shiv report

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Multi Management Infotech117/26, Sarvoday Nagar

Kanpur-208001Learning Centre Code:1875

A Project ReportOn

ANALYSIS OF BUYING BEHAVIOUR OFCONSUMER WITH SPECIAL REFERENCE

TO KANPUR CITY

Submitted by

Shiv Kumar Gaur

MBA ENR. NO. 520869880

In Partial Fulfillment of the Requirement For the Degree of MBAOf Sikkim Manipal University,India

Distance Education WingSikkim Manipal University

Distance Education wing, Syndicate HouseManipal-576119


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Student Declaration

I hear by declare that the Project report Entitled

ANALYSIS OF BUYING BEHAVIOUR OF CONSUMER WITH SPECIAL REFERENCE TO KANPUR CITY

Submitted in partial fulfillment of the requirements for the Degree of MBA toSikkim Manipal University, India, is my original work and not subitted for theaward of any other Degree, Diploma,fellowship, or any other similar titlle or

prizes

Shiv Kumar Gaur ENR. NO. 520869880


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EXAMINERSS CERTIFICATE

This is to certify that dissertation titled ANALYSIS OF BUYINGBEHAVIOUR OF CONSUMER WITH SPECIAL REFERENCE TO

KANPUR CITY

SUBMITTED BY Shiv Kumar Gaur in partial fulfillment of the requirementfor the award of degree of MBA of Sikkim Manipal University and is bonafiedrecord of the work done by him.

Internal Examiner External Examiner

University study Centre Certificate


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This is to certify that the project entitled ANALYSIS OF BUYINGBEHAVIOUR OF CONSUMER WITH SPECIAL REFERENCE TO

KANPUR CITY

submitted in partial fulfillment of the requirements for the degree of MBA of Sikkim Manipal University, India. subitted for the award of anyother Degree, Diploma,fellowship, or any other similar titlle or prizes

Roopesh upadhyay

HeadLcearning centre

ACKNOWLEDGEMENT


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I am deeply indebted to Mr. Sanjay Mitra my research

guide, the MULTI MANAGEMENT INFOTECH, Kanpur without his

help completion of the project was highly impossible.

I take this opportunity as privilege to articulate my deep senseof gratefulness to ANALYSIS OF BUYING BEHAVIOUR OF CONSUMER

WITH SPECIAL REFERENCE TO KANPUR CITYfor their timely help and positive encouragement. It was a

pleasure to work with these people and some other project

trainees as a team and a family.

I would like to acknowledge all my family members,

relatives, and friends for their help and encouragement.

Place : KANPUR

Date : Shiv Kumar

Gaur


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The latter half of the increase has seen a fresh wave of entrants in the

retailing business. This time round, it is not the adventurous or innovative

manufacturer looking for one more avenues to build brand equity. These are pure

retailers who have no serious plans for getting into manufacturing. These new

retailer aims to live or die within the confines of their retails offerings. And this

time, it is not just textile or garment sellers.

There are entrants in various files of commerce Food world and

Subhiksha in food and FMCD, Planet M, Music world, Music caf, Fast Forward

and Groove in music : Crossword. Fountainhead and Navneet in books, Viveks

and Vijay Sales, through old hands in the consumer durables game, plan to

expand at a rapid pace. The scenario is similar for some existing players like

Niligiris or Arvind Brands, who seem to have decided that this is the time to be

up and running. The oil companies no longer want to stick to inflammables.

However, garments still remain a favored spot for big players. Glob us and

Lifestyle have offerings that rival international standards. Then there are those

who want it all under one roof, so you are not at cross purposes when you enter a

Crossroads in Mumbai or an Ansals Plaza in Delhi, Yes, and the syndrome is not

in India as well.


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WHY STUDY RETAILING

So far, it has been seen that retailing is a vital and involuntary action

performed by the living structure of the market economy (as opposed to the case

in a barter economy). In a barter economy, barter transactions take place between

consumers themselves. Consumers interact directly whereas in a centralized

market economy, transactions taking place at a larger scale (both in terms of

volume and variety) necessitate an interface between the manufacturers and final

consumers. Hence we reinforce the fact that retailing is not a new deal. This

industry is extant as an interface between production and consumption, from

times immemorial, benefiting us consumers or producers in the various ways

discussed above.

My study concentrates on organized retailing, which consists of shopping

malls, markets, chain stores, and like. In the last few years a shift occurred in

India from individual retail outlets owned separately and managed distinctively

to professionally managed retailing. This is an industry, which has now started

attracting better investments and talent. Things changed primarily because of the

rising expectations of Indian consumers and the corporate responding quickly.

Today, the industry (in India) seems to be functioning somewhere between the


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accelerated development and maturity stages, with high growth rates, intense

competition and moderate profitability.

In order to get an idea of the magnitude of the issue we are dealing with,we look at the international scenario. During 1992, the largest 100 retailers in the

world generated over $1.1 trillion in revenues.

Retailing is the second largest industry in the world, one of the largest

employers of the world and an index of economic growth. In India there are

about 5 million retail outlets varying in sizes and nomenclatures. India has the

highest number of retail outlets per capita in the world but has the lowest retail

space per capita in the world (2 ft / person). Out of these 5 million outlets 96%

are smaller than 500 sq. ft. in area 3. There are about 3 million outlets in Indias

3700 designated towns and more than 6,00,000 villages. About 350 million

people live, within one-minute walk of these retail shops.

According to retail census conducted by market researcher ORG-MARK,

Rs. 4,79,568 crore worth of products were sold through these 5 million retail

outlets.

Manufacturers owned and retail chain stores are springing up in urban

areas to market consumer goods to the middle class in a much similar style as

malls around the globe. At present about 8% of the Indian population is

employed in the retailing industry as against 20% in USA. As India moves

towards the service oriented economy, a rise in this percentage is expected. The

number of the retail outlets is growing at about 8.5% annually in the urban areas


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and in towns with population between 1,00,000 to 1 million; the growth rate is

about 4.5%

According to Kurt Association, a global management consulting firm,organized retailing seems all set to power ahead from Rs. 5000 crore currently to

about Rs. 30,000 crore in next five years. A.T. Kearney reports that organized

retailing will account for about 20% of the total $8 trillion retail market in India

in the next 5-7 years as against 1-2% today.

Consumer Spend by 2005 (in Rs. crore)

Unorganised Retailing : 7,08,836

Organized Retailing :

Food and grocery 5,956

Non food 23,886

In India, organized retailing is catching up fast. Yet retailing is to be

recognized as full-fledged industry in the India. Organized retailing is bound to

grow tremendously provided the right marketing strategies are adopted.

Even though the big retail chains are concentrating on the upper segment

and selling products at higher prices like Crossroads, Akbarallys and Shoppers

Stop, retail stores are sprouting that cater to the needs of the middle class. With a

huge middle class population, the retailers like RPGs Food World are tapping

this market. The market is flooded with products branded and unbranded.

The customers are in a dilemma as to pick which one! The organized retail

chains, display all the products and the most attractive product catches the


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services to create exchanges that satisfy individual and organizational

objectives.

Organizational buyers purchase in order to perform a task or sell a producteffectively, efficiently and at a profit. They could be industrial buyers or

intermediary buyers. Industrial buyers are those who purchase goods and

services to be used in or to air manufacturing process. Intermediary buyers are

those (i.e. wholesalers and retailers) who buy merchandise for resale. Retailers

include street vendors, local supermarkets, department stores, restaurants, hotels,

barbershops, airlines and even bike and car showrooms. Still retailing may or

may not involve the use of a physical location. Mail and telephone orders, direct

selling to consumers in their homes and offices and vending machines all fall

within the purview of retailing. In addition to it, retailing may or may not

involve a retailer. Manufacturers, importers, non-profit firms and wholesalers

are acing as retailers when they sell goods and / or services to final consumers.

Whatever the form of retailing, a retail marketing strategy defines the

execution of the marketing process and facilitation of customer satisfaction. This

retail marketing strategy involves selecting a retail target market (i.e. the

carefully / exactly identified group of final consumers that a retailer seeks to

satisfy) and then implementing the corresponding retail marketing mix (i.e. a

combination of product, price, promotion and distribution strategies that will

satisfy the retail target market). The elements of the marketing mix encompass


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the facets shown in the table below. The table depicts consumer service as the

crux of the whole activity.

THE INDUSTRY STRUCTURE

Hence, commencing the study of retailing industry, we must first look at its

structure what the retailing industry is made up of, what is looks like. The

structure of the retailing industry can be studies from two perspectives

according to the form of ownership of various retail units or according to

the strategy mix that various retailers adopt.

Based on the form of ownership, various types of retailers comprising the

retailing industry are described below :

1. An unaffiliated or independent retailer is one who owns and

operates only one retail outlet. A family mostly owns it with high

dependence on the owner, thus affecting long run success and

employee morale. He is supposed to have a friendly personalized

image and his offering reflects the tastes and preferences of its owners

and customers. Kirana shops are very good examples of such retailers.

2. A Chain retailer or corporate retail chain owns and operates

multiple retail outlets (store units) under common ownership. Most

chains have well defined management philosophies, which tend to be

solid overall strategies. These contribute towards limiting the


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independence of the local owners of the individual units who, in

addition, lack commitment also.

Consistent strategies with reference to store hours, product assortment, prices, sales personnel, promotion and other policies must be maintained

throughout all branches in order to project a particular image to the chain. This

calls for centralized decision making which in turn result in difficulties for

individual units in adapting to local needs of the target markets.

There also exist associations of independent retailers, which are formed in

order to compete more effectively with corporate chain stores. They enjoy

benefits of a corporate chain while still maintaining status of individual owners.

These associations could be formed with other retailers (known as co-operative

chains), with sponsorship by a wholesaler (known as voluntary chains) rather

than by the retailers themselves or by franchise agreements sponsored by

manufacturers or distributors (known as dealers) or by service firms (known as

franchisees.)

3. A Franchise system results from a contractual agreement between a

franchiser and a retailer franchisee, thus allowing the franchisee to

conduct a given form of business under an established name as per a

particular business format in return for an initial fee and a percentage

of monthly gross sales as royalty. It helps franchise to create national

or international presence quickly and with similar investments (than


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required by the franchise alone for creating such a presence

independently).

There are some key questions that a franchisee must answer whileevaluating franchisee opportunity :

Does the franchise have a strong chance of competing in his community?

Does the franchise have potential for further growth or does its success

depend on a fad?

Will franchise ownership be an advantage in the business he is considering

or could he do as well on his own.

What is the companys attitude towards

Development of new products, franchisee termination and renewal, and

territorial protection for existing franchisees?

4. A Leased Department (LD) is a department in a retail store that is

rented to an outside party. If the existing store is well known, with a

large number of steady customers, it becomes easier for the LD to

generate immediate sales. It operates in categories on the fringe of the

stores major product lines and it must be taken care that it is not a

parasite and does not live off the traffic generated by other parts of the

store. Thus goods or services lines that it can offer may be restricted.

Apart from this, various requirements are imposed to ensure overall

consistency and co-ordination.


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labour or of getting access to healthful, environmentally safe plots, not

available from traditional stores.

INDUSTRY PLAYERS

What is the reason that big groups like Tatas, ITC, Piramal Enterprises and

S. Kumars are putting huge amounts of money into retailing?

The answer is very simple. Now, just a couple large organized retailers are

in the market whose turnover crosses Rs. 100 crore. And in this sector anything

above 25 crore counts you as a major player. Consultants like A.t. Kearney have

predicted that by year 2005 retailing will be worth Rs. 1,60,000 crore in India.

Table 1 give an overview of the main players in this sector along with their expansion plans :


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Table 1 : Indias Large Retailers

Company Turnover (in

Rs.Crores)

Outlets Space (insqft)

Expansion Plans (to beachieved by 2002)

RPG 156 27 Food world 2

Music World 4SpencersOutlets

200 000 50 Food World 8 Music

World 18 Health & Glowoutlets for total turnover of 23.75 crores per month

ShoppersStop

130 1 each inMumbai,Bangalore,Hyderabad,Delhi, Jaipur

100 000 15-17 outlets if FIPBapproves Foreign Equity

Vivek &Co.

90 8 in Chennai 3 inBanglore 1 inSalem

100 000 10 stores in Chennai andBangalore 7 in Hyderabad,Vishakapatnam &Vijayawada

Nilgiris 76 17 Supermarkets14 Cakeshops

80 000 4 outlets 30% growth interms of turnover 289stores by 2007

Pantaloon 60 12 stores 40franchises

90 000 11 superstores

NANZ 40 15 Supermarkets 70 100 N.A.Vitan 25 11 Departmental

Stores

50 000 25 Outlets 100 crore

turnover Crosswor D

16 Bookstores inAhmedabad,Delhi, Mumbai,Pune, Goa,

Nasik

27 000 25 stores

Landmark N.A. 1 in Chennai andCoimbatore

18 000 Plans to open Mall inCalcutta with Emami

KempChain of Stores

N.A. 2 stores inBangalore

125 000 Kemp City retailing cumentertainmentdevelopment, over 200


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acresCharaghDin

N.A. Mumbai store 10 000 Will remain singlelocation store

Source : Rushing into Retailing Business World, 31 May, 1999

FACTORS BEHIND THE CHANGE

Whats deriving the change?

There are some concrete factors:

Economic Progress: The rate of growth in Indian has gradually picked up

in the last two decades. In the eighties it breached the so-called Hindu rate

of growth and reached 5 percent levels, by the end of the nineties even this

was considered unacceptable. During at least 3 of the last 5 years the gross

domestic products has grown over the 7 percent levels. The government is

pushing for 8 percent over the next few years. Various international

leaders visiting India have expressed consensus over Indias this higher

rate of growth is bound to have an effect on the buying power and

disposable incomes.

Urbanization : Rising prosperity and population inevitably drive this

trend. Thesis true of India as well. The number of towns with population

of more than 10 lakhs continues to increase as do the size of already large

towns. These are the segments of interest to retailing aspirates is the

ascending traffic congestion levels. Indias automobile sales have


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multiplied in the 1990s. The net result is overcrowded towns and parking

hassles. One-stop shops become the places of choice in such a scenario.

Consumerism : Consumers the world over have their aspirations andIndia consumers are no different. In the past 3 years, when the economy

was not doing very well consumer durables sales in India were coasting at

close to 20 percent growth levels. He music industry followed the same

pattern. Driving this trend was media and cable TV proliferation, which

have been growing at a fast clip for a few years not. The resultant

exposure to new ideas and desires are fuelling consumer demand.

Brand Profusion : There has been an explosion of branded goods as a

corollary to the receptive conditions created by the above mentioned

trends. In the 1980s, there was just one brand of salt in the Indian market

Tata Salt oils used to be sold losses till a few years ago. Now there are at

least ten known brands of oil and in more variations than Indians have

ever used in the last few hundred years. Pack size proliferation is another

trend. This year, the shelves of retail supermarket find six brands of salt.

Just about every respectable brand in the world in consumer durable has

operations in India. Numerous garment brands have appeared in the last 2

to 3 years. These need shelf space and display.

Cheaper real estate : Real estate is the largest fixed investment for a

retailer. In the last few years real estate prices have tumbled. According to


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Price This will be most powerful magnet to drive footfalls. If you can

undercut successfully then market share will follow. This strategy has

worked wonderfully in affluent countries as the success of Wal- Mart or the European hypermarkets show. We have been this is Indonesia,

Thailand and Taiwan, and it is now happening in China. While

hypermarkets remain distant possibility in India, Subhiksha is clearly

showing that nothing works like price. This is the strategy all food

retailers will have to follow.

Service Consumer durables surveys indicate that consumers are confused

about brand benefits. A well informed sales staff would then be a

competitive advantage. No consumer durables retailer really has that yet in

India. So service can be a big differentiator in this difficult market sector.

It can work in other segments of retailing as well; Leading retailers in any

segment of retailing worldwide swear by good service Indian retailers

have already ignored this issue.


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THE INDIAN CONSUMER

What we buy and why we by

Understanding customer through socioeconomic or psychographic studies is

critical for retail chains. What do such studies say about India.

Dualities are omnipresent In the natural world or in commerce Capital

Profits owner-employee, liabilities-assets are common binaries from the

commercial world. The retailer consumer duality is one such close partnership.

The consumer is therefore central to many issues about organized retail. Is

the India market ready for organized retail? This is the 100 store question facing

many new and prospective entrants today. Consumer in sights are necessary to

arrive at any judgment on this for those already in business or in the process of

entering consumer knowledge is key to business strategy, including decision like

locations store size and form a, merchandise, break-even period and thus even

funding strategy.

This chapter looks at two issues- measurements of the Indian consumer markets and techniques employed by retailer to gather consumer knowledge.

Macroeconomic data is an important indicator of a countrys attractiveness.

Beyond this one needs to look at state or city specific data. Even this may not be

enough for retailer to make market entry decisions. At this state a retailer needs

to top market research methodologies to get precise information. MR techniques

are also more relevant once the retailer is in business. Some techniques for


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existing business are also discussed the chapter on Customer Relationship

Management.

CONSUMER BEHAVIOUR

Macro economic and household information gives a picture of consumer

buying power or the wallet size. The retail also needs to understand many more

issues about a consumer before he can take various strategic decisions like

location, store format or merchandise mix. For example, knowing where and

when a customer buys has implication on location and format Similarly

promotional strategy could be made better if the retailer had idea of the decision

making process could be made better if the retailer had idea of the decision

making process could be of the consumer. Among readily visible trends in urban

India is the increasing acceptance of casual clothing among urban Indian women.

Even the alliance at the work place has become for more relaxed about casual

wear. The Eastern influence has been heightened with the entry of a large

number of multinational corporation (MNCs) Friday wear has almost become a

corporate philosophy. In line with this trend, Allen Solly has introduced their

collection of casual office wear.

Most garment companies have originated a range of sold and bright plains

in shirt, to tap into the informal work wear ethic.

Commuting times have increased in large towns. This would indicate a

need for one-stop which could translate into a multi-brand large format store or a


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mall. With the increasing trend towards nuclear families the average family size,

especially in metros in declining. In fact empty nesters an American terms for

parents whose children have grown up and have left home and who are savingfor retirement are rapidly becoming a common phenomena in Indian metros.

Such a customer might prefer the convenience of home delivery or direct

marketing.

Some of these trends are also clearly visible in the late study

commissioned by KSA Technopak on the Indian Consumer.


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OBJECTIVE OF STUDY

1. To find out the difference in the services offered by a traditional store

vis a vis a Mall.

2. To find out the demographic profile of the consumer visiting traditional

store vis a vis Mall.

3. To find out the factors which motivate consumers to buy from a Mall

rather than from a traditional store..

4. To find out the change in the average monthly expenditure of consumer

while they make purchase from a mall in comparison to a traditional

store.

5. To find out the impact of Mall Culture on the buying behaviour of

Agra consumer.


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RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research

problem. It comprises of the various steps adopted by researcher along with the

logic behind it. According to Hudson All progress is born of inquiry. Doubt

is often better than overconfidence, for it leads to inquiry and inquiry leads

to inventions.

Research Type : Descriptive research

Universe : All the people of the city of Agra who buy any

product / services from a Mall or a traditional

store.

Sample Unit : A person of the city of the city of Agra who buy

any product / services from a Mall or a traditional

store.

Sample Size : 100

Type of Data : Primary Data

Secondary Data

Questionnaire

Various Retail Web Sites

Tools : Personal Interview

Sampling Method: Judgement and Convenience


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A NEW SHOPPING EXPERIENCE

However, disadvantages of allowing FDI in retail are significant. While

Wal-Mart may boost exports and buy directly from farmers, invest in food

processing and raise standards of agricultural products, it would affect livelihood

of 15 million small retailers acting as middlemen. Though this sector is largely

unorganized, they constitute 98 percent of the countrys retail trading and

contribute to 11 percent of GDP. With Wal-Marts entry, many of these retailers

will be rendered unemployed.

A country wilting under pressures of unemployment will find it hard to

suppress the ensuing social tension.

Global retail giants would recruit people who are educated and skilled.

Small time retailers might not stand a chance. Moreover, the retail houses may

be capital rather than labour-intensive. How is one to assume that retail giants

would source products from India and raise its exports? They may source from

low wage countries like Thailand, Bangladesh, Nepal or China. How can one be

sure that they would invest in food processing and help Indian farmers to sell

their produce directly to them and earn a better price? What happens when

farmers are unable to meet exact specifications and their produce is rejected? All

these questions need to be addressed before a decision is taken.

However, it is absurd to believe that once branded products enter the

market, unbranded products enter the market, unbranded products will lose their


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demand base. The Indian market is not integrated or homogenous. It caters to

different income groups. Such an argument is baseless.

The governments decision to allow 51 percent equity in single brandretailing to foreigners, after much deliberation, confirms that it is quite cautious

in its approach to opening up retailing. It knows domestic retailers interest need

to be considered. Hence, providing some lead time to local players to

consolidation their position seems to be the best option.

MALL MANIA


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In all metros, major and minor, across the country, the shopping mall is changing

lifestyles and landscapes. If the mall is undergoing a second wave of expansion

and reinvention in Mumbai and Bangalore, then its arrival in cities likeVisakhapatnam and Bhubaneswar has led to a rethink of established business

norms. In their varying shapes, sizes and descriptions, malls promise to change

the way India does shopping. At the peak of the Puja season in Kolkata this year,

the alleys of the citys iconic New Market were far from crowded. There was not

a single serpentine queue to be found.

Given an alternative, Kolkatas citizenry had chosen to go elsewhere to

the mall which has turned shopping from an ordeal to an outing, and become a

community hub where families congregate, entertain themselves and also buy

things. Kolkatas Forum Mall, Nashiks Big Bazaar, Velocity in Indore and

Mumbais Inorbit are the flagships of Indias booming mall culture. Vikas Jain, a

32-year-old garment exporter from Ludhiana, visits the newly inaugurated Ansal

Plaza once in five days. Visiting a mall has become a family outing with

entertainment, shopping and eating all under one roof, he says.

As the awareness and share of organized retail grows, developers are

rushing to keep up with the demand. By 2007, 22 new malls will be added to

Mumbais current tally of 10 operational malls, while the National Capital

Region will see 18 new malls. The Indian consumer is, perhaps for the first time,

king, and promoters know it.


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A malls strategy depends on its catchment area and the demographics it

serves. Forum in Kolkata is located on Elgin Road, an upmarket shopping area in

the middle of the city, and houses tenants like Shoppers Stop and the INOXmultiplex. Another Kolkata mall Metropolis on Eastern Metropolitan Bypass,

which is chock-a-block with middle-and lower-income group housing colonies,

sells itself as the inexpensive mall experience. Its biggest tenant is Big Bazaar.

The big-city malls other hook is parking. Bangalores Garuda Mall has

succeeded not only because of its stores but also because of its mega car park,

which takes in 1,000 cars. Says D.G. Uday, CEO of Garuda Mall: Consumers

want a comfortable environment that offers shopper-tainment a combination of

shopping and entertainment. The Phoenix Mills shopping mall in an old textile

mill area in central Mumbai has proved so popular, thanks to its mix of high-and

low-end brands, and options in both food and shopping, that the parking space

made available initially has proved inadequate. Now shoppers weave their way

past the construction site of multi-storey car park.

Drawing crows is, however, not the same as drawing profits. When a mall

opens most of the visitors are window shoppers. Mall in India have had to take

this in their stride and be innovative. In the first phase, investors bought mall

space from developers, especially in Gurgaon, at a premium, in the hope of

making a killing. That resulted in empty retail spaces and poor customer traffic.

Says the CEO of a retail brand, which is a big anchor tenant in most malls:

Gurgaon is a mess.


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Today, customers take air-conditioning and parking facilities as basic.

Value for money has changed to value for time. This makes quality of service on

time very important, he says.Leased mall space gives businesses a better chance of making profits. The

mall locks in the tenant for at least three year and big anchor tenants, like

multiplexes and chains like Shoppers Stop and Westside, for a longer period.

Every mall needs its anchors, which are its biggest draw. They could be a

superstore like Big Bazaar multiplexes like Delhis PVRS. The anchor is

meant to give a pull in return visits, stable footfalls and revenues. When the

INOX opened at Kolkatas Forum, it changed the economics of the mall.

According to Manoj Bhatia of INOX, Expenditure increased by 30 percent and

rentals doubled. You get everything for everyone under one roof, she says.

According to a KPMG study, retail sales of consumer goods in India are

expected to rise from Rs. 15,02,900 crore in 2004 to Rs. 27,70,400 crore by

2009. Organized retail is still at a nascent stage in India but there are some

pointers to the major growth areas. It is estimated that in 2003, the Indian

consumer spent 41 percent of his disposable income on groceries. It is, therefore,

easy to understand why malls, which have hypermarkets like Big Bazaar and

Shoprite as their anchors, tend to do better than others.

Getting people to a mall once is easy. Getting them to return and spend

money depends on a mall promoters ability to produce a good mix of shop-

pertainment. As footfalls increase so does the size of the mall from a modest


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sources assert that a well-managed business can give better returns in both forms

of business.

These rates of return are attractive. They are better than cost of funds andalso better than many other businesses in India. This means, big business is

likely to look at organized retail in a serious fashion. This is what to be

happening too, given the way most large business houses in India are

formulating plans for retailing.

INDIA NEEDS FDI IN RETAIL


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economically efficient. But there are strong reasons to believe that in India, they

will not be able to mine what CK Prahalad called the gold at the bottom of the

pyramid. While big-time retailing will definitely succeed in India, and bring

with it great benefits to middle and upper class consumers (and associated spin-

offs like real estate development), the armies of small traders who break down

bulk even further to cater to the numberless masses will continue to thrive.

Supermarkets will typically cater to car-owners who buy up a months supplies

at a time. They will buy big bottles of shampoo, cartons of cigarettes, and big

sacks of rice. The small traders will sell product in little sachets, loose cigarettes,half-a-kilo of rice, and so on. Their numbers will flourish and grow.

Even in rich nations, small traders manage to compete very effectively

with supermarket chains. In London, almost every corner shop is owned by an

Indian. We are the shopkeepers to a nation of shopkeepers! it does not behove

a nation of such splendid shopkeepers to fear foreign supermarkets.

The upshot of it all, of course, is that for the nation to progress, efficiency

gains in distribution are a must inordinately long distributional chains make trade

slow, expensive and cumbersome. As India progresses, it is vital that this chain

see shrinkage. What could very well work in the interests of both the small

traders as well as their poor customers are wholesale supermarkets, like

Bangalores Metro Cash & Carry, which caters to small traders and has therefore

located its sprawling stores outside the main city. Such wholesale supermarkets

will enable small traders to increase their margins and also pass on some of their

gains to the final customers.

The distributional chain will shrink, but not at the cost of the small traders.

Rather, it is the inefficient wholesalers and sub-wholesalers who will see a loss

of business. Wholesale supermarkets will be able to mine the gold at the bottom


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of the pyramid : but their product mix will vary immensely from retail

supermarkets.

In either case, in all our cities today, wholesale markets are invariably in

part of the old city : Congested and inaccessible. The real estate development

that will accompany FDI in retail as well as wholesale trade will make it possible

for a redrawing of city maps, with all these supermarkets sprouting all around the

periphery. This process of rebuilding the civic architecture around which urban

commerce works will give us a golden opportunity to get thins right for once as

far as city trade and traffic management is concerned.We can learn lessons from Seoul, where wholesale supermarkets stay open

all night, enabling small traders to come in from the surrounds after the evening

rush and depart with their wares before the morning rush hour.

If at all the government is genuinely concerned about small traders, then

it should implement policies that make them invulnerable to the hafta brigade

that milks them of their surpluses. Like every other Indian, they too need the

state off their backs.

CHALLENGES AHEAD FOR RETAILING

Organized retailing is not a bed of roses for the big players also. In

addition to the advent of Internet, various issues glare at retailing some of them

are :


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Human Resource :

Big retail shops do not confine their target segments for employees to

undergraduates. Shoppers stop broke the myth of MBAs not wanting to go intothe retailing career. Cross Roads and Spencer also hire MBAs to manage their

chains. However there still exists a gap between the supply and demand of

professionals. Mr. Goenka, Chairman RPG Group, hopes that one of the greatest

challenges facing modern retailing in India is the availability of trained

personnel. In order to address the problem RPG Group has set up a national

retail Institute in Chennai, which offers a variety of courses in retail management

for frontline, supervisory and managerial post.

Retaining the human resources is also a major challenge for these big

retailers. The bigwigs like Crossroads offer high compensation and create a

cohesive environment that makes an employee proud to be a part of such big

retail chains.

Space and Infrastructure :

To establish a retail shop/ Mall, the real estate and the infrastructure are

very vital. The expenditure and availability on both the accounts do hinder the

growth of the retail chain. The land ceiling restrictions and other state

restrictions on land use have prevented the growth of efficient retailing in the


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cities. An average investment of about Rs. 5 crore is required to establish a mall

and that explains the rush of big companies into this business. Small and

individual retailers find it difficult to pour in that much of investment. Inaddition to the initial investment, to combat e-tailing, expenditure has to be

incurred on technological side. This makes the retail projects less attractive for

the individual players.

Consumer Mindset Towards Discount Stores :

In India the concept of discount stores like Wall-Mart, at which genuine,

defect free international brands are available at 50% discount, is yet to catch on.

Still, The major section of customers is conservative and choosy and prefers to

go to a known retail shop than opt for a discount store. Very few discount stores

like SM2, Mumbai are at present operational. Its reach is confined to major

cities. Breaking the conventional mindset of the Indian consumers that discount

stores do not sell inferior goods will take some time.

Rural Market How To Penetrate?

Penetration into the rural market is what big retailers have to concentrate

on for growth. Attracting rural markets will be different from that of the urban

market. For example detergent cakes are preferred to powder and coconut oil in

bottle to sachets in the rural areas. The rural consumer are different from the


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There are really not enough players in the supermarket business for the business

itself to provide a direct answer to the cynics. Food world and Subhiksha are yet

to break even. Nilgiris has a large own brand portfolio, which entails higher margins.

Since organized retailing has a higher cost structure because of larger

manpower requirements and bigger investments in interiors and technology- it

needs higher turnover than existing fragmented stores for each its stores. In fact,

this is the entire premises of organized retail, which aims to achieve higher sales

by offering customers a better deal in one or more of the following disciplines.

Ambience

Service

Product assortment

Prices

The assumption upon which a Food world or a Globus chain is setup is

that, give the right advantage, a customer would prefer to travel that little extra

distance from his/her friendly neighborhood store. Outlets like Shoppers Stop,

Cross World and Planet M in Mumbai, and Food world or Subhiksha in Chennai,

already provide that chain stores can attract more than the threshold level of

customers. The reason that some of these chains have yet to be break even

possibly owes to the fact that they are currently in a stage of rapid expansion.

Each of these has fairly successful individual stores, which shows that they can

be financially viable in spite of larger cost commitments.


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Higher turnover can enable a chain to cut prices further, which leads to even

better customer response.

Findings and Analysis

The following results emerged out of the survey.


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(1) As the results indicate the number of people visiting the malls have a

larger proportion of males in comparison to the females with

percentage figures of males 60% and females 40%.

(2) People falling in the age group of 18 25 years has the largest

proportion as visitors with the percentage of 41%. Remaining

categories of age group had percentage figures as follows : Upto 18

years-14%; 18 25 years 41%; 25 35 years 23%; 35 50 years 14%

above 50 years 8%.


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(3) The third factor taken up was occupation of the visitors and the resultsdeclare that service class people and students were the one who visit

the malls most with percentage of 40% and 35% respectively. Other

occupational aspects covered were business people, retired people and

housewives and their proportions were 16%, 3% and 6% respectively.


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(5) Malls have become a symbol of affluent life style became evident from

the responses as 32% people market it as one of the reasons to visitmalls (figure). This was clubbed with convenience of getting most

things under the same roof along with good environment and service.

The various reasons for visiting the malls as rated by the customers

are : life style-32%, convenience-29%, good service-21%, ambience-

20%, quality of items-20%, social influence-13%.


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(7) Convenience in shopping is giving malls an edge over the general

scattered market where customers had to visit different places to make

their purchases while at the malls they are getting most of their

household items at the same corner. Malls are also emerging as a good place to hang around or pass time whenever you are free. The visitors

of the malls whose percentage ranged as high as 20% established this

(figure). Multiplex and upcoming branded food joints were also pulling

visitors towards the malls as it was providing them variety at the same

place. One factor, which was not included in the questionnaire but was

told by many is that the malls are also a suitable place for love birds as

they can roam freely without spending much and without being


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bothered by anyone. The proportion of visitors responding this was

about 19%. Also became known that malls were being used as a

complete day out / picnic spot where you could spend time, eat, enjoy,

watch movies, shop and be merry (Figure).

(8) It was also discovered that the branded items were a preferable

purchase in comparison to the unbranded items while there was a good

percentage of people who would purchase both branded as well as

unbranded items (figure). People also disclosed that the branded

products range carried by malls was larger in comparison to the general

shops but in the case of unbranded products the prices were more in thesame comparison.


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(9) An insight in the amount of money spent in each visit disclosed that

most customers spent an amount ranging Upto Rs. 500- 17%; from Rs.

500-1000, the percentage of such people was 36%. The figures that

followed were:- Rs. 1000-2000-34%; and Rs. 2000 and above 13%.


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(10) Customers were also driven to the malls by the sales schemes that

would come from time to time. Though the category of people who

always come to the malls during such schemes was only 15% and those

who never get affected by these was 20%. The highest percentage 45%

is of people who sometimes take note of these schemes and visit malls

during that time. Such schemes also affect the amount spent in

purchases, as people tend to purchase more to make best use of

opportunities available particularly in the household item categorywhere the consumption is on regular basis.


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(11) A comparison of the products available at the malls with those at the

general market revealed strong opinions of customers regarding price,

quality, variety and service provided.


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(12) But the way no coins is with a single side, similarly the well-developed

consumer friendly malls even suffer from shortcomings and

drawbacks. Digging inside this aspect several problems were also

reported by the consumers. Rush at the cash counters in the wee hours

and the generally huge crowd topped the list of problems with as high

as 96% and 89% people reporting it. Though the malls have all the

consumer friendly arrangements but the multi-storeyed and complex

structures often leave consumers confused about the utilities, a huge

82% people reported requirement of maps and guidelines in the malls.

Parking followed the list of severe problems with 80% people facing parking space problem and 71% people complaining about the massive

time consumed during entry and exit of vehicles. Unavailability of

washrooms on all the floors was the next in sequence with 64% people

reporting it, followed by problems of sitting arrangement and drinking

water, which were brought into notice by 63% and 62% visitors

respectively 60% of the people coming to malls also complained about

the absence of any medical facilities or even chemist shops in the


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malls, and for even small health problems they had to rush out. Some

48% visitors also reported small sizes of the lifts. Quite a good number

of people (44%) were also worried about the lack of proper security

systems and the vulnerability of malls towards any antisocial elementswho can be a threat to the otherwise comfortable environment. Some

people (22%) also said that the malls are becoming a centre for the neo

rich and do not accommodate the lower income group customers for

whom there were no products.

P ROBLEMS


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LIMITATION OF THE STUDY

(i) Biasness in data due to secondary information.

(ii) Study limited to Agra and nearby area.

(iii) There is no positive initiative taken by the respondent.


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CONCLUSION

Finding good quality, variety and service under the same roof along with

other facilities of time pass and entertainment, clubbed with ambience and life

style, the customers are moving fast and in number towards these malls and are

willingly ready to pay higher prices for the facilities. The malls are gradually

becoming a package of activities instead of segregation. This is the reason why

this culture has clicked the customers so well and so fast. If the problems that are

being faced by the consumers are dealt properly, even higher proportions of

visitors can be attracted. The fast track way, mall culture is picking up, if

managed properly, the brick and mortar stores will have a new face very soon

with lot of style and fresheness.


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BIBLIOGRAPHY

1. www.timesofindia.com

2. www.hindustantimes.com

3. www.indiatoday.com

4. www.indiatimes.com

5. www.projecthubs.com

6. Outlook magazines

7. Documents on retail market

8. www.lycos.com

9. Major shopping web portals

10. Philip Kotler : Marketing Management11. Berry Bermon : Retail Management

12. C.R. Kothari : Research Methodology
http://www.timesofindia.com/http://www.hindustantimes.com/http://www.indiatoday.com/http://www.indiatimes.com/http://www.projecthubs.com/http://www.lycos.com/http://www.hindustantimes.com/http://www.indiatoday.com/http://www.indiatimes.com/http://www.projecthubs.com/http://www.lycos.com/http://www.timesofindia.com/


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QUESTIONNAIRE

1- Name of the respondent?

2- Sex?

(a) Male (b) Female

3- Age?


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