Bangalore's first full-fledged mall with a multi-storey bookstore, 12 cinema halls and other entertainment
facilities. The mall is an attraction for tourists. The shopping mall houses 72,000 m2 (780,000 sq. ft.) of shops over five levels. A
major attraction at the mall is the multiplex, PVR. With over 100 different brands at discount prices, and three floors of undivided
attention for you, shopping will never be the same again.
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ANALYSIS AND INTERPRETATION
Consumer Buying Preference for the Product in Shopping
Malls
74% of people prefer to buy only textile products from the
shopping malls and 12% of people buy FMCG from the
shopping malls and other 7% of people buy only electronics
and 6% of people prefer to buy gifting items and only 1% of
people buy utensils from the shopping malls.
Change in Purchasing Decision due to Convincing Skill of
Seller.
66% peoples opinion that their purchasing decision has
changed because of the convincing skill of seller in shopping
malls where as 34% of peoples are not agreeing this
statement.
Effect of Schemes and Offer on Customers
85% of peoples purchasing decision affected by the schemes
and offer given by the shopping malls where as 15% of
peoples purchasing decision is not affected by the schemes
and offer given by the shopping malls.
Consumer Preference for the Quality
People have different opinion about the quality of products
that are available in shopping malls. 63% people opinion that
the product available in shopping malls are high quality and
36% people opinion that the products available are moderate
quality and only 1% peoples opinion that the product are in
low quality.
Shopping Malls are Better than Independent Shops
35% of people visit shopping malls than independent shops
because all product are available in one place. 13% people
visit shopping malls for availability of branded products. 6%
people prefer to visit shopping malls because of quality
product available. Whereas, 46% said they visited because of
all three reasons.
Regularity in Visiting Shopping Malls
37% of people visit the shopping malls on monthly basis and
31% of people visit the shopping malls on once in 6 months
and 17% of people visit the shopping malls in once in 3
months and 15% of people visit the shopping malls on a
weekly basis.
Frequency of Purchasing
46 respondent’s opinion that their frequency of purchasing
has increased because of existence of shopping malls and
remaining 54% people’s opinion is that their frequency of
purchasing is not increased because of existence of shopping
malls.
Loyal Customers
People do not want to purchase from same shopping mall.
Their purchasing decision was keep on changing. 96% people
do not buy from same shopping malls.
Consumer Preference for the Product Available in
Shopping Malls
People have different of opinion on product available in
shopping malls. 21% people consider that product available
in shopping malls is expensive whereas major portion of
respondent (53%) opinion that only moderate priced product
is available in shopping malls. In addition, 26% of people
opinion that the product available in shopping malls are
cheaper.
Consumer Preference about Performance
People have different opinion about the performance of shops
in shopping malls. 60% people considered that performance
of shops in shopping malls is very good whereas 39% people
considered that the performance is average and only 1%
people opinion that the performance of shops in shopping
malls are poor.
Ranking Scale of Shopping Malls
Table-1
Sources: Authors Compilation
From the above table, we can find that majority of people give 1st rank to forum mall, which is more than other malls and 2nd rank
to city center, and 3rd rank to big bazaar.
Malls Rank
I. II. III.
Big Bazaar 21 28 51
City Center 39 46 15
Forum Mall 45 30 25
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The Reason for Frequent Visit to Shopping Malls
Graph-1
Sources: Authors Compilation
28% of people visit shopping malls for shopping purpose and 17% of people visit shopping malls only for watching movie and
15% of people for time pass whereas 4%of people visit to have food in shopping malls and only 2% of people for play games
Rating Scale of Shopping Malls
Table-2
Big Bazaar
(1-10)
City Center
(1-10)
Forum Mall
(1-10)
Parking Space 6.43 7.81 7.40
Quality 6.89 7.91 7.88
Availability Of Branded Products 7.14 8.15 8.01
Services 7.03 7.81 7.67
Hygiene And Cleanliness 7.19 8.03 8.23
Sources: Authors Compilation
From the above table, it is clear that city center has been rated highest in parking space, quality, availability of products and
services. In hygiene and cleanliness, the highest rated mall is forum mall.
FINDINGS OF STUDY
According to our research, we can found that most of the people prefer to buy textile products and FMCG from the
shopping malls. It shows that the people think if they buy textile products from malls that is qualitative and other things
like electronics, utensils and gifting items people buy from online marketing, which are very much convincing.
Most of the people visit the shopping malls on a monthly basis, some people visit the malls on weekly basis, and some
people visit in once in 3 month or once in 6 month.
Most of the peoples purchasing decision changes with the offer and schemes given by the shopping malls.
96% of people agreed that they are not loyal customer of a specific mall they change their preference as per the service
provided by the malls.
Most of the people’s opinion that their frequency of purchasing has not increased because of existence of shopping
malls.
Most of the people’s opinion that their purchasing decision changes with the convincing skill of seller in malls. Some of
the sellers in malls can attract any customer by their effective communication.
Most of the people’s opinion that the prices of products available in shopping malls are moderate.
17%2%
28%
4%
15%
34%
a) Watching movies
b) Play games
c) Shopping
d) To have Food
e) Time pass
f) All of the above
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According to our research, we found that people have different opinion about the product available in shopping malls.
Most of the people opinion that the products available in shopping malls are high quality products.
Most of the people considered that the performance of shops in shopping malls is very good this shows that they are
satisfied with the performance of shops in shopping malls.
Quality of products, availability of all branded products at one place is the prominent reason for people to choose
shopping malls than independent shops.
Most of the people given a first preference to forum mall and last preference given to big bazaar this shows that they are
very much aware about the services provided by the forum mall.
SUGGESTIONS AND RECOMMENDATIONS
Shopping malls should provide offers and discounts on electronics so that customer can choose these shopping malls for
their purchase.
It should adopt certain strategy to retain its existing customers so that consumer will be loyal to only one mall.
From the research, it is found that people prefer to buy textile products from shopping malls so branded companies
should concentrate on utilizing this opportunity.
Since around 30% of the people visit, the shopping malls rarely. The malls should develop strategies to attract these
people and improve their business.
Since more than 90% of the people are not loyal customers of a specific mall. They should concentrate on the quality of
service provided by these malls.
Since most of the peoples opinion that their frequency of purchase it is not increased because of existence of malls.
Effort should be made by the shopping mall to increase the frequency of purchase by the customer.
The shopping malls should conduct events so that it can draw large number of crowd towards the mall.
CONCLUSION
Malls are an easy and convenient addition to society with the presence of multiple stores in the same location; consumer can buy
their material needs and wants without leaving the single overarching structure so the shopping malls provide quality service to
the customer up to their expectation.
REFERENCES
1. Retrieved from http://www.citycentremangalore.com/AboutUs.aspx?id=2
2. Retrieved from http://www.fibre2fashion.com/industry-article/free-retail-industry-article/indian-retail-industry-it...
3. Retrieved from http://www.knowthis.com/retailing/what-is-retailing
4. Retrieved from https://en.wikipedia.org/wiki/User:Tuxide/Wikiproject_Retailing#Project_goals
5. Retrieved from http://teamexcellence.co.in/retail.html
6. Retrieved from http://www.newworldencyclopedia.org/entry/Shopping_mall
7. Retrieved from http://www.studymode.com/essays/Essay-About-Malls-805785.html
8. Retrieved from http://suryawires.com/sector.php
9. Retrieved from http://theforumexperience.com/mallinfo.htm
*****
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IMPACT OF LEADERSHIP ON THE DEVELOPMENT OF SELF HELP GROUPS
M. Madhavi21 Dr. N. Thirupalu22
ABSTRACT
People come together into groups to achieve a number of needs, which can only be met through collective efforts. Human
groups as such constitute an important social unit in all societies and India is no exception to that. Poverty and Illiteracy are
the main social drawbacks of the developing countries. India with its vast rural population is also becoming vulnerable to this
problem. Because of the illiteracy majority of the population is excluded from the benefits provided by the formal economic
and financial system of the country. This is technically termed as financial exclusion. To bring the excluded sections of the
society into the mainstream financial system, the concept of financial inclusion has emerged as a powerful tool. An efficient
financial inclusion helps in easy availability and accessibility of finance to all the sections of the society irrespective of their
standards of living. Self Help Groups are Groups of women in Rural India who have joined them to uplift their social and
economic status by participating in some productive and developmental activities through the initiatives of Financial
Inclusion and Micro credit facilities extended by NGOs in some areas and supported by National Bank for Agricultural and
Rural Development in others. The mainstream studies suggest that the development of the Groups depend on the Leadership
of the Group largely. Hence, the authors have taken a study on the “Impact of Leadership” on the development of the Groups.
The study is conducted in five selected mandals of Rangareddy District of Andhra Pradesh during 2013.
INTRODUCTION
The historical development of present day Self Help Groups can be attributed to the efforts of Muhammad Yunus, who is a
Bangladeshi banker, Economist and Nobel Peace Prize recipient. He was a professor of Economics where he developed the
concepts of micro credit and microfinance. In 1976, during visits to the poorest households in the village of Jobra near Chittagong
University, Yunus discovered that very small loans could make a disproportionate difference to a poor person. Jobra women who
made bamboo furniture had to take out usurious loans for buying bamboo, to pay their profits to the moneylenders. His first loan,
consisting of US$27.00 from his own pocket, was made to 42 women in the village, who made a net profit of US$0.02 each on the
loan. Yunus believed that given the chance, the poor will repay the borrowed money and hence micro credit could be a viable
business model.
EMERGENCE OF SELF HELP GROUPS
As discussed earlier, Poverty and unemployment are the two major problems of underdeveloped countries, to which India is no
exception. In India, at the end of the ninth five-year plan, 26 per cent of the population was living below the poverty line and in the
rural area; the percentage is slightly higher (27.10%). The overall employment rate is estimated to be at 7.32 per cent, while the
female employment rate is around 8.5 per cent. However, the rate of growth of women unemployment in the rural area is
estimated to be around 9.8 per cent. This is because of the low growth rate of new and productive employment opportunities. By
the end of ninth plan, the rate of growth of employment was only 2.47 per cent. Therefore, the Government of India has
implemented various schemes to reduce poverty and promote gainful employment opportunities. However, the most attractive
scheme with less effort is the “Self Help Groups”.
Self Help Group is a registered or unregistered group of micro-entrepreneurs having homogeneous social, economic background;
voluntarily coming together to save small amounts regularly. These savings contribute to a common fund and meet their
emergency needs in mutual basis. The group members use collective wisdom and peer pressure to ensure proper use of funds and
timely repayment there of SHGs can be formed with 10 to 20 members. These groups can avail themselves of financial facilities
offered by financial institutions and the government.
The strategy of SHG programs has emerged as a popular technique for the facilitation of micro-enterprise development by Government,
Non-Government Organizations and educational institutes in rural areas in India. These initiatives are not simply the expressions of neo-
liberal politics that favor entrepreneurship and markets as the key for development; they are also the expressions of rural people’s needs
and interest in their own participation and empowerment. Self-help as a strategy for social development emphasizes self-reliance, human
agency and action (Vijayanthi KN, 2000). According to social action theory, people take action towards their goals as groups within the
context of their social environment. They have their own, locally defined motives and beliefs, their own interpretations of the meaning of
a situation, and they control their own actions.
21Research Scholar, Dravidian University; and Director, Aurora’s PG College, Telangana, India, [email protected] 22 Professor, Dravidian University; and Professor, Department of Management, Aurora’s PG College, Telangana, India,
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The first effort in institutionalizing rural credit was made by the Government of India in the first decade of twenty first century
with the emergence of Co-operative Societies Act, in 1904. In 1975, Regional Rural Banks were promoted with the objective of
accelerating rural economic development of the identified target groups i.e., weaker sections comprising small and marginal
farmers, agricultural laborers, artisans, small entrepreneurs etc.
With a view to evolve supplementary credit strategies for reaching the unreached rural poor in the rural areas like the landless
agricultural laborers, rural poor women etc., in a transparent and a cost effective way, National Bank for Agricultural and Rural
Development (NABARD) has introduced in 1992-93, a pilot project for linking SHGs with banks. The programme has helped in
resurgence of an alternative credit system administered by the clientele themselves, who have organized themselves into Self Help
Groups. Thus, an informal credit system was evolved with the assistance from formal financial institutions. The agencies involved
in the scheme were NABARD, Banks, NGOs and SHG members.
LEADERSHIP IN GROUPS
Leadership may be defined as the influence that particular individuals (leaders) exert upon the goal achievement of others
(subordinates) in an organizational context. It is established through a number of early researches that leaders have an ability to
see how different aspects of a situation fit together and influence each other. They seek out alliances, opportunities, and approach
goals in a proactive way. They have a positive effect on others, which attracts support from those who have similar needs for
accomplishment (Lewin, 1946). Their self-confidence creates a belief in other people’s abilities; therefore, emphasis is placed on
empowerment and freedom. Leadership has two distinct aspects: i) the individual who exerts influence, and ii) those that are the
objects of this influence. Successful leadership depends, largely, on the environment and situation in which these dynamics exist.
Leaders facilitate group functioning. A leaderless group faces problems in maintaining order and focus on group functioning. All groups
either formally or informally elect or select leaders to facilitate the functioning of the group. The development of leadership significantly
affects the development of the group. As pointed earlier, the effectiveness of the group is measured on two indicators, i.e., the emotional
environment and the task orientation. It has been suggested that some leaders are more task oriented whereas some others are happier to
keep the team together. In groups, leaders provide different inputs to enhance the goal attainment. The leadership has the potential of goal
attainment. Unfocused leadership results in wastage and delays goal achievement. In such groups, the functioning would be stressful and
may lead to conflicts sometimes.
OBJECTIVES OF STUDY
To study the importance of groups and emergence of the groups as significant constituents of the Indian Rural Society.
To understand the conceptual background and to study relevant literature on Self Help Groups.
To study the impact of Leadership in development of Self Help Groups.
LITERATURE REVIEW
Mansuri (2011) observed that the emergence of women development in India depends upon closely interlinked, economic, social,
cultural, religious, psychological, and institutional variables. The rural women can be very effective agents of change for better
homes, better society and ultimately for the development of robust economy for India which is very much essential in the present
global scenario.
Parida (2011) is of the opinion that the women power needs to be well directed and motivated on various developmental activities
so that women can be more productive and can become effective earners. NGOs are playing an active role in the promotion of
women lead self-help groups and these needs to be encouraged further.
Dhiren Vandra (2010) analyzed that SHGs had significant impact on the family of the members. Their status and standard of
living showed a positive change when compared to their status before joining the group. Majority of the women came out from
their household activities and started their own business however small it may be. The confidence level of women increased
immensely with this new development.
Srinivasan (2010) observed that the women members of SHGs declared that after joining the SHG they gained certain
commercial and marketing skills like borrowing from the bankers, selling their produce on their own. Due to this development,
they improved their bargaining power at the household and social fronts.
Tripathy (2004) revealed that the success of the economic activities taken up by the self-employed persons largely influenced the
poor people. The poor people were motivated by the decision-making process and broader financial base of the groups in their
village. They were expressed by the assets created by the group members and realized that group approach through SHGs is the
only means to achieve desired goals.
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DEMOGRAPHIC PROFILE OF RESPONDENTS
Andhra Pradesh is the leading state in the country in implementing the SHG Bank Linkage Program. In Andhra Pradesh, the
researchers have chosen Rangareddy District for convenience sampling. Five mandals Viz., Chevella, Hayath Nagar,
Ibrahimpatnam, Medchal and Tandur were selected randomly for the study. The following is a brief description of the mandals
taken for the study.
Chevella: Chevella is located at 60 Kms from Hyderabad and has 30 panchayats in its geographical area. It is a
shopping center for the nearby areas and active in SHG movement. There are 43 Village Organizations and Malkapur
division of Chevella is selected for the study, which consists of 83 SHGs. Among 83 SHGs registered, primary data
from 20 SHGs was gathered.
Hayath Nagar: Hayath Nagar is another mandal situated 20 Kms from Hyderabad in Rangareddy district, which is a
rapidly developing suburban area with 27 panchayats. There are 36 Village Organizations in this mandal and Kuntloor I
area is considered for the research where there are 65 registered SHGs and primary data was gathered from 20 SHGs
selected randomly.
Ibrahimpatnam: Ibrahimpatnam is located 50 Kms from the city of Hyderabad and has 22-gram panchayats in its
location. There are 30 Village Organizations in this mandal and Pocharam Village Organization is selected for the
study, which consists of 51 SHGs.
Medchal: Medchal mandal is 45 Kms from the city of Hyderabad with 27 village panchayats as constituents. There are
45 Village Organization in the mandal and Medchal-6 is taken for the research, where there are 65 SHGs.
Tandur: Tandur is town located at 125 Kms from the City of Hyderabad with 32 villages in the town. It is famous for
the stone and quarries are more in the town. There are 39 Village Organizations in the town and Narayanpur Village
Organization is selected for the study with 39 SHGs.
The size of the sample is decided as 1150 after considering the results of the pilot study conducted in Hayath Nagar mandal. These
1150 members belong to 100 groups of the five mandals taken for the study.
The socio economic profile of the respondents reveals that majority of the respondents are in the age group of 30-35years
representing 43.3 per cent of the sample followed by 25-30years and a minority of the respondents i.e., 8.7 per cent are above the
age of 50years. It has been observed in the Focus Group Discussion that the respondents with more than 50 years of age are either
widows or single members or left alones of the family. Yet, the drive to join in groups and enthusiasm to meet their livelihood
requirements is an appreciable factor. Increased awareness on the benefits of joining groups is also encouraging the individuals to
join the groups.
Majority of the groups taken for the study i.e., 45 per cent are having more than 4years of existence. In fact, it is observed that
groups with longer periods of existence have more affiliations. Leadership and other group factors are significantly influencing the
performance of the groups, with long duration of existence. The age of the group indicates its consistent efforts to improve
constantly through group formation and group working.
Of all the groups taken for the study, majority of the groups i.e., 43 per cent have 13-15 members, followed by 28 per cent groups
having 16-18 members. By this observation, the ideal group size preferred by the respondents can be assumed as 13-15. To be
more specific, the respondents opined that ideal size of the group is 15 and it is noted that initially majority of the groups are
starting with 10 members and increasing their size. In some of the groups, dropouts are also observed due to a number of reasons
like untimely payment, improper thrift discipline and other irregularities.
LEADERSHIP
Leadership is the key factor taken for the study. To study the effectiveness of leadership the following elements were considered:
Effectiveness and Capability of Leader,
Economic and Social Benefits due to the Leader,
Accessibility and reachability of Leader,
Pivotal Role in wealth creation,
Guidance by the Leader,
Representation of group interests,
Maintenance of accounts by the leader,
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Financial transparency and social justice by the leader,
Support during Crisis.
DATA ANALYSIS OF FACTORS TAKEN FOR STUDY
The following is the presentation of the data analysis of the factors taken for the study.
Table-1: Opinions of Respondents regarding the Effectiveness of Leadership
Scale Variables Number of Respondents Percentage
Strongly Agree 722 62.8
Agree 383 33.3
Neutral 20 1.7
Disagree 15 1.3
Strongly Disagree 10 0.9
Total 1150 100
Sources: Authors Compilation
As shown in the above table as well as in the graph, majority of the respondents are of the opinion that their leader is effective
which counts to 62.8 percent of the total respondents, followed by 33.3 per cent agreed to the same. 1.7 percent felt that they could
not say anything and 1.3 percent disagree that their leader is effective and a minimum of 0.9 percent opined that their leader is not
effective. The same is represented through a bar diagram above.
Table-2: Opinions of Respondents regarding the Economic and Social Benefits
Scale Variables Number of Respondents Percentage
Strongly Agree 737 64.1
Agree 370 32.1
Neutral 18 1.6
Disagree 16 1.4
Strongly Disagree 9 0.8
Total 1150 100
Sources: Authors Compilation
Regarding the economic and social benefits received due to their leader also majority of the respondents said that they strongly
agree the leaders are important for the benefits, contributing to 64.1 per cent of the total respondents. 32.1 per cent agreed to the
same, 1.6 per cent are neutral to this question, whereas 1.4 per cent disagreed and 0.8 per cent strongly disagreed that there are
economic and social benefits.
Table-3: Opinions of Respondents Regarding the Accessibility
Scale Variables Number of Respondents Percentage
Strongly Agree 595 51.7
Agree 436 37.9
Neutral 116 10.1
Disagree 3 0.3
Strongly Disagree 0 0
Total 1150 100
Sources: Authors Compilation
The above table shows the data related to accessibility of their leader. Majority of the respondents felt that the leader is accessible
to the group members representing 51.7 per cent of the sample, 37.9 per cent of the sample felt that they agree, 10.1 per cent of the
respondents felt that they could not say, while 0.3 per cent of the respondents disagreed to the statement.
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Table-4: Opinions of Respondents regarding the Pivotal Role of Leader
Scale Variables Number of Respondents Percentage
Strongly Agree 416 36.2
Agree 355 30.8
Neutral 259 22.5
Disagree 117 10.2
Strongly Disagree 3 0.3
Total 1150 100
Sources: Authors Compilation
The responses of the sample towards the pivotal role played by the group leader are represented above. There are different
opinions expressed by the group members in this regard. Majority of the respondents corresponding to 36.2 per cent of the sample
said that they strongly agree to the statement, closely followed by 30.8 per cent agreeing to the statement, 22.5 per cent are
neutral, 10.2 per cent of the sample disagreed and 0.3 per cent of the respondents said that they don’t feel that the leader is playing
a pivotal role.
Table-5: Opinions of Respondents regarding the Guidance by the Leader
Scale Variables Number of Respondents Percentage
Strongly Agree 712 61.9
Agree 89 7.7
Neutral 223 19.4
Disagree 63 5.5
Strongly Disagree 63 5.5
Total 1150 100
Sources: Authors Compilation
Majority of the respondents i.e., 61.9 per cent strongly agreed that they are receiving guidance by their leader, 7.7 per cent agreed
to that, whereas 19.4 per cent were not able to say anything, 5.5 per cent disagreed and the same percentage strongly disagreed
saying that they were not receiving any guidance from the leader.
Table-6: Opinions of Respondents regarding the Representation of Group Interests
Scale Variables Number of Respondents Percentage
Strongly Agree 268 23.3
Agree 506 44.0
Neutral 73 6.3
Disagree 124 10.8
Strongly Disagree 179 15.6
Total 1150 100
Sources: Authors Compilation
Majority of the respondents corresponding to 44 per cent of the sample agreed that their leader is representing group interests,
23.3 per cent strongly agreed to that, 15.6 per cent strongly disagreed saying that their leader is not representing them properly,
108 per cent said that they disagree to the statement and 6.3 per cent are neutral to it.
Table-7: Opinions of Respondents regarding the Maintenance of Accounts
Scale Variables Number of Respondents Percentage
Strongly Agree 571 49.7
Agree 374 32.4
Neutral 179 15.6
Disagree 26 2.3
Strongly Disagree 0 0
Total 1150 100
Sources: Authors Compilation
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The above table shows the responses of the sample on maintenance of accounts. Majority of the respondents representing 49.7 per
cent of the sample said that the leader maintains accounts, 32.4 per cent agreed to the same, 15.6 per cent are neutral, 2.3 per cent
disagreed to the statement while none of the respondents has strongly disagreed with the statement.
Table-8: Opinions of Respondents regarding the Financial Transparency
Scale Variables Number of Respondents Percentage
Strongly Agree 342 29.7
Agree 525 45.7
Neutral 214 18.6
Disagree 65 5.7
Strongly Disagree 4 0.3
Total 1150 100
Sources: Authors Compilation
Majority of the respondents corresponding to 45.7 per cent of the total respondents agreed that transparency is maintained in
financial matters, followed by 29.7 per cent strongly agreeing to the same, 18.6 per cent are neutral to this, 5.7 per cent disagreed
and 0.3 per cent strongly disagreed to the transparency maintained by the leader.
Table-9: Opinions of Respondents regarding the Support by the Leader
Scale Variables Number of Respondents Percentage
Strongly Agree 416 36.2
Agree 588 51.5
Neutral 143 12.4
Disagree 0 0
Strongly Disagree 3 0.3
Total 1150 100
Sources: Authors Compilation
The above table and graph show the opinions of the respondents related to the support extended by the leader to the group
members. 51.5 percent of the respondents agreed that they are receiving support from their leader, 36.2 percent strongly agreed to
the same, 12.4 percent are neutral, 0.3 percent stated that they are not receiving any support.
Table-10: Mean and Standard Deviations of Factors of Leadership
Factors Number of
Respondents
Minimum Score
given by
Respondents
Maximum Score
given by
Respondents
Mean Standard
Deviation
Effective Leadership 1150 4 5 4.65 .477
Economic Social Benefits 1150 4 5 4.67 .469
Accessibility 1150 3 5 4.42 .668
Pivotal Role 1150 2 5 3.94 .995
Guidance 1150 1 5 4.15 1.226
Representation 1150 1 5 3.49 1.366
Accounts Maintenance 1150 2 5 4.30 .810
Financial Transparency 1150 2 5 4.00 .839
Support 1150 3 5 4.24 .657
Average score 4.232 .938
Sources: Authors Compilation
The Mean and standard deviations of the factors related to Leadership are tabulated and presented above with an indication of
total number of respondents, the minimum and maximum scores awarded by the respondents to the mentioned factors. The least
score is 1 and the maximum score is 5 on a five-point scale. The higher the mean the higher is considered the significance of the
factor and the lower the standard deviation, the better is the significance of the factor.
In the above data, the economic and social benefits of the members got the score of 4.67 against the maximum score of 5
indicating a significant impact of the factor, while representation by the leader got the minimum score of 3.49 against 5. When
standard deviation is considered incidentally economic and social benefits got the least score of .469 while representation got the
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maximum score of 1.366 supporting the results of mean scores. The average mean of all the factors taken together is 4.232 and
average standard deviation is .938.
SUMMARY AND FINDINGS
As mentioned in the earlier chapters, the study of Self Help Groups is always interesting to the researchers and so does the present
study. Self Help Groups of the country are leading the program of micro finance throughout the world. The Indian Self Help
Groups are observed to be more dynamic and more cohesive inspite of the barriers of illiteracy and are proved excellent media of
social change. The following are some observations of the study:
Regarding the guidance provided by the leader, the respondents were very positive in their responses, said that their leaders were
active, and were always guiding them except in a few cases (5.5 per cent of the total sample) where the respondents were not
happy with the guidance provided by the leaders. When asked about the rotation of leadership, majority of the members opposed
saying that rotation will not vest responsibility on any of the leader, while a minimum were of the opinion that others may also be
given a chance of representing the group. Majority of the sample agreed that their leader is representing group interests before the
officials of banks, NGOs and other agencies as and when required and were good at communicating their difficulties also.
Majority of the groups opined that Banks and NGOs should promote them in getting more access to finance. The bank loans are
given to the groups, which have active leaders, and others are lagging behind in this aspect. There are certain groups, which have
active leaders still it is taking them more time to get the bank loan, as the leaders are not able to converse with the officials due to
illiteracy. To come out of this hurdle the groups can be given some literacy training also, which can improve their communication
abilities and self-confidence levels.
SCOPE FOR FURTHER RESEARCH
The present research was based on only Leadership influence on development of the groups. The behaviour of groups before
availing the loans and their repayment behaviour can also be studied to assess the performance of the groups. The study was
focused on five mandals of Rangareddy district only and other mandals can be studied for further research.
The scope can also be extended to other important indicators of performance like the nature of income generating activities,
spending patterns, improvement in the standard of living of the groups etc.
REFERENCES
1. Grace, Coyle. (1947). Group Experiences and Democratic Values, pp. 65. New York: Women’s Press.
2. Parida. (2011). Women Entrepreneurs in Rural Trade, pp. 50-56. New Delhi: Mangalam Publishers and Distributors.
3. K., Rajareddy. (2012). Self Help Groups in India: A study on Quality and Sustainability. APMAS, pp. 22-29.
4. Mansuri, B. D. (2011, September). Rural Women Entrepreneurs in India: Opportunities and Challenges. Kurukshetra,
pp. 17-19.
5. Malyadri, P. (2011, April). Union Budget 2011-12: Positive vibes for Micro Finance. Kurukshetra, pp. 19-22.
6. Meenai, Zubair. (2003). Empowering Rural Women: an approach to Empowering Women through Credit Based
SHGs, pp. 152-165. New Delhi: Aakar Books.
7. Sharma, A. (2011, September). Women Empowerment: milestones and challenges. Kurukshetra, pp. 10-12.
8. Srinivasan, G. (2011, April). Rural Development: the focus, Budget 2011-12. Kurukshetra, pp. 15-17.
9. (2011). A Report on the Status of Micro Finance in Andhra Pradesh. Hyderabad, Andhra Pradesh: Society for
Elimination of Rural Poverty.
10. Suman, Kalyan Chowdary. (2012). Women empowerment through Entrepreneurship. New Delhi: Avon Publications.
11. Thomas, Ditcher, & Harper, Malcolm. (2007). What’s wrong with Microfinance, pp. 10-12. Jaipur: Rawat Booksellers.
12. Trecker, Harleigh B. (1948). Social Group Work Principles and Practices, pp. 56-59. New York: Women’s Press.
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13. Wilson, Gertrude, & Gladys, Ryland. (1949). Social Group Work Practice, pp. 63-68. Boston: Houghton Mifflin Co.
14. World Human Development Index 2012. Retrieved on 24 February 2012, from http://www.hdrstats.undp.org.in
15. Retrieved on 21 December 2012, from www.ikp.serp.gov.in accessed on 21st December, 2012.
16. Retrieved from http://www.academia.edu/10718758/Leadership_and_Motivation
17. Retrieved from http://www.etd.uasd.edu/ft/th8424.pdf
18. Retrieved from http://sukimadurai.blogspot.com/
19. Retrieved from https://prezi.com/9aomsf2dwwnf/motivation-dynamics-in-leadership/
20. Retrieved from http://eprints.uni-mysore.ac.in/15222/
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NATIONAL RURAL HEALTH MISSION (NRHM): A BIRDS EYE VIEW
Ashish Upadhyaya23 Dr. Simranjeet Kaur Sandhar24
ABSTRACT
National Rural Health Mission or NRHM as it could be established based on its mission documents was a Government of
India intervention to improve the public health sector of the country. The aim of the paper is to explore the basic structure of
the NHRM scheme and to understand it from various perspectives. The government of India launched National Rural Health
Mission (NRHM). It is found that the health systems in our country show a contrite movement. The skill and dexterity of
our private medical sector are booming, with medical tourism being on a constant rise and India being favored as a
destination of medical facilities by people abroad. The aim of the paper is to understand this very aspect.
KEYWORDS
NRHM Schemes, Medical Facilities, Contrite Movement etc.
INTRODUCTION
There is no universally accepted definition of health; In fact, there have been many definitions in vogue. To the laymen, health
means a sound mind in a sound body, in a sound family, in a conducive environment. The Health Survey and Development
Committee (1946) correctly points out that “the term health implies more than absence of sickness in the individual and indicates
a state of symphonic functioning of the body and mind in relation to his physical and social environment, so as to enable him to
enjoy life to the fullest possible extent and to reach his maximum level of industrious capacity”.
The National Rural Health Mission (NRHM) is a proposal embarked on by the government of India to undertake the health
needs of underserved rural areas. Commenced in April 2005 by the Prime Minister of the country, NRHM was originally allotted
the work of meeting the needs of 18 health states that were identified to be low in the health indicators. The Union Health &
Family Welfare Ministry chaired by Dr. Anbumani Ramadoss through its decision on 1st May 2013, has allowed the
commencement of National Urban Health Mission (NUHM) as a Sub-mission of an all-inclusive National Health Mission (NHM),
with National Rural Health mission (NRHM) being the other Sub-mission of National Health Mission.
Figure-1
Sources: https://2.bp.blogspot.com/-
dDy1ixqAAl8/T9oxpuUAPDI/AAAAAAAAAJo/bcV5_4tg5D8/s1600/NRHM+Approaches.jpg
23Research Scholar, Devi Ahilya University, Madhya Pradesh, India, [email protected] 24Associate Professor, Indore Institute of Science and Technology, Madhya Pradesh, India, [email protected]
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REVIEW OF LITERATURE
There is credibly high-quality literature in the subject matter of public health in India. Many books, papers and reports have been
published by national and international organizations like ICMR, WHO, UNICEF, UNDP and World Bank.
A paper on Public Management and Indispensable Public Functions (2005), published by World Bank offer an overview of how
different approaches to progress public sector management recount to essential public health functions such as disease
surveillance, health education, monitoring and evaluation, work force development and health policy development. Managerial
autonomy is significant for promoting adjustment and modernization. Intensification of hierarchical responsibility within public
health system is vital and needs to not only change in the capability, autonomy and performance of service managers, but also
necessitate change in monitoring systems.
An additional paper published by Public Health Foundation of India (2010), compact with the quality in health care in conditions
of safety, efficiency, timelines, responsiveness, equity, and human and physical resources. The study is based on result assessed
over time in secure delivery and maternal and neonatal mortality. The study was approved for Malaysia, India and Ethiopia. In
case of India, the study recognizes the prevalence of high amount of maternal and neonatal deaths and low institutional delivery.
Further, it highlights issues such as poor access, poor infrastructure and facilities, ineffective treatment due to poor skills,
dishonesty and lack of responsiveness as main problems.
Health system has to deal with issues relating to organization. This comprises potentially new health systems arranged with
measured importance to quality and performance. Information management is enticing stakeholders with the explosion of
information. The lowest income groups in India get the smallest share of subsidies for curative health care. To decrease inequity
and make services pro-poor, programs and facilities must be restructured and made easily accessible for poor. A demand-driven
move toward availability of health services requires enhancement in availability of essential services, accountability mechanisms
and empowerment of clients.
Leadership in health care management has to acclimatize to changes in terms of style, process and organization. With change from
feudalistic and paternalistic society towards knowledge society, the leader is expected, not unavoidably to have all right answers
but all right questions. People and technology management will be significant issues. Leaders of future should think of putting
together internal processes and systems to meet external needs. Organizational structures will move from pyramidal to flat
structures within which the locus of control will continually shift. With rapid changes in information technology, leaders of future
should perceive change; conceive change and deliver change, thus leading change from the front.
OBJECTIVE OF STUDY
The aim of the paper is to explore the basic structure of the NHRM scheme and to understand it from various perspectives. The
government of India launched National Rural Health Mission (NRHM) in order to realize and achieve the objective of a timely,
affordable and competent healthcare for each citizen. The private medical sector is enjoying an unprecedented boom, with medical
tourism being on a rise constantly and India being favored as a destination of medical facilities by people abroad. The aim of the
paper is to understand this very aspect.
RESEARCH METHODOLOGY
The paper is a result of an ample literature review that tracks the substance of NHRM and its basic concepts in the Indian scenario.
The study is conceptual in nature where past researches and text data are used to validate the concepts and to put emphasis upon
its importance. Various journals and books are used as support system for the analysis of the paper. Observational analysis is used
as a tool for data analysis.
DISCUSSION
Salient features of NHRM
Innovation in Human Resource Management Encourage right of entry to enhanced healthcare at household level throughout the Accredited Social Health Activist
(ASHA). ASHA would perform as a link among the Auxiliary Nurse and the village Midwives and be answerable to the
Panchayat. ASHA would make trouble-free the implementation of the Village Health Plan along with Anganwadi
worker, ANM, functionaries of other Departments, and Self Help Group members, below the leadership of the Village
Health Committee of the Panchayat.
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Reinforcement of Public Health Delivery in India New-fangled notion of Indian Public Health Standards begins. They are set of principles imagined to perk up the value
of health care services in the country under the National Rural Health Mission.
Strengthening PHCs Mission aims at strengthening of PHC for delivery of quality anticipatory, primitive, healing, and decision-making and
Outreach services through sufficient and continuous supply of essential quality drugs and equipment’s (including
Supply of Auto Disabled Syringes for immunization) to PHCs. Stipulation of 24 hour service in 50% .PHCs by
addressing shortage of doctors, especially in high focus States, through mainstreaming AYUSH manpower.
Strengthen CHCs Infrastructure strengthening of CHCs by espousal and performance execution of IPHS standards which support
Promotion of Stakeholder Committees (Rogi Kalyan Samitis) for hospital management and developing standards of
services and costs in hospital care.
Decentralized Planning This includes “District Health Mission” at the District level and the “State Health Mission” at the state level. District
Health Plan would be a signal of synergy between Village Health Plans and State and National level priorities for
Health, Water Supply, Sanitation and Nutrition. It also comprises involvement of PRIs in planning process to get better
right of entry of facilities.
Strengthening Disease Control Mechanisms National Disease Control Programmes for Malaria, TB, Kala Azar, Filaria, Blindness & Iodine Deficiency and
Integrated Disease Surveillance Programme have been integrated under the Mission. For improved programme delivery,
and new Initiatives have been launched for control of Non Communicable Diseases.
CONCLUSION
The NRHM is an overarching programme that attempts to consolidate all existing disease control programmes under a collective
umbrella while at the same time improving the infrastructure and capability of the healthcare system in the country. Monitoring
the use of the substantial funds involved also needs inter-departmental coalition and establishment of new systems. Innovative
organisations such as the Rogi Kalyan Samitis are yet to meet their full potential and decentralised planning has not fully taken
off. The concern that confronted facilities and services, like lack of synergy with other departments are an offshoot of the lack of
purposeful planning and effective monitoring – activities requiring committed groundwork so as to help determine health issues in
conformity with local needs. Steady and persuasive direction and leadership from the Ministry would be necessary for carrying
out the programme’s activities by the States in both effective and speedy manner. However, the Mission is the only step forward
and with superior State participation and effective monitoring of the fund usage, has the potential to transform health delivery
system in the country.
REFERENCES
1. Goel, S. L. (2010). Primary/Rural Health Care System and Hospital Administration. New Delhi: Deep & Deep
Publications Private Limited.
2. (2010). Public Health Foundation of India.
3. Bradley, H Elizabeth, Sarah, Pallas, Chhitj, Bashyal, Leslie, Curry, & Peter, Berman. (2010). Developing Strategies for
Improving Health Care Delivery: A User’s Guide to Concepts, Determinants, Measurement, and Intervention Design
by World Bank.
4. Gill, Kaveri. (2009). A Primary Evaluation of Service Delivery under the National Rural Health Mission: Findings
from study in Andhra Pradesh, Uttar Pradesh, Bihar and Rajasthan – Planning Commission of India (Working
Paper 1/2009 – PEO).
5. Ramani, K.V., Mavalankar, Dileep, & Govil, Dipti. (2008). Strategic Issues and Challenges in Health Management.
New Delhi: SAGE Publications India Private Limited.
6. Khaleghian, & Monica, Das Gupta. (2005). Public Management and Essential Public Health Functions. World Bank.
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7. Mahal, Ajay, J., Singh, F., Afridi, V., Lamba, A., Lumber, & V., Selvaraju. (2002). Who Benefits from Public Sector
Spending in India? New Delhi: National Council of Applied Economic Research.
8. Navaneetham, K., & A., Dharmalinga. Utilization of Maternal Health Care Services in Southern India – Asia Meta
centre of Population and Sustainable Development Analysis. Singapore: Institute of Asian Research.
9. Clar, Chrisitine, & Bilal, Iqbal Avan. Evolution of the Concept of Quality of Care With Respect to Clean Delivery in
Health System in High, Middle and Low-Income Countries.
10. Fleming, Fallon, L Jr., & Eric, J. Zgodzinski. Essentials of Public Health Management Jones and Bartlett Learning.
ISBN-13: 978 1-4496-1896-4.
11. Gerth, H. H., & C., W. Mills- Max Weber. (1958). Essays in Sociology. Fair Lawn, New Oxford University Press.
12. Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/8917/8/08_chapter%202.pdf
13. Retrieved from http://www.ias100.in/basix_archive_details.php?id=282
14. Retrieved from http://gsupsc.blogspot.com/2013/04/national-rural-health-mission.html
15. Retrieved from http://socioeconomyataglance.blogspot.com/2012/09/national-rural-health-mission.html
16. Retrieved from http://health.uk.gov.in/pages/display/69-plan-of-action
17. Retrieved from http://www.upnrhm.gov.in/site-files/Mission-Document.pdf
18. Retrieved from https://en.wikipedia.org/wiki/National_Rural_Health_Mission
19. Retrieved from http://www.nrhm.gov.in/nhm/nrhm.html
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RURAL MARKETING: CHALLENGES AND OPPORTUNITIES
WITH SPECIAL REFERENCE TO INDIA
Dr. Rajesh K. Mahajan25
ABSTRACT
Across the globe, there are approximately four billion people who live in extreme poverty. The marketing firms, all around are
painstakingly struggling to convert these people in to their potential customers. Business visionaries have argued that. These
people dubbed the “Base of the Pyramid,” and make a good base for a big market. Words biggest corporations have tried to
address the basis needs of the rural people by playing everything in sales from clear water to electricity, Form FMCG to
consumer durables. This present paper discusses the challenges of rural marketing and the opportunities observing the
prospective rural market. It also deals with the participation of rural India and the shift of Multi-National corporations low
aids the Indian rural market, vast marketing opportunities offers a positive effect on all the participants. Keeping in mind
these factors, the Indian rural market is observed as an emerging, high potential market across the world.
KEYWORDS
Potential, MNC, Opportunities, FMCG, Marketing etc.
INTRODUCTION
The marketing companies, all over the world usually search a homogeneous mass and believe that the rural consumer have no
diversity. The homogeneous mass as found out by the marketing companies has simple dealings suiting the companies’ point of
view. It is a general view that market are not found but made especially in context of Indian rural market of lately, the importance
and value of rural Indian market has increased with the increase in economy thus resulting into increase in purchasing power of
rural communities. However, it should be noted that rural areas differ widely and the response of the rural consumers. The concept
of Multinational companies work only in developed nations. There has been few problems in marketing in rural areas since it also
encapsulates the problems of power purchasing and communication and physical distribution in difficulties. There has been
offered substantial development programs in agriculture, health, education, electrification etc. The sensitive development in such
sections has led to uplifted living standards of rural population, which encompasses almost 70% of countries population. The shift
is marked net only in income but also in predication and consumption. In this context, the marketing in rural sector has become an
important strategic goal in marketing but unfortunately, very little attention has been paid towards this sector. The two facets of
consumer rural marketing that constitutes the new center of rural development activities are production and marketing.
RURAL MARKETS IN INDIA
Any markets existing in area with less than 10,000 people can be designated as rural market. It is rather planning and
implementation of marketing function for the rural area. A live may marketing process digests good and Services form urban to
rural sectors and vie-verse. The Indian rural market guesses a large geographical land. Indian market is divided into rural and
urban market but Indian economy more or less depends on the rural demands. More than 70% of Indian population resides in
villages. Many big companies have felt the needs to set up their market in rural areas since true market leadership lies in trapping
the rural consumers. However, this sector faces many problems as the awareness is less amongst rural people hence the
consumerism also remains low. In addition, some areas face economic empowerment, education and health problem too.
IMPACT OF RURAL MARKETING
Indian Market has an urban marketing mindset and with such mindset, rural marketing is impossible. Indian Rural marketing has
emerged as an important discipline service them. The rural markets tend to contribute more share of profit than is urban
counterparts because of a high demand of consumption. These markets reach out to their customers, understand their needs and
navigate the supply of the goods accordingly. It is generally believed that in rural market, agriculture based marketing has larger
scope.
Rural market growth has increased five times more than the urban market. With a sudden shift in purchasing power on rural
communities, the rural markets have been able to acquire a good set up in countries like India and China.
25Principal, JC DAV College, Punjab, India, [email protected]
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The rural area in India is highly consuming industrial and urban manufactured goods because of the green and white revolution.
One in every rural household owns a mobile phone across the countries, electric fans; TV Set etc., have been in good demand
especially in rural market. Manufactured or processed good and services are being delivered to the rural consumer via Rural
Marketing. India and China happens to be a good great market for marketing developed goods. Such factors transform enormously
the marketers approach.
CHALLENGES FACED IN RURAL MARKET
Many Challenges are faced by the rural market as its features some of the characteristics like illiteracy, distant markets, potential
rail and road transportation etc. It also faces the pressure of distributing products and services amongst rural consumer while
apprehending their behavior. Socio-cultural factors, languages, lack of infrastructural facilities also adds to the problem of rural
market.
The distance is irreproachable in rural areas, service it’s so wide and distant. Each segment differs from the other. Each state,
district, region, differs from the other. Indian however has diverse culture and traditions hence differentiating each area form the
other.
To discern rural India is a difficult task. There are diverse spirits, feelings, shyness etc. Rural people can very well sense the tact
us and cheating of sales man, and hence maintain a healthy distance from them.
Salesman or People employed in marketing sector are not fully aware of the real needs of the rural consumer. They design
incorrect strategy of delivering goods and services in rural villages. Well conversant salesman in rural language is hard to find.
Though need of the market is studied from tope institutions from abroad but they fail to know the needs of the rural people and a
gap is left between there knowledge and reality. This is the reason of failure of many products in rural market.
Transportations and distribution facilities are proper infrastructure is the major requirement in this sector. Many villages are not
connected to rail transport. Subservices roads, poor connectivity, and the emerging intermediaries lead to greater losses.
Rural people opts for traditional and simple living standards they find it difficult to be adjusted to the new ones. Even educated
rich farmers stay away from branded products. Rural Consumers continuously buy things and are slow at decision-making they
buy the product after trying and testing.
The demands is not stable and regular in this area. Since the rural economy is agriculture based and agriculture depends upon
monsoon.
OPPORTUNITIES FOR MARKETRS
Myriad opportunities are being offered by the Indian rural market with its vast size and demands. Even the MNC’s fail to offer
such great opportunities to rural consumers.
Brands get more publicity and attract a large no. of consumers. HLL figures out that out of 5 lakhs villages in India, only one lakh
has been taped so far. It is a great indication of potential rural market.
The economy situations have been improving with various programs in rural areas. The increased income of absolute value.
The accessibility to the rural area has been made possible despite now development of the road network. This had made supply of
the goods and products to rural area much easy.
There has arrived a saturation point in the urban market and it has made it difficult for the market to reach out to new companies.
Thus, these companies are now targeting the rural market in search of greener postures.
CONCLUSION
The concept of rural marketing in India has just initiated. It has faced many challenges such as the strategies and plans devised to
deliver and satisfy the rural consumer and the dynamic of rural market of course. There are lots of potential backed in the rural
market like any other economy. However, along with this, this market faces several difficulty levels to achieve the targets while
exploring the market.
The placement of the rural market has been done and is seen as the futures of Indian markets. A lot more competitions has arisen
in the urban field, which has made it saturated. Therefore, the marketers need to explore the needs and demands of the rural
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customers before plunging into the market. The size of the rural market is fast expanding and offers a great scope for future.
Markets are made, and not found seems an opt and befitting phrase in context of the Indian Rural Markets.
REFERENCES
1. Pardeep, Kashyap, & Siddharth, Raut. (2006). The Rural Marketing Book. Biztantra Publication.
2. C., S. G. Krishnamacharyulu, & Lalitha, Ramakrishnan. Rural Marketing: Text and Case (2nd Edition). New Delhi:
Pearson Education.
3. Kashyap, P., & S., Raut. (2006). The Rural Marketing Book. New Delhi. Biztantra Publication.
4. Nabi, M. K., & K., C. Raut. (1995). Problem and Imperatives of Rural Marketing in India. Indian Journal of
Marketing, February-March: 16-24.
5. Rajagopal. (1988). Rural Marketing: Development, Policy, Planning & Practice. Jaipur: Rawat Publications.
6. Rao, K. L. K., & R., G. Target. (1985). Rural Marketing: A development approach. Vikalpa, 10(3), 315-326.
7. Velayudhan, S. K. (2002). Rural Marketing: Targeting the Non-urban Consumers. New Delhi: Response Book.
*****
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MARKETING STRATEGIES IN HANDICRAFTS IN INDIA
P. D. M. Raju26
ABSTRACT
India is one of the important Handicrafts in the entire world. It is highly labour oriented and is a cottage oldest and
traditional cottage industry in India. It is spread in every part of the country covering the rural and urban areas. The artisans
of this industry work on part time and fulltime basis. It provides employment opportunities to a large section of people
belonging to the weaker sections of the society. Indian artisans are facing cutthroat competition from the artisans of other
countries due to liberalization, privatization and globalization. The modern marketing techniques and methods adopted helps
the industry in solving their communication problems. Indian artisans will have an edge over that of other developing
countries of the world by updating its communication channel. This problem aims at prevailing an overview of the Indian craft
industry in general and the markets and the constrains behind the process of products reaching the end consumer in
particular.
KEYWORDS
Fama’s Ratio, Mutual Funds, Sharpe Ratio, Treynor’s Ratio etc.
INTRODUCTION
Since the down of civilization man is toiling art to know something about its nature. An unknown is always an enigma to human
beings. Man`s efforts to capture nature is not materialized science long. Nature provides everything to us the advantage of the
available natural resources people are creating safe and comfort zones. India lives in its villages. Man`s started living with fellow
human beings with the policy of live and let live.
In India different classes of people selected different professions as per their convenience and they were identified as per their
professions such as wavers, goldsmith, blacksmith, carpenters, barbers, fisherman, traders, priest, and so on. All this professions
have become hereditary and transfer by tradition from one generation to another generation. The raw materials produce from
primary sources were used to manufacture handicrafts. There was now interdependence between agriculture and handmade
industry. There was contentment among the people and lived happily in this materialistic world. With the advancement of
technology, their ideas proved the way to produce such goods and services, which were attracted to human eyes.
India has rich craft tradition distinguished by aesthetics and multi furious history of art. Indian crafts man and patterns were
mostly depictions of everyday archeological studies have revealed that during a period of manufacture for a given handicraft. It
can be deciphered from its productions techniques. From the times of cosmos the existence of crafts was there and they are
sometimes they serve purpose of exotic life. The iron pillars of emperor Asoka`s time is the splendid master pieces of art.
FORMS OF INDIAN HANDICRAFTS
There are different forms of handicrafts, which are having religious influence on Indian people. There is in separable affinity
between religion and Indian way of living from cradle to cemetery every human being is identified with some religion, caste,
creed and community. Indian society is influenced by various forms and religious influence will always having a lasting impact on
Indian contemporary society and its individuals even though Indian society is improvising the western culture from time to time.
DEFINITION
The term “HANDICRAFT” encompasses a wide range of artifacts. In the informal sector, which includes handicrafts has been
described by the International Labor Organization (ILO) as a part of economic activity characterized by certain features like
reliance on local available resources and skills, family ownership, traditional technology, skills generally acquired outside the
formal school system, un regulated and competitive markets.
IMPORTANCE OF STUDY
There are different types of handicrafts in our country. It is a development depends on the socio cultural and economic factors.
Even today, Indian artisans are depending on their traditional business. In rural areas, they depend more on intermediary. They are
exploiting the artisans by purchasing their products at lower prices and sometimes they even provide funds to the artisans at very
26Principal, Prabhas Degree & P.G. College, Andhra Pradesh, India, [email protected]
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high rates of interest. As a result artisans with creative ability are remind in poor economic conditions ware as the middle man are
becoming financially sound at their cost . As result the traditional craftsman are migrating to other sectors living behind their
traditional profession. India has past history of handicrafts and it is up to us to revive this noble craftsmanship, which depends
mainly on the creativity and imaginative thinking of the artisans.
SURVEY OF LITERATURE
During the last six decades several studies were conducted, explore the problems and prospects of rural industries in general and
handicrafts in particular. Rural India is connected with handicrafts and the lifeline. The perplexing problem before the parties in
power is to provide employment to those who are in employable conditions. However, in a populated country like India, providing
employment is a herculean task and more resources are required. Instead of depending on Government, many people prefer to
create self-employment by depending on handicrafts. This is the primitive profession whose traces can be found in the Vedic
literature. The Rig Veda literature being religion based describes mainly such objects and crafts were directly or indirectly
associated with religious rituals. It was evident that artisans used to make pottery, Weaving and Woodcraft etc.
Upadhyay (1973) made detailed review on the Vedas and Upanishads and made comments on the prodigious contributions of
village crafts to India`s external trade. Several studies suggested and witnessed that there is lot of affinity between the
handicrafts and ancient Indian history. (KARVE 1950, Kamala Devi 1958, Aruna 1959 And Khosla 1959). All these
contributors have recorded that India has an extremely rich craft tradition distinguished by great aesthetics and multifarious
art history.
Steps were also made to identify the prominence of rural crafts in the socio – economic development of rural communities to
whom the production of this industry belongs. Mehta (1958) was of the opinion that these rural artisan units are part of rural
economy with an object of providing employment to youth. several other contributors such as Bedi (1958), Rostan (1972),
Reva (1965), Myrdal (1968), Rao (1970), Peter (1971), Jaya Prakash (1972) Deshpande (1984) Streefkerk (1985) and Rao
(1986) were of the opinion that the contribution of rural industries including handicrafts to the social and economic sectors
cannot be undermined when compared to modern industry.
MARKETING TRENDS
For purpose of E-Marketing is to exploit the internet and other methods of electronic communication to penetrate into target
markets. The internet is also helping the traditional methods of communicating with customers. The main benefits of E-marketing
are delivery of large amounts of information in a user friendly way. Brand building is the latest available benefit, which was made
possible due to the availability of broadband connections. Two-way interaction between the supplier’s customers and between
customers and other likeminded customers. These interactions are applied during the various stages of customer journey. Cost
effectiveness in transferring information and products on sale cheaply at short notice to the prospective consumers, through the
web, email, and Mobiles.
Social media provides an opportunity to interact among various people in which they create share and exchange information.
Social media depends on Mobile and web based technologies to create highly interactive platforms. It introduces substantial
changes to communication between organizations, communities and individuals. Social media is differentiated from traditional
media in many aspects such as quality, frequency, usability and performance. Internet users spend more time with social media
sites than others at the same time the total time spend on social media `US` across pc and mobile devices increased by 37% to 121
billion minutes in the year 2012 when compared to 88 billion minutes in the year 2011. Social media includes negatives internet
forums web block, social blocks, micro blocking, wikis, social networks, pictures, video, social Book making etc. They provide
the user with different interaction possibilities ranging from simple chart to multi video conferences and exchange of email
messages to the participation in blocks and so on the web site is no longer a static page but a dynamic platform which gives scope
to the users the generation of content and the possibility of sharing their own experiences. With billions of customers, available
firms are coming up with new approaches to promote their brands and products online in a big way.
MARKTING STRATEGIES IN HANDICRFT INDUSTRY
Marketing involves large number of activates including marketing research, product development, distribution, pricing personal
selling, sales promotion, branding etc. Marketing activates are compared with other activates to sense, serve and satisfy customer
needs while meeting the goals of the organization. Handicrafts units are mostly run by individuals with their family members who
cannot effort to have an organized market in system. The artisan cum proprietor of the unit takes care of all the activates involved.
He spends most of his time on producing goods and in acquiring raw materials because of his literacy; he is not well versed with
market information relating to his products. The primary marketing aspects such as product price, place and promotion are
discussed as under.
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Product: It includes packing, color, price, prestige of manufacturer and retailer
Product Line: Marketing a single product is very uncommon in the present Days. Many firms offer a verity of product line. A
product line is a group of products according to customer needs. Change in product line depends on number of factors such as
tastes and fashion of the consumer nature of competition prevailing cost structure of the organization and so on. The handicrafts
units produce a number of products under the concept of product line. The artisans had new product and delay some of the
products as per the market conditions existing. They withdraw products, which are not profitable.
Product Planning and Development: It is found even in handicrafts they are the products of creativity and workmanship. They
create excellence in their products with the help of product planning and development. They undertake the process of expansion
and when there is demand for their products, they may even extend their production in anticipation of future demand. However,
expansion involves capital investment. Expansion means mechanization or enhancing the Existing capacity.
Pricing: It is a monetary expression value and is a point of exchange process. Buyers and sellers through negotiations say prices.
Through the process of bargaining both the parties, arrive at the anticipatory price. Setting one prices for all buyers is the modern
idea. The artisans are not able to estimate the exact cost of production due to several reasons as a result. They find it difficult to fix
the price based on cost of production. The craftsmen fix prices of articles basing on market acceptance and based on the price
offered by master craftsmen, dealers and co-operative society. Generally, prices fixed by craftsmen himself. Dealers will influence
the fixing of prices.
Place: Distribution is concerned with activities involved in transferring goods from producers to the end users. It includes
transport, storage and promotional activities. The artisans depend mostly on dealers and co-operative societies in marketing their
finished products some producers sell directly to the consumers. While others sell to dealers and co-operative societies but co-
operative societies are not servicing as a proper channel of distribution so, the craftsmen depend more on dealers and co-operative
societies to sell their product to the consumers.
Promotion: It is communicating the information to the buyer and seller to change the attitudes and behavior of consumers.
Promotion mix includes advertising, sells promotions, personal selling, publicity and packing. Craftsmen cannot under take
advertising because of the involvement of finance. Therefore, handicrafts corporations are under taking the work of publicity,
exhibitions, printing of brochures and participation in trade fair. The corporation will also under take to setup hoardings in
important places, near tourists centers etc., which service as a means of publicity other forms include participation in trade fairs,
sponsoring trade sending study teams to other states in the country etc.
CONCLUSION
There is vast cultural history to India and Indian handicrafts are accepted worldwide .Artisans are the reason for everything. The
future depends on the decisions taken by them today. In the corporate strategy, branding is important. Hence, artisans have to
involve in the brand formation strategy. The handicraft sector should not neglect the brand name under any circumstances. Time is
changing. What is permanent in this world is only time. New technologies are coming to the forefront of the customer. We have to
use information technology to get recognition within a short span of time. If appropriate steps are initiated this sector will thrive
further and gives good foreign exchange and employment to local artisans. The need of the hour is long-range vision and political
dynamism that takes the handicrafts sector to higher heights in the years to come.
REFERENCES
1. Prajapati, & Laila. (1981). Development of Handloom Industry. New Delhi: Deep & Deep.
2. Thaimani, K. K. (1987, November 24-26). Handicrafts during seventh five-year plan. In National Seminar on
development and Management of Handicrafts Cooperative, VAMNICOM.
3. Dak, T. M. (1989). Rural Industrialization: Challenges and Responses, pp. 23-24. Delhi: North Book.
4. Florence, K. (2005). Uganda Handicrafts Export Strategy (ITC Report).
5. (2010). Euro Zone Crises To Hamper Leather Industry. Resource Center RCIP. Retrieved from
http://www.fddiindia.com/publications/newsletter/2010/006-June/FDDINL_264_25.06.2010.pdf.
6. Sanyal, S., Banerjee, S., & Majumder, S. (2010). India’s Leather in the World Market: Exploration of Recent Trends.
Trade and Development Review, 3(1), 22–58.
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7. Retrieved from http://www.gjms.co.in/index.php/gjms/article/view/76
8. Retrieved from http://southren.ca/the-difference-between-new-media-and-social-media/
9. Retrieved from http://www.slideshare.net/akshatsrivastava4/dissertation-18628226
10. Retrieved from http://planningcommission.nic.in/plans/stateplan/upsdr/vol-2/Chap_b4.pdf
11. Retrieved from https://en.wikipedia.org/wiki/Social_media#Classification_of_social_media
12. Retrieved from https://en.wikipedia.org/wiki/Social_media#Distinction_from_other_media
13. Retrieved from https://en.wikipedia.org/wiki/Social_media
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LORD LINLITHGOW’S CORRELATION WITH INDIAN AGRICULTURE
& CONSTITUTIONALISM
Dr. Dharamjit Singh27
ABSTRACT
This research-oriented paper is an attempt to study the background based on which Victor Alexander John Hope, 2nd
Marquees of Linlithgow was appointed as the Viceroy and Governor General of India in 1936. He remained associated with
India in two official capacities. One was as Chairman of Royal Commission on Agriculture in India from 1926 to 1928 to
know the problems of the development of agriculture and of Indian peasant, the other one was his crowning position on
exalted post as Chairman, Joint Select Committee of British Parliament in 1933 to do the spade work in relation to the
constitutional reforms in India. To give justice to the theme explored, the author has consulted the Government of India files
available with National Archives of India, New Delhi and the then existing national and international level newspapers of
1934-1935 besides examining the parliamentary debates of Great Britain and related memoirs, reminiscences and
biographies in the reputed libraries of Delhi.
KEYWORDS
Royal Commission on Agriculture, Joint Select Committee of British Parliament, Indian Peasant, Viceroy and
Governor General of India etc.
INTRODUCTION
Lord Linlithgow is counted among those great Viceroys and Governor Generals of India whose regime was exceptionally longer
and who was acknowledged by the British Government remarkably competent. His appointment was based from his earlier two
august appointments, one in India, which gave him a chance to travel different parts of India to diagnose the intricacies of rural
economy and the other in Britain to have first-hand information of constitutional complex predicament of India. As Chairman of
Royal Commission on Agriculture, he travelled widely in the rural parts of India and assimilated their problems. As Chairman of
Joint Select Committee of the two Houses of British Parliament he got a chance to share with twenty two delegates of British
India to finalize constitutional recommendations for India and to have the constitutional view of the White Paper of 1931 and
subsequently the Government of India Act was promulgated on the recommendations of his masterly constitutional report. The
present paper is organized into five sections. Section I provides the introduction about the concept. Section II shows the
undertaken objective of the study. Section III deals with research methodology with sources of data and sample size. Section IV
presents detailed discussion and analyses the empirical results of the study. Section V summarizes and concludes the present
study.
OBJECTIVE OF THE STUDY
The objective of the study is to see how Lord Linlithgow remained linked with India from 1926 to 1935 before being elevated as
Viceroy of India and to analyses what was his performance as Chairman of Royal Commission on Agriculture and Joint Select
Committee of British Parliament.
RESEARCH METHODOLOGY
Contemporary Government of India files, National and International News Papers available at National Archives of India, New
Delhi have been consulted to prepare this research oriented manuscript. In order to give objective look to the theme, historical
research methodology has been practiced. The biographies and memoirs of different Viceroys have been exhausted to have a fair
picture of the subject.
DISCUSSION
Victor Alexander John Hope, the second Marquess of Lord Linlithgow presided over the fortune of India as its Viceroy and
Governor-General for seven eventful years from 18th April, 1936 to 20th October, 1943. His tenure of office was longer than any
other viceroy and fraught with graver anxieties arising out of historic events than that of any of his predecessors.1 He was born on
September 24, 1887 as the eldest son of the first Marquees of Linlithgow and the Hon. Hersey de Moleyns. He belonged to an old
and illustrious line of Scotitish noblemen. The father of the Viceroy-designate, the first Marquees of Linlithgow (created in 1902)
27Principal, Mata Sahib Kaur Girls College, Punjab, India, [email protected]
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was the first Governor-General of the Commonwealth of Australia, 1900-1902. Lord Linlithgow succeeded to the title, the year he
attained his maturity (1908)2 He was made Chairman of the Departmental Committee on the Distribution and Prices of
Agricultural Produce in 1923.When Ramsay MacDonald’s Labour Government came into power in 1924, he acknowledged the
Deputy Chairmanship of the Unionist Party organization. He was chosen Chairman of the Royal Commission on agriculture in
India. He worked in that office until 1928 when he was made G.E.C.I.E and Knight of the Thistle. He received an invitation to
accept the Chairmanship of the Unionist Party in succession to Colonel Stanley Backson, who had been appointed Governor of
Bengal in 1926. He declined the offer saying that he was reluctant to leave the work he had in hand.
When a Joint Select committee of the two Houses of British Parliament was constituted to prepare the draft of the Government of
India Act 1935, Linlithgow was appointed its Chairman (1933).3 He was also the Chairman of Market Supply Committee, Meat
Advisory Committee and later on the Board of Trade4 (1933-1936)4. He was the President of the Edinburg and East of Scotland
College of Agriculture and a fellow of the Royal Society of Edinburgh. He served as a Director of Bank of Scotland; Scottish
Widows Fund; Life Assurance Society; j& P Coats, Ltd. The Royal commission on Agriculture in India (1926-1928) with Lord
Linlithgow as its Chairman was appointed to examine and report on the then existing condition of agriculture and rural economy
in British India and to make recommendations for the improvement of agriculture and the prosperity of rural population. Its
personnel was announced by His Majesty’s Government on 1st April, 19265. As Chairman of the Royal Commission on
Agriculture in India from 1926-1928 he had toured British India extensively. He spent two winters in India and with characteristic
directness of aim went to the almost isolated hilltop of Mahabelshwur, instead of being busy at Shimla, to draft a report, which
had borne much valuable fruit6. The masterly report enhanced Linlithgow’s growing reputation. In pursuit of his work on
Agriculture Commission he travelled 18,000 miles in two years, and to use his own words, he “only took one working day off’ in
that time. He took care to master humblest peasants personally to get real insight into their hard lot in life. His reports displayed a
masterly grasp of the complications of Indian agriculture, and great confidence in bold measures of land reform suited to the needs
of India.7
Linlithgow found the agricultural research in India in its infancy and claims of research receiving a half-hearted recognition. On
his suggestion, the Commission planned an Imperial Council of Agricultural Research, the primary function of which would be to
promote, guide and coordinate agricultural and veterinary research throughout India. He preferred that a definite programme of
experiment should be laid down to ascertain, with all possible accuracy, the extent to which fertilizers could be used with profit.
He discerned agricultural engineering section of agricultural departments neglected and favoured its complete reorganization. In
order to make the cultivator familiar with agricultural research results, he not only favoured ocular demonstration to be shown to
him, but also stressed that it must be within the means of the cultivator to whom it was recommended. Linlithgow noticed the
working capital of the Indian cultivator, his livestock, cornered by serious cattle diseases and then suggested to the Commission
the establishment of a central veterinary hospital with a number of dispensaries serving subdivision of the districts.8
Linlithgow wrote commentary on Indian peasant. He did not find large-scale farming in British India. The average holding of the
cultivator was found small, about five acres in the South and East, and elsewhere not more than half the holdings exceeded that
limit. In many cases, holding consisted of a number of small pots dispersed throughout the lands of the village, some of which
were as small as hardly to repay tillage. He witnessed the people dwelling in small villages, the mud houses of which were
huddled together in a more or less compact area situated in the midst of the fields from which the populace derived their
livelihood. He was sorry to see 500,000 villages, out of which only a small proportion had so far been touched by metal led road
or railway; and post and telegraph offices were many miles apart He looked upon the uncertainly of the monsoon rains in the
greater part of India as the major hazard of cultivator’s life upon which he was entirely dependent except in areas artificially
irrigated.9
Analyzing the problems of subsistence of Indian peasant in 1932, Linlithgow saw political difficulties confronting India as dust in
the balance when weighed against the problem of the future food supply on India’s ever-growing millions. Measured in terms of
the means of livelihood at the disposal of the individual cultivator, he summarized that India was a poor country. He realized that
India’s prosperity and riches, in an overwhelming degree, were in the whole structure of India’s economy. He looked upon the
Indian peasant as the chief source and creator of both her wealth and her greatness. In fact, for Lord Linlithgow, peasant was
India. In order to lessen the burden of the peasant, he favored not only good government, but also as far as the circumstances
allowed, inexpensive government10.Under the British colonial rule , the development of Agriculture in India remained distorted
and it was lopsided. No doubt, it rose to the level of National agriculture but it was never prosperous agriculture. Agriculture
production was made possible as per the requirements of raw material of British Industry raw material. Indian peasant continued
to suffer and was made wretched due to colonial policies. Improvement of agriculture was possible if there would have been
native national government.
He was also chosen Chairman of the Joint Select Committee of British Parliament of Indian Constitutional Reforms, with
authority to call into discussion with representatives of Indian States and British India, to consider the future upon the White Paper
of December, 1931 (Proposals for Indian Constitutional Reform contained in Command Paper 4268 of great Britain).11 It gave
him another opportunity to know India. The selection of the Chairman of Select Committee was a difficult task. Prior to
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Linlithgow’s selection , Earl of Peel, a former Secretary of State was fixed up for this post.12 Peel also accepted the invitation for
being appointed at the first meeting to be summoned for the afternoon of April 25,1933 at 2.30pm. However in the morning of the
day when the meeting of the Committee was to take place, Peel had been suffered a severe attack of phlebitis and could not
become available. Then Lord Linlithgow became the choice of the Committee and duly voted to the Chair. If Peel had not been
immobilized by phlebitis, Linlithgow would not have been Chairman and if Linlithgow had not been Chairman, he would have
been given no opportunity to exhibit the qualities that subsequently made Stanley Baldwin, the then British Prime Minister, to
pick him for the Viceroyalty13 . For month after month, Lord Linlithgow attended the ponderous meetings of the Committee. His
conduct of the affairs of that Committee throughout its prolonged sitting of eighteen months won general admiration and revealed
a broad-minded and statesmanlike view of the intricate problems involved.14 Twenty-two representative Indians from British India
and seven from the Princely India were appointed as assessors to the Committee. Linlithgow counted it as an honour and privilege
to work with the delegates from British India and thus to come again into direct contact with Indian problems. He did everything
possible to make it easy for the Indians to take an active part in the general discussions and the examination of witnesses15. He
was proved an admirable Chairman, fair and courteous to all interests. He ceaselessly labored over the task of evolving the new
constitution for India for eighteen months. He wrote the introductory chapter of the report. It was a brilliant piece of writing and in
substance; it could hardly have been bettered as a summary of the case for a generous advance in Indian self-government and for
the Federal line of advance recommended by the Committee16. Being the Chairman , he defended the safeguards incorporated in
the constitutional proposals for India in his broadcast address on 22nd November 1934 in London, arguing that the majority of
Select Committee were satisfied if the grant of responsible government to be a reality , it demanded the presence of certain
statutory safeguards.17In the discussion on the resulting India Bill, which ran the gauntlet of burly “diehard” opposition, he played
the useful part of a fully informed and convinced exponent of the merits of the federal scheme and also defended proposed
expenditure to be done in case the Federal Scheme was implemented. His preoccupation in those years with the work of Joint
Select Committee and his close association with the development of the Committee’s report into legislative form were generally
conceded to qualify him subsequently particularly of the task of bringing the new Act into operation.18 His work early as
Chairman of Royal Commission on Agriculture in India and then as Chairman of Joint Select Committee of British Parliament on
Indian constitution reforms paved the way for his subsequent dignified appointment as Viceroy and Governor General of India on
the night of 6th August 1935 from 10, Downing Street. Since he had long coveted the Viceroyalty, he accepted that with alacrity. 19
CONCLUSION
It can be aptly stated that Lord Linlithgow, before appointed as Viceroy, performed exceedingly well both as Chairman of Royal
Commission on Agriculture and Joint Select Committee of British Parliament. He became able to analyses the dense problems of
rural population of India in two years. His interest in the Indian agriculture was extraordinary. He was always for the welfare of
Indian peasant and was concerned with his poverty. He also became well conversed with constitutional tangle of India having
inter action with British India, Princely India and with British delegates. The knowledge of the problems of agriculture and
constitutionalism helped him to qualify subsequently for the Viceroyalty of India.
REFERENCES AND NOTES
1. (1979). Obituaries from the Times, 1951-1960, Reading-England, pp. 447. Hereafter cited as Obituaries from The
Times).
Dharmjit Singh, Lord Linlithgow in India 1936-1943, ABS publications, Jalandhar, 2005, pp.1-16.
Dharmjit Singh. British Imperialism and Political Impasse in India in 1941, pp.159-175. (2007). Research
Journal Social Sciences, 15(1). Punjab University, Chandigarh. Chandigarh: Chandigarh Publishing House.
2. (1935, August 08). The Times of India, pp. 9.
3. Joint Committee on Indian Constitutional Reform (session) 1933-1934), Proceedings (London 1934) Vol. I, pt. II, pp.1.
The Statesman, 7th August, 1935, pp.9
4. Who was Who, 1951-1960 (London 1961), V, pp.664.
5. (1926, April 02). The Statesman, pp. 7.
6. (1935, August 07). The Times, pp. 8. London.
7. (1928). Royal Commission on Agriculture in India (Abridged Report), pp. 4-31. Bombay. See also: The Statesman,
17th April 1936, pp. 9.
8. Department of Education, Health and Lands, Government of India, February 1929, File No. Agriculture ‘A’,
Proceeding No. 1. National Archives of India, New Delhi.
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(1928). Royal Commission on Agriculture in India (Abridged Report), pp. 4-31. Bombay.
9. Victor, Alexander J. H. Linlithgow. (1932). The Indian Peasant, pp. 13. London.
10. Victor, Alexander J.H. Linlithgow. (1932). The Indian Peasant, pp.18-19. London.
11. The Parliamentary Debates, Extracts Relating to Indian Affairs, House of Lords, Session 1932-1933, pp. 260.
London, 1933, Pt. I.
Joint Committee on Indian Constitutional Reform (session) 1933-1934), Proceedings (London 1934) Vol. I,
pt. II, pp.1
12. (1954). Viscount Templewood, Nine Troubled Years, pp. 89. London. Hereafter cited as Templewood, Nine Troubled
Years.
13. Templewood, Nine Troubled Years, pp. 89.
14. (1935, August 07). The Civil and Military Gazette, pp. 1.
15. Templewood, Nine troubled Years, pp.90.
Joint Committee on Indian Constitutional Reform (session) 1933-1934), Proceedings (London 1934) Vol. I,
pt. II, pp.33-34
16. (1935, August 08 & 1936, April 17). The Statesman, pp. 8 & 9 (respectively).
Joint Committee on Indian Constitutional Reform (session 1933-1934), Report (London 1934) Vol. I, pt. I,
pp. 1-244
17. (1934, November 24). The Statesman, pp. 9.
18. The Parliamentary Debates, House of Lords (Britain), Official Report, Fifth Series, 1934-1935, November 20 to
February 28, London, 1935, Vol. 95, p.453.
(1935, August 08). The Times of India, pp. 9.
19. Carl Bridge. (1986). Holding India to the Empire, pp. 141. New Delhi.
The Times, (London), 7th & 8th August 1935, pp. 10 &. pp. 12 respectively. His appointment caused no
surprise, as he was to implement in India what he has done as Chairman of two august bodies.
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RETAILING STRATEGIES FOR CUSTOMER SATISFACTION:
RESEARCH FRAMEWORK TO STUDY SELECT RETAIL CHAINS
Dr. Ravi Prakash Kodumagulla28
INTRODUCTION
The retail store industry continues to look for ways to create better service that will lead to an increase in customer satisfaction
and customer loyalty. The retail marketplace in the 21st century is fueled with competition, creativity, and innovation. Retail store
managers throughout world are taking into consideration managerial tools and processes to improving customer satisfaction. The
introduction provides the reader a general purpose of the importance of this research and outlines the scope of the research to
define the problems associated with the study. The purpose of the current study is to determine whether retail stores can improve
customer satisfaction through the store choice, merchandise display and store atmospherics employment of technology in core
service. If there is found to be a relationship between improved customer satisfaction through the store choice, display and store
atmospherics employment of technology in core service systems in the retail environment then the relationship merchandise will
be employed in a manner to predict future improvements. The reason for the study is to analyze whether an increase in customer
satisfaction can be achieved through store choice, merchandise display, store atmospherics and employment of technology in core
service. If a significant relationship is found, the results of the research study may offer solutions to the potential problems
associated with retail store chains thereby helping retail store chains increase revenues. The research objective highlights four
specific hypotheses that may be productive in gauging the evaluative quantitative outcomes of this research study. The retail store
industry is seen as a global organism intended to create competitive advantage through buying low cost consumer products
throughout the world and passing the savings on to consumers. Technology can afford retail store chains with the ability to
compete in a global economy, the retail store chain will still need to find attractive ways to increase consumers buying habits.
REVIEW OF LITERATURE
Although retail store chains compete on price, effective marketing allows retail store chains to differentiate something other than
price (“Stores,” 2008)1. The format for which marketing differentiate retail stores to impact a segment of the population means
that retail store chains will need a better understanding of how the product mix within their inventory affects their customer
overall experience. The consumer’s overall experience in this study is measured by the dependent variables: customer satisfaction
and customer loyalty. There are significant studies available to support the collection of this study. Baidya and Basu (2007)2
captured the effectiveness of marketing expenditures from a brand perspective. Park and King (2007)3 evaluated food retailing
efficiency through the role of information technology. Mitchell (2008)4 wrote about retailers attracting and retaining shoppers by
offering the appropriate mix of national and private label products. Britt (2008)5 incorporated the management process enabling
their managers to run reports on sales and other performance measures to handle inventory better.
OBJECTIVES OF STUDY
The study aims at exploring, in detail the following in the context of customer satisfaction in retail sectors:
To Study the ‘customer service’ offered by the retailer and evaluate its implications on delivering customer satisfaction.
To investigate the ‘store choice and issues’ and calculate their effect on customer satisfaction.
To evaluate the ‘merchandise displays’ factors and study their impact on customer satisfaction.
To examine the issues in ‘store atmospherics’ and measure their influence on customer satisfaction.
To critically examine the retailer’s strategies in relation to customer service, store choice & issues, merchandise display,
store atmospherics, and suggest a model.
SCOPE OF STUDY
The scope of the study is wide from a concept point of view, because it covers major aspects of ‘Retailing Strategies for customer
satisfaction’. However, from an empirical point of view, the scope of the study is narrow. On the aspect of retailing strategies, the
study confines to the twin cities of Hyderabad and Secunderabad, Andhra Pradesh. The study explores retailing practices in the
select Food and Grocery retail chains in Hyderabad & Secunderabad. The contribution of only four customer satisfaction related
attributes, viz., ‘customer service’, ‘store choice and issues’, ‘Merchandise Display ’and‘ Store Atmospherics’ are selected for the
study.
28Professor, Vishwa Vishwani School of Business, Osmania University, Telangana, India, [email protected]
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HYPOTHESES OF STUDY
The following hypotheses are formulated for testing in the study:
H1: Core and other service factors have a greater influence on customer Satisfaction.
H2: There is a significant difference between merchandise displayed in retail stores and customer satisfaction as per their
Income level.
H3: ‘Store Choice’ and issues have a significant effect on customer satisfaction according to their Income & Marital
Status.
H4: ‘Store atmospherics’ has a positive influence on customer satisfaction.
H5: A conceptual model in which the Store Service, Store choice, Merchandise display and Store atmospherics well fit
the data better.
RESEARCH METHODOLOGY
This Chapter presents the details of research methods used in the study. The first five sections describe the basic methodological
aspects of the present study. The other sections describe the data used for the study; include types of data and their collection
methods, research instruments, research design, sampling design and the tools and techniques for data analysis. The ‘sampling
method’, ‘method of collecting data’, ‘statistical tools’ and the reasons for choosing personal interview have also been explained
in this chapter.
Research Problem
Customer satisfaction measures how a product or a service performs in relation to customer needs and expectations. In conducting
satisfaction studies, most firms want to determine what the important features is and attributes are for their services or products
and then measure perceptions of those features as well as overall satisfaction. The evaluation of those elements is a crucial point
for understanding positive or negative market answers.
Sampling Design
Population Sample Universe
The population universe in the present study consists of all the Food and Grocery retail chains in the Twin Cities of Hyderabad &
Sec-bad. Presently in the twin cities there are around 16 food and grocery retail chains operating.
Sample Frame
The sample frame consists of all the Customer (Converts) visiting these retail outlets. Every retail store has a number of customers
who walk in and walk out. This study frame confines itself to only those who purchase the goods from the store. They are referred
to in the retail terminology as “Converts”.
Sampling Method and Size
Simple Random Sampling (Without replacement) was adopted for the present study. A sample of around 500 respondents, were
finally chosen for the present study.
Statistical Tools and Techniques used in the Study
For analyzing the primary data, statistical tools have been used in the Research Study, which included the following:
Frequency Tables,
Chi-square test; and Factor analysis.
EXPLANATION
It is evident from the Figure that the Customer has a set of perceptions on Store Choice & issues, Merchandise Display, Customer
Service and Store Atmospherics. The outcome of these 4 attributes yield his/her Satisfaction Process. The Customer may be either
Satisfied or Dissatisfied. The outcome of level of Customer Satisfaction may result either in positive or negative perceptions. Both
of these are learned perceptions and they add on to the Customer forming new set of perceptions about the retailer. This has a two-
way interacting effect on the Retailers Strategies. In this research both the +ve and –ve perceptions and their affect are not
measured, as they are the extraneous variables in the present study. The effect of all the extraneous variables is affecting the
present research study is treated as constant.
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CONCEPTUAL FRAMEWORK OF THE RESEARCH
Figure-1
FINDINGS OF STUDY
The study was aimed at measuring customer satisfaction through the specific attributes of research, i.e. viz., Customer Service,
Store choice, Merchandise displays, Store atmospherics that finally suggest the strategies to be adopted by the Retailer. The study
was conducted on customers in select stores of Hyderabad & Secunderabad. From the data collected and analyzed there upon, the
following findings are drawn:
It is understood that all customers of the 5 select retail chain stores observed that Retail management strategies is over
all satisfactory for the data collected and there is a considerable scope for improvement of the same.
The present study on Retail stores shows Male dominated responses and the ratios were 62% Male, 38% Female.
Marital Status of the respondents, who visited the stores, shows that 58% were married and 42% were unmarried.
Most of the respondents are from Nuclear family (71%); the remaining 29% are from Joint family. The respondents who
purchased (Converts) from the stores and having 2 or less than two children were 78.2% (cumulative). This shows that
the store is conveniently to the customers who are from Nuclear family, married and are having 2 or less children.
The percentage of respondents (Converts) were Employees (41.6%), Professionals (17.5%), Business (19.6%),
Housewives (6.4%) and Students 14.9%).
The majority of the respondents who are visiting the study stores, consist of Employees and business people, whose
income are ranging from Rs 10,000 to 40,000 per month, having own houses or apartment. This shows that people with
an income of above Rs 40,000 per month visiting the stores are less in number.
The most of the respondents (Store converts) whose monthly budget for food and grocery were ranging between Rs
1,000 – Rs 4,000.
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Only 40% of the respondents are having Store membership cards. The store thus has to motivate the customer through
gifts, discounts and benefits for more members to join. Therefore, it is evident that awareness to increase store
membership is a major factor to improve the customer satisfaction.
SUMMARY
Considering the market environment, leaders of retail chains are pressured to meet high growth measures in the area of revenue
growth. The pressure that retail store managers face in maintaining high growth measures deals with the challenges and the
complexities of consistently trying to match a product with the needs of the customer (Dion, 2008, p. 3). In respect to developing
and or improving customer retention, leaders of retail store chains may want to explore ways in which they can improve the
current systems and design a process model that may help retail store chains increase customer satisfaction beyond the national
average.
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A STUDY ON CONSUMER PERCEPTIONS IN TERMS OF PREFERENCES
AND ATTITUDES TOWARDS COCA-COLA SOFT DRINKS
Dr. U. Kanaka Rao29 D. Udaya Shekhar30
ABSTRACT
In this pare an attempt is made to understand and analyze Consumer Perceptions in terms of their Preference and Attitudes
towards Coca-Cola Soft Drinks. Coca-Cola brings back the Fizz to India Coca-Cola, the corporate nourishing the global
community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a gap of 16
years giving a new Thums-Up to the Indian Soft Drink Market. In the same year, the company took over ownership of the
nation’s top soft-drinks brands and bottling network. No wonder, these brands have assumed an iconic status in the minds of
the consumers. Coca-Cola India has made significant investments to build and continually consolidate its business in the
country, including new production facilities, wastewater treatment plants, distribution systems and marketing channels. Coca-
Cola India is among the country’s top international investors, having invested more than US$ 10 billion in India within a
decade of its presence and further pledged another US$ 400 million in 2015 for its operations.
PRELUDE
The term “Soft Drinks” refers to all types of non – alcoholic, carbonated, sweetened and flavored beverages. They are all
artificially sweetened. The soft drink industry has been undergone many changes with changing consumer needs, wants and
changing government policies. This formed the basis for different innovations in packaging such as bottles, cans, tetra packs, pet
bottles etc., in a variety of flavours. On a hot summer day, soft drinks become a welcome factor for its refreshing taste and as one
starts gulping, it gives some sort of satisfaction, which cannot be defined in words but can only be felt. The term “Soft Drinks”
refers to all types of non – alcoholic, carbonated, sweetened and flavored beverages. They are all artificially sweetened. The soft
drink industry has been undergone many changes with changing consumer needs, wants and changing government policies. This
formed the basis for different innovations in packaging such as bottles, cans, tetra packs, pet bottles etc. in a variety of flavours.
“Soft Drink” market is like an ocean, the demand for its can never be estimated properly, for as long as the competition from
unorganized sector and homemade drinks continue unabated. In Europe, there are many springs with natural effervescent water of
the sputnik use since not everyone will get this water as often as they wanted of human mind though of increased volume of say
and these early attempts marked the beginning of bottled soft drinks in volume. Around 1807, in the American continent, bottled
soda was on a large-scale, and the credit goes to Joseph Hawkins, who invented a machine and obtained a patent for
manufacturing and bottling carbonated water in 1809. This is the first instance of recorded patents in soft drinks.
With the invention made by John Mervin Nooth, an English man who developed an apparatus for the production of Co2 (Carbon
dioxide) during 1832 cholera epidemic, manufacturing fort drinks on scientific lines was made possible. (Effervescent water was
manufactured basing on this invention).
REVIEW OF LITERATURE
Swen and Combs, 1976 the concept of user satisfaction occupies a central position in marketing thought and practice. The
centrality of this is that the profits are generated by satisfying the needs and wants of the users or customers. This field of research
emerged in the early 1970’s and has accelerated in the recent years. It is hypothesized that customer satisfaction is positively
related to the product performance, dimension of which were categorized qualitatively into instrumental i.e. natural attributes of
the product like capability, usability etc. The expressive i.e. psychological or determinant attributes like color style etc.”
Oliver, L. Richard, 1981 “2It was later identified that the distribution channel plays a unique role in satisfying the needs of the
retailers than the manufacturer by proposing a non-traditional multiphase satisfaction programme based on major components of
satisfaction process.”
“3Today’s customers are becoming harder to please. They are smarter, more price conscious, more demanding, less forgiving and
many more competitors with equal or better offers approach them. The challenge, according to Jeffrey Gitomer, is not to produce
satisfied customers; several competitors can do this. The challenge is to produce delighted and loyal customers”.
29Associate Professor, Department of Business Management, Swarna Bharathi Institute of Science & Technology, Telangana,
India, [email protected] 30Assistant Professor, Department of Business Management, Madawalabu University, Ethiopia, [email protected]
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NEED FOR STUDY
The attitudes of the target consumers are highly vibrant showing the things of fast movement in their life styles. They are also
amenable to marketer’s purposive maneuvers. Second, Khammam soft drinks market is highly promising and there lies a lot of
potential, which is yet to be tapped. Third, the market has to two components representing both formal and informal marketers. As
consumer behaviour is crucial factor, which influence the buying decision of the target segment, it is very essential to study the
attitudes of the target customers.
STUDY OBJECTIVE
To study the consumer perceptions in terms of their preference and attitudes towards soft drinks.
METHODOLOGY
The data collected for the preparation present paper is gathered from the sources, which includes primary and secondary.
Primary Source
Majority of primary data is gathered by making a sample survey of 200 Respondents consisting of cross section of this societies
were selected on a random basis a schedule has been designed and administered among all the 200 Respondents the summary was
carried out in Khammam City during the month of May to June 2015. For analysis and interpretation of the data, percentages were
used.
Secondary Source
A part of the data is also gathered through the secondary sources, which include company website, previous reports, annual
reports, magazines and other published articles.
SCOPE OF STUDY
The study focuses its attention on consumer behaviour in general and soft drink markets in particular. Accordingly, only a few
selected characteristic relating to Soft drink buyers in relation to their socio-economic background and purchasing related matter
are studied. The survey was conducted during May and June – 2015 in Khammam on a selected group of 200 respondents.
ANALYTICAL TOOLS FOR STUDY
Statistical Tools used for analyzing the study data includes Simple Averages, Percentages, and Totals. However, for, it is of
descriptive nature and does not establish a causal relationship between characteristics chosen for study. Therefore, it does not
involve use of any quantitative methods.
Table-1: Predicting the preference of Coca-Cola Drink by both the Genders
S. No. Response Number of Respondents Percentage
1. Yes 123 65
2. No 67 35
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-2: Revealing the Reasons for the Discrimination on the basis of Gender in its Consumption
S. No. Response Number of Respondents Percentage
1. Because of Colour 10 15
2. More Stronger 8 12
3. More Acidic 42 62
4. Cannot Say 7 11
Total 67 100
Sources: Primary Data
Note: Unit of Measurement = Persons
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Table-3: Revealing the Background of the People who Consumes the Drink
S. No. Response Number of Respondents Percentage
1. City Culture People 67 35
2. Village Background 19 10
3. Both Area People 86 45
4. Cannot Say 18 10
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-4: Showing Particulars about Viewing of Coca-Cola Advertisement on T.V.
S. No. Response Number of Respondents Percentage
1. Yes 184 97
2. No 6 3
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-5: Showing the Impact of Advertisement on Respondents
S. No. Response Number of Respondents Percentage
1. Inspiring 72 38
2. Motivating 82 43
3. Encouraging 20 10
4. Not at all 16 9
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-6: Is your favorite Drink is Hygienic?
S. No. Response Number of Respondents Percentage
1. Yes 120 63
2. No 42 22
3. Cannot Say 28 15
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-7: Respondents Awareness of Coca-Cola Manufacturing Process
S. No. Response Number of Respondents Percentage
1. Yes 122 64
2. No 68 36
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-8: Respondents Satisfaction about Manufacturing Process
S. No. Response Number of Respondents Percentage
1. Yes 102 84
2. No 20 16
Total 122 100
Sources: Primary Data
Note: Unit of Measurement = Persons
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Table-9: Volume of Drink Preferred by Respondents
S. No. Response Number of Respondents Percentage
1. 300 ml 60 31
2. 200 ml 106 57
3. 500 ml 14 7
4. 1500 ml 10 5
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-10: Depicting Opinion about the Pet Bottle Drink
S. No. Response Number of Respondents Percentage
1. Yes 121 64
2. No 69 36
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-11: Depicting the Reasons for the Difference between Bottle Drink and Pet Bottle Drink
S. No. Response Number of Respondents Percentage
1. More Tasty 60 49
2. More Quality 42 35
3. More Fresher 10 8
4. More Stronger 9 8
Total 121 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-12: Depicting the Details Regarding Consumption of Pet Bottles
S. No. Response Number of Respondents Percentage
1. Occasionally 72 38
2. Outings 38 20
3. Home Consumption 41 22
4. Parties 39 20
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-13: Showing the Opinion Regarding the Affordability of Price
S. No. Response Number of Respondents Percentage
1. Yes 122 64
2. No 68 36
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-14: Depicting the Fair Price Quoted by the Respondents
S. No. Response Number of Respondents Percentage
1. Less than 5/- 51 75
2. Less than 8/- 02 03
Less than 6/- 10 15
Fair Price 05 07
Total 68 100
Sources: Primary Data
Note: Unit of Measurement = Persons
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Table-15: Depicting the Opinion Regarding the Awareness of “Rumor’s in Soft Drink Industry”.
S. No. Response Number of Respondents Percentage
1. Yes 124 65
2. No 66 35
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-16: Depicting the Belief of the Respondents in the Rumor’s
S. No. Response Number of Respondents Percentage
1. Yes 58 47
2. No 66 53
Total 124 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-17: Respondents Opinions of the Rumor’s on Soft Drinks
S. No. Response Number of Respondents Percentage
1. It Contains Pesticides 40 69
2. Caffeine Content 18 31
3. Alcohol 0 0
4. Cannot Say 0 0
Total 58 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-18: Showing the Opinion of Respondents about Film Star Advertisements
S. No. Response Number of Respondents Percentage
1. Attracting 120 63
2. Encouraging 42 22
3. Discouraging 11 06
4. Cannot Say 17 09
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-19: Respondents Opinion on Film Star Advertisements in T.V.
S. No. Response Number of Respondents Percentage
1. Yes 173 91
2. No 17 09
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-20: Furnishing the Opinion of those Respondents who Approved Film Stars in Casting for their Favorite Drink
S. No. Response Number of Respondents Percentage
1. Chiranjeevi 135 78
2. Venkatesh 10 06
3. NTR 10 06
4. Any of them 18 10
Total 173 100
Sources: Primary Data
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Table-21: Furnishing the Opinion of those Respondents who Disapproved Film Stars in Casting for their Favorite Drink
S. No. Response Number of Respondents Percentage
1. Political Leaders 0 0
2. Freedom Fighter 0 0
3. Doctors 8 48
4. Scientists 9 52
Total 17 100
Sources: Primary Data
Note: Unit of Measurement = Persons
Table-22: Respondents Advice on Modification in the Drink Manufacturing Process
S. No. Response Number of Respondents Percentage
1. Change in Colour 51 27
2. Change in Bottle 80 42
3. Change in Process 39 20
4. Change in Supply pattern 20 11
Total 190 100
Sources: Primary Data
Note: Unit of Measurement = Persons
SUMMARY OF FINDINGS
As per the survey 50% of the respondents prefer 200ml drink, as their volume of quantity for their thirsty needs
Majority of respondents take cool drinks occasionally. Coca-Cola Drink is consumed occasionally and mostly on
outings, it was confirmed by 70% of the Coca-Cola drinkers.
78% of the respondents approved Chiranjeevi as a film star in casting for their favorite drink.
Brands selection, Place selection, Time selection, Quantity selection are the decisions taken by the individuals
themselves. This phenomenon is found among all the respondents belong to different income group categories. The role
of the parents is insignificant.
75% of the respondent deposited less than Rs. 5/- as the fair price for their favorite drink.
Respondent has advised the modifications in the manufacturing prices, as per that 42% of the respondents advice there
should be change in the bottle, after every process.
The advertisement scheme of Coca-Cola has been successful as it is able to motivating people in taking this drink and
this is admitted by 43% of the Coca-Cola drinkers.
Customers have quoted that:
Price of the Soft Drink to be constant along with quality and quantity.
Use of pesticides issue was a major concern.
The domination of the retail shop sellers during the buying decision and brand selection process should be controlled.
Check the Brand availability from time to time with better distribution to the retail outlets.
SUGGETIONS
The supply management of the soft drinks should be according to the needs of the customers to facilitate the movement,
availability and various logistic based activities.
The maintenance of the sanctity and healthy environment will enhance the confidence among the users.
The influence groups for buying decision-making should be considered in managing the customers effectively.
As part of the advertisement, Coca-Cola should be given more publicity, to reach the customers in the remote areas.
As a matter of innovation the company, should also produce fruit juices and hot drinks like tea, coffee etc., which are
suitable to drink in winter and rainy seasons, which will improve demand and goodwill for the company?
Most of the respondents expressed that 200ml is sufficient for fulfilling their thirsty needs. Hence, it is to be supplied at
large size in the market, because some of them feel that it is scarce in the market.
Coca-Cola should also be made available in tins, in small towns.
Decrease a little bit of sweetness in the drink, since it is felt like taking more calories in diet.
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The above are the few suggestions gathered from the customers, from the survey made which may be some times
biased. Hence, the suggestions are totally based on the customer’s opinion.
REFERENCES
1. Schiffman, & Kanuk. (1991). Consumer Behaviour (6th Edition), pp. 220-234. . Prentice Hall.
2. Stanford, C. T. (1998-99). Customer Relationship Management: Market Trends and Opportunities (11th Edition), pp.
59-62.
3. Engle, Blackwell, & Kollatt (2000). Consumer behavior (3rd Edition), pp.155-167. New York.
4. Eenest, Dichtar. (1964). Handbook of Consumer Motivations (1st Edition), pp.12-19. McGraw Hill.
5. Philip, Kotler. (2012). Marketing Management (12th Edition), pp. 297-301.
6. Ramaswamy & Namakumari. Marketing Management (5th Edition), pp. 254-269. TMH Publishers.
7. Retrieved from www.cocacola.com
8. Retrieved from www.pepsi.com
9. Retrieved from http://www.academia.edu/5167110/CHAPTER_-1_INTRODUCTION
*****
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A STUDY ON VIDEO DISPLAY AS VISUAL MERCHANDISING TOOL
AND IT’S INFLUENCE ON CONSUMER BUYING BEHAVIOUR
WITH SPECIAL REFERENCE TO GROCERIES
Dr. Hemanth Kumar S.31 Dr. Sathyanarayana S.32
ABSTRACT
In today’s world, there is a variety of cereals, pulses and oil introduced in the market and has been increasing along with the
purchasing power of consumers. The greatest challenge faced by today’s generation while buying these cereals pulses and oil
is not how to cook but how to choose these essential commodities to cook. Today’s consumers have very little Knowledge
about these products and depend on the advice of their friends and relatives or try to experiment with these products, such as
rice in small quantities before they buy them in huge quantities. However, the knowledge about these essential commodities is
restricted to the present generation. In order to help and to educate the consumer about these essential commodities such as
the age of rice, the methods to be followed while cooking these cereals and pulses or the cleaning process it under goes etc.,
visual merchandising can be seen as important source of information provider to the consumers.
Aiming at providing the right information to consumers become an important aspect while making their decisions during their
purchase. Visual merchandising is majorly explored and exploited in apparels. However the current study aims at utilizing the
tools of visual merchandising
Such as visual displays (electronic displays) in order to provide necessary information about these essential commodities to
the consumers. Hence, this empirical study is aimed at presenting the Information to the consumers about the products
(cereals, pulses and oil) in an effective and creative way and understanding the impact of consumers purchasing behaviour
with the introduction of the product displays in the Store.
INTRODUCTION
Visual Merchandising Displays
Visual merchandising can be defined as the activity that matches effective merchandise assortment with effective merchandise
display (Bell & Ternus, 2006: 20). In today’s retailing environment, visual merchandising forms a central part of the retailer’s
marketing strategy. Besides the window displays, which are clearly designed with the purpose to attract walk ins by consumers
and encourage walk-ins, there are also in-store decorations that are designed to enhance the consumer’s comfort and convenience
while shopping, and overall to offer the consumer a better shopping experience. Taking into account the importance of visual
merchandising on retail businesses today, the single and most important reason for using visual merchandising displays is to
engage with and inspire shoppers, to encourage them to buy more of the products the retailer is selling, to increase sales, make
margin and generate a return on floor space. Visual merchandising also has a profound effect on the acceptance of a product, the
creating of the brand value perceptions, as well as the overall marketing of the product or brand.
PROBLEM STATEMENT
Visual merchandising is a concept where the consumers are influenced to buy products, which range from apparels to groceries.
The knowledge of consumers between the age group of 18-30 years is relatively low while purchasing groceries like rice, wheat,
pulses, oil. In order to educate the consumers with the introduction of information for these groceries is provided, which focus on
the origin of the product, age of the product, procedure to cook etc. Therefore, this empirical study aims at understanding the
acceptance of consumers with the introduction of visual displays, which provides the detailed information of products to these
consumers.
RESEARCH OBJECTIVES
To analyses factors influencing the buying behaviour of the consumers.
To understand buying behaviour of grocery items in retail stores.
To study video display as visual merchandising tool and its influence the Buying behaviour of consumer.
31Assistant Professor, M. P. Birla Institute of Management, Karnataka, India, [email protected] 32Associate Professor, M. P. Birla Institute of Management, Karnataka, India, [email protected]
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SCOPE OF STUDY
It is known that the shoppers feel that merchandising displays are very effective in influencing purchase decisions. The
information provided to the consumers about the Product quality helps in differentiating and comparing between the products. The
study is limited to the grocery products such as rice, wheat, pulses, oil etc., where the detailed information is provided to them.
Therefore, the retail industry can take measures to see the changing preferences of consumers and how they look forward to find
probable solutions in their day-to-day business. This strategy can prove to be a source of revenue generation by increasing the
sales volumes of the consumer products.
NATURE OF STUDY
This is an explorative study and concerns with finding the consumer preference towards the way buying groceries. The study is
based on the purchases made by the consumers in the retail outlets like the supermarkets, departmental stores, kirana stores, single
and multi-branded retail outlets where the groceries are sold.
Primary Data
In this study, the responses were collected through a structured questionnaire. Convenient sampling method was used in this
research. As the name implies, the respondents were choosen based on the convenience of the researcher. This non-probability
method is often used during preliminary research efforts to get a gross estimate of the results, without incurring the cost or time
required to select a random sample.
Sample Description
The sampling units were selected based on actual problem and the objective of the study. The focus was on the age group of 18-30
years as it forms the base for the research. The number of samples considered is 100
Table-1: Table Showing the Age Group of Respondents
Age Number of Respondents Percent
Less than 18 Years 02 2.0
18-30 87 87.0
30-45 07 7.0
More than 45 04 4.0
Total 100 100
Sources: Field Investigation
DATA REPRESENTATION AND INFERENCES
Table-2: Table Showing Factors Which Influence Respondents to Buy Products
During
Store Visit Location
Brand
Name
Offers and
Discounts
Varieties and
Assortments
Visual
Displays
Shopping
Experience Quality Advertisement
Highly
Satisfied (5) 31 18 18 20 12 20 61 9
Satisfied (4) 34 45 35 38 41 43 24 18
Neutral (3) 23 26 31 32 25 23 9 44
Dissatisfied (2) 8 11 15 10 19 15 4 24
Highly Dissatisfied (1) 8 4 5 4 8 3 5 9
Sources: Field Investigation
Inferences
From the table-2, most of respondents buy product based on the quality of the product during their visit to retail store. The buying
patterns of consumers are still considered volatile however, quality is considered the most important criterion to visit a particular
retail stores. The respondents have rated location as an important factor while buying the grocery followed by the brand name of
the product and the shopping experience one receives. However, the offers and discounts offered by the retailer was rated
relatively lower when compared to the other factors.
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Table-3: Table Showing Respondents to the Facilities provided to them while Purchasing
Facilities Provided
While Making a
Purchase
Origin Process of
Growing
Cleaning
Process
Technology
Employed
Cooking
Methods
Age of the
Product
Farming
(Organic /
Non organic)
Use of
pesticides
Highly
Satisfied (5) 13 16 30 8 17 30 28 39
Satisfied (4) 37 33 39 34 41 34 36 25
Neutral (3) 28 35 18 33 22 24 22 20
Dissatisfied (2) 13 11 11 17 17 10 13 14
Highly Dissatisfied (1) 11 7 4 10 5 4 4 5
Sources: Field Investigation
Inferences
From the table-3, most of respondents would want to know information about the usage of pesticides in their produce while
making a purchase. The consumer has a right to seek information on/about the cereals pulses and oil before making a purchase.
The most important information that a consumer sought after information by the consumer, which influences to buy the cereals
pulses and oil, is the cleaning process the product that has to go through. This factor is considered the most important criteria
while choosing the cereals pulses and oil. It is the highest rated factor amongst all the factors considered. The respondents were
keen to know the pesticides that were being used. This implies that the consumers are aware about the side effects of pesticides
and much emphasis is given on the same. The age of the cereal pulses are also given equal importance along with the farming
techniques being used i.e. if it is organic farming or industrial farming. Therefore, high emphasis is given on all the factors from
the origin of the product to the demonstration of the use of these products.
Hypothesis-1
Null Hypothesis (H0): There is no significant relationship between the monthly Expenditure and the prices of groceries
are raised.
Alternate Hypothesis (H1): There is a significant relationship between the monthly Expenditure and the prices of
groceries are raised.
Table-4
Value D.f. Asymp.
Sig.(2-ided)
Pearson Chi-Square 2.316a 3 .509
Likelihood Ratio 30.781 3 .0268
Linear-by-Linear Association .842 1 .359
N of Valid Cases 97
Sources: Authors Compilation
Analysis: It is evident from the above table that the Chi-square value is 2.316 with p value of .509, which is greater than the set
level five percent. Hence, the researcher rejected the null hypothesis.
Hypothesis-2
Null Hypothesis (H0): There is a no significant relationship between age group and purchases made by visual merchandising.
Alternate Hypothesis (H1): There is a significant relationship between age and purchases made by visual merchandising.
Table-5
Value D.f. Asymp.
Sig.(2-sided)
Pearson Chi-Square 6.413a 3 .093
Likelihood Ratio 9.075 3 .028
Linear-by-Linear Association 1.158 1 .218
N of Valid Cases 100
Sources: Authors Compilation
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It is evident from the above table that the Chi-square value is 6.413 with p value of .093, which is greater than the set level five
percent. Hence, the researcher rejected the null hypothesis.
FINDINGS
The study was conducted to understand the influence of the visual displays while making purchase was found to be accepted by
the respondents.
The respondents buying behaviour with respect to groceries mainly depend upon the experience of oneself and on the information
that is gathered about the cereal pulses and oil from family and friends.
The major factors that influence the buying behaviour of the consumers are the Origin of the products, the cleaning process that it
goes through, the pesticides Used on the crops, the farming techniques, which are adopted etc., adds value in making a decision.
The highest rated factors, which form the basis for making a decision, from where and how to buy the cereals pulses and oil, are:
Quality
Age of the product
Cleanliness
Pesticides Used
Shine of the pulses
Post cooking taste
The overall shopping experience.
Information about the origin of the cereals pulses and oil, up to the post cooking methods was considered vital and helpful while
making a decision to buy the product. These factors help us to understand the need to fulfil the requirements of the respondents.
Surprisingly offers, discounts associated with the price have not been the focus of the consumers when it comes to quality of the
cereals pulses and oil. There is a resistance built while choosing the best deals if the offers do not include the products that the
consumer seeks.
Therefore, the study indicates that the information provided by the visual displays will benefit the consumer in choosing a product
in a better way.
SUGGESTIONS
The study shows an entreated keen interest in the usage of visual displays in an effective manner and has shown acceptance from
the consumer. Hence, implementation of this strategy would enable the retailers to have an edge in increasing the sales of the
products and gaining the confidence of the consumer.
It is derived from the study that the consumer need not be over loaded with the complete information but just an over view of the
essential and specific information would be enough.
It is evident from the study that the consumers do not tend to look at the same information; hence, it is required to update the
information regularly.
According to the study, the maximum amount of time is spent on buying vegetables. This implies that the consumer is more
conscious about the vegetables that one consumes. Hence if in providing brief information about the vegetables is extended then
this can be proven beneficial to the consumers.
When it comes to choosing cereals pulses and oil the study shows that the majority of the respondents buy based on their prior
experience. Therefore, in order to tackle this issue the retail stores should formulate the strategy to attract these consumers through
visual displays providing them a better way to choose their products.
CONCLUSION
Visual impact plays a vital role when a consumer enters a retail store. It is one of the most important factors of retail
merchandising. The visual information is gathered in less than a split second. Using the visual displays as a component to
influence, educate and create awareness of the existing products to help choose the consumers better and right products. This in
turn helps building credibility in the mindsets of the consumers. In addition, it helps to educate consumers not just about the
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existing but new products as well. Facilitating the right kind of information, with right amount of specific and essential
information will help the consumer in taking the right decision while making their purchase valuable.
In today’s world, people are very much conscious about their health. People are aware of the ill effects of Genetically Modified
crops, industrial crops and advantages of organic products, filtered and not refined oil that is supposed to have harmful chemicals
left behind from the purification process. It would only add to this movement to have visual displays, which provide accurate and
reliable information to the consumers, which will give them the power of informed decision making when it comes to their health
at the end of the line, through conscious purchasing of essential commodities like pulses, rice, cereals and oil.
REFERENCES
1. Kotler, P. & Keller, K. (2011). Marketing Management (14th Edition). London: Pearson.
2. Morgan, T. (2008). Visual Merchandising: Windows and In-store Displays for Retail. Laurence King: London
3. Ramandeep, Sodhi, & Rita, Kant. (2012), Visual Merchandising – A Changing Scenario. Asia Pacific Journal of
Marketing & Management Review, Vol.1, No. 2, ISSN: 2319-2836
4. S., Meenakumari. (2013). Role of Visual Merchandise in Retailing of Supermarkets in Chennai. Asia Pacific Journal of
Marketing & Management Review, 2(9). ISSN: 2319-2836.
5. Alireza, Miremadi, & Rahil, Khoei. (2013). The Art of Visual Merchandising on Consumer Buying Behavior: A Case
Study of Retailing Industry. International Journal of Contemporary Business Studies. ISSN: 2156-7506.
6. Sujata, Khandai, Bhawna, Agrawal, & Anju, Gulla. (2012). Visual Merchandising as an Antecedent to Impulse Buying:
An Indian Perspective. International Journal of Business and Management Studies, 1(1), 267-277. ISSN, 2158-1479.
7. W., M. C. B. Wanninayake, & Pradeep, Randiwela. (2007). The Impact of Visual Merchandising on Consumer Store
Choice Decisions in Sri Lankan Supermarkets. In 7th Global Conference on Business & Economics. ISBN: 978.
8. William, Abarajithan. (2013). Significant of Visual Merchandising as a Weapon of Strategic Marketing: In Sri Lankan
Food Retailing. International Journal of Management Research and Review, 3(2), Article No-3/2355-2363.
9. Yoo-Kyoung, Seock, & Young, Eun Lee. (2013). Understanding the Importance of Visual Merchandising on Store
Image and Shopper Behaviours in Home Furnishings Retail Setting. European Journal of Business and Management,
5(4). ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online).
10. Bhasin, Harmeet Kaur. The Unified Global Feel of Indian Retail-Visual Merchandising the Indian way. IOSR Journal
of Business and Management (IOSR-JBM), pp. 26-31. ISSN, e-ISSN: 2278-487X, p-ISSN: 2319-7668.
11. Carey, Noland, & M., Isabel Meirelles. (2008, Special). Visual Representation of Health Information: A Critique of the
2005 Food Pyramid. American Communication Journal, 10(S).
12. Kaur, Amandeep. (2013). Effect of Visual Merchandising on Buying Behavior of Customers in Chandigarh.
International Journal of Engineering Science and Innovative Technology (IJESIT), 2(3). ISSN: 2319-5967
IS09001:2008 Certified.
13. Rajasekharan, Pillai, Azmiya, Iqbal, Habiba, Umer, Aisha, Maqbool, & Namrata, Sunil. (2011). Design, Effectiveness
and Role of Visual Merchandising in Creating Customer appeal, Munich Personal RePEc Archive (MPRA), 30365,
posted 21.
14. Tess, Winlock, Eric, Christiansen, & Serge, Belongie. (2010). Toward Real-Time Grocery Detection for the Visually
Impaired. In Computer Vision and Pattern Recognition Workshops (CVPRW), IEEE, pp. 49 – 56. ISSN: 2160-7508.
15. Yolande, Hefer. (2013). Visual Merchandising Displays – Practical or Ineffective Yolande. International Retail and
Marketing Review, 9(1), 73-78. ISSN: 18174428.
16. Bailey, Comyns. (2012). Impact of Visual Merchandising on University of New Hampshire Students (Honors Theses,
Paper 93).
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17. Yolande, Hefer, & Africa, Michael C. Cant. (2013). Visual Merchandising Displays’ Effect on Consumers: A Valuable
Asset or an Unnecessary Burden for Apparel Retailers. International Business & Economics Research Journal,
12(10).
18. Arora, V. P. S., Sharma, Shivani, & Singh, Nirdesh K. (2007). Nature and Functioning of Visual Merchandising in
Organized Food Retailing. Agricultural Economics Research Review, 20(Conference Issue), 441-456.
19. Rani, Malika. (2012). a Study on the Impact of Visual Merchandising on Consumer Buying Behavior. Asian Journal of
Research in Business Economics and Management, AJRBEM, 2(6). ISSN: 2249‑7307.
20. Khurram, L. Bhatti, & Seemab, Latif. (2013). The Impact of Visual Merchandising on Consumer Impulse Buying
Behaviour. In Proceedings of 4th Asia-Pacific Business Research Conference. ISBN, 978-1-922069-31-3.
21. Shubham, Rattan. (2014). Branding the Krome Apparel Stores across Chandigarh. Asian Journal of Multidisciplinary
Studies, 2(4). ISSN: 2321- 8819 (Online), 2348-7186 (Print).
22. Sonali, Banerjee, & Parul, Yadav. (2012). Analysis of Visual Merchandising: Effect on Consumer Buying Behaviour.
International Journal of Retailing and Rural Business Perspective, 1(2). ISSN (P): 2279-0934, (O): 2279-0942.
23. Retrieved from
http://www.academia.edu/6943561/Visual_Merchandising_in_Retail_by_Rahul_Jadhav_and_Prashant_Chaudhar...
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THE EFFECTS OF RURAL MARKETING STRATEGIES OF PURCHASE DECISION MAKING
Dr. S. Prasad33
ABSTRACT
Indian rural market is attractive as well as challenging. It offers huge opportunities to the marketers as it is in developing
stage and account 80 per cent consumers. The lifestyles of rural consumers have undergone wonderful changes due to
growing incomes, increasing literacy rate, exposure TV and interaction with the urban counterpart. Liberalization of trade, on
one side, opened up new vistas to the marketers and on the other side, posed stiff competition. The present paper is an attempt
to understand the profile of the consumers in rural market. The effects of rural marketing strategies on purchase decision-
making.
KEYWORDS
Consumer Preference, FMCG Products, Rural Marketing etc.
RURAL MARKETING IN INDIA
The concept of Rural Marketing in India Economy has always played an influential role in the lives of people. In India, leaving
out a few metropolitan cities, all the districts and industrial townships are connected with rural markets. The rural population in
India accounts for around 627 million, which is exactly 74.3 percent of the total population. The rural market in India brings in
bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. The rural market in
Indian economy generates almost more than half of the country's income. Rural marketing is the new buzzword as the new
marketing mantra for the survival and the growth of and the success forcing companies to go rural. The most popular strategies to
hit the rural market have been the small packaging strategies i.e. sachets products. Sachets meet the needs of rural consumers in
several ways. Sachets are inexpensive, they occupy a small amount of space, and they allow consumers to experiment with new
products that they may never have tried before.
Sometimes, rural marketing is confused with agricultural marketing – the later denotes marketing of produce of the rural areas to
the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or
services to rural producers or consumers. The consumer is the king and all actions should start with his view in mind. Consumer
behaviour “is the study of the processes involved when individuals or groups select, purchase, use, or dispose or products,
services, ideas, or experiences to satisfy needs and desires.
Rural Consumer Behaviour refers to the buying behaviour of final consumers - individuals and households who buy goods and
services for personal consumption. All of these final consumers combined make up the consumer market. The consumer market in
this case is Rural India. Consumers in this huge segment have displayed vast differences in their purchase decisions and the
product use. Villagers react differently to different products, colours, sizes, etc. in different parts of India. Thus, it is important to
study the thought process that goes into making a purchase decision, so that marketers can reach this huge untapped segment.
“Rural marketing is defined as a function that manages all activities involved in assessing, stimulating and converting the
purchasing power of rural consumers into an effective demand for specific products and services and moving these products and
services to the people in rural areas to create satisfaction and a better standard of living and there by achieving organizational
goals” (Iyer 2010). The process should be able to straddle the attitudinal and socio-economic disparity between the urban and rural
customers.
Figure-1
Sources: Authors Compilation
33Assistant Professor, Department of International Business and Commerce School of Management, Alagappa University, Tamil
Nadu, India, [email protected]
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Urban-to-Rural (U 2 R): A major part of rural marketing falls into this category. It includes the transactions of urban marketers
who sell their goods and services in rural areas, like pesticides, fertilizers, seeds, FMCG products, tractors, bicycles, consumer
durables, etc.
Rural-to-Urban (R 2 U): Transactions in this category fall under agricultural marketing where a rural producer seeks to sell his
products in an urban market, like seeds, fruits and vegetables, milk and related products, forest produce, spices, etc.
Rural-to-Rural (R 2 R): This includes the activities that take place between two villages in close proximity to each other, like
agricultural tools, handicrafts and bullock carts, dress materials, etc.
NEED FOR STUDY
The present study has revealed the extent to which rural consumers living around the rural areas. The consumer requires the
product quality, price realization, channels of distribution, availability and promotion. This study attempts to ascertain the view of
the rural consumer is pre-purchasing behaviour variables such as attitude towards brand preference and purchase decision-making.
There were studies about the marketing strategies obtained through the various companies such as P&G, ITC, Colgate Palmolive
which focuses on marketing to urban but the study on rural marketing strategies were found to be rare but Hindustan Unilever
Limited is a company which caters to the needs of rural market and Hindustan Unilever Limited has a wide range of product mix,
many people are prefer to buy a HUL products. Since, this study could supplement the needs of rural marketing strategies of HUL
such as Small unit packaging strategies, Premium products strategies through this fulfills the need for the study on rural marketing
strategies on Hindustan Unilever Limited
STATEMENT OF PROBLEM
Rural marketing includes all these activities of assessing, stimulating and converting the rural purchasing power into an effective
demand for specific products and with the aim of raising the standard of living. Rural marketing is any marketing activity in which
one dominant participant from rural areas.
Various factors influence the purchase decisions of the consumers, packaging, brand name, quality, price and promotions are
influence the rural purchase. The main problem faced by the rural consumers namely lack of distribution, lack of availability of
the products, limited of the choice of the products. Hence, the researcher has to analyze these problems faced by the rural
consumers.
REVIEW OF LITERATURE
Skinner (1990) opined that when a consumer purchases an unfamiliar expensive product he uses a large number of criteria to
evaluate alternative brands and spends a great deal of time seeking information and deciding on the purchase. The type of decision
making used varied from person to person and from product to product.
Bronnenberg et al. (1996) in their article observed that, it is becoming increasingly evident that a consumers brand choice
decision in low involvement categories does not involve full search, evaluation and comparison of price of all brands available at
the point of purchase. The authors proposed a two stage choice in which consumer first identifies a subset of brands within the
universal set of brands called the choice set and then evaluates only those brands that are in the choice set relative to one another
to select a single brand.
Venkateswaralu et al (2000) opined that the role of women in decision making for consumer non-durables is high and in the case
of durables, both husband and wife decide together.
Gaur et al (2002) observed that, consumers buying behaviour normally should include the less observable decision process that
accompany consumption including where, how often and under what conditions consumers make their purchase of desired goods
and services.
Vikas Saraf (2003) opined that, brands are successful because the people prefer them to ordinary products. In addition to the
psychological factors, brands give consumers the means whereby they can make choice and judgment. Customers can rely on
chosen brands to guarantee standard quality and services. People believe that the brand itself is something that changes consumer
behavior.
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SCOPE OF STUDY
The researcher has studied about the rural consumer behaviour, brand preferences and pre purchasing behavior. The researcher
studied about the strategies like small unit packaging strategies, premium product strategies of Hindustan Unilever Limited. The
geographical coverage of the study is limited to Manamadurai only.
OBJECTIVES OF STUDY
To study the demographic profile of the consumers in rural market.
To study the effects of rural marketing strategies on purchase decision-making.
HYPOTHESIS
There is no significant relationship between the demographic variables viz, age, sex, education, occupation and income
of the consumers and the brand preferences of the products in rural consumers.
There is no significant relationship between the effects of rural marketing strategies on purchase decision making.
Research Design
Research design used in the study was Descriptive research design. A descriptive research design is the one, which is description
of the state of affairs, as it exists at present. It includes survey and fact finding enquiries of different kinds. The researcher has no
control over the variables.
Research Methodology
The study were based on both primary and secondary data for these purpose of collecting primary data a structured questionnaire
is prepared on the basis of literature on the subject. The questionnaire consists of questions about personal data of the consumers,
sources of information for pre-purchase behaviour, brand preferences, small unit packaging strategies and the problems of rural
marketing. Based on the data collected, the final format of the questionnaire was prepared then the researcher had interviewed
each respondent and recorded the information supplied by them with respect to every item in the questionnaire.
Sampling Technique
The researcher has adapted Mall Intercept method of sampling which is one of the Non-probability sampling methods to select the
sample respondents. A Mall-intercept method is a method whereby respondents are intercepted in shopping malls. The process
involves interacting with the shoppers, screening them for appropriateness, and administering the survey on the spot or inviting
them to the shopping place to complete the questionnaire.
Sample Size
The target sample for this study is 160 respondents in various areas of Manamadurai that was done independently and they are
further divided into 80 males and 80 females’ that lies in age group of 20-40 including business class, service class, students and
house wives, two of the questionnaires were in completed. So that the sample size is 158. The formula for calculating the sample
size is as follows,
Z2 x (p) x (1 – p) (1.96)2 x 0.5 x 0.5
SS = = = 160
C2 (0.008)2
SS = Sample Size
Z = Z-value 1.96 for a 95 percent confidence level
P = Percentage of population picking a choice
C = Confidence interval
Statistical tools used in the study
The collected data have been processed with the help of appropriate statistical tools using SPSS package the tools include
Descriptive statistics, Analysis of Variance, Karl Pearson’s Correlation Co-efficient, and Factor Analysis.
Descriptive Statistics on Demographic profile of the Respondents
Demographic Profile includes gender, age, occupation, monthly income, marital status, educational qualifications, total members
of the family, and total employed persons of the family and monthly total family income.
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Table-1: Demographic Profile of Respondents
Demographic Variable N Frequency Percentage Mean Standard
Deviation
Gender
Male
Female
158
60
98
38
62
1.62
0.487
Age
1.Below 20years
2.20-30 years
3.30-39 years
4.40-49 years
5.above 50 years
158
5
100
9
20
24
3.2
63.3
5.7
12.7
15.2
2.73 1.197
Occupation
a. Government Employee
b. Private Employee
c. Student
d. Businessmen / Women
e. Others
158
6
28
70
15
39
3.8
17.7
44.3
9. 5
24.7
3.34 1.143
Monthly Income
1.Below Rs.5,000
2.Rs.5000-RS.10,000
3.Rs.10,000-Rs.20,000
4. above Rs.20,000
158
24
95
9
30
15.2
60.1
5.7
19.0
2.28 0.945
Marital Status
1.Married
2.Unmarried
158
62
96
39.2
60.8
1.61 0.490
Educational Qualification
1.Illiterate
2.Upto +2
3.Graduate
4.Post Graduate
5.Other Higher Qualification
158
9
34
53
54
8
5.7
21.5
33.5
34.2
5.1
3.11 0.99
Total members of the family
1.Below 3 members
2.3 to 5
3.5 to 7
4.Above 7 members
158
9
115
25
9
5.7
72.8
15.8
5.7
2.22 0.632
Employed persons of your family
1.Below 3 members
2.Above 3 members
158
53
105
33.5
66.5
1.66 0.474
Total Family Income
1.Below Rs.50,000
2.Rs.50,000-
158
40
118
25.3
74.7
1.75 0.436
Sources: Primary Data
From the above table, it represents the descriptive statistics of demographic variables such as Gender, Age, Occupation, Monthly
income, Educational Qualification, Marital Status, and Members of the family, employed persons of the family, total family
income. Among the gender, variable 62% of the respondents belong to female category and 38% of the respondents belong to
male category. The mean score of the gender category was found to be 1.62 and standard deviation of the gender category was
found to be 0.487.
Among the age category 63.3% of the respondents belong to 20-29 years, 15.2% of the respondents belong to 50 years above,
12.7% of the respondents belong to 40-49 years, 5.7% of the respondents belong to 30-39 years and 3.2% of the respondents
belong to below 20 years. The mean score of the age groups was found to be 2.73 and standard deviation of the age groups
category was found to be 1.197.
Among the occupation category 44.3% of the respondents belong to the students, 24.7% of the respondents belong to the other
occupations, 17.7% of the respondents belong to private employee, 9.5% of the respondents belong to the business men/women,
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and 3.8% of the respondents belong to the govt. employee. The mean score of the occupation category was found to be 3.34 and
the standard deviation of the occupation category was found to be 1.143.
Among the monthly income 60.1% of the respondents belong to Rs.5000-Rs.10,000, 19.0% of the respondents belong to above
Rs.20,000, 15.2% of the respondents belong to below 5000 and 5.7% of the respondents belong to Rs.10,000-Rs20,000. The mean
score of the occupation category was found to be 2.28 and standard deviation of the gender category was found to be 0.945.
Among the marital status, 60.8% of the respondents relate to unmarried and the remaining 39.2% of the respondents relate to
married status. The mean score of the marital status was found to be 1.61 and the standard deviation of the marital status category
was found to be 0.490.
Among the Educational Qualification category 34.2% of the respondents belong to post graduates, 33.5% of the respondents
belong to graduates, 21.5% of the respondents belong to up to HSC 5.7% of the respondents belong to illiterates and the
remaining 5.1% of the respondents belong to other higher qualifications. The mean score of the educational qualifications was
found to be 3.11 and the standard deviation of the educational qualifications category was found to be 0.990.
Among the total members of the family category 72.8% of the respondents belong to 3 - 5, 15.8% of the respondents belong to 5 -
7, and the remaining 5.7% of the respondents belong to both the below 3 members and the above 7 members. The mean score of
the total members of the family category was found to be 2.22 and the standard deviation of the total members of the family was
found to be 0.632.
Among the employed persons of the family category 66.5% of the respondents belong to family size of above 3 members and
33.5% of the respondents belong to below 3 of the employed persons. The mean score of the employed persons of the family was
found to be 1.66 and the standard deviation of the members was found to be 0.474.
Among the monthly total family income category, 74.7% of the respondents gets Rs.50,000 - Rs.1,00,000 and 25.3 of the
respondents gets below Rs. 50,000. The mean score of the monthly total family income was found to be 1.75 and the standard
deviation of the members was found to be 0.436.
Table-2: Garret Scores for the Products sold by HUL
Products
Rank
1 2 3 4 Garrets Score Garrets Rank
Soaps 4818 2336 1971 2409 11534 1
Shampoos 1539 2508 2508 2451 9006 2
Toothpaste 516 1419 2322 2537 6794 3
Cosmetics 1161 1323 891 891 4266 4
Sources: Primary Data
Table 4.18 portrays the garret scores the highest score is awarded to the product “Soap” is ranked as the product first, followed by
the “Shampoo”. The lease score is awarded to “Cosmetics” and hence it is inferred that the “Soaps” is the major products provided
by the Hindustan Unilever limited.
Table-3: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .540
Bartlett's Test of Sphericity Approx. Chi-Square 425.274
D.f. 36
Sig. .000
Sources: Primary Data
The KMO measures the sampling adequacy, which should be greater than 0.5 for a satisfactory factor analysis to proceed. If any
pair of variables has a value less than this, consider dropping one of them from the analysis. The off-diagonal elements should all
be very small (close to zero) in a good model. Looking at the above table, the KMO measure is 0.540.
Bartlett's test is another indication of the strength of the relationship among variables. This tests the null hypothesis that the
correlation matrix is an identity matrix. An identity matrix is matrix in which all of the diagonal elements are 1 and all off
diagonal elements are 0. You want to reject this null hypothesis. From the same table, we can see that the Bartlett's test of
sphericity is significant That is, its associated probability is less than 0.05. In fact, it is actually 0.000, i.e. the significance level is
small enough to reject the null hypothesis. This means that correlation matrix is not an identity matrix.
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Factor Analysis for Premium Product Strategies
Table-4: Rotated Component Matrixa
Component
Factors 1 2 3
Like premium .802 .192 -.038
Identify .376 .012 -.839
Available .244 .692 -.109
Mass product .297 .239 .852
Feel unique .495 .625 .145
Abundant good -.188 .629 .246
Price of the products .549 -.523 .210
Usage premium .846 -.032 -.109
Price high .006 .658 .124
Note: Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Sources: Primary Data
In this study, the factor analysis has been used to find the dominant variables influenced in premium product strategies.
Through the analysis “Like premium” (0.802), price of the products (0.549) and usage premium (0.846) are identified in the first
factor. Usage of the premium products has the highest significant positive loading. The factor one is characterized as the good.
The second factor includes the variables namely Availability (0.692), feel unique (0.625), Abundant good (0.629) and price high
(0.658) are identified in the second factor. Availability of the products has been highest significant positive loading. The second
factor characterized as a good.
The third factor consists of the variable mass product (0.852) only one variable is identified in the third factor it has the highest
significant positive loading. The factor three is characterized as the good.
Through the factor analysis, it is inferred that most of the respondents and their product preference have significantly improved.
Out of nine factors, eight factors are identified and these factors are influenced on the premium product strategies.
Factor Analysis for Small Unit Packaging Strategies
Table-5: Rotated Component Matrixa
Component
Factors 1 2 3
Sachets -.165 .679 .258
Less quantity .567 .348 .630
Feel cheaper -.066 .171 .899
Abundantly available -.345 .609 .357
Comfortable to buy .424 .486 -.558
Packing at small size .073 .764 -.068
Small packets -.854 .084 .118
Disturb ecology .800 -.124 .002
Note: Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Sources: Primary Data
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In this study, the factor analysis has been used to find out the dominant variables influenced in the small packaging strategies.
Through the analysis “less quantity” (0.567) and packets disturb ecology (0.800) have identified the first factor. Small packets
disturbs ecology has the highest significant positive loading. The factor one is characterized as good.
The second factor includes the variables namely sachets (0.679), abundantly available (0.609) and packing at small size (0.764)
are identified as the second factor. Packing at small size has the highest significant positive loading. The second factor is
characterized as the good for use.
The third factor includes the variables namely less quantity (0.630) and feel cheaper (0.899) are identified the third factor. Small
packaging feel cheaper has the highest significant positive loading. The third factor is characterized as good to buy.
Through the factor analysis, it is inferred that most of the respondents and their thought about the small packaging products have
significantly improved. Out of eight factors, seven factors are identified and these factors are influenced on their small packaging
strategies.
Table-6: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .583
Bartlett's Test of Sphericity Approx. Chi-Square 322.402
D.f. 28
Sig. .000
Sources: Primary Data
The KMO measures the sampling adequacy, which should be greater than 0.5 for a satisfactory factor analysis to proceed. If any
pair of variables has a value less than this, consider dropping one of them from the analysis. The off-diagonal elements should all
be very small (close to zero) in a good model. Looking at the above table, the KMO measure is 0.583.
Bartlett's test is another indication of the strength of the relationship among variables. This tests the null hypothesis that the
correlation matrix is an identity matrix. An identity matrix is matrix in which all of the diagonal elements are 1 and all off
diagonal elements are 0. You want to reject this null hypothesis. From the same table, we can see that the Bartlett's test of
sphericity is significant That is, its associated probability is less than 0.05. In fact, it is actually 0.000, i.e. the significance level is
small enough to reject the null hypothesis. This means that correlation matrix is not an identity matrix.
Analysis of Variance Showing the Relationship between the Pre-Purchasing Behaviour and the Educational Qualification
H0: There is no significant difference between the pre-purchasing behaviour and the educational qualification of the respondents
Table-7
Educational Qualification N Mean Std. Deviation Std. Error F Sig.
Illiterate 9 3.43 .000 .000
upto +2 34 3.40 .248 .043
Graduate 53 3.20 .468 .064 4.340 .002
Post Graduateab 54 3.24 .272 .037
Other Higher Qualification 8 2.93 .076 .027
Total 158 3.26 .351 .028
Sources: Primary Data
Hence, we conclude that there is no significant difference between the educational qualifications and the factors to be considered
before purchasing the particular brand, which is significantly differentiated with @ 1% level.
From the above table F value (13.611) is found to be significant. It shows that there is a significant difference between the
educational qualifications and the factors to be considered before purchasing the particular brand and hence the null hypothesis is
rejected.
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From the above table represents, the homogeneous subset of Educational qualification of the respondents with regard to pre-
purchasing behaviour and the most influence factor of the educational qualification is other higher qualification.
Analysis of Variance Showing the Relationship between the Monthly Income and the Pre-Purchasing Behaviour
H0: There is no significant relationship between the monthly income and the pre-purchasing behavior
Table-8
Monthly Income N Mean Std. Deviation Std. Error F Sig.
below Rs.5000 24 21.79 1.503 .307
Rs.5000-Rs.10,000ab 95 23.68 2.344 .241
Rs.10,000-Rs.20,000 9 22.22 2.108 .703 13.661 0.000
Above Rs.20,000 30 21.00 2.244 .410
Total 158 22.80 2.458 .196
Sources: Primary Data
From the above table, F value 13.661 is found to be significant @ 1% level. Hence, the null hypothesis is rejected and there is a
significant relationship between the monthly income and the pre-purchasing behaviour. From the Duncan Multiple Range Test it
is found that the respondents who earn up to Rs.5000-Rs.10000 were found to be the most influencing factor among the other
monthly income of the respondents.
FINDINGS
The majority of the respondents belong to female category.
The majority of the respondents are in the age group of 20-30 years.
The majority of the respondents are students.
The majority of the respondents earn a monthly income of Rs.5000-10,000.
The majority of the respondents are postgraduates.
The majority of the respondents belong to family size of 3-5 members.
Head of the family play an important role for buying HUL products on behalf of the family. In Most of the families,
house wife and the children are influencers to buy products followed by the head of the household who decides to buy
the products
Through the factor analysis, it is inferred that most of the respondents and their product preference have significantly
improved. Out of nine factors, eight factors are identified and these factors are influenced on the premium product
strategies.
Through the factor analysis, it is inferred that most of the respondents and their thought about the small packaging
products have significantly improved. Out of eight factors, seven factors are identified and these factors are influenced
on their small packaging strategies.
There is a significant relationship between the educational qualification and the lack of consumer education.
There is a significant relationship between the monthly income and the pre-purchasing behaviour of the consumers
CONCLUSION
Rural marketing has witnessed an increase in the buying power of consumers, accompanied by their desire to upgrade the standard
of living. The marketing mix of many companies is now being tailored to rural taste and life style. Indian rural market is
fascinating as well as challenging. Rural marketing has a great potential for growth in future. Rural India is becoming more
accessible because of ambitious rural road connectivity programme (Prime Minister Gram Sadak Yojana), satellite TV, internet,
mobiles and modern automobiles. Today, rural consumer has become aspirant, quality conscious and well acquainted with
branded products and services.
REFERENCES
1. European Association for Comparative Economics Studies (EACES) 9th Bi-Annual
2. Neeraj, Jha. (2000, June 19). Gung-ho on rural marketing. The Financial Express.
3. Ravindranath, V. Badi, & Naranyansa, V. Badi. (2004). Rural Marketing. Himalaya Publishing.
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4. Saini, D. R. (1972). Strategy of Rural Marketing, 2(5), 22-25.
5. Pradeep, Kashyap, & Sidharta, Raut. (2010). Rural Marketing, pp. 3, 11, 25
6. Schiffman, L., & L., Knauk. (2000). Consumer Behavior (7th Edition). Prentice Hall.
7. Kotler, P. Principal of Marketing.13e south Indian context.
8. (2002, July 03).Big Brands innovate to tap the rural market. Business Line.
9. Retrieved from www.thehindubusinessline.in
10. Retrieved from www.indiatelevision.com
11. Retrieved from www.ruralmart.com
12. Retrieved from http://www.ijocam.in/uploads/3/4/0/0/3400848/ijocam_sep_2015_volume_2_issue_4_interior_final.95-
100....
13. Retrieved from http://www.slideshare.net/rajlakshmi2611/rural-marketing-ppt-15774354
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marketi...
15. Retrieved from http://www.readbag.com/sapientindore-sm-mba-semiv-405m-rural-consumer-behavior
16. Retrieved from http://www.insead.edu/facultyresearch/research/details_articles.cfm?id=2709
17. Retrieved from http://indianmba.com/Faculty_Column/FC1027/fc1027.html
18. Retrieved from http://www.coolavenues.com/marketing-zone/rural-marketing%3A-challenges-opportunities-%2526-
strategi...
19. Retrieved from http://indianmba.com/Faculty_Column/FC1129/fc1129.html
20. Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/3472/10/10_chapter%202.pdf
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A STUDY DETERMINANT OF CUSTOMER EXPERIENCE IN THE SELECT
RETAIL FORMATS IN CHITTOOR DISTRICT
R. Jesse Rezin Grand34 L. Vincent Raj Kumar35 Dr. N. Chandrika36
ABSTRACT
Retail industry can be broadly classified into two categories namely- organized and unorganized retail. As the Indian retailing
is getting more and more organized various retail formats are emerging to capture the potential of the market. Now that we
have entered a new era, it is necessary to shift attention from the features-and benefits approach advocated by traditional
marketing to customer experiences. Understanding and recognizing the importance of customer experience is essential to
withstand in highly competitive and ever changing retail environment. Knowledge of the various determinants of customer
experience will give the retailers an edge over the competitors.
There are several determinants of the customer experience, including social environment, service interface, retail atmosphere,
stores assortment, price, customer experience in alternate channels, retail brand and experience.
This paper provides retailers with specific knowledge of the determinants that the customer considers being most important
and significant contributor to an enhanced customer experience. It is suggested that the retailers take note of the significant
predictors while developing retail format strategies. It also identifies the demographic characteristics of the customers.
Understanding the customer and the key determinants of customer experience are critical to the retailer in order to withstand
the competition in the Indian market.
The aim of the study is to contribute to the knowledge of customer experience by studying the various determinants and to
show the influence of various determinants of customer experience in select retail formats.
KEYWORDS
Branded Stores, Customer Experience, Price, Social Environment and Super Markets etc.
RETAIL INDUSTRY: AN OVERVIEW
Retail industry can be broadly classified into two categories namely-organized and unorganized retail. Organized retail -
Organized traders/retailers, who are licensed for trading activities and registered to pay taxes to the government. Unorganized
retail – It consists of unauthorized small shops - conventional Kirana shops, general stores, corner shops among various other
small retail outlets - but remain as the radiating force of Indian retail industry.
The retail market is expected to reach a whooping Rs. 47 lakh crore by 2016-17, as it expands at a compounded annual growth
rate of 15 per cent, accordingly to the ‘Yes Bank - Assocham’ study. The retail market, (including organized and unorganized
retail), was at Rs. 23 lakh crore in 2011-12. According to the study, organized retail, that comprised just seven per cent of the
overall retail market in 2011-12, is expected to grow at a CAGR of 24 per cent and attain 10.2 per cent share of the total retail
sector by 2016-17. The global retailing industry had total revenue of $10,526.1 billion in 2010, representing a compound annual
growth rate (CAGR) of 4.3% for the period spanning 2006-2010.
The food and grocery segment was the most lucrative segment in 2010, with total revenue of $6,630.2 billion, which is equivalent
to 63% of the industry value. The global retailing industry grew by 3.9% in 2010 to reach a value of $10,526.1 billion. The
compound annual growth rate of the industry in the period 2006–10 was 4.3%. Retailing has played a major role in the global
economy. In developed markets, retailing is one of the most prominent industries. In 2008, the US retail sector contributed 31%
to the GDP at current market prices. In developed economies, organized retail has a 75-80% share in total retail as compared with
developing economies, where unorganized retail has a dominant share. In 2008, the slowdown in the global economy and credit
crunch led to decrease consumer spending. Despite difficult economic conditions, the global retail industry continued to grow,
building on the bounce back in growth that started in 2010.
34Assistant Professor, Annamacharya Institute of Technology and Sciences, Andhra Pradesh, India, [email protected] 35Assistant Professor, Annamacharya Institute of Technology and Sciences, Andhra Pradesh, India, [email protected] 36 Associate Professor & Head, Annamacharya Institute of Technology and Sciences, Andhra Pradesh, India, [email protected]
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KEY DRIVERS OF THE INDIAN RETAIL INDUSTRY
Emergence of nuclear families.
An increase in the double-income household’s trend.
Large working population.
Reasonable Real estate prices.
Increase in disposable income and customer aspiration.
Demand as well as increase in expenditure for luxury items.
Growing preference for branded products and higher aspirations.
Growing liberalization of the FDI policy in the past decade.
Increasing urbanization.
Rising affluence amid consumers.
BOTTLENECKS
A long way to meet international standards.
Lack of efficient supply-chain management.
Lack of required retail space.
No fixed consumption pattern.
Shortage of trained labor.
Lack of proper infrastructure and distribution channel.
GOVERNMENT INITIATIVES
The Government of India has taken various initiatives to improve the retail industry in India.
The Ministry of Urban Development has come out with a Smart National Common Mobility Card (NCMC) model to
enable seamless travel by metros and other transport systems across the country, as well as retail purchases.
IKEA, the world’s largest furniture retailer, bought its first piece of land in India in Hyderabad, the joint capital of
Telangana and Andhra Pradesh, for building a retail store. IKEA’s retail outlets have a standard design and each
location entails an investment of around Rs 500–600 crore (US$ 75–90 million).
The Government of India has accepted the changes proposed by Rajya Sabha select committee to the bill introducing
Goods and Services Tax (GST). Implementation of GST is expected to enable easier movement of goods across the
country, thereby improving retail operations for pan-India retailers.
The Government has approved a proposal to scrap the distinctions among different types of overseas investments by
shifting to a single composite limit, which means portfolio investment up to 49 per cent will not require government
approval nor will it have to comply with sectoral conditions as long as it does not result in a transfer of ownership
and/or control of Indian entities to foreigners. As a result, foreign investments are expected to be increase, especially in
the attractive retail sector.
INVESTMENT SCENARIO
The Indian retail industry in the single-brand segment has received Foreign Direct Investment (FDI) equity inflows totaling US$
344.9 million during April 2000–September 2015, according to the Department of Industrial Policies and Promotion (DIPP).
With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many
companies have invested in the Indian retail space in the past few months.
Amazon India expanded its logistics footprint three times to more than 2,100 cities and towns in 2015, as Amazon.com
invested more than US$ 700 million in its India operations since July 2014.
Adidas AG, renowned for its Adidas and Reebok sports brands, has become the first foreign sports company to get
government approval to open 100 percent foreign-owned stores in India.
Wal-Mart India plans to add 50 more cash-and-carry stores in India over the next four to five years.
Aeropostale, an American teen fashion retailer, has chosen to enter India over China, and expects India to be among its
top three markets over the next four years with revenue target of Rs 500 crore (US$ 75 million).
Opinio, a hyperlocal delivery start-up, has raised US$ 7 million in a Series-A funding from Gurgaon-based e-commerce
fulfillment service firm Delivery along with investment from Sands Capital and Accel Partners.
Textile major Arvind Limited has announced a partnership with Sephora, owned by LVMH Moet Hennessy Louis
Vuitton, a French luxury conglomerate, in order to enter into the beauty and cosmetics segment.
Mobile wallet company MobiKwik has collaborated with Jabong.com to provide mobile payment services to Jabong’s
customers.
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DataWind collaborated with HomeShop18 to expand its retail footprint in the country. Under the partnership,
HomeShop18 and DataWind would jointly launch special sales programmes across broadcast, mobile and internet
media to provide greater access to the latter is tablet range.
Fashion And You has opened three distribution hubs in Surat, Mumbai and Bengaluru to accelerate deliveries.
Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375 million) in a fruit and vegetable processing unit,
an integrated meat processing unit, and a modern shopping mall in Hyderabad, Telangana.
Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and the fourth-largest supermarket retailer in the
country, acquired Total hypermarkets owned by Jubilant Retail. With an aim to strengthen its advertising segment,
Flipkart acquired mobile ad network AdiQuity, which has a history of mobile innovations and valuable experience in
the ad space.
US-based Pizza chain Sbarro plans an almost threefold increase in its store count from the current 17 to 50 over the
next two years through multiple business models.
DEFINITION OF VARIABLES
Customer Experience (CE): Is the internal and subjective response customers have to any direct or indirect contact with a
company. Direct contact generally occurs in the course of purchase, use, and service and is usually initiated by the customer.
Indirect contact most often involves unplanned encounters with representatives of a company’s products, service or brands and
takes the form of word-of-mouth recommendations or criticisms, advertising, news reports, reviews and so forth (Meyer and
Schwager 2007).
Social Environment (SE): The social environment refers to how customers interact with their family, friends or other customers.
A better social environment leads to a positive customer experience. In this research, social environment is measured in terms of
reference groups, customer-to-customer interaction and crowding.
Service Interface (SI): Refers to the interaction between the customer and the service person and the impact of technology
(Verhoef et al 2009). The study is carried out with the assumption that an excellent service interface would influence customer
experience positively. Service interface is measured in terms of influence of service person and technology.
Retail Atmosphere (RA): The atmosphere of the retailer can have a significant impact on the experience of the customer. The
retail atmosphere is measured in terms of design, temperature and music.
Stores Assortment (SA): Assortment can be described as the ability of the retailer to offer a wide array of products to the
customer with variety, uniqueness, and quality (Verhoef et al 2009).
Price: The factor of price in the concept of customer experience is defined by the way customers perceive loyalty programs and
discount policies. Music and design influence intention to patronize a retail store and how much time and money is spent in the
retail unit.
Alternative Channels (AC): According to Weiss et al (2003) when a number of channel options are available to the customer,
they may rotate channel usage and thus experience of one channel is most likely to affect the experience in the other channel.
Retail Brand (RB): Customers’ brand perceptions may influence their customer experience. Fitzsimons et al (2008) found that
the type of brand and customers’ perceptions of the brand could influence their behavior.
Previous Customer Experience (PE): According to Velazquez et al (2010), customers with a positive experience of the product
or service at a previous instant are more committed to the retailer. The study is carried out with the premise that experience
influences customer experience.
PROBLEM STATEMENT
Creating greater customer experience seems to be one of the central objectives in today is retailing environments. Retailers
around the globe have embraced the concept of customer experience management, with many incorporating the notion into their
mission statements.
In this study, an attempt is made to discuss the conceptual model, antecedents of the customer experience construct. The research
problem, therefore, is to understand the contributors to customer experience in the retail formats of Chittoor district.
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SCOPE OF THE STUDY
The current study focuses exclusively on the organized retailing sector in India. The study is restricted to the modern retail store
formats namely supermarket, specialty stores and branded stores. The study is carried out in Chittoor district, which is one of the
most energetic markets of Andhra Pradesh.
OBJECTIVES OF STUDY
To identify the determinants of customer experience in selected retail formats.
To analyze the relationship between the determinants and the customer experience.
To suggest measures to improve customer experience for the selected retail formats.
REVIEW OF LITERATURE
According to Jhamb and Kiran (2012) carried out a study to understand the relationship between the choice of retail formats,
based on products attributes, store attributes, consumers’ demography and retail marketing strategies. The study has designed a
framework for the choice of modern retail formats from consumer and retailer’s perspectives. Carpenter and Brosdahl (2011)
explored the choice of retail format among the male shoppers. Findings suggest direct and positive relationships between
department store patronage and shopping enjoyment, brand loyalty, price competitiveness, knowledgeable salespeople and
presence of well-known brands. According to Ghosh et al (2010), the phenomenal growth of retail in India is reflected in the
rapid increase in number of supermarkets, departmental stores and hypermarkets in the country. The study addressed issues
related to store attributes and their relevance in the store selection process. Huddleston (2009) has drawn a comparison in
customer perceptions related to satisfaction with conventional grocery stores as compared to specialty grocery stores. Chavadi
and Kokatnur (2010) studied various factors, which drove the customers into a shopping mall and the effectiveness of sales
promotion of those malls. Price discount, offers, gifts and samples are the four promotional tools chosen for this study.
HYPOTHESIS
Hypothesis is tested separately for Super Markets, Specialty Stores and Branded Stores.
H1: Social environment influences customer experience.
H2: Service interface affects customer experience.
H3: Retail atmosphere affects customer experience.
H4: Product assortment has an effect on customer experience.
H5: Price influences customer experience.
H6: Experience in alternate channels influences customer experience.
H7: Retail brand has an effect on customer experience.
H8: Experience affects customer experience.
LIMITATIONS OF STUDY
The sample of the study is only limited to 3 retail formats of Chittoor district of Andhra Pradesh State and thus the
result may not represent the entire State.
Sample size is 120, from three selected retail formats.
The research is mainly based on primary data and so it would be depending on awareness and willingness of the
customers.
RESEARCH METHODOLOGY
Sources of Data: Tull and Hawkins (1987) list three basic data collection approaches in marketing research namely secondary
data, survey data and experimental data. Both secondary and survey data collection approaches were used for this study.
Data Collection Instrument: Questionnaire Design.
Sampling Design: Convenience sampling a method of non-probability sampling is proposed for this particular study. The
respondents were approached at their home and asked to complete the questionnaire.
Sample Size: The main survey was carried out with 120 respondents and 105 questionnaires were found to be complete of which
40 belong to the supermarket category, 28 belong to specialty store category and 37 belong to branded store category.
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Regression Equation (CE) =a + 1 SE + 2 SI + 3 RA + 4 AS + 5 PR + 6 AC + 7 RB+ 8 PE
CE-Customer Experience
SI- Service Interface
RA-Retail Atmosphere
SA-Stores Assortment
PR-Price
AC-Alternative Channels
RB- Retail Brand
PE-Past Experience
DATA ANALYSIS FRAMEWORK
Statistical Package for Social Sciences used for the analysis of data. Different multivariate statistical techniques are used to test
the proposed hypotheses. Significance tests and estimates were used to evaluate the magnitude and direction of the effect(s) of
each of the determinants and the customer experience for the selected retail formats. Multiple regressions were used to test the
relationship between dependent and independent variables and to check for the significance of the factors and the hypothesized
causal paths.
Analysis of Data
By using SPSS software, suitable statistical tools and techniques have been working to test and interpret the data as follows:
Multiple Regression Analysis
A regression is a statistical tool used to find out the relationship between two or more variables. In simple regression, there will
be only two variables, one variable being caused by the behavior of other variable. The former is defined as an independent
variable and the latter is defined as a dependent variable. When there are two are more independent variables, the analysis that
describes the relationship between the two is called multiple regressions. The main objective of using this technique is to predict
the variability of the dependent variable based on its co variance with all the independent variables. It is useful to predict the level
of dependent phenomenon through multiple regression analysis models, if the level of independent variable is given.
Supermarket
A supermarket is defined as a form of self-service grocery store, offering a wide variety of food and household merchandise,
organized into departments, which are larger, and has a wider selection than a traditional grocery store.
Table-1: Predictor Effects and β Estimates for Determinants on
Customer Experience for Supermarket
Model Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) .477 .230 2.078 .039
Past Experience .261 .052 .276 5.041 .000
Atmosphere .306 .058 .320 5.274 .000
Assortment -.038 .066 -.040 -.576 .565
Price .135 .065 .147 2.080 .039
Service Interface -.054 .063 -.057 -.853 .395
Social Environment .156 .057 .175 2.750 .006
Retail Brand .013 .084 .013 .161 ..872
Alternate Channel Experience .091 .046 .112 1.991 .048
Sources: Primary Data
Table-2: Summaries of Regression Models for Determinants and Customer Experience for Supermarkets
Model 1 R R Square Adjusted R Std. Error of the Estimate
1 .793 a .629 .617 .58852
Sources: Primary Data
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Table-3: Model Significance for Supermarkets
Model Sum of Squares d.f. Mean Square F Sig.
Regression 144.005 8 18.001 51.972 .000
Residual 84.856 245 .346
Total 228.861 253
Sources: Primary Data
Interpretation: The result of the multiple regression using enter method as in Table 2 and Table 3, shows that overall model for
supermarket yielded a significant statistic (F=51.972, p<0.000) and adjusted R Square is 0.617, explained by social environment,
Service interface, retail atmosphere, assortment, price, Experience in alternate channels, retail brand and previous customer
experience.
Specialty Stores
Specialty stores focuses on special market segments and carpet area generally ranges from 2000-5000 sqft.
Table-4: Multiple Regression Analysis
Sources: Primary Data
Note: Dependent Variable: Customer Experience
Table-5: Summaries of Regression Models for Determinants and Customer Experience for Specialty Stores
Model R R Square Adjusted R Std. Error of the Estimate
1 .916 a .839 .826 .45643
Sources: Primary Data
Table-6: Model Significance for Specialty Stores
Model Sum of Squares d.f. Mean Square F
Regression 109.526 8 13.691 65.717
Residual 21.041 101 .208
Total 130.568 109
Sources: Primary Data
Interpretation: result of the multiple regression using enter method as in Table 5 and Table 6, shows that overall model for
specialty stores yielded a significant statistic (F=65.717, p<0.000) and adjusted R Square is 0.826, explained by social
environment, Service interface, retail atmosphere, assortment, price, Experience in alternate channels, retail brand and previous
customer experience.
Branded Stores
Branded stores are said to be exclusive showrooms either owned or franchised out by the manufacturer.
Model Un standardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) .894 .346 2.588 .011
Past Experience .376 .065 .296 5.743 .000
Atmosphere .514 .057 .509 9.046 .000
Assortment -.045 .080 -.046 -.564 .574
Price .183 .084 .157 2.176 .032
Service Interface .158 .069 .163 2.304 .023
Social Environment .539 .073 .516 7.396 .000
Retail Brand -.126 .101 -.106 -1.248 .215
Alternate Channel Experience .126 .043 .158 2.893 .005
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Table-7: Predictor Effects and β Estimates for Determinants on
Customer Experience for Branded Stores
Model Un standardized
Coefficients
Standardized
Coefficients
t
B Std. Error Beta
(Constant) 1.140 .284 4.013
Past Experience .254 .053 ..346 4.782
Atmosphere .260 .062 .308 4.192
Assortment -.045 .097 -.054 -.462
Price .221 .068 .270 3.261
Service Interface .325 .090 .432 3.600
Social Environment .507 .076 .640 6.643
Retail Brand -.087 .104 -.102 -.838
Alternate Channel Experience . -.039 . .048 -.060 -.811
Sources: Primary Data
Table-8: Summary of Regression Models for Determinants and Customer Experience for Branded Stores
Model R R Square Adjusted R Std. Error of the Estimate
1 .838 a .703 .679 .46866
Sources: Primary Data
Table-9: Model Significance for Branded Stores
Model Sum of Squares d.f. Mean Square F
Regression 51.466 8 6.433 29.290
Residual 21.744 99 .220
Total 73.210 107
Sources: Primary Data
The result of the multiple regression using enter method as in table 8 and table 9, shows that overall model for branded stores
yielded a significant statistic (F=29.290, p<0.000) and adjusted R Square is 0.679, explained by social environment, Service
interface, retail atmosphere, assortment, price, Experience in alternate channels, retail brand and previous customer experience.
FINDINGS
The regression results for the various determinants on customer experience showed support for many hypotheses in the various
retail store formats. The effects of the various determinants namely social environment, service interface, retail atmosphere,
assortment, price, Experience in alternate channels, retail brand, previous customer experience were examined using linear
regression.
Supermarket: The regression model and its related estimates indicate that in case of supermarket, social environment,
atmosphere, price, alternate channel experience and previous experience play a major role in creating a superior customer
experience than Service interface, Assortment, Retail brand. Therefore, for the supermarket, hypotheses H1, H3, H5, H6, H8 are all
supported.
Speciality Stores: In the case of specialty stores the regression model and the corresponding β estimates indicate that social
environment, service interface, retail atmosphere, price, alternate channel experience and past experience have significant effect
on customer experience than stores Assortment and stores Retail brand. Thus, it can be concluded that in the case of specialty
stores, hypotheses: H1, H2, H3, H5, H6 and H8 are all supported.
Branded Stores: In the case of branded stores, the model has a good fit, as the p value is significant at 5% level of significance.
The adjusted R Square depicts that 68% variation in the dependent variable customer experience is accounted by social
environment, service interface, retail atmosphere, price and experience than Assortment, stores Experience in alternate channels
and Retail brand. Hence, it can be said that in the case of branded stores, hypotheses: H1, H2, H3, H5 and H8 are all supported.
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CONCLUSION
Retailers need to consider new concepts and approaches, and most of all, new approaches within the organization to capitalize on
the new opportunities offered by experiential marketing.
Yelkur (2000) argues that creating memorable experiences is critical to retaining current customers and attracting new ones.
Improving overall experience, without the risk of raising unrealistic consumer expectations, holds enormous promise for both
goods and services retailers.
Organizations must strive to orchestrate or to stimulate positive experience to be successful (Haeckel et al 2003). The present
study has indicated the need to focus on the various antecedents to create positive experiences. In summary, customers’
experiences resulting in positive emotional reactions are increasingly being seen as real and sustainable differentiators between
competing retailers.
The insight provided by the study about the various contributors and the suggested measures to improve customer experience
enable the retailer to frame marketing strategies which in turn may create a deeper bond towards the retail outlet and will directly
impact the purchase behavior of the customer.
REFERENCES
1. Baker, Julie, Grewal, Dhruv, & Levy, Michael. (1992). An experimental approach to making retail store environmental
decisions. Journal of Retailing, 68, 445-460.
2. Choudhary, H., & Sharma, V. (2009). Empirical Study on Operational Efficiency in Retail Stores in Chandigarh
Tricity. Prabhandan: Indian Journal of Management, 2(3).
3. Dikshit, Anand. (2011). The Uneasy Compromise - Indian Retail. The Wall Street Journal.
4. Levy, Michael, & Weitz, Barton A. (2004). Retailing Management. BurrRidge, IL: McGraw-Hill/Irwin.
5. Martin, C. L., & Pranter, C. A. (1991, Summer). Compatibility management: Customer-to-customer relationships in
service environments. Journal of Service Marketing, 3, 6–15.
6. (2008). The Great Indian Bazaar- The Organized Retail Comes of Age in India. McKinsey Report.
7. Pan, Yue, & George, M. Zinkhan. (2006). Determinants of Retail Patronage. Journal of Retailing, 82(3), 229–243.
8. Sengupta, Anirban. (2008). Emergence of modern Indian retail: an historical perspective. International Journal of
Retail & Distribution Management, 36(9), 689-700.
9. Retrieved from http://www.ibef.org/industry/retail-india.aspx
10. Retrieved from http://www.authorstream.com/Presentation/mady_dawn-2743972-current-trends-retails-2016/
11. Retrieved from
http://www.slideshare.net/iosrjce/customer-experience-in-supermarkets-and-hypermarkets-a-comparative...
12. Retrieved from http://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue12/Version-2/P017122116123.pdf
13. Retrieved from http://info.shine.com/industry/retail/7.html
14. Retrieved from http://www.indianchamber.org/sectors/retail/retail-notes-june-2015/
15. https://www.linkedin.com/pulse/20141022164952-76587159-it-s-all-about-the-customer-experience-whatev...
16. Retrieved from http://asq.org/qualitynews/qnt/execute/displaySetup?newsID=18247
17. Retrieved from http://www.slideshare.net/twinklekande/consumer-prefrence-towards-organized-retail-to-unorganized-
re...
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18. Retrieved from http://www.slideshare.net/n_nikte/visual-merchandising-communication
19. Retrieved from http://www.newmanpublication.com/admin/issue/br/02%20spl.pdf
20. Retrieved from http://bccaarmel.ac.in/main/downloads/Article_10.pdf
21. Retrieved from http://www.palgrave-journals.com/rlp/journal/v9/n1/full/rlp200927a.html
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THE STUDY OF CONSUMER PURCHASING BEHAVIOR IN ORGANIZED
AND UNORGANIZED RETAIL DIVISION OF UTTAR PRADESH
WITH SPECIAL REFERENCE TO LUCKNOW DISTRICT
Mohammad Imtiaz37
ABSTRACT
India is one of the largest markets for retail players in the world. Many hypermarkets, departmental stores supermarkets, have
been inaugurated in past few years in diverse part of India. The shopping tradition is changed from conventional marketing
culture to shopping mall society. The business of retail in India has going through key change. We have seen the developing of
new format and the purpose of worldwide concepts and constructs even though with modification to outfit the Indian
atmosphere. It not only provides the Indian shopper a broad preference, but also represents a very huge service chance for
people with various ability sets.
KEYWORDS
Consumer Behavior, Organized and Unorganized Retail etc.
INTRODUCTION
Retailing is the final step of any economic activity. It surround the business activities involved in selling goods and services to
customers for their personal, family or household use. It includes every sale to final consumers varying from cars to apparel to
meals at restaurants to movie tickets.
The word ‘retail’ is derived from the French word ‘retailer’, which means ‘to cut a piece off’ or ‘to break bulk’. A retailer is a
person, agent, agency, company or organization, which is involved in reaching the goods, merchandise or services to the final
consumer. Retailing is one of the most important growing industries in India. Napoleon Bonaparte’s jibe about ‘a nation of
shopkeepers’ still has a sphere of truth. The retail sector in India is witnessing a remarkable growth and creating huge
employment. Retailing can be illustrious in a variety of ways from other businesses such as manufacturing. Retailing hold
following characteristics, which vary, from manufacturing in following ways:
There is a direct end-user communication in retailing.
It is only spot in the value chain to offer a platform for promotions.
Sales at the retail stage are usually in smaller unit sizes.
Location is a critical aspect in retail business.
In most retail businesses, services are as vital as core products.
There are huge numbers of retail units evaluate to other members of the value chain. This occurs first to meet the
necessities of geographical coverage and population density.
Activities of Retailers
Retailers are often referred to as ‘middlemen” or “intermediaries”, who occupy a middle position, receiving and passing on
products from producers and wholesalers to customers. Retailers thus carry out various business actions and perform functions
such as categorization, holding stock etc. that add value to the offerings they make to the target segments. Therefore, the key
objective of any successful channel is to make sure availability of the right product, in the right quantity, at the right time via the
right channel.
Factors Responsible for the Growing Importance of Retail Sector
The retail sector is more and more being analyzed as an important economic activity that accounts for a significant part of the
economy, it employs a large proportion of workforce, and retailers today are among the largest and most of sophisticated
organizations. The various factors accountable for the growing importance of retail sector like:
Noticeable importance in economy.
Key employer.
37Research Scholar, Department of Management Studies, Mewar University, Rajasthan, India, [email protected]
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Retailers as gatekeepers.
Diversifying activities of retailers.
Organization growing on international scale.
Size of operations allowing for supply chain control.
Blurring of retail areas to include to wider areas of wider activities.
Large and increasing contribution to GDP.
LITERATURE REVIEW
For the world of retailers, there is no doubt that India is the Promised Land (Fels, 2007). India’s retail sector is likely to grow to
US$635 billion by 2015 (Fels, 2007). The modern retail formats are screening healthy growth in the form of departmental stores,
supermarkets and hypermarkets (Gill, 2007).Certainly, over the last 50 years, retail site decisions have been exceeded by models
emphasizing the benefits of one stop shopping (Mandhachitara, 2007). Modern retail chains drive efficiencies in the process of
allocation and invest in infrastructure that would otherwise be left to governments to build (Fels, 2007). Foreign investment in
retailing promotes improved productivity and competence, improved sourcing, improved quality of employment (Mukherjee and
Patel, 2005). Foreign retailers source the vast majority of their products locally. German chain METR & says it sources 957 of its
products from India and Carrefour buys about 907 of its products locally for its hypermarkets in China (Fels, 2007). Cultural
change might be unavoidable. Hawkins et al. (2004) suggest that culture is not static but evolves and changes slowly over time.
Cultural change is an ongoing evolutionary process that involves changes in the priorities of values at both individual and societal
levels (Egri; Ratlson 2004). With increasing globalization the retail industry is facing more and more competition which is making
them struggle harder and harder to succeed through better performance ( Koh, Kim, and Kim, 2006).The retail industry in India is
largely unorganized and predominantly consists of small, independent, owner-managed shops that have dominated Indian retailing
over the decades and are present in every village and local community or street corner stores, addressing the needs of the
population in the area and being the point of contact with the consumer. There are about 12 million retail outlets in the country;
only about 4 per cent of them are larger than 500 sq. ft. in size (Gill 2007). Culture as a key factor to influence consumers’
behavior has been intensively studied Cross-culturally (e.g. Levy 1959; Belk 1988; Belk et. al.1988; Gilly 1988; Belk et. al.1989;
—Jacobs et al. 1991). The organized retailing scenario is stabilized for some time now as players like Big Bazaar, Barista, Pizza
Hut, Shoppers’ Stop, McDonald’s, Subway etc. have become successful in establishing a national footprint.(Gill, 2007). &
ordinary people are buying what the rich can afford, a surprising number of consumers have accepted private label brands in a
country where small, individual stores selling no-name goods have been the rule for decades (Gill, 2007). Retail growth will
continue in India, but an influx of foreign players, limited and expensive desirable real estate and foreign investment restrictions
have pushed the country’s retail market closer to maturity (Global Retail development index 2010). China, India, Brazil and
Russia remain the highest priority markets for retail expansion according to these executives, with nearly 80 percent of
respondents citing one of these markets as part of their firms’ plans for short-term international growth. (Global Retail
development index 2010). There are many approaches to understanding and defining retailing. It can be defined as any business
that directs its marketing efforts towards satisfying the final consumer based upon, the organization of selling goods and services
as a means of distribution”, (Gill, 2007). However, in supply-led economies such as the former centrally planned economics
(CPES) of eastern and central Europe, retailing has traditionally been viewed as an unnecessary and unproductive link in the
channel of distribution (Myers and Alexander, 1997), —Jack (2001). Experience of retailing in US shows that existing theories of
retail development based on changing consumer needs are inadequate to explain new developments” (Gill, 2007). Knowing who
the customers are and what they want become critically important for designing, advertising and promoting products, and
developing the right pricing strategy to make customers feel that they are getting value for the price paid (Hauser, 2005).
However, an emerging body of new literature assumes that preferences of consumers are constructed during the purchase process,
based on the task and the context (Hoeffler; Ariely, 1999). The experience of China, Brazil and Thailand show that opening of
retail sector to FDI has not only generated immense employment opportunities but also has given a big boost to their economy as
a whole. Indian policy makers are also of the view that giving the retail sector a thrust will not only result in boosting the
economy, but also that the retail sector has the potential to be leveraged in order to rejuvenate specific targeted sector, including
the rural economy - such as manufacturing, food processing, packaging and logistic services( Gill, 2007). Choice is dependent
upon customer preferences, but other influences, such as availability and perceived price, also influence the products that
customers choose (Hauser, 2005). Selecting a shop for patronage is a two-step process for many consumers. First, the selection of
the shopping area is made second comes the selection of stores within the area (Foxall, Goldsmith, 1994). In the initial stage, 49%
FDI in multi-brand retail should be allowed, which could be raised to 100 per cent in three to five years depending on the sector’s
growth.
OBJECTIVES
The main objective is to study of consumer purchasing behavior in organized and unorganized retail sector of Uttar Pradesh with
special reference to Lucknow district.
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Sub-Objectives
To understand the relationship between Organized and Unorganized retail sector with reference to the factors affecting
consumer-purchasing behavior.
To find out the most influencing factor that affects the consumers’ purchasing behavior.
RESEARCH METHODOLOGY
The present study is a descriptive type of research study. The study aims to find out the factor of consumer purchasing behavior in
organized and unorganized retail sector of Uttar Pradesh with special reference to Lucknow district in order to conduct the study
100 respondents of Lucknow city have been surveyed and questionnaire method was used for data collection.
Sources of Data
The source for the study has been collected from both primary and secondary data. The primary data has been collected through a
well-drafted questionnaire. The secondary data has been collected through different sources like:
Books,
International and national journals,
Reports of World bank, Department of economic affairs, Planning commission,
Magazines,
Internet.
Research Approaches
Qualitative: The field of the study requires in-depth observation, instruments to get what customers do expect and get and how
giant organized retailers are affecting small retailers and in turn affects them, therefore qualitative approach is one of the essential
tool.
Quantitative: A research technique in which scientific concrete and projectable numerical data that can be statistically analyzed is
gathered, often from large samples also called hard data. The use of qualitative approach in the collection of data has been
attempted in order to give the study a concrete statistical shape. Here it will be pertinent to write that no quantitative technique for
the data analysis has been used. The analysis of the data in findings and interpretation part is purely descriptive in a holistic
manner-taking cognizance of different dimensions of the matter at hand.
Sampling Unit
Unorganized Retailers,
Organized Retailers,
Survey Methods
Personal Interviews,
Telephonic Interviews,
E-mailing,
Observations.
RETAIL LAYOUTS
Layouts of Selling
The different layout of selling or the store ‘package’ that the retailer present to the shopper is called as retail layout. A layout is
defined as a kind of retail mix, used by a set of retailers. Store Layout are layout based on the physical store where the vendor be
in touch with the customer. It is the mix of variables that retailers use to build up their business strategies and comprise the mix as
assortment, price, transactional convenience and experience. As a result, every retailer wants to assess the facilitator and obstacle
in the retail marketplace. This first involve in identifying the key drivers of growth, the shoppers’ outline and shopper opportunity.
It also means evaluating the nature of competition and challenges in the market place. Then the retailer decides the fundamentals
of the retail mix to satisfy the target markets’ needs more efficiently than its competitors. The alternative of retail mix elements
will allow it to decide the type of layout or arrangement of business. One of the key elements of a retailer’s success is the layout
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that they use to present to their target customers. A retailer can decide a layout based on the kind of store design they want to
make, the region they would like to create, the variety of products and services they desire to offer and approach taken to pricing.
The most significant feature is that the layout should be ideal to their target demographics.
In the past, small independent players such as conventional and small grocery stores have dominated the Indian retail sector. It is
the modern times that organized multi-outlet retail idea has gained drive. As per the study carry out by the ICRIER on the subject
‘Impact of Organized Retail on Unorganized Retail Sector’; the retail business is projected to grow at 13% p.a. from US$ 322
billion in 2006-07 to US$ 590 billion in 2011-12. In modern retailing, layout is the key strategic option. Retailers can get edge
over competitors by innovating their layout. In India, organized retailers are trying out a large variety of layout. Local situation
and insight into the local buying behavior have to shape the layout choice. A good point to note in the retailing industry in the
present day is the level of experimentation occurring locally in terms of layouts. For example, ITC e-chaupal is an innovative
model, which brings together a two-way flow of goods in retail outlet. Farmers sell their produce and purchase goods to fulfill
their expenditure needs. Irrespective of the size, there is strong appearance of definite retail layouts in India. Organized retail as
well as unorganized retail are of enormous importance for the producers and the traders as well as to the consumers. Unorganized
retailing existed from the early stage of business development while organized retailing become popular after large-scale
production during late 1800’s.
Unorganized Retail Formats
India is a huge country, which lives in villages consist of 80% of population. Some of them get employment in the government
departments or in private or public sector. A great number of people’s employment depends upon agricultural activities/
unorganized sector. Majority of consumers make purchase daily for daily needs. These needs are satisfied by the neighbor’s kirana
/ general stores, roadside vendor, weekly hats / markets, and melas on special occasions. Customer gets easy credits for their small
purchases at unorganized retail shop. They pay back ‘as and when earned’ basis. The customers get the choice to pay in the
evening for the purchases in the morning or vice-versa, pay next day, pay weekly or monthly for the purchases. Sometimes, the
customer gets period credit for special needs like marriages, illness and death of family members.
Although there are many unorganized retail formats in India, yet generally unorganized retail formats can be categorized in two
parts:
Non-movable Retail Formats,
Movable Retail Formats.
Under Non-movable Retail Formats, popular formats are kirana/general stores like medical store, cloth and readymade garments
shop, cosmetics stores etc.
Weekly Hat / Market, Mela, Hawkers and Pheriwala, Roaming Salesman/Vendors are the movable retail formats.
Organized Retail Layout
Disposable income of Indian consumers have increased considerably during the last decade, so they keep on demanding better
products and services, and a better shopping environment. As the income level increases, the consumer’s option for modern retail
format also change. Young consumers are more tending to shop from modern retail formats as compare to older ones. Due to
important product attribute like improved quality, variety of brands and variety of merchandise and store attribute like parking
facility, qualified sales personnel and complete security etc.; consumers have a preference to modern retail formats. The main
provider for the growth of planned retailing are the withholding strategies, promotional strategies, growth and improvement
strategies, growth and development strategies, pricing strategies and competitive strategies of retailers. It plays a vital role in
enhancing the sales of retail formats. Several layout have been experimented by retailers. Some of them are:
Malls: Malls ranging from 60,000 sq. ft. to 7,00,000 sq. ft., are the largest form of organized retailing today. These provide an
ideal shopping experience with a merger of product, service and entertainment, all under a single roof.
Convenience Stores: These are comparatively small stores situated near residential areas and open for extended hours for all
seven days a week. These carry a partial line of high-turnover convenience products and fill significant consumer needs. People
are ready to pay for the convenience.
Department Stores: Department Stores are another type of rising formats and these carry several product lines- characteristically
clothing, home furnishings and household goods - with each line operating as a separate department managed by specialist buyers
or merchandisers.
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Hypermarkets / Supermarkets: Hypermarkets and Supermarkets are the newest formats located in or near suburban high streets.
Hypermarkets hold a product range varying from Foods, Home-ware, Appliances, Furniture, Sports, Toys and Clothing; and
Supermarkets are large self-service outlets, catering to diverse shopper needs and primarily focus on Food, Grocery, and personal
sales.
Discount Stores: Consumers prefer to pay a low price can visit the Discount Stores or Factory Outlets, which offer discounts on
the MRP, as they sell in bulk and have higher economies of scale.
Specialty Stores: These stores particularly provide to consumers who are looking for various brands at one store. For example,
apparel stores, sporting goods stores, furniture stores and bookstores are some of the examples of specialty stores. (Kotler, 2006;
Sinha, 2007 and Jasola, 2007)
Category Killers: Large format stores that focus in a narrow line of merchandise e.g. Vivek, Vijay Sales, Mega Mart. They use
their buying power to negotiate low prices and exceptional terms and guaranteed supply when items are in short supply.
Seamless Malls: conglomerate of retailers without walls separating the individual stores. One massive shop, with hundreds of
popular brands sharing space with each other e.g. Pantaloon’s Central Mall.
Outlet Mall: Shopping centre with national brand-name retailers selling economical merchandise e.g. City Mall.
Anchor Clients: The most important basics in a large format mall. An anchor is among the first clients to go into a mall, and
occupy at least 25-30% floor space e.g. Big Bazaar in Sahara Mall Gurgaon.
Draw Tenant: A store that attracts a large number of possible customers to a shopping centre, often an anchor store.
Food Court: Separate area of a shopping centre contain fast-food outlets and a common, seating area.
Figure-1
Sources: Authors Compilation
CHALLENGES FACED BY ORGANIZED RETAIL SECTOR IN INDIA
Even though the organized retail market does offer a huge untouched prospective, it should also be recognized that it is not that
easy to function in retail market because of a number of problems. Retailers need to tackle the following challenges in order to
become flourishing on long term.
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The organized retail sector in India is still at a developmental phase, characterized by a very small number of players
trying to generate a new standard. To become a flourishing industry, the Indian retail sector has to create a center of
attention by leading Indian and foreign players to make sizeable investments.
Technology is one of the main challenges faced by organized retailers for proficient management.
Lack of skillful personnel in retail sector.
Retail reduction is also one of the main challenges. Retail contraction is the difference in the price of stock as per the
books and the real stock accessible in the shop. The causes of retail decrease are mainly employee theft, shoplifting,
administrative errors and vendor fraud. Efficient online monitoring system need to be executed.
Understanding customers in terms of customer behavior and loyalty is a tricky job. Retailers need to put into practice
effectual customer relation management and loyalty agenda.
Distribution is an essential part of any retail organization. Delivering the right goods to the right place at the right time is
key job of allocation. Retail majors are under serious pressure to get better their supply chain systems and distribution
channels and arrive at the levels of quality and service preferred by customers. The lack of appropriate infrastructure
and distribution channels in the country results in unproductive processes.
Organized retail outlets use incredibly huge amount of electricity for a variety of purpose from lighting, air
conditioning, escalators, cold storing, billing systems, lifts etc. Because of inadequate and incompetent power supply, a
huge amount of private investment goes into ensuring power backups. This makes it very tricky for organized retail to
grow.
The retailers in India are paying very high price for real estate. This increases the maintenance price and diminish profit
margins.
Competition from unorganized sector is an additional challenge facing the organized retail industry in India.
As more and more organized retail outlets are spotting the Indian geography, competition is no more controlled between
organized and unorganized retailing. It is now obvious between organized retailers as well. Well-organized and efficient
loyalty programs, home delivery of goods, customer retention strategies, offers, discounts etc. are the order of the day
DATA ANALYSIS
Relationship between Organized and Unorganized Retail Sector with reference to the Factors Affecting Consumer-Purchasing
Behavior.
Table-1: Calculation of Coefficient Correlation between Organized and Unorganized Retail Division
Factors X
Dx =
(X-11.12) Dx2 Y
Dy =
(Y-11.12) Dy2 DxDy
Quality 4 -7.12 50.6944 4 -7.12 50.6944 50.6944
Price 6 -5.12 26.2144 4 -7.12 50.6944 36.4544
Reference Group &
Family Influence 6 -5.12 26.2144 7 -4.12 16.9744 21.0944
Income 7 -4.12 16.9744 8 -3.12 9.7344 12.8544
Social Status 8 -3.12 9.7344 10 -1.12 1.2544 3.4944
Shopping Lifestyle 12 0.88 0.7744 12 0.88 0.7744 0.7744
Schemes and Offers 17 5.88 34.5744 13 1.88 3.5344 11.0544
Customer Services 18 6.88 47.3344 20 8.88 78.8544 61.0944
Convenience 22 10.88 118.374 22 10.88 118.3744 118.3744
TOTAL
100/9=
11.12
330.89
100/9 =
11.12
330.8896 315.8896
Sources: Authors Compilation
Here the value of correlation (r)
Correlation (r) = 315.8896 / 330.89 = 0.9547
The value of correlation should lie between -1 to +1, here the value of correlation is +.915, therefore it is found that high positive
relationship exists between the variables.
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Factors Influencing Purchasing Behavior of Customers for Organized and Unorganized Retail Sector
Graph-1
Sources: Authors Compilation
CONCLUSION
The conclusion resultant from the study of the composed data is that there is a high encouraging connection between organized
and unorganized retail sector with suggestion to the feature touching consumer-purchasing behavior. It is establish that the
relationship is highly positive amongst the variables. The consequence regarding the most influencing factors is also analyzed.
The author acknowledged the factors on which study is done are- Quality of the product, Price, Reference group or family
influence, Income, Social Status, Shopping Lifestyle, Schemes and Offers, Customer Service and Convenience or Reach. The
author concluded that the above-mentioned factors have deep impact on customers purchasing behavior.
It is also concluded that customers prefer those purchase point where there are more schemes and offers. As after analyzing the
primary data it is found that schemes and offers are found the most influencing factor of consumer purchasing behavior in
organized retail, whereas when talking about the unorganized retail it is found that convenience or reach is measured as most
influencing factor of consumer purchasing behavior.
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Reference
Group &
Family
Influence
IncomeSocial
Status
Shopping
Lifestyle
Schemes
and Offers
Customer
ServicesConveniece
Organized 18 22 8 12 6 6 17 7 4
Unorganized 10 12 13 20 8 4 7 4 22
0
5
10
15
20
25
No
. o
f R
esp
on
den
ts
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7. Aggarwal, V. (2008). The Era of Retail Revolution: Contribution to Economy in Research in Management and
Technology, Eds., Aneet and Ramanjeet Singh, pp. 429-442. Deep and Deep Publications Private Limited.
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10. Anand, K. S., & Sinha, P. K. (2009). Store format choice in an evolving market: role of affect, cognition and
involvement. International Review of Retail, Distribution and Consumer Research, 19(5), 505-534.
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15. Bhardwaj, R. K., & Makkar, U. (2007). Retail Revolution- Emerging Challenges and Issues. Journal of IMS Group,
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PROFILE OF PRODUCTION OF MUGA SILK IN ASSAM:
A CASE STUDY OF GOALPARA DISTRICT OF ASSAM
Shahnaz Ali38 Dr. Horen Goowalla39
ABSTRACT
Indian silk industry is unique in several ways. India is the only country that commercially produces all the four types of silk
viz., Mulberry, tasar, eri and muga-consuming over 80% of the silk fabric production within the country. India is the second
largest producer of silk in the world with an annual silk production of around 16,500 M.Tons. With over one billion
population, India is a huge market by any standards where silk has occupied an enviable position since “silk is indispensable
in ceremonies and religious rituals, being necessary in wedding, festivals and funerals. Goalpara, as a poor district of Assam,
in which sericulture is a very profitable cottage industry for the poor family. The area of Goalpara district is composed of
eight (8) Development blocks and twentysix (26) Sericultural circles (Table 2).
The eight blocks are Kushdhowa, Balijana, Krishnai, Matia, Jaleswar, Kharmuza, Lakhipur and Rangjuli. Many families of
Goalpara district take the sericulture as the main source of income. The district of Goalpara is well known for its production
of quality muga seed cocoons and reeling cocoons. Sericulture in Goalpara district is the household occupation of the rural
areas and most of the people are belongs to tribal communities of the society. Apart of the population of various tribal
communities like Mech, Cachari, Rabha, Garo, Hajong, Koch etc., Schedule caste. An attempt has been made to highlight the
profile of production of Muga Silk in the study area and draw conclusion.
KEYWORDS
Distribution of Muga Villages, Muga Rearers, Production Activity, Price of Muga Silk etc.
INTRODUCTION
Human being has adored the natural silk fibre for various purposes from time immemorial, it is still reign supreme as “The Queen
of Fabrics” in the world textile industry of the world, and the demand is increasing year after year. Silk clothes have a look and
feeling of affluence that no other can equal. Due to its great value and use, there have been many attempts in various parts of the
world for production of silk in a large scale. One of the methods is rearing of silkworm on large scales by different techniques
with great care in natural and controlled condition in different parts of the world for large-scale production of fine silk. This is
known as sericulture. ‘Seri’ is a Latin word which means ‘silk’ and ‘culture’ is to ‘rear’. Silk is a natural filament created by the
silkworm. Therefore, sericulture means the raising or rearing of silkworms for the production of silk.
History of International Silk
Historically, Sericulture was introduced for the first time, into China by Hoshomin, the Queen of China. For a long time, the
Chinese Government considered sericulture, and as an industry, it was not known in other countries. Later, it was introduced into
Europe and Japan as well.
Chinese silk is still the cheapest and perhaps the contributing factor to the cost price is much favourable in China unlike in India.
However, the export potential of this sector is promising as silk production in Japan is declining and that of China, the largest silk
production in the World, it is stagnant or declining (World: Raw Silk- Market Report Analysis and forecast to 2020).
OBJECTIVES OF THE STUDY
To study the profile of production of Muga silk in Assam
RESEARCH METHODOLOGY
The study has been based on only secondary data. Secondary data has been collected from the scholarly articles, books, referred
journals, published and unpublished thesis, newsletters, and various websites.
38Research Scholar, Department of Commerce, Dibrugarh University, Assam, India, [email protected] 39Associate Professor, Department of Commerce, Mariani College, Assam, India, [email protected]
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Silk in India
Indian silk industry is unique in several ways. India is the only country that commercially produces all the four types of silk viz.,
Mulberry, tasar, eri and muga-consuming over 80% of the silk fabric production within the county. India is the second largest
producer of silk in the world with an annual silk production of around 16,500 M.Tons. With over one billion population, India is a
huge market by any standards where silk has occupied an enviable position since “silk is indispensable in ceremonies and
religious rituals, being necessary in wedding, festivals and funerals”.
Silk in Northeast
The golden yellow silk produced by the Muga silkworm, Antheraea assama is found mainly in North Eastern region of India. The
culture has also spread in different districts of neighboring states viz. East Garo Hills, West Khasi Hills and Re-Bhari districts of
Meghalaya, Mokokchung, Wokha and Kohima of Nagalan, Tameoglong of Manipur, Aizawl of Mizoram and Dibang valley,
Lohit, Changurh and Papumpare of Arunachal Pradesh.
Silk in Assam
Assam is also known for producing all four types of silk. Sericulture has been practiced in the state from time immemorial, and is
proud of traditionally producing Muga silk. Muga culture is endemic to erstwhile Assam and is the largest producer of the famous
golden Muga silk in the world. Muga culture has a glorious history in Assam. The silk of Assam was first made known to the
world during 1962 through famous traveller, Join Joseph who made a special mention to the effect that silkworm special in Assam
remained on trees and all round the year-end brilliant staffs were made out of the same.
Muga Silk in Goalpara District
Goalpara as a poor district of Assam, in which sericulture is a very profitable cottage industry for the poor family. The area of
Goalpara district is composed of eight (8) Development blocks and twenty six (26) Sericultural circles (Table 2). The eight blocks
are Kushdhowa, Balijana, Krishnai, Matia, Jaleswar, Kharmuza, Lakhipur and Rangjuli. Many families of Goalpara district take
the sericulture as the main source of income. The district of Goalpara is well known for its production of quality muga seed
cocoons and reeling cocoons. Sericulture in Goalpara district is the household occupation of the rural areas and most of the people
are belongs to tribal communities of the society. Apart of the population of various tribal communities like Mech, Cachari, Rabha,
Garo, Hajong, Koch etc., Schedule caste and General classes also taken up Sericulture as their primary source of income.
About 7612 families are engaged in sericulture directly in Goalpara district of which 5366 families practiced in eri culture, 2145
families practice muga culture and 821 families practice mulberry culture at present. About 251.57 hectare of land is covering
with different food plantation including plantation in Departmental farms and in private sector. At about 2145 farmers are
practicing muga culture in Goalpara district, they are involved in the production of reeling cocoons and seed cocoons, 65 Private
grainuers are functioning in the district to supply silkworm seed material to the Sericulturists, 26 private silk reeling devices are
functioning in the district. The private silk reeling entrepreneurs procure the cocoons produced by the Sericulturists through the
Government Cocoon Markets in the district as well as other state and produce raw silk. About 12 weavers are involved for
weaving silk fabric from 288. villages of 8 development blocks and cultivating 251.57 hectare acres of area covered with 2,40,500
of Som plants in Goalpara district (Table 2), (Anonymous, 2014-15).
Table-1: Block Wise Distribution of Muga Villages, Muga Rearers, Areas and Some Plants in Goalpara District
S. No. Blocks Number of Villages Circles Number of Rearers Area (Acre) Number of Plants
01 Rangjuli 97 9 694 283.62 72,638
02 Kushdhowa 65 7 469 318.45 91,299
03 Matia 26 3 182 65.50 8,414
04 Krishnai 16 1 112 307.16 95,886
05 Balijana 51 3 457 226.24 76,019
06 Kharmuza 12 1 84 11.70 2,000
07 Lakhipur 19 2 133 233.15 65,261
08 Jaleswar 2 nil 14 59.00 25,750
Total 288 26 2145 1504.82 4, 37, 267
Sources: Silk Directory - Muga, Assistant Director Sericulture, Goalpara, Assam. (2014)
Apart from above, in Government sector, there are about 38,792 of muga food plants in 18 Farms and Centres covering 487.86
acres of land in Goalpara district, Assam. India, where a total of 6.5 MT of muga raw silk produced during the year 2014-15
(Anonymous, 2014-15).
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Table-2: Production Activity and Beneficiary engaged in Muga Culture in Goalpara District
S. No. Type of Activities Number of Persons
1 Reeling Cocoon Production (Commercial Rearers) 1821
2 Seed Cocoon Production (Seed Rearers) 221
3 Disease Free Laying Production (Graineurs) 12
4 Muga Cocoon Reeling (Reelers) 26
5 Muga Silk Fabric Production (Weavers) 65
Total 2145
Sources: Silk Directory - Muga, Assistant Director Sericulture, Goalpara, Assam (2014)
Table-3: Price of Muga Silk items in Goalpara District
S. No. Muga Products Divisions Units Price (Rs.)
01 Cocoon Seed Cocoon Per number 2-5
Reeling Cocoon Per number 1-2
Cut/Pierce Cocoon Per Kg 500-550
02 Silkworm Seed Dfls Per gram 7-10
03 Silk Raw Silk Per kg 1200-1500
Spun Silk Per kg 2000-3000
Sources: Annual Report, Directorate of Sericulture, Assam (Anonymous 2014)
Plate-1: Life Cycle of Muga Silkworm
Moth Pupa with cocoon
Sources: Authors Compilation
Plate-2: Muga Silkworms on Som Tree
Sources: Authors Compilation
Plate-3: Muga Farmer Transferring Muga Silkworm
Sources: Authors Compilation
Plate-4: Muga Moths Laying Eggs On Kharika
Sources: Authors Compilation
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Plate-5: CSTRI Type Muga Reeling Machine
Sources: Authors Compilation
Plate-6: Muga Reeling By Women Reelers
Sources: Authors Compilation
Plate-7: Muga Silk Weaving By Male Weaver
Sources: Authors Compilation
Plate-8: Muga Silk Products
Sources: Authors Compilation
Plate-9: Customer Purchasing Muga Riha
in Exhibition Stalls
Sources: Authors Compilation
Plate-10: Goalpara District Grainage House
Sources: Authors Compilation
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CONCLUSION
Assam is the land of mystic nature, colorful people of diverse ethnic groups, speaking different languages and following multi-
dimensional culture. All the ethnic groups maintain their identity by languages, style of living, dress, and festivals etc. The style of
living is reflecting through their code of dresses woven by them using traditional designs. Fascinated by the intricate designs and
uniqueness of the fabric Mahatma Gandhi once commented that the “Women of Assam weave fairy tales in cloth”.
REFERENCES
1. (2014-15). Anonymous: Silk Directory- Muga. Assam. Goalpara: Asst. Director Sericulture.
2. (2014). Anonymous: Final Report, Assam Agricultural Competitiveness Project (AACP), Marketing Study of Muga
& Eri Silk Industry in Assam.
3. (2013-14), (2014-15). Anonymous: Annual Report. Assam: Directorate of Sericulture.
4. Barua, B. K. (1969). A Cultural History of Assam (Early Period), 1(5), 103 – 104.
5. Bharali, N. (1967). Som: The Muga Food Plant. Indian Silk, 6(1), 5-6.
6. Bharali, N. (1969). History of muga silk industry in Assam. Indian Silk, 7(12), 13-14.
7. Chetia, Reena. (2013). Traditional Knowledge and Problems Involved in Muga Culture of Assam: A Case Study of
Golaghat District. International Journal for 8.Basic Sciences and Social Sciences (IJBSS), 2(2), 129-134. ISSN:
2319-2968.
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22. Retrieved from https://en.wikipedia.org/wiki/Silk
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STATUS REPORT OFUNORGANIZED RETAILING:
A CASE STUDY OF CHENNAI METROPOLITAN AREA
Dr. M. E. Prabhakar40
ABSTRACT
Globalization has paved the way for many industries to accelerate its growth trajectory and retailing is said to be one such
sunrise industry, which has exhibited the highest potential for growth. The emergence of global markets coupled with IT
revolution has fueled its growth of retailing across the world. Unorganized retailing is one such sector (unorganized) which is
characterized by high level of fragmentation in India where 95 percent or more which falls under that particular category.
Unorganized retailing is one such industry with has a huge potential in different aspects including contribution in employment
as well as economic growth. The paper traces the status of unorganized retailing in Chennai Metropolitan area (CMA)
KEYWORDS
Unorganized Traditional Retailing; Modern Stores; Foreign Direct Investment; Business Challenges etc.
INTRODUCTION
Retailing is a kind of distribution activity in which the retailer purchases from the suppliers or manufacturers and sells it directly
to consumers with a defined profit. It is a tail activity in the business chain where end user and last intermediaries who does the
transaction. Indian Retail industry is segmented into organized (modern retail stores) and (traditional) unorganized retailing and it is
basically known as ‘nation of shop keepers’ in the world due to the presence of more than 13 million retail outlets. Beyond buying –
selling activity, these stores are performing various functions like social meeting place, points of exchanging of information and
serve as socially integrated units. Unorganized retailing was classified as unorganized sectoring India, which contributes more in
terms of employment and GDP next to agriculture. These sectors were not recognized as industry, which in turn hampers the
operational as well as other functional aspects too. Due to emergence of modern stores, retailing some has added more problems
to unorganized retailing. These unorganized retail stores are also known as in different terminology like neighbourhood retailing,
convenience retailing, mom & pop stores, kirana stores, traditional retailing etc. The paper traces the status report of unorganized
retailing in Chennai Metropolitan Area (CMA) on the emergence of modern stores.
REVIEW OF LITERATURE
Academic research into the unorganized retailing in our country is lacking, due to non-recognition of these businesses and there is
no any regulatory mechanism available to monitor and look after the business prospects of unorganized retailing. Unorganized
retailing is a universal phenomenon in which it lacks the theoretical definition and other characteristics to define the business.
These unorganized industries were not given importance in any countries, United Kingdom was the first country who has initiated
to study about it, and they formed a one-member committee headed by Bolton in 1971 to define the characteristics as well as
problems significantly surrounded by these unorganized retailers. The committee in turn gave three aspects / characteristics for
traditional retailing; first, economic aspect (a small firm has a relatively small share of its market), management aspect (a small
firm is managed by its owners in a personalized way, not through formalized management structures), and the aspect of
independence or free from outside control (A small firm does not form part of a larger enterprise and decision making done by
managers or owners). Hence, these retail activities have to be seen from social, economic, and operational aspects in order to
understand it better.
Small-scale retailing is been closely associated with human civilization, it has been a part of the society, and they are deeply
rooted in it. Shoppers particularly who shop locally see local shops performing social and community functions (Smith and Sparks
1997). The role of shopping facilities serve to underline the inherently social nature of the shopping process and the critical role
that small stores play in this regard as a fundamental ‘building block’ of customers’ retail activities (Holbrook and Jackson 1996)
and also developing familiarity and building relationships (Pioch and Byrom 2004) with local customers that allows them to offer
residents benefits (Byrom, Medway, and Warnaby 2003) and creating ‘emotional connections’ in a friendly environment (Baron et
al., 2001). Being small scale in nature, these traditional retailing is a family owned business in which, the entire family and their
livelihood depends upon these business. Lauder et al (1994) quoted that, family businesses “provide a critical infrastructure for
economic activity and wealth creation” (Poutziouris, et al 2004). Broadbridge and Calderwood, (2002) explained that traditional
retailers should focus on local residents to beat modern retailers. In opinion of Hermann Kent, this endured in the 1930s; these
shopkeepers are true individuals and community assets. They have ‘live stakes’ in the places where they carry on business. What
40Associate Professor, Department of Management, S.M.S., Nagaland University, Nagaland, India, [email protected]
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money they make, they largely spend where they make it. They render municipal and social welfare services. Rather than just
performing a utilitarian function, these small local stores meet a variety of social, sustainability and ethical needs (Megicks 2007).
Their ability to meet the needs of a diverse range of customers (Kirby 1987) stems from the variety of ways in which small stores
perform a social function: for some, they are the only store available; for others, they are a source of emergency supply and for
most, they are a focal point and source of specialist supplies (Smith and Sparks 1997). Kaufman and Hernandez (1991)
commented that, smaller stores do considerably better at establishing or maintaining community and cultural relations than do
larger retailers. The other main characteristics include, covering local area, proximity to consumers, fixed class customers,
identifying the individual and family needs, home delivery, extended credit facility, opening long hours and over the counter
services. Hence, the social role played by these traditional retailing seems to be simple but it is very important aspect, which is
said to be unique when compared to modern stores.
Traditional retail businesses promote entrepreneurial and risk taking activity, which has a positive consequence in terms of local
employment and income generation (Basu 1998; O’Dwyer and Ryan 2002). Since by nature of small scale, these retailers have no
bargaining power like corporate backed modern retailing, they are always at the receiving end in the case of supply chain with the
manufacturer. As a result, it has been argued that supermarket operator’s benefit from such vertical supply linkages and their
buying power can lead to exploitation of the consumer in terms of price (Delgado and Waterson 2003).
These traditional retailers play a major role in “fill in grocery purchase, rather than stock in grocery purchase”. The store choice is
dependent on the timing of shopping trips, as consumers may go to a smaller local store for short ‘fill-in’ trips and go to a larger
store for regular shopping trips (Kahn and Schmittlein, 1989). This traditional format is generally used by consumers for fill-in
trips and snack trips (Kahn and McAlister 1997) and adds value to access convenience, due to its convenient locations in
comparison to supermarkets. Majority of shoppers actually use small and large stores flexibly and inter – changeably for both top
– up shopping and major one stop shopping needs. Small traditional retailers have their own unique capabilities and distinctive
competencies (McGee 2000), and they create value in three main ways: by virtue of certain features generic to smaller outlets; by
the development of specialist store formats or by targeting their activities on specific consumer groups. In terms of their generic
features, small convenience stores meet the needs of consumers by adapting to the local population (Birtwistle and Tsim 2005),
providing a better service and product range tailored to shoppers needs, and offering incremental services that fulfill
neighbourhood needs better than supermarkets. Finally, the preference for the small store ends up by fill in grocery needs. Small
retailers are in a position to develop knowledge of particular groups, some of which have a stronger affinity with them than other
shoppers (Child, et al 2002) by specializing and developing a congruence between the image of the store and the customers they
are appealing to (O’Cass and Grace 2008). and also providing and developing home delivery (Meneely, et al 2008); stocking
products that are perceived as more ‘authentic’ fresh foods (e.g., vegetables) and spending more time with the customer (Groves
2001) and advising them on the quality and meaning of the product (Hilton 1998). In the current climate, the independent
retailer’s ability to provide positive, interpersonal components of the retail experience could be viewed as a real strength and
exploited to the full (Baron et. al., 1999). There are so many evidences that smaller retailers are finding success by providing
customer service that is unparalleled at the larger retailers utilizing these types of concepts from mom and- pop stores (Tosh
1998).
Lack of management expertise, under-capitalization, disadvantages of lack of economies of scale, lack of resources to gather
market intelligence, and inability to adapt new technologies (Lauder, et al 1994) make big barricades for the small store retailer to
grow. Despite the changing nature of the market and changing nature of consumer behaviour and a diversity of external business
and economic factors, there is still a role for small, independent shops and convenience stores at both social and economic levels
(Baron, Harris, Leaver and Oldfield, 2001)The changes in the business environment have placed increasing pressure on traditional
retailing businesses, with smaller firms experiencing difficulties during the first three years of existence following start-up
(O’Dwyer and Ryan, 2000). Therefore, the target audience for these traditional retailers is all about the nearby catchment area
population.
Government policy in foreign direct investment in multi brand retailing has brought unorganized retailing industry into the
business limelight. There is absolutely no level playing field for both modern retailing and unorganized retailing even though the
business environment seems to be same. The external factors are playing a predominant role and these factors make the small-
scale retailing to have a tough game in the business environment. The independent small shop has been the numerically dominant
retail form in many countries and this industries potential in contributing in employment, GDP it has been largely unknown. In
India, this small-scale retailing plays a vital role towards the development and is consistent with growth of economy.
RESEARCH METHODOLOGY
Research Objectives
The business status report describes the particular situation of a business environment with a defined time. The present research
intended to find out the status of unorganized retailing (Food & Grocery) in Chennai metropolitan area (CMA). It follows 3P
approach, which consists of:
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Progress (Past): What has been achieved as of now from the past?
Problems (Present): What are the challenges the industry is facing currently?
Plans (Future): How the industry could progress in days to come?
Research Questions
Did the unorganized retailer’s experienced reduction of customers?
What is the status of business turnover?
What is the overall opinion of the future prospects of their business?
Research Participants & Sample Framework
The present research concentrates only on the context of unorganized traditional retailers and the research participants are the
owners or who are running the unorganized retail business for at least 5 years are more. The status report is a part of larger survey,
which was administered to find out the different aspects of unorganized retailers in comparison with modern store retailers in the
study area (CMA). These stores were categorized into two segments namely treatment group and control group based upon the
location from the modern stores. Treatment groups are the stores, which are situated within 6km of the modern stores and control
group, which are located far away from the modern stores. This classification based on distance seems to be mandatory since it
directly affects the business prospects of unorganized retailers. The Chennai metropolitan area was equally represented by
dividing the city into 13 zones. The questions were open ended and the responses were taken down verbatim care was taken not to
intimidate and favour the answers. All the possible answers were taken into account and categorized for the analysis. On the part
of status report, the opinions were elicited in every 10th respondents out of 500 and 5th respondent out of 121 were chosen
randomly from the treatment group and control group retailers under study respectively so as to get the unbiased answers. In total
74 retailers were sampled to find out the opinion of their business prospects.
Table-1: Primary Sample Survey Zones
Sources: Authors Compilation
ANALYSIS& INTERPRETATION
The data gathered through questionnaires survey from traditional store owners were analyzed through means, averages,
percentages, chi square test and other descriptive statistics. Since it is a status report, the data gathered and analyzed was restricted
only to above said questions. For this purpose, SPSS 18.0 was used.
The table-2 and figure-1 shows a clear variation in the opinion of both the groups. Although chi square did not show significant
difference for various opinions between the two groups, one can witness in the graph that treatment groups thinks that there was a
reduction in the number of customers over the years. Present situation might not have been significant to say that there was any
impact on the traditional shops in terms of customer turn over according to the found results. These results are according to the
perceived notions by the shop owners. The actual situation may be different. It may also be possible that the present trend may not
be significant and in future, this may have a significant change over the years.
S.
No.
CMA
Zones
(Treatment Group)
Traditional Retailers
Interviewed (No.)
Opinion
Elicited
(Control Group)
Traditional Retailers
Interviewed (No.)
Opinion
Elicited
1. Zone 1 48 5 3 1
2. Zone 2 36 4 28 5
3. Zone 3 45 4 28 5
4. Zone 4 54 6 2 -
5. Zone 5 57 6 4 1
6. Zone 6 34 3 35 8
7. Zone 7 34 3 2 -
8. Zone 8 47 5 4 1
9. Zone 9 44 4 1 -
10. Zone 10 57 6 5 1
11. Zone 11 28 3 3 1
12. Zone 12 4 - 2 -
13. Zone 13 12 1 4 1
Total 500 50 121 24
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Chi Square Analysis for the Opinions of Retailers to Question-1
Table-2 Figure-1
Sources: Opinion recorded from Retailers;
Note: Chi square = .282 (Not Significant)
Groups
Opinion
Total
Chi Square
Value
p
Value
Yes No No
Opinion
.282
NS
Treatment
Group
18 14 18 50
36.0% 28.0% 36.0% 100.0%
Control
Group
5 6 13 24
20.8% 25.0% 54.2% 100.0%
Total 23 20 31 74
31.1% 27.0% 41.9% 100.0%
Sources: Opinion recorded from Retailers
The table-3 and figure-2 shows a clear picture about opinion on business turnover decrease due to the emergence of modern
stores. Although chi square did not show significant difference for various opinions between the two groups, one can see in the
graph that no opinion and no answers were more from the respondents who have indicated that there was a change. Present
situation might not have been significant to say that there was any impact due to emergence of modern stores on the traditional
shops in terms of business turn over according to the found results.
Chi Square Analysis for the Opinions of Retailers to Question-2
Table-3 Figure-2
Sources: Opinion recorded from Retailers;
Note: Chi square = .946 (Not Significant)
Groups
Opinion
Total
Chi Square
Value
p
Value
Yes No No
Opinion
.946
NS
Treatment
Group
3 29 18 50
6.0% 58.0% 36.0% 100.0%
Control
Group
1 14 9 24
4.2% 58.3% 37.5% 100.0%
Total 4 43 27 74
5.4% 58.1% 36.5% 100.0%
Sources: Opinion recorded from Retailers
Chi Square Analysis for the Opinions of Retailers to Question-3
Table-4
Groups Business Prospect
Total Chi –Square
Value
‘p’
value Grow Not Grow Not Sure
Treatment
Group
26 15 9 50
.061
NS
52.0% 30.0% 18.0% 100.0%
Control
Group
19 2 3 24
79.2% 8.3% 12.5% 100.0%
Total 45 17 12 74
60.8% 23.0% 16.2% 100.0%
Sources: Opinion recorded from Retailers
Note: Chi Square value = .061 Not Significant
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Figure-3
Sources: Opinion recorded from Retailers
Table-4 and Figure-3 show a clear opinion of both the groups. The chi square test did not show significance difference for various
opinions given by the respondents of treatment and control group. From the above figure and table, it is known that majority of the
respondents have indicated that the business will grow in future unmindful of the growth of modern stores. Hence, in the present
situation wherein the growth of modern stores whether in the area of treatment group or control group may not create any affect in
future. This may be due to the reason that they have a class of customers in their own business environment who have no other go
except to make convenient and comfortable purchases from these traditional stores. Hence, it appears that the traditional shops
shall even co-exist along with the modern stores.
MAJOR FINDINGS
The opinions given by the unorganized retailers were not shown much impact on traditional unorganized retailers due to the
emergence of modern retail stores. However, at the same time, the neutral as well as negative responses were relatively
considerable level due to the impact of modern retail stores. Though the unorganized retailers may suffer in terms of reduced
business turnover and profit, they may not go out of business immediately due to several other factors.
LIMITATIONS OF THE RESEARCH
There are several limitations to this study both conceptual and methodological. Due to the emerging nature of this retail industry,
limited secondary source and authenticated data were not made available. This current study was restricted only to retail aspect of
the food and grocery segment since it is most unorganized than any other segment. In addition, data collection took lot of
relationship building, recommendations of known Neighbours and also briefing about the research and motivating them which
took lot of time, money and energy. Despite those above said limitations, the study provides answers to the basic problems in
which traditional retailers are entangled due to the emergence of modern store retailing.
CONCLUSIONS
To conclude, the traditional unorganized retailers are running their business with reduced margin of profit and as of now, modern
stores did not make any huge impact. In addition, the government policy towards FDI in multi brand retailing has yet to take up
proper shape. Once FDI in multi brand retailing is freely allowed, which may create a huge unrest among retailers and it has been
already erupted in some other places. The Indian retail market environment is capable enough to accommodate both the aspects of
retailing activity and it may leads to level playing field if government considers and tackles the FDI issue very carefully.
SCOPE FOR FUTURE RESEARCH
The present study aimed at traditional food and grocery stores to find out the impact on them due to the growth of modern stores.
The study also proposed to find out the impact difference between traditional stores (treatment group) which are nearer to modern
stores and traditional stores (control group) which are far away from modern stores so as to relate these differential impact to the
preference factors of modern stores found attracting by traditional store customers who switched over to modern stores. In
addition, the food and grocery supply chain linkage with these stores have not been taken up in the present study and this offers
future scope for research.
treatment gp, Business
prospect Grow, 26
treatment gp, Business
prospect Will not grow,
15
treatment gp, Business
prospect unsure, 9
control gp, Business
prospect Grow, 19
control gp, Business
prospect Will not grow,
2
control gp, Business
prospect unsure, 3
treatment gp
control gp
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The researcher was purposive in studying traditional retail food and grocery stores and hence the other segments are to be studied
by the future research workers to know the glimpse of unorganized retailing industry.
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22. Pioch, E., & J., Byrom. (2004). Small independent retail firms and locational decision-making: Outdoor leisure retailing
by the crags. Journal of Small Business and Enterprise Development, 11(2), 222–233.
23. Poutziouris, P., Steier, L., & Smyirnos, K. (2004). A commentary on family business entrepreneurial developments.
International Journal of Entrepreneurial Behaviour and Research, 10 (1/2), 7 – 11.
24. Smith, A., & L., Sparks. (1997). Retailing and Small Shops: Scottish Office Central Research Unit.
25. Tosh, M. (1998). Size is not everything. Progressive Grocer, 77, 53–60.
26. Retrieved from http://accman.in/images/jan09/Retailing1.doc
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“MICROFINANCE” AN EFFECTIVE TOOL FOR WOMEN EMPOWERMENT:
A CASE STUDY OF UTTAR PRADESH
Rachna Gupta41 Bharat Kumar Meher42
ABSTRACT
Even after the introduction of banking sector in India, there is still a lacking of banking and other financial services for lower
income group people as well as for women. Such gaps gave birth to the development of Microfinance Institutions. In a
developing country like India, Microfinance is treated as an effective way to provide financial services not only to lower
income group of people, but also to the entrepreneurs and small businesses. As India is regarded as a male dominated society,
many attempts have been made to give an equal status to the women also. Many programmes have been initiated and steps
have been taken in empowering the women of the country. Introduction of Microfinance institution is one of such major step
for women empowerment. This paper is an attempt to analyze the role of Microfinance Institutions of Uttar Pradesh in women
empowerment. A critical analysis has also been done on the various schemes or financial services rendered by microfinance
institutions for the purpose of not only to eradicated the social evil like poverty but also to uplift the status of women in our
country. For this purpose, 3 Microfinance Institutions of Uttar Pradesh (S.E. Investment. Cashpor Microcredit and Sonata
Financial Services Ltd.), have been taken into consideration for the study. The sample size has been taken based on Net worth
of the companies. Companies whose Net worth was more than 2 million in the financial year 2014-15 have been selected for
the study. This study shows that selected Microfinance institutions have been playing a vital role in women empowerment
by rendering various financial and non-financial support to women like Loan, Employment Training, Education, Medical
Facilities etc. Besides that, Microfinance Institutions are also providing tectonic service as SHG (self- help group).
KEYWORDS
Microfinance Institutions, Women Empowerment, NABARD, Financial Services, Net Worth etc.
INTRODUCTION
Women play a vital role in the overall development of a country, as they constitute half the human resources of a nation. The
economic wealth of a country will be severely depleted if about half of the nation’s human resource is neglected or deprived of
relevant facilities required for development. Taking into consideration the need for involving women in various development
activities, “the Government of India has initiated several affirmative measures by way of programmes and schemes to bring them
into the mainstream of development. These affirmative actions have brought about perceptible changes in the socio-economic
conditions of women.” Introduction of Microfinance is one of such major step which not only puts emphasis on providing
financial services to the poor and underprivileged but also to encourage women empowerment and uplift the status of women in
India.
“The history of Microfinance can be traced back as long to the middle of the 1800s when the theorist Lysander Spooner was
writing over the benefits from small credits to entrepreneurs and farmers as a way getting the people out of poverty. But it was at
the end of World War II with the Marshall plan the concept had a big impact.”1, But as far as India is concerned, “the history of
microfinance dates back to establishment of Syndicate Bank in 1921 in private sector. During the early years, Syndicate Bank
concentrated on raising micro deposits in the form of daily/weekly basis and sanctioned micro loans to its clients for shorter
period. But microfinance came to limelight only when Dr Yunus gave it a mass movement in Grameen Bank experiment.”2
Microfinance can be regarded as a source of financial services not only for entrepreneurs, small businesses but also for the lower
income group or poor or for whom there is lack of availing the banking related facilities. Similarly, a Microfinance Institution
(MFI) is an organization that provides financial services to the poor as well as to the women. This is a very broad definition,
which includes a wide range of providers that vary in their legal structure, mission, and methodology. However, all share the
common characteristics of providing financial services to clients who are poorer and more vulnerable than traditional bank clients.
Almost all provide loans, to their members, and many other services like insurance, accepting deposits etc. Microfinance
Institutions also help in filling up the black holes of the society poverty, unemployment and regional disparities. The various
objectives of microfinance institutions are to eradicate poverty from the society, providing financial assistance for self-
employment and empowering the women of the nation. In India, about 70% women are poor because they do not have any
41Research Scholar, Department of Accountancy and Law, Faculty of Commerce, Dayalbagh Educational Institute (Deemed
University), Uttar Pradesh, India, [email protected] 42 Research Scholar (JRF), Department of Commerce, Dr. Harisingh Gour Central University, Madhya Pradesh, India,
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financial support. Women are illiterate or less educated unemployed and lack of self-employment training. Therefore, to remove
such bottlenecks, Microfinance Institutions offer various financial services to provide an aid to such women, like small loans,
Scholarship, Emergency loans. Besides these financial services, such institutions like providing Employment training, free camps
Education etc. for women empowerment etc., also provide many other non-financial services. In the area of women
empowerment, many other institutions also working like NABARD (National bank for Agriculture and Rural Development) and
SHG (Self-Help Groups).
REVIEW OF LITERATURE
Adeline Mukayiranga (2013) A Case Study: Pro-Femmes / Twese Hamwe through DUTERIMBERE Micro-Finance Institution:
In a male dominated society, women have always been underestimated and discriminated in all spheres of life whether it be their
family and social life or their economic and political life. Even the unorganized sector has been heading into microfinance
movement. The paper is an attempt to study the role of microfinance intervention in promoting women empowerment in Rwanda
through Pro-Femmes / Twese Hamwe and other institutions.
Tiyas Biswas (2012) Women Empowerment through Micro Finance: A Boon for Development: This paper seeks to examine the
impact of Micro finance with respect to poverty alleviation and socioeconomic empowerment of rural women. An effort is also
made to suggest the ways to increase women empowerment.
Dr. M. Aruna and Rema Jyothirmayi (2011) The Role of microfinance in Women Empowerment: A study of the SHG bank
linkage program in Hyderabad (Andhra Pradesh): The present study acknowledges that despite of bottlenecks, microfinance is
capable of graduating struggling poor from their shackles and helps to upscale them to a better living and playing significant
positive role in upgrading women empowerment.
Sara Noreen (2011) Role of Microfinance in Empowerment of Female population of Bahawalpur district: Empowerment of
women is one of very important issue in developing countries. It is suggested that education facilities and family protection must
be provided in a proper way. Microfinance institutions should strengthen and expand their support to resource poor women.
IMPORTANCE OF STUDY
India is a developing country where about 70% women are poor due to lack of financial and other non-financial support. A sincere
initiative has been taken by the Microfinance institutions to provide financial and non-financial services to poor clients as well as
to women. Such institutions also made significant efforts to empower the women of the nation by providing numerous services
like self-employment training, awareness programs, promotion of leadership qualities etc. However, on the other hand many
women are still unaware about the various schemes of Microfinance, which could provide benefits not only to the poor but also to
the women. This paper is an attempt to aware about the various schemes to encourage women empowerment and none of the
studies in Uttar Pradesh context, examines these issues being an important area, which needs to be investigated.
OBJECTIVES OF STUDY
To analyze the various schemes provided by the 3 selected Microfinance Institutions of Uttar Pradesh, for lower income
group people or poor;
To know the various programs and schemes offered by Microfinance Institutions to encourage Women Empowerment.
RESEARCH METHODOLOGY
Nature of Study: The study is Empirical in nature.
Area: The area of study is limited to the state of Uttar Pradesh.
Population Size: There are 10 Microfinance Institutions in Uttar Pradesh.
Sample Size: Three Microfinance Institutions of Uttar Pradesh (S.E. Investment, Cashpor Microcredit and Sonata
Financial Services Ltd.) have been selected for study. The sample size has been taken based on Net worth of the
companies. Companies whose Net worth was more than 2 million in the financial year 2010-11 have been selected for
the study.
Sources of Data: For the purpose of study, the Secondary Data have been used. Either secondary sources comprise of
published Annual Reports in the form of soft or hard of respective companies, websites of selected Microfinance
Institutions (MFIs), various reputed Journals and Magazines, Periodicals and Newspapers etc.
SELECTED MICROFINANCE INSTITUTIONS
Three Microfinance Institutions have been selected:
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S. E. Investment (Agra)
SE Investments Limited was promoted as a private limited Company under the Companies Act, 1956, on 5th March 1992. On 1st
March 1995, fresh certificate of incorporation, consequent upon conversion to Public Limited Company was granted by the office
of the Registrar of the Companies, Uttar Pradesh, and Kanpur. The Registered Office of the Company had been shifted from
Block no. 54, Sanjay Place, Agra to S547, IInd Floor, Main Road, Shakarpur, and Delhi with effect from 22nd May 2003.
S.E. Investments Ltd. focuses on Small Finance and works with low-income families to provide financial solutions. It is also in
the business of providing term loan and working capital support to traders and medium sized enterprises. The company is
presently operating in the districts of Agra, Mathura, Bareilly, Aligarh, Hathras, Delhi, Jaipur, Ahmedabad, Mumbai and Jodhpur.
Presently the Company is engaged in the business of advances against stock of goods equipment, immovable property and other
assets and providing Safe Deposit Locker services. The Company is also having 2.4 MW Wind Energy Generator at Bangalore in
Karnataka and 0.80 MW Wind Energy Generator at Jaisalmer in Rajasthan. The Company is a category `A' Deposit Accepting
Non Banking Finance Company registered with Reserve Bank of India.
Promotion of Women Entrepreneurs Revolution (POWER): The Company has promoted a Non-Government Organization in
the name of ''Promotion of Women Entrepreneurs Revolution'' (POWER) for extending training and assistance to women folk
especially in rural areas through imparting vocational and professional training programs. Details of training camps organized by
POWER are as follows:
Table-1: Training Camps Organized
Year Number of Training Camps Organized Number of Women Trained
2013 17 82
2012 32 168
Sources: Official website of S.E. Investment Limited
Cashpor Micro Credit (Varanasi)
CASHPOR Micro Credit is a poverty focused, not for profit Company that provides microfinance exclusively to Below Poverty
Line women in eastern U.P. and Bihar. Mission of Cashpor Microcredit is to identify BPL women in rural areas and to provide
financial and other vital credit plus services in an honest timely and efficient manner. The Cashpor Financial & Technical Services
Pvt. Ltd (CFTS) has started operations in Mirzapur District in September 1997, as an experimental FastTrack, commercial
approach to establishing a Grameen Bank type institution. In the first six months of establishment and field operation, only 100
women have chosen this as credit institution and by that time, CFTS has opened six branches in the area. The second six-month
period was more challenging because there was no addition in the clients and at the end of the year, the number was only 100. In
February 1998, CFTS called 10 selected clients for a formal meeting at Mirzapur, CFTS paid them all the transport charges and
arranged formal lunch with their families. In meeting, officials of CFTS discussed the objectives of the firm to the clients that
CFTS wants to provide micro-credit facility to them with continual, timely and hones access to service for as long as they needed.
After this meeting, CFTS started its journey to success, which has become remarkable.
Figure-1: Credit Plus Activities of Cashpor Microcredit
Sources: Authors Compilation
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The objective of Credit Plus Activities is to provide services viz. Scholarship, Health Education (Freedom from Hunger) and
Community Health Facilitator Training Program to CASHPOR’s clients, along with providing them with the cost effective loans.
Scholarship: To provide financial support to the existing clients so that their children are in school.
Health Education: To create awareness regarding the overall health of our clients and their family.
We impart education on health in two ways:
Health Education program along with Micro credit submit campaign & freedom from hunger
Community Health Facilitation Program along with Healing Fields Foundation.
Health Education Program along with Micro Credit Submit Campaign & Freedom from Hunger
We Cover four Modules with Micro credit submit campaign & freedom from hunger:
Child Illness,
Women’s Health,
Family Planning,
Diarrhea.
Conducted first pilot training batch with 9000 Client with 25 Female staff members by covering three modules (Child illnesses,
family planning & women’s Health)
All of the 25 female staff members had provided training to their co-workers and they in turn have created awareness among
clients on Child Health. All of these trained staff members are also trained on Diarrhea, the next module, and they have already
started creating awareness among their clients. As the center has rotated so, they have started facilitating at their new centers.
In Chandauli District, all of the staff members have completed their facilitation of Child health manual. Some of staff members
have already been transfer from Chandauli to Varanasi, so they will facilitate child Health module at Varanasi District. Left of
center Managers of Chandauli district are not facilitating the Health education program.
All female center Manager have been trained on Women’s Health and completed the facilitation of Health Education at their
centers. Now we have start the process to merge the health education program with healing fields program.
Community Health Facilitator Training Program: Through this program, CASHPOR wishes to create awareness regarding
Health among clients and non-clients both and to facilitate their access the health services to develop a healthy community in and
around our operational area. It is intended opportunity to integrate the health education in to the community health facilitator
program.
Healing fields’ foundation has signed a contract with two hospitals (Vishwamitra hospital & Sidhashram Sewa Sadan) where
doctor are agreed to provide concession which are as follows:
50% discount on Consultancy fee,
30% on medical examinations, and
5% on medicines.
Community Health Leadership: CMC has signed an agreement with healing fields foundation unique project recently launched
by the company (selected from our women borrowers) on pilot basis in Buxar District of Bihar 21st September 2010 in association
with Healing Fields Foundation (HFF). Under this project, our company and HFF will select 80 women among our clients and
train them for six months to become a full-fledged Community Health Leaders (CHL). Each of such 80 CHL would be able to
provide health intermediary services to 300 Cashpor Clients. Households with average total population of 1500. Company expects
that through this program Company will be able to bring measurable changes among our clients in terms of Health seeking
behavior, improvements in health and dietary habits, awareness of healthcare programs and services of the government, possible
decrease of preventable and communicable illness like vector borne and water borne, over a period of 2 to 4 years. If this pilot is
successful, then it will be disseminated to other CASHPOR districts.
Integration of Health Education: This is a unique project recently started by the company on pilot basis. Under this project, all
center managers of eighteen selected branches in six districts (Buxar, Ballia, Chandauli, Ghazipur, Mirzapur, and Varanasi) are
engaged in providing fifteen minutes of health education for clients in each of their center meetings after conducting their normal
business in each such center on daily basis. Currently all these center managers are delivering lessons to our members of the topic
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“facing illness that attack our children”. For this purpose, these center managers have been provided training by our training
department in association with ‘Freedom from Hunger’ and ‘Micro Credit Summit campaign’. We getting a positive response
from our clients as well as from our staffs. Our Center Managers and Supervisor are highly motivated in providing healthcare
trainings to the clients.
Financial Literacy Workshops for Clients: Every year we conduct a financial literacy program to educate our clients and
women on the existing baskets of products regarding its actual cost and pricing etc. they also make them aware about the new
developments taking place in the company. This year we initiated an insurance product for our clients, here our core focus was on
the awareness and need for the insurance.
Various Financial Assistance Schemes provided by Cashpor Micro Credit for Women
We are living in 21st century where we see the development in our surroundings but still the condition of women is very
miserable. For improving the condition of women, private and public both sectors are taking active participation such as UP
Government has launched helpline number 1090 for women safety. Cashpor Micro Credit is also taking participation for women
empowerment by providing Mahila Sashaktikaran Loan and Mahila Surksha loan.
Table-2: Loan Products of Cashpor Microcredit for Women Empowerment
Name Repayment
Frequency
Tenure
of Loan
Grace
Period
Interest
Rate Purpose
CASHPOR Urja
Loan (upto Rs. 5,000)
Weekly 52 Weeks 2 Weeks 19.29% Stove / Solar Lamp / any Solar
energy operated devices
CASHPOR Mahila
Sashaktikaran
Loan
(upto Rs. 1,000)
Weekly 52 Weeks 2 Weeks 21.17% For purchasing new Mobile
phone for opening saving
account and to smoothly
operate existing Savings
Account
Fortnightly 26 fortnights 1 Fortnight 21.45%
Monthly 12 months Instalment start
from last week
of first month
21.66%
CASHPOR Mahila
Surksha loan (upto
Rs. 3000)
Weekly 26 weeks 5 weeks 15.94%
Loan can utilized to combat the
emergencies situations such as
flood, fire, epidemic, serious
accidents, Earthquake and
confinement.
Sources: Official Website of Cashpor Micro Credit
The above table depicts the various types of financial assistance, which would add up something to empower the women. The
various types of loans provided by Cashpor Micro Credit are following:
Cashpor Urja Loan: This loan has been provided to obtain devices like Stove, Solar Lamp or any Solar Energy operated devices.
This loan may be extended to 52 weeks and the repayment of loan would be weekly with a period of grace of two weeks. The rate
of interest would be at the rate of 19.29%.
Cashpor Mahila Sashaktikaran Loan: Main purpose of Mahila Sashaktikaran Loan is to purchase new mobile phone by which
women can contact with helpline number in emergency time. Mahila Sashaktikaran Loan is also helpful for opening and
maintaining existing saving account. Cashpor Mahila Sashaktikaran loan amount is provided upto Rs.1000 for maximum 12
months.
Cashpor Mahila Surksha Loan: Cashpor Micro Credit also provides Cashpor Mahila Surksha loan. Loan amount is upto Rs.
3000 and loan tenure is 26 weeks. Cashpor gives 5 weeks as grace period for repaying the loan amount. Basic purpose of this loan
to compensate women while natural disaster and accidents such as flood, fire, serious accident, earthquake etc.
Sonata Finance (P) Limited
Sonata Finance (P) LTD. aims to make microfinance financially self-sustainable. They use systematic processes, technology and
training to help ensure we offer quality service to our borrowers. Sonata Finance distributes small loans that begin at Rs. 2,000 to
Rs. 50,000 to poor women so they can start and expand simple businesses and increase their incomes at the rate of 26% per
annum.
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SONATA works exclusively with women because they are the most marginalized among the poor and because they tend to invest
the majority of their income into the household and for their children. Sonata finance has set itself a mission to "identify and
motivate poor women in a cost-effective way and deliver them micro finance services in an honest, timely and efficient
manner."
SONATA has adopted an individual as well as a group lending approach and few other best practices with some minor
adjustments to suit local conditions. SONATA lends money to individuals or groups of 10 to 20 women members and designates
them as the ultimate guarantor of each of its members. If one member does not repay the loan, no individual in the group is
eligible to receive another loan.
SONATA FINANCE provides different financial and Non- financial services for women empowerment:
Income Generating Loans: In the initial growth period, SONATA only offers one basic loan product, which is strictly
restricted to income generating activities. During the first cycle and on average, clients apply for a loan of a maximum
Rs. 8,000 (the minimum amount is Rs. 2,000). During each cycle thereafter, the client has the option of applying for up
to 120% of the previous loan amount. The basic loan is repaid in equal weekly installments at "center meetings" held in
the local communities. Prepayment of principal is possible but only if the client settles the entire balance of the principal
outstanding.
The Emergency Loans: The emergency loan is designed to meet events that could put the continuity or effectiveness of
the income generating activity at risk. To be able to access an emergency loan, the client must present a good rating in
terms of credit discipline. Like the basic loan, all the associates in the group must approve the emergency loan. The
emergency loan will be granted for a term of 25 weeks with weekly payments and the maximum loan amount is Rs.
2,000.
Individual Lending: SONATA Finance provides Individual Loan lending for individuals. Rest of the procedure is
same as in-group lending procedure.
Employment Training & Free Education: Other than, above stated activities SONATA FINANCE also provides
Employment training to women, Education, provides Medical facilities for themselves and their children etc.
CONCLUSION
In this today’s world, the status of women is equal that of men. It is quite clear that the status of women are also increasing day by
day, and for such upliftment of women, micro finance institutions has played a major role. This paper is based on the study of
Micro finance institutions in Uttar Pradesh in empowering the women, which throws light on the various schemes and financial
assistance provided by selected micro finance institutions in empowering the women of Uttar Pradesh.
The above observations and analysis provide enough facts that these 3 micro finance institutions has created a good example that
there is also a prime motive of empowering women of Uttar Pradesh behind the establishment of such type of micro finance
concerns but still there are many rural areas which also need such establishments for the empowerment and development of
women. It is also true that micro finance can only assist to the women, which would be limited to a certain extent. Hence a joint
effort is much needed by not only from such institutions or NGOs but also from the government and society as a whole, to
empower the women, on the result of which the women would be regarded as the assets of a family and society rather than a
liability.
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Bank Linkage Program in Hyderabad (Andhra Pradesh). Indian Journal of Commerce & Management Studies, II(4),
77-95. May 2011
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