Introduction

The traditional suburban small firms occupies a large amount of floor space,
usually on a single level. It is usually situated near a residential area in order to be
convenient to consumers. Its basic appeal is the availability of a broad selection of
goods under a single roof at relatively low prices. Other advantages include ease of
parking and frequently the convenience of shopping. This gives owners and employees
a chance to develop expertise and a reputation for knowledge and selection within the
store.

Prince Hypermart is a form of grocery store, a self-service store offering a wide

variety of food and household merchandise, organized into departments. It is larger in
size and has a wider selection than a traditional firm, also selling items typically found in
a convenience store, but is smaller and more limited in the range of merchandise than a
big-box store. Their basic principle is that it is easier to sell more goods to the same
customers by providing a large variety of goods than to sell the same kind of goods..

Prince Hypermart typically comprises meat, fresh produce dairy, and baked
goods departments, along with shelf space reserved for canned and packaged goods
as well as for various non-food items such as household cleaners, pharmacy products
and pet supplies. Most small firms also sell a variety of other household products that
are consumed regularly, clothes, and some stores sell a much wider range of non-food
products.

They also present elaborate in-store displays of products. The stores are usually
part of corporate chains that own or control (sometimes by franchise) other firms located
nearby are increasing opportunities for economies of scale. Challenges to small
business involve undercapitalization due to thin profit margins, sales below fixed costs,
underpricing, inadequate cost control and greater sensitivity to change. It. keeps a large
variety of products and hence offers an opportunity to the customers to select goods of
their liking from a large stock of goods of different qualities, brands, designs, colours
and even styles. This saves in many costs, attracts customers and increases the sales
and profits.
 Theoretical Framework

The development of a Hypermarket sector is based on consumer satisfaction

and consumer is considered as the emperor in the retail market. So, it is very important
to know the factors which impact consumer satisfaction and their preference towards
the retail sector. Many theories have been developed on consumer satisfactions which
are presented below:

Consumer satisfaction means consumer’s fulfillment response. It is a judgment

on the product or service features or the product service itself, providing the level of
consumption-related to fulfillment including levels of under or over fulfillment. As per
Festinger (1957), consumers make some kind of cognitive comparison between
expectation about the product and the perceived product performance. This view of the
consumer’s post-usage evolution was introduced into the satisfaction. According to
Anderson (1973), consumers can reduce the tension resulting from a difference
between expectations and product performance. So, that they coincide with perceived
product preference by raising the level of satisfaction, minimizing the relative
importance of the disconfirmation experienced.

The Disconfirmation theory argues that ‘satisfaction is related to the size and
direction of the disconfirmation 24 experience that occurs as a result of comparing
service performance against expectations’. Szymanski and Henard (2004) found in their
meta-analysis that the disconfirmation paradigm is the best predictor of customer
satisfaction. Ekinci et al (2004) cites Oliver’s updated definition on the disconfirmation
theory which states that satisfaction is the guest’s fulfillment response. According to
Atkinson (1988), Knutson (1988) and Akan (1995) cleanliness, staff behavior
convenience of location, timely service, safety and security are the fundamental factors
which are responsible for consumer satisfaction and their preference to the retail outlet.
Contrast theory was first introduced by Hovland, Harvey and Sherif (1987), Dawes
(1972) et al In their view the consumers post-usage attitude lead to results in opposite
prediction for the effects of expectations on satisfaction which holds that a surprise
effect occurs leading to the difference being magnified or exaggerated.
 According to Negativity Theory (Carl Smith and Aronson, 1963) dissatisfaction
will occur if perceived performance is less than expectations or if perceived
performance exceeds the expectations. The theory of cognitive says the different
proposes that people have a motivational drive to reduce difference by changing their
attitudes, beliefs and behaviors, or by justifying or rationalizing them. Consumer
behavior is all about understanding how people choose to spend their money and time
in buying and consuming various goods and services they desire.
 Conceptual Theory

Consumer preference: Is the subjective (individual) taste as measured by utility

of various bundles of goods. Retailers or sellers permit the consumer to rank these
bundles of goods according to the levels of utility given to the consumer. The preference
of consumer is independent from income and price.

Consumer loyalty: Customer loyalty is all about attracting the right customer,
getting them to buy, buy often and buy in higher quantities and also bring more
customers. Brand loyalty: Brand loyalty involves commitment and repeated consumer
purchase behavior follows perceived value, satisfaction and trust on the brand.

Consumer loyalty: Customer loyalty is all about attracting the right customer,
getting them to buy, buy often and buy in higher quantities and also bring more
customers.

Brand loyalty: Brand loyalty involves commitment and repeated consumer

purchase behavior follows perceived value, satisfaction and trust on the brand

In 2003, Walter Thompson identified that there are eight core underlying truths
about Indian consumers which significantly influence their attitudes depending upon
Entrepreneurial, Speed and Lightness in all aspects of life: enjoyment, religion and
spirituality for physical and mental health. The family has a brand, the newness of the
life, manipulation and power play for family harmony and getting more out of less . The
demographics, psychologies, environmental and life style are the very important factors
which impact on consumer behaviour.

The competition from new players entering the market, imitation of new features
and increase in number of new offers, customers have acquired new choices and so on.
Consumers become more price sensitive, which has forced businessmen to adapt
differentiated and customer oriented strategies in order to enable them to stand out in
the competition and gain a competitive advantage.

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 Statement of the Problem

If supermarkets entered in neighborhoods where they expected business

conditions to be good, and those favorable conditions also affected small stores, the
deleterious effect of supermarkets on shops would be underestimated. In order to
correct for this potential problem, we introduce two modifications to the basic
specification.
Satisfying customers is one of the main objectives of every business. Businesses
recognize that keeping current customers is more profitable than having to win new
ones to replace those lost. Management and marketing theorists underscore the
importance of customer satisfaction for a business's success. Customer satisfaction is
the key factor in knowing the success of any retail store or business, therefore it is very
important to measure it and to find the factors which affect the customer satisfaction.

Customers are most likely to appreciate the goods and services that they buy if
they are made to feel special. This occurs when they feel that the goods and services
that they buy have been specially produced for them or for people like them. It should
be always keep measuring in order to get feedback for the product and service in order
to develop it further with wide customization.

The main goal of this research question is to understand the store attributes that
determine the choice for a particular supermarket. Store attributes can be defined as the
“summation of all attributes of a store as perceived by the shoppers through their
experience of that store” (Omar, 1999). Therefore the following research question is
answered: Which store attributes determine the choice of the consumer for a traditional
supermarket?

The store attributes influencing the choice for a hypermarket are based on the
study of Parasuraman et al. (1988). The most relevant store attributes for this study are;
assortment and brands; convenience; price and price promotions; store environment
and atmosphere and customer service quality. These will be discussed in this chapter
and the effect of them on the choice for a supermarket will be considered.
 Significance of the Study

This study is very much relevant to present times as this will make awareness
about the impact of estores upon retail stores. The sudden surge in online shopping and
customers have adjusted to it to a greater extent which it a real cause of concern for the
thousands of retailers who have a small shop offering a small variety of products which
are their source of livelihood.

This study wants to unravel the real scenario and also look into the threat that
looms over the various small scale retailers. In this study an attempt has been made so
that retailers are aware of the upcoming that is expected to loom over their business in
the near future so that they can appropriate arrangements to face such challenges.
Dynamism stands the base of the current scenario and as a result of that anything that
remains stagnant will be surpassed by others. It’s time the retailers start thinking deep
into this aspect and come up with better and advanced strategies

Scope and Limitation

In spite of all sincere efforts, the study is not foolproof in nature. It suffers from variety of
limitations due to the following reasons:

The study is limited to a specific area

Besides that, the detailed study has been conducted taking on retail stores based upon
convenient sampling.

.Time is also a limiting factor as the study is conducted in a very short span of time.
 Definition of Terms

Store attributes: can be defined as the “summation of all attributes of a store as

perceived by the shoppers through their experience of that store” (Omar, 1999).

Choice for hypermarket: in this paper it is the choice for a grocery store to buy the
groceries in this supermarket.

Assortment: “the number of different items in a merchandise category” (Levy & Weitz
1995).

Brands: A brand can be defined as “a name, term, sign, symbol, or design, or

combination of them which is intended to identify the goods and services of one seller or
group of sellers and to differentiate them from those of competitors” (Kotler, 1991).

Convenience: anything that tries to save resources (time, costs and energy) and/or
affect time and effort perceptions (Pan & Zinkhan, 2006).

Price: price is what is given up or sacrificed to obtain a product (Zeithaml, 1988). Price
promotions: reducing prices and in this way customers receive a discount (Bell & Lattin,
1998).

Store environment and atmosphere: deals with the physical store

attributes (Pan & Zinkhan, 2006).

Customer service quality: the quality of customer interactions (Parasuraman, 1988).

 Related Literature

The literature has analyzed whether entry of large stores increases market
concentration. Franklin (2001) finds little effect of Hypermarket on food seller
concentration, while Martens et al. (2006) find that the entry of Wal-Mart stores
increases concentration in local markets. More generally, see Jarmin et al. (2003, 2005)
and Haskel and Sadun (2009) for descriptions of the retail and supermarket sectors in
the US and the UK respectively.

The paper of the researcher is more related to the strand of the literature that
analyzes whether the exit of small stores is the consequence of larger supermarkets'
entry. The study of the effect of hypermarket entry on, for example, the probability of
survival of small “mom and pop” shops is important for several reasons. First, entry can
effect the employment in the sector, and the structure of the industry. Second, if prices
are lower in hypermarkets than in groceries (see Hausman and Leibtag, 2004), this can
have a direct impact on the welfare of consumers. Third, hypermarket economies of
scale and scope can increase the productivity of the retail sector through a creative
destruction process (see Foster et. al (2002) for the U.S, and Haskel and Sadun (2009)
for the UK). The evidence of the impact of hypermarkets on small grocery stores is
mixed. Sobel and Dean (2008) study the impact of Wal-Mart’s entry on all small retailers
and show that there is no long-run effect. Although they do find a reallocation effect on
the small business sector as a result of Wal-Mart entry, their results suggest that some
sectors expand while others contract.

On the other hand, Jia (2008) shows that the entry of Wal-Mart alone explains
37% to 55% of the net change in small retailers in small- and medium-sized US
counties. She also finds that when either Wal-Mart or Kmart enter a market, they make
46% to 58% of discount stores either unprofitable or unable to recover their sunk costs.
When both enter a market, this figure rises to 68.4%.4 Basker (2005) also finds a
reduction in the number of small retailers, following a Wal-Mart entry.5 For Italy, Viviano
(2008) finds that entry by large hypermarket leads to a decrease in the number of small
shops. The paper that is most related to ours in terms of its results is Igami (2011). He
shows that the entry of a large hypermarket increases the chance of exit of larger
stores, but has a positive impact on the survival probability of smaller incumbents. He
links his results to competition in a differentiated product setting: different floor sizes of
stores imply different products for consumers, which translate into different shopping
habits. This literature suggests that the impact of supermarket entry could be linked
either to the size of the newcomer or to the size of the incumbents. Finally, another
closely related paper is Dubra and Ferrés (2006) who study the consequences of
hypermarket entry on small firms in Uruguay. We improve on their data set and on their
estimation techniques.
 Related Studies

According to Dr. Singh and Dr. Kawr (2011), India’s retail sector is at inflection
point with organized retail poised for an approximately 35 percent compound annual
growth rate (CAGR) for next few years. However, valued at around US$ 320 billion, the
Indian retail sector is still relatively small by global standards. The study analyzes
factors like rapid economic growth, increase in the income and decrease in the Below
Poverty Line families; increase in middle class population impacts the growth of
retailing. Authors find that India will become fifth largest consumer market by 2025. The
increase in mall culture is changing face of Indian consumerism, increase in
urbanization, easy availability of credit and regulatory scenario Reddy and Ranganathan
(2010).

Nair (2011) conducted a study on the growth of PLB’s (private label brands)
internationally and among Indian retailer mainly in food and grocery segment. It
investigates the perceptions of consumers for PLBs and their involvement in purchasing
of such PLB’s in the retail segment. The study is based on primary data with 225
samples size, by using convenient random sampling techniques, data was collected in
top retail chains in the food and grocery segment in Pune district and analyzed by using
descriptive statics. It has come out with unique PLB association in the minds of
consumers to determine the customer loyalty, consumer preference, shopping behavior
and thereby add to retail brand equity .

According to M. Gopalakrishnan (2010), retailing is the second largest sector in

terms of number of outlets and employment generation. The Rural retail market is
projected to dominate the retail industry landscape in India by 2012 with total market
share of above 50 percent. In order to control the fullest potential, the mantra for next
phase retail growth strategy would be “Go Rural”. The rural and small town’s economy
which accounts for 60 percent of India’s income has remained unchanged from the
economic slowdown. Moreover, rural incomes are on the rise forced largely by
continuous growth in agriculture for successive years. Focus should be made on the
agencies like Universities to ensure adequately trained manpower resources for this
sector.k
 Research Design

Descriptive research: This design is defined as research that uses a set of

scientific methods to collect raw data and create data structures that describe the
existing characteristics of a defined target population or market structure.

Descriptive studies aim to portray, depict or describe certain fields of interest in

order to select a course of action.

Descriptive studies are most suited when the researcher already possesses
knowledge about and experience from the subject, and that the scope of the study is to
describe a certain field thoroughly, often only involving one way of collecting data.
Descriptive research, also known as statistical research, describes data and
characteristics about the population or phenomenon being studied. Descriptive research
answers the questions who, what, where, when and how.

Research Environment

The locale of this study are the patrons of Prince Hypermart, Tankulan,Manolo Fortich
Bukidnon.

Population: The population would comprise customers of retail stores at Prince

Hypermart.

Frame: The frame would comprise customers of Prince Hypermart

The results obtained from statistical techniques were quantitatively analyzed to

investigate the attributes of consumers’ preference towards traditional market. The
effect of demographic characteristics on 123 consumers’ preference has also been
analyzed. In this cross-sectional study various segments of population of the retail
consumers were sampled. The integration of the qualitative and quantitative
approaches has been applied in this research along with the use of inductive and
deductive reasoning has been implemented.
 The Respondents

The population of the study consists of consumers who buy the items of daily
needs or the groceries. Specifically the consumers in Prince Hypermart.

For effective coverage and to lower the cost, Non probabilistic convenience
sampling technique was used to select the participating respondents. Consumers were
subdivided into six groups: Students, Housewives, the Unemployed, Employed,
Business and Retired people.

Research Instrument

The research instruments used to gather necessary information include

questionnaires and observations.

The use of questionnaires serves as a written reference about the latest and
actual information which are essential to the study. It is far by the most common
instrument in collecting information. It is consist of a set of questionnaires presented in a
written form. The observations were also used to gain a more in depth informations.

Data Gathering Procedure

After selecting and finalizing the tools for data collection, the researcher started
to visit consumers and randomly gave the questionnaire under investigation personally
for taking prior permission from the Dean and the President of the school for collecting
the necessary data.

In order to giving responses to the questions free and frankly, honestly and
sincerely, they made aware there are no right or wrong answers to these questions and
their professional carrer would not be affected as it was only an exercise for research
purpose and their responses would be kept strictly confidential.
 Statistical Tool

Tools for the data analysis used are the descriptive statistical tools such as
Mean, Standard Deviation and Factor Analysis whereas, inferential statistical tools used
are Reliability test, t-test, ANOVA (Analysis of Variance) which was carried out and
Hypotheses were tested at 5% level of significance. Data was collected, entered into
Microsoft Excel and coded before processing it with SPSS 16.0. Statistical tools were
used to analyze the data as per requirements of the objectives.

To draw the valid conclusions and test them empirically, an exhaustive use of
statistical technique of Factor Analysis was used. To further test the reliability of the
data, Kaiser-Meyer-Olkin (KMO) and Bartlett Test of Sphericity were also determined. In
addition, to measure the internal consistency reliability of data, both quantitatively and
statistically, statistical technique of Cronbach Alpha Coefficient was applied. Other tools
included Descriptive Statistics such as frequencies, Percentages, Arithmetic Averages;
Standard Deviations etc. were also used as per the need of the research objectives.
Inferential statistical tools: Reliability Test, t-Test, ANOVA (Analysis of Variance) was
carried out and Hypotheses were tested at 5% significance.