A STUDY

ON“Organized and Unorganized Retail market-”

BY

N.AMIT

(Reg. No - 5123)

Of

VISHWA VISHWANI INSTITUTE OF SYSTEMS AND MANAGEMENT

Under the Guidance of

Prof. Anand

Associate Professor

A PROJECT REPORT

Submitted to the

FACULTY OF BUSINESS MANAGEMENT

In partial fulfillment of the requirements for the award of the

POST GRADUATE DIPLOMA IN MANAGEMENT

CERTIFICATION FROM INTERNAL GUIDE

This is to Certify that the dissertation titled “ A STUDY ON ORGANIZED AND UNORGANIZED RETAIL MARKET“ By Mr : N.Amit, Reg No : 5123 Is a record of research work done during the year 2010-11, under my directions and that the dissertation has not previously formed the basis for the award of any degree or Diploma or Associate ship , with the similar title, by any other university/Institute.

Hyderabad Signature of Internal Guide

Date : (Name of the internal Guide)

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DECLARATION

I hereby declare that the dissertation on “A STUDY ON ORGANIZED AND UNORGANIZED RETAIL MARKET“ has been written by me during the year 2010-11, under the guidance of Prof.Anand of Vishwa Vishwani Institute of Systems & Management, Hyderabad, in partial fulfillment of the requirement of the award of Post Graduate Diploma in Management.

I also declare that this dissertation is the result of my own efforts and has not been copied from any other source or submitted to any other university/Institute, before.

Hyderabad Signature

Date: (Name of the student)

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` CERTIFICATION

This is to certify that Mr.N.Amit, Reg No : 5123 of PGDM IV Semester at Vishwa Vishwani Institute of Systems & Management, Hyderabad, has prepared the dissertation titled “A STUDY ON ORGANIZED AND UNORGANIZED RETAIL MARKET “during the year 2010-11 under the guidance of Prof. Anand as a partial fulfillment , for the award of Post Graduate Diploma in Management, by our Institute.

Hyderabad (Signature)

Date: Director, Academics

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Executive Summary

The real GDP is expected to grow at 8-10 per cent per annum in the next five years. As a result, the consuming class with annual household incomes above Rs. 90,000 is expected to rise from about 370 million in 2006-07 to 620 million in 2011-12. Consequently, the retail business in India is estimated to grow at 13 per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The study shows:

• The unorganized retail sector is expected to grow at about 10 per cent per annum with sales rising from US$ 309 billion in 2006-07 to US$ 496 billion in 2011-12.

• Given the relatively weak financial state of unorganized retailers, and the physical space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand for retail.

• Hence, organized retail which now constitutes a small four per cent of total retail sector is likely to grow at a much faster pace of 45-50 per cent per annum and quadruple its share in total retail trade to 16 per cent by 2011-12.

• This represents a positive sum game in which both unorganized and organized retail not only coexist but also grow substantially in size.

• The majority of unorganized retailers surveyed in this study, indicated their preference to continue in the business and compete rather than exit.

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CHAPTER – 1

Introduction to Indian retail industry

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Introduction to Indian retail industry:

The sea of change can pull customers in many directions. It is our responsibility to light the way

and take care of them… before the competition does.

RETAILING Means “Re-tailing” to the customers so that they comeback.

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

personal, family, or household use. It covers sales of goods ranging from automobiles to apparel

and food products, and services ranging from hair cutting to air travel and computer education.

Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not

considered a retail activity.

The Indian retail story couldn't have been more different. India has approx 12 million retail

stores, more than rest of the world put together. But the per capita square feet area under retail is

just 2 sq.ft or 0.2 sq. meters with fragmented kirana stores being the predominant players.

Retailing in India has remained in the unorganized sector and largely untouched by corporate.

The first decade of modern retail in India has been characterized by a shift from traditional

channels to new formats including department stores, hypermarkets, supermarkets and specialty

stores across a range of categories.

Modern retail formats have mushroomed in metros and mini-metros, in the last few years

modern retail has also established its presence in the second rung cities. Thus, exposing the

residents of these cities to shopping options, they have never experienced before. It has been

forecasted that the share of modern retail will increase from 2 per cent currently, to about 15-20

per cent over the next decade. To begin with, retailers today will have to support the large retail

infrastructure in terms of Malls and Superstores that are being created. The challenge for leading

retailers shall therefore shift from diverting demand to creating demand.

With all the modern stores offering convenience in terms of an assortment of products,

ambience, service and innovative products, the paradigm shall shift from competing with the

kirana stores to an in-house demand creation. Relevant experiences from consumer goods

companies, which have successfully crafted an explosion in demand in their sectors, through

innovation, consumer driven strategies, will be head runner. Times are changing. With the GDP

at an all time high and income levels shooting through the roof, the average Indian consumer has

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never had it so good. The propensity to consume has reached peaks that had never been scaled

before. Credit cards are flashed with disdain and shopping baskets are getting bigger all the time.

Here are some factors that indicate the potential of retail in India:

At 271 million, one of the largest consuming base in the world, forming 27% of the total

population.

A high spending community below 45 years comprises 81 percent of the population.

A young population with 54% population below 25 years

Increased literacy from 44% in 1965 to 70% in 2003

Increase in working women from 1.3 million in 1961 to 4.8 million in 1998.

The first decade of modern retail in India has been characterized by a shift from traditional

kirana shops to new formats including department stores, hypermarkets, supermarkets and

specialty stores across a range of categories. Modern retail formats have mushroomed in metros

and mini-metros.

In the last few years, modern retail has also established its presence in the second-rung cities,

exposing residents to shopping options like never before. However, even as modern retailers

garner share from traditional channels, there is a larger role they would be required to play in

boosting consumption levels. Figures suggest that the total turnover of the sector is around Rs 10

lakh crores, of which 4 percent is contributed by the organised sector.

The retail sector in India is highly fragmented with organized retail contributing to only 2% of

total retail sales. The retail sector in developed countries was also highly fragmented at the

beginning of the last century but emergence of large chains like Wall Mart, Sears, and

McDonald’s led to rapid growth of organized retail and growing consolidation of the retail

industry in the developed countries.

Organized retail is growing rapidly and we see the emergence of large organized retail chains

like Shopper’s Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over the

country. The opportunities in retail industry in India will increase since Indian retailing is on the

threshold of a major change.

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India retail industry is the largest industry in India, with an employment of around 8% and

contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25%

yearly being driven by strong income growth, changing lifestyles, and favorable demographic

patterns. It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200

billion. India retail industry is one of the fastest growing industries with revenue expected in

2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-

8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising

incomes, and a steep rise in rural consumption. It has further been predicted that the retailing

industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5

billion.

Shopping in India have witnessed a revolution with the change in the consumer buying behavior

and the whole format of shopping also altering. Industry of retail in India which have become

modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and

sprawling complexes which offer food, shopping, and entertainment all under the same roof.

India retail industry is expanding itself most aggressively, as a result a great demand for real

estate is being created.

1.1 Traditional Convenience Stores:

Traditional convenience stores are too well established in India than to be wiped out and besides

there is uniqueness in the traditional items that represent the sub-continent. The retail stores in

India are essentially dominated by the unorganized sector or traditional stores. Infact the

traditional stores have taken up 98 percent of the Indian retail market. Now stores run by families

are primarily food based and the set up is as Kirana or the 'corner grocer' stores. Basically they

provide high service with low prices. If the stores are not food based then the type of retail items

available are local in nature.

The traditional family run convenience stores can take pride in the fact that the Kirana is the

most common outlet forms for the consumers. The tough competition for convenience stores are

coming from organized retail stores dealing in food items, like:

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Apna Bazaar

Canteen stores

Food World

Subhiksha

Food Bazaar

Convenience Stores are open for long hours and is one of the formats of the Indian retail stores

that cater to basic needs of the consumer. A good example of such would be Convenio. These

stores are found in both residential as well as commercial markets. The food products of

traditional family run convenience stores are comprised of branded as well as non-branded items.

The benefit of family-run convenience stores is that they give importance to:

Personal touch

Facilities of credit

Quick home delivery

Non-food based stock comprises of multiple and varieties of local brands.

The future of such stores as they face competition from organized sector, would depend on the

following particulars:

Place and capacity

Diligent area coverage

Disciplined work schedule

Managing turnover

Revenue from assets

Customer service and satisfaction

The traditional family run convenience stores serves the purpose of the housewives who

definitely wants to avoid traveling long distances to purchase daily needs. The convenience

factor in terms of items, among people in general can be highlighted as below:

Groceries

Fruits

Drug Store

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Necessary stationery

As such traditional family run convenience stores are here to stay and cannot be oversized by the

organized retail sector besides, it represents the variety of India.

1.2 Indian organized retail market:

Indian organized retail market is growing at a fast pace due to the boom in the India retail

industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about

10% to the country's GDP. The organized retail market in India out of this total market

accounted for Rs 350 billion which is about 3.5% of the total revenues.

Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010.

Traditionally the retail industry in India was largely unorganized, comprising of drug stores,

medium, and small grocery stores. Most of the organized retailing in India have started recently

and is concentrating mainly in metropolitan cities. The growth in the Indian organized retail

market is mainly due to the change in the consumers’ behavior. This change has come in the

consumer due to increased income, changing lifestyles, and patterns of demography which are

favorable. Now the consumer wants to shop at a place where he can get food, entertainment, and

shopping all under one roof. This has given Indian organized retail market a major boost.

Retail market in the organized sector in India is growing can be seen from the fact that 1500

supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian

companies are entering the Indian retail market which is giving Indian organized retail market a

boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in

the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloons is

another Indian company which plans to increase its retail space to 30 million square feet with an

investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global

giant for a £ 750 million joint venture. A number of global retail giants such as Walmart,

Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market

will definitely grow as a result of all this investments

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Classifying Indian retail:

(A)Modern Format retailers

1) Supermarkets (Foodworld)

2) Hypermarkets (Big Bazaar)

3) Department Stores (Shoppers Stop)

4) Specialty Chains (Ikea)

5) Company Owned Company Operated (BP)

(B)Traditional Format Retailers:

1) Kiranas: Traditional Mom and Pop Stores

2) Kiosks

3) Street Markets

4) Exclusive /Multiple Brand Outlets

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(C)Large Indian retailers

1. Hypermarket

1) Big Bazaar

2) Giants

4) Star

II Department store

1) Lifestyle

2) Pantaloons

3) Piramyds

III Entertainment

1) Fame Adlabs

2) Fun Republic

4) PVR

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Classification of Indian retail sector

2. Classification of Indian retail sector:

a) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing sector Traditional types of

retailers, who operate small single-outlet businesses mainly using family labour, dominate this

sector In comparison, super markets account for a small proportion of food sales in India,

However the growth rate of super market sales has being significant in recent years because

greater numbers of higher income Indians prefer to shop at super markets due to higher standards

of hygiene and attractive ambience.

b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on health and beauty products

.Here also small, single-outlet retailers dominate the market .However in recent years, a few

retail chains specializing in these products have come into the market. Although these retail

chains account for only a small share of the total market their business is expected to grow

significantly in the future due to the growing quality consciousness of buyers for these products.

C) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets operate all over India.

Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing

and footwear stores have modern products and attractive displays to lure customers. However,

with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely

that the traditional outlets will survive the test of time.

D) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market, very few large

and modern retailers have established specialized stores for these products. However there is

considerable potential for the entry or expansion of specialized retail chains in the country.

E) DURABLE GOODS

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The Indian durable goods sector has seen the entry of a large number of foreign companies

during the post liberalization period. A greater variety of consumer electronic items and

household appliances became available to the Indian customer. Intense competition among

companies to sell their brands provided a strong impetus to the growth for retailers doing

business in this sector.

F) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have encouraged consumer

expenditure on leisure and personal goods in the country. There are specialized retailers for each

category of products (books, music products, etc.) in this sector. Another prominent feature of

this sector is popularity of franchising agreements between established manufacturers and

retailers.

Today’s trend is the development of integrated retail cum Entertainment centers or shopping

malls. An increasing number of retailers are focusing on malls now as opposed to stand-alone

developments. While the number of shopping malls has seen a massive surge in the recent past in

the metros and their suburbs, the latest trend in this sector is the increasing focus on providing

leisure activities such as multiplexes, facilities for kids' entertainment, eateries etc. within the

mall premises. Customer less the time consumes and more entertainment with his family in malls

because they within shopping mall number of retail shop and variety of products and selected the

product they want. Good environment in mall. Less crowed and These are enclosed, air-

conditioned, multi-level malls of at least 100,00 sq ft. Critical to these malls is the concept of the

anchor, the key outlet or store around which other outlets cluster. The most popular Indian

anchors include Shoppers' Stop, Globus, Pantaloon, Lifestyle and hypermarkets like Big Bazaar

and Giant. Cinemas also often anchor malls. Driven by the lucrative tax breaks, the old single

screen theatres are being divided into three-five smaller screens, as was done in the US, years

ago, for example Wave and PVR.

Consumer behavior and retailing decisions

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3. Consumer behavior and retailing decisions:

Consumer behavior refers to the mental and emotional process and the observable behavior of

consumers during searching, purchasing and post consumption of a product or service. Consumer

behavior involves study of how people buy, what they buy, when they buy and why they buy. It

blends the elements from psychology, sociology, sociopsychology, anthropology and economics.

It also tries to assess the influence on the consumer from groups such as family, friends,

reference groups and society in general. Buyer behavior has two aspects: the final purchase

activity visible to any observer and the detailed or short decision process that may involve the

interplay of a number of complex variables not visible to anyone.

Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors:

Social Factors

Psychological Factors

Personal Factors.

A. Social Factors

Social factors refer to forces that other people exert and which affect consumers’ purchase

behavior. These social factors can include culture and subculture, roles and family, social class

and reference groups.

B. Psychological Factors

These are internal to an individual and generate forces within that influence her/his purchase

behavior. The major forces include motives, perception, learning, attitude and personality.

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C. Personal Factors

These include those aspects that are unique to a person and influence purchase behavior. These

factors include demographic factors, lifestyle, and situational factors.

Consumer decision-making process generally involves five stages:

Information Search

Problem Recognition

Purchase Action

Alternative Evaluation

Post purchase Actions

consumer Attribute affecting choice of format between organized and unorganized Retail

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3.1 Retail outlet selection and brand selection:

There are three fundamental patterns, which a consumer can follow and they

could be:

(I) Brand first, retail outlet second

(ii) Retail outlet first, brand second

(iii) Brand and retail outlet simultaneously.

A consumer wanting to buy a car may collect information on brands and purchase it from a retail

outlet based on his perception of price offered or after sales service provided by the outlet

(typically, search for information on brands is followed by retail outlet selection in durables). In

certain product categories, especially where `category killers' exist, consumers may think of the

retail outlet initially and then the brands (television, refrigerator and audio products retailed

through outlets like Vivek and Co. in the South, could be an example).

One more dimension may be to compare brands in the evoked set at retail outlets which also

exist in an evoked set of their own. This is highly possible, especially in the Indian context where

dealers develop a social relationship with consumers, especially in semi-urban and rural areas.

Primary research could be used to discover the specific sequence involved in a situation of this

kind. A `brand first' dimension may need feature-based advertising and a `retail outlet first'

dimension may require a set of point-of-purchase (POP) materials and special training to sales

personnel to recognize the needs of consumers.

Brand first and outlet second: The brand was probably thought of by the consumers because-

(i) the consumers may not have developed a relationship with any retailer which is strong enough

to get into the `evoked retail set' or

(ii) the brand has got into the evoked set because of advertising or positive word of mouth. Local

advertising with the mention of brand names which have already got into the evoked set would

enable consumers to be `pulled' to the outlet. Primary research may be required to identify the

brands in the evoked set.

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Organized vs Unorganized Retail

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4. Organized vs Unorganized Retail:

In the developed economies, organized retail is in the range of 75-80 per cent of total retail,

whereas in developing economies, the unorganized sector dominates the retail business. The

share of organized retail varies widely from just one per cent in Pakistan and 4 per cent in India

to 36 per cent in Brazil and 55 per cent in Malaysia (Table 2.2). Modern retail formats, such as

hypermarkets, superstores, supermarkets, discount and convenience stores are widely present in

the developed world, whereas such forms of retail outlets have only just begun to spread to

developing countries in recent years. In developing countries, the retailing business continues to

be dominated by family-run neighbourhood shops and open markets. As a consequence,

wholesalers and distributors who carry products from industrial suppliers and agricultural

producers to the independent family-owned shops and open markets remain a critical part of the

supply chain in these countries.

Table 2.2: Share of Organized Retail in Selected Countries, 2006

Country Total Retail Sales (US$ bn) Share of Organized Retail (%)

USA 2,983 85

Japan 1,182 66

China 785 20

United Kingdom 475 80

France 436 80

Germany 421 80

India 322 4

Source: Planet Retail and Technopak Advisers Pvt. Ltd

NEED FOR STUDY

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This study will contributes to the understanding that consumers and retailers in most cases have

different perceptions in relation to store image and shopping habits, justifying the need for

consumer marketing research, which is important in helping retailers, implement in a real

marketing orientation. The study will examines the choice of format the consumer has when he

or she decides to buy a particular product and also describes the development of organized retail

in the future, focusing on aspects with potential effect on purchasing behavior among the

consumers. The focus is on consumer expectations. The questions were formulated to capture the

overall behavior of the consumers and with the help of the survey questionnaire the analyses was

done. An attempt has been made to explore the way organized retail has dramatically changed

not only the Indian traditional retailing structure but also the consumption behavior.

OBJECTIVES

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1) To identify the various factors that effect the choice of format i.e organized or unorganized retail.

2) The types of goods consumers prefer to purchase from each format3) Findings that can help the company gain its key strengths and weakness

SCOPE

The project took about two months to finish which included how much customer are aware of organized and unorganized retail markets and how well they differentiate both kinds of retail markets in India.

LIMITATIONS

There was a limited time period. Restricted to a limited area in Hyderabad/secunderabad. Explaining customers about organized and unorganized retail markets took time. Limited numbers of customers were chosen for survey process.

The responses given by respondents were not always accurate because the respondents

gave the response according to their understanding.

Sometimes the respondents are not willing to fill the questionnaire and hence the

resultant may not be correct.

RESEARCH METHODOLOGY

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Sampling Design:

1. Sampling unit Respondents of (few malls)

2. Size of sample 15 respondents

3. Sample Method Random Sampling

4. Types of questionnaire Close ended

Type of Data:

Data type collected for analysis is PRIMARY i.e. data has been observed and recorded by the

researchers for the first time to their knowledge. Data collected through journals, newspapers &

internet is SECONDARY type.

Method of data collection:

This study is a research which utilizes interrogation and observation method for data collection.

Secondary data was obtained from intensive analysis & observation. The primary data are those,

which are collected afresh and for the first time, and thus happen to be original in character. The

secondary data, on the other hand, are those which have already been collected by some one else

and which have already been passed through the statistical process. Method employed to collect

data is Questionnaire. This is a simple survey conducted by filling in questionnaire from the

people who visit malls.

Collection of the Primary data:

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

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CHAPTER-2

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SWOT-ANALYSIS

Strengths :

Retailing is a “technology-intensive" industry. It is technology that will help the organized retailers to score over the unorganized retailers. Successful organized retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. They introduced two innovative logistics techniques – cross-docking and EDI (electronic data interchange).

On an average a super market stocks up to 5000 SKU's (Stock keeping Units) against a few hundred’s stocked with an average unorganized-retailer.

Weakness :

Less Conversion level: Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25 percent. On the other hand, a high street store of retail chain has an average conversion of about 50-60 percent. As a result, a stand-alone store has a ROI (return on investment) of 25-30 percent; in contrast the retail majors are experiencing a ROI of 8-10 percent.

Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base.

Opportunity :

The Indian middle class is already 30 crore & is projected to grow to over 60 crore by 2010, making India one of the largest consumer markets of the world. The IMAGES-KSA projections indicate that by 2015 India will have over 55 crore people under the age of 20 – reflecting the enormous opportunities possible in the kids and teens retailing segment.

Organised retail is only 4 percent of the total retailing market in India. It is estimated to grow at the rate of 27 percent p.a. and reach Rs. 1,37,000 crore by 2010.

Percolating down: In India it has been found out that the top 6 cities contribute 66 percent of the total organised retailing. While the metros have already been exploited, the focus has now been shifted towards the tier-II cities. The 'retail boom' of which 85 percent has so far been concentrated in the metros, is beginning to percolate down to these smaller cities and towns. The

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contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25 percent.

Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination for all their needs. "Hariyali Bazar", started by DCM Sriram group, provides farm-related inputs & services. The Godrej group has launched the concept of 'agri-stores' named "Aadhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees, pastes

Threats :.

If the unorganized retailers are put together, they are parallel to a large supermarket with little or no over-heads, a high degree of flexibility in merchandise, display, prices and turnover.

Shopping Culture has not developed in India as yet. Even now malls are just a place to hang around, largely confined to window-shopping.

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CHAPTER-3

27

LITERATURE REVIEW

Mathew Joseph and Manisha Gupta_September 2008: The Indian retail sector is booming

and modernizing rapidly in line with India’s economic growth. In this review the author talked

about the impact of organized retailing on traditional retailing. With the increase in number of

various formats for shopping like malls, departmental stores, hypermarkets etc the Indian

consumer’s preferences are changing towards and that’s the reason foreign investors like the

king of retail Wal-Mart also came into the Indian retail ground in collaboration with Bharti.

There is a huge untapped market is present in India right now which contains a number of

opportunities for retailers.

Sen-2000: Store Image and Consumer Shopping Habits: Indian Context: In India, some

empirical studies provide important information about consumer behavior and its responses to

the development of organized retail. Economical and social changes are major contributors for a

growing fragmentation of consumers into multiple segments with different values and buying

priorities. Consumers have become more pragmatic, educated and demanding, learning how to

manage money and time more efficiently. The focus on low prices was gradually replaced by a

value for money perspective. The study developed by ETIG (Economic Times Intelligence

Group, 2002) confirms these tendencies. Concerning food, the most important attribute

mentioned was quality, followed by price. Indian consumer has different reasons for preferring

different store formats, either modern or traditional; Sen (2000) confirms this in the study

undertaken in Indian context. He confirms that in the case of hypermarkets, the main motives for

preferences, in decreasing order are low prices, the possibility of buying everything in the same

place and the general appearance of the store. Several investigations emphasize the possible

coexistence of different store formats (Chandrasekhar, 2001) and others point out the

relationship between the type of store and the type of products. These studies show that, while

specialized and traditional stores are preferred for fresh products, hypermarkets are preferred for

shopping in general, and also for frozen food, groceries and beverages. The purchase of

perishables in hypermarkets is reduced.

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Radhakrishnan, 2003: Traditional Retailers Perceptions about Organized Retail

As already mentioned, organized retail has deeply changed the Indian commercial structure.

However, it is not exclusively responsible, as other changes (economical, social and cultural

ones) have occurred simultaneously. Concerning the more direct effects of organized retail on

different types of commerce, it is possible to verify that the major impact is felt on traditional

retail and, in particular, on the food sector. The impact of organized retail is also significant on

other types of retail, namely toys, stationery goods and household appliances; moreover, it is

probable that competition gets more intense in other sectors, such as clothing and furniture.

RNCOS (March 15, 2009/24-7 press releases): Increasing trend of organized retailing will

drive the growth of convenience-store industry in the world. By 2011, Asia remains the fastest

growing convenience store market in the world as the major Asian retail markets registered

explosive growth in opening up of new convenience store. Changing consumer preferences,

lifestyle and rising income level, which is heavily influenced by economic growth, remains the

major driving force for c-store industry in the Asian region. as per "Global Convenience Store

Market Analysis".

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CHAPTER-4

30

Data analysis and interpretation

1) Are you aware of organized and unorganized retail sector?a) Yes b) No

Interpretation : from this we can understand that out of 15 customers with whom I have interacted only 1 does not know about organized retail market and other customers are aware of retail markets.

2) What kind of retail stores do you like to visit?a) Organized b) Unorganized

Interpretation: it is clearly shown that most of the customers prefer to visit organized retail stores rather than unorganized.

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3) If organized why?

a) Variety b) Better servicesc) Assortment of product d) Economical

Interpretation: from this bar graph we can understand that most of the customers prefer organized retail markets because of assortment of products and then variety of products and least see about the price of the products.

4) If unorganized why?

a) Convenient b) Credit facilityc) Home delivery d) any other..............................

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Interpretation: most of the customers prefer unorganized retail market because of the credit facility they get and based on their convenience.

5) Where do you like to purchase your FMCG products?

a) Organized b) Unorganized c) Both

Interpretation: here we can see that most of the customers like to purchase their FMCG products from both organized and unorganized sectors.

6) Where do you like to purchase your FMCD products?

a) Organized b) Unorganized c) Both

Interpretation: From this bar graph we can see that most of the customers like to purchase products from organized FMCD products and few like to purchase from both organized and unorganized FMCD retail shops.

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7) Where do you like to shop for your products?

a) Local outlets b) Brand outlets c) Shopping Malls d) others..........

Interpretation: in this chart we can observe that the number of customers who like to shop at local outlets and shopping malls are equal and people who like to purchase at branded outlets are few.

8) What was your last purchased product?

a) FMCG b) FMCD C) Others...........

Interpretation: most of the last purchased products were FMCG products by customers.

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9) How is your experience on your last purchased product?

a) Highly satisfied b) Satisfied c) Dissatisfied d) highly dissatisfied

Interpretation: most of the customers are satisfied with their products and hardly customers are dissatisfied.

10) What is your reason for satisfaction/dissatisfaction?(tick either satisfied/dissatisfied and answer)

a) Variety b) Convenient c) Assortment of products d) Economical

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Interpretation: here we can see that almost all customers satisfaction and dissatisfaction levels are equal .and based on all four options given their mind set changes.

CHAPTER-5

36

FINDINGS

Customer’s preferences for grocery shopping are gradually shifting from local kirana

stores to organized convenience stores.

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

customers.

Payment through credit cards is increasing purchases from convenience store.

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

convenience store. .

Maximum no of customers belongs to young age group.

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

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

Maximum no of customers are belonging to upper middle class.

Maximum no of customer are preferred Shopping Malls for purchasing.

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

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

class.

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

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CONCLUSION

The customers are attracting towards shopping malls & retail outlets.

The shopping malls & retail outlets are targeting to middle class customers because the

purchasing power of this class is rapidly growing as well as the class is also growing.

The young generation is fashion & show-off conscious so retail outlets are mainly

focused on them.

Most of the family wants to purchase from big showrooms and malls because there are no

bargaining system so the have a trust that there is no cheating.

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

customers.

Big retail stores are running customer loyalty programs which has increased profits and

no. of customers.

Recommendations / Problems to be overcome

The first challenge facing the organized retail sector is the competition from unorganized sector.

In retail sector, Automatic approval is not allowed for foreign investment.

Taxation, which favors small retail businesses.

Developed supply chain and integrated IT management is absent in retail sector.

Lack of trained work force.

Low skill level for retailing management

Need to have more updated and fresh stocks.

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Bibliography:

Goswami. P and Mishra. M, 2009, Would Indian consumers move from kirana store to organized

Retailers when shopping for groceries, Asia Pacific Journal of Marketing and Logistics, Vol. 20,

No. 1

ICRIER journal paper, September 2008

http://ssrn.com/abstract=994238

BOOKS:-

Marketing Management. ----Kotler & Keller

Marketing Management in Indian Perspective

----V. S. Ramaswamy & S. Namakumari

Retail management ---Levy & Weitzs

WEBSITES:-

www.emraldinsight/1355-5855.htm

www.Fibre2fashion.com/industry-article

www.tataretail.com

www.retailindia.net

www.retailyatra.com

www.retailbiz.com

www.aboutus.com

www.businessworld.in

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ANNEXURE

QUESTIONNAIRE

A STUDY ON ORGANIZED AND UNORGANIZED RETAIL MARKETS IN INDIA

NAME: ................................................

AGE : ................................................

OCCUPATION: ................................................

1) Are you aware of organized and unorganized retail sector?a) Yes b) No

2) What kind of retail stores do you like to visit?a) Organized b) Unorganized

3) If organized why?a) Variety b) Better servicesc) Assortment of product d) Economical

4) If unorganized why?a) Convenient b) Credit facilityc) Home delivery d) any other..............................

5) Where do you like to purchase your FMCG products?a) Organized b) Unorganized c) Both

6) Where do you like to purchase your FMCD products?a) Organized b) Unorganized c) Both

7) Where do you like to shop for your products?a) Local outlets b) Brand outlets c) Shopping Malls d) others..........

8) What was your last purchased product?a) FMCG b) FMCD C) Others....................

9) How is your experience on your last purchased product?a) Highly satisfied b) Satisfied c) Dissatisfied d) highly dissatisfied

10) What is your reason for satisfaction/dissatisfaction?(tick either satisfied/dissatisfied and answer) a) Variety b) Convenient c) Assortment of products d) Economical

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