Study on consumer buying behavior in super market and ...

Study on consumer buying behavior in super market and kirana stores

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Executive summery

A project report containing the marketing research on “a study on consumer

buying behavior in super market and kirana stores in Belgaum city” it was an

opportunity to learn the practical aspects of retailing sector and industries. Topic

concerned to industry requirement as Lucky super market dealing with grocery,

stationery, greeting, cosmetics, gift items and other house hold items from last one

year. Threats of new entrants in belgaum city increasing computation in the category

and existing unorganized players like local kirana stores also giving neck to neck

computation for supermarkets so a study is conducted to know the consumer buying

behaviour and to know the which are the influencing factors considered by the

customer while buying required grocery and other products for their consumption. the

information is collected by structured questioner that include all the requirement of

Lucky super market needed to increase their sales by knowing consumer buying

behaviour, influencing factor and further expectations of consumer

WHAT IS RETAILIG

Retailing is the set of business activities that adds value to the product and service

sold to consumers for their personal or family use.

A retailer’s role in distribution channel

A retailer is a business that sells product or services or both, to consumers for their

personal and family use. Retailers attempt to satisfy consumer needs by having the

right merchandise, at the right price, at the right place when consumers want it.

Retailers also provide markets to producers to sell their product. Retailer is the final

business in a distribution channel that‟s links manufactures to consumer

Distribution channel



Is a set of firms that facilitate the movement of product from the point of production

to the point of sale to ultimate consumer?

Factions of performed by retailers

Although there are situation where it is to easier and cheaper to buy directly from

manufactures, such as farmers market. Retailer they sell to consumer and facilitative

the distribution of those products and service for those who produce them. These

factions are:

1. providing an assortment of product and service

2. breaking bulk

3. holding inventory

4. providing service

Providing an assortment

Offering an assortment enables their customers to choose from the wide selection of

brands, designs, size, color and prices in the location. Super markets provide

assortment of food, health and beauty care and household product.

Breaking bulk

Retailers offer the product in smaller quantities tailored to individual consumers and

household consumption pattern. This is called braking bulk. It is effective for both

manufacture and consumer it is cost effective for manufacture to package and ship

merchandise in larger, rather than smaller quantities. It is also easier for consumer to

purchase in smaller quantities.

Holding inventory

A major function of retailer is to keep inventory that is already broken into user

friendly sizes so that produce will be available when consumer want them.

Providing service



Retailer provides services that make it easier for customer to buy and use products.

They offer credit so consumer can have a product now and pay for it later. They

display product so consumers can see and test them before buying.

CONSUMER BUYING BEHAVIOR

Possibly the most challenging concept in marketing deals with understanding

why buyers do what they do (or don‟t do). But such knowledge is critical for

marketers since having a strong understanding of buyer behavior will help shed light

on what is important to the customer and also suggest the important influences on

customer decision-making. Using this information, marketers can create marketing

programs that they believe will be of interest to customers. As we might guess, factors

affecting how customers make decisions are extremely complex. Buyer behavior is

deeply rooted in psychology with dashes of sociology thrown in just to make things

more interesting. Since every person in the world is different, it is impossible to have

simple rules that explain how buying decisions are made. But those who have spent

many years and analyzing customer activity have presented us with useful

“guidelines” in how someone decides whether or not to make a purchase.

Types of Purchase Decisions

Consumers are faced with purchase decisions nearly every day. But not all

decisions are treated the same. Some decisions are more complex than others and thus

require more effort by the consumer. Other decisions are fairly routine and require

little effort. In general, consumers face four types of purchase decisions:



Minor New Purchases: These purchases represent something new to a consumer

but in the customer‟s mind is not a very important purchase in terms of need,

money or other reason (e.g., status within a group).

Minor Re-Purchases : These are the most routine of all purchases and often the

consumer returns to purchase the same product without giving much thought to

other product options (e.g., consumer is brand loyalty).

Major New Purchases: These purchases are the most difficult of all purchases

because these are important to the consumer but the consumer has little or no

previous experience making the purchase AND is important. This type of decision

often (but not always) requires the consumer to engage in an extensive decision-

making process.

Major Re-Purchase: These purchase decisions are also important to the customer

but the customer feels more confident in making the decision since they have

experienced purchasing the product in the past. For marketers it is important to

understand how consumers treat the purchase decisions they face. If a company is

targeting customers who feel a purchase decision is difficult (i.e., Major New

Purchase), their marketing strategy may vary greatly from a company targeting

customers who view the purchase decision as routine. In fact, the same company

may face both situations at the same time; for some the product is new, while

other customers see the purchase as routine. The implication of buying behavior

for marketers is that different buying situations require different marketing efforts.

Why Consumers Buy

As we discussed earlier that customers make purchases in order to satisfy

needs. Some of these needs are basic and must be filled by everyone on the planet



(e.g., food, shelter) while others are not required for basic survival and vary

depending on the person. It probably makes more sense to classify needs that are not a

necessity as wants or desires. In fact, in many countries where the standard of living is

very high, a large portion of the population‟s income is spent on wants and desires

rather than on basic needs. But here consumer we are referring to the actual buyer, the

person spending the money. But is should also be pointed out that the one who does

the buying is not necessarily the user of what is bought and that others may be

involved in the buying decision in addition to the actual buyer. While the purchasing

process in the consumer market is not as complex as the business market, having

multiple people involved in a purchase decision is not unusual. For example, in

planning for a family vacation the mother may make the hotel reservations but others

in the family may have input on the hotel choice. Similarly, a father may purchase

snacks at the grocery store but his young child may be the one who Selected it from

the store shelf. So understanding consumer purchase behavior involves not only

understanding how decisions are made but also understanding the dynamics that

influence purchases.

WHAT INFLUENCES PURCHASING:

As we discussed the decision-making process for consumers is anything but

straightforward. There are many factors that can affect this process as a person works

through the purchase decision. The number of potential influences on consumer

behavior is limitless. However, marketers are well served to understand the KEY

influences. By doing so they may be in a position to tailor their marketing efforts to

take advantages of these influences in a way that will satisfy the consumer and the

marketer (remember this is a key part of the definition of marketing).



For the purposes of this tutorial we will break these influences down into three

main categories: Internal External and Marketing. However, those interested in

learning more about customer buying activity may want to consult one or more

consumer behavior books where they will find additional methods for explaining

consumer buying behavior.

For the most part the influences are not mutually exclusive. Instead, they are

all interconnected and, as we will see, work together to form who we are and how we

behave. For each of the influences that are discussed we will provide a basic

description and also suggest its implication to marketers. Bear in mind we only

provide a few marketing implications for each influence; clearly there are many more.

INERNAL INFLUENCES:

We start our examination of the influences on consumer purchase decisions by

first looking inside ourselves to see which are the most important internal factors that

affect how we makes choices.

Perpetual filter:

Perception is how we see ourselves and the world we live in. however, what

ends up being stored inside us doesn‟t always get there in a direct manner. Often our

mental makeup results from information that has been consciously or unconsciously

filtered as we experience it, a process we refer to a as a perceptual filter. To us this is

our reality, though it does not mean it is an accurate reflection on what is real. Thus,

perception is the way we filter stimuli (e.g., someone talking to us, reading a

newspaper story) and then make sense out of it.



Perception has several steps

Exposure – sensing a stimuli (e.g. seeing an ad)

Attention – an effort to recognize the nature of a stimuli (e.g. recognizing it is

an ad)

Awareness – assigning meaning to a stimuli (e.g. humorous ad for particular

product)

Retention – adding the meaning to one‟s internal makeup (i.e., product has fun

ads)

How these steps are eventually carried out depends on a person‟s approach to

learning. By learning we mean how someone changes what they know, which in turn

may affect how they act. There are many theories of learning, a discussion of which is

beyond the scope of this tutorial, however, suffice to say that people are likely to learn

in different ways. For instance, one person may be able to focus very strongly one

time while another person may need to be exposed to the same advertisement many

times before he/she been recognizes what it is. Consumers are also more likely to

retain information if a person has a strong interest in the stimuli. If a person is in need

of new car they are more likely to pay attention to a new advertisement for a car while

someone who does not need a car may need to see the advertisement many times

before they recognize the brand of automobile.

Knowledge:

Knowledge is the sum of all information known by a person. It is the facts of

the world as he/she knows it and the depth of knowledge is a function of the breadth



of worldly experiences and the strength of an individual‟s long-term memory.

Obviously what exists as knowledge to an individual depends on how an individual‟s

perceptual filter makes sense of the information it is exposed to.

Attitude:

In simple terms attitude refers to what a person feels or believes about

something. Additionally, attitude may be reflected in how an individual acts based on

his or her beliefs. Once formed, attitudes can be very difficult to change. Thus, if a

consumer has a negative attitude toward a particular issue it will take considerable

effort to change what they believe to be true.

Personality:

An individual‟s personality relates to perceived personal characteristics that

are consistently exhibited, especially when one acts in the presence of others. In most,

but not all, cases the behaviors one projects in a situation is similar to the behaviors a

person exhibits in another situation. In this way personality is the sum of sensory

experiences others get from experiencing a person (i.e., how one talks, reacts). While

one‟s personality is often interpreted by those we interact with, the person has their

own vision of their personality, called self-concept, which may or may not be the

same has how others view us.



Lifestyle:

This influencing factor relates to the way we live through the activities we

engage in and interests we express. In simple terms it is what we value out of life.

Lifestyle is often determined by how we spend our time and money.

Roles:

Roles represent the position we feel we hold or others feel we should hold

when dealing in a group environment. These positions carry certain responsibilities

yet it is important to understand that some of these responsibilities may, in fact, be

perceived and not spelled out or even accepted by others. In support of their roles,

consumers will make product choices that may vary depending on which role they are

assuming. As illustration, a person who is responsible for selecting snack food for an

office party his boss will attend may choose higher quality products than he would

choose when selecting snacks for his family.

Motivation:

Motivation relates to our desire to achieve a certain outcome. Many internal

factors we have already discussed can affect a customer‟s desire to achieve a certain

outcome but there are others. For instance, when it comes to making purchase

decisions customers‟ motivation could be affected by such issues as financial position

(e.g., can I afford the purchase?), time constraints (e.g., do I need to make the

purchase quickly?), overall value (e.g., am I getting my money‟s worth?), and

perceived risk (e.g., what happens if I make a bad decision).

Motivation is also closely tied to the concept of involvement, which relates to how

much effort the consumer will exert in making a decision. Highly motivated



consumers will want to get mentally and physically involved customers (e.g., milk)

but marketers who market products and services that may lead to high level of

consumer involvement should prepare options that will be attractive to this group. For

instance, marketers should make it easy for consumers to learn about their product

(e.g., information on website, free video preview) and, for some products, allow

customers to experience the product (e.g., free trial) before committing to the

purchase.

EXTERNAL INFLUENCES

Consumer purchasing decisions are often affected by factors that are outside

of their control but have direct or indirect impact on how we live and what we

consume.

Culture:

Culture represents the behavior, beliefs and, in many cases, the way we act

learned by interacting or observing other members of society. In this way much of

what we do is shared behavior, passed along from one member of society to another.

Yet culture is a broad concept that, while of interest to marketers, is not nearly as

important as understanding what occurs within smaller groups or sub-cultures to

which we may also belong. Sub-cultures also have shared values but this occurs

within a smaller groups. For instance, sub-cultures exist where groups share similar

values in terms of ethnicity, religious beliefs, geographic location, special interests

and many others.

As part of their efforts to convince customers to purchase their products,

marketers often use cultural representations, especially in promotional appeals. The

objective is to connect to consumers using cultural references that are easily



understood and often embraced by the consumer. By doing so the marketer hopes the

consumer feels more comfortable with or can relate better to the product since it

corresponds with their cultural values. Additionally, smart marketers use strong

research efforts in an attempt to identify differences in how sub-culture behaves.

These efforts help pave the way for spotting trends within a sub-culture, which the

marketer can capitalize on through new marketing tactics (e.g., new products, new

sales channels, added value, etc.).

Other Group Membership:

In addition to cultural influences, consumers belong to many other groups with

which they share certain characteristics and which may influence decisions. Often

these groups contain opinion leaders or others who have major influence on what the

customer purchases. Some of the basic groups we may belong to include :

Social Class – represents the social standing one has within a society based on

such factors as income level, education, occupation.

Family – one‟s family situation can have a strong effect on how purchase

decisions are made.

Reference group – most consumers simultaneously belong to many other groups

with which they associate or, in some cases, feel the need to disassociate.

Situation:

A purchase decision can be strongly affected by the situation in which people

find themselves. Not all situations are controllable, in which case a consumer may not

follow their normal process for making a purchase decision. For instance, if a person

needs a product quickly and a store does not carry the brand they normally purchase,

the customer may choose a competitor‟s product.



How Consumers Buy:

So now that we have discussed the factors influencing a consumer‟s decision

to purchase, let‟s examine the process itself. This process is presented in a sequence

of 5 steps.

However, whether a consumer will actually carryout each step depends on the type of

purchase decision that is faced. For instance, for minor re-purchases the consumer

may be quite loyal to the same brand, thus the decision is a routine one (i.e., buy the

same product) and little effort is involved in making a purchase decision.

In cases of routine, brand loyal purchases consumers may skip several steps in

the purchasing process since they know exactly what they want allowing the

consumer to move quickly through the steps. But for more complex decisions, such as

Major New Purchases, the purchasing process can extend for days, weeks, months or

longer. So in presenting these steps marketers should realize that, depending on the

circumstances surrounding the purchase, the importance of each step may vary.

Need / Want / Desire is Recognized:

In the first step the consumer has determined that for some reason he/she is not

satisfied (i.e., consumer‟s perceived actual condition) and wants to improve his/her

situation (i.e., consumer‟s perceived desired condition). For instance, internal triggers,

such as hunger or thirst, may tell the consumer that food or drink is needed. External

factors can also trigger consumer‟s needs. Marketers are particularly good at this

through advertising; inshore displays and even the intentional use of scent (e.g.,

perfume counters). At this stage the decision-making process may stall if the

consumer is not motivated to continue (see Motivation above). However, if the

consumer does have the internal drive to satisfy the need they will continue to the

next step.



Assuming consumers are motivated to satisfy his or her need, they will next

undertake a search for information on possible solutions. The sources used to acquire

this information may be as simple as remembering information from past experience

(i.e., memory) or the consumer may expend considerable effort to locate information

from outside sources (e.g., Internet search, talk with others, etc.) How much effort the

consumer directs toward searching depends on such factors as : the importance of

satisfying the need, familiarity with available solutions, and the amount of time

available to search. To appeal to consumers who are at the search stage, marketers

should make efforts to ensure consumers can locate information related to their

product. For example, for marketers whose customers rely on the Internet for

information gathering, attaining high rankings in search engines has become a critical

marketing objective.

Evaluate Options:

Consumer‟s search efforts may result in a set of options from which a choice

can be made. It should be noted that there may be two levels to this stage. At level one

the consumer may create a set of possible solutions to their needs (ie., product types)

while at level two the consumer may be evaluating particular products (i.e., brands)

within each solution. For example, a consumer who needs to replace a television has

multiple solutions to choose from such as plasma, LCD and CRT televisions. Within

each solution type will be multiple brands from which to choose. Marketers need to

understand how consumers evaluate product options and why some products are

included while others are not. Most importantly, marketers must determine which

criteria consumers are using in their selection of possible options and how each

criterion is evaluated. Returning to the television example, marketing tactics will be



most effective when the marketer can tailor their efforts by knowing what benefits are

most important to

Consumers when selecting options (e.g., picture quality, brand name, screen

size, etc.) and then determine the order of importance of each benefit.

Purchase:

In many cases the solution chosen by the consumer is the same as the product

whose evaluation is the highest. However, this may change when it is actually time to

make the purchase. The “intended” purchase may be altered at the time of purchase

for many reasons such as: the product is out-of-stock, a competitor offers an incentive

at the point-of-purchase (e.g., store salesperson mentions a competitor‟s offer), the

customer lacks the necessary funds (e.g., credit card not working), or members of the

consumer‟s reference group take a negative view of the purchase (e.g., friend is

critical of purchase). Marketers whose product is most desirable to the consumer must

make sure that the transaction goes smoothly. For example; Internet retailers have

worked hard to prevent consumers from abandoning online purchase (i.e., online

shopping carts) by streamlining the checkout process. For marketers whose product is

not the consumer‟s selected product, last chance marketing efforts may be worth

exploring, such as offering incentives to store personnel to “talk up” their product at

the checkout line.

After-Purchase Evaluation:

Once the consumer has made the purchase they are faced with an evaluation of

the decision. If the product performs below the consumer‟s expectation then he/she

will re-evaluate satisfaction with the decision, which at its extreme may result in the

consumer returning the product while in less extreme situations the consumer will

retain the purchased item but may take a negative view of the product. Such



evaluations are more likely to occur in cases of expensive or highly important

purchases. To help ease the concerns consumers have with their purchase evaluation,

marketers need to be receptive and even encourage consumer contact. Customer

service centers and follow-up market research are useful tools in helping to address

purchasers concerns.

Management Problem

Lucky supermarket is at nascent stage established in 2005. So management

wants to know consumer buying behavior and influencing factors while buying goods

and comparing it with local Kirana Stores.

Statement of the Problem

As there is cut throat competition between supermarkets and Kirana stores and

each has its own significance and is available with some difference in price and

quality. The situation demands the market analysis by knowing the consumer buying

behavior which gives an overview of the market in quantitative terms. Hence the

research problem is “An empirical study on consumer buying behavior in super

markets with comparison to grocery (Kirana) stores and to know the basic criteria

for choosing products.”

Purpose of the Study

The purpose of the study is to get practical knowledge and to get the

experience and also to know various challenges that are faced in corporate world. The

main intension of choosing this topic is to know

Consumer buying factors and their expectation from supermarkets compared

to local Kirana stores.



To know the basic criteria for choosing product in supermarkets and unique

services provided by them.

The study will help to improve the market share to supermarkets by knowing

the consumer buying behavior.

Scope of the Study

In the present study primary data has been collected from the people of

Belgaum city through personal interview method with the help of questionnaire. For

the collection of primary data, researcher has personally met 100 respondents.

Collecting primary data from the respondents was a good exposure. All the

respondents throughout the study are very co-operative. For conducting the research,

respondents have been selected randomly.

Objectives of the Study: -

1. To understand consumer buying behavior with respect to super market and

grocery store.

2. To identify the key factors influencing buying behavior.

3. To know the customer expectation from the super market.

4. To know the unique services provided by both super market and grocery store.



Industry Profile

After 50 years of unorganized retailing and fragmented kirana stores, the

Indian retail industry has finally begun to move towards modernization,

systematization and consolidation. Today, modernization is the catch phrase and the

key to understanding retail in the next decade. It is India's largest industry, accounting

for over 10 per cent of the country's GDP and around eight per cent of the

employment. Retail industry in India is at the crossroads. The total retail trade in India

is estimated at about Rs 11, 00,000 crore, out of which organized business accounts

for only Rs 14,000 crore. The organized retail industry is poised to grow at 35 per

cent per annum in the next five years. It has emerged as one of the most dynamic and

fast paced industries with several players entering the market. But because of the

heavy initial investments required, break even is difficult to achieve and many of

these players have not tasted success so far. However, the future is promising; the

market is growing, government policies are becoming more favorable and emerging

technologies are facilitating operations.

Retailing in India is gradually inching its way toward becoming the next boom

industry. The whole concept of shopping has altered in terms of format and consumer

buying behavior, ushering in a revolution in shopping in India. Modern retail has

entered India as seen in sprawling shopping centers, multi-storied malls and huge

complexes offer shopping, entertainment and food all under one roof. The Indian

retailing sector is at an inflexion point where the growth of organized retailing and

growth in the consumption by the Indian population is going to take a higher growth

trajectory. The Indian population is witnessing a significant change in its

demographics. A large young working population with median age of 24 years,



nuclear families in urban areas, along with increasing workingwomen population and

emerging opportunities in the services sector are going to be the key growth drivers of

the organized retail sector in India.

With rapid developments across the globe in the way business is conducted

and the improvements made, the retail industry has undergone a transition. Led by the

demand of Indian consumers, the transformations in retail formats have given rise to

supermarkets, hypermarkets and malls in India.

Retailing is an important infrastructure perquisite for modernizing India and

can facilitate rapid economic growth. Modernization of all retail services would

enable efficient delivery of goods and value-added services to the consumer, making a

higher contribution to the Gross Domestic Product.

The Indian consumer is changing rapidly. The average consumer today is

richer, younger and more aspiration in his/her needs than ever before. Consumers

now value convenience and choice at par with getting value for their hard-earned

money. A range of modern retailers is attempting to serve the needs of the‟ new‟

Indian consumer. The last few years have witnessed an explosion of organized retail

formats like supermarkets and hypermarkets in an otherwise fragmented Indian

retail market. To tap this growth opportunity, Indian retail organizations need to be

prepared of a quick scale up across dimensions of people, processes and technology

in Addition to identifying the right formats and value proposition for the Indian

Consumer. The positive demographics and the Indian consumer's increasing

disposable income have been highlighted by several studies. Increasing double

income families in cities is another positive factor. Salary hikes too in India are



expected to increase at a faster pace than other developing countries. All these

portend a sustained growth in discretionary spending in India.

Indian retail: shifting gears

India is witnessing an unprecedented consumption boom. The economy is

growing between 7 and 8 percent and the resulting improvement in income dynamics

along with factors like favorable demographics and growth in aspiration consumption

are the drivers. There are multiple factors driving Indian retail growth. With roughly

60 percent of the total population below 30 years of age, favorable demographics are

expected to drive consumption across categories. The purchasing power of a young

consuming middle class has been talked of considerably since the time of economic

liberalization in 1991. However, it is only today that we are witnessing the spending

power associated with this consumer segment. For example 50percent of the cellular

phone purchases in the past year were by the under-30 age group2. This consumption

is expected to continue due to the aspiration nature of spending associated with this

consumer segment.

The positive demographics and the Indian consumer's increasing disposable

income have been highlighted by several studies. Increasing double income families

in cities is another positive factor. Salary hikes too in India are expected to increase at

a faster pace than other developing countries. All these portend a Sustained growth in

discretionary spending in India.

Food and apparel retailing likely to drive growth

With various factors impacting growth in retail, some segments are bound to

grow faster than others. For instance, increasing affluence is driving growth in the

watches and jewellery segment, while awareness of health is driving growth in



lifestyle pharmaceuticals. The retailers who participated in the KPMG Retail Survey

expect growth in retail segments across the board; however, food and grocery is

expected to see the highest growth with clothing emerging as the second fastest

growing segment.

The modern retailing action is in the urban areas

A distinctive feature of organized retailing in India is that it is largely an urban

phenomenon so far. Organized retail has been more successful in cities more so in the

south and west of India.



The reasons for this regional variation range from differences in consumer

buying behavior to cost of real estate and taxation laws. More than 80 percent of

survey respondents indicated that the largest opportunity for modern retail is in the

urban centers, specifically metros. While several respondents agreed that from a

potential for retailing perspective, all regions had significant latent demand. However,

the adverse cost equation in serving rural markets is a key issue preventing rapid retail

growth in non-urban centers.



Nonetheless, the case for Indian retailers to explore rural markets is strong.

Factoring the size of the rural population and agricultural income growth in rural

India, the rural market is definitely an opportunity for retailers with an innovative

retail proposition. A clear indicator of this potential is the share of rural market across

most categories of consumption.

Key challenges in tapping this potential are the fragmentation of the market

given the geographic spread and infrastructure issues like lack of distribution and

logistics.

Rural retailing

India is witnessing different experiments to tap this latent potential. ITC is

experimenting retailing through its e-Choupal and Choupal Sagar – rural

hypermarket. HLL is using its Project Shakti initiative – leveraging women self help

groups – to explore the rural market. Mahamaza is leveraging technology and network

marketing concepts to act as an aggregator and serve the rural markets. A common

theme that emerges is the need for business model innovation to tap the rural retail



potential. India may not have the winning rural retailing model yet but players are

experimenting and this is a step in the right direction.

Emerging channels – Increasing traction

India is also witnessing action in different non-store retailing channels.

Hindustan Lever Limited has initiated Sangam Direct, a direct to home service.

Network marketing has been growing quite fast and has a few large players today.

Gas stations are seeing action in the form of convenience stores, ATMs, food courts

And pharmacies appearing in many outlets.

Information technology is another tool that has been used by retailers ranging

from Amazon.com to eBay to radically change buying behavior across the globe. The

e-tailing channel is slowly making its presence felt in India. Companies in India are

using either their own web portal or are tying up with horizontal players like

Rediff.com and Indiatimes.com to offer their products on the web.

The future is bright but obstacles can sour the picture

Organized retailing industry is clocking impressive growth in India. More than

70 Percent of the retailers KPMG surveyed expect to grow at rates in excess of 40

percent per annum in the next three years.

Most of the modern retailers in India have a regional footprint today. A key

trend that can be expected in the next three years is the emergence of national chains.

All the players we met have rapid ramp up plans. If the plans of our survey

respondents fructify, India should see a doubling of the retail outlets and retail space

in the next three years. However, the survey respondents cited potential roadblocks

that can sour the high-growth retail picture.

1. Real estate costs:

Most retailers interviewed expressed concerns about the high cost of



real estate today. On the other hand, the average purchase ticket size in India is

still low. This could lead to a situation of high fixed cost, with low contribution

per sale for retailers. High footfalls would be a necessary condition for success.

Unless real estate costs become conducive to retail growth, most retail business

will take a longer time for break-even.

2. Distribution costs:

A key bottleneck mentioned by respondents is the absence of distribution

networks connecting Tier-II towns with regional logistics hubs. There is scope for

organized logistics players like regional transport companies. Third party logistics

(3PL) players to develop these distribution networks including Warehouses, cold

chains and truck/ multi-modal services connecting these Locations. Indian

corporate is making investments in warehouses and hubs.

3. Regulatory aspects:

A point that kept emerging in various discussions with the retailers was

the dated regulations in the country. For example Weights and Measures Act

expects all goods to be available in the factory packed form in the stores.

Similarly Agricultural Produce Marketing Committee (APMC) Acts consider even

small volume purchases to qualify as wholesale deals. There are also variations

among states with respect to aspects like store timings. All these are hindrances

that can restrict rapid growth of retailing in India.

4. Skilled retail personnel:

A key concern raised by most respondents has been the expected

shortfall of trained manpower to meet expansion plans. With increasing

competition from the ITeS industry, retail manpower shortage could become a

critical bottleneck that limits player's expansion plans. Individual players are



taking proactive measures like providing on-the-job training, setting up retail

academies etc to ensure availability of people with the right skill sets. However,

the industry as a whole would need to step forward and put in place measures to

deal with the critical gap.

Indian retail expanding the number of formats

Organized retailers in India are trying out a variety of formats, ranging from

discount stores to supermarkets to hypermarkets to specialty chains. A common

element of the expansion plans of different players appears to be the hypermarket. All

leading Indian retail players are either already present or have plans for hypermarkets.

Which format has the most potential? – The Chinese Experience

In the Chinese market, modern format stores such as hypermarkets and

convenience stores have proved to be extremely successful. One of the key enablers

for this popularity has been the high level of urbanization in the country. Another

unique factor in these hypermarkets is that they predominantly stock food. They also

stock 'fresh produce' along side groceries to cater to local consumer tastes. An AC

Nielsen survey across seven leading Chinese cities in July 2005 pointed to the

popularity of modern formats in China. Up to 46 Percent of respondents stated that

hypermarkets/ convenience stores made up a significant part of their overall grocery

expenditure, and 66 percent stated that they 'often' visited hypermarkets and

convenience stores (refer annexure: The China Retail Market).

Format choices by Indian retailers

The respondents of the KPMG retail survey in India felt that specialty and

supermarket Format has the most potential for growth in India followed by

hypermarkets. Understandably, with poor Internet infrastructure (in terms of PC

penetration and Internet connectivity), e tailing was identified as a channel with the



least potential by most respondents. Similarly, with traditional 'kirana' stores offering

an undisputed 'convenience' proposition, our respondents felt that convenience Stores

may not grow as fast in the Indian context.

While many respondents agreed that hypermarkets had potential, their

estimate for the number of successful hypermarkets in India was conservative. The

buying behavior of Indian consumers and the infrastructure issues were identified as

key impediments to the rapid growth of hypermarkets in India. India remains largely a

small stock keeping unit (SKU) purchase market today. Many homes still lack

refrigerators and in homes that have one, it is typically available in small sizes

(penetration of refrigerators in India is 15 percent, 75 percent of these are in urban

areas). Availability of transportation to drive a long distance for purchases too is an

issue. All these are expected to make the adoption of hypermarkets a little slow after

the initial burst that captures the latent urban demand for this format.

Are multiple formats necessary?

The opinion amongst the respondents was tilted towards multiple formats.

Almost 40 percent opined that a single format is sufficient for success while 60



percent opined that multiple formats would be needed in India. A key reason why

multiple formats may be needed in India is the diversity of the country.

One such factor could be the rural - urban difference. Hence, ITC is experimenting

with a rural hypermarket through its Choupal Sagar format, which combines the grain

procurement and storage centre with the mall. A key aspect of the model is to capture

the farmer's visit to a mandi to sell his produce and offer a range of products and

services to leverage the availability of cash with him/ her post the sale. Going by their

initial experience, farmers actually do not Mind traveling a distance to buy monthly

provisions and consumer durables (since they are used to traveling to sell their

produce). This may be in contrast to urban consumers, who may not want to travel.

Retail outlook for India – Multiple formats and experimentation

In India too, it may be difficult to transplant a successful international format

directly and expect a similar performance. Local conditions and insights into the local

buying behavior have to shape the format choice. A good point to note in the retailing

industry today is the level of experimentation happening locally in terms of formats.

Players like Subhiksha and Margin Free Markets are providing convenience with

discount on goods, while internationally convenience formats typically charge a

premium over the market prices. Similarly, ITC is experimenting with a model, which

brings together a two-way flow of goods in the retail outlet - farmers sell their

produce and purchase goods to fulfill their consumptions needs. While the experience

of these retailers as they scale up beyond their current geographies may provide new

insights and lead to modification or fundamental re-engineering of their formats in

future, such experimentation and identification of an appropriate format for the local

conditions would differentiate winners from losers in Indian retail market of the

future.



Malls: over-capacity?

With all the major retailers planning to double the number of stores and the

retail space that they would need in the next three years, availability of real estate

space would be a key enabler for growth. The respondents of KPMG Retail Survey

highlighted their concern on the high cost of retail space. This is understandable given

that most Indian cities are choking under rapid urbanization. Central Business

Districts (CBDs) in most cities today are not capable of supporting the massive

growth plans of retailers. The emergence of a mall culture and development of malls

should come across as a positive development. Approximately 68 million square feet5

of mall space is expected to come up by end of 2007. However, around 70 percent of

our survey respondents opine that there will be an over-capacity once all the new

malls open. While some respondents felt that the over-capacity was in pockets like

Gurgaon, others felt that there would be over-capacity in malls across all major cities.

The reason stated for the anticipated mall over-capacity is that many malls may not be

able to get the necessary anchor tenants.

Focused malls – An emerging opportunity

Another aspect that was highlighted by the respondents is the lack of

differentiation amongst the malls that are coming up. Given this we quizzed the

respondents if there was a scope for focused malls. One area where India is

witnessing destination malls is in the form of specialty gold malls, which have largely

jewellery

Retailers; almost 70 percent of the respondents felt that there was a scope for

focused malls in India. Some highlighted that India may take some more time before

focused malls become successful. The survey respondents felt that since customers

often visit shops with an intention to purchase a specific product, they would prefer



focused malls. These malls essentially replicate traditional high streets and provide

benefits of cluster advantage.

Mall developers need to differentiate and specialize

Clearly, generic me-too malls may soon run out of flavor, given the large

Capacity in malls that are being planned. Malls need to differentiate themselves

clearly; one option may be to look at specialization.

Operations: at a nascent stage

Successful retailers have a strong hold on operations – be it merchandising,

supply chain management or procurement. Tesco leverages its customer data to fine-

tune its stocks to meet customer requirements. Wal-Mart leverages information

technology to enable supply chain management practices and generates superior

margins. Successfully adopted cluster strategy and continuous replenishment

concepts to outperform its peers. Clearly, managing operations innovatively can

provide a significant competitive advantage to retailers.

Retailers in India are on the verge of significantly scaling up their operations.

To assess the retailers preparedness for the planned rapid growth, surveyed the

retailers in India along three dimensions

• Internal processes

• Supply chain management practices: critical for ensuring scalability and

Managing costs

• Private label management: critical from managing margins

• Loss prevention: critical for managing margins

• Real estate space availability and costs: a key enabler for growth

• Availability and cost of financing: another key enabler for growth



The following sections capture our survey findings in each of these areas.

The retail supply chain in India

The key imperative facing retailers in India is to have a robust and scalable

supply chain that would facilitate rapid growth. One measure of efficient operations is

the inventory turns ratio. The US retail sector has an average inventory turns ratio of

about 18. The best global retailer like a 7-Eleven has over 50 turns of inventory. Most

Indian retailers KPMG surveyed have inventory turns levels between 4 to10. Another

metric of efficient supply chain management is the stock availability on the retail

shelves. Global best practice retailers achieve more than 95 percent availability of all

SKUs on the retail shelves. The stock out levels among Indian retailers surveyed

ranged between 5 to 15 percent. Looking at the inventory turns and stock availability

metrics, retailers in India clearly need to augment their operations.

Supplier integration – Predominantly manual

Operations of retailers and suppliers are not integrated in India. All the

retailers surveyed have manual information exchange with their suppliers. In

developed countries, retailers practice Vendor Managed Inventory (VMI) systems,

where the supplier has access to the point of sales data of the retailer and plans

Automatic replenishments responding to the stocks available at the retailer. Some best

practice retailers like Tesco have implemented lean techniques like „millruns‟ - taking



continuous orders from suppliers as the inventory depletes and doing multiple small

lot shipments from the supplier to the stores Such efficient replenishment practices are

today practised in the Indian auto and auto component industry. So retailers in India

can leverage such expertise available to implement efficient supply chain

management techniques.

Supplier maturity – Low in India

Supplier maturity, in terms of adherence to delivery schedules and delivering

the quantity ordered, is an issue in India. About 55 percent of the retailer's surveyed

felt that there was a need for suppliers to enhance their service levels. While a few

large manufacturers have key account management teams to cater to modern retail

channels, most of the suppliers deal with the retailers through their distributors or

wholesalers. Some multinational retailers operating in India have achieved superior

service level from their Indian suppliers by working with them. Organizations like

McDonald's spent significant time and efforts when they came in to augment the

capability of local suppliers by bringing in their international suppliers to either

partner with or transfer key capability to Indian suppliers.

Sourcing – Largely tactical today

Ordering by retailers is more tactical than strategic in India. Not many retailers

have long term purchase agreements with suppliers. From time to time, orders are

placed to leverage the various trade schemes that manufacturers come up with. This

leads to retailers taking larger inventories when there is a good trade promotion

scheme by the manufacturers. In contrast retailers like Wal-Mart have partnered with

manufacturers like P&G to develop 'Every Day Low Price' strategies where prices and

discounts are kept uniform throughout the year. Retailers in India also face constraints



due to some regulations (like the APMC Act), which prevent large volume, direct

purchases of fresh produce.

Fragmentation of supply chain due to tax laws

Sales tax laws in India lead to retailers having state level procurement and

storage rather than a regional/ national warehousing strategy. This decentralized

procurement and storage leads to Indian retailers having higher inventories. However,

in the next two/ three years, post full implementation of VAT and removal of the

central sales tax (CST), supply chain streamlining is expected.

Technology adoption and usage – Quite low by international standards

Technology usage is low in India today, compared to levels achieved in

advanced economies. Retailers like Wal-Mart and Metro have started experimenting;

which is expected to provide much better inventory visibility and hence facilitate

efficient management of inventory. Retailers in India are still to adopt bar coding

completely. The level of bar code usage is also largely due to retailers‟ initiatives of

printing these codes at their warehouses, unlike in developed countries where all the

suppliers print bar codes. Most retailers do not have integrated IT systems today.

Many retailers that we surveyed have few IT systems in the areas of supply chain

management, vendor development, merchandising and inventory management. The

annual spends on IT is quite negligible. most of the retailers surveyed do have plans

for implementing integrated IT systems in the coming years. Clearly retailers in India

have a significant catch-up act to do both in supply chain management and adoption

of IT. The good point is that retailers can leverage the experiences of international

retailers like Tesco, 7-Eleven and Wal-Mart to Leapfrog to the latest practices in

managing their supply chain and leveraging information technology.



Private labels – Increasing significance

A key strategy adopted globally and increasingly in India by retailers is the

use of private labels or store brands. Globally private labels contribute to 17 percent

of retail sales and are growing at 5 percent an annum3. Private labels provide a higher

margin to the retailers while simultaneously offering lower prices to consumers. There

is an increasing acceptance for private labels in India. A recent survey by AC Nielsen

has identified that 56 percent of their survey respondents in India consider private

labels to be good alternatives to manufacturer brands. In India, private label

penetration is on the rise. Some of the major food & grocery retailers average between

20 percent to 30 percent private label penetrations with the highest penetration of

about 50 percent today. In clothing and apparel, some retailers have as much as 65

percent of the sales coming from private labels. While private label penetration is on

the rise, it is largely in the areas of groceries, home care, clothing and apparels.

Internationally, private labels are available in many more categories including

healthcare, cosmetics, beverages, etc. This expansion would take place in India as

well. The rapid growth of Indian retailers in the coming years would provide the

necessary scale for many to launch an active private label programmed. In areas like

consumer durables, the rapid development of Original Design Manufacturers would

facilitate easy introduction of private labels soon.

Loss prevention

A key challenge for Indian retailers would be to manage shrinkages at this

level and not allow it to Deteriorate with the rapid growth of their retail networks.

Shrinkage typically takes place due to a combination of factors: internal theft, external

theft and inter company frauds. While typically internal theft accounts for major



portions (both globally and in India), retailers tend to concentrate on the other two

factors. Indian retailers can adopt the best practices that are implemented by retailers

in developed countries. According to a survey conducted by Efficient Customer

Response (ECR), in Europe, top six measures used by retailers to reduce shrinkage

are

• Cash protection equipment: safes, caches

• Intruder alarm systems

• Live closed circuit television

• Mystery shoppers

• Electronic Article Surveillance Equipment (EAS)

• Employee integrity checks

Retailers in India are increasingly adopting these measures. Globally best

practice organizations embed loss prevention into every facet of retail operations and

this is what Indian organizations should work towards as well

Real estate – Availability and high costs are issues

Availability of quality retail space is a critical enabler for the anticipated rapid

growth of modern retailing in India. The preferred form of retail real estate acquisition

is through long-term leases in India. Few retailers prefer a mix of owned and leased

real estate space and some own the real estate space. A majority of the survey

respondents felt that the availability of retail real estate space is adequate in India.

However there were some instances where retailers had to wait a few years before

they got a suitable location to set up their stores. A pressing issue facing retailers

today is the cost of real estate. An overwhelming majority of the respondents felt that

the real estate in India is over priced today.



Finance should not be a constraint for players in India

Easy availability of finance at competitive rates is a critical enabler for the

envisaged rapid growth of retailing in India. While an analysis of the retailers

indicated that debt contributes to between 15 and 40 percent of the sources of funds

for retailers in India, equity financing is the most preferred mode of financing growth

by retailers. Within equity internal accruals followed by own funds seem to be the

most liked options. IPOs seem to be the least likely option that may be chosen by

retailers for funding growth. On availability of finance, most respondents felt that it

was relatively easy to raise finance in India. Almost everyone agreed that it is quite

easy to raise finance in India if the business case is sound. It may however be a little

time consuming. A large majority of the respondents also felt that the cost of capital

in India is competitive. Some highlighted that from a global perspective, cost of

financing is a little higher in India.

Internal challenges need to be overcome

Easy availability of finance at competitive rates is a key enabler for growth in

India. Retail space availability and costs are issues. In operations management and

leveraging technology, retailers in India are at a nascent stage. This would be one area

of opportunity for winners of the future to distinguish themselves clearly from the rest

of the industry.



Human resources: significant gaps

a) The impending war for talent in India

Retailing is manpower-intensive. Developed economies like the US, which

has a high penetration of modern retailing formats, employ between 10 - 11 percent of

their workforce in retailing. It is estimated that in India up to 70 million square feet of

retail space will be created by 2007. The plans of most retailers who were met with

forecasted a strong growth (almost doubling of store space and number of outlets) in

the next three years. Assuming one front-end customer associate for every 300 square

feet of retail space created, India would approximately need an additional 210,000

customer associates in the next three years. While the actual figure may be different,

this gives a clear indication of the magnitude of resources required to support the

growth of retailing in India. A key question in everyone‟s mind is whether resource

availability would become a bottleneck to growth in Indian retailing.

b) India faces a retail resource shortage

Respondents to the Retail Survey were unanimous in their opinion about the

paucity of trained retail personnel both at the store as well as managerial level. All our

respondents agreed that there was either a 'shortfall' or 'significant shortfall' of skilled

resources in retailing in India. While ostensibly, there should be no manpower

shortfall in India, given its large working population, the gap lies in finding people

with the right skill-sets; like Customer orientation and selling which are critical. A

recent study done by IMAGES Retail, a magazine on Indian retail, identified gaps in

both in-store and non-store resources available in India. The gap in the managerial

cadre is a little better since general managers from industries like FMCG are able to

quickly learn and adapt to the demands of retailing.



c) There are significant competency gaps

Significant competency gaps in India. Supply chain and customer relations

followed by merchandising, facilities management and vendor development are areas,

which have significant gaps that need to be addressed. An area like branding and

marketing is considered slightly better since expertise from other industries like

consumer products and telecom can be leveraged easily in retail branding as well.

Clearly, this is a reflection of India being at nascent stages of modern retail

development. Also unlike in a mature sector like manufacturing, where there is a large

base of vocational training schools, there is no equivalent grassroots training facility

for the retail services sector.

Proactive training – An imperative

Given the shortage in numbers and available competency, proactive training is

a key imperative for Indian retailers. With poor public training infrastructure in retail

industry, most retailers in India depend on in-house training. All the survey

respondents have a significant portion of on the job training in their existing stores for

new recruits. In a few instances, retailers have ties with management/ training

institutes and some leverage their international partner's infrastructure. Some retailers

have taken the step of setting up their own retail schools: a case in point is RPG

Institute of Retail Management. ITC is planning a retail-training academy in

partnership with NIS Sparta. Some retailers are tying up with management institutes

to develop specific training programs for there Employees - Pantaloon has tied up

with K.J.Somaiah Institute of Management to offer specialized courses in retail

management. Best in class global retailers have proactive training strategies. Costco

has its Costco University and McDonald‟s has its Hamburger University. Proactive



training strategies would become a competitive differentiator for retailers given the

resource and competency shortages in India.

People attrition – Low now but expected to worsen

Globally retailing is a high people turnover industry. Even large retailers face

attrition of the order of 40 to 60 percent annually. Indian attrition levels are currently

low compared to global standards. However, it is expected to worsen given the rapid

expansion being witnessed and the existing shortage facing the industry. To make

matters worse, retail has to compete with other high growth industries like Telecom,

Insurance and more specifically ITeS/ BPO firms (see box) which look for similar

skill-sets like customer orientation, selling skills, and communication skills, etc.

Respondents in our survey cited ITeS as the sector to which most in store personnel

migrate to from retailing. All these are expected to aggravate attrition in retailing and

industry expects the attrition levels to increase in the coming years. The attrition in

middle and senior management is not as significant as the front end personnel.

However since there is an absence of specialized retail professionals in the country,

most of the non-store managers in retail today are from the FMCG, telecom and IT

sectors. A key issue is lack of competency in modern retailing practices. As retailing



grows rapidly, the demand for managers with good retailing experience is set to

increase and hence the attrition levels are expected to worsen.

Indian retailers need creative HR practices

Indian retailers need to develop a combination of good HR practices to

enhance competency and retention while simultaneously develop processes and

systems to ensure high people turnovers do not disrupt operations. Indian retailers can

take a leaf out of a best in class retailer like Costco in enhancing their employee

retention rates. Happy and more permanent employees ensure higher customer

satisfaction and retention that more than offset the higher costs of good HR practices.

Organization chart

Proprietor

Manager

Salesman

Grocery Stationar

y Greeting Cosmetic

s Gifts



Sampling of the study

Disstratified proportionate random sampling method has been adopted for this

study. The total sample size of 100 respondents has been selected randomly from

Belgaum cities as per the convenience of the researcher. All these respondents have

been personally met by the researcher for collecting primary data.

Population: - whole belgaum city is considered as population for the purpose

of the study

Sample size: - 100

Sample unit: - from large number of consumers are randomly selected

Sampling method:- random sampling survey method was adopted for the

purpose of the study

Research design

The research design selected for this research is descriptive research design.

Descriptive research design is the one that simply describes something such

demographic characteristics of consumers who use/sell the product/service. The

descriptive study is typical concerned with determining frequency with which

something occurs or how variables vary together.



Data collection methods

1. Literature survey: In this method I went through the documents & files

given to me by the company.

2. Observational method: I carried out this method to get the first hand

information. I observed what is carried out in the company and the

respondent‟s attitude towards the product.

3. Individual interviews: This is a time consuming method. I personally met

individual respondent & interacted with them about their opinion towards

service provided by supermarkets and grocery stores. This gave me a clear

overview of their attitude towards the product

4. Questionnaire: This is a structured method where set of questions are listed

& the respondents are asked to fill in the questionnaire. I prepared a

questionnaire with reference to the store Manager, Mr. Yeangimatt. It

includes 16 descriptive questions, which brings out the respondents opinion

towards supermarket and kirana store. It also tests the level of knowledge &

awareness of the company‟s products. It also highlights their expectations

from the company.



Interpretation and Analysis

type of family

64 64.0 64.0 64.0

36 36.0 36.0 100.0

100 100.0 100.0

Nuclear

joint family

Total

ValidFrequency Percent Valid Percent

Cumulative

Percent

joint familyNuclear

Pe

rce

nt

70

60

50

40

30

20

10

0

Out of 100 respondents 64% belongs to nuclear family and rest of 36%

belongs to joint family according to survey conducted.



Families spending on consumption of food grocery

Families spending on consumption of food grocery

5 5.0 5.0 5.0

19 19.0 19.0 24.0

54 54.0 54.0 78.0

22 22.0 22.0 100.0

100 100.0 100.0

500

1000

1500

2000& above

Total

Valid

Frequency Percent Valid Percent

Cumulative

Percent

2000& above15001000500

Pe

rcen

t

60

50

40

30

20

10

0

22

54

19

5

54% of the family spend 1500 Rs on their family for consumption of food grocery

22% spend Rs 2000&above 19% spend 1000 Rs/month and remaining 5% family

spend 500/month for consumption of food grocery.



How often do you buy required/ needed grocery?

how offen do you buy required/ needed grocery

10 10.0 10.0 10.0

28 28.0 28.0 38.0

62 62.0 62.0 100.0

100 100.0 100.0

Daily

weekly

montly

Total

Valid


Cumulative

Percent

montl yweekl yDail y

Fre

qu

ency

70

60

50

40

30

20

10

0

62

28

10

62% of the respondents buy required grocery monthly 28% buys weekly and

remaining 10% buy needed grocery daily.



Have you visited any super market?

Have you visited any super market

67 67.0 67.0 67.0

33 33.0 33.0 100.0

100 100.0 100.0

Yes

No

Total

Valid


Cumulative

Percent

NoYes

Perc

ent

70

60

50

40

30

20

10

0

33

67

67% of the respondents visited super markets and remaining 33% are not visited.



Reasons for not visiting super market

Resons for not visiting super market

6 6.0 18.2 18.2

5 5.0 15.2 33.3

18 18.0 54.5 87.9

4 4.0 12.1 100.0

33 33.0 100.0

67 67.0

100 100.0

less awarness

Not convenience

Less requirements

post purchase

Total

Valid

SystemMissing

Total


Cumulative

Percent

post purchase

Less requirements

Not convenience

less awarness

Pe

rcen

t

60

50

40

30

20

10

0

12

55

15

18

55% of the respondents not visited super market due to less requirement of

needed grocery 18% not visited due to less awareness 12% due to post purchase in

other shops and remaining 15% are not visited because of not convenience



Where do you purchase grocery for consumption?

Where do you purchase grocery for consumption

32 32.0 32.0 32.0

61 61.0 61.0 93.0

7 7.0 7.0 100.0

100 100.0 100.0

super market

Kirana stores

Wholesale traders

Total

Valid


Cumulative

Percent

Wholesale tradersKirana storessuper market

Perc

ent

70

60

50

40

30

20

10

0

7

61

32

61% of the respondents purchase grocery for consumption from kirana store

32% purchase from super market and remaining 7% purchase from wholesale

traders



Who influence to buy grocery from Kirana Store?

Who influence to buy grocery from Kirana store

15 15.0 24.6 24.6

4 4.0 6.6 31.1

17 17.0 27.9 59.0

25 25.0 41.0 100.0

61 61.0 100.0

39 39.0

100 100.0

Friends

calleges

Family members

Vendor relattion

Total

Valid

SystemMissing

Total


Cumulative

Percent

respondents ranking

15

4

17

25

0

5

10

15

20

25

30

friends collegues family

members

vendor

relations

respondents ranking

41% of the respondents buy grocery from kirana store influenced by vender

relation 28% influenced by family member 25% influenced by their friends and

remaining 6% influenced by colleagues to buy product from kirana store



Who influence to buy grocery from super market?

Who influence to buy grocery from super market

9 9.0 28.1 28.1

3 3.0 9.4 37.5

15 15.0 46.9 84.4

5 5.0 15.6 100.0

32 32.0 100.0

68 68.0

100 100.0

Friends

Callages

Family members

Vendor relation

Total

Valid

SystemMissing

Total


Cumulative

Percent

respondents ranking

9

3

15

5

0

2

4

6

8

10

12

14

16

friends collegues family

members

vendor

relations

respondents ranking

47% of the respondents buy grocery from super market influenced by family

member 28% influenced by friends 16% influenced by vender relation and

remaining 9% influenced by colleagues to buy product from super market



Credit facilities do you influence while buying from kirana store

credit facilities do you influence while buying from kirana store

25 25.0 45.5 45.5

12 12.0 21.8 67.3

6 6.0 10.9 78.2

7 7.0 12.7 90.9

5 5.0 9.1 100.0

55 55.0 100.0

45 45.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

easily avalablity of product do you influence to buy a product

6 6.0 11.3 11.3

5 5.0 9.4 20.8

7 7.0 13.2 34.0

18 18.0 34.0 67.9

17 17.0 32.1 100.0

53 53.0 100.0

47 47.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

vender re lation do you influence to buy a product from kirana store

13 13.0 23.2 23.2

14 14.0 25.0 48.2

22 22.0 39.3 87.5

6 6.0 10.7 98.2

1 1.0 1.8 100.0

56 56.0 100.0

44 44.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent



product avalable in small quantity wil you influence to buy product

11 11.0 20.8 20.8

4 4.0 7.5 28.3

9 9.0 17.0 45.3

13 13.0 24.5 69.8

16 16.0 30.2 100.0

53 53.0 100.0

47 47.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

less prise do you inflence to buy a product from kirana stores

5 5.0 9.1 9.1

17 17.0 30.9 40.0

11 11.0 20.0 60.0

9 9.0 16.4 76.4

13 13.0 23.6 100.0

55 55.0 100.0

45 45.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

0

10

20

30

1 2 3 4 5

1 25 6 13 11 5

2 12 5 14 4 17

3 6 7 22 9 11

4 7 18 6 13 9

5 5 17 1 16 13

credit facility easy availabilityvendor

relationshipsmall quantity less price

25 respondents had given 1st rank to credit facility, 22 respondents given 3

rd rank to

vendor relation and 17 respondents given 2nd

rank to fewer/less prices and fallowed

by easy availability and small quantity.



door delivery service do you influence to buy product from super market

5 5.0 16.1 16.1

1 1.0 3.2 19.4

7 7.0 22.6 41.9

10 10.0 32.3 74.2

8 8.0 25.8 100.0

31 31.0 100.0

69 69.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

quality of the product do you influence to buy from super market

9 9.0 29.0 29.0

13 13.0 41.9 71.0

7 7.0 22.6 93.5

1 1.0 3.2 96.8

1 1.0 3.2 100.0

31 31.0 100.0

69 69.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

displaying of products do you influence to buy from super market

6 6.0 19.4 19.4

3 3.0 9.7 29.0

14 14.0 45.2 74.2

4 4.0 12.9 87.1

4 4.0 12.9 100.0

31 31.0 100.0

69 69.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

convenience of super markets do you influence to buy products

5 5.0 16.1 16.1

1 1.0 3.2 19.4

14 14.0 45.2 64.5

11 11.0 35.5 100.0

31 31.0 100.0

69 69.0

100 100.0

1

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent



discounts on product do you influence to buy from super markets

7 7.0 21.9 21.9

14 14.0 43.8 65.6

2 2.0 6.3 71.9

2 2.0 6.3 78.1

7 7.0 21.9 100.0

32 32.0 100.0

68 68.0

100 100.0

1

2

3

4

5

Total

Valid

SystemMissing

Total


Cumulative

Percent

0

5

10

15

1 2 3 4 5

1 5 9 6 5 7

2 1 13 3 0 14

3 7 7 14 1 2

4 10 1 4 14 2

5 8 1 4 11 7

door delivery qualityproduct

displayconvenience discounts

9 respondents had given 1st rank to quality, 14 respondents given 2

nd rank to

discounts and 14 respondents given 3rd

rank for product display fallowed by

convenience and door delivery.



Social factor influence other then basic needs to buy a product

Social factor influence other then basic needs to buy a product

37 37.0 37.0 37.0

7 7.0 7.0 44.0

22 22.0 22.0 66.0

11 11.0 11.0 77.0

23 23.0 23.0 100.0

100 100.0 100.0

Culture

Values

Attitude

Belief

Festivals

Total

Valid


Cumulative

Percent

Festival sBeli efAttitudeValuesCulture

Pe

rcen

t

40

30

20

10

0

23

11

22

7

37

37% of the respondents influenced by culture 23% influenced by festivals

22% influenced due to attitude and 11% influenced by belief, remaining 7%

influenced due to values.



Basic criteria for choosing a product in super market

Basic criteria for choosing a produt in super market

16 16.0 16.0 16.0

5 5.0 5.0 21.0

39 39.0 39.0 60.0

21 21.0 21.0 81.0

19 19.0 19.0 100.0

100 100.0 100.0

Product display

Product assortment

Post purchase

Brand awarness

vender relation

Total

Valid


Cumulative

Percent

vender relation

Brand awarness

Post purchase

Product assortment

Product display

Per

cent

50

40

30

20

10

0

1921

39

5

16

39% of the respondent‟s basic criteria for choosing a product are due to post

purchase 21% due to brand awareness 19% choose due to vender relation 16% basic

criteria is due product display and remaining 5% respondents choosing criteria is

because of product assortment.



Further expectation from super market

Further expectation from super market

46 46.0 46.0 46.0

21 21.0 21.0 67.0

12 12.0 12.0 79.0

21 21.0 21.0 100.0

100 100.0 100.0

Cedit facility

Free door delivery

Discounts

Small quntities

Total

Valid


Cumulative

Percent

Small quntitiesDiscountsFree door deli veryCedit facili ty

Per

cent

50

40

30

20

10

0

21

12

21

46

46% of the respondents expect credit facility from super market 21% expect

free door delivery 21% expects small quantities due to less requirement and remaining

12% expects more discounts from super market



Subsidiary facilities do you required from super market

Subsidery facilities do you required from super market

19 19.0 19.0 19.0

6 6.0 6.0 25.0

48 48.0 48.0 73.0

27 27.0 27.0 100.0

100 100.0 100.0

Parking

Entertainment

fruits and vegetables

Restorent

Total

Valid


Cumulative

Percent

Restorent

fruits and vegetable

Entertainment

Parking

Per

cent

60

50

40

30

20

10

0

27

48

6

19

48% of the respondents expect subsidiary facility from super market is

availability of fruits and vegetable 27% expects restaurants facility 19% required

parking facility and remaining 6% required entertainment facility.



Findings

1 Out of 100 respondents 64% belongs to nuclear family and rest of 36%

belongs to joint family according to survey conducted.

2 54% of the family spend 1500 Rs on their family for consumption of

food grocery 22% spend Rs 2000&above 19% spend 1000 Rs/month

and remaining 5% family spend 500/month for consumption of food

grocery

3 62% of the respondents buy required grocery monthly 28% buys

weekly and remaining 10% buy needed grocery daily.

4 67% of the respondents visited super markets and remaining 33% are

not visited.

5 55% of the respondents not visited super market due to less

requirement of needed grocery 18% not visited due to less awareness

12% due to post purchase in other shops and remaining 15% are not

visited because of not convenience

6 61% of the respondents purchase grocery for consumption from kirana

store 32% purchase from super market and remaining 7% purchase

from wholesale traders

7 41% of the respondents buy grocery from kirana store influenced by

vender relation 28% influenced by family member 25% influenced by

their friends and remaining 6% influenced by colleagues to buy

product from kirana store

8 47% of the respondents buy grocery from super market influenced by

family member 28% influenced by friends 16% influenced by vender



relation and remaining 9% influenced by colleagues to buy product

from super market

9 25 respondents had given 1st rank to credit facility, 22 respondents

given 3rd

rank to vendor relation and 17 respondents given 2nd

rank to

fewer/less prices and fallowed by easy availability and small quantity.

10 9 respondents had given 1st rank to quality, 14 respondents given 2

nd

rank to discounts and 14 respondents given 3rd

rank for product display

fallowed by convenience and door delivery.

11 37% of the respondents influenced by culture 23% influenced by

festivals 22% influenced due to attitude and 11% influenced by belief,

remaining 7% influenced due to values.

12 39% of the respondent‟s basic criteria for choosing a product are due to

post purchase 21% due to brand awareness 19% choose due to vender

relation 16% basic criteria is due product display and remaining 5%

respondents choosing criteria is because of product assortment.

13 46% of the respondents expect credit facility from super market 21%

expect free door delivery 21% expects small quantities due to less

requirement and remaining 12% expects more discounts from super

market

14 48% of the respondents expect subsidiary facility from super market is

availability of fruits and vegetable 27% expects restaurants facility

19% required parking facility and remaining 6% required

entertainment facility



Suggestion

• Marketers must try to understand consumer behaviour so that they can offer

consumers greater satisfaction. An understanding of whom and why

individuals or groups buy products and services helps marketers design more

appealing marketing programmes.

• Post purchase is the basic criteria for choosing the product so create good

brand image in the minds of consumers and provide as much as information

regarding product and service available.

• Maintain customer relationship so that consumers are always loyal towards the

organisation and influence others to buy grocery and other products.

• Create awareness regarding super market product, prising and other special

service available in lucky super market.

• Make membership card for introducing credit facility for present and loyal

customers.

• Make available grocery in small quantity for attracting nuclear families.

• Maintain customer data base to get monthly order.

• Provide discounts and special services during festival seasons because it is one

of the most important social factors that influence to buy product from

supermarkets.

• Create fruits & vegetable section and out source the same to the restaurants as

subsidiary facility required by consumer. This helps to increase sales of

supermarket.



Conclusion

India‟s retail development is inevitable. Most of the retailers in India are

harping on quality, service, convenience, satisfaction and assured benefits to lure

shoppers into the store. Supermarket should create value for the consumer and

must decide suitable vehicle to deliver desired consumer value. Probably in a

growing market no one finds difficulty in pulling customer into store but that may

not be sufficient to operate profitably. Supermarket need to find out what matches

consumer requirement and offer better than competition. Supermarket certainly

needs to be innovative in designing the value proposition and deciding the format

to deliver that to the consumer. All about serving the consumer better, faster and

at less cost.



Questionnaire

1) Name

2) Nuclear family [ ] Joint family [ ]

3) How much will you spend on your family for consumption of food and grocery per

month?

a) 500[ ] b) 1000[ ] c) 1500[ ] d) 2000& above [ ]

4) How often do you buy required/needed grocery?

a) Daily [ ] b) weekly [ ] c) monthly [ ]

5) Are you visited any super market?

a) Yes [ ] b) no [ ]

6) Reasons for not visiting super markets

a) Less awareness [ ] b) not convenience [ ] c) less requirement [ ]

d) due post purchase [ ]

7) Where do you purchase grocery for consumption?

a) Super markets [ ] b) co-operative society [ ] c) kirana store [ ]

d) whole sale merchant [ ]

8) Who influenced you to buy food grocery from kirana store?

a) Friends [ ] b) colleagues [ ] c) family member [ ]

d) Vender relation [ ]

9) Who influenced you to buy food grocery from super market?

a) Friends [ ] b) colleagues [ ] c) family member [ ]

d) Vender relation [ ]



10) Which of the following attribute do you influence while buying product from

Particular kirana stores (assign the ranks 1 to 5)

a) Credit facilities [ ] b) easily available [ ] c) vender relation [ ]

d) Small quantities [ ] e) price factor [ ]

11) Which of the following attribute do you influence while buying product from

Particular Super market ( assign the rank 1 to 5)

a) Door delivery [ ] b) Product quality [ ] c) Product display [ ]

d) Convenience [ ] e) price/discounts [ ]

13) What are the social factor do you influence other than basic needs

a) Culture [ ] b) values [ ] c) attitude [ ]

d) Belief [ ] e) festivals [ ]

14) The basic criteria for choosing the product because of the following factors

a) Product display [ ] b) product assortment [ ] c) post purchase [ ]

d) Brand awareness [ ] e) vender relation [ ]

15) What is your further expectation from super markets?

a) Credit facility [ ]

b) Free door delivery [ ]

c) Discounts [ ]

d) Small quantities [ ]

16) Which are the subsidiary facility do you expect from super markets?

a) Parking [ ]

b) Entertainment [ ]

c) Fruits & vegetable [ ]



d) Restaurants [ ]

THANK YOU

Study on consumer buying behavior in super market and ...

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