“MARKET CONDITION, WHEN

PEOPLE ARE AFFECTED

BY MARKET SHORTAGE”.

A Project Submitted to

University of Mumbai for partial completion of the degree of

Masters in Commerce

Under the Faculty of Commerce

By

Dhiraj Harishchandra Jaiswal

Under the Guidance of

Dr. LEENA NAIR

TOLANI COLLEGE OF COMMERCE , 150-15, SHER-E-

PUNJAB SOCIETY, GURU GOBIND SINGH ROAD, ANDHERI-
EAST, MUMBAI – 400093.

SEM IV

Academic Year : APRIL 2020

 “MARKET CONDITION,WHEN
PEOPLE ARE AFFECTED
BY MARKET SHORTAGE”.

A Project Submitted to

University of Mumbai for partial completion of the degree of

Masters in Commerce

Under the Faculty of Commerce

By

Dhiraj Harishchandra Jaiswal

Under the Guidance of

Dr. LEENA NAIR

TOLANI COLLEGE OF COMMERCE , 150-15,

SHER-E-PUNJAB SOCIETY, GURU GOBIND
SINGH ROAD, ANDHERI-EAST, MUMBAI –
400093.

SEM IV

Academic Year : APRIL 2020

 INDEX

Sr Name of the chapter Page No.

No.

1 Introduction 2

1.1 3

1.2 3

1.3 3-4

1.4 4-5

1.5 5

1.6 6

1.7 6-7

1.8 7

1.9 7-12

2 Research Methodology 13

2.1 13

2.2 14

2.3 15

2.4 15 -16
3 Literature Review 17-19

4 Data Analysis Interpretation and 21

Presentation

4.1 Graphical Representation 21-32

5 Bibliography Conclusion 32

5.1 Finding 32-35

5.2 Conclusion 35 -36

5.3 Bibliography 36

5.4 Appendix
 TOLANI COLLEGE OF COMMERCE

Certificate

This is to certify that Mr. Dhiraj Harishchandra Jaiswal has worked and duly
completed his Project Work for the degree of Master in Commerce (Financial
Markets) under the Faculty of Commerce in the subject of DR. Leena Nair and her project
is entitled, “MARKET CONDITION,WHEN PEOPLE ARE AFFECTED BY
MARKET SHORTAGE” under my supervision.

I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is his own work and facts reported by her/his personal findings and investigations.

------------------------------- ------------------------------- ------------------------- ----------------------------

Dr. LEENA NAIR Dr. SADHANA VENKATESH EXTERNAL EXAMINER Dr.VIJAYA KRISHANA
 Declaration by learner
I the undersigned Mr. Dhiraj Harishchandra Jaiswal here by, declare that the
work embodied in this project work titled “MARKET CONDITION,WHEN
PEOPLE ARE AFFECTED BY MARKET SHORTAGE” forms my own
contribution to the research work carried out under the guidance of Dr. Leena Nair
is a result of my own research work and has not been previously submitted to any
other University for any other Degree/ Diploma to this or an y other University.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and presented
in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified by

Dr. LEENA NAIR

 Acknowledgment
(Model structure of the acknowledgement)

To list who all have helped me is difficult because they are so numerous and the depth

is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh

dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do

this project.

I would like to thank my Principal, Dr. Vijaya Krishna for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Dr. Sadhana Venkatesh, for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide

Dr. Leena Nair whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference

books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped

me in the completion of the project especially my Parents and Peers who supported

me throughout my project.
 CHAPTER 1

INTRODUCTION

In economics, a shortage or excess demand is a situation in which the demand for

a product or service exceeds its supply in a market. It is the opposite of an excess
supply.

Sometimes the market is not in equilibrium-that is quantity supplied doesn't equal

quantity demanded.  When this occurs there is either excess supply or excess demand.

A Market Surplus occurs when there is excess supply- that is quantity supplied is

greater than quantity demanded.  In this situation, some producers won't be able to sell
all their goods.  This will induce them to lower their price to make their product more
appealing.  In order to stay competitive many firms will lower their prices thus
lowering the market price for the product.  In response to the lower price, consumers
will increase their quantity demanded, moving the market toward an equilibrium price
and quantity.  In this situation, excess supply has exerted downward pressure on the
price of the product.

A Market Shortage occurs when there is excess demand- that is quantity demanded is

greater than quantity supplied.  In this situation, consumers won't be able to buy as
much of a good as they would like.  In response to the demand of the consumers,
producers will raise both the price of their product and the quantity they are willing to
supply.  The increase in price will be too much for some consumers and they will no
longer demand the product.  Meanwhile the increased quantity of available product
will satisfy other consumers.  Eventually equilibrium will be reached.
1.1.HOW A SHORTAGE WORKS ?

In a normally functioning market, there is an equilibrium between the quantity

demanded and quantity supplied at a price point dictated by market forces. A shortage
is a situation in which demand for a product or service exceeds the available supply.
When this occurs, the market is said to be in a state of disequilibrium. Usually, this
condition is temporary as the product will be replenished and the market regains
equilibrium. Shortage should not be confused with "scarcity," in that shortages are
usually temporary and can be corrected, while scarcities tend to be systemic and
cannot be replenished.

There are three main causes of shortage:

1. Increase in demand (outward shift in the demand curve): For example, a sudden
heatwave leads to an unexpected demand for energy that cannot be met.
2. Decrease in supply (inward shift in supply curve): For example, an unexpected
freeze results in the destruction of orange crops leading to a drastic reduction in
the supply of orange juice.
3. Government intervention: Shortages can also be the result of government-
imposed price ceilings.

Possible causes of a shortage include miscalculation of demand by a company

producing a good or service, resulting in the inability to keep up with demand, or
government policies such as price fixing or rationing. Natural disasters that devastate
the physical landscape of a region can also cause shortages of such essential products
as food and housing, also leading to higher prices of those goods. Global consumer and
business trends can also create commodities and labor shortages.

Shortages are quite common in command economies. This is where the government
will not allow the free market to dictate the price of a commodity or service based on
the forces of supply/demand. When this happens, an artificially high number of people
may decide to purchase that item because of the low price. For example, if the
government provides free doctor visits as part of a national healthcare plan, consumers
may experience a shortage of doctor services. This is because people are more likely to
visit a doctor when they no longer have to pay directly for the cost.

Example of a Shortage
Some examples of shortages in different markets include the following:

Cocoa Shortage
As of 2016, chocolate makers face a shortage of cocoa beans because of falling
supplies of the raw commodity and increased demand for chocolate. In 2015, the
global demand for chocolate increased by 0.6% and rose to 7.1 million tons. However,
the production of cocoa from leading cocoa bean suppliers in areas such as Ghana and
the Ivory Coast fell by 3.9%, and the global supply of cocoa beans was just 4.1 million
tons. A factor in the increased demand is that consumption of chocolate candy is on the
rise in China and India. Overall, the demand for cocoa in Asia jumped by 5.9% in
2015. As a result, the price of cocoa in 2015 rose to over $3,000 per metric ton, the
highest level since 2012. To reverse the cocoa shortage, leading chocolate producers,
such as Nestle S.A., are partnering to educate West African cocoa farmers on best
practices and techniques to boost their production.

Cybersecurity Job Shortage

Economic and technology trends can also create job market shortages when the need
for workers with new skills rises. For example, the expansion of cloud computing in
government and healthcare services has also created an increased risk of cybercriminal
activity. Cybersecurity professionals are needed to keep business and government
systems safe from ongoing hacker threats. There is, however, a shortage of workers
with the skills needed to fill this career specialty. The U.S. Bureau of Labor
Statistics (BLS) reports that there were 209,000 unfilled cybersecurity job openings in
2015. The BLS also projects that the demand for cybersecurity professionals will rise
by 18% between 2014 and 2024.
1.2. WHAT CAN ELIMINATE A SHORTAGE
The Shortage
Working the Market

A shortage can be illustrated using the market

for 8-track tapes displayed in this exhibit. This
graph was generated after long hours attending
the 88th Annual Trackmania 8-Track Tape
Collectors Convention at the Shady Valley
Exposition Center.

The equilibrium, found at the intersection of the negatively-sloped demand curve and

positively-sloped supply curve is at a price of 50 cents and a quantity of 400 tapes.
Equilibrium, however, is not the primary point of interest. The interest lies
in disequilibrium and shortage.

A shortage emerges at any price below the equilibrium price of 50 cents. A prime
candidate to generate a shortage is a price of 30 cents. Click the [Shortage] button to
illustrate the resulting shortage.

 Quantity Supplied: At 30 cents, the quantity supplied is only 200 tapes. Because
the price is relatively low, sellers are guided by the law of supply and are not
willing and able to offer much of the good for sale.

 Quantity Demanded: However, at the same 30 cent price, the quantity

demanded is 600 tapes. At this relatively low price, buyers act according to the
law of demand and are willing and able to buy a great deal of the good.
  The Shortage: The end result is that the quantity demanded exceeds the quantity
supplied by 400 tapes. As such, the shortage at 30 cents is 400 tapes. Of course,
a different price generates a different shortage.
Eliminating the Shortage
Then What?

A market reacts in a specific manner in response

to a shortage. Although sellers are able to sell as
much of the good as they want at the going
market price, buyers are not able to buy as much
of the good as they want. In this example,
sellers are able to sell all 200 tapes they offer
for sale. Buyers, however, are only able to buy
200 of the 600 tapes they want. The buyers come up short by 400 tapes.

Because buyers are not satisfied with this shortage, because they cannot buy all of the
tapes that they are willing and able to buy at 30 cents each, they are motivated to offer
a higher price, to induce sellers to part with a larger quantity. Click the [Price Rise]
button to illustrate what occurs.

What happens as this price rises?

 Increase in Quantity Supplied: According to the law of supply, a higher price

induces an increase in the quantity supplied. This is just the sort of thing that the
buyers hope happens when they offer a higher price. They want a larger
quantity supplied.

 Decrease in Quantity Demanded: However, according to the law of demand, a

higher price also induces a decrease in the quantity demanded. Buyers who
demand a large quantity at the 30 cent price are inclined to reduce their quantity
demanded as the price rises.

 No More Shortage: The increase in the quantity supplied and the decrease in the
quantity demanded both act to eliminate the shortage. Best of all, as long as any
 shortage exists, the price continues to rise, and the shortage shrinks. The price
stops rising ONLY when it reaches 50 cents, which is the equilibrium price, the
price that generates the same quantity demanded as supplied. It is the price that
does not have a shortage.

1.3. Advantages & Disadvantage of MARKET SHORTAGE

 You can position scare items as a hot commodity to drive interest and
purchases.
 You can adopt a new angle on positioning your goods and services and tell an
engaging story to explain why there is a scarcity. 
 You have the potential to drive a ton of sales in a short amount of time,
especially if you're using tactics like countdowns and inventory warnings. 

 You might push away prospective customers, especially if they like your brand
but aren't accustomed to feeling pressured by scarcity. 
 Your strategy of creating the illusion of scarcity might feel deceptive or
downright dishonest.
 Your reputation is on the line, so if you’re promoting low value products or
services as a hot commodity, expect a big backlash from paying customers. 

1.5. Definitions

1. Definition of Shortage: In common use, the term "shortage" may refer to a

situation where most people are unable to find a desired good at an affordable
price, especially where supply problems have increased the price. "Market
clearing" happens when all buyers and sellers willing to transact at the
prevailing price are able to find partners. There are almost always willing
buyers at a lower-than-market-clearing price; the narrower technical definition
doesn't consider failure to serve this demand as a "shortage", even if it would be
described that way in a social or political context (which the simple model
of supply and demand does not attempt to encompass).
 2. Definition of Market Shortage: A Market Shortage occurs when there is
excess demand- that is quantity demanded is greater than quantity supplied.  In
this situation, consumers won't be able to buy as much of a good as they would
like.  In response to the demand of the consumers, producers will raise both the
price of their product and the quantity they are willing to supply.  The increase
in price will be too much for some consumers and they will no longer demand
the product.  Meanwhile the increased quantity of available product will satisfy
other consumers.  Eventually equilibrium will be reached.

-Meaning of Shortage: A shortage is a lack of something, especially a severe lack.

A drought is a shortage of water. When there's a shortage, there's not enough of
something. If you don't have enough money to pay your bills, you have a shortage of
money. A bad football team may have a shortage of good players. This kind of
shortage is like a deficit or shortfall. A shortage can also be a severe dearth of
something, like a famine, which is a lack of food. If there's a drought because of little
rainfall, that's a serious shortage.

1.6.EFFECTS OF MARKET SHORTAGE:

Decisions which result in a below-market-clearing price help some people and

hurt others. In this case, shortages may be accepted because they
theoretically enable a certain portion of the population to purchase a product
that they couldn't afford at the market-clearing price. The cost is to those who
are willing to pay for a product and either can't, or experience greater difficulty
in doing so.
In the case of government intervention in the market, there is always a trade-
off with positive and negative effects. For example, a price ceiling may cause a
shortage, but it will also enable a certain percentage of the population to
purchase a product that they couldn't afford at market costs. Economic
shortages caused by higher transaction costs and opportunity costs (e.g., in
the form of lost time) also mean that the distribution process is wasteful. Both
of these factors contribute to a decrease in aggregate wealth.
Shortages may cause:

 Black (illegal) and Grey (unregulated) markets in which products that are

unavailable in conventional markets are sold, or in which products with
excess demand are sold at higher prices than in the conventional market.
 Artificial controls of demand, such as time (such as waiting in line)
and rationing.
 Non-monetary bargaining methods, such as time (for
example queuing), nepotism, or even violence.
 Panic buying
 Price discrimination.
 The inability to purchase a product, and subsequent forced saving.

Big Basket - bigbasket.com (Innovative Retail Concepts Private Limited) is India’s

largest online food and grocery store. With over 18,000 products and over a 1000
brands in our catalogue you will find everything you are looking for. Right from fresh
Fruits and Vegetables, Rice and Dals, Spices and Seasonings to Packaged products,
Beverages, Personal care products, Meats – we have it all.
Choose from a wide range of options in every category, exclusively handpicked to
help you find the best quality available at the lowest prices. Select a time slot for
delivery and your order will be delivered right to your doorstep, anywhere in
Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore, Coimbatore,

Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, LucknowKanpur,

Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore and Chandigarh
Tricity You can pay online using your debit / credit card or by cash / sodexo on
delivery. We guarantee on time delivery, and the best quality ! – “ as they Claim.”
Grofers - Grofers is India’s largest low price online supermarket in the grocery space. The
company uses its in-house technology platform to manage a network of over 5,000 partner
stores that enable the company to run a fast and lean supply chain
– from manufacturers straight to customers in 16 cities namely Delhi, Mumbai,
Kolkata, Chennai, Bangalore, Hyderabad, Pune, Gurgaon, Noida, Ahmedabad, Jaipur,
Lucknow, Kanpur, Rohtak, Bhiwandi & Meerut. Grofers utilizes its efficient supply chain to
deliver over 25 million products to customers every month. A majority of these products
belong to the company’s 8 in house brands namely Grofers Happy Day, Grofers Happy
Home, Grofers Mothers choice, Grofers Happy Baby, G Fresh, Orange and budget brands
Save more and Have more. It is hereby clarified that Grofers India Private Limited does
not have any relation with the mark ‘GROFFR’, which (we are given to understand) is used
by Redstone
Consultancy Services Pvt. Ltd for its real estate services business, which is not related
to Grofers India Private Limited in any manner. - “as they Claim”.

1.8. Existing Offline Vendor:

Vegetables & Fruits vendor: In offline market we can include Whole seller & retailer,
but we have took for retailers. Basically offline vendor they don’t have any identity as
when we walk from any street/road we see many street shop & hawker selling fruits
& vegetable and grocery stuffs in a general (Kirana) stores. As in practically, they
don’t give false statement or they don’t claim big words unlike online market.

As they don’t have huge capital resource they don’t go for online market. Not only
for online market but there are other factors to as Risk factor, administration set up,
education, etc . As in general if they had education then why would they go for
owing a shop. Due to development of online market, many shopkeeper have realize
that their earning have fallen down.

In an Area like Andheri east, there are more than 100-120 shopkeepers of fruits &
vegetable and around 35-50 grocery stores. This data is about pin code of 400093 &
400069, Nagar Das Road & MIDC. We can assume, how many shopkeepers will be
there in whole Mumbai?
1.9. Factors Affecting Online Shopping

Online shopping becomes relevant in the last decade. The kind of business online
retailer are doing is proof enough that they are providing some benefits to customer
which offline shopping does not give to the customer. These are the factors affecting
online shopping:

Risk: When customer buy products from online shopping they do not touch or feel
the product in a physical sense .Hence we understand that lot of risk is involve while
buying an online product whether it will reach us on proper time or not is also a
concern and also there may arise a risk of product size and color as it may differ in
real view or sense. Sometimes the product ordered is kind of damaged.

Convenience: Online shopping is much more convenient than offline shopping.

Instead of taking out your vehicle and visit shop to shop you can just sit at your home
and do the shopping. It is convenient to sit at one place and shop the product of our
choice without moving from place to place. Once you have decided on what you
want to buy the payment process is seamless and the order is delivered to your
place. Online shopping makes things more convenient. We can have a lot of choice
over there in any kind of material we want to deal with that too without any fear of
dealing with any dealer or distributers. Online shopping is convenient in its real
sense as it do not carry any dealing with issues of asking for wanted items or issues
of asking for desired kind of items which helps in avoiding the part of waiting,
asking, questioning about the product.

Anxiety :People’s anxiety of exploring the sites and experimenting over them is also
a matter of concern. Sometimes people those who are not very known to any sites
like Big Basket or Grofers any sites they just feel like it’s a tough kind of activity over
net and its complicated in there sense as they are not very fond of doing online
shopping as it takes a time to even understand the product about its details. This
particular activity makes them irritated and anxietous over any kind of fatal online
dealing.

Previous online experience: How has been a person’s experience in past as far as
online shopping is concerned is a major story of concern. Previous experience is what
matters actually as its hamper or sometime it keep good view or mood of people.
There are two experiences one is about good and another is about bad. Both has its
own and different affect in the mind of buyers. So these factors also influence online
shopping or e shopping. Pricing Policy: Online retailers gets an inherent advantage
in pricing as they don’t have to bear expenses like store rent, bills etc. They can pass
their price directly to customer and generally offer a lower price to customer than
offline market. Even when shipping charges are included than also it is better than
the offline shopping. Hence, determines the level of online shopping. Lower the
price- higher the mood to demand, higher the price –lower the demand. Price of any
commodity also influences the purchasing power of any specific buyer. Consumer
generally prefer mild or normal price with good quality and do not want to spend or
expense lot for any kind of stuff. So buying and selling both are simultaneously
affected by the price of product.

Quality: The quality of product at online sites and offline stores vary a lot and then
this determines the frequency of online shopping. Quality also carries good affecting
nature over any kind of shopping. As consumer or buyer want to have a good quality
of product as they spent their huge sum of money. In general, qualities is a primary
need over any kind of purchasing as it somewhat secure or give a good sense of
buying or kind of guarantee about the product preferred.

Online trust: It depends on customer perception whether they trust a particular site
and its product and services. Hence the frequency of online shopping also depends
upon whether they trust a particular site or not. People are different in there nature
and thoughts, some kind of people trust online dealing some kind of people are in
fear of online dealing. Trust carry a lot of points examples- trust about the same
product size quantity weight and security etc.
Tangibility of the product: At the store the customer gets to touch and feel the
product they purchase before buying which help the customer to take the decision
to buy the product or not whether the product will suit the customer need or not.
Whether, we can and see feel a product is also a reason which determines whether a
person’s wants to go for shopping or not. Tangibility of any product also determines
the online shopping. Without touching the preferred or desired substance nobody
can get its security about the worthiness or quality or sense of any preferred
product.

Delivery time: The product ordered by the customer in online shopping takes a
minimum of six to seven days to deliver the product to the customer. But in offline
shopping the possession of the goods is immediately transferred to the buyer. So this
is a major factor which affects the online shopping. People want a good delivery
time; they prefer to get a product in a desired time or in short time of duration.
Duration is the second major factor affecting the demand of product.

Income: The person whose income is more, do more online shopping as compared
to the person whose income is less. Income plays a major role to purchase online
products. Higher income people prefers to purchase online more than offline as it
gives them reliability and convenient. Higher the income higher wills the purchasing
of online product and vise-versa.

Taste and preference: The taste and preference of the customer vary from customer
to customer and time to time, taste and preference also a factor which influences
online shopping. Taste and preference of age group also matters in online shopping.
Old people buy or purchase product for their kind of use. Young generation or
teenagers use to purchase their taste of product. Taste and preference move in tend
of ages and choices. Every customer or buyer choices are different in nature as per
their ages.

Information: The information given in the site may not be correct or may not be
appropriate information. The full information about the quality of the product may
not reach to the customer. Hence it will affect the online buying of the customer.
Information provided by the preferred sites may be not the same about the detail of
the product. May be with the provided information and details customers are not
very satisfied. Sometimes it happens that even many customers use to buy the
product after their full knowledge of details as they prefers the detail are accurate
and good in sense. Information related to product may vary in its real sense when it
arrives or delivered to relevant customer.

Variety: The kind of variety that a customer gets online is hard to match any product
purchased offline. The online retailer’s stock products from the entire major brand
and a customer can find any product in their listing no matter how hard to find it is in
the offline store. Online and offline both shopping provide variety of range from
various brands. Variety in it itself is the foremost dealing factor which influence the
market.
Larger the variety of product in shop higher the selling and vice-versa.
People generally prefer to move where they get more variety of products.

Discreet shopping: While buying some products customers don’t feel comfortable to
purchase it in offline store. Shopping online is discreet and some online portals also
provide discreet shopping. Purchase of girly material are very convenient in offline
shopping as it is not dealt with any kind of uncomfortable situation. There is no
person to who is to ask for any kind of intimate product, customer can easily cope
with offline as they can go and purchase their usable items without any kind of
hesitations.

Offers: Apart from offering products at lower price most online shopping regularly
come up with discount offers in association with bank, brand etc. Which entail
customer to get additional saving while buying products online? Offline stores only
give offer or discount during stock clearance or when the manufactures gives the
discount on the products. Online shopping always provides offers at all the time and
day. In every purchase we get some offers even if there is no festival or carnivals.
Offers are a great factor which attract customer to purchase online. Offer carry a
great influence in shopping.

Instant gratification: Customer buying offline gets their products as soon as they pay
for it but in online shopping customer have to wait for their product to get their
product. Under normal circumstances waiting a day or two does not matter much
but when a customer want to get the product instantly than offline shopping become
necessary.

Available product and services: Online shopping offer customers more benefit by
providing more variety of goods and services that they can choose from. There are
some goods which a customer can only find online.
Factors Affecting Offline Shopping

Offline shopping has existence since the existence of mankind. Offline shopping gives
different types of benefits to the customer. There are some factors which affect the
shopping offline those are as follow:

Less number of choices: There are limited numbers of choices when it comes to
offline shopping. The numbers of varieties are limited. The ranges of products
available in the shops are limited. Sometimes, the stocks are old and are up for
discount and sale. Basically in offline or any shop we get less numbers of choices as
it consists of manual work. We have to choice in that less number of materials due to
manual factor.

Time consuming: It takes a lot of time to go shopping to a store. Distance from

home or workplace to the store is time consuming. It is also time consuming while
trying out the outfits in a store or even going through other products. In off-line
shopping customer move one place to another and one shop to another in search of
their desired product.

Information: What generally happens is that the information provided by a

shopkeeper isn’t correct. Also this information doesn’t always suit our needs. And we
buy products according to what they say when we ourselves don’t have adequate
knowledge about the products. Such purchases are based on goodwill when we
happen to know the shopkeepers.

Authenticity: Offline shopping is more authentic than online shopping. While buying
the product we can feel the texture of it and know what it’s like. We exactly know
what we are buying while buying anything offline. But in online shopping, we don’t
always know what exactly we are buying. This is because what we see on the
websites is not always what we buy when the product reaches us.

Taste and preference: The taste and preferences of the customer change from time
to time. While buying any product from a store we have the flexibility and the choice
to try out outfits. But while buying any product from a website we don’t have this
facility. Therefore, buying offline caters more to the changing taste and preferences
of the customers.
Bargaining: In offline store a customer can do physical bargaining to the seller unlike
shopping online. In online shopping a customer cannot do bargaining as the price of
the product is fixed. Some of the customer purchased products depending upon
bargaining so they do not go for online shopping as they feel shopping online is more
costly than the market.

CHAPTER 2

RESEARCH METHODOLOGY

2.1. Nature of Market

The Nature of Marketing (or Modern marketing) may be studied under the following
points:

1. Human activity: Originally, the term marketing is a human activity under

which human needs are satisfied by human efforts. It's a human action for human
satisfaction
1. Consumer-oriented: A business exist to satisfy human needs, hence business
must find out what the desire of customer (or consumer) and thereby produce goods
& services as per the needs of the customer. Thus, only those goods should be
produce that satisfy consumer needs and at a reasonable profit to the manufacturer
(or producer).

3 Art as well as science: In the technological arena, marketing is the art and science
of and satisfying choosing target markets customers through creating, delivering, and
communicating superior customer value. It is a technique of making the goods
available at right time, right place, into right hands, right quality, in the right form
and at right price

4. Exchange Process: All marketing activities revolve around commercial

exchange process. The exchange process implies transactions between buyer and
seller. It also involves exchange of technology, exchange of information and
exchange of ideas.

4. Starts and ends with customers: Marketing is consumer oriented and it is

crucial to know what the actual demand of consumer is. This is possible only when
required information related to the goods and services is collected from the
customer. Thus, it is the starting of marketing and the marketing end as soon as
those goods and services reach into the safe hands of the customer

5. Creation of Utilities: Marketing creates four viz. time, place, components of

utilities possession and form. The form utility refers to the product or service a
company offers to their customers. The place utility refers to the availability of a
product or service in a location i.e. Easier for customers. By time utility, company can
ensure that products and services are available when customers need them. The
possession utility gives customers ownership of product or service and enables them
to derive possession utility gives customer’s ownership of product or service and
enables them to derive benefits in their own business

6. Goal oriented: Marketing seeks to achieve benefits for both buyers and sellers
by satisfying human needs. The ultimate goal of marketing is to generate profits
through the satisfaction of the customer
7. Guiding element of business: Modern Marketing is the heart of industrial
activity that tells what, when, how to produce. It is capable of guiding and controlling
business.

8. System of Interacting Business Activities: Marketing is the system through

which a business enterprise, institution or organization interacts with the customers
with the objective profit, satisfy customers and manage to earn relationship. It is the
performance of business activities that direct the flow of goods and services from
producer to consumer or user.

9. Marketing is a dynamic processes. Series of complex interrelated functions:

Marketing is a continuous and interrelated process. It involves continuous planning,
implementation and control.

2.2. Objective of the study

The present study broadly compares the online and offline shopping, specifically the
objectives are:

(a) To analyze the significant difference between the online and offline consumer
groups in terms of demographic, technology use, availability and attitude of
the consumer.
(b) To examine the factors influencing the consumer to switch from the offline
shopping to online shopping and online to offline shopping.
(c) The factor influencing the consumer to shop solely online and solely offline.

(d) To analyze whether the qualification of the consumer affect the online
shopping and offline purchasing.

2.3. . Methodology of the Study

This part of study defines all the process of data collection. When it comes to data collection,
there are two methods in general used by researcher to collect data, primary and secondary
method. Primary method includes observation method, Interview/questionnaire method,
and case study method. Secondary method is the method in which already there is collected
data. e.g. - newspaper, magazine, book, etc. The present study is based on combination of
both qualitative and quantitative data. The qualitative data is collected through the sampling
from the consumer. Random consumer is selected for the sampling purpose. The sample
individual is selected from different age group, different sex and from different location of
Andheri east. The different group of people including, employee women & unemployed
women, housewives and others are considered as sample for the study.

(a) Sampling: The target group is of different age, different age group people are
considered because , to know whether which group of people are involved more in
the online shopping and which group of people is not confined to shop online. There
are four division of age group in the questionnaire to examine which group is going
for more online shopping and which group is going for more offline shopping.

(a) Sample size: Determining the size of sample that is needed for a particular
piece of research. For this research 100 sample size is taken for the interviews. From
this sample size the calculation of simple percentages for each variable is done.

(b) Questionnaire/Interview method: Questionnaire method is easy way to find

out the data, which is entertaining, interesting for women & here to we have
considered only literate women . We have formed 10 questionnaire for this survey.

2.4. Significance of the Study

The consumers in today’s era have not only many stores choice, but they also have a wide
variety of channels to choose from. With the start of numerous channels (e.g. Mobile
Commerce, E-Commerce) and a continuous increase in the competition among channels, the
understanding of what incites consumers to purchase from one channel rather than another
becomes progressively important channel design and management.
In recent years, studies distinguished another non store retail format Internet. Recent
studies investigated why consumers shop through stores, catalogs, or the Internet .The study
contributes to the current marketing literature by comparing the offline and online channel
side-by-side. This study also contributes hypothetically and practically to a better
understanding of consumer behavior, particularly the online buying decision process.

The two major research streams and three distinct research phases can be identified in the
online consumer behavior. The first major research stream identified explores the possibility
that product attributes such as the product’s suitability for evaluation and delivery via the
Internet are important drivers of online purchases.

The research stream identified explores the importance of the consumer’s situation
as an important driver of online retail sales. Within this second research stream the
consumer’s situation is taken to include access issues, demographic issue, product
availability, technological familiarity, experience, trust, and brand and customer
service. Clarification of the debate as to whether it is the product attributes or the
consumer’s situation that principally drives the online purchase decision process will
contribute to a better understanding of consumer behavior. The outcome of the
research will assist retailers understand why consumers search and evaluate
products online and then buy them offline and vice versa.

Andheri East is taken as area of study because no study is being done in the context
of Andheri East not even in the context of Mumbai. As Andheri is a center city in
Mumbai, I like to take this city as the study area. This study will give the idea about
which shopping will be best for the consumer point of view? Which option would be
preferred by the consumer to shop whether online or offline his study will give the
clear idea about the internet shopping.
 CHAPTER 3

LITERATURE REVIEW

Kozinets, (1999) identified that social media provides a new channel to acquire product
information through peer communication, and these informational society influences affects
the consumer decision processes and product evaluations.

Kotler and Amstrong (2001) customers go through five stage of purchasing decision process
when making a purchase decision. These five steps of buying decisions are (i)
Need Recognition, (ii) Information Search, (iii) Evaluation of Alternatives, (iv) Purchase
Decision, and (v) Post Purchase Behavior.Rubin

A. M. (2002) has indicated that there is a connection between social interaction and
framing of consumers’ opinion.

Schlosser (2005) has indicated that even a small amount of negative information from a few
postings can have substantial impacts on consumer attitude.

Devaraj et.al (2006) critically analysed an empirical study in USA regarding examination of
online channel preference. He examined the behavioural and economic features that add to
online consumer's satisfaction and further head to their preference of online channel. The
results indicate that asset specificity and uncertainty structure variables the electronic
marketplace are related with the conduct constructs such as, personalization, website
design, time responsiveness, security and reliability of the online channel. Further, it was
found that, personalization, time responsiveness, security, and reliability are also
significantly linked to the consumer satisfaction outcome with the channel. Website design
has not significant effect to online consumer's satisfaction. Finally, it was indicated that
satisfaction resulting from the above conduct variables was strongly related to the
consumer's preference online channel preference.

According to Riege A. (2007) an effective relationship is necessary for transferring the

knowledge. Different types of proximity affect the effectiveness of knowledge transfer
between individuals. The reason is that proximity can be part of culture factor which can be
linked with values shared by a different group of people, which provide guidelines for their
behaviors.

Allsop, D. T. et al., (2007) says that one of the peers to peer communication with high
influential channel is the Word-of-mouth or e-word of mouth.

Mirza, H. (2008) says that social media is the medium with the highest respondents in term
of expressing themselves and sharing of experience is something that the respondents are
looking for in social network. Further he identifies four basic characteristics of social media
which are Openness, Conversation, Community and Connectedness. Openness because
social media are open for comments, participation and sharing of information and contents
are usually not password protected. Conversation as a characteristic of social media is a two
way communication channel unlike traditional media where the main approach is
broadcasting of messages. The next characteristic is that social media allows people to build
community with in a short time and discuss their interest. At last social media make use of
links in other websites to connect people and resources.

Shin (2008) Interactivity with target brand in social media is perceived differently by
consumers depending on the message they convey.

The Economist (2009, April 2) stated that consumers rely on personal sources such as

“Recommendation by friends” to make purchases.

Mangold and Fauld (2009) suggests that social media has also influenced consumer behavior
from information acquisition to postpurchase behavior such as dissatisfaction statements or
behaviors.

Kozinets et al., (2010) says that Social media websites provide a public forum that gives
individual consumers their own voice, as well access to product information that facilitates
their purchase decisions.

Bernadette D’Silva et al., (2011) suggest that social media can be used as a growing platform
for launching new products. This can lead to higher sales and helps in increasing the market
share of the products. Further analysis indicates that the youth have their own set of
preferences for different social media websites.

Arora and Yadav (2012) in their study find that three factors are considered for checking the
impact of Facebook on product purchase decision i.e. brand community engagement,
information about the product and word of mouth. Consumer is mostly influenced by
positive word of mouth rather than other factors.

Selvakumar (2014) concentrated on consumer’s perception of the product sold online and
the issues considered important to online shopping. This study was conducted among the
online shoppers at Coimbatore which is in Tamil Nadu state. It is to analyse the impact of
consumer opinion and the attitude. Questionnaire was made to collect the data from the
population; these questionnaires were given to college going students. The total sample size
is 150 respondents. The finding of this study shows that improvement and accessibility
influence the customer’s intention to shop online.

Chaing and Dholakia (2014) carried out a study in which they examined the purpose the
customer to purchase goods online during their shopping. Mainly there are three variable in
their study those affects the consumer to purchase online or to go offline. Those are the
accessibility features of the shopping sites, the type of the products and their characteristic,
and the actual price of the product. The study revealed that the accessibility and the
convenience of the shopping sites create the intention in the customer to purchase or not.
When there are difficulty faced by a consumer to purchase online then the customer switch
to the offline shopping for the purchase behavior and the consumer face difficulty in offline
purchasing then they go to the online purchasing. After relating both the medium of
shopping the consumer said that the online shopping is more convenient for them and gives
more satisfaction which inspires the consumer to purchase online in the internet.

Iyer and Eastmen (2014) found that the population of senior who are more literate, more
knowledgeable and who are more aware of the technology and those who have a positive
behavior towards online shopping and internet are more into online shopping. But the
population of senior who are less aware of the internet and the shopping sites are less
involved in the shopping sites because they do not have a positive attitude towards online
shopping rather they are much more interested in offline shopping and the seniors who are
more involved in the internet uses more online sites for purchasing the goods over the
internet. The senior which have more knowledge about the internet and the shopping sites
they compares both the shopping i.e. online and offline shopping for their purchasing of
goods. However their knowledge and the use of internet by them has no connection with
their age and their satisfaction level while purchasing online.
 CHAPTER 4

DATA ANALYSIS, INTERPRETATION & GRAPHICAL PRESENTATION

GRAPHICAL REPRESENTATION

Q.1. Gender

OPTION Female Male

N0. OF
RESPONSE 87.50% 12.50%

N0. OF RESPONSE

90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Female Male

INTERPRETATION

On Y-axis we have took percentage & on X-axis we have taken no. of response as Male &
Female. Here we have presented number of people, who were took in the survey in
percentage form no. of female who have took the survey are 43 & no. of male were 7 out of
group of 50.

Q.2. Occupation

OPTION Service Employed Housewife

N0. OF
RESPONSE 0.00% 37.50% 62.50%

N0. OF RESPONSE

70.00%
60.00%
50.00%
40.00%
30.00%

20.00%
10.00%

0.00%
1 2 3

INTERPRETATION

On Y-axis we have took percentage & on X-axis we have taken no. of response in numeric
form as 1, 2 & 3. Here we have took survey from the people who were in Service as1,
Employed as 2 and Housewife as 3. As we can see in above mentioned data that online &
offline market data is collected from whom only, who regularly for shopping. Here we can
easily understand that no. of response ae in Service or Employed or Housewife.

Q.3. Age group

OPTION 18‐25 26‐35 36‐45 45‐55

N0. OF
RESPONSE 35.00% 27.00% 28.0% 10.0%

N0. OF RESPONSE

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

INTERPRETATION

On Y-axis we have took percentage & on X-axis we have taken no. of response in numeric
form ages in a group form. Here we have tried to explained that no. of response are from the
group age as between 18-25 there are 18, between 26-35 there are 13, between 36-45 there
are 14 ,45-55 there are 5 respondent .
Q.4.Which market did you find easier for shopping?

online offline
OPTION market market both
N0. OF
RESPONSE 15.40% 46.20% 38.50%

N0. OF RESPONSE

50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
online offline both
market market

INTERPRETATION

In this question we have found the information, how many people have found easy way to
shop via online market or offline market or both. On Y axis we have took percentage of
people have found which market easier. On X axis we have took markets which represents
the data about consumers .

Q.5. Which device do you prefer for online shopping ?

OPTION mobile laptop

 N0. OF
RESPONSE 100.00% 0.00%

N0. OF RESPONSE

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
mobile laptop

INTERPRETATION

In this Question we have found that while doing online shopping, which device is more use
by people mobile or laptop or pc ?. On Y axis we have took percentage of device used by
shoppers. On X axis we have took devices which are mostly used by shoppers, we have found
that mostly people used for online shopping of grocery.

Q.6. What do you prefer for shopping online market ?

Better Less time All the

OPTION service consuming Benefits above
N0. OF
RESPONSE 11.10% 22.20% 22.70% 44%
 N0. OF RESPONSE

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
above
better service less time benifits all the
consuming

INTERPRETATION

In this question we have found that why shoppers prefer online shopping. On y axis we have
took percentage of respondent preference. On X axis we have took some of the facility
provided by online market as in Better service/Less time consuming/Benefits/All of the
above. Here we have come to conclusion that many shopper who shop online have liked all
services provided by online marketers.

Q.7. What do you for shopping offline market ?

quality physical sales all the

OPTION product existence service above
N0. OF
RESPONSE 27.30% 18.20% 9.10% 46%
 N0. OF RESPONSE

50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
quality product physical sales service all the above
existance

INTERPRETATION

In this question we have found response from people who don’t go for online market. On Y
axis we have took the percentage of service provided by offline market like street vendor. On
X axis we have took the services provided by offline marketers.
Many of consumers have like about all of service provided by offline marketers.

Q.8. Have you find online market are trustworthy than offline market & viceversa?

OPTION yes no
N0. OF
RESPONSE 45.50% 54.50%
 N0. OF RESPONSE

56.00%
54.00%
52.00%
50.00%
48.00%
46.00%
44.00%
42.00%
40.00%
yes no

INTERPRETATION

In this question we have come to the conclusion that many of consumers don’t feel online
market as trustworthy because of their personal experience. On Y axis we have took the
information in percentage that people have trust on online/offline market. On X axis we
have took response of the consumer who found offline market more trustworthy than online
market. Thus we comes to know that there are still some consumers who found offline
market better than online market & they still have good
faith

Q.9. Have you ever received any special benefits while buying online market?

OPTION yes no
N0. OF
RESPONSE 66.70% 33.30%
 N0. OF RESPONSE

70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
yes no

INTERPRETATION

Here we have found that many of consumer have received benefits like Cashback & some
discount for those consumers who regularly buys from online market. On y axis we hve took
percentage of responses. On X Axis we have took the responses of consumer that who have
received the special benefits & who have not received. Does we can understand this how
they attract consumer towards them and buy from online market.

Q.10. Who provides better service as in online market or offline market?

Online offline
OPTION market market both
N0. OF
RESPONSE 25.00% 41.70% 33.30%
 N0. OF RESPONSE

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Online market offline market both

INTERPRETATION

Here we can come to conclusion that many consumers buy from online market as well as
offline market & some of them are habitual of the market from here they feel more
comfortable. On Y axis we have took percentage of response about better market. On X axis
we have took the markets where people have chosen their preferable market as online
market or offline market or both.
 CHAPTER 5

BIBLOGRAPHY AND CONCLUSION

FINDINGS

In this project we have found many things between online market & offline market

Here we have found that offline market are afraid to go for online market due to various
factors, due to which their expansion/growth has stopped. Due to which they are still
surviving in this competition world.
Offline market are happy with, what they have in their life. They are in strong believe that
one fine day all this online market will fall down & they will still survive. Here they don’t
worry about the demand & supply unlike online market.
Offline market literally says that, if consumers wants to go for online market they can happily
go but one or other day, they have to come back again to the offline store or market.

Offline market is good when online market is out of service due to various reasons
sometimes during heavy rains, emergency cases, etc. an offline market vendor said to a
customer that, ”while going for online market, we can give you same service & their black
truth of nonphysical existence.”
Online market have black truth that hardly some people know about it, i.e. actually they
don’t have physical existence unlike offline market. There is more gap between reality and
what they claim.

Online market they don’t have any place in physical existence, what is reality? Actually there
website is real , their delivery guys are real but goods what they display in their website are
bought from local vendors & they packed it in that way it looks like that product which are
order by consumers are from their company but he facts remain the same they don’t shop or
godown/warehouse unlike offline markets.

Online market is famous but still some people believe in physical market that is offline
market & they believe in handpicked good quality product, checked by them for their
satisfaction level. Many consumer told that, there no price difference between offline
market & online market. Its myth that they provides discount or benefits, they include all
charges in the selling goods & in delivery charges.

Online marketer also have to face many problems because of existing market players,
everyday a new online marketer enter into the market & due to which they compete
between themselves. Due to which offline marketer have to face problem of price crashes.
They are many online market seller as Big Basket, Grofer, Nature’s basket, Starquik,
Ninjakart, SuprDaily,etc and many more are there & may be upcoming much more.
Consumers have many mindset, they are happy when they get good quality product at low
price & some customers are there who wants good quality at any cost but quality matters
for them. Some are there they go for low price & quality doesn’t matter for them. Some are
there who go for benefits or offers or discount or any other benefits. Thus economist have
said consumer is a King, but that was real in old days now people have their own preference
& taste where they can be clown also for their benefits. Some are happy when they get a
chance to bargain with the vendor & win on price war. Some customer are headache for
offline vendors, they have lots of drama for buying stuffs. Some customers are theft, whose
target is to get some goods to be stolen. Some customers are good by heart, some are
educated they give importance to that vendor. Some customers behave like they have own
the vendor but that uneducated vendor keep shut his mouth & tolerate that customers.
Thus this are some real life customer experience.
CONCLUSION

Preference of shopping medium whether it is online or offline by the respondents depends

upon demographic variables and the sources which both the medium used to attract
customers.

The study reveals that the male are less doing the online shopping than female. The female
are more into online shopping because they enjoy doing shopping whether it is offline
shopping or online shopping. The young generation are more often purchasing from online
sites because of the revolution in the technology among the youth population and they are
able to use this technology for their well-being more than other age group category.

Big Basket is the shopping site which is more preferable by the youngster. There are
increasing demand of online shopping because the variety of options for the consumers to
choose and that to at a reasonable price and sometime even less price than the market.
Exotic items were less demanded from the online shopping but vegetables are much more
demanded by the consumers.

There are several places where goods are not delivered by the shopping sites in the
preferable area, it is seen that with the advancement of the technology the preference of
the online shopping increases. Earlier people more uses the offline shopping. Now also
people who are not aware of the several shopping sites and not that technically advanced
are less into internet for shopping.

This study advanced an ideal that uses consumer value perceptions to increase our
thoughtful of channel choice. Earlier work verified the key effect of perceived value has on
purchase intentions, but merely concentrated on product or store value insights. This paper
extends the studies while asking the questions from the consumer who are into online
shopping as well as offline shopping to rate both the channels in the terms of performance,
products, time of delivery, quality and other related aspects of online and offline shopping.
By accepting this approach, investigators and experts can gain valuable insights into the
motivations to adopt a definite channel for shopping.
A cluster of all customer communication with products, services or persons that is specific.
Another concern was that the conceptual model, a theoretical context for the study
of the theoretical basis of all the research on it is placed. Customer behavior is a
process of discussions with investors to buy goods and consumer behavior
suggestions of the process.

These are the 4 factor of consumer participation is defined as:

Person’s Features,

Standard of living,

Basic needs and

Status that directly inspire the needs.

BIBLIOGRAPHY

1. BIG BASKET

1. GROFERS

4. SURVEY MONKEY

4. DYPATIL MANAGEMENT SCHOOL

5. GKTODAY

6. SCRIBD FOR IDEA

8. SEMANTICSCHOLAR

APPENDIX
Q.1. Name

Q.2. Gender
(A)Male
(B)Female

Q.3. Occupation
(A)Service
(B)employed
(C)other

Q.4. Age group

(A) 18-25
(A) 25-35
(B) 35-45
(C) 45-55

Q.5. Which market did you find easier for shopping?

(A)Online market
(B)offline market
(C) both

Q.6. Which device do you prefer for online shopping?

(A)Mobile
(B)Laptop

Q.7. What do you prefer for shopping online market?

(A)Better service
(B)Less time consuming
 (C)Benefits
(D)All the above

Q.8. What do you for shopping offline market?

(A)Quality product
(B)Physical existence
(C)Sales service
(D)All the above

Q.9. Have you find online market are trustworthy than offline market?
(A)Yes
(B)No

Q.10. Have you ever received any special benefits while buying online market?
(A)Yes
(B)No

Q.11. Who provides service as in online market or offline market?

(A)Online market
(B)Offline market
(C)Both