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Group members:

Name
Akhani Ronak

Roll No.
1

Prajapti Chandrakant 41

CHAPTER 1.
ABSTRACT:
The customers perception is your reality.
Retailing is one of the largest sectors in the global economy and is going through an
evolutionary stage in India. Retail is currently a flourishing sector of the Indian economy. The
Indian Retail industry has grown at a 14.6% CAGR during FY07-12. This growth can be
directly credited to the emergent Indian economy as well as increase in Private Final
Consumption Expenditure (PFCE) and bring revolution in Indian peoples consumption
pattern. This tendency is expected to continue for at least the next two-three decades,
magnetizing huge attention from entrepreneurs, business heads, investors as well as real
estate owners and builders segments of the economy. Despite this growth, the Indian retail
industry is highly fragmented, with the organized retailing still at a nascent stage which
accounts for far less percentage than the unorganized retailing of the total Indian retail
market. It is estimated that organized retailing accounts for less than 5% of todays market,
but is expected to develop between14% to 18% by 2015. During FY07- 12, the organized
retailing in India has grown at a CAGR of 26.4%; higher that the total growth of Indian
retailing. The sector is the largest source of employment after agriculture, and has deep
access into rural India generating more than 10 per cent of Indias GDP.
This study aims to identify the factors influencing the perception towards organized
retailing from unorganized retailers. The primary data was gathered by administering a

prearranged questionnaire with 100 customers selected purposively from Udaipur District.
The data analysis of customer attitude towards unorganized and organized retailers shows
that there is a difference between the consumers perception towards both organized retailers
and unorganized retailers regarding their store image, range of products, brand choices, price,
store atmosphere, credit availability, and shop proximity. The data has been collected with the
help of structured questionnaire containing close and open ended questions. Statistical
software and MS excel were extensively used for analyzing the data collected. The rationale
of the study is twofold: First, to examine the shift in perception in the retail sector taking
place due to organized form of retailing.

INTRODUCTION:
Retailing means Re-tailing to the customers so that they come back towards them. Retailing
consists of all activities involved in selling goods and services to consumers for their
personal, family, or household use. In 2004, The High Court of Delhi defined the term
retail as a sale for final consumption in contrast to a sale for further sale or processing (i.e.
wholesale). India is the 2nd fastest growing in the world. It is 3rd largest economy in the
world in terms of GDP and fourth largest economy in terms of Purchasing Power Parity. India
presents a huge opportunity to be used as a hub to the world. India is the promised land for
global brands and Indian retailers A Vibrant Economy. Retailing in India is progressively
moving towards becoming the next fastest growing industry.
According to A.T. Kearney, retailing accounts for $410 billion and organized retailing
accounts for only 5% of the above market. According to the Global Retail Development
Index 2012, India ranks on 5th among the top 30 emerging retail markets. The recent
announcement by the Indian government with Foreign Direct Investment (FDI) in retail,
especially allowing 100% FDI in single brands and multi-brand FDI has created positive
attitudes in this sector.
Retail industry in India has a huge growth potential and opportunities existing in
multiple sectors and segments. For a long time, the corner grocery stores (kirana stores) were
the single choice available to the consumers. But with the LPG policy in 1991 the
international formats of retailing paved their way in India. As the time passes, organized
retailing especially has been creating curiosity amongst Indian consumers to sketching them
into malls for shopping in huge numbers.
However the growth in organized retailing has been limited primarily to the urban
markets in the country. Even the large chunks of unorganized retail have not fell depressed
from this nominal growth in organized retailing and have tried to restructure and redefine
themselves by introducing self- service formats, and value-added services, such as credit and
home delivery. To safeguard the position in the market retailers have made an attempt to
attract customers by offering newer service dimensions and creating unique shopping
experiences for the customers.

Perceptions about these retailers are largely determined by tangible characteristics of


stores, such as format or size, proximity, varieties available as well as intangible factors like
the store atmosphere, complaint handling, etc.

Growth Drivers of the Retail Sector


The Indian retailing sector is at an inflexion point where the growth of organized retailing and
consumption by the Indian population is going to take a higher growth trajectory. The Indian
population is observing a noteworthy demographics change. An increasing young working
population under age of 24 years, sharp rise in the per capita income, an increase of dual
income nuclear families in the urban areas, along with increasing working women population,
internet revolution and emerging opportunities in the services sector are going to be the key
growth drivers of the organized retail sector in India. The whole model of shopping has
altered in terms of format and consumer shopping behavior pattern, which ultimately could
lead to a shopping revolution in India.

MAJOR PLAYERS OF RETAILING:


UNORGANIZED RETAIL STORES:

Local Kirana stores


General or provisions stores
Small shops
Carts

ORGANIZED RETAIL STORES:

o
o
o
o
o
o
o
o

o
o
o
o

Shopping malls:
Big bazaar
Star bazaar
Subhiksha mart
V mart
Himalya malls
Reliance marts
Wal-Mart
Other shopping malls
Online shopping websites:
flipkart.com
snapdeal.com
amazon.com
ebay.in

CHAPTER 2.
LITERATURE REVIEW
Though significant work has been done to study the impact of organized retailing on
unorganized retailing at the national level, but not much has been studied in the North

Gujarat, probably due to late entry of organized retailing in North Gujarat. Some related
studies undertaken in the past and reviewed are:

Lahiri, Isita and Samanta, Pradeep Kumar (2010), in their paper titled Factors
influencing purchase of apparels from organized retail outlets mentioned that apparel
takes a hefty share in organized retail because people are more quality conscious and
comparatively less price sensitive. They also highlighted the distinct features of
organized retail outlets like discount offers, pick and choice etc., which are considered

to be more appealing by the buyers.


Ramanathan & hari(2011) observed from their study that due to the recent changes
in the demographic system of consumers, and the awareness of quality conscious
consumption, consumers preferred to buy different products both from the organized
and unorganized retailers. Joseph, Soundararajan, Gupta, & Sahu, (2008)
concluded that unorganized retailers in the locality of organized retailers were
adversely affected in terms of their volume of business and profit. According to him
with the emergence of organized outlets consumers gained through the availability of
better quality products, lower prices, one-stop shopping, choice of additional brands
and products, family shopping, and fresh stocks. According to report of ICRIER
organized and unorganized retail not only coexist but also grow substantially. The
reason behind that the retail sector is gradually growing on an overall basis hence the
benefit of this growth goes to both the sectors. Kearney, (2006) found that traditional
markets are transforming themselves in new formats such as departmental stores,
hypermarkets, supermarkets and specialty stores. Martineau, (1958) first time used
the concept of store image. This store image was partly based on functional attributes
and partly on psychological attributes. In functional attributes he included variety of
commodities, layout, location, price value relation, and service that consumers could
independently compare with other stores. Whereas in psychological attributes
attractiveness and lavishness symbolized special attributes of that store. Munjal,
Kumar, & Narwal, (2011) through their research concluded that the kirana shops
being affected by malls is only a myth. He further concluded that in spite of the
available opportunities to the organized retail to grow in India these kirana shops also
were benefited from this growing economy. Sivaraman.P, (2011) from his study
concluded that the impact of organized retailers was clearly visible on the business of
unorganized retailers in terms of sales, profit and employment. Due to their financial

infirmity these small retailers continuously struggled to introduce changes in their


existing retail practices. Some kind of intervention was required for their future

existence.
Another study by Ali, Kapoor., & Moorthy, (2010) in their study indicated that
consumers shopping behavior was influenced by their income and educational level
while gender and age had no significant impact on their behavior. While Dodge,
Robert, Summer, & Harry, (1969) and Aaker, Jones, David, & Morgan, (1971)
concluded that consumers socio economic background, their personality, and past
purchase experience were those factors upon which the customers decision lied. Nair
& Nair, (2013) in their study revealed that the perception of service quality was
influenced by various natures among various customers and some of the general
factors like personal interaction, physical aspects on which customer perception
remained constant and common. But Singh & Agarwal, (2012) revealed that
customers preferences for grocery shopping were gradually shifting from local kirana
stores to organized convenience stores. Brand choice and credit card facilities were
the main determinants which influenced preferences from kirana to organized retail.
Payment through credit cards increased purchases from organized retail store. Sinha
& Banerjee, (2004) in their study concluded that store convenience and customer
services positively influenced consumers store selection. Gupta , (2012) concluded in
her study that store attributes like convenient operating hours and accessibility were
the factors which lead to customer loyalty and not store appearance. Similarly,
product attributes like freshness of the product and availability of products range
according to the pocket were major determinant of loyalty. It was also evident that
even today Kiranas are preferred by customers because of various reasons viz.
convenient location, home delivery, personal relations with shopkeeper, giving
products on credit, payment in installments. Srivastava, (2012) in his study showed
that the overall customers perception across urban and suburban was not varied. The
customers were ready to pay higher prices for branded goods across the urban and
suburban areas. They gave priority to purchase grocery from nearby shops while for
purchasing of apparel they liked to travel some distance. The outcomes of the study
showed that the exposure of marketing strategy through electronic and print media
made the customers more choosey and knowledgeable. Whereas Solagaard &
Hansen, (2003) identified several store attributes that were considered important for
the consumers evaluation of stores. These attributes were merchandise, assortment,

merchandise quality, personnel, store layout, accessibility, cleanliness and


atmosphere.

CHAPTER - 3
RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY:

To study the factors influencing the consumers to buy from organized

retailers/unorganized retailers.
To study the influence of demographic factors on buying decisions from organized

and unorganized retailers.


To study the perception of customers towards organized and unorganized retailers.

SUB-OBJECTIVES OF THE STUDY:

To know the significance and limitations of organized retailing in North Gujarat.


To know the significance and limitations of unorganized retailing in North Gujarat.
To study the impact of organized retailing on unorganized retailing in North Gujarat.
To study the different factors that affect consumer behavior with regards to buying

from a organized retail outlet or unorganized retail outlet.


To study the future prospects of organized retailing and unorganized retailing in North
Gujarat.

HYPOTHESIS:

There is no significant difference between the choices of retailers format across

shopping items.
There is no significant difference in the choices of retailers formats across the family

income level.
There is no significant difference between the choices of retailers format across

various shopping factors.


There is no significant difference between the choices of retailers format across the

respondents age.
There is no significant difference between the choices of retailers format across the
respondents gender.

RESEARCH DESIGN: Descriptive Research

DATA COLLECTION METHODS:


PRIMARY DATA:
Primary data will be collected through personal one-to-one interview from the
respondents by stratified random sampling technique.
SECONDARY DATA:
Secondary data will be collected from websites available on Internet, especially that
of the organized and unorganized retail enterprises. Besides, the cyber forums also serve as
source of secondary data, wherein the forum members provide the relevant secondary data
available with them. The research study is more of a behavioral study and so it is qualitative
as well as quantitative in nature. However, quantification of the subjective data will be done
using techniques like the rating scale technique. It will include a descriptive and exploratory
research of the relationship between the purchase behavior of a buyer and the socio-cultural,
economic, technological, personal, psychological and other factors around the consumer,
which influence his/her purchase behavior.
TYPE OF SCHEDULE
Structured Questionnaire with suitable scaling.
TYPE OF QUESTIONS:
Likert scale, Close ended and multiple choice questions.
STATISTICAL TOOL USED:
Chi square test, Weighted Average

RESEARCH INSTRUMENT
Research instruments, for the purpose of primary data collection were Questionnaires.
The questionnaire was divided into 3 parts.
Part-A had questions related to demographic information of respondents.
Part-B was related to some basic information regarding respondents choice to visit

particular retailers for purchasing an item.


Part-C contained semantic differential scale to measure customer perceptions
regarding store attributes related to its image.

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