a comparative study of online retail (e

Transcription

Volume 2, Number 3, July - September’ 2013
ISSN (P):2279-0934, (O):2279-0942
A COMPARATIVE STUDY OF ONLINE RETAIL (E-TAILING) WITH CONVENTIONAL
RETAIL IN SPECIAL REFERENCE TO INDIA
Dr. Pankaj Bijalwan1 Anupam Sirswal2
ABSTRACT
The growth of Information technology in India has provided the multiple benefits to Indian consumers. The growth of etailing is one of them. The e-tailing business in India is able to cater the needs of the customers of all the metro and non-metro
towns. The boom of retailing in metro town is becoming a matter of envy for the customers of non-metro towns. E-tailing has
provided a level playing field for all. The customers living and small towns may also have to access the quality products at the
reasonable prices. The penetration of Information Technology in India has enabled e-tailing companies to approach larger
base of customers. The customer at the click of mouse can order products of their own choice at comparatively lower cost.
The customers are open with various options.
KEYWORDS
Retailers, e-Tailing, Online shopping, Internet, Retailing, Conventional Retail etc.
INTRODUCTION
E-tailing (less frequently: e-tailing) is the selling of retail goods on the Internet. Short for "electronic retailing," and used in
Internet discussions as early as 1995, the term seems an almost inevitable addition to e-mail, e-business, and e-commerce. Etailing is synonymous with business-to-consumer (B2C) transaction.
E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997 when Dell Computer reported
multimillion-dollar orders taken at its Web site. The success of Amazon.com hastened the arrival of Barnes and Noble's e-tail site.
Concerns about secure order taking receded. The year 1997 was also the year in which Auto-by-Tel reported that they had sold
their millionth car over the Web, and Commerce Net/Nielsen Media reported that 10 million people had made purchases on Web.
E-tailing has resulted in the development of e-tailware - software tools for creating online catalogs and managing the business
connected with doing e-tailing. A new trend is the price comparison site that can quickly compare prices from a number of
different e-tailers.
DIFFERENCES BETWEEN RETAILING AND E-TAILING
The retail business model that is practiced in thousands of shops and strip malls in cities all over the world is widely understood.
However, many fail to understand that the Internet e-tail business model is substantially different. Some of these differences are
obvious, while others only become clear later sometimes when it is difficult to respond to them. Here are the differences, along
with the barriers and benefits found in an online store business model.
Instant Physical Transfer versus Mail Delivery
The retail model involves leasing a display room, ordering products into inventory, which are stocked on display shelves.
Shopping is either do-it-yourself or salesperson-assisted. Goods are purchased at a cash register, packed in plastic bags, and
carried out with the customer. The e-tailing model, on the other hand, has much more in common with catalog mail order sales
than with retail. Customers shop with little assistance in an online storefront, pay via credit card, and products are shipped or
drop-shipped to them via a parcel courier or postal carrier. When you think about it, the business models are very different.
Tangible v/s NonTangible
Retail stores allow shoppers to see and touch the products, to make sure they are getting what they want. Shelves carry boxes
containing products, shoppers read product information on the box, and perhaps open the box to examine the contents. Usually a
shopper can ask questions of a store clerk, while, in some stores, salespeople actively try to assist.
Online stores, however, only allow the shopper to look at pictures and read product information. The best online stores, though,
are able to provide more product information online than a retail shopper might find. Sometimes this wealth of information can
make up for the absence of a salesperson. However, the better stores are providing some kind of live chat or instant phone call to
answer questions. While retail shoppers can see and personally examine the product before purchasing, online stores need to make
special efforts to help shoppers get what they want, or face expensive product returns after delivery.
1Professor
and Head, Department of Management Studies, COER, Uttarakhand, India, [email protected]
Officer, COER, Uttarakhand, India, [email protected]
2Administrative
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals.
467 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Difference in Market Scope and Competition
The competition that retail stores face is mainly from other stores within driving distance. It may be fierce on the local front, but
at least the number of competing stores is finite. For online stores, on the other hand, the competition can seem almost infinite.
Since geographic barriers pose little limitation to shoppers, an online store is forced to compete with every other similar online
store in the entire country, and, at least in some niches, with all similar stores globally. The competition online is indeed
staggering. It is difficult to rise above the clutter to even be noticed, and the store’s position on search engines may be buried
beneath 20 or 30 others.
However, before you despair, realize that the vastness of the Internet is also its great strength. Instead of just relying on a
customer base within driving distance, your customers can come literally from your entire nation, and, to some degree, from
around the world wherever your language is spoken. Yes, the competition is great, but the market is huge. With good marketing, a
local store might be nicely profitable, but well-marketed online store could serve a much large clientele and earn huge profits.
The key for the online storeowner is to find and perfect a marketing mix that is within her budget, but also effective in bringing in
customers. Though the competition seems intense, if you poke and prod just a bit, you find that most of the competition is flabby.
Their storefronts are a sham, the lights are on but nobody is home, and the storeowners are not working it very hard or have given
up. If you work both smart and hard, you can conceivably carve out a substantial slice of business within your niche, despite of
the competition. In e-tailing, you would rather have many competitors and still have access to a huge market, than limit both,
since entrepreneurial skills can move a business toward the top.
Inventory and Real Estate Costs
The typical retail store business model requires several thousand square feet for inventory displayed in a pleasing manner on
shelves, a checkout stand, and a backroom for extra inventory. In addition, since the retailer is trying to attract walk-in traffic, this
real estate must be zoned commercially, requiring high lease costs per square foot. E-tailers, on the other hand, since they never
meet the public face-to-face, can occupy space in a home office, a garage, less expensive office space, or lower cost light
industrial warehouse space. This saves substantial overhead.
No matter the differences in the models, however, there remains the need for inventory space. E-tailers meet this need in one of
four ways:

Warehouse Inventory: This is the typical e-tail approach: purchase inventory and place it in warehouse space where it is
accessible to employees who pick, pull, pack, and ship to customers. This approach is expensive, since you are paying for
both warehouse space, and have capital tied up in inventory on the shelves. However, this method allows the best quality of
customer service, since shipping and inventory records are maintained in-house. This is Amazon.com’s current method,
having built five large regional warehouses in key but low-cost areas of the US near shipping depots.

Local Distributor: After receiving a day’s orders, the e-tailer purchases the products from a local distributor, and then
transports them to his own facility for packing and shipping. This was Amazon.com’s original method of fulfillment when
it was small, using an Ingram book distribution outlet in the same city. The method only works where the distributor can
keep an adequate stock on hand that the e-tailer can obtain quickly. The advantage is that the e-tailer does not have capital
tied up in inventory or unneeded warehouse space, has all the shipping records on hand, and has a good idea of the
distributor’s stock. The disadvantage is that the e-tailer is very dependent upon his distributor’s supplies, and may not be
able to accurately reflect available inventory to his shoppers before they purchase.

Drop Shipping: Some manufacturers and distributors will allow e-tailers to fax an order or send an electronic order. The
manufacturer or distributor then ships from its warehouse to the customer, using the e-tailer’s packing slip and labels. This
saves the e-tailer from investing in expensive inventory and warehouse space, but the e-tailer pays a higher than normal
wholesale price for the product, cutting the e-tailer’s margins. Many e-tailers use this method because it requires little startup capital. The problem is difficulty in providing good customer service, since the e-tailer does not always have good
communication with drop-shippers about product availability, back-orders, and shipment dates. Many e-tailers keep an
inventory of their best selling products and sale items on hand, and rely on drop shipping for less popular products. This
way they can provide good customer service most of the time on popular items but make a comprehensive line of products
available for their customers to order.

Fulfillment Houses: Some businesses specialize in providing full warehouse, inventory ordering, customer call center, and
shipping services to mail order merchants and e-tailers. While the e-tailer does not lease his own warehouse, he pays for
inventory that is stored in the fulfillment house’s warehouse, and fees based on the space required to store it. The advantage
is that e-tailers can outsource product fulfillment to those who can do it most efficiently. This works best with unique
products that have higher profit margins. With commodities, there just are not enough margins to pay for fulfillment house
services.
468 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Fulfillment Costs
Retailers provide product fulfillment to their customers by stocking shelves, providing shopping carts with real (not virtual)
wheels, checkout stands, and plastic bags in which shoppers carry purchases to their cars. E-tailers’ costs include shipping
department employees, boxes, tape, internal packing, shipping costs (usually passed on to the customer), and order tracking.
Of course, fulfillment costs are closely related to the inventory method selected. If you carry inventory in-house and have your
own shipping department, you are betting that your costs will be lower this way than outsourcing to companies that are set up to
do this very efficiently. Many analysts believe that fulfillment costs, along with customer acquisition costs, will determine
whether an online store can stay in business or not. This is a big, unseen e-commerce key. The more efficient your shipping
operation, the better your overall profit margin. The more time and money consumed by inefficient operations, the more likely
you are to fail.
Customer Service Costs and Returned Goods
Closely related to the method of fulfillment you choose is the level of customer service you can provide. Smaller retail stores
designate one or two key employees who handle time-consuming customer inquiries, complaints, and returns. Larger stores have
a customer service desk where customer service inquires are handled. There is no money to be made here. In fact, bins behind the
customer service counter contain many returned items that are a drain on profits. The purpose, however, is to retain customer
confidence and good will. Smart retailers follow the dictum that the customer is always right — even when he is wrong. A
displeased customer can easily decide to both (1) never shop in the store again, and (2) tell several others how badly he was
treated. Customer trust is ground-zero for business success.
E-tailers often neglect customer service. The large e-tailers learned the miseries of poor customer service during Christmas 1999.
However, many smaller e-tailers have yet to take customer service seriously. Instead of a customer service desk, e-tailers usually
provide a customer service e-mail address. Smarter e-tailers provide a telephone number where dissatisfied customers can quickly
speak to a real person. Live chat can also provide instant real-person attention. Customer service can sometimes be outsourced to
call centers or fulfillment houses. Nevertheless, great customer service is the second big key to e-tailing success. Since customers
are so expensive to acquire, to make any money, existing customers must be retained at whatever cost — since that cost is very
likely to be lower than customer acquisition costs.
The economies scales of Conventional multi brand and single brand retail store can achieved in the market with huge customer
base whereas online retail is not restricted on geographical customer base.
IMPORTANCE OF ETAILING FOR CUSTOMERS
The customers in metro and urban cities have the easy access to various single brand and multi brand retail outlets. However, the
customers of suburban and non-metro cities are not having access to such retail outlets. With the growth of technology, various
online stores have evolved and which are able to provide various brands to the customers easily and at less expensive prices. This
study is an effort to find out the acceptance of online marketing over conventional retail. The proposed research will also help to
identify the factors for comparison between online retail and conventional retail. Retailers are increasingly leveraging their
presence across channels of catalogue, web, stores and kiosks, to increase their share of the customer’s wallet and expand across
consumer segments. Recent studies on consumer shopping behaviour indicate that multichannel shoppers show a significantly
higher value and frequency of purchase than single channel shoppers. It will also help the marketing company to adopt the
adequate distribution network for the customers of sub urban and non-metro cities.
E-TAILING: THE FUTURE
E-Tailing is emerging as an attractive alternative to the traditional brick-and-mortar retaining. Chances are that they will
co-exist profitably
Retail or to e-tail? That sounds like a Shakespearean dilemma. You ask any retailer; chances are that he will say both.
It all began a couple of years ago. Retailing as an attractive business was slowly emerging out of the shadows. Quite a few
corporate houses began looking at retailing as one way to corporate salvation. Notable among them are: the R P Goenka group,
the Tata, the S Kumars, the Rajan Raheja group and the Ajay Piramal group. In addition, many more are still in the process of
finalizing their forays into retailing.
The Dilemma
Even as loose ends of retailing plans are being tied up, e-tailing has begun catching the attention of many entrepreneurs.
Suddenly, you started hearing e-tailing names such as Rediff.com, Jaldi.com, Fabmart.com, Tsnshop.com and Satyamonline.com.
This could well be the beginning of an e-tail revolution.
469 | P a g e
ISSN (P):2279-0934, (O):2279-0942
As the new sensation unfolds, it should be understood that retailing is serious business. Thanks to the popularity of the Internet, etailing is assuming greater significance. A number of products and services are on e-tail offer and novel plans are being worked
out by many e-tailers. Consider Skumars.com for instance.
Skumars who had earlier wanted to offer its franchise only to those having 2,000 square feet space has now improved its offer. It
is now offering its franchise in Skumars.com to those possessing just 50 square feet space. So, the dilemma continues: to retail or
to e-tail?
How large is the retailing industry? Is e-tailing large enough to take on so many players? True, both retailing and e-tailing are still
nascent and growing. One estimate by consultants KSA Technopak is that the organized retailing sector should be as large as Rs
5,000 crore and e-tailing in India should be just about Rs 12 crore. Says K Vaitheeswaran, vice president (marketing) of the
Bangalore-based Fabmart: "But then the growth potential for both retailing and e-tailing is tremendous."
What is the rationale behind such an assertion? Anything, which involves a direct sale to a consumer at any point of time, could
be termed as retailing, be it selling of books, apparels, footwear’s, music or even grocery among other things. Such a retail trade
could take place in a shopping mall, in a department store or in a basic mom-and-pop store or in a friendly neighborhood grocer's
shop. Most of such retail trades that can be done through the brick-and-mortar retailing route can be successfully replicated on the
Internet as well.
DISTINCT FEATURES
However, if one bothered to get down to the nitty gritties of retailing and e-tailing, the differences in the way business is
conducted in both the segments should become clear.
A retailer is restricted to a particular location, retailing is location-driven. However, an e-tailer can go global. Being local in
nature, a brick-and-mortar retailer has to identify a good location for his operations and wait for customers. On the other hand, an
e-tailer has to virtually attract a customer to his site and offer him exemplary services. In fact, location is no longer the key to
success if e-tailing is what we are talking about. Thus, while the target customer remains the same in both retailing and e-tailing,
the mode of conducting business is changing dramatically.
There is another distinct feature of e-tailing that is challenging. In retailing, as much as 50 per cent of the initial investment could
go towards acquiring real estate. Post-acquisition of real estate, a retailer has to spend considerable time, effort and money in
setting up his shop, stocking inventory and creating display patterns. Thanks to web-driven retailing, an e-tailer has no such
hassles. However, there is a challenge before him: retaining a customer who has shopped through his site.
Retaining an E-Tail Customer
That is more than just a challenge. The primary aim of every e-tailer is to attract a prospective customer to his e-tail site. That
calls for a large ad spend. Naturally, there has been a surge in dot.com advertising in countries such as the United States. Dot.com
ad spends is so large that as much as two-thirds of the capital raised by dot.com companies are spent towards advertising? Ad
spends by dot.com companies are so huge that whatever savings achieved in the areas of real estate and inventory is more than
offset.
The question remains: after that entire ad-spend, will the customer remain loyal to the e-tailing site. As per Jaldi.com: "The
Internet customer is very hard to predict and is different from the normal customer. Retaining him is not so simple. While a
retailer expects strong loyalty, such a loyalty on the Net is difficult to obtain. A customer may shift from the Internet if someone
else offers him a better deal."
That is why Jaldi.com will be using a mix of marketing tools such as public relations, advertising, promotions, direct marketing
and Internet advertising to spread awareness among its target audience. Jaldi.com went a step ahead. Its offline promotions started
with a successful consumer launch held at Priya PVR I theatre in New Delhi where 3,600 free Phir Bhi Dil Hai Hindustani tickets
were given to every customer who logged on and registered at the site Jaldi.com.
What all these tell you is one simple thing: customer retention is the toughest thing on the web. As per K. Ramesh, vice president
of i2inext.com: "First of all, it is difficult to get a consumer come to your site. After he comes in, the task is to retain him and get
him frequently. Once he is confident about you, he will use his credit card to make his purchases at your site."
Changing Economics
That is one aspect of the e-tailing promotion. In fact, it has been observed in countries such as the USA, traditional retailers,
despite the strength of their brand equity and their existing relationships with suppliers and customers find it extremely hard to
compete online. Reason: the vast difference between the retailing and the e-tailing segments.
470 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Though this is true, the web offers a host of advantages, which may tilt the economics in its favour. The Internet world could
transform much of the traditional economics of retailing. While a physical store caters only to a particular locality, the Internet
reaches out to the world. The fallout: in e-tailing, the e-tailer goes for a bigger and wider audience and still be in touch with
individual preferences.
Another approach that is emerging in e-tailing is to re-examine the normal retailing value chain. The web makes it possible to
dispense with much of the traditional value chain altogether, thanks to direct sales by manufacturers to consumers. There is
another side to this approach. According to some e-tailing specialists, web retailing also creates new points in the value chain.
Example: Internet portals that act as shopping malls or intermediary aggregators such as Vasool.com that offers a new way of
amassing buying power.
Certainly, the economics of the Internet offers a powerful first mover advantage. An e-commerce operation on the web can be
scaled up at a low cost in such a way that its physical equivalent cannot. In addition, even among e-tailers there is the first mover
advantage. If the first mover gets everything right - its website, its order fulfillment and distribution - a newcomer might find it
much harder to beat an established person at the game. Biren Ghose, chief executive officer (new media) of United Television,
which owns the site Tsnshop.com, says, "The first time a person shops on the Net is always a special occasion."
Shopping on Net
Why should anyone shop on the Net? What is the incentive to try a new medium of shopping?
If anyone has to try this new medium of shopping, there should be overwhelming reasons for doing so. The benefits must go
beyond mere convenience. For one, the consumer will certainly be interested if he gets things cheaper on the net. The Net being a
new medium, we have to convince people to use this new medium to buy." "For convincing, a customer to use this new medium,
one has to offer an incentive to buy on the Net. Otherwise, it would be very difficult to get a customer to shop with you."
According to consultants KSA, easier and faster shopping are the reasons for shopping on the Net.
You can go to a brick-and-mortar retailer who could offer you 10,000 items in his store. Chances are that he might be 10 per cent
out of stock. On the other hand, the Internet offers millions of products with no chances of an out of stock situation.
Easy and comfortably obtained info is another advantage that shopping on the Net offers. On the Internet, product information is
just a few clicks away, all accessed in the comfort of a home. Traditional retailing stands out in stark contrast: the consumer
searches frantically, runs up and down, and grills a poorly trained store assistant who is unable to help him out. In the bargain,
valuable time is lost. Simply put, shopping on the Internet for, say 15 minutes could save a two-hour trip to the mall. Consumers
prefer to save this time so that they can devote more time for their professional and domestic priorities.
THE HURDLES
Is shopping on the Net really catching on in India? The Indian scenario is quite different from that of the West. For good reasons.
Indians have always been great shoppers and enjoy shopping anywhere in the world. With malls and departmental stores
springing up in India now, Indians are just beginning to get a taste of things to come. Internet shopping is one such taste, which
the Indians have begun to savour.
There are hurdles here, however. One, need for a critical mass. This is vital for any successful e-commerce project. Consider:
growth in e-commerce will come not from well-designed websites or web-marketing but from deeper penetration of the Internet.
That is why a case has been made out for increasing broadband Internet connections, which are faster than the dial-up
connections.
One estimate is that India has mere 20-lakh Internet users, mostly concentrated in the metros. Web analysts feel that in many areas
of retailing and commerce, Internet is unlikely to garner a sizable slice of the market. In addition, that could be for several years to
come. This is true, especially in businesses where margins are thin. Consider fast moving consumer goods, the FMCG sector.
Says Devangshu Dutta, general manager of KSA Technopak: "In the Indian FMCG business, margins are as low as 10 per cent.
Hence, e-tailing in such areas might not catch on."
Two, despite a higher Internet penetration, cities like Mumbai or New Delhi might not be a haven for an e-tailer. Reason: for
things like grocery, there is a shop out there at every nook and corner. All that an individual has to do is just make a phone call
and the goods are delivered at his doorstep. Thrown in along with free home delivery is a month's credit. In case of perishables
such as fruits and vegetables, the Indian buyer prefers them farm-fresh. What does he do? While returning from work, they drop
in at the vegetable market and complete their purchases.
Three, cheap labour. Thanks to easy availability of domestics at an affordable wage bill, quite a few of the rich customers hire
them for doing domestic chores, which include shopping.
471 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Four, the usual Indian aversion to use credit cards. Thanks to low penetration of credit cards and the lack of popularity of debit
cards, e-tailing might find it an uphill task to catch on.
It is not just the aversion to credit cards. Says Viraj Savant, director, DBS Internet Services: "Elder citizens are averse to using
even the computer." However, they are at ease while using the remote control of a television set. That throws up an interesting
solution. Accessing the Internet through a television in the near future might be something that an individual should be offered if
e-tailing is to grow faster. The last and the most important hurdle to the growth of the e-tailing industry is the efficient
management of logistics. Here the role of a courier company is extremely important. Most portals offering e-commerce have tied
up with courier companies. For instance, Jaldi.com has tied up with Gati for taking care of their delivery logistics.
There are other examples too. Blue Dart plans to enter the household shipment business in a big way to serve the needs of the
online community in India. Looking at the coming e-commerce boom, Blue Dart is targeting an 80 per cent annual jump in its
business, mostly from the shipment requirements of its online customers. For this purpose, Blue Dart has already invested Rs 40
crore to tune up its existing infrastructure and interface it with e-commerce potential.
On the technological front, Blue Dart is upgrading its intranet facility, linking 1,300 terminals with over 2,000 people at 70
locations to meet the e-commerce requirements. This means that e-shoppers in these locations can log on to Bluedart.com and ask
for the shipment of ordered goods from these e-shops. In addition, Blue Dart has aligned with leading portals and e-shops like
Rediff.com and Fabmart.com to meet their distribution needs.
What Will Work?
The most important question now is this: what kind of retailing model is going to deliver the goods in the Indian scenario?
For an answer, consider the following. The most important cost advantage of e-tailing comes from whittled down shop front costs
and elimination of intermediaries and economical distribution. For example, book e-tailing means dispensing with big shops
replete with slow-moving stock. Consider the case of Amazon.Com, where the orders go straight to the wholesaler. That means
the working capital costs are cut down drastically. Not just that, an e-tailer is paid before he pays his distributor. The implication:
need for lower working capital.
However, one has to compare these gains against certain web-related costs that have to be provided for. Running a website and
servicing it to ensure that it is cent per cent reliable is not easy. Logistics and distribution are of utmost importance and that is
where many e-tailers are known to have gone wrong. While it is true that many e-tailers have been able to cut costs, they have lost
large sums of money in the process of offering goods at low prices. A few of them who have made profits have ploughed them
back for financing customer acquisition or retention.
Not all these mean an end to traditional retailing. E-tailing will have to co-exist with traditional retailing. Says Vaitheeswaran:
"For things such as music and books, a whole new market will be created. This will increase the market manifold." E-tailers will
have to work in combination with traditional retailers. Even the biggies in the business such as Amazon.com have realized this
and are setting up distribution warehouses for the same.
As the combination of retailing and e-tailing set to deliver the goods, the trend of using the Internet as another service medium
will gradually catch up. E-tailers like Jaldi.com have already set up kiosks in various cities, which have been successful.
Tsnshop.com makes use of its teleshopping network franchisees in various cities for selling its products. Says Ghose: "It helps in
gaining customers fast as individuals have the option of returning the goods purchased if they do not like it. They can just go
across to the shop. This gives them a certain level of comfort and confidence." Such a comfort and confidence-level is necessary
for a successful e-tailing venture.
Forecasts about e-tailing abound. Sample one of them here. Says Goel: "My forecast is that a 10-crore population shopping for a
minimum of Rs 100 per year in the next one year. This should translate into a business of Rs 1,000 crore."
On balance, what we are witnessing now is certainly a tip of the iceberg. Such is the growth potential in the e-tailing industry that
it is not possible to put a figure against the industry's size or growth. Therefore, there are pluses and minuses in the case of
retailing and e-tailing. With so many hurdles around for e-tailing, it would be long time before e-tailing really catches up.
However, the trend has begun. The model, which will work in such an Indian context, is this: a peaceful and complementary coexistence of retailing and e-tailing.
REFERENCES
1.
Baye, M. R., Morgan, J., & Scholten, P. (2003). The value of information in an online consumer electronics market.
Journal of Public Policy and Marketing, 22, 17-25.
2.
Guttman, Robert H., Moukas, Alexandros G., & Maes, Pattie. (1998). Agents as mediators in electronic commerce.
International Journal of Electronic Markets, 8(2), 22–27.
472 | P a g e
ISSN (P):2279-0934, (O):2279-0942
3.
Haubl, G., & Trifts, V. (2000). Consumer decision making in online shopping environments: The effects of interactive
decision aids. Marketing Science, 19(1), 4-21.
4.
Kalyanam, K., & McIntyre, S. (2002). The E-Marketing Mix: A contribution of the E-tailing wars. Journal of Academy
of Marketing Science, 30(4), 487-499.
5.
Kim, S. Y., & Lim, Y. J. (2001). Consumers' perceived importance of and satisfaction with internet shopping.
Electronic Markets, 11(3), 148-154.
6.
Metters, R., & Walton, S. (2007). Strategic supply chain choices for multi-channel Internet retailers. Service Business,
1, 317-331.
7.
Rabinovich, E. (2004). Internet retailing intermediation: A multilevel analysis of inventory liquidity and fulfillment
guarantees. Journal of Business Logistics, 25, 139-170.
8.
Rao, Bharat. (1999). The Internet and the revolution in distribution: A cross-industry examination. Technology in
Society, 21(1), 287-306.
*****
BUSINESS PROPOSAL FOR CONFERENCES PUBLICATIONS IN JOURNALS / AS PROCEEDINGS
We are pleased to present this proposal to you as publisher of quality research findings in / as Journals / Special Issues, or
Conference Proceedings under Brand Name ‘Pezzottaite Journals’. We aims to provide the most complete and reliable
source of information on current developments in the different disciplines. The emphasis will be on publishing quality articles
rapidly and making them available to researchers worldwide. Pezzottaite Journals is dedicated to publish peer-reviewed
significant research work and delivering quality content through information sharing.
Pezzottaite Journals extends an opportunity to the ‘Organizers of Conferences & Seminars’ from around the world to
get ‘Plagiarism Free’ research work published in our Journals, submitted and presented by the participants within the
said events either organized by /at your Department / Institution / College or in collaboration.
As you know, the overall success of a refereed journal is highly dependent on the quality and timely reviews, keeping this in
mind, all our research journals are peer-reviewed to ensure and to bring the highest quality research to the widest possible
audience. The papers submitted with us, will follow a well-defined process of publication and on mutual consent. Publications
are made in accordance to policies and guidelines of Pezzottaite Journals. Moreover, our Journals are accessible worldwide as
‘Online’ and ‘Print’ volumes.
We strongly believe in our responsibility as stewards of a public trust. Therefore, we strictly avoid even the appearance of
conflicts-of-interest; we adhere to processes and policies that have been carefully developed to provide clear and objective
information, and it is mandate for collaborating members to follow them.
Success Stories:
We had successfully covered 4 International Conferences and received appreciation from all of them. If you have any query,
[email protected], [email protected]. We will respond to your inquiry, shortly. If you
have links / or are associated with other organizers, feel free to forward ‘Pezzottaite Journals’ to them. It will indeed be a
pleasure to get associated with an educational institution like yours.
(sd/-)
(Editor-In-Chief)
FOR ANY CLARIFICATION OR SUGGESTION, WRITE US:
Editor-In-Chief
Pezzottaite Journals,
24, Saraswati Lane, Bohri, Near Modern Dewan Beverages,
Jammu Tawi – 180002, Jammu and Kashmir, India.
(Mobile): +91-09419216270 – 71
[email protected],[email protected]
473 | P a g e
ISSN (P):2279-0934, (O):2279-0942
A STUDY ON WOMEN ENTREPRENEURS IN BEAUTY CARE SERVICE INDUSTRY
WITH SPECIAL REFERENCE TO VIRDHUNAGAR DISTRICT
Dr. A. Sujatha3 P. Jeyachitra4 M. S. Sooriyakala5
ABSTRACT
The field of entrepreneurship is characterized by competition, financial gain and independence, and the socio-economic
setting provides a base for individuals to venture into entrepreneurship. Individuals perform the entrepreneurial role because
of a desire to achieve, and individuals with a high need for achievement venture into enterprise building, whether small or
large. This paper presents findings on the reasons why women group venture into business and what motivates them to do so.
The analysis is based on primary data collected from district of Virudhunagar.
Though the central government and state governments have launched many entrepreneurial development programmes
especially for women, there is no remarkable achievement in rural areas. Therefore, an attempt has been made to identify the
problems faced by women Entrepreneurs and to take suitable remedial measures to overcome their problems.
KEYWORDS
Women Entrepreneur, Beauty Care, Service Industry, Business, Entrepreneurial Development Programmes etc.
PREAMBLE
Entrepreneurs exhibit determination to make their business dream a reality; this is fuelled by a position for success. The pursuit of
an entrepreneurial opportunity is an evolutionary process in which entrepreneurs select out many steps along the way, make
decisions to positively evaluate opportunities, to pursue resources and to design the mechanism of exploitation.
Traditionally, women’s occupational status has always been closely associated with the home and the family. She has only a
secondary status because she is economically dependent on her father or husband. In both the industrially advance and less
developed countries women are bound with cumulative inequality because of social – Cultural and economic discriminating
practices.
The role and degree of integration of women in economic development is always an indicator of women’s independence, social
status and is a measure of women’s contribution to the economic development.
STATEMENT OF PROBLEM
A large number of women are mainly engaged in subsistence agriculture as well as in micro and small-scale enterprises (MSE). In
most of the developing countries, women constitute 70-80 per cent of the total agricultural labour force and they account for over
80 per cent of food production. It is not surprising therefore to find many women engaged in food processing, weaving, personal
services, beverage preparation, and selling of snack foods. In the MSE sector worldwide, women make up one-quarter to onethird of the total business population and in manufacturing, they constitute one-third of the global labour force. In addition to their
economic and income-generating activities, women assume multi-faceted roles in society, i.e. as breadwinner of a family, unpaid
family worker, service providers in the communities and mother/care-taker of the family. Hence, this paper attempts on the
reasons why women group venture into business and what motivates them to do so.
REVIEW OF LITERATURE
Ms. Themozhi G., in her study titled “A Study on Women Entrepreneurship in Coimbatore District” has provided the status of
women, motivational factor with their relation to socio–economic background of women entrepreneurs. She has covered the
entrepreneurial performance of women and the various constraints encountered by women.
Ms.Chandra P., in her study “Women Entrepreneurs: A Study with Special reference to Beauty palours in Virudhunagar District”
has found that majority of the beauty parlour women entrepreneurs has been facing financial problems.
Ms. Nisha Ashokan in her study titled “Measuring the Performance of Enterprises run by Women Entrepreneurs in Chennai” has
analyzed the financial efficiency and the financial stability of enterprises run by women entrepreneurs.
3Head
of Department, P.G. Commerce, Sri Kaliswari College, Tamil Nadu, India, [email protected]
Scholar, Sri Kaliswari College, Tamil Nadu, India, [email protected]
5Research Scholar, Sri Kaliswari College, Tamil Nadu, India, [email protected]
4Research
474 | P a g e
ISSN (P):2279-0934, (O):2279-0942
OBJECTIVES OF STUDY


To know the socio economic background of the women entrepreneurs.
To study the success factors of women entrepreneurs in beauty care service.
RESEARCH METHODOLOGY
The present study is empirical one based on survey method. The data were collected from both primary and secondary source.
The primary data were collected from women entrepreneur who engaged in beauty care service by means of interview schedule.
The study aims at analyzing women entrepreneur engaged in beauty care services and their problems on starting and carrying out
beauty care service. The collected data were tabulated and analyzed in a systematic manner. Percentage analysis, Descriptive
analysis, Statistics, ANOVA, Factor analysis was administered to test the hypotheses.
DATA ANALYSIS & INTERPRETATION
Demographic Factors of Respondents
a) Age-Wise Classification of Respondent
The Age is an important aspect of self-development since the resistance to change is relatively less when older. The young are
generally interested in learning things and taking risks, essential for entrepreneurship. However, elders have more knowledge and
experience. Therefore, the age of the women entrepreneurs is included in the present study.
Table-1: Age-wise Classification of Respondents
S. No.
1
2
3
4
Age Group
Below 30
30 to 40
40 to 50
Above 50
Total
Sources: Primary Data
Number of Respondents
20
42
33
5
100
Percentage
20.0
42.0
33.0
5.0
100
The Table shows clearly that the age group of the respondents 20 percent of them belongs to the age group between 30, 42 percent
of them between the age group of 30 to 40 and 33 percent of them are 40 to 50 years and 5 percent of them belong to the age
group of above 50 years. Inference: 95 per cent of the study respondents are less than 50 years of age.
b) Martial Status of Entrepreneurs
The marital status of the women entrepreneurs may influence the need of finance and the mode of earnings. It may also determine
the ability to start the enterprise and the selection of the enterprise. It can influence the psychological framework of entrepreneurs.
In the present study, the marital status of women entrepreneurs is classified as single, married, divorcee and widow.
Table-2: Marital Status of Respondents
S. No.
1
2
3
4
Marital Status
Single
Married
Divorcee
Widow
Total
20
55
14
11
100
Percentage
20.0
55.0
14.0
11.0
100
Above table reveals that out of 100 entrepreneurs a maximum of 55 per cent women entrepreneurs are married, 20 per cent of the
entrepreneurs are single, 14 per cent of the entrepreneurs are divorcee and remaining 11 per cent of the respondents are widows.
Inference: Most of the respondents of the study are married.
c) Motivational Factor
The role of women entrepreneurs in the process of economic development has been recognized from nineties in various parts of
the world. Today, in the world of business, women entrepreneurship has become an essential movement in many countries and
has been accepted in all areas of working. The United Nations report has also concluded that economic development is closely
475 | P a g e
ISSN (P):2279-0934, (O):2279-0942
related to the advancement of women. In nations where women have advanced, economic growth has usually been steady. By
contrast, in countries where women have been restricted, the economy has been stagnant. Women become entrepreneurs due to
several factors, which may be grouped under “Pull factors” and “Push factors”.
Factors influencing the women entrepreneurs are pull factors and push factors:
Pull Factors are encouraging factors, they are:




Desire to do something.
Need for independence.
Availability of finance.
Concessions and subsidies given by the government.
Push Factors are compelling factors, they are:



Unfortunate family circumstances (death of husband & or father).
Financial difficulties.
Responsibility towards family.
d) Ambition Factors
Table-3: Respondents’ Ambition Factors to Start the Parlour
Ambition Factors
Self Employment
To Improve Status
To Earn Money
Family Business
1.00
40
40.0%
30
30.0%
38
38.0%
19
19.0%
Count
%
Count
%
Count
%
Count
%
Ranks
2.00
3.00
20
18
20.0%
18.0%
21
17
21.0%
17.0%
27
30
27.0%
30.0%
24
33
24.0%
33.0%
4.00
22
22.0%
32
32.0%
5
5.0%
24
24.0%
Table-4: Descriptive Statistics
Ambition Factors
Self Employment
To Improve status
To Earn money
Family Business
Valid N (list wise)
N
100
100
100
100
100
Mean
2.1900
3.1700
2.0200
2.6200
Std. deviation
1.04151
1.09226
.94259
1.05198
The above table shows that the respondents’ ambition to start the parlour is to earn money followed by self-employment, family
business and to improve status.
e) Opportunity Factors
Table-5: Respondents’ Opportunity Factors to start the Parlour
Opportunity Factors
Government Support
Low Investment
Previous Experience
Education in this field
Count
%
Count
%
Count
%
Count
%
1.00
4
4.0%
33
33.0%
36
36.0%
29
29.0%
Ranks
2.00
3.00
14
32
14.0%
32.0%
15
28
15.0%
28.0%
33
20
33.0%
20.0%
35
21
35.0%
21.0%
4.00
50
50.0%
24
24.0%
11
11.0%
15
15.0%
476 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-6: Descriptive Statistics
Opportunity Factors
Government Support
Low Investment
Previous Experience
Education in Field
Valid N(list wise)
N
100
100
100
100
100
Mean
3.2800
2.4300
2.0600
2.2200
Std. deviation
.85375
1.18283
1.00323
1.03064
From the Table, it is found that the respondents’ opportunity factor to start the parlour as previous experience followed by
education in this field, low investment and the government support
SUGGESTIONS



Entrepreneurship is a dynamic concept and no specific personality attribute can generate success. However, the
technical knowledge and skill, parental support, previous job experience may help an entrepreneur to compete
successfully in the market.
An awareness of various entrepreneurial risks helps an entrepreneur to build up strategies to control/ counter them and
become successful.
The location advantage is also a factor of success. It decides the direction of development of grass root
entrepreneurship.
FINDINGS
The various problems, which stand in the way of speedy growth of women entrepreneurs, have been listed. In addition to them,
some suggestions are also made:




95 percent of the study respondents are less than 50 years of age.
Most of the respondents of the present study are married.
The respondent’s ambition factor to start the parlour is to earn money followed by self-employment, family business
and to improve status.
The respondent’s opportunity factor to start the parlour is previous experiences followed by education in this field, low
investment and the government support.
CONCLUSION
Entrepreneurial movement started late and is still in its infancy. The movement requires pre and post follow up support to utilize
women power in the country’s economic development. A co-ordinate role of the government and voluntary agencies with an
integrated approach will help to develop women entrepreneurship.
REFERENCES
1.
Desai, Vasant. Dynamics of Entrepreneurial Development. Delhi: Himalaya Publishing House, pp. 14.
2.
Saravanavel. P. (1997). Entrepreneurial Development. Madras: ESS, Peekay Publishing House, pp. 66.
3.
Themozhi, G. (1994, October). A Study on Women Entrepreneurship in Coimbatore District (Doctoral Thesis).
Madurai Kamaraj University.
4.
Selvarani, K. (2004). Women entrepreneurship and venture management–A Study in Virudhunagar District
(Doctoral Thesis). Madurai Kamaraj University.
5.
Ruddardatt, & K., P. M. Sundaram. (2000). Indian Economy. S. Chand and Company.
6.
Kazmi, Azhar. (1999). What young entrepreneurs think and do: A study of second generation Business Entrepreneurs.
The Journal of entrepreneurship, 8(1). New Delhi: Sage.
*****
477 | P a g e
ISSN (P):2279-0934, (O):2279-0942
IMPACT OF FOREIGN DIRECT INVESTMENT ON RETAIL SHOPS
Dr. Prasanna Kumar6
ABSTRACT
The main question being raised is whether the traditional mom and pop stores will survive and co-exist or leave the field for
major organized retail players. The answer could be a co-existence. The major advantage for the smaller players is the size,
complexity and diversity of our Indian Markets. If we look at the organized retail players, most of them have opened shop in
the Metros, Tier 1 and Tier 2 towns. Very rarely do we find organized players in the rural areas and we have more than 70%
of the population living in the rural areas. There is a multitude of reasons being floated around to prevent the liberalization Of
the FDI norms for Indian retail: Primary among these is the concern regarding the kirana stores as well other locally operated
Mom and Pop stores being adversely affected by the entry of global retail giants such as Wal-Mart, Carrefour and Tesco. As
these brands would come with advanced capabilities of scale and infrastructure in addition to having deep pockets, it is argued
that this would result in the loss of jobs for lakhs of people absorbed in the unorganized sector.
On the contrary, it would lead to the creation of millions of jobs as massive infrastructure capabilities would be needed to
cater to the changing lifestyle needs of the urban Indian who is keen on allocating the disposable income towards organized
retailing in addition to the local kirana stores. These stores would be able to retain their importance owing to their unique
characteristics of convenience, proximity and skills in retaining customers. In addition, these would be more prominent in the
Tier-II and Tier-III cities where the organized supermarkets would find it harder to establish themselves. FDI in multi-brand
retail is therefore a necessary step that needs to be taken to propel further growth in the sector. This would not only prove to
be fruitful for the economy as a whole but will also integrate the Indian retail sector with the global retail market. It is not a
question of how’ it will be done but when‘.
FDI investment In India has been the subject of active debate for a long time. Its introduction has been challenged and entry
has been opposed by many organizations. However, it benefit to the Indian context. The major driver for the development in
the retail sector is mainly due to consumers ‘choice preference’. Though there was a restriction in the direct investment, many
foreign players are finding new ways to enter the market. Currently we have 51% Foreign Direct Investment (FDI) in the retail
trade of single brand products and to the extent of 100 per cent in Cash and Carry wholesale formats. However, lot of retailers
suffers from FDI and they are losing their customers and sales expansion from FDI. I was taken 100 samples to investigate the
data on “impact of FDI on retail shops” finally; the result was 69% of FDI impact on retail shops so H1 is accepted.
KEYWORDS
FDI, Retail, Investments, Franchise, GDP, Reserve Bank of India, Shops etc.
INTRODUCTION
The retail industry in India is the second largest employer with an estimated 35 million people engaged by the industry. There has
been opening of Indian economy to foreign organization for foreign direct investment through organized retail. The union
government has sanctioned 51% foreign direct investment in multi-brand like Wal-Mart, Carrefour, and Tesco up to 100% in
single brand retail like Gucci, Nokia and Reebok. This will make foreign goods and items of daily consumption available locally,
at a lower price, to Indian consumers. The new policy will allow multi-brand foreign retailers to set up shop only in cities with a
population of more than 10 lakhs as per the 2011 census. There are 53 such cities. This means that big retailers can move beyond
the metropolises to smaller cities. The final decision will however lies with the state governments. Foreign retailers will be
required to put up 50% of total FDI in back-end infrastructure excluding that on front-end expenditures. Expenditure on land cost
and rentals will not be counted for the purpose of back-end infrastructure. Big retailers will need to source at least 30% of
manufactured or processed products from small retailers. The government will go for surprise checks and if found irregularities
then the deed will be broken with a second of time. Homegrown retailers have not muscles and the reach to go for the big game
like Subiksha and Vishal Retail. They have expanded their retail chain but did not have the resources to manage the backend
across several cities. If we look rationally at the FDI in retail sector then it will be a win-win situation for all.
Foreign Direct Investment
Foreign Direct Investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management
interest (10 percent or more or voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum
of equity capital of the long-term capital, and short-term capital as shown in the balance of parameters. It usually involves
participation in management joint venture, transfer technology, and expertise. There are two types of FDI: inward foreign direct
investment and outward foreign direct investment result in in a net FDI inflow (positive or negative) and “stock of foreign direct
6Associate
Professor, K.L.U. Business School, K. L. University, Andhra Pradesh, India, [email protected]
478 | P a g e
ISSN (P):2279-0934, (O):2279-0942
investment” and outward foreign direct investment, which is the cumulative number for a given period. Direct investment
excludes investment through purchase of shares.
FDI may be distinguished into:
Horizontal Foreign Investment (HFI): It refers to investment of a firm in a foreign country to produce the same products which
produce in its home country.

Horizontal FDI implies that FDI is undertaken in the same industry by the firm as it operates in at home. For example,
Electrolux - a Swedish firm - the manufacturing of household appliances (such as washing machines, refrigerators,
dishwashers and so on) invested in Asia and Eastern Europe for producing similar household appliances is the case of
horizontal FDI.

HFI implies geographical/spatial diversification of the firm's product line.

It represents intra-enterprise product transfer in the process of integration in marketing.
Vertical Foreign Investment (VFI): It is meant for integration process in the production. There may be backward vertical
investment or forward vertical integration.

Backward Vertical Integration (B VI) implies that the firms directly invest in a foreign country to produce intermediate
goods that are meant to be used as inputs in its domestic production process. In extractive investment in petroleum or
minerals usually there is BVI.

Forward Vertical Investment (FVI) implies that the firm invests in a foreign country in producing the final stage goods
or assembly of the product to market it directly to the foreign buyers. FVI, thus, involves establishment of an assembly
plant or sales branch for exports.
FDI Policy in India
Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the
Foreign Exchange Management Act (FEMA) 1999. The Reserve Bank of India (RBI) in this regard has issued a notification,
which consists the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations,
2000. This notification has been amended from time to time. The Ministry of Commerce and Industry, Government of India is the
nodal agency for monitoring and reviewing the FDI policy on continued basis and changes in sectoral policy / sectoral equity cap.
The FDI Policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy
and Promotion (DIPP). The foreign investors are free to invest in India, except few sectors/activities, where prior approval from
the RBI or Foreign Investment Promotion Board (FIPB) would be required.
Scholarly Treatment of Object

Growth in Economy: Due to coming of foreign companies’ new infrastructure will be build, thus real estate sector will
grow consequently banking sector, as money need to be required to build infrastructure would be provided by banks.

Job Opportunities: Estimates shows that this will create about 80 Lakh jobs. These career opportunities will be created
mostly in retail, real estate. However, it will create positive impact on others sectors as well.

Benefits to Farmers: In most cases, in the retailing business, the intermediaries have dominated the interface between
the manufacturers or producers and the consumers. Hence, the farmers and manufacturers lose their actual share of
profit margin as the intermediaries eat up the lion’s share. This issue can be resolved by FDI, as farmers might get
contract farming where they will supply to a retailer based upon demand and will get good cash for that, they need not
to search For buyers.

Benefits to Consumers: Consumer will get variety of products at low prices compared to market rates, and will have
more choice to get international brands at one at one place.

Cheaper Production Facilities: FDI will ensure better operations in production cycle and distribution. Due to
economies of operation, production facilities will be available at a cheaper rate thereby resulting in availability of
variety products to the ultimate consumers at a reasonable and lesser price.

Availability of New Technology: FDI enables transfer of skills and technology from overseas and develops the
infrastructure of the domestic country. Greater managerial talent inflow from other countries is made possible. Domestic
consumers will benefit getting great variety and quality products at all price points.
479 | P a g e

ISSN (P):2279-0934, (O):2279-0942
Long Term Cash Liquidity: FDI will provide necessary capital for setting up organized retail chain stores. It is a longterm investment because unlike equity capital, the physical capital invested in the domestic company is not easily
liquidated.
OVERVIEW OF RETAIL INDUSTRY
Understand the constituents of retail industry and types of retail outlets. A brief discussion on the etymology of the Retail word
followed by a discussion on challenges and need for today from a technology perspective.
Retailers are business firms engaged in offering goods and services directly to consumers. In most—but not all— cases, retail
outlets are primarily concerned with selling merchandise. Typically, such businesses sell individual units or small groupings of
products to large numbers of customers. A minority of retailers, however, also garner income through rentals rather than outright
sales of goods (as in the case of enterprises that offer furniture or gardening tools for rent) or through a combination of products
and services (as in the case of a clothing store that might offer free alterations with the purchase of a suit).
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system
called the supply-chain. A retailer purchases goods or products in large quantities from manufacturers or directly through a
wholesaler, and then sells smaller quantities to the consumer for a profit. Retailing can be done either in fixed locations or online.
Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the
needs of a large number of individuals, such as a public utility, like electric power.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing;
sometimes it is done as a recreational activity. Recreational shopping often involves window-shopping (just looking, not buying)
and browsing and does not always result in a purchase.
Etymology
Retail comes from the Old French word tailer (compare modern French retailer), which means "to cut off, clip, pare, divide" in
terms of tailoring (1365). It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433 (from the Middle
French retail, "piece cut off, shred, scrap, paring").
The Retail Industry
The United States retail sector features the largest number of large, lucrative retailers in the world. A 2012 Deloitte report
published in STORES magazine indicated that of the world's top 250 largest retailers by retail sales revenue in fiscal year 2010,
32% of those retailers were based in the United States, and those 32% accounted for 41% of the total retail sales revenue of the
top 250. The retail industry is a massive part of the overall U.S. economy. In 2005, for example, retail establishments accounted
for 18 percent of all nonfarm private sector jobs and had sales of $3.2 trillion. Moreover, a healthy population of smaller
enterprises characterizes many retail niches; indeed, the vast majority of retail employees in the United States work at
establishments with fewer than 20 employees.
Industry Dynamics
Retail trade is widely known as a very competitive area of commercial endeavor, and observers note that many fledgling retail
establishments do not survive for more than a few years. Indeed, competition for sales has become so great that consumers have
seen a marked blurring of product lines among retailers. Increasingly, retailers have taken to stocking a much greater variety of
goods than their basic industry classification would indicate (bookstores, for example, increasingly stock music products, while
food, liquor, office supplies, automotive supplies, and other wares can all be found in contemporary drug stores). This
development further complicates efforts to establish and maintain a healthy presence in the marketplace. However, for the small
business owner who launches a retail store on an adequate foundation of capital, business acumen, and attractive merchandise,
involvement in the trade can be rewarding on both financial and personal fulfillment levels.
Primary Retail Types
A marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders
set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation
around the whole world. Retail enterprises can be either independently owned or operated or part of a ‘‘chain,’’ a group of two or
more stores whose activities are determined and coordinated by a single management group. A single company may own all
stores that are part of a chain, but in other cases, the individual stores may be franchises that are independently owned by a small
businessperson.
Many different types of retail establishments exist, and, as noted above, the overall industry has seen a significant blurring of the
boundaries that had long separated the wide range of companies operating under the retail umbrella. Nonetheless, retailing
establishments still generally fall into one of the following general categories:
480 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Specialty Stores
These establishments typically concentrate their efforts on selling a single type or very limited range of merchandise.
Clothing stores, musical instrument stores, sewing shops, and party supply stores all fall within this category. A typical
specialty store gives attention to a particular category and provides high level of service to the customers. A pet store
that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under
this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the
respective stores.
Department Stores
These establishments are comprised of a series of departments, each of which specializes in selling a particular grouping
of products. Under this compartmentalized arrangement, consumers go to one area of the store to purchase tableware
and another area to acquire bedding, for example. These typically are very large stores offering a huge assortment of
"soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries
variety of categories and has broad assortment at average price. They offer considerable customer service.
Supermarkets
This is a self-service store consisting mainly of grocery and limited products on nonfood items. The supermarkets can
be anywhere between 20,000 and 40,000 square feet (3,700 m2), example: SPAR supermarket. These retail
establishments, which were primarily involved in providing food to consumers, have increasingly ventured into other
product areas in recent years. They account for the vast majority of total food-store sales in America.
Discount Stores
Tend to offer a wide array of products and services, but they compete mainly on price. They offer extensive assortment
of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. These retail outlets
offer consumers a trade-off: lower prices (typically on a broad range of products) in exchange for lower levels of
service. Indeed, many discount stores operate under a basic ‘‘self-service’’ philosophy.
Mail-Order Businesses and other Non-store Retailing Establishments
The customer can shop and order through internet or mail or other mediums and the merchandise are dropped at the
customer's doorstep. Here the retailers use drop-shipping technique. They accept the payment for the product but the
customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do
not want to travel to retail stores and are interested in home shopping. However, it is important for the customer to be
wary about defective products and non-secure credit card transaction. Example: Amazon, Pennyful and eBay. NonStore sales have become an increasingly ubiquitous part of the American retail landscape; indeed, some retail
establishments subsist entirely on mail / internet order, forsaking traditional stores entirely, while other companies
maintain operations on both levels. This category includes sales made to end consumers through telemarketing, vending
machines, the Internet, and other non-store avenues. Electronic retail has been growing at a significantly higher rate
than retail trade as a whole.
Current Challenges
Consumers today have changed the way they interact with businesses. Prime among them is the means by which they purchase
products, services or offerings. The consumer has adapted to multiple channels and moves easily across channels to search for
products, decide on the best product through discussions with peers, search for the best prices and promotions, finalize a
store/web-store and finally make a purchase. Retailers need to understand this need to service the customers through various
channels, while presenting an integrated view of the business. In the world of retail where product differentiation is minimal and
consumers tend to be price sensitive, there is a need to provide differentiation by creating a consistent experience when consumers
move across channels and create incremental mind share through personalized experience. A proper framework is needed to
understand all the facets of operations and technology, which need to be deployed to deliver on the expectations.
Multi-brand FDI to hit kirana shops: Metro Boss
By Dipti Jain, Sources: The Economic Times
Not just small traders and kirana stores are worried over loss of business if foreign direct investment (FDI) in multi-brand retail is
allowed. Even international chains such as German retailer Metro Cash & Carry believe that the reform move may affect local
businesses.
481 | P a g e
ISSN (P):2279-0934, (O):2279-0942
While the influx of international retail giants will bring in investments in back-end and supply chain management, the Indian arm
of Metro Cash & Carry said this will decrease the importance of small traders in the country as consumers would shift to large
format stores from the local kirana shops.
“Consumers will shift to large format stores, so the relevance of small traders will decrease. Because of substantial increase in
disposable income due to a growing economy, the focus has today shifted from small to large format stores,” said Rajeev Bakshi,
managing director, Metro Cash & Carry, India.
The statement by the German company comes as a surprise especially after international chains have been waiting for the opening
of FDI in the sector as they reason it would benefit smaller players by way of technological enhancements as well as creation of
new jobs, besides giving them an opportunity to tap into the growing retail market in India.
The government and other retailers have argued that the entry will help local outfits get more efficient and innovative and check
wastage as nearly 40 per cent of the farm produce is lost due to poor storage and distribution facilities in the country. Several
global giants such as Wal-Mart and Carrefour are waiting for the government to finally permit FDI in the multi-brand segment, an
area that Metro does not intend to enter immediately.
In recent weeks, the government has pitched for opening up multi-brand retail and even cited the backing it has received from
several states.
The government allowed 100 per cent FDI in single brand retail last year. However, the permission for 51 per cent FDI in multibrand retail had to be put on hold after widespread protests by Congressmen as well as UPA allies, including Trinamool Congress.
While the impact on small traders would affect Metro’s business in the country, the company is betting on a growing business
from hotels, restaurants and caterers (Horeca) for continued growth. “This will indirectly impact our business, but then the other
business takes off. People are eating out much more than before. Therefore, our Horeca business will go up. The net effect on us
is balanced,” Mr. Bakshi said.
However, Mr. Bakshi added that it is not just foreign retail majors; even large cash-rich domestic players have the capacity to
exploit the market. Despite discussions that modern stores and wholesale chains would make the local channels irrelevant, Mr.
Bakshi said with the demand pattern shifting, these models are becoming irrelevant themselves. Metro Cash & Carry entered
India in 2003 and currently has 11 wholesale distribution centers.
The company has already invested close to Rs 1,000 crores and plans to open six to eight stores annually, each entailing an
investment of around Rs 60 crores. The company recently opened its store in Delhi and Jaipur and is planning two more stores in
Chandigarh and Indore.
FDI in multi-brand retail bound to affect small traders, says C. Rangarajan
C.R. Sukumar, ET Bureau Sep 21, 2012, 04.09PM IST
Tags: PMEAC Chairman Dr C. Rangarajan…,
Amidst concerns of the opposition parties over the adverse impact of foreign direct investment into multi-brand retail, Chairman
of the Prime Minister's Economic Advisory Council (PMEAC) Dr. C. Rangarajan said it would affect the small traders, who need
to become part of the modern retail change story.
Addressing an international seminar on 'Organized Retailing vis-a-vis Farm Economy of India' in Hyderabad on Friday, he,
however, said the fear that FDI in multi-brand retail "could result in large scale replacement of small retailers is misplaced."


Long Term Stocks For 2013 Exclusive List of Long Term Stocks To Own In 2013. Get Free Copy Now!
Equitymaster.com/Long-Term-Stocks
Ecommerce Opportunities Get Exposure & Best Ecommerce Opportunities @ Ecommerce Show.
www.franchiseindia.com
According to him, "The existence of large retail chains even in advanced countries has not wiped out the small shopkeepers or
what are called 'Mom and Pop' stores. They retain a personal touch which is absent in large retail outlets. Also, their proximity to
where people live is a great advantage."
Rangarajan viewed that an overwhelming percentage of food and grocery being sold in India was through traditional retail outlets
such as kirana stores, street hawkers and wet market stall operators. "Once the share of overall modern retail in food reaches about
25-30%, it is bound to affect the kirana traders first and then the small and marginal traders."
To address the adverse affects, he advised the small traders to take part in the modern retail change story and be assimilated into
organized retail, upgrade through infusion of capital and better training and organize themselves under their banner through
franchises.
482 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Rangarajan, who has been for years advocating FDI into retail sector, said the aim of the modern organized retail was to offer
better prices to both consumers and producers and reduce the gap between the two. Saying that modern retailers were able to offer
better prices to consumers and producers owing to economies of scale in procurement, handling and logistics, he has advised the
farmers to form into groups for better bargaining with the modern retailers.
"Direct marketing of produce to modern organized retail networks also helps the farmer in getting a better price than through
mandis. Regular supply agreements with groups of farmers and modern retail outlets will help farmers have an assured minimum
income besides cutting down on wastage, transportation costs and providing fresh supply of food items to consumers," the
PMEAC chairman said.
Citing high vegetable prices in 2010-11 that shot up by 60-70% owing to deficiencies in the current archaic marketing
arrangements, he said FDI flows into backend infrastructure such as cold storages and warehouses could help softening of prices
and thereby help contain inflation.
Rangarajan said the Agriculture Produce Marketing Committee (APMC) Act was amended aimed at providing more competitive
choices to the farmers and to encourage private investment. Now "there is a strong case for removing perishables from the
purview of APMC regulations as the nature of the commodity requires speedy transaction in order to minimize wastage."
Clarity on quantity of foreign investments into multi-brand retail sector is expected in a few months, he said, expressing inability
to hazard a guess on how much it could address the current account deficit, which stood at 4.2% of the gross domestic product
(GDP) last year. "The total capital flows that are required to cover the current account deficit are around $70 billion and therefore
one form of capital inflow cannot really make a big dent on financing the current account deficit," he said.

Ecommerce Conference Tips on how to start & grow eRetail @ Ecommerce Conference. Apply Now!
www.franchiseindia.com
OBJECTIVES OF STUDY





To understand the concept of FDI,
Identify the roles and responsibilities of government to permitted FDI in India,
To evaluate the difference between the single brand and multi brand in India,
To determine the nature of FDI impact on small kirana shops retailers,
To offer the suggestions for the smooth operations of FDI.
Primary Data: Sample Size: 100; Sampling Technique: Random Sampling; Population: Finite; Data Collection Instrument:
Observation, Interview and Questionnaire; Demographic: 100% retail shops owners. The sample profile was all the sections of
society. Geographic Location: Vijayawada city.
HYPOTHESIS OF STUDY
H0 (Null hypothesis): FDI not impact on retail shops.
H1 (Alternative hypothesis): FDI impact on retail shops.
Finally, the result has been FDI impact on retail shops the result calculating under the range of the respondents and frequency
table and percentage analysis. So h1 is accepted.
RESULTS AND ANALYSIS
Table-1
0-4 = NO
10%
5=NETURAL
21%
6-10=YES
69%
Sources: Priamry Data
The above table depicts that the data has been divided into three categories and indicate the codes to the retailers, these three
categories are 10% retailers say ‘no’ and 21% retailers under into neutral and 69% retailers said ‘yes’, therefore the impact on
FDI is high.
483 | P a g e
ISSN (P):2279-0934, (O):2279-0942
FINDINGS OF STUDY













Need is to attracts good FDI to improve economic growth and providing job opportunities and adopting technology
from other countries.
India gives desired returns from FDI and makes ways for more FDI.
Medium and small retailer’s shutdown from the FDI, and most of the retailers suffering from FDI.
They are trying to alternative strategy for their business. Like gumastha jobs, and courier wala.
They want to change infrastructure of the shops facing competitiveness in the market.
They are losing customers from FDI because of FDI offers best price of the product to the customers.
They except subsidies from the government.
Peoples that are more qualified are preferred organized stores.
In organized sector, parking facility is available so peoples are agreeing organized is preferable.
Quality of products is available in both the sectors.
In organized sector more num of respondents are visit according to proper planning.
In unorganized sector, their visit is unplanned one.
In organized sector, different verity of products is under one roof.
SUGGESTIONS





To attract the new customers, organized retailers needs to offer low price and available more brands.
Customer considers quality as their first preference, so the outlet should give more stress on it; resulting organized as
well as unorganized retail should always improve services and update their technology.
Organized retail outlet should try new dealers who have the potential, so they can target more market.
Organized outlet should improve it‘s after sales service because its hits badly to the company‘s market share. More
detailed customized services should be provided.
To attract the new customers, organized retailers needs to offer low price and available more brands.
CONCLUSION
Many policy makers and academics contend that FDI can have important positive effects on the Indian country economic growth.
In addition to direct capital financing, FDI can be a source of valuable technology and knowhow while fostering linkages with
local firms, which can help jumpstart an economy. Based on these arguments, industrialized and developing countries have
lowered their trade barriers and offered incentives to encourage foreign direct investment in their economies. In fact, the empirical
results obtained in this paper seem to reflect that idea. Analyzing the data from the questionnaire and given result to this research,
so most of the retailers suffering from FDI they are thinking like they want to change infrastructure of the shop and some retailers
searching for alternative business for their life but FDI is needed to India but it is impact on retail shops.
REFERENCES
1.
Guruswamy, M., Sharma, K., Mohanty, P. J., & Korah, J. T. (2005). In India’s Retail Sector: More Bad than Good?
Economic and Political Weekly, 40(7), 619-623.
2.
Kalhan, A. (2007). Impact of malls on small shops and hawkers. Economic and Political Weekly, 42(22), 2063 – 2066.
3.
Mukherjee, A., Satija, D., Goyala, M. T., Mantrala, M. K., & Zou, S. (2011). Impact of the retail fdi policy on Indian
consumers and the way forward (ICRIER Policy Series No. 5).
4.
Patibandla, M. (2012). Foreign Direct Investment in India’s retail Sector: Some Issues (Working Paper No. 366).
Indian Institute of Management Bangalore.
5.
Sarma, E. A. S. (2005). Need for caution in retail FDI. Economic and Political Weekly, 40(46), 4795–4798.
6.
Jain, Dipti. (2012). Multi-brand FDI to hit kirana shops: Metro boss. The Economic Times.
7.
Ravi. (2012, September 20). FDI in Indian Retail: The big benefits will come tomorrow. Not Today in India.
8.
Sukumar, C. R. (2012, September 21). FDI in multi-brand retail bound to affect small traders. Economic Times Bureau.
9.
Antony, Anu. (2012). The Transitional Shift Of Indian Market Space and FDI in Retail SCMS Cochin. Kerala, India.
*****
484 | P a g e
ISSN (P):2279-0934, (O):2279-0942
PRIVATE BRANDS AND STORE LOYALTY:
AN EMPIRICAL STUDY IN CHINCHWAD, PUNE
Akanksha Taunk7
ABSTRACT
Private labels in modern retailing are a set of values and promises made by the retail organization to their customers. They are
the values and promises from the organization that any competition cannot offer. It is definitely not about a product or service
identity, an image or a logo created by a retail organization for its merchandise or services to be known. It can be defined as a
private brand of the retailer. It may not be the product produced by the retailer, but they can make agreements with small-scale
manufacturers to produce products for them.
The major reason for the retailers to go for private labels is to boost up their sales and increase profit. Nevertheless, it is true
that no retailer can make huge amounts of profits from private labels, as mostly they will be charged at a lower price due to
low marketing and operational costs. The demand for the product will depend upon the utility and quality of the product.
Therefore, the retailer cannot compromise on the quality.
The people doing the purchasing, as well as those consuming the products, have been quite happy to try private label offers.
There are numerous reasons for this, with the most obvious one related to economics. Generally, during a recession or a period
of escalating prices (like the one we are currently experiencing), consumers are more willing to try private label products?
While many will return to traditionally branded products when the economy turns around, some will stay with private labels,
thus driving up the baseline level for those products. Therefore, this exploratory research was carried out on a private label and
store loyalty to find out effect of factors that affect the private label brand prospect in India.
KEYWORDS
Private Brands, Store Loyalty, Retailing, Drivers etc.
INTRODUCTION
Private labels have come a long way over the last three decades. They started with retailers wanting to offer cheaper substitutes.
This was for two reasons. One, having private label meant that retailers could negotiate a better margin from the manufacturer. In
addition, the other, when they had private labels, they had a differentiator. The biggest change in the last decade or so has been the
entry of premium private label. They are no longer saying, “buy us because we are cheap”, instead today; they are saying “buy us
because we are the best”. By offering high quality products, many private labels have started charging more than regular
manufacturers.
Retailers are looking at private labels or store labels as one of the option to drive the customers to their stores. The emergence of
organized retailing in India has made Private Labels a reality. It is now well within the reckoning of the consumer, retailers and
brand owners. A Private Label is not merely a product with the store/retailer’s name on it. It takes more to qualify as a Private
Label. The consumer must see the Private Label product as distinct from being just a ‘product in a pack’. There must be a clear
perception that ‘it is produced by this store’.
Customer will be happier if a quality product is made available at a reasonable price irrespective of whether a branded
manufacturer or a retailer delivers it. It is a general observation that store brands are priced 20-30% lower than the national brands
.Moreover, if properly created, private labels can contribute handsomely to the revenue of the store. Private Labels require high
customization in each country, region and category. They not only enhance the retailer profit, but also increase category sales and
build store loyalty. Private Labels are poised to grow in the near future and throw a lot of challenges and opportunities for
retailers.
DRIVERS OF PRIVATE LABEL PENETRATION
The manufacturer: For many years, manufacturers have focused their marketing activities on the “consumer” to the detriment of
the “shopper”. By using continual price promotion and reduced advertising, marketers undermined loyalty to their brands.
Meanwhile, the retailer focused on people is shopping behavior and found ways to improve the experience of people visiting their
stores. Only recently have manufacturers teamed up with retailers to create programs that focus on the consumer in a shopping
role.
7Placements
Officer & Head Corporate Relations, SaiBalaji Group of Institutes (IIMS, IIMHRD, SBIIMS), Maharashtra, India,
[email protected]
485 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The retailer: Not only do retailers gain margin from their own brands, but they can also differentiate themselves from the
competition with unique offerings. Retailers also benefit from the trend towards “disintermediation”. Retailers, because of their
close relationships with shoppers, can take advantage of this and target specific lines to match local needs.
The shopper: The people doing the purchasing as well as those consuming the products have been quite happy to try private label
offers. There are numerous reasons for this, with the most obvious one related to economics. Generally, during a period of
escalating prices (like the one we are currently experiencing); consumers are more willing to try private label products.
FACTORS THAT WORK AGAINST PRIVATE LABEL PENETRATION
For all the circumstances that seem to favor the continued growth of private labels, other conditions exist that may limit the upside
of these brands, at least in some categories. While the BrandZTM database shows that for categories like diapers and mineral water
in the United States, more than half of the category of users would include a store brand in their competitive set, private label
baby foods or body washes are considered by, at most, just 10 percent of category users would include a store brand in their
competitive set, private label baby foods or body washes are considered by, at most, just 10 percent of category users. Nielson
global data shows private label value shares ranging from 25 to 32 percent for products such as refrigerated food and plastic wrap
to 2 percent for cosmetics and baby food. Two factors seem to drive this situation: relative cost and risk. In the case of baby food
and cosmetics, the relative risk seems high even if the price differential is large. It is critical for shoppers to trust these products,
and brands have invested a great deal in developing high levels of trust. On the other hand, the risk for purchasing and using
diapers and mineral water is low. Economies of scale also play an important role. Economics generally favor manufacturers who
can amortize fixed and developmental costs across the volume distributed through dozens of doors, while grocery chains (even
national ones) might not generate sufficient sales to justify adding a store brand.
GLOBAL SCENARIO OF PRIVATE LABELS
Private label growth in global scenario is evident from the following graph. It shows private label share of market by value in
percentage. It is evident from the graph that the private label brand will grow in the near future and can give a tough competition
to the national brands.
Graph-1: Planet Retail, partly based on AC Nielson’s Work
Switzerland
UK
Belgium
Germany
Spain
France
Neitherlands
Canada
Australia
World Avg.
USA
Hungary
Italy
India
South Africa
Brazil
China
Russia
2012
2007
0
5
10
15
20
25
30
35
40
45
50
Sources: Planet Retail, partly based on AC Nielson Work
Private label products generate anything from 1 percent of All Commodity Volume (ACV) in Mexico to close to 50 percent in
Switzerland (AC Nielson, 2005). In Germany and the United Kingdom, private labels account for almost one-third of the value of
goods sold. The United States has more room to grow, with private labels accounting for products are growing at about 10 percent
per year, which is twice the overall global rate.
Private labels are widespread and are making their presence felt in almost all the categories. Categories such as personal care and
food are growing at a faster pace when compared to other categories such as personal care and food are growing at a faster pace
when compared to other categories. The following table shows the global growth rate of private labels by product area.
486 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-1: Private Label Shares and Growth Rates by Product Area
(Based on Value Sales)
Private Label
Share (2009-10)
Growth (2009-10)
Sl. No.
Product Area
%
%
1.
Refrigerated Food
32
9
2.
Paper, Plastic & Wrap (PPW)
31
2
3.
Frozen Food
25
3
4.
Pet Food
21
11
5.
Shelf-stable Food
19
5
6.
Diapers & Feminine Hygiene
14
-1
7.
Healthcare
14
3
8.
Non-alcoholic Beverages
12
3
9.
Home Care
10
2
10.
Snacks & Confectionery
9
8
11.
Alcoholic Beverages
6
3
12.
Personal Care
5
3
13.
Cosmetics
2
23
14.
Baby Food
2
13
Sources: Nielsen’s A C (2010), “The Power of Private Label”, Report.
INDIAN SCENARIO OF PRIVATE LABELS
The share of private labels in any country depends on how consolidated the retail chains are. Developing a good quality brand has
a high development and innovation cost attached to it. To be able to absorb such costs, Indian retail chains will need to scale up.
Retailing in India is still very primitive. Now, private labels almost do not exist in the country. They are less than 5 percent of the
retail business and still have a long way to go. Nevertheless, Indian retail is extremely hot and it offers a proposition that cannot
be seen anywhere else in the world. Only in China and India can retail chains have as many stores as they have in the US. In no
other country can one imagine companies having 5,000-6,000 stores of their own.
Indian retail is ranked 50th in the world, so there is a lot that retailers here can learn from the 49 countries ahead. Nevertheless,
Indian retailers need to take care that the private labels they create must have some quality. In addition, retailers must make sure
that they do not over exercise the private label option. If they fall into the trap of using too many private labels, they will end up
losing customers. It has been seen that when retail chains rely heavily on private labels, customers feel that they lack choices.
According to Nirmalaya Kumar, Professor of Marketing and Director of the Aditya Birla India Centre, London Business School,
and co-author of Private Label Strategy, “In a few years, most retail chains will have close to 5,000 stores in India. A profit of,
say, Rs 5 lakhs a store a month would mean a profit of Rs 250 crores. 10 such companies would mean profits of Rs 2,500 crores
with their combined turnover being more than Rs 25,000 crores”. Many Indian retailers have understood the importance of the
private label brand and started their own brands in order to compete with national brands. Various private label brands in India are
as shown in the table below:
Table-2: Private Labels in Different Categories
A. Category: Apparel
Retailer
Shoppers Stop
Shoppers Stop
Shoppers Stop
Piramyd
Piramyd
Ebony
Westside
Westside
Westside
Private Brands
Kashish
Stop, Life
Vittorio, Frattini
Rudra and Kaanz
Ventiuno
ETC
Hyper city
Westside
Ascot
SRC, Westsport, 2 Fast, 4You,
Richmond, Urban Angels and Westside
City Sense
Hyper city
City Life
Hyper city
City Style
Product
Ethnic Ladies wear
Clothing
Premium men’s wear
Ethnic women’s wear
Shirts for men
Formal, casual, woolen & evening wear range of
clothing in men women &kids wear
Clothing
Premium range of clothing for men
Clothing
Value packs of tees, socks, briefs, vests,
basic denim, etc. for men, women & kids.
Everyday wear for men, women, kids &
Footwear, styled for value.
Offers the latest trends in clothing in the
487 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Hyper city
River Inc.
Globus
Big Bazaar
Big Bazaar
Big Bazaar
Big Bazaar
Big Bazaar
Big Bazaar
Big Bazaar
Pantaloons
Pantaloons
Pantaloons
Fresh
Fashion store
Globus and fashion 21
Knighthood
AFL
Shyla
Pink & Blue
DJ & C
Shatranj
Privilege Club & Studio NYX
Springboard and Victoria
Srishti
Bare Denim, Bare Leisure
market at prices that are affordable.
Arrange of quality denims for men, ladies & kids.
The range comprises of basic denims, fashion denims,
Tees, cargos, denim shirts & jackets.
Men’s & women’s wear.
Shirts
‘Wrinkle-free’ apparel
Apparel for Women
Children’s apparel
Denim wear
Ethnic apparel
Evening wear
Designer prêt lines
Ethnic salwar kameez (mix and match range)
Ladies wear
John Miller, Indigo Nation, Scullers, JM
Sports, Ajile, Urban Yoga, Akkriti & F
Factor
Bare, Annabele, Honey, Ajile and Akkriti
Men’s wear
Pantaloons
Fresh Fashion
store
Pantaloons
Chalk Boys, Chalk Girls, Bare 7214, Giny
Fresh Fashion
& Jony, Barbie & Bob the builder
store
B. Category: Food and Grocery
Pantaloon Retail
Tasty Treat
Food Bazaar
Pantaloon Retail
Premium Harvest
Food Bazaar
Pantaloon Retail
Tastymate
Food Bazaar
Pantaloon Retail
Pure and Fresh
Food Bazaar
Hyper city
Fresh Basket
Hyper city
Hyper city
Reliance Fresh
Star India
Bazaar
Hyper city
Supremia
Reliance Select
Star India Bazaar (limited to packing)
Select (better quality) Popular (starting
price-quality)
Fabmall
Fabmall
Foodworld
Foodworld
C. Category: Consumer Durables
Home Solution
Koryo
Retail India Ltd.
Home Solution
Sensei
Retail India Ltd.
Infiniti Retail
Crom ã
Kid’s wear
Ready to eat
Basmati rice, atta and edible oil.
Dairy products beverages
Butter, three and oil
Men, seafood, fresh produce, freshly baked breads, specialty
bread
Everyday foods like cereals, spices, flour, pulses, dry fruits
Cereals, Spices, flour, pulses, dry fruits
Staples
Rice, sugar etc.
Rice, sugar, pulses
Rice, sugar, bread, jam, socks, floor cleaners
Air conditioners, flat color televisions, home theatres,
DVD players, microwave ovens and irons
Air conditioners, fm radios, pen drives, iron box
Home entertainment, small appliances, white goods,
computers, communications, music, imaging, gaming software
Consumer Durables
Star India
Millenia
Bazaar
Vivek & Co.
Napro
Vivek & Co.
Cool air
D. Category Lifestyle
Shoppers Stop
Push and shove
Pantaloons Blue
Cube, Koenig, RIG, Lombard and UMM
Sky
Star India bazaar
Companion
Sources: Chavadi and Shilpa, (2010) “Private Labels in Retailing”.
VCDs and DVDs
Coolers
Perfumes and Deodorants
Watches
Luggage
488 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Private labels in the consumer packaged goods (CPG) industry have seen a worldwide surge in availability and market share in
recent years. According to the Private Label Manufacturers Association (PLMA 2007),”private labels now account for one of
every five items sold every day in U.S supermarkets, drug chains and mass merchandisers”. The market share of private labels is
projected to grow to 27% in 2010 (Planet Retail 2005).Private labels are even stronger outside North America, their market share
being 26% in Western Europe (Planet Retail 2005). The main reasons that have been cited in the business and academic press for
retailers desire to stock private labels are (a) higher retail margins on private labels; (b) negotiating leverage with national brand
manufacturers; and (c) higher consumer store loyalty. Significant evidence in support of the first two reasons now exists in the
literature (e.g., Ailawadi and Harlam 2004; Hoch and Banerji 1993; Narasimhan and Wilcox 1998; Pauwels and Srinivasan 2004).
The focus of this paper is on the third reason-the purported ability of private labels to improve consumer’s loyalty to a particular
retailer. As per Dhar et al. (1997), the retailers can introduce private labels when cross price sensitivity between national and store
brand is high. It means that variations in the price of national brands lead to a substantial change in the sales of store brands. The
same holds good when the market is price sensitive. Raju et al. (1995) proposed that retailer’s profits are going to increase if more
number of national brands is available in a product category. Serdar Sayman et al. (2002) study on positioning of store brands
found that popular national brands are usually targeted by premium quality store brands. They also observe that the competition is
more intense when high quality store brands compete with national brands.
Private labels use may be associated with higher store loyalty (Richardson, Jain and Dick 1996; Steenkamp and Dekimpe
1997).For instance, Richardson et al. (1996) state that “store brands help retailers increase store traffic and customer loyalty by
offering exclusive lines under labels not found in competing stores” without offering any empirical evidence on the matter.
Likewise, PLMA (2007) states that “retailers use store brands to increase business as well as to win the loyalty of their customers.
Whether a store brand carries the retailer’s own name or is part of a wholesaler’s private label program, store brands give retailers
a way to differentiate themselves from the competition.”
Branding research suggests that it would be difficult for a retailer’s private label credibility to stretch across too many very
different product categories (Ailawadi and Keller 2004).This is supported by Steenkamp and Dekimpe (1997) who report that the
quality perception of a retailer’s private label varies considerably across categories. On the other hand, price savings from the
purchase of private labels will be more salient when consumers buy many private labels than when only a few items in their
shopping baskets are private labels. Also, research on the characteristics of heavy private label buyers shows that they have a
generalized attitude to focus on price (Ailawadi, Neslin, and Gedenk 2001; Burton et al. 1998; Garretson, Fisher, and Burton
2002). Consumers who focus on price engage in more price search, cherry pick the best deals, and spread their expenditure across
multiple stores (Mägi 2003; Urbany, Dickson, and Kalapurakal 1996).Prior research suggests that some consumers simply are not
willing to buy private label products (Ailawadi, Neslin, and Gedenk 2001; Nies and Natter 2007), particularly in some categories
(Batra and Sinha 2000; Sethuraman and Cole 1999). This is particularly true of hedonic products, which are mostly bought on
experiential rather than functional considerations (Assael 1998, Holbrook and Hirschman 1982).It is also true for publicly
consumed products that signal what kind of people we are to others (McCracken 1986) and may entail social risk (Batra and Sinha
2000; Livesey and Lenmon 1978). So even consumers who are very loyal to retailer will continue to buy a core set of national
brands.
OBJECTIVES OF STUDY
The Primary aim of the study was to study the relationship between Private Brands & store loyalty. The research was done to see
whether various factors related to any private label brand are related to store loyalty or not. Therefore, the objectives can be
enumerated as follows:





To find out the various factors that builds the store traffic.
To study the association between private label’s quality and store loyalty.
To study the impact of private label’s promotion on store loyalty.
To study the impact of price differential between national brand and private label and store loyalty.
To study the association between private label’s innovativeness and store is loyalty.
Research Design
An exploratory study has been carried out to get clarity of the objectives by interacting with customers. The underlying and the
most important factors driving customers to the stores were also explored. Descriptive study was carried out to study underlying
association between the store loyalty and various factors.
Scope and Sample of Study
In order to analyze the relation between store loyalty and a private label brand, the study was conducted using the survey method
on a sample of 200 respondents. The study is confined to respondents of Chinchwad (Pune) only. The sample was chosen based
on random sampling. Profile of the respondents is given in table-3.
489 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-3: Profile of Respondents
Monthly Income
No.
Age Group
Less Than 10000
55
Less than 25
10001 to 25000
59
25 – 34
25001 to 40000
67
35 – 44
40001 and above
19
45 and above
Occupation of Respondents
No.
Gender
Student
70
Male
Business Person
54
Female
Professional
55
Government Employee
21
Sources: Authors Compilation
No.
69
55
28
48
No.
110
90
Method of Data Collection
In the present study, data was collected through a structured questionnaire. Pretesting of the questionnaire was done on 25 People.
Item Selection
The important factors, which affect consumer choice that ultimately affects store choice of the customer, are explored in this
study. For this, 20 attributes were selected. Factors affecting the store loyalty and private label brand relation were also selected.
The subsequent list of attributes was presented to 25 people used in the preliminary exploration and they were asked to suggest
any changes to the list. Based on those responses, the language of some of the parameters was slightly modified and used in the
final survey.
Scale and Scoring of Items
Scaling techniques used in the questionnaire was Likert Scaling. Respondents were presented with five response categories
ranging from most important to least important and were asked to rate the factors according to their preference (5= Most
Important and 1=Least important).
Questionnaire Design
The questionnaire was a blend of following types of questions: Questions generating classification and identification information
(name, age group, profession); Dichotomous and multiple choice questions; Question based on semantic differential scale (5-point
scale) and rank order; open-ended questions were put in to get the views of the respondents at large; Codes were assigned to the
responses of the classification questions to the rating questions (5=Most important and 1=Least important).
HYPOTHESES TESTING
Hypotheses taken for the study are as follows:





Null Hypothesis (Ho): Attributes are uncorrelated with the population.
Alternate Hypothesis (HA): Attributes are correlated with the population.
Null Hypothesis (H0): Store Loyalty and quantity of a private label are independent of each other.
Alternate Hypothesis (HA): Store loyalty and quality of a private label are dependent on each other.
Null Hypothesis (Ho): Price differential between national brand and private label and store loyalty are independent of
each other.
Alternate Hypothesis (HA): Price differential between national brand and private label and store loyalty are dependent
on each other.
Null Hypothesis (Ho): Private label’s promotion and store loyalty are not related.
Alternate Hypothesis (HA): Private label’s promotion and store loyalty are related.
Null Hypothesis (Ho): Private label’s innovativeness and store loyalty are not related.
Alternate Hypothesis (HA): Private label’s innovativeness and store loyalty are related.
RESULTS AND DISCUSSIONS
Hypothesis-1
Null Hypothesis (Ho): Attributes are uncorrelated with the population.
Alternate Hypothesis (HA): Attributes are not uncorrelated with the population.
490 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The important factors, which affect consumer choice, which in turn affects store choice of the customers, are explored in this
study. The Following table shows the list of variables considered.
Table-4: Variable Considered for Study
Sr. No.
Factors
1
More Variety
2
Good Quality Product
3
Private labels
4
Location
5
Near to home
6
Take order on Phone
7
Close to work place
8
Convenience
9
Open for long hours
10
Parking facility
Sr. No.
11
12
13
14
15
16
17
18
19
20
Factors
Fair prices
Depth in product
Value for money
Fast Billing
Better Lighting
Store design
Home delivery
Credit given
Good experience
Likes the place
Principal Component Analysis was used since it was an exploratory factor analysis. The important parameters were listed as
shown in the table and each respondent was asked to rate them according to the importance in their store selection decision on a
scale of 1 to 5. (With 1 being the least important and 5 being the most important). Factor analysis was used here to understand the
interdependence amongst the attributes. The hypothesis, which was designed for the factor analysis, is as follows:
Factor analysis was run by using principle component analysis method in SPSS; Results of factor analysis are as follows:
Table-5: KMO and Bartlett’s Test of Sphericity
Kaiser-Meyer-Olkin Measure of Sampling Adequacy
Bartlett’s Test of Sphericity
Approx. Chi-Square
Df
Sig.
.784
1414.755
105
.000
Table-6: Rotated Component Matrix (a)
1
0.078
0.861
0.65
0.197
-0.19
0.419
0.463
0.122
0.027
-0.02
0.006
0.151
0.213
0.337
-0.22
0.359
0.069
-0.07
2
0.186
-0.07
-0.08
0.865
0.813
0.607
0.518
-0.02
0.371
0.059
0.397
0.05
-0.31
0.01
2.267
0.52
0.154
0.21
Component
3
4
0.865
0.025
0.2
0.156
-0.014
0.634
-0.19
0.199
0.098
-0.07
0.315
0.273
0.889
0.465
0.884
0.973
-0.469
0.23
0.055
0.795
-0.004
0.727
0.413
0.687
-0.148
-0.25
0.125
0.065
0.483
-0.13
-0.003
0.066
-0.073
-0
0.319
0.207
Fast Billing
Better Lighting
Convenience
Value for money
Fair prices
Good Quality Products
Open for long hours
Take orders on Phone
Parking facility-0.02
Credit given
Depth in product
Home delivery
Good experience
Store design
Private label
More variety
Location
Near to home
Note: Extraction Method: Principal Component Analysis;
Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 12 iterations
5
0.051
0.23
0.16
-0.17
0.153
-0.07
-0.02
0.259
0.454
0.034
0.916
0.236
-0.76
0.693
0.59
0.571
0.037
0.216
6
0.203
-0.18
0.109
0.036
0.027
-0.08
0.082
0.078
-0.34
0.396
-0.14
-0.08
-0.05
0.304
0.27
0.094
0.869
0.654
491 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-7
Initial Eigen values
Component
Total
% of
Cumulative
Variance
%
25.825
25.825
15.745
41.570
11.561
53.132
9.617
62.749
8.561
71.310
6.995
78.305
4.929
83.235
4.161
87.396
3.365
90.760
2.956
93.716
2.233
95.949
1.613
97.562
1.179
98.741
.634
99.375
.426
99.801
.167
99.968
.023
99.991
.010
100.000
Extraction Sums of
Squared Loadings
Total
% of
Cumulative
Variance
%
5.165
25.825
25.825
3.149
15.745
41.570
2.312
11.561
53.132
1.923
9.617
62.749
1.712
8.561
71.310
1.399
6.995
78.305
1
5.165
2
3.149
3
2.312
4
1.923
5
1.712
6
1.399
7
0.986
8
0.832
9
0.673
10
0.591
11
0.447
12
0.323
13
0.236
14
.127
15
.075
16
.033
17
.010
18
.007
Note: Total Variance Explained Extraction Method: Principal Component Analysis
Rotation Sums of
Squared Loadings
Total
% of
Cumulative
Variance
%
3.133
15.666
15.666
2.919
14.594
30.261
2.734
13.668
43.929
2.639
13.193
57.122
2.458
12.290
69.413
1.779
8.893
78.305
Inferences
Two attributes, viz. liking the place and near to work place were rejected from the original set of 20 because they were having
least co-relation with all the other attributes (Refer to Co-relation Matrix). The KMO and Bartlett’s test value 0.784 which is
greater than 0.5 (refer to table 5) is considered adequate to conduct factor analysis. From table 8 it is clear that the initial 18
variables have been reduced to 6 variables. From Rotated component matrix, we can club these variables as follows:
Table-8: Clubbed Variables
Sr. No.
Factor name
1
Experience
2
Value
3
Time Utility
4
Possession Utility
5
Merchandize
6
Place Utility
Convenience
Good Quality
Open For long Hours
Order on phone
More Variety
Location
Clubbed Variable
Better Lighting
Good experience
Fair Price
Value for money
Fast Billing
Home Delivery
Credit Given
Private label
Depth of product
Near to Home
Store Design
Hypothesis 2
Null Hypothesis (H0): Store loyalty and quality of a private label are independent of each other.
Alternate Hypothesis (HA): Store loyalty and quality of a private label are dependent on each other.
Inference
As the value of p (0.008) is less than α (0.05), null hypothesis is rejected. Hence, the store loyalty and quality of a private label are
dependent on each other.
Table-9: Store Brand Quality and Store Loyalty Cross-tabulation
Store Brand Quality
Premium Quality
Average Quality
Acceptable Quality
Total
Store Loyalty
Yes
No
55
38
46
9
34
18
135
65
Total
93
55
52
200
492 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-10: Chi-Square Tests
Value
df
Asymp Sig (2-sided)
Pearson Chi-Square
9.597a
2
.008
Likelihood Ratio
10.327
2
.006
Linear-by-Linear Association
1.479
1
.224
N of Valid Cases
200
Note: a. 0 cells (.0%) have expected countless than 5.The minimum expected count is 16.90
Hypothesis 3
Null Hypothesis (Ho): Price differential between national brand and private label and store loyalty are independent of
each other.
Alternate Hypothesis (HA): Price differential between national brand and private label and store loyalty are dependent on
each other.
Inference
As the value of p (0.000) is less than α (0.05), null hypothesis is rejected. Hence, the price differential between national brand and
private label and store loyalty are dependent on each other.
Table-11: Price Difference and Store Loyalty Cross-tabulation
Chi-Square Tests
Price Difference
More
Less
Total
Store Loyalty
Yes
No
70
57
65
8
135
65
Total
127
73
200
Value
df
Asymp Sig
(2-sided)
.000
.000
.000
.000
Exact Sig
(2-sided)
Exact Sig
(1-sided)
Pearson Chi-Square
24.316b
1
Continuity Correction
22.795
1
Likelihood Ratio
27.040
1
24.195
1
.000
.000
N of Valid Cases
200
Note: a. Computed only for a 2x2 table
b. D cells (0%) have expected count less than 5.The minimum expected count is 23.
Hypothesis 4
Null Hypothesis (Ho): Private label’s promotion and store loyalty are not related.
Alternate Hypothesis (HA): Private label’s promotion and store loyalty are related.
Inference
As the value of p (0.014) is less than α (0.05), null hypothesis is rejected. Hence, Private label’s promotion and store loyalty are
related.
Table-13: Promotional Efforts and Store Loyalty Cross Tabulation
Chi-Square Tests
Promotional Efforts
Total
More
Less
Store Loyalty
Yes
No
100
37
35
28
135
65
Total
137
63
200
493 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Value
df
Asymp Sig
(2-sided)
Exact Sig
(2-sided)
Pearson Chi-Square
5.981b
1
.014
Continuity Correction a
5.213
1
.022
Likelihood Ratio
5.842
1
.016
Fisher’s Exact Test Linear-by-Linear
5.951
.015
.022
Association
N of Valid Cases
200
Note: a. Computed only for a 2x2 table.
b. 0 cells (0%) have expected count less than 5. The minimum expected count is 20.
Exact Sig
(1-sided)
.022
Hypothesis 5
Null Hypothesis (Ho): Private label’s innovativeness and store loyalty are not related.
Alternate Hypothesis (HA): Private label’s innovativeness is store loyalty is related.
Inference
As the value of p (0.000) is less than α (0.05), null hypothesis is rejected. Hence, private label’s innovativeness and store loyalty
are related.
Table-15: Store Brand and Store Loyalty Cross Tabulation
Chi-Square Tests
Store Brand
Innovative
Traditional
Total
Store Loyalty
Yes
No
67
54
68
11
135
65
Total
121
79
200
Value
df
Asymp Sig
(2-sided)
.000
.000
.000
.000
Exact Sig
(2-sided)
Pearson Chi-Square
20.53gb
1
Continuity Correction a
19.164
1
Likelihood Ratio Fisher’s Exact Test
22.124
1
.000
20.437
1
N of Valid cases
200
Note: a. Computed only for a 2x2 table.
b. 0 cells (0%) have expected count less than 5.The minimum expected count is 25.
Exact Sig
(1-sided)
.000
FINDINGS AND CONCLUSION
From this study, one can conclude that private labels are able to position themselves significantly in the minds of the customers
and are gaining acceptance. Category growth in specific private label segments such as apparels, consumer durables, food and
grocery are growing at a faster pace while the lifestyle product category is yet to pickup. The future of private labels is dependent
on the retailer’s ability to overcome key challenges such as adaptive supply chain practices, quality infrastructure, co-optation,
hybrid marketing channels, talented professionals, accelerated growth in new categories, blurring dividing lines between private
label and national brand and more manufacturing expertise.
From the study, it was found that Experience, Value, Time Utility, Possession Utility, Merchandize, and Place utility are the most
influencing factors, which drive the customer to a particular retail store. Therefore, these are the factors, which should be
considered while planning a store design. This will help the retailers to build store traffic. Thus, in return, it will help the retail
stores to increase sales.
REFERENCES
1.
Nielsen, C. A. (2010). The Power of Private Label (Report).
494 | P a g e
ISSN (P):2279-0934, (O):2279-0942
2.
Ailawadi, Kusum L. (2009). The reciprocal relationship between private labels use and store loyalty (Working Paper
No. 2007-38). Dartmouth: Tuck School of Business.
3.
Chavadi, Chandan, & Kokatnur, Shilpa. (2008, August). Do private brands result in store loyalty an empirical study in
Bangalore. The ICFAI University. Journal of Marketing Management, VII(3), 6-33.
4.
Corstjens, Marcel, & Lal, Rajiv. (2000, August). Building store loyalty through store brands. Journal of Marketing
Research, 37(3), 281-291.
5.
Chavadi, Chandan, & Ganjali, Shilpa Rajesh. (2007). Private labels in retailing. Marketing Mastermind, VII(6), 14-17.
6.
Churchill, Gilbert A., Iacobucci, Dawn Jr. (2005). Marketing research methodology and foundation (9th ed.). Thomson
South-Western Publication.
7.
Kothari, C. R. (2005). Research Methodology (3rd ed.). New Delhi: Sultan Chand & Sons.
8.
Mills, David E. (1995, November). Why retailers sell private labels? Journal of Economics and Management Strategy,
4(3), 509-528.
9.
Nielsen, C. A. Private Label: A ’good alternative’ to other brands, offering the same quality & value (Global
Consumer Survey). Retrieved from http://jp.en.nielson.com/news/documents/PrivateLabel_AConsumerSurvey.pdf
10. Private Label is the Brand. Business World. Retrieved from http://www.businessworld.in/index.php/Books-andGuides/Private-Label-Is-The-Brand.html
11. Can
private
labels
become
real
brands?.
Business
OutLook.
Retrieved
http://business.outlookindia.com/inner.aspx?articleid=1245&subcatgid=485&editionid=999&catgid=72
from
12. The making of Brand in India. IIM, Kozhikode. Retrieved from http://dspace.iimk.ac.in/bitstream/2259/361/1/261274.pdf
13. Indian Brand Equity Foundation. Private labels will dominate 50 percent of Indian retail. Retrieved from
http://www.ibef.org/artdisplay.aspx?cat_id=105&art_id=15505
14. Latest News and Events from Retail Sector (India Reports). Retrieved from http://www.india-reports.com/retailweekly/Jan-28-Feb-3.aspx
15. Working
Paper.
Sri
Krishna
College
of
Engineering
http://www.indianmba.com/Occasional_Papers/OP132/op132.html
and
Technology.
Retrieved
from
*****
INFORMATION FOR AUTHORS
Pezzottaite Journals invite research to go for publication in other titles listed with us. The contributions should be original and
insightful, unpublished, indicating an understanding of the context, resources, structures, systems, processes, and performance
of organizations. The contributions can be conceptual, theoretical and empirical in nature, review papers, case studies,
conference reports, relevant reports & news, book reviews and briefs; and must reflect the standards of academic rigour.
Invitations are for:








International Journal of Applied Services Marketing Perspectives.
International Journal of Entrepreneurship & Business Environment Perspectives.
International Journal of Organizational Behaviour & Management Perspectives.
International Journal of Retailing & Rural Business Perspectives.
International Journal of Applied Financial Management Perspectives.
International Journal of Information Technology & Computer Sciences Perspectives.
International Journal of Logistics & Supply Chain Management Perspectives.
International Journal of Trade & Global Business Perspectives.
All the titles are available in Print & Online Formats.
495 | P a g e
ISSN (P):2279-0934, (O):2279-0942
ANALYSIS OF COST AND RETURN STRUCTURE OF COWPEA CULTIVATION
Dr. D. Amutha8
ABSTRACT
Cowpea (Vigna unguiculata L.) is one of the important kharif pulses grown in India. It is a warm season crop, well adapted to
many areas of the humid tropics and subtropical zones. Cowpea is tolerant to heat and dry conditions, but is intolerant to frost.
Cowpea is highly responsive to fertilizer application and the dose of fertilizer depends on the initial soil fertility and moisture
availability. This paper analyses the cost and returns for large and small farmers cultivating cowpea from five villages in
Thoothukudi district.
The present study is based on both primary and secondary data covered only six months period (2013). The proportionate
random sampling technique has been adopted to select 150 cowpea farmers from 5 villages in Thoothukudi district. The cost
analysis shows that per acre total cost, that is operational cost of cultivation for large farmers, worked out to Rs.2573.69
whereas it was Rs.2380.97 for Small farmers. It is observed that total cost incurred was found higher in the case of large
farmers compared to small farmers. The cost of human labour forms the major component of the total cost of production for
both Large and Small farmers. Next to human labour comes the amount spent on the use of chemical fertilizers. It came
behind the cost of farm manure, cost of irrigation, pesticides, seed cost and bullock labour. The costs of all the inputs except
bullock labour were found to be higher for Small farmer than for large farmers. Thus, it is revealed from the analysis that as in
cowpea, the small farmers were found more efficient than the large farmers were, both were cost-wise and return wise in the
case of producing cowpea also.
KEYWORDS
Cowpea, Fertility, Moisture, Operational Cost, Total Cost, Bullock Labour etc.
INTRODUCTION
Cowpea (Vigna unguiculata L.) is one of the important kharif pulses grown in India. It is a warm season crop, well adapted to
many areas of the humid tropics and subtropical zones. Cowpea is tolerant to heat and dry conditions, but is intolerant to frost
(Davis et al., 2000). The crop is grown from March to April and is harvested between June and July depending upon its end use.
Incorporation of cowpea as a legume in crop sequences enriches soil fertility and provides a dense soil cover to check wind
erosion and evapo-transpiration loss of soil water. It is grown throughout India for its long, green vegetable pods, seeds, and
foliage for fodder. In India, cowpea is grown on about 0.5 million ha with an average productivity of 600 to 750 kg grains/ha.
Cowpea is highly responsive to fertiliser application and the dose of fertiliser depends on the initial soil fertility and moisture
availability (Ahlawat and Shivakumar, 2005). This paper analyses the cost and returns for Large and Small farmers cultivating
cowpea from five villages in Thoothukudi district.
OBJECTIVES OF STUDY
The Objectives of the present study are:
1.
2.
To study the age and literacy level characteristics of sample farmers, and
To analyze the cost and returns for large and small farmers cultivating cowpea.
The present study is based on both primary and secondary data covered only six months period (2013). Primary data has been
collected through interview schedule. The proportionate random sampling technique has been adopted to select 150 cowpea
farmers from 5 villages in Thoothukudi district. A separate interview schedule was designed, pilot tested and used for data
collection. The total household sample is 150. The secondary data has collected from Department of Statistics of Tuticorin,
Agricultural University in Killikullam, Tamil Nadu Agricultural University, Coimbatore and various research centers like Madras
Institute of Development Studies (MIDS), and Centre for Development Studies (CDS), Trivandrum. The secondary data were
collected from various government organizations, both published and unpublished reports. In addition, other sources of
information were collected from books and journals.
RESULTS AND DISCUSSION
The farms of less than 5 acres were grouped on small size and farms of more than or equal to 5 acres are grouped as large size. In
the cowpea, out of 150 sample farmers, 47 belong to small size and remaining 103 belong to large size.
8Assistant
Professor, St.Mary’s College (Autonomous), Tamil Nadu, India, [email protected]
496 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-1: Age-Wise Distribution of Sample Farmers
Age (in years)
Large
Small
Overall
Less than 30
5 (3.33)
3 (2.00)
8 (5.33)
30-40
60 (40.00)
25 (16.67)
85 (56.67)
40-50
24 (16.00)
12 (8.00)
36 (24.00)
Above 50
14 (9.33)
7 (4.67)
21 (14.0)
Total
103 (68.66)
47 (31.33)
150 (100)
Sources: Survey Data
Note: Figures in brackets represent percentages to total.
Table 1 shows that in case of cowpea, the farmers below 30 years constitute only 5.33 per cent to the total. Those above 50 years
form 14.00 per cent only. The respondents between the age group 30 to 50 years constitute 80.67 per cent. The age group of 3040 years was relatively higher in the case of large farmer (40.00 per cent) while it was only 16.67% in the case of Small farmers.
Table-2: Literacy Levels of Sample Farmers
Literacy Level
Large
Small
Illiterate
2 (1.33)
3 (2.00)
School level
82 (54.67)
23 (15.33)
College level
14 (9.33)
18 (12.0)
Professional and others
5 (3.33)
3 (2.00)
Total
103 (68.66)
47 (31.33)
Note: Figures in brackets represent percentages to total.
Overall
5 (3.34)
105 (70.00)
32 (21.33)
8 (5.33)
150 (100)
Table 2 reveals that in cowpea, farmers having the college level education form 21.33% the total. It was found that 70.00 per cent
of the farmers are the study area had only school education, followed by illiterates (3.34 per cent). The school level education
percentage was higher among large farmers (54.67 per cent) than among Small farmers (15.33 per cent) respectively.
Cost and Returns Structure of Cowpea
Table-3 furnishes information on the average cost and returns structure of large and small farmers cultivating cowpea of pulses.
Table-3: The Per Acre Average Cost and Returns Structure of Large and Small Farmers Cultivating Cowpea
SI.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Cost Component
Human labour (including family labour)
Bullock labour
Chemical fertilizer
Pesticide cost
Seed cost
Farm manure
Cost of Mechanical Power
Interest on working capital
Cost A
9.
Rent
10.
Interest as fixed capital (excluding land cost) land revenue,
less and taxes, depreciation of implements and machinery
Total – Cost C (total)
Yield per acre in kg
Gross Returns (Rs.)
Net Returns (Rs.)
Large
Farmers
1141.01
225.84
395.88
206.36
126.65
188.64
78.23
211.08
2573.69
265.40
113.06
Small
Farmers
1060.37
224.18
356.27
196.87
132.09
154.62
74.63
181.94
2380.97
271.78
163.63
Overall
Farmers
1115.75
225.32
383.47
203.38
128.35
177.98
77.10
201.95
2513.30
267.41
128.92
2952.16
182.31
9115.50
6163.34
2816.38
196.12
9806.28
6989.90
2909.62
186.64
9331.94
6422.32
It is inferred from Table 3 that in the case of farmers cultivating cowpea, the large farmers produced 182.31 kgs of green gram
and earned Rs.9115.50 while their net returns were Rs.6163.34. In the case of Small farmers produced 196.12 kgs of cowpea and
earned Rs.9806.28 whereas their net returns were Rs.6989.90. In overall, yield per acre, gross returns and net return earned were
186.64 kgs, Rs.9331.94 and Rs.6422.32 per acre respectively. It indicates that the small farmers were getting higher yield and
thereby higher net income than large farmers.
497 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The cost analysis shows that per acre total cost, that is operational cost of cultivation for large farmers, worked out to Rs.2573.69
whereas it was Rs.2380.97 for Small farmers. It is observed that total cost incurred was found higher in the case of large farmers
compared to small farmers. The cost of human labour forms the major component of the total cost of production for both Large
and Small farmers. Next to human labour comes the amount spent on the use of chemical fertilizers. It came behind the cost of
farm manure, cost of irrigation, pesticides, seed cost and bullock labour. The costs of all the inputs except bullock labour were
found to be higher for Small farmer than for large farmers. Thus, it is revealed from the analysis that as in cowpea of pulses, the
small farmers were found more efficient than the large farmers, both cost-wise and return wise in case of producing cowpea also.
The per acre percentage of various cost components are given in Table 4.
Table-4: Per Acre Percentage Cost of Various Cost Components to Total Cost of Cowpea
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Cost Component
Human labour (including family labour)
Bullock labour
Chemical fertilizer
Pesticide cost
Seed cost
Farm manure
Cost of Mechanical power
Interest on working capital
Cost A
9.
Rent
10.
Interest as fixed capital (excluding land cost) land revenue,
less and taxes, depreciation of implements and machinery
Cost C (Total)
Large
Farmers
38.65
7.65
13.41
6.99
4.29
6.39
2.65
7.15
87.18
8.99
3.83
Small
Farmers
37.65
7.96
12.65
6.99
4.69
5.49
2.65
6.46
84.54
9.65
5.81
Overall
Farmers
38.34
7.75
13.68
6.99
4.41
6.12
2.65
6.94
86.38
9.19
4.43
100.00
100.00
100.00
Table 4 reveals that the percentage cost on variable inputs (Cost A) to total cost (Cost C) was 87.18% for large farmers, 84.54 per
cent for Small farmers and 86.38% for overall farmers. In Cost A, human labour cost was found to be high for Large, Small and
overall farmers at 38.65%, 37.65% and 38.34% respectively followed by cost on chemical fertilizers. The large farmers spent
13.41 per cent of the total cost on utilisation of chemical fertilizers while Small farmers and overall farmers spent 12.65% and
13.68% respectively. Next to this, the major cost component was the cost of bullock labour which constituted 7.65%, 7.96% and
7.75 per cent of the total cost for Large, Small and overall farmer respectively. Cost of pesticides worked out to 6.99% for large
farmers, 6.99% for Small farmers and 6.99% for overall farmers. Interest paid on working capital constituted 7.15%, 6.46% and
6.94% for Large, Small and all farmers respectively. Interest on farm assets, depreciation of implements and machinery involved
3.83% of the total cost for large farmers and 5.81% for Small farmers in the case of cowpea of cultivating pulses. Thus, it may be
concluded that the expenditure on inputs exhibited almost similar pattern in cowpea crop of pulses as well as farmer groups
(Rajagopalan et.al., 1978) and (Harrison, 1972) reported similar results.
CONCLUSION
Thus, it is concluded from the analysis that small farmers are economically more efficient than large farmers of cowpea
cultivation in the study area. This could be due to the better supervision and more efficient farm management favoured by the
smaller size of operational holdings. This indicated that apart from the efficient allocation of inputs, direct supervision and farm
management are crucial determinants of economic efficiency.
REFERENCES
1.
Ahlawat, I. P. S., & Shivakumar, G. B. (2005). Kharif pulses. In Textbook of Field Crops Production. Dr. R. Prasad
(Ed.). New Delhi: Indian Council of Agricultural Research.
2.
Davis, D. W., Oelke, A. E., Oplinger, S. E., Doll, D. J., Hanson, V. C., & Putman, H. D. (2000). Alternative field crops
manual. Retrieved from http://www.hort.purdue.edu/newcrop/afcm/cowpea.html.
3.
James, Quigley Harrison. 91972). Agricultural modernisation and income distribution: An economic analysis of the
impact of new seed crops on the crop production of small and large farms in India (Mimeo) (Doctoral Thesis).
Princeton University.
4.
Rajagopaln, V. (1978). Studies on Cost of Production of Major Crops in Tamil Nadu. Coimbatore. Tamil Nadu
Agricultural University: Department of Agricultural Economics.
*****
498 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CUSTOMER SATISFACTION IN ORGANIZED RETAILING: AN EMPIRICAL STUDY
WITH SPECIAL REFERENCE TO DEWAS CITY
Dr. Satnam Kour Ubeja9
ABSTRACT
Retailing is a distribution channel function where the retailing organization will buy products from certain manufacturers and
then sell it directly to consumers. India is the emergence of organized retail. There has been considerable growth in organized
retailing business in recent years and it is poised for much faster growth in the future. The organized retail industry in India is
to grow 15-25 per cent annually and would triple times in size by 2015. Retailing is gradually inching its way towards
becoming the next boom industry. The purchase of goods or services includes a number of factors that could affect each
decision.
Customer satisfaction is defined as the number of customers, or percentage of total customers, whose reported experience with
a firm, its products, or its services (ratings) exceeds specified satisfaction goals. Customer satisfaction is more complex and
even more important for retailers today than in past. The objectives of this study were to investigate the effects of sales
promotion mix and group of factors with respect to product, price, place and promotion on customer satisfaction in shopping
malls of Dewas city and to study the variations in these factors across gender wise. Mall intercept survey was conducted to
study of sales promotion mix and group of factors on customer satisfaction in shopping malls of Dewas city.
The sample included 200 active mall shoppers. The sales promotion mix on customer satisfaction were identified by a
structure questionnaire and captured in 5 factors of sales promotion mix and 11 factors of group of factors. The study will help
the managers of shopping malls to understand the underlying sales promotion factors on customer satisfaction of the shoppers
in the malls and help them to craft their marketing strategies, also study will help to understand the factors, which mostly
influence the male or female customer to purchase the products from shopping malls with respect to price, place product and
promotion. Profiling customers by their choice of sales promotion mix provide more meaningful ways to identify and
understand various customer segments and to target each segment with more focused marketing strategies.
KEYWORDS
Customer Satisfaction, Sales Promotion Mix, Shopping Malls, Organized Retailing etc.
INTRODUCTION
Marketing can define in different terms such as it is the process of exchanging goods services and ideas through the set of
activities, these facilities of goods and services flow from producer to consumer, therefore we can conclude that marketing is just
the process of activity which match with the market demand and it is the transformation flow of ideas from primary to final stage
or ultimate consumers, and it is based on ultimate profit, target customers and market segmentation. Promotion is the process of
marketing communication to inform, persuade, remind and influence consumers or users in favor of product or service. Promotion
has three specific purposes. It communicates marketing information to consumers, users and resellers. Promotion persuades and
convinces the buyer and influences his/her behavior to take the desired action. In this process, the promotional mix includes four
ingredients: 1) Advertising; 2) Publicity; 3) Personal Selling; 4) Sales Promotion.
Retailing comes from an old tradition and is rooted in the social fabric. Retailing is also an important social institution, because
about 30 percent of what we spend goes on products and services that we buy from retailers. Definition of retailing also indicates
the way we study retailing to make it more efficient and profitable, and clearly marks its contribution to our society. A shopping
center, shopping mall, or shopping plaza, is the modern adaptation of the historical marketplace. The mall is a collection of
independent retail stores, services, and a parking area, which is conceived, constructed, and maintained by a separate management
firm as a unit.
A shopping center, shopping mall, or shopping plaza, is the modern adaptation of the historical marketplace. The mall is a
collection of independent retail stores, services, and a parking area, which is conceived, constructed, and maintained by a separate
management firm as a unit. The everyday definition of retail and organized retailing can be described as the act of selling of goods
and merchandise from a fixed location. An important aspect of the current economic scenario in India is the emergence of
organized retail. There has been considerable growth in organized retailing business in recent years and it is poised for much
faster growth in the future. Major industrial houses have entered this area and have announced very ambitious future expansion
plans. Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a
company meet or surpass customer expectation. Organizations need to retain existing customers while targeting non-customers.
Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or
services to the marketplace. Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty.
9Assistant
Prfoessor, Prestige Institute of Management and Research, Madhya Pradesh, India, [email protected]
499 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Customer satisfaction data are among the most frequently collected indicators of market perceptions. Customer satisfaction is
measured at the individual level, but it is usually reported at an aggregate level. It can be, and often is, measured along various
dimensions. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or
scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the
organization being measured. Their satisfaction is generally measured on a five-point scale.
B. Kamaladevi (2010), they have found the survival of fittest & fastest is the mantra of today’s business game. To compete
successfully in this business era, the retailer must focus on the customer’s buying experience. To manage a customer’s experience,
retailers should understand what “customer experience” actually means. Finally, in conclusion there are some fundamental points:
Customer Experience Management is not simply an old idea in a new wrapper. The result was that there are now more services
and products available than at any time in the past, yet customer satisfaction are on a downward slide.
Bromley Rosemary D. F. & Matthews David L (2007), they had researched specially for those wheelchair customers who were
unable to discuss earlier about their shopping experience in various shopping malls and super market. Therefore, this paper was
again a searching of customer satisfaction but in separate segment or demographic area.
Ha Hong-Youl and Muthaly Siva (2008), this study had proposed framework to explain customer satisfaction responses in the
banking and supermarket industries. The proposed model was grounded in the traditional B2C link, but also explicitly
incorporates advertising spending and perceived quality into the theoretical framework. As the advertising spending of a new
service campaign, along with customer orientation, can influence consumers' expectations about service quality and lead to
satisfaction.
Hekman David R., et. al (2010), in this research, researcher has found the result that, customer satisfaction surveys have become
a common source of performance feedback for employees and organizations. Researchers had given some new aspects that
customer satisfaction was primary factor for the companies this time for strategic decision-making and to find some factors for
compensation of employees. Customer satisfaction in most of cases were gender biased they had found because this mainly attach
with the behavior of people and performance which is always related to gender wise.
Kai Kristensen, Hans Jorn Jhul & Ostergaard Peder (2001), Customer satisfaction and customer loyalty were becoming
increasingly important factors in modern retailing a market characterized by slow growth and intense competition. In this paper
researcher have explained that European retailing was changing rapidly, developers were concentrating on increase in store size
and ownership. Store chains were increasingly being branded in order to increase differentiation between chains, subsequently
increasing store loyalty. Private labels have obtained a more dominant role within the last few years. Because of this growth,
market was gaining the competition and try increase customer satisfaction and customer loyalty.
Period of Study



Study was focused only on gender as a Demographic variable.
Study comprised of different shopping malls of Dewas city.
Different customers of various shopping malls have been taken as a field.
Objectives of Study




To identify the factors of sales promotion schemes on customer satisfaction with reference to shopping malls.
To find the effects of sales promotion schemes on customer satisfaction with respect to gender wise.
To identify the group of factors of customer satisfaction with reference to shopping malls.
To find the effects of group of factors on customer satisfaction with respect to gender wise.
Hypothesis
To know the effects of eighteen sales promotional and forty-three factors on customer satisfaction, the following null and
alternative hypothesis have framed:




Null Hypothesis H01: There is no significant impact or difference in mean satisfaction level of customers because of
various sales promotional factors according to gender wise.
Alternative Hypothesis H11: There is significant impact or difference in mean satisfaction level of customers because
of various sales promotional factors according to gender wise.
Null Hypothesis H02: There is no significant impact or difference in mean satisfaction level of customers because of
various groups of factors according to gender wise.
Alternative Hypothesis H12: There is significant impact or difference in mean satisfaction level of customers because
of various groups of factors according to gender wise.
500 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Data Sources



To design the structured questionnaire the18 items of sales promotion mix and 43 items of group of factors of customer
satisfaction are taken from extensive study of sales literature viz. journals of marketing, international journals of
marketing, various business review and marketing management magazines etc.
The primary data are collected from 200 customers of different shopping malls, spreading across Dewas city and having
above 20 yrs age and already have purchased products from any shopping malls.
Apart from these 18 and 43 factors, five categorical variables are also used to know the effects of all factors on the
customer satisfaction. The five Categories have selected for the study are as –Age, Sex, Education, Occupation and
Income.
Sample and Design
The design of present study is descriptive as well as empirical in nature. The main purpose of study is to find the impact of group
of factors on customer satisfaction in organized retailing in dewas city. The sample size is 200 customers. The sample comprised
of respondent above 20 years age & having experienced of shopping from shopping malls and sales promotion mix. The
independent variables comprises of education, age, sex, occupation, income and location. Entire universal has been divided as:





Age: The age group were 20-30, 30-40, 40-50 & 50 and above. This was kept to cover maximum percentage of
universe, grouping in class interval helped in easy tabulation.
Education: It contained to choices –UG, PG & Others.
Occupation: It contained the choices of – Service, Business, Student and Housewife.
Sex: It contained the choices of- Male & Female.
Income: It contained the choices of- 1-2 Lacks, 2-3 Lacks, 3-4 Lacks and 4 Lacks and above.
Data Collection
The questionnaire is split into three sections. First section deals the demographic factors, Second section related to 18 factors of
sales promotion mix and third sections deals with 43 groups of factors. The questionnaire had given five point scales rating
Highly Dissatisfied to Highly Satisfied and comparative weights one to five, where five is the highest rank. The data collected
from customer of different shopping malls later classified based on gender i.e. 100 female and 100 male customers.
Tools for Analysis
In the application of statistical tool, cares has been taken and draw a real picture without any manipulation. Factor analysis and
ANOVA test applied to minimize the factors to find their effectiveness & variances. The statistical package as SPSS (version 17)
used, MS – Excel also used for analysis. The levels of significance were tested of five percent level.
Factor Analysis
The normal varimax solution is not obtained directly from a correlation matrix. It is obtained by rotating other types of factor
solutions to the varimax form. In the present study, it was considered desirable to use the highest factor-loading criterion to select
customer satisfaction included in sales promotion mix and all group of factors. This criterion was uniformly used in the factor
analyses carried out on the total sample of the study.
ANOVA Test
The generated factors which have got with factor analysis by using SPSS software (17.1) version, with the help of these factors
we have applied ANOVA test by using SPSS software (17.1) to measure the variance among different variables. Tukey Karner
multiple comparison has been used to get the mean difference and analyzing the results. It has been applied on 5% level of
significance, to test the variance between different demographic variables on sales promotion mix and overall customer
satisfaction in shopping malls.
Table-1: ANOVA Test Formula
Source of
Sum of
Variation
Squares
Between samples
SSB
Within samples
SSW
Total
Degree of
Freedom
c-1
n-c
n-1
Mean
Squares
MSB= SSB/c-1
MSW=SSW/n-c
Computed of
Value of F
F=MSB/MSW
Table value
of F
501 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-2: ANOVA Test Measurement with Computed Value to Table Value
Case
a) If the computed value of P is less
than ά
b)If the computed value of P is greater
than ά
Interpretation
The difference in the variance is significant and it could not have arisen due to
fluctuations of random sampling and hence reject H0
The difference in the variance is not significant and it could not have arisen due
to fluctuations of random sampling and hence accept H0
Tools for Data Analysis: Data was analyzed using statistical techniques (at 5% level of significance), ANOVA.
Reliability Test
After the testing of questionnaire, we have tested reliability of whole data on all factors. Reliability test has been made on
completely 100 samples for testing the reliability of customer satisfaction. With the help of Coefficient (Cronbach Alpha), we
have tested the reliability of factors. Reliability of 100 samples for customer satisfaction has Cronbach’s Alpha (.771), which is
excellent; according to different theory of reliability, value above 0.6 is appropriate, low value below the 0.5 implies that
reliability may not be appropriate. No items have been removed from the questionnaire.
Table-3: Sex
Frequency
Percent
Valid Percent
Cumulative Percent
M
100
18.3
50.0
50.0
F
100
18.3
50.0
100.0
Total
System
200
347
36.6
63.4
100.0
547
100.0
Valid
Missing
Total
Table-4: Case Processing Summary
N
Cases
%
Valid
200
36.6
Excludeda
347
63.4
Total
547
100.0
a. List wise deletion based on all variables in the procedure.
Table-5: Reliability Statistics
Cronbach's Alpha
N of Items
.771
18
Table-6: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
.843
1.353E3
Df
153
Sig.
.000
Approx. Chi-Square
.899
3.850E3
Df
903
Sig.
.000
502 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Factor analysis was adopted to capture the sales promotion mix on customer satisfaction in shopping malls. It summaries the
results of the factor analysis which was run using the Principal Component Approach with a varimax rotation.
Table-8: Result of Factor Analysis
Factors Label and Items
Rotated Factor
Loadings
Factor 1: Luck by Chance Offers
Contests
Scratch Card
Lucky Draw
Annual Rating point on permanent card
Anniversary/Festival Schemes
.600
.745
.550
.767
.834
Factor 2: Frequent and Warranty Offers
Weekly/Monthly offers
Spot/ Movement Offers
Product Warranties
.652
.865
.521
Factor 3 : Monetary and Quantity Benefit Offers
Refunds/Cash Back
Bonus/Extra
Free Gift
Sampling
.524
.871
.676
.752
Factor 4: Gift and Discount offers
Buy one Get one free
Stock clearing Sale
Exchange offers
Reliability Coefficient
(Cronbach Alpha)
.799
.769
.840
.732
.873
.669
.766
Effects of Various Demographic Factors on Customer Satisfaction With Respect to Sales Promotion Mix in Dewas
Table-9
Sex
Factor 1: Luck by Chance Offers
Factor 2:Frequent and Warranty Offers
Factor 3: Monetary and Quantity Benefit Offers
Factor 4: Gift and Discount offers
F
.169
2.663
.850
1.511
Sig
.035*
.076
.021*
.219
Bartlett’s test of sphericity and Kaiser-Olkin (KMO) measure are adopted to determine the appropriateness of data set for factor
analysis. High value (between0.5 to 1) of KMO indicates that the factor analysis is appropriate, low value below the 0.5 implies
that factor analysis may not be appropriate. In this study, the result of Barteltt’s test of sphericity (0.00) and KMO (0.899) and
(0.843) indicates that the data are appropriate for factor analysis.
In this study, factor analysis was carried out in two stages. In stage one; known as the factor extraction process, objective was to
identify how many factors to be extracted from the data. Using principal component analysis, 18 items were extracted by four
factors and 43 items were extracted by eleven factors. Only the factors having latent roots or Eigen value greater than 1 were
considered significant; all factors having Eigen value less than 1 were considered insignificant and were discarded. All the five
factors together accounted 78.32% and 75% of the total variance. In the second stage, all the factors were interpreted and labeled.
Items having factor loading more than 0.4 were included in the interpretation. More detailed descriptions of the factors are
presented in the next section.
Impact of Gender on Customer Satisfaction with respect to Sales Promotion Mix
As discussed above, four sales promotion mix and eleven group of factors have been extracted with the help of factor analysis and
ANOVA was used to study the variation in the sales promotion mix on customer satisfaction across gender. The four factors and
eleven factors are summarized below:
503 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-10
Factors Label and Items
Rotated Factor
Loadings
Reliability Coefficient
(Cronbach’s Alpha)
Factor1: Product Consciousness
Variety of product under the roof
Availability of the products
Brand availability of the products
Latest Fashion/Latest products
Feasibility of the products
Display of products
Greater variety/ Product range
.745
.678
.634
.765
.611
.542
.824
Factor 2: Comfort With Entertainment Seekers
Good food court
Multiplex
Good environment of the mall
Trolley/Lifts/Escalators
.657
.531
.761
.642
Factor 3: Extra Service Conscious
Free delivery system
Permanent card facility
Play stations for kids
Location
Complaint facility
.562
.734
.515
.621
.667
Factor 4: Store and Hygiene Consciousness
Store Design
Space to move
Parking
Washroom
Time saving
.621
.532
.788
.545
.564
Factor 5: Price consciousness
Price of the Product
reliability about price
Sales promotion Schemes
.654
.614
.732
.787
Factor 6: Billing Flexibility & Facility
Fast Billing
Sufficient Billing Counter
Installment Facility
.897
.723
.556
.800
Factor 7 : Sales People Consciousness
Personal attention
Excellent suggestions of sales people in buying decision
Presentation by sales person are excellent
Opening hrs/Days are excellent
.863
.657
.543
.626
Factor 8: Confused by Over Choice of Store
Excellent Services from other stores
Packaging
.813
.638
.729
Factor 9: Cash consciousness
Credit card facility
Debt card facility
.668
.534
.690
Factor 10:Employee Consciousness
Staff is helpful
Sales People
.817
.690
.698
.657
……….
Factor 11: Taste consciousness
Aroma of the Product
.878
.762
.856
.887
.667
504 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-11
Sex
Factor 1:Product Consciousness
Factor 2:Comfort With Entertainment Seeker
Factor 3:Extra Service Conscious
Factor 4:Store and Hygiene Consciousness
Factor 5:Price Consciousness
Factor 6:Billing Flexibility/ Facility
Factor 7: Sales people Consciousness
Factor 8 Confused over the choice of store
Factor 9:Cash consciousness
Factor 10:Employee Consciousness
Factor 11:Taste consciousness
F
4.531
4.45
3,25
5.67
5.667
5.52
4.43
5.31
3.34
7.43
6.21
Sig
.035*
.451
.542
.024*
.032*
.354
.034*
.612
.352
.451
.743
Factor-1: Lucky by Chance Offers
The factor measures the luck based schemes and festival offers from different sales promotion mix on customer satisfaction of
Dewas city’s customers in our sample. Customers who score high on this factor are very festival event conscious. They are very
conscious to get best benefits in festival schemes to buy any types of product. They always check and compare the festival offers
before purchasing the products in the shopping malls. They even go to more than one store to get best festival offer for the
product they buy. Table8 indicates that; the highest loading (0.834) item in this factor is “Annual Festival Scheme”. Goff C.
Brent (2002), identified the five factors for customer satisfaction in Sweden, factors were selection, atmosphere, convenience,
sales people, refreshments, location, promotional activities and merchandising policy. With the help of these factors, they had
found the effects with respect to demographic variables, but the concentration was not on sales promotion mix.
It has revealed that the significance values of F for sex has impact on customer satisfaction, its value is less than 0.05. So they do
have significant impact on lucky and bumper offers in Dewas city. Female (mean 3.55) greater than male (mean 3.2), so female
are much interested in festival offers, they just want offers and prizes.
Factor 2: Frequent and Warranty Offers
This Factor reflects the frequent offers dimensions of customer satisfaction with respect to sales promotion mix of Dewas city in
our sample. Dewas customers consider spot movement offers and warranties of the product while purchasing the products in
shopping malls. It is very important for them to take best. Customers who score high on this factor perceive the new offers every
week and they are willing to make special efforts to choose products with the very best movement offers. Table8 indicates that the
highest loading (0.865) item in this factor is “Spot/Movement Offers”
Erasmus Alet C. and Lebani Kethuswegape (2008), they have used sales promotion mix but in limited areas like credit card,
permanent card, total 15 factors were assumed related to sales promotion mix and have found that store card was much useful for
customers in age wise rather than other sales promotion mix. It indicates that the significance value of F for gender is greater than
0.05. So, Dewas city’s customers do not have significant impact on monetary and quantity benefit offers with respect to gender
wise.
Factor 3: Monetary and Quantity Benefit Offers
This factor measures the monetary and quantity benefit offers, which gives customer satisfaction to Dewas customers in our
sample. Customers who score high on this factor are conscious of quantity and cash and do not want to take risk, they just want
something extra or bonus in every type of products for getting satisfaction. They always appreciate and use such type of offers,
which give extra, or cash back facility. Even for getting this type of customer satisfaction, they go to more than one store, to get
better bonus offers. Table8 indicates that; the highest loading (.871) item in this factor is “Bonus/ Extra”.
It indicates the effects of various demographic variables on customer satisfaction in accordance to Dewas city. It indicate the
effects of sex on customer satisfaction according to Dewas city. It indicates that the significant value of F sex has impact on
frequent and warranty offers in Dewas city. In our sample in Dewas city female (mean = 3.21) are more conscious in frequent
offers than male (mean =3.11) customers, who comparatively less use this type of offers.
Factor 4: Gift and Exchange Offers
This factor measures the Gift and Exchange offers, which gives customer satisfaction to Dewas customers in our sample.
Customers who score high on this factor are very conscious of gift and exchange offers and they can even change their brands or
505 | P a g e
ISSN (P):2279-0934, (O):2279-0942
shopping malls for getting gift or exchange offers, they just want gifts or exchange on same product for getting satisfaction. They
always appreciate and use such types of offers, which give gifts. Even for getting this type of customer satisfaction, they go to
more than one store, to get better gifts and exchange offers. Table8 indicates that; the highest loading (.873) item in this factor is
“Stock Clearing Sale”.
Ha Hong-Youl and Muthaly Siva (2008), have recommended only price related sales promotion mix, and identified its impact
with respect to demographic variables, found students were price sensitive. It indicates the effects of gender on customer
satisfaction according to Dewas city. It indicate that the significant value of F for sex, is greater than 0.05. So, in Dewas city
customers do not have significant impact on Gift and exchange offers in shopping malls. In Dewas city’s customers are not gift
conscious. They do not have behavior to purchase the products because of gifts and exchange offers available in shopping malls.
Impact of Gender on Customer Satisfaction with respect to Group of Factors
Factor 1: Product Consciousness
Table 10 indicates that this factor measures the product dimensions; which gives customer satisfaction of Indian customers in our
sample. Customers, who score high on this factor are more product conscious or variety-seeking customers or always like
different varieties of the products in different range for getting satisfaction. They always appreciate and visit those shopping
malls, which have total product availability or variety. Even for getting this type of customer satisfaction, they go to more than
one store to get better range of the products or latest products. These types of customers are not quality conscious but they have
consciousness about only different presentation of product or multiple options of display of the product. The highest loading
(.824) item in this factor is “Greater Variety/Product Range”.
Table11 indicates the effects of gender on customer satisfaction. According to Dewas city, this indicates that the significant value
of F for sex has less than 0.05 so there is impact on customer satisfaction; people are more consciousness about product in Dewas
city according to gender wise. In our sample in Dewas city, sex-male (mean =3.8) are mainly variety seeking customers in
shopping malls than female (mean =3.1).
Factor 2: Comfort with Entertainment Seekers
Table 10 indicates that this factor measures the comfort and entertainment dimensions; which gives customer satisfaction of
Indian customers in our sample. Customers who score high on this factor are very particular about comfort and entertainment
seeker or environment conscious; they always want smooth and healthy environment in shopping malls for getting satisfaction.
They always appreciate and visit those shopping malls, which depend on totally comfort or related to status symbol or having
multiple varieties of entertainment. The highest loading (.761) item in this factor is “Good Environment in the mall”.
Table11indicates the effects of various demographic variables on customer satisfaction according to Dewas city. This indicates
that the significant value of F for sex is greater than 0.05. So, Dewas city’s customers do not have significant impact on comfort
and entertainment consciousness.
Factor 3: Extra Service Conscious
Table 10 indicates that this factor measures the extra service dimensions provided by shopping malls; which gives customer
satisfaction of Indian customers in our sample. Customers who score high on this factor are very particular about extra services
and facilities like permanent card provided by shopping malls for getting satisfaction. They always appreciate and visit those
shopping malls, which depend or give some special services to their customers. Even for getting this type of customer satisfaction,
they go to more than one mall to get better comfortable services for themselves & their kids also and flexible facilities as well.
The highest loading (.734) item in this factor is “Permanent card facility”.
Table11indicates the effects of various demographic variables on customer satisfaction according to Dewas city. This indicates
that the significant value of F for sex is greater than 0.05. So Dewas city’s customers do not have significant impact on extra
services consciousness with respect to gender wise.
Factor 4: Store and Hygiene consciousness
Table 10 indicates that this factor measures the store and hygiene dimensions; which gives customer satisfaction of Indian
customers in our sample. Customers who score high on this factor are very particular about store layout and flexibility to
movement and time conscious for this they believe that parking facility is very important; whatever they use and purchase from
shopping malls for getting satisfaction always want space, comfort and hygiene to park the vehicle. They always appreciate and
visit those shopping malls, which depend on total hygiene, good layout or having multiple options to save the time in parking.
Even for getting this type of customer satisfaction, they go to more than one mall to get better infrastructure of store. The highest
loading (.788) item in this factor is “Parking”.
506 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table11 indicates the effects of gender on customer satisfaction according to Dewas city. This indicates that the significance value
of F for sex is less than 0.05. There is impact on customer satisfaction; people are more consciousness about product in Dewas
city according to gender wise. In our sample in Dewas city, sex-female (mean =3.7) are mainly parking conscious customers in
shopping malls than male (mean =3.22).
Factor 5: Price Consciousness
Table 10 indicates that this factor measures the price dimensions; which gives customer satisfaction of Indian customers in our
sample. Customers who score high on this factor are very particular about price and very conscious to get the best price for the
products they buy for getting satisfaction in shopping malls. They always appreciate and visit those shopping malls, which have
some schemes on price; they check and compare the prices of products before purchasing them. The highest loading (.732) item in
this factor is “sales promotion mix”.
Table11 indicates the effects of gender on customer satisfaction according to Dewas city. This indicates that the significant value
of F for Sex is less than 0.05. There is impact on customer satisfaction; people are more consciousness about product in Dewas
city according to gender wise. In our sample in Dewas city, sex-female (mean =3.56) are mainly sales promotion conscious
customers in shopping malls than male (mean =2.72).
Factor 6: Billing Flexibility & Facility
Table 10 indicates that this factor measures the billing dimensions; which gives customer satisfaction of Indian customers in our
sample. Customers who score high on this factor are very particular about billing facility & counters and very conscious to
sufficient billing counters for billing for getting satisfaction in shopping malls. They always appreciate and visit those shopping
malls, which have best billing facilities; they check and compare the billing system from other malls. Even for getting this type of
customer satisfaction, they go to more than one mall to get services regarding billing. The highest loading (.897) item in this
factor is “Fast Billing”.
of F for sex is greater than 0.05. So, Dewas city’s customers do not have significant impact on billing consciousness.
Factor 7: Sales People Consciousness
Table 10 indicates that this factor measures the sales services dimensions; which gives customer satisfaction of Indian customers
in our sample. Customers who score high on this factor are very particular about sales people and very conscious to get best
service and attention from sales people for getting satisfaction in shopping malls. They always appreciate and visit those shopping
malls, which have best sales people services; they check and compare the services, which have given by sales people with other
malls and also opening and closing hours of shopping malls. The highest loading (.863) item in this factor is “Personal Attention”.
of F for sex is less than 0.05. Therefore, there is impact on customer satisfaction; people are more consciousness about personal
attention given by sales person in Dewas city according to gender wise. In our sample in Dewas city, sex-female (mean =2.25) are
mainly sales promotion conscious customers in shopping malls than male (mean =2.12).
Factor 8: Confused by Over Choice of Store
Table 10 indicates that this factor measures the best store or mall dimensions; which gives customer satisfaction of Indian
customers in our sample. Customers who score high on this factor perceive the product related or price related information
available to be confusing and for getting satisfaction, they search many stores and malls for getting maximum information about
product and services. They never appreciate and visit any shopping mall because they often feel confused to choose the best
product from best store; they check and compare product quality, brand availability and the services, which have been given by
sales people with other malls and also opening and closing hours of shopping malls. The highest loading (.813) item in this factor
is “Excellent Services from Other Stores”.
Table11 indicates the effects of various demographic variables on customer satisfaction according to Dewas city. This indicates
that the significant value of F for sex is greater than 0.05. So, Dewas city’s customers do not have significant impact on different
store options with respect to gender wise.
Factor 9: Cash Consciousness
Table 10 indicates that this factor measures the cash dimensions; which gives customer satisfaction of Indian customers in our
sample. Customers who score high on this factor are very particular about cash and very conscious to give direct cash in bill so
they always search card facility for getting satisfaction in shopping malls. They always appreciate and visit those shopping malls,
which have card facility; they check and compare the services, which are given by other malls in debt and credit cards. The
highest loading (.668) item in this factor is “Credit Card Facility”.
507 | P a g e
ISSN (P):2279-0934, (O):2279-0942
of F for sex is greater than 0.05. So, Dewas city’s customers do not have significant impact on cash consciousness. Therefore in
Dewas city with respect to gender wise, customers are not conscious for any type of credit or debit card facility for getting
customer satisfaction in shopping malls.
Factor 10: Employee Consciousness
Table 10 indicates that this factor measures the employee dimensions; which gives customer satisfaction of Indian customers in
our sample. Customers who score high on this factor are very particular about staff and sales people are very conscious about
services; taken by staff and employees for getting satisfaction in shopping malls. They always appreciate and visit those shopping
malls, which have good staff and cooperative employees; they check and compare the services, which have been given by other
malls’ staff and sales people. The highest loading (.817) item in this factor is “Staff is Helpful”.
employee choice with respect to gender wise.
Factor 11: Taste Consciousness
Table 10 indicates that this factor measures the taste, smell, or feeling dimensions; which gives customer satisfaction of Indian
customers in our sample. Customers who score high on this factor are very particular about feeling or touch, also very conscious
about smell; for those products, which they are purchasing from shopping malls to get customer satisfaction. They always
appreciate and visit those shopping malls, which have good stuff or smooth touchy products; they check and compare the products
with taste or touch which they have purchased from different malls. The highest loading (.657) item in this factor is “Aroma of the
products”.
aroma with respect to gender wise.
CONCLUSION
The objectives of this study were to investigate the customer satisfaction with respect to sales promotion mix and group of factors
in shopping malls and to study variations in the customer satisfaction with respect to sales promotion mix and group of factors
across gender wise. Following the study of Anselmsson Johan (2006), Bromley Rosemary D. F. & Matthews David L (2007),
Goff C. Brent, Boles S. James, Bellenger N. Danny & Stojack Carrie (1997), Sproles and kendall (1986), an attempt was made to
profile the customer satisfaction in shopping malls. They all have identified many factors related to sales promotion mix; from
which we have selected 18 factors of sales promotion mix and 43 items of group of factors and tried to measure the customer
satisfaction in shopping malls. With the help of factor analysis, we have found 4 new factors and 11 group of factors
In addition, this study shows that the average customer of Dewas city in our sample was not very sale promotion conscious, but
gender wise they are quite conscious about some types of sales promotion mix factors. It is found that; female, those are
dependent or independent are more conscious about sales promotion which is related to on the spot offers in shopping malls for
getting customer satisfaction in Dewas city. Shopping is funny activity for them. Customers are recreational in their shopping but
they are not sales promotion conscious, they want variety of products but with quality and good services. They are coming
shopping malls for purchasing products but for getting customer satisfaction, they do not attract to any type of sales promotion
mix, which is available in shopping malls.
In addition, this study shows that the average customer of Dewas city in our sample was very conscious about organized retailing,
people are very conscious about extra facilities and services provide by personal selling in shopping malls; they also want hygiene
and clean atmosphere in shopping malls. Students are quite conscious about any type of satisfaction factors. It is found that;
female are even more conscious to do shopping from shopping malls and they are not price conscious.
REFERENCES
1.
Chunawalla, S. A., & Sethia, K. C. (2008). Foundation of Advertising theory & practice (7th revised ed.). Delhi:
Himalya Publication House, pp. 45-55, 75-95.
2.
Chhabra, T. N., & Grover, S. K. (2005). Marketing Management (3rd Revised ed.). Dhanpat Rai & Company Private
Limited, pp. 15-20.
3.
Krisnawamy, K. N., Shivkumar, A., & Mathirajan M. (2006). Management Research Methodology. Pearson
Education, pp. 20-25.
508 | P a g e
ISSN (P):2279-0934, (O):2279-0942
4.
Kotelr, Philip, Keller, Kevin, Koshy, Abraham, & Jha, Mithileshwar. (2008-09). Marketing Management: A South
Asia Prospective (13th ed.). Delhi: Pearson Education, pp. 25-30, 45-50.
5.
Kotler, Philips, & Gray, Armstrong. (2008). Principle of Marketing (12th ed.). Delhi: Pearson Education, pp. 450-460.
6.
Kotler, Philips. (2008). Marketing Management (13th ed.). Delhi: Pearson Education Eastern Economy, pp. 56-62.
7.
Kothari, C. R. (1997). Research methodology (2nd ed.). Jaipur: New Age International Publisher, pp. 15-25, 55-60 &7680.
8.
Guiltinan, M. (1996). Marketing Management: Strategies and Programs. Mc GrawHill/Irwin, pp. 15-23.
9.
Nair, R. Suja. (2008). Consumer Behavior. Delhi: Himalaya Publication House, pp. 12-18.
10. Newman, J. Andrew, & Cullen, Peter. (2002). Retailing Environment and Operations, pp. 45-48.
11. Shrivastava, K. K., & Khandai, Sujata. (2002). Consumer Behavior in Indian Context. Delhi: Mcgraw Hill. 15-20.
12. Anselmsson, Johan. (2006). Sources of customer satisfaction with shopping malls: a comparative study of different
customer segments. Int. Rev. of Retail, Distribution and Consumer Research, 16(1), 115–138.
13. Bromley, Rosemary, D. F., & Matthews, David, L. (2007). Reducing consumer disadvantage: reassessing access in the
retail environment. Int. Rev. of Retail, Distribution and Consumer Research, 17(5), 483–501.
14. Ellickson, Paul B., & Misra, Sanjog. (2008, September-October). Supermarket pricing strategies. Marketing Science,
27(5), 811–828. ISSN 0732-2399.
15. Goff, C. Brent, Boles S. James, Bellenger, N. Danny, & Stojack, Carrie. (1997). The Influence of Salesperson Selling
Behaviors on Customer Satisfaction with Products. Journal of Retailing, 73(2), 171-183. ISSN No. 022-4359.
16. Goyal, B. B., & Aggarwal, Meghna. (2009). Organized retailing in India- An empirical study of appropriate formats and
expected trends. Global Journal of Business Research, 3(2).
17. Ghosh, Piyali, Tripathi, Vibhuti & Kumar, Anil. (2010). Customer expectations of store attributes: A study of organized
retail outlets in India. Journal of Retail & Leisure Property, 9, 1, 75–87. Macmillan Publishers Limited.
18. Hekman, David R., Aquino, Karl, Owens, Bradley P., Mitchell, Terence R., Schilpzend, Pauline, & Leavitt, Keith.
(2010, April). An examination whether and how racial and gender biases influence customer satisfaction. Academy of
Management Journal, 53(2), 27. ISSN No. 0001-4273, 238-264.
19. Hong, Youl Ha, & Muthaly, Sivahe. (2008). Effects of Advertising Spending on Satisfaction: A Comparison Study of
Bank and Supermarket Industries. Journal of Current Issues & Research in Advertising, 30(2), 11. ISSN No.10641734, 87-97.
20. Hiu, A., Siu N., Wang C., & Chang, L. (2001). An Investigation of Decision-Making Styles of Consumers in China.
The Journal of Consumer Affairs, 35(2), 326-345.
21. Kamaladevi, B. (2010, January). Customer Experience Management in Retailing. Business Intelligence Journal, 3(1).
22. Kai, Kristensen, Hans Jorn, Jhul, & Ostergaard, Peder. (2001). Customer satisfaction: some results for European
Retailing. Total Quality Management, 12(7 & 8). ISSN 0954-4127 print/ISSN1360-0613 online/00/070890-08, 890897.
23. Patel, V. (2008). Consumer Decision Making Styles in Shopping Malls: An Empirical Study. New Age Marketing:
Emerging 93Realities. New Delhi: Excel Books, pp. 627-637.
24. Sproles, George B., & Kendall, Elizabeth L. (1986). A Methodology for Profiling Consumers' Decision-Making Styles.
The Journal of Consumer Affairs, 20(2), 267-279.
25. Retrieved on January, December, 2012 from http://www.ebscohost.com/
*****
509 | P a g e
ISSN (P):2279-0934, (O):2279-0942
RURAL CONSUMERS CHOICE OF MOTORCYCLE ATTRIBUTES:
AN EMPIRICAL STUDY IN PUNJAB
Dr. Monica Bedi10
ABSTRACT
The study attempts to find out the important factors which rural consumers consider important while purchasing a motor
cycle. Data was conducted in Ropar district in state of Panjab, India. In the research, twenty-one decision variables were
considered which covered almost all the features of a motorcycle that a consumer thinks are important before purchasing a
motorcycle. This research would be helpful to the manufacturers of motorcycles in finding out the loop holes about their
existing products in market and to find out the scope of improvement in the new products.
This study will give the companies a broad overview about what are the basic essential features, which are, required among
the different customer groups also it would help them to design bikes for a niche group of customers who have a specific set
of demands.
KEYWORDS
Punjab, Consumer Behavior, Motor Cycle, Value of Money, Aesthetics, Service, Brand Image, Technology, Rural
Consumer etc.
INTRODUCTION
Indian two wheeler industry is the second largest in the world and stands next to china and Japan in terms of production and sales
respectively (IMacs report,Automotive-two-wheelers,2012). The segment can be broadly categorized into three sub-segments viz;
scooters, motorcycles and mopeds. According to IMaCS estimates, the Indian two-wheeler is expected to show average grow rate
of 12-14 percent in FY13. In addition, it contributes the largest volumes amongst all the segments in automobile industry. Total
two-wheeler sales have gone up to 11.7 million units in FY2011, which accounts for 76 percent of total sales volume of the Indian
automobile industry. The 150cc segment recorded the biggest growth from around 42000 bikes a month in 2005, to nearly 65,000
bikes in September 2011. However, there has been shift in demand towards 125cc engine models as customer trade off fuel
efficiency for more power. Hero Honda Motors Ltd (HHML) maintains its market share of 54.6% market share in FY2011. Bajaj
Auto Ltd continues to rank second with 26.8% market share, Honda at third position with 7.3% market share where as TVS Motor
Company Ltd market share stand at 7%(IMacs report,Automotive-two-wheelers,2012).
The competition is intensifying more with the entry of many national and foreign players. Japanese, Korean, European, and
American OEMs entered the Indian Market after the announcement of 100 percent FDI into automobile industry. For the
automobile industry, information on product attributes from a consumer perspective is useful for both manufacturers and retailers.
Basically there are different type of customers in the market, who consider different factors before purchasing a two wheeler, hese
factors depend upon their individual choice and behavior, and hence each and every customer is having different set of needs for
the product he is planning to buy, but a company can only provide few of these combinations which tries to be a best fit for the
masses, hence there arises the need of the study of this consumer behavior which will help the companies to know that what are
the ingredients which a customer wants in his bike so that it reaches best to his satisfaction level.
A good understanding of the importance of different product attributes in consumers’ mind is of much help to successful product
development and enacting effective advertising campaigns. As consumer behavior is influenced by social, economical
environment, Indian rural consumers may differ from those of the other countries in terms of perceiving importance of product
attributes. It is, thus of interest to conduct an investigation with Indian rural consumers. No research has been found on the
importance of various attributes for Indian rural consumers. In addition, in recent years, this market has been growing rapidly,
becoming more competitive. It is meaningful to investigate and analyze the attributes of motorcycle to provide information for
automobile manufacturers and dealers to make effective decisions in product development and marketing.
INDIAN RURAL MARKET
India's largely rural population residing in over 600,000 villages has caught the attention of Indian and multinationals looking for
new areas of growth. Rural market offers tremendous growth opportunity to companies in an attempt to increase their product
sales.
According to National Accounts statistics (2010), rural India accounts for 70 percent of India’s population, 48 percent of the
national income, 56 percent of the total expenditure and 33 percent of the total savings. The rural revolution is driven by
increasing purchasing power, changing consumption patterns, rising education, access to technology, improving infrastructure and
10Assistant
Professor, University Business School, Panjab University, Chandigarh, India, [email protected]
510 | P a g e
ISSN (P):2279-0934, (O):2279-0942
increased government initiatives to boost the rural economy. Moreover, rural lifestyles and behavioral trends are coming to urban
pattern in form and variety. With the opening up of rural markets, improved road connectivity and higher disposable income one
can expect excellent prospects for motorcycles in rural areas also. It has also become a status symbol and a fashion statement
especially among youth in India. With the reduction in the price differential between scooters and motorcycle, there has been a
shift in favor of motorcycles. Despite impressive growth, motorcycle penetration rate is still low in rural India.
According to FADA (2012), in the auto segment, vehicle penetration level in rural India is at 3.3 percent as compared to 10
percent in urban areas. As India rural market is economically growing, there exists a huge untapped growth potential for the
motorcycle manufacturers. The market is vibrant, modern and upbeat. New technology, materials, styles features and colors are
coming in.
The focus is on ride quality and comfort. Electronics has played a big way in improving the fuel efficiency, reducing emission
levels, new safety methods and improving performance parameters. In the rural areas, consumers have come to prefer sturdier
bikes to withstand the bad road conditions. Therefore, the purpose of this paper is to identify the factors contributing to the choice
of motorcycles among the rural consumers. This study will be a great help for manufacturers for designing a proper bike with
proper mix of features especially catering to the needs of rural consumers.
CONCEPTUAL FRAMEWORK
The purchase decision making is a complex process. A consumer’s decision-making style is defined as “a mental orientation
characterizing a consumer’s approach to making choices”. According to Sproles and Kendall, decision-making is relatively stable
and has a lasting effect on consumer decision making. The purchase of goods and services includes a number of factors that could
affect each decision.
According to the information process model (Engel, et al.1986), after recognizing a need for good or service, consumer gathers
relevant information, and finally makes the final purchase decision. During this process, the various attributes draw the attention
of the buyer, form the bases for evaluation and thus, form the selection criteria in purchase decision making. Information on the
relative importance of various attributes of products in consumers’ mind is also useful for new product development. Actually,
understanding buying related decision-making behavior of consumers is important for companies’ strategic marketing activities
and designing effective communication strategies for different consumer segments.
The problem can be defined as “To identify and analyze the attributes influencing the choice of Motor Cycles among Indian rural
consumers in Punjab”. The nature of study was descriptive type to study the various decision variables influencing the purchase
decision of motor cycles. Based on the literature review, 21 attributes were identified, as decision variables, which covered almost
all the features of a motorcycle that a rural consumer thinks, are important before purchasing a motorcycle. Primary data was
collected with the help of structured questionnaire. A five point rating scale was used. Judgmental Sampling was carried out to
choose a sample size of 300 respondents residing in Ropar district of Punjab.
According to the 2011 Indian Census, the population of Indian Punjab is 27,704,236 (males 14,634,819 & females 13,069,417).
The literacy rate in Punjab is 75%, male literacy being 80.23% and female literacy 68.36%. Being an agricultural state, a large
part of the population lives in the rural area. Roughly, 66% of the people live in rural areas while the rest of the 34% are urban
residents. As per 2001 India census, 2011 Ropar had a population of 48,165.There are about 601 villages in the district. The major
cities in Ropar District are Morinda, Kurali, Anandpur Sahib and Chamkaur Sahib. Factor analysis, correlation and regression
analysis was used for data analysis. Further, certain recommendations were also made for the companies based on these results.
FINDINGS AND DISCUSSION
Customer Profile
Table1 presents a comprehensive profile of the customers who had participated in this research study. The majority of
participating consumers was in the age range 28-32 years (32.3%); followed by consumers in the age range of 18-22 years
(26.3%). The respondent’s education level was divided into high school students (20.3%), college graduate level (24.3%),
postgraduate (28.3%), and others (27.0%).
The Major chunk of the respondents consisted were either Post graduate and graduate (52.6%) which signifies that the population
responded to the questionnaires was an educated group. About 41.6% of respondents were having monthly household income
between Rs.10,001 - Rs. 20,000 and 25.0% had monthly household income between Rs. 20,001- Rs. 40,000. Findings from the
study indicated that approximately 26% of motorcyclists have access to a car as an alternative mode while 46.7% have no
alternative mode of transport.
511 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-1: Sample Characteristics
Age ( years)
18-22 years
23 -27 yrs
28-32 yrs
>32 yrs
Total
All (n=300)
n
79
71
97
53
300
p
26.3
23.6
32.3
17.6
100.0
61
73
85
81
300
20.3
24.3
28.3
27.0
100.0
50
125
75
50
300
16.6
41.6
25
16.6
100.0
82
78
140
300
27.3
26
46.7
100.0
Education
High school
College graduate level
Post graduate
Others
Total
Monthly Income
<Rs 10,000
Rs 10,001-20,000
Rs 20,001-40,000
>Rs 40,000
Total
Alternative mode of transport for motorcyclist
Access to other type of two wheeler
Access to four wheeler
No alternative mode of transport
Total
Factors Contributing to Motorcycle Popularity
The study elicited specific questions in order to explain factors that contributed to motorcycle use as opposed to other mode of
transport. Key factors addressed were: a) affordability, b) reduced travel time, c) cost savings, and d) maneuverability (Table 2).
The main incentives motivating the use of the motorcycle were that it reduced travel time during traffic congestion, it offered cost
savings and it is affordable. About 82% of the respondents agreed that the reason for choosing the motorcycle as a mode of travel
was that it reduced travel time during traffic congestion while 80.6% and 59.0% considered it economical to maintain and cheap
to own respectively. 61% believed that motorcycle has become a symbol of style.
Table-2: Factors that Encourages the Use of Motorcycle or Motorcycle Popularity
Statements
1
It is cheap to own
2
It reduces travel time during traffic congestion
3
It is economically to maintain (cost savings)
4
It is easier to maneuver
5
It has become a symbol of style among the youth.
NAD = neither agree nor disagree.
Disagree
21.6
8.7
12.0
19.3
25
NAD
19.4
9.3
17.3
24
13.3
Agree
59.0
82.0
80.6
56.6
61.7
Factors Contributing to Motorcycle Choice
Factor analysis was used for data analysis. Principal Component Analysis with Varimax rotation was used in order to reduce the
number of variables and to determine the actual number of factors underlining the construct. Before running the Principal
Component Analysis on the data, it was examined whether the data was suitable for factor analysis or not. This is done by visual
inspection of the correlation matrix and anti–image matrix.
Bartlett’s test of sphericity and the KMO measure were further analyzed. It was found that Bartlett test of sphericity was
significant (chi-square 1289.368, p=.000) and the Kaser-Meyer-Olkin measure of sampling adequacy was 0.762 which larger than
0.6, which showed that the use of factor analysis was appropriate. To set the criteria for the factor analysis, factors with
eigenvalue greater than 1.0 and items with rotated factor loadings of 0.50 or greater were retained. Table 3 presents the factor
analysis results. Among the items, all twenty-one items were retained for the factor analysis and six factors were identified. This
512 | P a g e
ISSN (P):2279-0934, (O):2279-0942
factor solution explains 74.24% of the variation, a very reasonable proportion; all eigenvalue exceeded 1.0. More importantly, the
six factors confirm the characteristics proposed. The names of the factors, the statements labels and factor loadings are
summarized in Table 5.
Table-3: Factor Analysis of Choice Criteria
Factor Labels ( mean)
Total
Value for Money
(mean=4.15)
Aesthetics
( mean=3.86)
Service
( mean=3.76)
Brand Image
( mean=3.33)
Technology
( mean=3.22)
Promotional Activities
( mean=2.57)
Items
Factor
loading
Price
Maintenance Cost
Fuel Efficiency
Color
Style
Model
Speed
Driving comfort
Seating comfort
Customer Service
After sales service
Resale Value
Exchange offer
finance scheme available
Popularity of a Brand
Height of motorcycle
Type of engine
Free Insurance
Free servicing
Free Gift
Warranty /Guaranty
0.741
0.768
0.796
0.762
0.633
0.739
0.798
0.837
0.818
0.682
0.802
0.805
0.718
0.824
0.722
0.865
0.755
0.689
0.857
0.813
0.724
Variance
Explained (%)
74.24%
20.133
Cronbach’s
Alpha
12.121
0.888
11.308
0.876
10.964
0.900
10.605
0.829
9.108
0.700
0.788
Table shows that “value of money” is the explain 20.13 percent of the variance. “Aesthetics” has been shown to be the next
important factor accounting for 12.12% of variance. The third factor, “service” accounts for 11.30% of the variance. This includes
customer service, after sales Service and resale value as important factors. “Brand Image” factor comprises of three statements
and it amounts to 10.96% of total variance. The factor “Technology (in terms of height of motorcycle, type of engine)”accounts
for 10.60% of variance. Four statements have loaded on “Promotional Activities” factor and explain 9.10% of the total variance.
Importance of Attributes
The 21 attributes of motorcycle and their relative importance are presented in Table 4. The average score of attribute measure the
relative importance of each attribute. The table is arranged according to these average scores. The larger the score, the more
important is the attribute for the consumers. In the table is also shown the standard deviation of the score, a measure of dispersion.
It can be seen that the average score of the attributes ranges from 4.23 for price to 1.82 for free gift. Standard Deviation varies
from 0.68 to 1.27.
Table-4: Relative Importance of Motorcycle Attributes
Attributes
Price
Fuel Efficiency
Model
Maintenance Cost
Resale Value
Speed
Color
Style
Popularity of Brand
After Sales Service
Mean
4.23
4.20
4.10
4.04
3.94
3.87
3.86
3.85
3.77
3.75
Standard Deviation
0.91
1.02
0.82
1.03
0.60
0.90
0.99
0.68
0.89
0.90
Attributes
Driving Comfort
Warranty / Guaranty
Customer Service
Finance Scheme Available
Seating Comfort
Type of Engine
Height of Motorcycle
Free Insurance
Exchange Offer
Free Servicing
Free Gift
Mean
3.66
3.65
3.60
3.44
3.39
3.22
3.13
2.78
2.69
2.03
1.82
Standard Deviation
1.07
0.88
0.93
0.97
0.89
1.00
0.94
1.28
1.13
0.88
1.27
513 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Some observations can be made on the importance of motorcycle attributes. First, it can be seen that all of the 21 attributes have
some relevance to Indian consumers since the average scores are all above 3 except the sales promotion methods. According to
the ranking of all these scores, the four important attributes are identified, which are: Price, Fuel Efficiency, Model type and
Maintenance Cost. Average scores of the four attributes are all above 4.which means that they are important to consumers. There
is an obvious gap between these four attributes and the other attributes. 3.94 for resale value.
Correlation and Regression analysis
To address the relationship between Consumer Purchase Intentions and Factors, regression analysis was done on the data
collected consumers. The relationship was first investigated using Pearson correlation to check the linear relationships between
independent and dependent variables. Table 5 shows the Pearson correlation. Preliminary analysis revealed that there was no
violation of the assumption of linearity and homoscedasticity and all associations were found to be significant at 95% level in
both sub-samples.
Table-5: Correlation Analysis
Value for
Money
Consumer Purchase Intention
0.800*
Note: *Correlation significant at .05 level
Aesthetics
Service
0.774*
0.735*
Brand
Image
0.664*
Technology
0.546*
Promotional
Activities
0.492*
In the second step, to develop beyond this overall picture and to identify which aspects of service quality have a stronger
influence on the purchase intention, regression analysis was carried out. In each model, six factors, which consisted of 21
attributes, served as the independent variables and overall purchase intention as the dependent variable. After conducting
regression analysis, multi-linearity diagnostics was conducted in to identify the multi-collinearity problem among independent
variables.
A scrutiny of the results in table 6 show that Value for Money, Aesthetics, Service and Brand Image are significant predictors of
consumer purchase intention in motor cycle segment in Indian automobile segment. An inspection of the coefficient of
determination (R2) for regression (results), also show that four factors are effective predictors of consumer purchase intention. As
reported in table 6, R2 and adjusted R2 value for consumer purchase intention was found to be 0.811 and 0.647 respectively. In the
present study, factors, “Value for Money” had the most powerful impact on consumer purchase intention. “Aesthetics” showed
the second most powerful effect on consumer purchase intention, followed by “Service”, and “Brand Image”. Service, the third
important factor includes customer service, after sales Factor “Technology” and “Promotional Activities” was not found to be
statistically significant in the model.
Table-6: Antecedents of Consumer Purchase Intentions - Regression Analysis Results
Dependent
Variable
Consumer
Purchase
Intention
Independent
Standardized Regression
T-value
Significance
Variable
Coefficients ( β )
Probability
Constant
3.364
0.001
0.418
4.190
0.000
Value for Money
0.373
3.792
0.000
Aesthetics
0.292
2.855
0.005
Service
0.194
2.257
0.027
Brand Image
R2
0.811
adjusted R2
0.647
F
P = 0.027
Sample Size
300
Note: *Beta co-efficient is the standardized regression co-efficient, which allows comparison
dependent variable of each independent variable.
**t-statistics help to determine the relative importance of each variable in the model.
TV
VIF
0.900
0.899
0.778
0.735
2.052
1.036
1.523
1.868
of relatives on the
A multi-collinearity problem is likely to occur when explanatory variables correlate with each other. Consequently, the effect of
each variable of the dependent variable becomes difficult to identify. Hence, Tolerance Value (TV) and Variance Inflation Factor
(VIF) for each explanatory variable were used to measure multi-collinearity. Normally a set of explanatory variables is highly
correlated if tolerance is low and VIF exceeds ten, thus presenting a multi-collinearity problem. The multi-collinearity diagnostic
statistics were listed in table 6. It can be seen that tolerance value is towards the higher side and VIF does not exceed the
recommending limit.
514 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CONCLUSION AND RECOMMENDATIONS
In this study, attributes of motorcycle for Indian consumers were investigated, which provides some insight into
consumer behavior in automobile industry. Rising commodity prices hardening interest rates and high inflation may lead
to slow growth in the short term, the growth over the medium to long term is expected to grow at healthy rate in FY2013.
From the analysis it came out that fuel efficiency, maintenance cost and Price are the major decision variable for customers who
seek value for money in their product. Those scoring high on this factor appear conscious of prices in general. They are also
concerned with maintenance cost and fuel efficiency. Importantly, they always prefer getting the best value for their money. They
are likely to be comparison shoppers. However, competitors like Bajaj and Hero Honda offer more fuel-efficient and cheaper bike
in the form of Boxer and CD Dawn respectively, which also lower maintenance cost. Hence, there is a good scope for
improvement on this front for other competitors. “Aesthetics" factor reveals color, style, and model preference, speed, driving
comfort and seating comfort for choosing the particular brand of motorcycle. There are a large number of young populations,
which focuses on aesthetics of the product like color, style, model etc. There are many bikes present in the market like Bajaj
Pulsar, Hero Honda Karizma and are successful because of their aesthetics.
In addition, there is a need of innovation for the other competitors as well to provide such kind of bikes in the market. In case of
driving and seating comfort, ways can be explored to make the bike and the riding more comfortable, for example, improving the
seating space in the bike can be improved. Service and resale value as important factors. Since, there is a population who
concentrates on service provided by the company so the companies should provide a service not only at the time of selling its
product but even after the product be sold. For example, Resale value is one of the major strengths of any automobile. Hence, in
order to capitalize on this strength, the company should start a ‘Real Value Chain’ for motorcycle owners. Here the company’s
dealers will offer exchange offers to the owners of motorcycle to get new Motorcycle by giving their old motorcycle and paying
some additional amount.
The dealers can then sell these old motor cycle after reconditioning and at prices much below the cheapest offer available for a
standard segment bike of any brand. This will help the company to capture that market segment which cannot afford to pay Rs.
25,000 to 30,000 or avail the finance scheme. It will also help the company in giving tough competition to other competitors.
Brand Image factor exhibits that the overall brand image of the company can also be one of the success factors in the market that
is why the companies like Hero Honda and Bajaj are successful in the market. In addition, the companies can leverage the value
of their brand equity in better way by launching still cheaper but good quality products.
REFERENCES
1.
Crawford, C. M. (1994). New Product Management (4th ed.). Burr Ridge. IL: Richard D. Irwin.
2.
Engel, J. F., & Blackell, D. R. & Miniard, W. P. (1990). Consumer Behavior (6th ed.). New York. NY: The Dryden
Press.
3.
Retrieved on 2013, June 15 from https://en.wikipedia.org/wiki/Punjab,_India
4.
Retrieved on 2013, June 20 from http://www.fadaindia.org/
5.
Retrieved
on
2013,
June
20
http://www.indiastat.com/economy/8/nationalincome/175/nationalaccountsstatistics/375959/stats.aspx
6.
Retrieved on 2013, June 25 from http://www.siamindia.com/upload/amp.pdf
7.
Kumari, A. S., Reddy, R. D., Kameshwari, L. M. (2005). Consumer buying behavior in two wheeler Industry: with
special reference of Hero Honda Motorbike. Indian Journal of marketing, 35(10), 36-40.
8.
Madikonda, Kishore Babu, & Reddy, D. Raghunatha. (2004). A Study on Passenger Car Industry in India. Indian
Journal of Marketing, 34(10), 36-39.
9.
Sproles, G. B., & Kendall, E. (1986). A methodology for profiling consumers’ decision making styles. Journal of
Consumer Affairs, 20(2), 267-279.
from
10. Arun, F., Modern. (2008). Upbeat market. The Hindu Survey of Indian Industry, 166-168.
11. Lheem, H. S. (2008). Changing face of the Indian automobile. The Hindu Survey of Indian Industry, 157-162,
12. Ulrich, K. T., & Steven, T. Eppinger. (2005). Product Design and Development (3rd ed.). New York. NY: McGrawHill.
*****
515 | P a g e
ISSN (P):2279-0934, (O):2279-0942
A STUDY ON RURAL WOMEN EMPOWERMENT THROUGH SELF HELP GROUPS
Dr. A. N. Tamragundi11 Sri Devarajappa S.12
ABSTRACT
The empowerment and autonomy of women and the improvement of their political, social and economic status are highly
important and in addition, it is essential for the achievement of sustainable development. In the world, women are facing
threats to their lives, health and well being as a result of being overburdened with work and also on account of their have of
power and influence. In most regions of the world, women receive less formal education than men and at the same time
women own knowledge abilities and coping mechanisms often go unorganized.
Need of Study: In India, SHGs are formed by rural people with the objective of improving their livelihood through collective
savings and investments in income generating activities. It is said that SHG is very effective, efficient and relevant tool for
organizing and empowering the poor especially women in rural areas. Therefore, a need was felt by the researcher to
understand the concept of SHG and to know its impact on Socio-economic empowerment of women in rural areas.
Conclusion: Targeting women through microfinance has proved to be a successful and efficient economic development tool.
Women are usually the primary or sole family caretakers in many developing countries like India. Helping them to gain
additional daily income improves the conditions of their entire household. Putting extra income in women’s hands is the most
efficient way of affect an entire family, as women typically put their children’s needs before their own. SHG provides a
paradigm shift in the strategy for resolving the socio-economic deprivations of the women.
KEYWORDS
Rural Women, Self Help Groups, Empowerment, Rural Entrepreneurship, Socio-Economic Factors etc.
INTRODUCTION
The SHGs play today a major role in poverty alleviation in rural India. A growing number of poor people (mostly women) in
various parts of India are member of SHGs and actively engage in savings and credit as well as in other activities. The saving and
credit focus in the SHG is the most prominent element and offer a chance to create some control over capital albeit in very small
amounts. The SHG system has proven to be very relevant and effective in offering women to break gradually away from
exploitations and isolation.
Almost all-major “Donor Agencies” support SHG in India in one way or another and many success stories are available,
describing how membership in a SHG changed the life of particular individual or group for the betterment. Many NGOs in India
are promoting the SHG mechanism. In India SHGs are formed for a variety of purpose and by a variety of people. SHGs formed
by rural people with the objective of improving their livelihoods through collective savings and investments in income generating
activities.
NEED OF STUDY
A need was felt by the researchers to understand the concept of SHG and to know its impact on Socio-economic empowerment of
women in rural areas. Hence, the study entitled “A Study on Rural Women Empowerment through Self Help Groups” is
undertaken. Mundgod is one of the Towns in Mundgod Taluk in Uttar Kannada District in Karnataka State. Mundgod is 55 km far
from its District Main City Karwar. It is 354 km far from its State Main City Bangalore. There are 110 Self Help Groups in the
Mundagod and total amount lent among SHGs is amounting to Rs 94.76 lakhs and amount collected by SHG is Rs 10.01 lakhs.
There is ample scope for SHGs in the study area.
The information relating to the research was collected from both primary and secondary data. Primary data was collected through
well-designed, pre-structured, close-ended questionnaire. Random sampling technique was used to choose the respondents from
study area, for the purpose of the study total number of 50 respondents were selected. In addition, Secondary Data is collected
through books, Journals, Internet. The data thus collected was properly analyzed and interpreted using proper tools, tables,
percentages.
11Assistant
Professor, P.G. Department of Commerce, Karnatak University, Karnataka, India, [email protected]
Assistant Professor, Department of Commerce, University College of Arts, Tumkur University, Karnataka, India,
[email protected]
12
516 | P a g e
ISSN (P):2279-0934, (O):2279-0942
DATA ANALYSIS AND INFERENCES
Profile of Respondents
Table-1: Respondents Profile
Classification
Number of
Respondents
Percentage
19
20
11
-50
38
40
22
-100
30
7
7
6
-50
60
14
14
12
-100
i) On basis of Age
20-30
30-40
40-50
50 & above
Total
ii) On the basis of
Education
Illiterates
SSLC
PUC
Graduation
Others
Total
Sources: Field Survey
Classification
iii) On basis of Occupation
House wife
Profession
Business
Others
Total
iv) On the basis of
Average Income
10,000-15,000
25,000-35,000
40,000-50,000
65,000-80,000
Total
Number of
Respondents
Percentage
42
-8
-50
84
-16
-100
25
12
9
4
50
50
24
18
8
100
Table 1 shows that 38 percent of the respondents comes under 20-30 age group, 40 percent of respondents falls under age 30-40
group and 22 of the respondent comes under 40-50 age group and finally under 50 and above shows nil. It also provides the
information regarding the qualification of respondents i.e., 60 percent of the respondents are illiterate and 14 percent respondents
completed SSLC & 14 percent respondents comes under PUC education level and 12 percent of respondents are graduates and
none of the respondents falls under other category of education. As far as the occupation of the respondents in the SHG is
considered, 84 percent of the respondents are housewives, nobody falls under professional occupations, and 16 percent of them
are businesswomen. About average income of respondents, 50 percent of respondents have an average income between Rs.
10,000 – Rs. 15,000 and 24 percent of respondents have an average income between Rs. 25,000-Rs. 35,000, similarly 18 percent
of respondents have an average income Rs. 40,000-Rs. 50,000 and finally 8 percent of respondents have an average income
between 60,000-80,000.
Table-2: Awareness among Respondents
Awareness through
Friends
Relative
Others
Total
Percentage
54
24
22
100
It is found in the study that all the respondents are aware about the SHG. Table 2 indicates that 54 percent of respondents say that
they come to know about SHG through their friends and 24 percent of the respondents say that they got awareness through the
relatives, 22 percent respondents came to know about SHG from others.
Table-3: Opinion towards Socio-Economic, Cultural and Political Empowerment of Women
Opinion
Economic Development
Strongly Agree
Agree
Disagree
Total
Social Development
Strongly agree
Agree
Disagree
Total
Number of
Respondents
Percentage
10
24
16
50
20
48
32
100
30
20
-50
60
40
-100
Opinion
Cultural Development
Strongly agree
Agree
Disagree
Total
Political Development
Strongly agree
Agree
Dis-agree
Total
Number of
Respondents
Percentage
36
14
-50
72
28
-100
50
-50
100
-100
517 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table 3 shows the information regarding the economic empowerment of women in SHG 48 percent of the respondents say in that
they are economically developed by SHG, 32 percent of respondents disagree with this, and 20 percent respondents strongly agree
for this concept. It also shows opinion towards social development of women through SHGs, 60 percent of respondent strongly
agree with social development from SHG and 40 percent respondents agree with the social development. 72 percent of the
respondents strongly agree with the cultural development 28 percent of respondents just agree with this concept. In addition, 100
percent of the respondents opined that SHG helps for political empowerment.
Table-4: Aids provided by SHG to members
Aids Provided
Finance aid
Training
Supply of Raw materials
Support Marketing
Others
Total
20
15
--15
50
Percentage
40
30
--30
100
Table 4 reveals the information regarding aids provided by the SHG to the members. 40 percent of respondents got the financial
aid, 30 percent of respondents got help through the training, 30 percent respondents received the help by way of raw materials,
and 30 percent of them got help in other way.
Table-5: Financial Improvements
Opinion
Increases the Saving Habit
Increases the Family Income
Supply the Finance For Various Purpose
Total
Number of Respondent
14
16
20
50
Percentage
28
32
40
100
Table 5 shows the information regarding the financial improvement through the SHG 28 percent of respondents say that SHGs
has increased saving habit and 32 percent of respondents say that it has increased their family income and 40 percent respondents
say it has given financial help for the various purpose.
Table-6: Purpose of Loan Taken
Purpose
Children Education
Children Marriage
Business
Acquiring Home Appliances or Jewellaries
Others
Total
20
14
12
4
-50
Percentage
40
28
24
8
-100
Table 6 reveals the information about purpose of loan taken the from SHG, 40 percent of respondents say that they have taken
loan for that children education and 28 percent respondents have taken loan for the child marriage, 24 percent respondents have
taken for their business and 8 percent of the respondents have taken loans for acquiring or purchasing home appliances and
jewellaries.
Table-7: Mode of Savings by Respondents
Modes
Bank
Post Office
Social Organization
Others
Total
35
15
--50
Percentage
70
30
--100
Table 7 states information regarding the mode of saving habit among members i.e. 70 percent of respondents have the savings in
banks and 30 percent respondents have the saving in Post Office.
518 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-8: Suggestions to Improve the SHG
Particulars
Provide more loan for members
Provide loan at low rode of interest
Provide the loan to right time
Others
Total
27
16
7
-50
Percentage
54
32
14
-100
Table 8 reveals the information regarding the suggestion given by the members for the improvement of SHG. 54 percent
respondents say that SHG have to provide more loans for the members, 32 percent respondent say that should provide loan at the
lower rate of interest and 14 percent respondents say that should provide the loan at the right time where the members are in need
of the loan.
Table-9: Opinion about SHG
Opinion
Good
21
Very good
29
Bad
-Total
50
Percentage
42
58
-100
Table 9 shows the information about opinion about the SHG. 42 percent respondents say that it is good to join SHG and 58
percent respondents say it is very good to be in SHG. None of them opined as bad.
FINDINGS

There is only few business women (16 percent) become member of SHG and remaining Portion i.e., 84 percent are from
non-working group and homemakers.

All of SHG members agree that there is social benefit from becoming member of SHG. Majority of them also opined
that it helps in their economic development. 72% of respondents strongly agree that SHG improves their cultural skills.

All members opined that they get political importance because of their membership in SHG.

SHG helps its members to improve their economic background mainly by way of lending loan and training them.

SHG become a source of finance for members. It increases the family income of members and it provides finance
mainly for the purpose children education and children marriage.
REFERENCES
1.
Agrawal, Meenu, & Nelasco, Shobana. (2009). Empowerment of Rural Women in India. New Delhi: Kanishka
Publishers.
2.
Thakur, Naresh Ram. (2009). Rural Women Empowerment in India in Empowerment of Rural Women in India. New
Delhi: Kanishka Publishers.
3.
Nelasco, Shobana, & Antorozarina, Junofy. (2009). Rural women empowerment through Self Help Groups in
Empowerment of Rural Women in India. New Dehi: Kanishka Publishers.
4.
Manamohan, Geeta, Tushir, Monica, & Chadha, Sumita. (2008). Rural banking and Micro Finance. Southern
Economist.
5.
Nashi, S. K. (2004). Micro finance; A study of stree shakti (SHG) programmes. Southern Economist.
6.
Bhole, L. M. Financial Institutions and markets TMH. New Delhi.
7.
Bhatia, Anju. (2000). Women Development and NGOs. New Delhi: Rawat Publication.
*****
519 | P a g e
ISSN (P):2279-0934, (O):2279-0942
A STUDY OF FOOD RETAILING SYSTEM IN INDIA: A CONCEPTUAL STUDY
Dr. Rajkiran Prabhakar13 Shilpi Raj14
ABSTRACT
The food industry in India is a sunrise sector. The food retail industry consists of the total revenues generated through food
sales from supermarkets, hypermarkets, cooperatives, discounters, convenience stores, independent grocers, bakers, butchers,
fishmongers and all other retailers of food and drink for off-the-premises consumption. According to market forecast of Data
monitor, in 2011 the Indian food retail industry is expected to have a value of $218.2 billion, an increase of 29.9% since 2006.
The compound annual growth rate of the industry in the period 2006-2011 is predicted to be 5.4%. The year 2011 witnessed
flashing retail news throughout the year, the most obvious, but most politically sensitive issue was lifting the ban on Foreign
Direct Investment (FDI) for multi-brand retail chains like Walmart & Carrefour.
In the year 2012, government of India opened the food processing industry for 100% FDI and food-processing industry is the
backbone of food retail industry. The stream was opposed with million micro-business kirana entrepreneurs & the support
highlighted the obvious benefits like better returns, quality, employment & improvement of farmer community socioeconomic strata. Branded food is the key attraction for any food & grocery organized store. Apart from various infrastructural
constraints and operational challenges, organized retailers also face shrinking margin share challenges from leading brands
and competition from local mom n pop stores. In this scenario, this study is an attempt to analyze the food-retailing sector in
India. It attempts to find out the constraints that the industry is facing and point out the emerging trends, which provides the
bunch of opportunities to the food retail sector.
KEYWORDS
Food Retailing, Food Processing, Branded Foods, Opportunities, Organized Retail etc.
INTRODUCTION
The Indian Retail Industry
The time has come for Indian retailing. The signals are there all over. The newspapers, business press, the governments, the Chief
Executive Officers of large corporations, all talk about it day in day out. The Indian economy is likely to continue its steady
growth with enhanced share in global trade and steady agricultural outputs. Booming employment opportunities, rising urban
disposable income and credit card ownerships, changing lifestyles and demographic profiles all are showing a favorable skew
towards a rising consumerism culture, boding well for retailing growth. Consumer spending is clearly set to accelerate its pace.
Demographics continued to show a positive skew to spur retailing growth. Consumers groups aged between 20-45 years are
emerging as the fastest growing consumer group and the mean age of Indians is now pegged at 27, a mean age that reinforces
spending across all the retailing channels of grocery, non-grocery and non-store. India’s burgeoning middle class will drive up
nominal retail sales through 2010 by 10 percent per annum. At the same time, organized retail is becoming more important. At
present organized retail accounts for a mere 3 percent of the total, by 2010 this share had already reached 10 percent. Thus, most
of India’s growth in retail is in the future, not the past.
The country’s middle class has been expanding due to rapid urbanization, increasing per capita income, increased participation of
women in the urban work force and globalization. Although decreasing with rapid urbanization, food is still a major spend in the
Indian households. Rural retailing is witnessing explorations by both corporations and entrepreneurs – ITC's Choupal Sagar,
HLL's project Shakthi and Mahamaza are some of the models being tried out. While conclusive evidence to identify the winning
rural retailing model is not yet available, such experiments are steps in the right direction. Grocery retailers continued to be the
staple of retailing in 2005, accounting for three-quarters of overall retailing value sales. India witnessed a breathtaking rise in
grocery retailer outlet numbers fuelled by the rapid expansion of modern retail formats, such as supermarkets, hypermarkets and
convenience stores.
Spread of Organized Retailing in India
Organized retailing is spreading and making its presence felt in different parts of the country. With the entry of very large
corporate houses like Reliance Fresh, Vishal, AV Birla group, Bharati Walmart joint venture and the existing Biz Bazaar, Spencer,
Food Mart are also in large scale expansions across the country, the spread of the organized retail is going to reach soon the small
populations towns of 1 lac to 5 lacs after covering all big, medium and small cities. The trend in grocery retailing, however, has
13
Assistant Professor, Faculty of Management Studies, Banaras Hindu University, Uttar Pradesh, India,
[email protected]
14Research Scholar, Faculty of Management Studies, Banaras Hindu University, Uttar Pradesh, India, [email protected]
520 | P a g e
ISSN (P):2279-0934, (O):2279-0942
stated with a growth concentration in the South. Though there were traditional family owned retail chains in South India such as
Nilgiri's as early as 1904, the retail revolution happened with various major business houses foraying into the starting of chains of
food retail outlets in South India with focus on Chennai, Hyderabad and Bangalore markets, preliminarily. In the Indian context,
Big Bazaar and Reliance fresh have pioneered a countrywide chain in food retailing only.
Graph-1
Sources: Pratichee Kapoor & Aneesh Saraiya: “Food Retailing: Backbone of Organized Retail Formats”
Retail Models in India: Current & Emerging
Several co-existing types and formats characterize the Indian food retail market. These are:
Current Kirana Stores and Hawkers:


The roadside hawkers and the mobile (pushcart thela variety) retailers.
The kirana stores (the Indian equivalent of the mom-and-pop stores of the US).
Emerging the Organized Retailers within Modern Trade, we have:





The discounter (Subhiksha, Apna Bazaar, Margin Free, Reliance Fresh).
The value-for-money store (Nilgiris, Big Bazaar, and Cooperative Stores).
The experience shop (Foodworld, Trinethra).
The home delivery (Fabmart).
Super stores & wide reach stores (Reliance Fresh, Spencer, Food Mart).
Food Retail Industry in India
Consumer Food Preferences an estimated 20-30 percent of the Indian population is strictly vegetarian in accordance with the
tenets of Hinduism. Those Hindus who eat meat tend to do so sparingly and beef consumption is taboo among Hindus, Jains and
Sikhs who comprise over 80 percent of India’s population. Furthermore, non-vegetarian food is not consumed during special days
or religious observances. India’s large Muslim population (estimated at 160 million) does not consume pork and eats Halal animal
products that are sourced from livestock that were slaughtered according to the tenets of Islam.
Indians tend to take pride in the many regional and varied foods that comprise Indian cuisine. In general, Indians have a strong
preference for fresh products, traditional spices and ingredients, which has generally slowed the penetration of American and other
foreign foods. However, the acceptance of packaged, convenience and ready-to-eat food products is increasing, especially among
younger consumers and the urban middle class. Many Indians are quite willing to try new foods while eating out, but often return
to traditional fare at home. Italian, Thai and Mexican foods are reportedly the fastest growing new cuisines in India and consumers
are slowly diversifying their consumption patterns. Typical imported food items that can be spotted in retail stores in major cities
include dry fruits and nuts, cakes and cake mixes, pastries, chocolates and chocolate syrups, seasonings, biscuits, canned fruit
juices, canned soups, pastas, noodles, popcorn, potato chips, canned fish and vegetables, ketchup, breakfast cereals, and fresh
fruits such as apples, pears, grapes and kiwis.
Imported Food Market in India effectively prohibited imports of most food products up until 10 years ago. Consequently, the
business of importing food is relatively new and consumer awareness of imported foods is limited, but growing. In 2011, India’s
market for consumer food products was valued at $2.0 billion, up from $1 billion in 2008. Nuts, dried fruit and fresh fruit account
for about half of consumer-ready imports, but imports of other products are growing at the same rate, albeit from a very small
base. The United States ($448 million) was the largest supplier of consumer oriented agricultural products followed by China
($200 million), Nepal ($84 million), Afghanistan ($84 million) and Australia ($79 million).
521 | P a g e
ISSN (P):2279-0934, (O):2279-0942
For many Indian consumers, even upper income consumers, the option to consume imported foods and new cuisines is a new
experience. While consumers may be familiar with foreign foods in a restaurant setting or during international travel, many do not
know how to prepare foreign foods at home. Consumer education is an important part of introducing new and imported foods to
the market. Similarly, “Indianizing” products by altering a product’s flavor or demonstrating how a foreign product can be fused
with Indian foods are other ways of introducing new products. As India’s modern retail sector develops, it will likely become an
increasingly important vehicle for introducing imported food product to consumers before moving those products to the traditional
retail sector. India now has several 24-hour food networks and cooking competition shows are becoming popular on television.
Increased exposure to foreign foods and the opportunity to consume them is expected to lead to continued growth in the sector.
Imported nuts and fruits feed easily into India’s traditional retail channels.
An estimated 90 percent of imported fresh fruit is sold in roadside stands and open markets. Imported packaged and consumerready foods are found primarily in hotels; a small number of gourmet grocery stores that specialize in imported foods; in the
imported foods sections of some larger store formats and in thousands of small neighborhood stores that have some degree of
specialization in imported foods. One of the better-known imported food brands has products in over 22,000 stores across India, of
which 19,000 are small traditional retail outlets. Hence, while the modern retail sector is expected to become an increasingly
important means of selling imported foods, India’s traditional retail system will remain an important way of reaching consumers
for years to come. A variety of imported food products from the United States and other countries can be easily seen on the
shelves of the organized retail stores: Beverages (Fruit juices, concentrate, alcoholic beverages, and carbonated drinks)
Confectionary items Dry fruit and nuts Breakfast cereals Fresh fruits and vegetables Canned and frozen food Preserves, jam,
jellies, and marmalades Health food products Pasta and noodles Soups, syrups, and seasonings Sauces and salad dressings.
Table-1
Sources: Pratichee Kapoor & Aneesh Saraiya “Food Retailing: Backbone of Organized Retail Formats”
Indian consumer associates different aspects with each format of store; the decision matrix illustrates the expectations and aligned
attributes with different formats of food retailing.
Table-2
Sources: Pratichee Kapoor & Aneesh Saraiya “Food Retailing: Backbone of Organized Retail Formats”
522 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The table below shows the estimated size of food retail sector in India on 2011
Table-3
Sector
Estimated size on 2011
Total Retail (Food and Non- Food)
$450 Billion
Organized Retail (Food and Non-Food)
$27 Billion (6 % of total retail sales)
Food Retail (Modern and Traditional)
$270 Billion (60 % of total retail sales)
Modern Food Retail
$5.4 Billion (2 % of total food retail sales)
The food retail market includes the retail sales of all food products, both packaged and
unpackaged, as well as beverages (including retail sales of all alcoholic and nonalcoholic beverages)
Sources: FAS Mumbai Analysis and Trade Estimates.
The growth of organized retailing in developing countries has been received with both the positives and negatives. According to
study conducted by (Feeny et al, 1996) in Thailand, though initially supermarkets were very successful. Thai shopping habits and
spending was still attuned to traditional shop houses. The same results emerge from Indonesia.
A.C Nielson (2007) study in the capital of Jakarta and in the second-tier cities of Bandung and Cirebon, focusing on consumers’
buying habits in supermarkets versus traditional markets. The survey revealed that penetration of grocery retailing has occurred
much more rapidly in processed, dry, and packaged foods and in household and personal care products. Modern retail has forged
in the Far East with remarkable success.
According to Anand and Vikram, 2006, The Food Retail Industry in the Far East has evolved into what could be called ‘the
breeding ground’ for emerging models with countries like Singapore being the home to some of the big players in the industry.
Singapore has been considered ‘the breeding ground’ for modern retail formats. Another country, which enjoys an active spot on
the retailers map, is Japan. The retail industry is as huge as US$ 1088 Billion, with a split of US$ 594.8 Billion in the non-food
segment and US$ 493.2 Billion in the food-retailing sector. Studies of the Euromonitor and A. T. Kearney in India have found that
the organized retail formats have a vast scope to spread.
According to the Euromonitor survey, 2008, ‘Food retailing in India’, there are a large variety of retailers operating in the Indian
food retail industry and it is highly fragmented. However, traditional retailers, who operate small single outlet businesses mainly
using family labour, dominate this industry. In comparison, supermarkets account for a very small proportion of food sales. This is
because of the strong competitive strengths that traditional retailers possess and greater numbers of higher income Indians
preferring to shop at supermarkets because of convenience, higher standards of hygiene and the attractive ambience.
The study is based on secondary sources of data. The main source of data is various Economic Surveys of India, Ministry of
Commerce and Industry, Ministry of Food Processing Industry, online database of Indian Economy, Journals, Articles, News
Papers, etc.
OBJECTIVES OF STUDY
The following are the main objectives of this paper relevant to the current market:



To analyze the food retailing system in India.
To identify the challenges in food retailing in India.
To find the growth opportunities in the food retail sector in India.
KEY CHALLENGES IN FOOD RETAILING
Penchant for Fresh / Home-Made and Value Consciousness
The Indian consumer, unlike his western counterpart, has a penchant for freshly cooked food over packaged food. This is a result
of dietary patterns, poor electricity supply, low penetration of refrigerators and a family structure where one of the primary roles
of the homemaker is feeding the family. The Indian consumer is extremely value conscious.
A TSMG study indicates that packaged food players need to drive down prices by almost 35-40% to be comparable on cost with
homemade food.
523 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Diversity of Tastes and Preferences
Multiple cultures, languages and religions have a huge bearing on the tastes and preferences of the Indian consumer. This will
pose a challenge for players aspiring to develop a pan Indian presence.
Willingness to Travel
Given the current density of retail outlets in India, retailers will have to motivate the consumer to trade convenience with price,
range and ambience.
Sourcing Base and Efficiency
The fragmented agri supply base coupled with an inadequate legal framework make it difficult for retailers and food processors to
procure quality produce at competitive costs directly from farmers. The small size of the food processing industry further limits
the supply options.
Real Estate Availability and Cost
Rentals account for 7-7.5% of the total costs for organized retail in India against global benchmarks of less than 3%. Real estate
availability and costs will continue to remain a challenge in the retail industry with factors like adequate parking, ambience and
proximity being the key drivers of footfalls.
Manpower Availability
As organized retail expands, there is expected to be a dearth of skilled manpower. The lack of institutions and courses for different
aspects of retail management will have an impact on the overall supply of quality manpower.
EMERGING TRENDS IN FOOD RETAILING
Likely Transformation of the Supply Chain
To counter the unbeatable advantages of convenience of a hop, skip and a jump access and home delivery, organized retailers
seem to have just one option - offer attractive prices to the consumer. A successful retailer's winning edge will therefore come
from sourcing - how best it can leverage its scale to drive merchandise costs down, increase stock turns and get better credit terms
from its vendors. There are obvious and hidden areas where costs can be pruned and the benefits of this lower cost of retailing can
be passed on to customers as lower prices, which in turn should fuel demand. One way of trimming costs is if the pressure points
in the long, often unnecessary supply chain for produce and staples can be identified and suitably dealt with.
Supplier Retailer Relationships
Traditionally the supplier-retailer relation in India comprised several layers such as the national distributor, the regional
wholesaler and the end retailer. However, this scenario is fast changing with the organized retail increasing its presence in the
country where the relationship is directly with the manufacturer. However, this new model has been affecting the relationships that
the manufacturer enjoys with the traditional system, which is still the most dominant in the entire retail sector. The issue of
differential pricing is being taken up at several forums and the manufacturers are addressing the growing dissatisfaction among the
traditional retailers. However, we see that in the long term, the role of a national distributor would slowly fade away or get
restricted to the rural/ upcountry regions.
Innovations in Transportation Logistics
The logistics service providers have been innovating several interesting formats and models for the retail sector. As of now,
organized retail chains in India do not, by far, outsource logistical requirements, they develop their own network. This was
because the supply-chain was still in its infancy stage, which has begun to mature and the systems are being well defined. As retail
chains begin to focus more and more on the retail end, the logistics support would begin to get outsourced. The logistics service
providers have begun to come out with innovative customized solutions for the retail chains such as GATI’s model for distribution
of Alphonso mangoes throughout the country with the Information Technology support. We see that the logistics service
providers would continue to innovate and develop effective distribution systems for the retail sector.
Formats
Currently the retail sector in India is populated with the traditional mom-and-pop stores and some 1000 odd supermarkets under
organized retail chains. A daring few ventured into the Hypermarket segment with successful results and other players are fast
replicating this format. This experience indicates that the Indian consumer has matured to the next level of shopping experience.
Given the Indian conditions and the vast diversity, a single format may not be possible for the national presence, but region
524 | P a g e
ISSN (P):2279-0934, (O):2279-0942
specific formats may evolve. An interesting observation is that of lack of presence of organized retail chains in the rural/semiurban centers as over 60% of Indian population is still in these parts. An ideal “no frills” model to start with, would be ideal for
the rural markets; this would help to take them to the next level of supermarket experience.
Social Trends
Social trends of a country have impact on the scheme of growth of food retailing in a country. India is country that is vast
geographically and diverse culturally. This has taken its toll on food retailing with retailers having to adapt to the local cultures
and palates of the area in which they have established or plan to establish. This is a major reason for many or most retailing chains
restricting their operations to a certain part of the country. However, the trends now are slowly moving towards cultural
integration where people of all states and diametrically opposite cultures tend to try out foods and materials of other states and
communities. This movement towards social integration would make it very feasible in the near future for retailing chains and
erstwhile local chains to spread across the country. Increased income levels and more women willing to make use of their
education by joining work has increasingly affected the shopping pattern that is moving towards fulfilling the need of convenience
shopping in the form of Supermarkets (now graduating to Hyper format) home deliveries.
Online Retailing
The single most important evolution that took place along with the retailing revolution was the rise and fall of the dotcom
companies. A sudden concept of `non-store' shopping emerged, which threatened to take away the potential of the store. More
importantly, the very nature of the customer segment being addressed was almost the same. The computer-savvy individual was
also a sub-segment of the `store' frequenting traffic. Internationally, the concept of net shopping is yet to be proven. In addition,
the poor financial performance of most of the companies offering virtual shopping has resulted in store-based retailing regaining
the upper hand. Other forms of nonstore shopping including various formats such as catalogue/mail order shopping, direct selling,
and so on are growing rapidly. However, the size of the direct market industry is too limited to deter the retailers. For all the
convenience that it offers, electronic retailing does not suit products where `look and see' attributes are of importance, as in
apparel, or where the value is very high, such as jewellery, or where the performance has to be tested, as of consumer durables.
The most critical issue in electronic retailing, especially in a country such as ours, relates to payments and the various security
issues involved.
Impact of Technology
The other important aspect of retailing relates to technology. It is widely felt that the key differentiator between the successful and
not so successful retailers is primarily in the area of technology. Simultaneously, it will be technology that will help the organized
retailer score over the unorganized players, giving both cost and service advantages. Retailing is a `technology-intensive' industry.
It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1,200 point-of-sales counters of JC
Penney to its corporate headquarters. Successful retailers today work closely with their vendors to predict consumer demand,
shorten lead times, reduce inventory holding and thereby, save cost. Wal-Mart pioneered the concept of building a competitive
advantage through distribution and information systems in the retailing industry. They introduced two innovative logistics
techniques - cross-docking and electronic data interchange. Today, online systems link point-of-sales terminals to the main office
where detailed analyses on sales by item, classification, stores or vendor are carried out online. Besides vendors, the focus of the
retailing sector is to develop the link with the consumer. `Data Warehousing' is an established concept in the advanced nations.
With the help of `database retailing', information on existing and potential customers is tracked. Besides knowing what was
purchased and by whom, information on softer issues such as demographics and psychographics is captured.
Food Safety Issues
As awareness grows about food safety issues, the need for countries to provide greater assurance about the safety and quality of
food also grows. The increase in world food trade and the advent of the Sanitary and Phytosanitary (SPS) Agreement under the
World Trade Organization (WTO) have also raised interest in food safety requirements. To ensure a strong presence in global
markets, India realizes the need to meet these challenges and keep pace with international developments.
In India, it has come to the notice of public of late that very “popular” food companies could also go wayward as far as foodsafety and public health is concerned. This has triggered off a drive by the public and the Government to put more stringent food
safety and public health measures in place while manufacturing, storing and packaging of foodstuffs takes place. Most foodstuffs
pass through the organized retail channels on their way to the purchase baskets of consumers and therefore the retailers are
beginning to realize the need for food safety and security. Grading and standardization measures are being taken at various stages
of the manufacturing, processing, packaging and storing of all kinds of food materials.
To ensure food safety and maintain product integrity from the source to the customer (farm-to-plate) the Food Retailing
Companies would have to establish a totally integrated infrastructure and services package. This connects and maintains the flow
of food from the source (farmers/food growers, farm service centers, market yards, processors, importers) to the customer
(foodservice outlets, food-processing units, food retailers and food exporters). This package will help eliminate or prevent
identified hazards or reduces them to acceptable levels. This trend is slowly beginning to take shape with the efforts to integrate
525 | P a g e
ISSN (P):2279-0934, (O):2279-0942
and consolidate the supply chain in Indian Food Retailing. The Bureau of Indian Standards, the national standards body in India,
has adopted the Codex, HACCP (The Hazard Analysis Critical Control Point) and food-hygiene standards. Food processing units
are being encouraged to adopt these systems on a voluntary basis.
Organizations like VOICE (Voluntary Organization in the Interest of Consumer Education) have undertaken the responsibility to
document the existing level of implementation of National Laws concerning labeling and packaging of imported food products, to
analyze and compare with the Indian made food products and similar imported food products in terms of adherence of the
National Laws, to prepare a well-documented campaign kit for the consumer groups in India on the study to sensitize and build
awareness among consumers on seeking and demanding mandatory information on all packaged food products.
Food Labeling In India with Special Reference to Codex Guidelines
Food retailers have realized that they should have a good understanding of the general concepts, role and functions of labeling of
food products in view of the various kinds of foods available in the market. Consumers in Indian markets are now only buying
products that are labelled and the labels should contain true information about the product, safety and its quality having the
required standard that may not threaten the health or safety of any single individual. Knowledge of food standards for labeling as
prepared by national (PFA) and international authorities (Codex) is essential for food retailers.
The Codex Alimentarius Commission body implements the joint FAO-WHO food standards program, the purpose of which is to
protect the health of consumers and to ensure fair practices in the food trade. In view of this, it is pertinent to follow its rules and
regulations in matters of food safety and labeling. The decisions made by Codex have profound effects on economics and the
health and well-beings of citizens around the world. The fact that 165 nations are members of Codex and this membership
represents 98 percent of the world’s population further illustrates the great influence Codex.
Most retailers in the organized food retailing industry in India have begun to insist on labeling that has to be standardized as
awareness among consumers has increased considerably. Standards on labeling have become mandatory with a specific mention
of the name of the food item, and date of manufacture and storage instructions. Where the scope of Codex Standard is not limited
to pre-packaged foods, a provision for labeling of non-retail containers may be included. In such cases, the provision may specify
that information on provisions shall be given either on the container or in the accompanying documents, except that the name of
the product, lot identification, and the name and address of the manufacturer or packer shall appear on the container.
CONCLUSION
India’s food retail industry is dominated by thousands of small “kirana” stores, which account for 98 percent of food sales. During
the mid-1990s, there were an estimated 200 modern grocery stores operating in India. Small kirana stores and government-run
food distribution outlets supplying essential commodities dominated the Indian market. The emergence of larger chains and stores
began around 2005 and the sector has since grown to nearly 3,000 modern retail outlets across India. While many retailers are
expanding and opening new stores, profitability continues to be an issue for many as factors such as high real estate costs, high
capital borrowing costs, shrinkage, high debt levels, training of qualified staff and a costly supply chain add significantly to
operating costs.
On September 14, 2012, the Government of India (GOI) again approved 51 percent Foreign Direct Investment (FDI) in multibrand retail. The new policy establishes investment requirements for foreign retailers and hypermarkets, which have thus far been
limited to wholesale operation. FDI not only brings in capital but also state-of-art technology and best managerial practices,
thereby providing better access to the domestic industry to foreign technology and integration into the global market. Foreign
Direct Investment also brings new products, new technology and improved quality in the Food Processing Sector resulting in
reduction in wastage of agri products, safe and hygienic foods, higher employment and enhancing export potential of processed
foods. Backed with FDI and government policies for the development of the food industry provides immense opportunities in the
food-retailing sector. The identified challenges can be overcome with help of government support and the retailers to explore and
utilize the potential of the industry can utilize the emerging trends in the sector.
REFERENCES
1.
Nielsen, C. A. (2007). Survey of Consumer's shopping behaviour and perceptions toward modern & traditional trade
channels in Indonesia (Report).World Bank/Indonesia.
2.
Anand, & Vikram. (2006). Indian food retail sector in the Global Scenario. Chennai: Sathguru Publications.
3.
Debasis, Pradhan, & Mangaraj, K. B. (2008). Reliance Fresh Stores in Food Retailing. London Business School: A. V.
Birla Centre.
4.
Jain, Neeraj. (2007, August 10-12). Food Retail Opportunities and Challenges. Lucknow: IIM.
5.
Retrieved on 17 August, 2013 from http://mofpi.nic.in/policies/index.html
526 | P a g e
ISSN (P):2279-0934, (O):2279-0942
6.
Retrieved on 12 August, 2013 from http://www.ibef.org/download/Food_Processing50112.pdf
7.
Retrieved
on
15
August,
2013
http://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/Indian%20Retail%20Time%20to%20change%20lanes.pdf
Retrieved
on
02
August,
2013
http://www.technopak.com/Files/Technopak_Food_and_Beverages_Outlook_June_2012.pdf
8.
9.
from
from
Mpundu, M. (2005). Supermarket giants: Just another way of dumping?. Panos London. Retrieved from
http://www.panos.org.uk/global/tradingplaces_feature10.asp.
10. Narayanan, S. (2007). A Revolution in the Making: The Case of Agro Food Retailing in India. Ed. Per Pinstrup
Andersen and Fuzhi Cheng. New York: Cornell University Ithaca. Retrieved on 25 August, 2013 from
http://cip.cornell.edu/handle/dns.gfs/1200428172
11. Nath, K. (2005, February). Retailing in India: FDI and policy options for growth. New Delhi: Address given to the
Federation of Indian Chambers of Commerce and Industry (FICCI).
12. Ruben, R., Slingerland, M., & Nijoff, H. (2006). Agro-food chains and networks in development. Springer.
13. Reardon, & Gulati. (2008). The rise of Supermarkets and their development implications:International experience
relevant for India. Washington D. C.: IFPRI.
14. Reardon, T., & Berdegue, J. (2002). The rapid rise of supermarkets in Latin America: Challenges and opportunities for
development. Development Policy Review, 20(4), 371–388.
15. Reardon, T., & Hopkins, R. (2006). The supermarket revolution in developing countries: Policies to address emerging
tensions among supermarkets, suppliers, and traditional retailers. European Journal of Development Research, 18(4),
522–545.
16. Viswanadham, N. (2006, October 6). Food and Retail Chains in India (ISAS Working Paper No. 15).
*****
CALL TO JOIN AS MEMBER OF EDITORIAL ADVISORY BOARD
We present you an opportunity to join Pezzottaite Journals as member of ‘Editorial Advisory Board’ and ‘Reviewers
Board’. Pezzottaite Journals seek academicians and corporate people from around the world who are interested in serving our
voluntarily ‘Editorial Advisory Board’ and ‘Reviewers Board’. Your professional involvement will greatly benefit the success
of Pezzottaite Journals.
Please forward below stated details at [email protected].

Updated Resume, Scanned Photograph, and Academic Area of Interest.
For Paper Submission & Clarification or Suggestion, Email Us @:
[email protected], [email protected]
Editor-In-Chief
(Mobile): +91-09419216270 – 71.
(sd/-)
(Editor-In-Chief)
Editor-In-Chief
(Mobile): +91-09419216270 – 71
[email protected],[email protected]
527 | P a g e
ISSN (P):2279-0934, (O):2279-0942
A PUBLIC PRIVATE PARTNERSHIP MODEL FOR CREATING QUALITY EDUCATION
AND INCREASING THE EMPLOYABILITY OF RURAL POPULATION IN INDIA
THROUGH SATELLITE EDUCATION
Sudeshna Reddy15 Asha Mathew16 Dr. Anil Rao Paila17
ABSTRACT
In India, the term ‘Quality education’ is a buzzword. Government of India has come up with many projects to improve the
educational system in the country, especially in the rural India. Private organizations are also investing time and effort for
CSR initiatives in the country. Many organizations have their own foundations that work for the upliftment of the society and
the educational system.
This paper tries to come up with a conceptual Model where private and public organizations can work together to improve the
quality of education and increase the employability of rural population.
KEYWORDS
Private Public Partnership, CSR, Quality education, Satellite education, EDUSAT, ICT, Building Employability etc.
INTRODUCTION
The Existing Educational System in India
One of the best performers within the world economy, India has experienced significant economic growth in recent years, but
while the boom has generated opportunities for students of urban India’s elite schools, students from rural India are being left
behind. In an environment in which Board Exam scores determine the subject stream a student enters, which determines the job
one gets, which in turn determines how much money one makes, and so on, intrinsic motivation, creativity, and critical thinking
have taken a back seat. Lack of appropriate education system is hindering the economic and social prospects of Indian students
especially the ones from Bharath-the rural Population.
As per the latest census the literacy rate of rural India is 68.9% compared to the 74% of urban India. But the point of concern is
out of this 68.9% how many are able to make it to higher education. Are we able to bridge the gap between the Urban and Rural
higher education system?
The challenge in the educational sector especially in the rural India includes:






Lack of proper infrastructure,
Dearth of qualified teachers/ICT trained teachers,
Deficient in ICT based teaching learning process,
Difficulty in the maintenance of H/W and S/W (for computerised institutions),
Even in schools that have computers the access for students is limited,
Absence of elite educational institution.
Distance learning via satellite offers industry an opportunity to provide high quality, cost-effective education. Report of the
steering committee secondary, higher & technical education for 11th 5 year plan clearly indicates the lack of quality education in
the country especially the rural India. From the documents and records of Ministry of Human Resource and Development it is
evident that many ICT based projects has been implemented in the country to promote Technology based education and the
results are not that convincing.
Satellite education can help to eradicate the educational problems faced by Rural India. GSAT -3, known as EDUSAT is meant
for distant class room education from school level to higher education. Mr. T.S Subramanian in his article in frontline dated
October (09-22-2004) pointed out about satellite education.
15 Assistant
Professor & Maanger CMC, Welingkar Institute of Management Development and Research, Karnataka, India,
[email protected]
16 Assistant
Professor, Welingkar Institute of Management Development and Research, Karnataka, India,
[email protected]
17Dean & Director, Welingkar Institute of Management Development and Research, Karnataka, India, [email protected]
528 | P a g e
ISSN (P):2279-0934, (O):2279-0942
In developing economies like India, CSR is seen as part of corporate philanthropy in which corporations augment the social
development to support the initiatives of the government. However with time, the scenario of CSR has changed from being
philanthropic to being socially responsible to multi stake holders. The period of 1960s and 1970s saw an emergence of CSR
activities being inbuilt in corporate philanthropy. (Mohan, 2001). Zadek et al., (2001) point out that CSR can best be understood
as a consequence of global business activities, due to which business will have to take greater account of its impacts on society.
The concept of CSR captures the dynamics of the relationship between business and society (Davis et al., 1988). The core theme
of CSR is to deal, interact and relate with stakeholders with an ethical approach (Hopkins, 2003) that is not harming or hurting
any stakeholder (Sethi, 1979; Carroll, 1979; Waddock, 2004; Andrews, 1971; Buchholz and Rosenthal, 2002; Wood, 1991; Jones,
2005). While there is no universal definition of corporate social responsibility, it generally refers to transparent business practices
that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment.
OBJECTIVES OF STUDY
•
•
•
•
•
To study the existing educational system in rural India.
To understand some of the projects by the government to provide quality ICT based education in the country, especially
in rural India.
To understand the CSR status in India.
To come up with a conceptual model to improve the educational system in the country.
To leverage the use of EDUSAT – satellite based education in the country.
PROJECTS INITIATED BY INDIAN GOVERNMENT FOR QUALITY EDUCATION
Government of India has come up with multiple projects for creating; developing and strengthening education system in the
country especially in rural India. Projects like:
Sarva Shiksha Abhiyan: Which aims to improve the performance of school system through a community owned
approach?
Sakshat: A one stop educational portal for lifelong learning for students,
NPTEL: National Programme for Technology Enhanced Learning which aims to enhance quality engineering
education in the country by developing curriculum based video courses and web based e-courses to be prepared by 7
IITs and IISC with the total out lay of 20.47 crores. This project was formally launched by IIT-Madras on 3rd September
2006.
Introduction of DD-Gyan Darshan an educational television channel set up by Doordarshan and Indira Gandhi Open University
with the assistance from the Ministry of Education which has four round the clock channels offering interesting and informative
programs for school going , college going students and youths seeking career opportunity .
Other initiatives includes introduction of Gyan-Vani, NammaDhwani, The IT @school project etc.
All the above sited projects intend to improve the educational sector of the country, but defy in the educational system in rural
area will not be resolved until and unless the digital divide in the country is reduced. The use of IT in education is nothing less
than a miracle. When we think about providing ICT support for rural education mostly it is to provide hardware to schools to
support the cause. Installing a PC in a remote school or college is not the effective solution for the issues faced by the educational
sector in rural India. Equal opportunities should be given for urban and rural students.
Satellite education can be one solution to the problem sited above. A model in which the remotest and most isolated locations can
be connected through satellite and video conferencing equipments and teaching can be conducted by skilled faculty resource of
renowned institutions. This mode of education will help to bridge the gap between urban and rural educational sector to some
extent. It is a significant achievement for all the teachers and experts in the country to pool their collective wisdom for the benefit
of every Indian learner and hence reduce the urban and rural gap. To achieve this mission in the country GSAT-3, known as
EDUSAT was launched on 20.09.2004. EDUSAT is meant for distant class room education from school level to higher education.
This is the first dedicated "Educational Satellite" that provide the country with satellite based two way communication to class
room for delivering educational materials. This is a Geo-synchronous satellite developed on I-2K bus. GSAT-3 is co-located with
METSAT (KALPANA-1) and INSAT-3C at 74o E longitude.
Though the scheme to propagate education in the country through satellite education is an ambitious plan the results of the
initiated projects are not convincing. It has been close to a year since ‘Sarva Shiksha Abhiyan’, the Centre’s programme to
achieve universalisation of elementary education, has had an EDUSAT programme, according to SSA officials. The reason,
officials say, is a shortage of manpower.
529 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Chart-1: EDUSAT Satellite
Existing Model for Rural Education –Using EDUSAT
EDUSAT: Satellite
Launched for Education
purpose on 20/09/04
EXPECTED
Outcome
Real Scenario
Actual
Outcome
EDUSAT: Satellite
Launched for education
purpose on 20/09/04
Failure
1.
EDUSAT could not bridge the gap
between urban and rural education
sector.
2.
Classes did not continue due to lack of
resource persons.
3.
Reach was low and not many projects to
enhance rural education / higher
education were launched.
4.
Not many learning
established in rural area.
hubs
1.
Extension
of
quality
education to remote and
rural regions,
2.
Make up for the dearth of
good teachers by providing
connectivity
with
classrooms far away
3.
Facilitate the dissemination
of knowledge to the rural
and remote population
about important aspects
like health, hygiene and
personality
development
and allow professionals to
update their knowledge
base as well.
were
From the depicted model it’s clear that EDUSAT was a dream project which aimed to spread the educational wave throughout the
country but the result was not much convincing .To make the maximum use of the project.
In order to utilize EDUSAT for the betterment of education sector in the country we have conceptualized a Public-PrivatePartnership Model (PPP Model). A model in which private organizations can utilise their CSR initiatives and work hand in hand
with government to improve the educational sector in the country especially in rural India.
CSR is not a new concept in India. The new CSR law – the companies’ bill passed by one of the two houses of Parliament
prescribes that companies are expected to spend 2% of their profit in proceeding three financial years towards CSR. The brief on
Companies Bill 2012 is given below. This act will replace the Companies Act of 1956.
530 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Companies that have a turnover of over Rs 1,000 crores,
or have a net worth of Rs 500 crores,
or that have recorded a net profit of Rs 5 crores.
Who is
covered?
Provision?
These companies are expected to spend 2% of their profit in preceding three financial years towards CSR.
Punishment?
The bill says, they’re “expected” to…meaning it is not compulsory to spend money. BUT, the same bill
provides that:
Board of directors will be responsible for seeing that company spends money for CSR.
It is compulsory to send report on the CSR-spending to the Corporate Affairs Minister.
If company is not spending money for CSR, it’ll have to explain why they are not doing so.
Companies that do not report will face a penalty ranging from Rs 50,000 to Rs 25 Lakh or even
imprisonment of up to three years.
Ever since their inception, corporate like the Tata Group, the Aditya Birla Group, and Indian Oil Corporation, to name a few have
been involved in serving the community. Through donations and charity events, many other organizations have been doing their
part for the society. The basic objective of CSR in these days is to maximize the company's overall impact on the society and
stakeholders. CSR policies, practices and programs are being comprehensively integrated by an increasing number of companies
throughout their business operations and processes. A growing number of corporate feel that CSR is not just another form of
indirect expense but is important for protecting the goodwill and reputation, defending attacks and increasing business
competitiveness.
Companies have specialized CSR teams that formulate policies, strategies and goals for their CSR programs and set aside budgets
to fund them. These programs are often determined by social philosophy which have clear objectives and are well defined and are
aligned with the mainstream business. The programs are put into practice by the employees who are crucial to this process. CSR
programs ranges from community development to development in education, environment and healthcare etc.
Chart-2
Existing Model – Corporate Social Responsibility with Education as main agenda
Corporate Social
Responsibility
Expected
Outcome
Real Scenario
1.
2.
3.
4.
Corporate Social
Responsibility
PitFalls
1.
2.
3.
4.
5.
6.
7.
Building Social responsibility awareness for the
corporate.
Subject Matter Experts sharing their knowledge
with the rural students.
To follow the Companies Act setting the
guidelines for CSR activities.
General Development of the Rural Education
System.
Actual
Outcome
Due to the time constraints the corporate cannot drive the agenda on their own.
Gap between urban and rural education sector.
Chart-2
Reach was low ,and not many projects to enhance
rural education / higher education were launched.
Not many learning hubs were established in rural area.
Industry Ready employable skills were not focused on.
No focus by the foundation with the help of the subject matter experts, on the course design so far.
No focus by the foundation with the help of the subject matter experts, on the content development.
531 | P a g e
ISSN (P):2279-0934, (O):2279-0942
According to report by the Hong Kong-based brokerage and investment firm, CLSA Leading Indian companies - ITC Ltd and
Reliance Industries Ltd (RIL) have received top rating in Asia for their corporate social responsibility (CSR) initiatives. In a
report ‘Ethical Asia’ that analyses CSR performance of 50 large corporate in Asian countries, including India, China, Japan and
Malaysia, CLSA has given a rating of five points (highest in the scale of 1 to 5) to ITC and RIL.
India as a country represented by seven large corporate has received an average rating of 3.7 for its CSR initiatives within Asia.
Other Indian companies - Infosys, Tata Consultancy Services and Larsen & Toubro-- have received four points out of five.
While Sterlite Industries got a rating of three, Tata Motors came last in the list with a rating of one point. Ratings are based on
criteria such as environmental impact, social impact, corporate governance, transparency and level of detail in the CSR reports
filed by the companies.
Table-1: Describes the CSR initiatives of Some of the Indian Companies
Sl.
No.
1
Company
2
ITC
3
TATA
Steel
4
Tech
Mahindra
Infosys
Initiatives
 Foundation was started in 1996,
 Infosys Foundation: healthcare, education and promotion of
arts & culture,
 Works to improve the computer literacy among rural people,
including the teachers,
 The foundation focuses on improving healthcare, education
and basic facilities in the society,
 Today the operations extend to the states of Andhra Pradesh,
Tamil Nadu, Maharashtra, Orissa & Punjab majorly.
 ITC’s e-Choupal – path breaking initiative (2000),
 Primary education for the rural poor to enhance employability,
 Social and farm forestry,
 women’s empowerment, livestock development, primary
education,
 The three major global environmental milestone achieved by
ITC are “carbon positive”, “water positive” and “solid waste
recycling positive.
 Tata Steel’s CSR policy focuses, social sustainability,
healthcare initiatives, environmental sustainability, and
inclusive growth.
Tech Mahindra Foundation:
 Education – improving learning abilities in children from
disadvantaged families,
 Women’s empowerment – with focus on minorities,
 Enabling People With Disability (PWD) – with thrust on the
Visually Impaired (VI),
 Vocational Training (VT): leading to gainful employment in
the job market for the economically weak.
Amount Spent
One percent of Infosys’ profit
goes to the foundation annually
(post taxation).
2.1 percent of the profit,
Sources: http://www.indiacsr.in
Dated: Thursday, December
20th, 2012.
Four percent of the net profit,
Sources: http://www.indiacsr.in
Dated: Thursday, December
20th, 2012.
Rs 897 Lakhs in the financial
year 2011 – 12,
Sources: The Tech Mahindra
Foundation…Report.
In order to reach quality education to the unreached population of the country. Government can tie up with private firms which
are already working for the upliftment of education sector. With the help of these organizations government can come up with
learning hubs in the stipulated area .The private firms can extend the assistance to government for the projects financially and also
through their expertise.
Many of the initiated projects of the government using EDUSTAT didn’t work out due to lack of resource person, well equipped
learning centres, technical glitches etc. The private organization can extend their support in:
1.
2.
3.
Financial Support,
Support to set up learning centres,
Technical and professional Expertise.
The conceptual model given below is derived after taking into consideration the corporate CSR foundations of the namely Infosys,
Tech Mahindra, ITC which are already involved in the enhancement of educational sector in the country. The Proposed Public
Private Partnership (PPP) model strives to obtain quality education in rural India and hence improves the employability of the
people.
532 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Chart-3
Proposed Model: Private Public Partnership Model for Quality Education in Rural India – Using EDUSAT
EDUSAT: Satellite Launched
for Education purpose on
20/09/04
(Public: Govt)
Funding
1. To set up learning Hubs
2. Hardware/ Software Resources / High speed internet set ups
Expected Outcome
Companies Foundations
1.
2.
3.
4.
Infosys Foundation,
Tech Mahindra
Foundation,
ITC ‘S Foundation,
Azim Premji
Foundation.
(Private: Corporates)
Expertise
1. Technical expertise,
2. Training for the facilitators,
3. Content Development,
4. Course Design.
1. Quality Education in
Rural
India
Using
EDUSAT,
2. Increased employability
of rural population,
3.
Developing
more
Industry
specific
employable skills in rural
regions,
4.
Providing
more
possibilities
and
opportunities for ‘White
Collar’ jobs in rural
regions.
ANALYSIS OF THE MODEL
The proposed model is in collaboration between Government and private organizations of the country. Under this partnership
government can come up with projects which support quality education in rural India:
1)
2)
The foundations can help in setting up learning hubs in rural region.
The foundations can also enable infrastructure development. The setting up of Hardware/ Software Resources / High
speed internet set ups.
3) Qualified professors and industry experts can reach the unreached population of the country without having the trouble
of travelling and other constraints.
4) Using stipulated software, learning materials can be shared and assignments can be submitted.
5) The Subject matter experts, academicians can collaborate with the foundations and work towards building more
industry employable skills set development.
6) The Subject matter experts, academicians can collaborate with the foundations and work on designing, developing and
imparting employability / industry specific courses.
7) Interested and qualified students can assemble in the local learning hub and can listen to lectures like their urban
counterparts.
8) Both Urban and rural population get equal opportunity and exposure to quality education. Hence the divide in quality
education can be resolved to some extend and as a result employability of the rural population also increases.
9) CSR wing of private companies can assist during the implementation Phase of the project along with the support from
the government.
10) The mission of quality education throughout the country can be accomplished by this Private Public Partnership
Model.
CHALLENGES
The proposed model is a conceptual model which considers only limited private organizations. The success of collaboration
between private organization and government for CSR initiates needs to be verified. The proposal for quality education in rural
India is through satellite education. The implementation difficulty of learning hubs in remote location is another challenge. To set
up learning centres in inaccessible locations where there is scarce of electricity itself is a challenge. Another challenge is lack of
qualified resource for conducting sessions.
533 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CONCLUSION
The projected model for quality education in association with private and public can be a solution to resolve some of the
educational and digital divide that exists between urban and rural population:
1)
Private organizations through their CSR initiatives can assist the implementation of government initiated projects for
quality education in the country.
2)
The employability of the rural population can be improved, and equal opportunity for urban and rural population can be
accomplished by the implementation of the proposed model.
3)
More structured delivery of the course can be enabled as the CSR wing of the company, foundation and other subject
matter experts are part of the entire life cycle of the course design, development and delivery.
SCOPE OF RESEARCH
•
The model can be implemented in projects like Sarva Shiksha Abhiyan’ and based on the outcome this model can be
further modified.
•
Widening the scope of the study by including various works done by various Foundations in education sector.
•
Widening the scope to include the possibility of enabling the same proposed model with the support of the Nongovernmental organisations, in cases where the foundations are not in place.
•
Selecting a model region, to implement the proposed model. Hence during this implementation period, the model can be
further fine-tuned and made more fool-proof. This is a necessary format before implementing the proposed model on
larger regions.
REFERENCES
1.
Mohan, A. (2001). Corporate Citizenship: Perspectives from India. Journal of Corporate Citizenship, 2001(2), 107117.
2.
Hemingway, C. A. (2013). Corporate Social Entrepreneurship: Integrity Within (in the series Business, Value
Creation, and Society, eds. R. Edward Freeman, J. Moon and M. Morsing), Cambridge: Cambridge University Press,
2013. ISBN 9781107007208.
3.
Read-Brown, Alex, Bardy, Florent, & Lewis, Rebecca. (2010). Sustainability in Asia ESG reporting uncovered.
Retrieved
on
February
10,
2011
from
http://www.asiansr.com/Sustainability_in_Asia___ESG_Reporting_Uncovered.pdf
4.
World Bank. (2002). Definition of Emerging Economies, Global Economic Prospects and the Developing Countries.
Retrieved on February 10, 2011 from www.sustainability.com/developing-value/definition-emerging.asp
5.
Aupperle, K. E., Carroll, A. B., & Hatfield, J. D. (1985). An empirical examination of the relationship between
corporate social responsibility and profitability. Academy of Management Journal, 28(2), 446-463.
6.
(2011). Steering Committee Secondary-Planning Commission (Report),
http://planningcommission.nic.in/aboutus/committee/strgrp11/str_hsedu.pdf
7.
5
year
plan
by
planning
commission
(Report),
87,
http://planningcommission.nic.in/plans/planrel/fiveyr/11th/11_v1/11th_vol1.pdf
8.
Subramanian, T. S. (2004, October 09-24). EDUSAT (Report). Frontline, 21(21).
9.
Garg, Mamta, & Jindal, Kumar Manoj. (2009). EDUSAT- E-learning Through Satellite –Reaching the Unreached
Information Paper. International Journal of Recent Trends in Engineering, 1(2), 149-151.
pp.
39-41.
137-190.
Retrieved
Retrieved
from
from
10. Nagy, A. (2005). The Impact of E-Learning. In Bruck, P. A., Buchholz, A., Karssen, Z., Zerfass, A. (Eds). E-Content:
Technologies and Perspectives for the European Market. Berlin: Springer-Verlag, 79-80.
11. Retrieved on February 20, 2013 from http://www.isro.org/satellites/edusat.aspx.Referred
*****
534 | P a g e
ISSN (P):2279-0934, (O):2279-0942
ATTRITION IN INDIAN RETAIL INDUSTRY: AN ANALYSIS OF ORGANIZED RETAIL
IN NORTH EASTERN UTTAR PRADESH
Tripti Dwivedi18
ABSTRACT
The Indian retail industry has been growing at a remarkable rate with number of new players entering into the market. The
changing standard of living and shopping patterns of Indian consumers, particularly in urban areas, encourages the
convenience of one-stop shopping.
The industry currently accounts for 8% of the employment and is estimated to be the fourth largest globally. The retail
industry has come up with a large number of employment opportunities. Employee retention and motivation of staff has
become the major concern for HR department in the retail industry. Looking at the tiring schedules and tasks involved in the
retail industry, attrition rates are higher than any industry and it becomes imperative for HR staff to take good care of their
employees who form the building blocks of their retail chain. Handling attrition challenges most to retail companies. It creates
a gap if growth of retail and hiring cost of the employees.
KEYWORDS
Attrition, HR Issues, Retail Management, Indian Rural Market, Job Satisfaction Factors, Uttar Pradesh etc.
INTRODUCTION
According to ‘India Retail Report 2013’ published by IMAGES Group is one of the largest retail destinations globally with a size
of Rs. 2,23,572 Crore i.e. US $ 40.5 Bn. It has been growing at approx 7% per annum and expected to reach 4, 87,423 Crore i.e.
US $ 88.3 Bn by 2015. Global Retail Development Index (GRDI) 2011, among emerging markets of the world, ranks Indian
fourth most attractive nation for retail investment. This booming sector provided approximately 7% of the total workforce present
in India, which is the second largest after agriculture in our country.
However, the total retail market in India is highly unorganized with only 15% contribution of organized retail. This is due to
emergence of large retail outlets and shopping malls, specifically focuses on business in urban and semi-urban areas, and is
managed by skilled human capital. It is expanding rapidly and spreading its roots towards rural areas as well. Researches also
shows that another reason for the exponential growth in organized retail is the empowerment of middle class, which is today of
close to 300 million people that is growing at nearly 2% a year.
However, the industry is also coping with high rates of attrition and this will continue as more players enter the market and for a
sector that employs 35.06 million people and is second to only agriculture, retaining its workforce has become a big concern.
According to Bijou Kurien, President and CEO, Reliance Retail, on an average about 40% of attrition is seen in all retail chains in
India. His analysis forecasts that it will probably be up to 60-65% in the case of food and grocery and probably 25% in apparel
and other lifestyle retail industry.
Rapid growth in organized retail and opening of new malls and stores have raised attrition levels steep high to 96 per cent a year,
say consultants, which is very high in comparison to 3-4 years back. Indian retailers, big and small, are facing high personnel
attrition across stores. A number of corporate groups - Reliance, Birlas and Bharti, for instance - have entered the sector. Existing
ones such as the Future group, Spencer’s and others have expanded, opening avenues for employment. In a recent survey
conducted in July 2012 to January 2013 by Tata Consultancy Services and the Retailers Association of India (RAI), with 34
retailers, it was found that one third of the retailers had average attrition rates of more than 8% in a month, which is almost 100
per cent a year.
No particular reason can be advocated for attrition but it can be a combination of many reasons behind it. Qualification may be a
reason because retail sector primarily does not ask for high qualification eligibility criteria. According to a senior executive of
Mumbai-based retail chain a 10th standard pass outs may stay for longer period than 12th pass outs. Salary hike can be a concern
for attrition. Attrition in retail is most frequently attributed to a purely economic reason - that salespeople jump jobs for a raise of
a few hundred rupees. Whenever a new retail store is opened, they offer Rs. 500 more and get front-end staff. For many front-end
sales staff, even a Rs 500 hike is enough to switch. Money is only one of the many reasons for attrition. The conditions are
prolonged by various factors and it depends upon the situation and conditions of the retail stores and its employees both.
18Assistant
Professor, Sherwood Business School, Uttar Pradesh, India, [email protected]
535 | P a g e
ISSN (P):2279-0934, (O):2279-0942
This research aspires to create a model for employee retention in retail sector and study various factors involved in high attrition
rates in sector in North Eastern Uttar Pradesh region in India. Aspects like perceived attitudes i.e. employee motivation, employee
satisfaction, employee involvement and life interest and work compatibility etc. Various theories of job satisfaction have been
identified and studied which argues the correlation with high attrition in retail sector model and the Hackman and Oldham’s Job
Characteristics model (1976) was taken as the base for this research. Hackman & Oldham (1976) proposed model for job
characteristics, which is widely used as a framework to study how particular job characteristics impact on job outcomes, including
job satisfaction. The model states that there are five core job characteristics (skill variety, task identity, task significance,
autonomy, and feedback) which affect three critical psychological states (experienced meaningfulness, experienced responsibility
for outcomes, and knowledge of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work
motivation, etc).
Ma Foi Randstad, a leading HR services provider in the country, which has been conducting the employment trends survey since
2004, released its 2010 Employment Trends Survey findings. The survey revealed that trade including consumer retail services
has added an increased figure of 7,600 to the employment figure of 6, 30,800 in December 2009.
Job satisfaction is a major concern for retail industry today. Various management and job satisfaction techniques have been
identified to study the phenomena of the industry. Some argue that Maslow’s hierarchy of needs theory, a motivation theory, laid
the foundation for job satisfaction theory. This theory explains that people seek to satisfy five specific needs in life –
physiological needs, safety needs, social needs, self-esteem needs, and self-actualization. This model served as a good basis from
which early researchers could develop job satisfaction theories.
Job satisfaction can also be as range of issues, which influence an individual's skill of work, or their quality of working life. Job
satisfaction can be understood in terms of its relationships with other key factors, such as stress at work, general well-being, worklife interface, control at work and working conditions.
Various models of job satisfaction took into account for studying the phenomena of ever increasing attrition rates and decreasing
job satisfaction are:







Affect theory,
Dispositional theory,
Equity theory,
Discrepancy theory,
Two-factor theory (motivator-hygiene theory),
Job characteristics model,
Motivating Potential Score.
OBJECTIVES OF STUDY
Objective of this study is to analyze and decide the priority factors, which cause the attrition in the rapid growing Indian retail
industry. Higher employability capacity in this sector leads to factors, which are important for higher attrition rates. Objective is
to analyze reasons, which encourage the employee to leave the retail organization. According to the various theories, factors that
influence job satisfaction:




Environmental factors,
Strategic Employee Recognition,
Individual factors:
o Emotion,
o Genetics,
o Personality,
Psychological factors.
However, for this research, after a detailed analysis and a pilot survey, twelve basic factors identified to be researched and tested
for employees in retail sector. These reasons are vital from an organizations point of view to apply solutions to the problems
identified after the research to encourage them to develop measures for the problem. Moreover, it let organizations to adapt with
more employee friendly environment to let their employees stay for a longer time.
The factors identified are: a) Job security, b) Growth, c) Challenging work environment, d) Responsibility, e) Training and
Development, f) Recognition and Promotion, g) Politics, Disputes and Biasness, h) Skill Development, i) Salary, j) Achievement
Ignorance, and k) Incentives and Bonuses.
536 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The research was conducted in May-June, 2013 to understand and analyze the reasons behind high attrition rates in retail industry
in North Eastern part of U.P in India. A sample of 80 respondents was drawn from northeastern part of the state in this country
from various retail outlets and stores. The respondents were asked to state their level of agreement and disagreement of above
mentioned factors on the 5-point likert scale, where 5=Strongly Agree, 4= Agree, 3= Neutral, 2= Disagree and 1= Strongly
Disagree.
A questionnaire was framed for the detailed survey including various demographics characteristics of the retail employees but
analysis was done for described factors. Convenient sampling method was adopted for administering the questionnaires.
Methods of Data Collection
Primary data was collected with the help of structured questionnaire circulated among 124 regular employees of retail sector from
which 80 completed and found genuine questionnaire respondents were selected. Study was carried out in the month of May-June
2013. Factor analysis test is used to find out various priority factors among the various factors important for attrition. Factor
Analysis was carried out by using SPSS 17.0. MS Excel 2003 is used to create database and store respondents data, which further
carried out in SPSS for detailed analysis.
DATA ANALYSIS
Factor Analysis
In order to establish the strength of the factor analysis solution, it is essential to establish the reliability and validity of the
obtained reduction. This is done with KMO and Bartlett’s test of sphericity. The result on test is given below:
Kaiser-Meyer-Olkin Measure of Sampling Adequacy
Bartlett's Test of Sphericity Approx. Chi-Square
.589
154.022
df
55
Sig.
.000
It may be noted that the value of KMO statistics is 0.589 which greater than 0.5, which indicates that factor analysis could be used
for the given set of data. Further p value is 0.00 which is less than 0.05 indicates the rejection of the hypothesis that the correlation
matrix of the variables is insignificant.
It is important to indicate how much of each variable is accounted for the underlying factors taken together. It is a measure of the
percentage of the variable’s variation that is explained by factors. The communality of each variable is explained in table below.
Table-2: Communalities
Job security
Growth
Challenging work environment
Responsibility
Training and Development
Recognition and Promotion
Politics, Disputes and Biasness
Skill Development
Salary
Achievement Ignorance
Incentives and Bonuses
Initial
Extraction
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
.754
.846
.531
.329
.612
.760
.580
.678
.613
.664
.454
Sources: Data Analysis
Note: Extraction Method: Principal Component Analysis
537 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-3: Total Variance Explained
Extraction Sums of Squared Loadings
Component
Total % of Variance Cumulative % Total % of Variance Cumulative %
Job security
Growth
Responsibility
Skill Development
Salary
2.399
1.852
1.461
1.110
.963
.783
.640
.594
.558
.409
.231
21.808
16.836
13.280
10.089
8.750
7.121
5.821
5.400
5.074
3.721
2.101
21.808
38.644
51.924
62.012
70.763
77.883
83.704
89.104
94.178
97.899
100.000
2.399
1.852
1.461
1.110
21.808
16.836
13.280
10.089
21.808
38.644
51.924
62.012
We note from the above table that there are FOUR factors with Eigen value more than one. Hence, we can find that four factors
are extracted for description.
Table-4: Component Matrixa
Component
1
Job security
Growth
Responsibility
Skill Development
Salary
.056
-.687
1.436
.287
-.742
-.573
.305
.431
.676
.069
.471
2
.012
.536
.694
.487
-.078
.585
.049
-.038
.385
.348
.473
3
.851
.159
-.212
-.095
-.060
.238
-.328
.697
-.050
.004
.029
4
.160
.248
-.069
-.003
-.229
.183
.613
-.071
-.071
-.734
.083
Note: Extraction Method: Principal Component Analysis.
a. 4 components extracted.
The above-mentioned four factors should be statistically independent. This means that the correlation among the factors scores
should be zero. The next task is to interpret the factor-loading matrix called the component matrix. In order to do so and to be able
to interpret results in a better way a factor rotation matrix is calculated using Varimax rotation option in SPSS, which results in
independent factors. The result obtained after Varimax rotation is given below:
538 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-5: Rotated Component Matrix a
Component
1
Job security
Growth
Responsibility
Skill Development
Salary
2
-.054
-.066
.540
.562
-.544
.034
.292
.168
.735
.285
.660
3
.182
.917
.382
.092
.394
.867
-.086
-.203
-.253
-.018
.003
4
.847
-.033
-.258
-.052
-.263
.061
-.178
.773
.089
-.079
.123
-.027
-.013
.163
.037
.304
.055
-.675
.106
.033
.759
-.056
a. Rotation converged in 5 iterations.
FINDINGS
The cutoff point is decided to 0.6. After factor analysis the two variables related to factor 1 having a factor loading above 0.6 are
‘Salary’ and ‘Incentive and Bonuses’ found to be priority factor for attrition. The variables corresponding to factor 2 for which the
factor loading is greater than 0.6 is ‘Growth’ and ‘Recognition and Promotion’. The variables corresponding to factor 3 with
factor loading more than 0.6 are ‘Job Security’ and ‘Skill Development’. The variables corresponding to factor 4 with factor
loading more than 0.6 are ‘Politics, Disputes and Biasness’ and ‘Achievement Ignorance’.
CONCLUSION
In this research ELEVEN basic factors for attrition in retail sector were identified that were important in order to encourage
organizations to focus upon. These factors tell the basic reasons of attrition in Indian retail sector. Researchers have found a
number of other factors that impacts attrition. Businesses must be aware of such factors to keep up with the rapidly increasing
attrition. In our conclusion after factor analysis, it is observed that the factor 1 comprising of ‘Salary’ and ‘Incentive and Bonuses’
can be termed as ‘Monetary Benefits’ and factor 2 comprising of the variables ‘Lack of Growth’ and ‘ Lack of Recognition and
Promotion’ can be termed as ‘Lack of Motivation’. Factor 3 comprised of variables ‘Lack of Job Security’ and ‘Lack of Skill
Development’ termed as ‘Lack of Personal Benefits’. Factor 4 comprised of variables ‘Politics, Disputes and Biasness’ and
‘Achievement Ignorance’ termed as ‘Poor Working Condition’. This shows that the most important factors behind attrition
encouraging an employer to switch the job are Monetary Benefits followed by ‘Lack of Motivation’ in the job. Employee then
looks for ‘Personal Benefits’ in the very short time at one place followed by ‘Poor Working Condition’ which is due to negligence
of management control systems.
REFERENCES
1.
Bajaj, Chetan, & Tuli, Rajnish (et. al). (2005). Retail Management. New Delhi: Oxford University Press.
2.
Fisher , Schoenfeldt, & Shaw, J. B. (2006). Human Resource Management (6th ed.). Boston: Houghton Mifflin
Company.
3.
Kothari, C. R. (2006). Research Methodology. New Delhi: Vishwa Prakashan.
4.
Rao, Gangadhara M., Rao, V. S. P., Narayana, S. P. (1989). Organizational Behaviour: Text and Cases. Konark
Publishers Private Limited.
5.
Addison, John T., Stanley, Siebert, Joachim, Wagner, & Xiangdong Wie. (2000). Worker participation performance:
evidence from Germany and Britain. British Journal of Industrial Relations, 38, 7-48.
6.
Batt, R. (2002). Managing customer services: human resource practices, quit rates, and sales growth. Academy of
Management Journal, 45(3), 587–597.
539 | P a g e
ISSN (P):2279-0934, (O):2279-0942
7.
Cappelli, P. (1999). The new deal at work: Managing the market-driven workforce. Boston: Harvard Business School
Press.
8.
Guptha, C. P., & Mitali, Chaturvedi. (2007, June). Retailing: An Emerging Trend in India. Indian Journal of
Marketing, XXXVII. New Delhi.
9.
Ilgen, D. R., & Pulakos, E. D. (1999). The changing nature of performance: Implications for staffing, motivation,
and development. San Francisco. CA: Jossey- Bass Publishers.
10. Mallkarjunan, K. (2008, March). Employee Attrition: An overview of the causes and remedies. Hyderabad: ICFAI
University Press. 39-42.
11. Mobley, W.H. (1977). Intermediate linkages in the relationship between job satisfaction and employee turnover.
Journal of Applied Psychology, 62, 237-240.
12. Prasad, Vijay Durga. (2007, May). The Spread of Organized Retailing in India. Indian Journal of Marketing, XXXVII,
New Delhi.
13. Radha, Mohan. (2008, March). Revisiting Empowerment as a Retention Strategy: A Snapshot. HRM Review, 53-58.
Hyderabad: ICFAI University Press.
14. Schneider, B., Hanges, P. J., Smith, B., & Salvaggio, A. (2003). Which comes first: Employee attitudes or
organizational financial and market performance?. Journal of Applied Psychology, 88, 836-851.
15. Williams, L. J., Hazer, J. T. (1986). Antecedents and consequences of satisfaction and commitment in turnover models:
a re-analysis using latent variable structural equation methods. Journal of Applied Psychology, 72(1), 219-231.
16. Attrition
Analysis
–
Indian
Organized
Retail
Sector.
Retrieved
http://www.studymode.com/essays/Attrition-Analysis-Indian-Organized- Retail-852502.html
on
17. Attrition hits Indian retail sector:
http://ideas.repec.org/p/wop/pennin/95-04.html
May,
What
went
wrong?
Retrieved
18. (2011).
Indian
Brand
Equity
Foundation.
Retail.
Retrieved
http://www.ibef.org/artdispview.aspx?in=63&art_id=29841&cat_id=376&page=1
on
on
September,
2011,
from
2013
from
2011
from
19. Larry, W. Hunter. (1995). How will competition change Human Resource Management in Retail Sector.
20. Saini, Mayu. (2011). More Single Brand Retailing Seen in India. Retrieved on August, 2011 from
http://www.wwd.com/retail-news/financial7/india-suspends-decisionon-foreign-retailers-416820?module=today
*****








540 | P a g e
ISSN (P):2279-0934, (O):2279-0942
A STUDY OF CONSUMER BEHAVIOUR THAT INFLUENCE PURCHASE DECISION OF
FMCG PRODUCTS IN RURAL MARKETS OF UTTAR PRADESH
Preeti Srivastava19 Raman Kumar20
ABSTRACT
The Fast Moving Consumer Goods sector is a vital contributor to India’s Gross Domestic Product. The FMCG sector has been
contributing to the demand of lower and middle-income groups in India. Over 73% of FMCG, products are sold to middle
class households in which over 52% is in rural India.
Rural marketing has become the hottest marketing arena for most of the FMCG companies. The rural India market is huge and
opportunities in it are limitless. Saturation and cutthroat competition in urban areas, many FMCG companies are moving
towards the rural market and making new strategies for targeting the rural consumer. The Indian FMCG companies are now
busy in formulating new competitive strategies for this untapped market for so while and having high potential. Therefore, a
comparative study is made on growth, opportunity, and challenges of FMCG’s in rural market.
One of the most attractive reasons for the companies for tapping it is income is rising in rural areas and purchasing power of
the lower and middle income group is also rising and which is eager to spend money on improvement of their lifestyle. This
paper will provide detailed analysis about the participation of FMCG industry in growth of rural market of India and discuss
about customer attitude towards better purchase decision for the FMCG’s in rural market with growing awareness and brand
consciousness among people across various socio-economic classes in rural market.
KEYWORDS
Marketing Management, Consumer Behavior, Rural Market, FMCG, Rural Retailing, Consumer Attitude etc.
INTRODUCTION
The rural population in India is accounted around 12% of the whole world population and residing in the villages of India. A
World Bank study has revealed that almost two-thirds of India's total population lives in rural areas. The Indian rural FMCG
market is something that every business house is looking forward for. Most of the companies are gradually transforming their
rural business operations. Broader focus on agri-business is increasing rural incomes and providing better growth prospects to the
FMCG companies. With the advancement of infrastructure and better technology, supply chain is becoming more robust and easy.
FMCG sector is also likely to benefit from growing demand in the market. FMCG companies have immense possibilities for
growth as with wider choice of products and demand. Consumerism is becoming effective and companies are more focused upon
empowering consumers in the area, i.e. if companies get successful in making consumers brand oriented and offers new
generation products, they would be able to generate rapid growth in the market.
Companies expect good results from rural market. India's rural population, accounting for about 12 per cent of the world's
population, presents a huge, untapped market. Companies cannot take chance now to ignore enormous opportunities in rural India,
taking into consideration the population density in such areas.
FMCG companies in India already have enjoyed a gigantic market of FMCG products because of the large and growing
population of the country, which also takes interest in newer lifestyle. In recent years, rural markets have obtained very much
importance in countries like China and India. The overall growth of the economy has increased the purchasing power of the rural
communities. The improved economic situation of both the rural and urban consumers has helped FMCG companies to further
expand their market. The Indian FMCG companies offer a wide variety of consumer products. Personal care products, Toiletries,
packaged food items, healthcare products, soaps, detergents, plastic products, hygiene products, home care, beverages, grooming
products, home utilities, utensils etc. It is the fourth largest sector in India. It has provided more than 3 million employments with
a market size of over Rs 110,000 crore and is estimated to grow over Rs 185,000 crore by 2014. FMCG Industry in India has
backbone of very strong and well-established established distribution channels.
Because of the green revolution in India, the rural areas are consuming a large quantity of industrial and urban manufactured
products. To be focused and specialized, rural marketing strategies have been formulated. With the help of such strategies, rural
market is now becoming profit centers. Importance of rural market attracts researchers to analyze consumer behavior of rural
customer. Indian rural customer is largely illiterate. Due to this consumer is unable to identify brand and does not get awareness
of the products. Products with more information printed and user manual based are more likely to be discouraged by the
consumer. This difference creates different focused strategies for rural and urban consumers. Moreover, different products
19
Assistant Professor, Sherwood College of Engineering Research & Technology, Uttar Pradesh, India,
[email protected]
20Assistant Professor, Sherwood College of Engineering Research & Technology, Uttar Pradesh, India, [email protected]
541 | P a g e
ISSN (P):2279-0934, (O):2279-0942
strategies for rural and urban market are creating high competition between branded and local products. Due to illiteracy, local
leaders, based on caste and religious leaders etc, also influence purchase.
However, it is expected that the rural customers purchasing power and their income will rise in future. At present, urban India
largely holds consumption for 66% of total FMCG products, with rural India accounting for the remaining 34%.
RATIONALE OF STUDY
In a Press Release on January 3rd 2010, ASSOCHAM, The Associated Chambers of Commerce and Industry in India, have
forecasted an extreme growth in the FMCG sector. According to it, FMCG products will be account for more than 50% of growth
in its Rural areas by 2012 which in totality is projected to grow at an CAGR of 10% to carry forward its market size to over
Rs.1,06,300 crore. Further, the analysis drew the attention towards the rural and semi-urban areas where FMCG market
penetration is currently about 2% in general as against its total growth rate of about 8%. The Indian rural market with its
enormous size and demand has observed a never-to-miss opportunity to FMCG companies. In India, the rural population is nearly
three times the urban areas. Because of cutthroat competition, FMCG companies are facing high pressure on the margins of
manufacturers of FMCG products. The well-established players like Hindustan Lever Limited, Nirma, Indian Tobacco Company,
Dabur, Wipro, Godrej, Britannia, Coca-Cola, Pepsico India etc. will make killings.
According to ASSOCHAM, FMCG products which will create drastic demand in rural markets, will be mainly comprise soaps,
detergents, cold drinks, consumer durables, toothpastes, batteries, biscuits, namkeens, mosquito repellants, refined oil, and hair
oil. In addition, the analysis by ASSOCHAM says that FMCG industry, the product categories like foods category, toiletries,
beverages, detergents, edible oil, and cosmetics will attract focus. About one-third of fast moving consumer goods (FMCG) and
consumer durables are sold in rural markets.
OBJECTIVES OF STUDY
Depending on the findings of the previous studies and exploratory researches, fifteen variables are primarily being considered for
analysis. It is assumed that these twenty variables generally affect consumers’ brand preference for FMCG in rural retail store
environment. Variables are: a) Product Feature, b) Display, c) Sales Promotion, d) Competitive Pricing, e) Influence of salesman,
f) Dealing Pattern, g) Preferred Brand choice, h) Packaging, i) Variety of products, j) Convenience of purchase, k) Another
Customer’s Influence, l) Environment, m) Time, n) Credit Facility, and o) Decision making capability of Consumer.
Data Collection
This research is descriptive in nature. It describes about the factors in rural area and their motive while purchasing the FMCG
products from the store. Secondary data was used to construct the basic framework of the study. Primary data was collected from
a group of respondents through structured questionnaires by personal in-home interview procedure.
Samples
Primary data was collected from a group of 156 respondents from upskirts of Lucknow and Barabanki district in India but 110
was selected for actual research as they seems to be genuine and complete. The respondents were selected through the
convenience sampling technique, since the procedure is less time consuming and more convenient.
Methods of Data Collection
Primary data was collected from 110 respondents from up skirts of Lucknow and Barabanki district in India. The respondents
were selected through the convenience sampling technique, since the procedure is less time consuming and more convenient.
Factor Analysis
In the first phase of the research, variables were observed which might have effect on consumer decision making. In the second
phase, a statistical analysis was conducted on identified variables based on primary data collected through survey. The
questionnaire was designed to administer the information about demographic characteristics of the respondents while the next part
was to observe the consumer’s attitude towards identified factors. Respondent were asked to respond based on 5-point Likert
scale.
The respondents were asked to state their level of agreement and disagreement of above mentioned factors on the 5-point scale,
where 5 = Strongly Agree, 4 = Agree, 3 = Neutral, 2 = Disagree and 1 = Strongly Disagree. Descriptive statistical analysis
techniques are used to analyze demographic characteristics of rural consumer and multivariate Factor Analysis is applied to
observe the characteristics of observed factors behind rural consumerism. Factor Analysis is a class of procedure primarily used
542 | P a g e
ISSN (P):2279-0934, (O):2279-0942
for data reduction and summarization. Relationships among sets of many interrelated variables are examined and represented in
terms of few underlying factors. Factor Analysis was carried out by using SPSS. Data Collection and recorded in MS Excel 2003.
FINDINGS
Demographic Profile
Table-1: DP 1
Gender
Male
Female
Frequency
73
37
%
66.36
33.64
Age
<15
16-25
26-35
36-45
>45
Total
110
Frequency
14
42
28
16
10
110
%
12.73
38.18
25.45
14.55
9.09
Table-2: DP 2
Store Choice
Frequency
Small Local Store
53
Local Market
35
Super Store
22
Percent (%)
48.18
31.82
20.00
Table-3: DP 4
Purchase Frequency
Purchase
Once in a week
Twice in a week
More than Twice in a week
Total
Frequency
42
38
30
110
%
38.18
34.55
27.27
100
Table-4: DP 3
Income (p. a.)
<50,000
50 K - 1 Lac
> 1 Lac
Frequency
27
45
38
%
24.55
40.91
34.55
Education Level
Below High School
High School
ISC
Graduate
Frequency
42
19
28
21
%
38.18
17.27
25.45
19.09
Factor Analysis Test
Table-5: FA1
KMO and Bartlett's Test
Approx. Chi-Square
.605
660.905
Df
105
Sig.
.000
543 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-6: FA2
Total Variance Explained
Extraction Sums
of Squared Loadings
Component
Total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
3.240
2.080
1.884
1.412
1.170
.942
.899
.796
.672
.523
.514
.388
.344
.078
.058
% of
Cumulative
Variance
%
21.598
13.870
12.558
9.411
7.801
6.282
5.994
5.306
4.477
3.489
3.423
2.585
2.295
.523
.387
21.598
35.468
48.026
57.437
65.238
71.520
77.514
82.820
87.298
90.786
94.210
96.795
99.090
99.613
100.000
Rotation Sums of
Squared Loadings
Total
% of
Variance
Cumulative
%
3.240
2.080
1.884
1.412
1.170
21.598
13.870
12.558
9.411
7.801
21.598
35.468
48.026
57.437
65.238
% of
Cumulative
Total Variance
%
2.450
2.028
1.949
1.906
1.454
16.331
13.518
12.993
12.704
9.693
16.331
29.848
42.841
55.546
65.238
Table-7: FA3
Rotated Component Matrix a
Component
Product Feature
Display
Sales Promotion
Competitive Pricing
Influence of salesman
Dealing Pattern
Preferred Brand choice
Packaging
Variety of products
Convenience of purchase
Another Customer’s Influence
Environment
Time
Credit Facility
Decision making capability of Consumer.
1
2
3
4
5
-.163
.079
-.370
-.201
-.447
.933
.179
.089
-.249
.134
.133
.175
.061
-.363
.930
-.196
.764
.583
-.048
.597
-.021
.066
-.053
-.254
.028
.009
.024
.464
.638
-.104
-.123
.017
.370
.500
-.486
.003
.204
.034
.212
.747
-.462
-.027
.469
-.480
-.016
.608
-.110
-.244
-.307
-.240
-.096
.116
.011
.731
.171
.255
.765
.147
-.223
-.061
-.047
.051
.016
.242
.187
.011
.764
-.643
.073
-.013
-.203
.074
-.365
.182
.040
a. Rotation converged in 18 iterations.
544 | P a g e
ISSN (P):2279-0934, (O):2279-0942
DATA ANALYSIS

From the above table DP2, it is observed that 48% people still buy the FMCG products from the small local stores.
Another 31% people like to buy those products from the groceries in the local markets. Only 20% of the people prefer
the superstores.

Table DP3 also shows that, 38% of the people go for purchasing FMCG products once in a month. On the other hand,
34% of the people go for shopping those products twice in a month. Another 27% shop more than once in a month.

It may be noted that the value of KMO statistics is 0.605 which greater than 0.5, which indicates that factor analysis
could be used for the given set of data. Further p value is 0.00 which is less than 0.05 indicates the rejection of the
hypothesis that the correlation matrix of the variables is insignificant.
CONCLUSION
From the study, it was found that five factors are responsible for influencing consumers’ preference for FMCG brands in rural
store. The cutoff point is decided to 0.7. The two variables corresponding to factor 1 having a factor loading above 0.7 are
‘Dealing Pattern’ and ‘Decision making capability of consumer’ while factor 2 with value greater than 0.7 is ‘Display’ followed
by Factor 3 that ‘Convenience’. Factor 4 comprised of ‘Environment’ and ‘Variety of products available’. Factor 5 comprised of
single variable with value more than 0.7 is ‘Preferred Brand Choice’. Hence we can conclude that purchase decision taken by a
customer in rural area is ‘Influence by others’ followed by ‘Display’ of products in retail store. ‘Convenience’ and ‘Environment’
of retail store plays important role afterwards. ‘Preferred Brand’ is definite choices of some brand conscious people may for their
prices.
REFERENCES
1.
Kotler, P. (2003). Principles of Marketing. New Delhi: Prentice Hall of India.
2.
Schiffman (et.al.). (2008). Consumer Behaviour (3rd Ed.). New Delhi: Prentice Hall of India.
3.
Kotler, Philip, Kellar, Kevun Lane, Koshy, Abraham, & Jha, Mithileshwar. Marketing Management-Principles in
Marketing (14th Ed.). New Delhi: Pearson Publication.
4.
Gopalaswamy, T. P. Rural Marketing. New Delhi: Vikas Publishing House.
5.
Nair, S., & Kumar, N. (2010). Consumer Behaviour and Marketing Communication (1st Ed.). Himalaya Publishing
House.
6.
Majumdar, R. (1991). Marketing Research : Text Applications and case studies. Wiley Eastern Limited.
7.
Park, C. W., & Iyer, E. S. (et. al.). (1989). The Effects of Situational Factors on In-Store Grocery Shopping Behavior:
The Role of Store Environment and Time Available for Shopping. The Journal of Consumer Research, 422-433.
8.
Blattberg, R. C., & Eppen, G. D. (et al.). (1981). A Theoretical and Empirical Evaluation of Price Deals For Consumer
Non durables. The Journal of Marketing, 116-129.
9.
Krishna, A. (1991). Effect of Dealing Patterns on Consumer Perceptions of Deal Frequency and Willingness to Pay.
Journal of Marketing Research, 441-451.
10. Armstrong, Scott J. (1991). Prediction of Consumer Behavior by Experts and Novices. Journal of Consumer Research,
251–256.
11. Anisimova, T. A. (2007). The Effects of Corporate Brand Attributes on Attitudinal and Behavioural Consumer Loyalty.
Journal of Consumer Marketing, 24(7), 395–405.
12. Mittal, Banwari, Holbrook, Morris, Beatty, Sharon, Raghubir, Priya, & Arch, Woodside. (2008). Consumer behaviorHow humans think, feel, and act in Marketplace, New York: The Free Press, 143-161.
13. Mukherjee, W. (2011, February 25). Aspirational goods to drive FMCG growth: Study. The Economics Time.
Retrieved
on
May
20,
2011
from
http://articles.economictimes.indiatimes.com/2011-0225/news/28634134_1_consumer-products-indian-fmcg-aspirational-products
545 | P a g e
ISSN (P):2279-0934, (O):2279-0942
14. Attrition Analysis – Indian Organized Retail Sector. Retrieved on November,
http://www.studymode.com/essays/Attrition-Analysis-Indian-Organized- Retail-852502.html
2011
from
15. Indian Rural Market. Retrieved on May, 2013 from http://www.ibef.org/industry/consumer-markets/indian-ruralmarket.aspx
16. Rural Employment. Retrieved from http://rural.nic.in/sites/downloads/programmesschemes/Rural_Employment.pdf
17. Fast
Moving
Consumer
Goods
http://www.mbarendezvous.com/fastmoving.php
(FMCG)
in
Rural
India.
Retrieved
from
2011
from
18. Consumer
Behaviour
Annotated
Bibliography.
Retrieved
on
May,
http://www.studymode.com/essays/Consumer-Behaviour-Annotated-Bibliography-710101.html
19. Department of Rural Development, Uttar Pradesh. Retrieved from http://rd.up.nic.in/
20. Retrieved from http://rural.nic.in/sites/downloads/gramin-bharat/Gramin_bharat_May_12ENG.pdf
21. Rural
India,
market
of
the
future.
Retrieved
on
November
29,
http://www.thehindu.com/business/companies/rural-india-market-of-the-future/article4147251.ece
2012
from
*****
BUSINESS PROPOSAL FOR CONFERENCES PUBLICATIONS IN JOURNALS / AS PROCEEDINGS
We are pleased to present this proposal to you as publisher of quality research findings in / as Journals / Special Issues, or
Conference Proceedings under Brand Name ‘Pezzottaite Journals’.
We aims to provide the most complete and reliable source of information on current developments in the different disciplines.
The emphasis will be on publishing quality articles rapidly and making them available to researchers worldwide. Pezzottaite
Journals is dedicated to publish peer-reviewed significant research work and delivering quality content through information
sharing.
Pezzottaite Journals extends an opportunity to the ‘Organizers of Conferences & Seminars’ from around the world to
get ‘Plagiarism Free’ research work published in our Journals, submitted and presented by the participants within the
said events either organized by /at your Department / Institution / College or in collaboration.
As you know, the overall success of a refereed journal is highly dependent on the quality and timely reviews, keeping this in
mind, all our research journals are peer-reviewed to ensure and to bring the highest quality research to the widest possible
audience. The papers submitted with us, will follow a well-defined process of publication and on mutual consent. Publications
are made in accordance to policies and guidelines of Pezzottaite Journals. Moreover, our Journals are accessible worldwide as
‘Online’ and ‘Print’ volumes.
We strongly believe in our responsibility as stewards of a public trust. Therefore, we strictly avoid even the appearance of
conflicts-of-interest; we adhere to processes and policies that have been carefully developed to provide clear and objective
information, and it is mandate for collaborating members to follow them.
Success Stories:
We had successfully covered 4 International Conferences and received appreciation from all of them.
If you have any query, [email protected], [email protected]. We will respond to your
inquiry, shortly. If you have links / or are associated with other organizers, feel free to forward ‘Pezzottaite Journals’ to them.
It will indeed be a pleasure to get associated with an educational institution like yours.
(sd/-)
(Editor-In-Chief)
546 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CHALLENGE IN RURAL MARKETING FOR FMCG SECTOR
Shweta Singhal21 Priya Rathi22 Abhinav Bhardwaj23
ABSTRACT
The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This sector touches every aspect
of human life. The FMCG producers now realize that there is a lot of opportunity for them to enter into the rural market. The
sector is excited about the rural population whose incomes are rising and the lifestyles are changing. There are as many
middle-income households in the rural areas as there are in the urban. Thus, the rural marketing has been growing steadily
over the years and is now bigger than the urban market for FMCGs. Globally, the FMCG sector has been successful in selling
products to the lower and middle-income groups and the same is true in India. Over 70% of sales are made to middle class
households today and over 50% of the middle class is in rural India. The sector is excited about a burgeoning rural population
whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also with a near saturation
and cutthroat competition in urban India, many producers of FMCGs are driven to chalk out bold new strategies for targeting
the rural consumers in a big way. However, the rural penetration rates are low. This presents a tremendous opportunity for
makers of branded products who can convert consumers to buy branded products. Many companies including MNCs and
regional players started developing marketing strategies to lure the untapped market. While developing the strategies, the
marketers need to treat the rural consumer differently from their counterparts in urban because they are economically, socially
and psycho-graphically different to each other. This paper covers the attractions for the FMCG marketers to go to rural, the
challenges, the difference between the rural and the urban market, budget measures, their positive and outcomes, need, major
strategic roles and challenges and opportunities of FMCG companies in rural sector.
KEYWORDS
FMCG Sector, Rural Sector, Rural Marketing, Globalization, Information Technology, Rural Consumer, Challenges,
Urban Consumer etc.
INTRODUCTION
What Is Rural?
According to the census of India, villages with clear surveyed boundaries not having a municipality, corporation or board, with
density of population not more than 400sq.km and at least 75 per cent of the male working population engaged in agriculture and
allied activities would qualify as rural. Therefore, from the above stated conditions, there are 638,000 villages in the country. Of
these, only 0.5 cent has a population above 10,000 and 2 per cent have population between 5,000 and 10,000. Around 50 per cent
has a population less than 200. However, FMCG and consumer durable companies are considering a territory as a rural market,
which has more than 20,000, and below 50,000 populations. According to them, class-II and class-III towns are considered as
rural. According to the census of India 2001, there are more than 4,000 towns in the country that are categorized as Class II and
III Towns based on the population. Size of rural market is estimated to be 42 million households and rural market has been
growing at five times the pace of the urban market.
Rural Marketing
The concept of Rural Marketing in India Economy has played an influential role in the lives of people. The rural market in India
is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country.
Rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural
regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to
urban areas. The rural market in India is vast, scattered and offers a plenty of opportunities in comparison to the urban sector. It
covers the maximum population and regions and thereby, the maximum number of consumers.
'Go rural' is the slogan of marketing guru is after analyzing the socio-economic changes in villages. The Rural population is nearly
three times of the urban, so rural consumers have become the prime target market for consumer durable and non-durable products,
food, construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of
agri-input products such as seeds, fertilizers, pesticides and farm machinery.
However, the success of the product in the rural market is as predictable as rain. It has always been difficult to understand the
rural markets. Marketers need to understand the social dynamics and attitude variations within each village. But by overcoming
the challenges and looking into the opportunities which rural markets offers to the marketers it is said that the future is very
21Assistant
Professor, K.I.E.T., Uttar Pradesh, India, [email protected]
Professor, K.I.E.T., Uttar Pradesh, India, [email protected]
23Associate Professor, K.I.E.T., Uttar Pradesh, India, [email protected]
22Assistant
547 | P a g e
ISSN (P):2279-0934, (O):2279-0942
promising for those who understand the dynamics of rural markets and exploit them to their best advantage. Rural markets face
the critical issues of Distribution, Understanding the rural consumer, Communication and Poor infrastructure.
The marketer has to strengthen the distribution and pricing strategies. Improvement in infrastructure and reach, promise a bright
future for those intending to go rural. Rural consumers are keen on branded goods nowadays, so the market size for products and
services seems to have burgeoned. The rural population has shown a trend of wanting to move into a state of gradual urbanization
in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services.
To expand the market by tapping the countryside, many MNC's are foraying into India's rural markets. Among those that have
made headway are Hindustan Liver, Coca-Cola, LG electronics, Britannia, Colgate Palmolive and the foreign invested telecom
companies. These companies' foreseeing the vast size and demand in the rural market cannot afford to ignore. Rural market
accounts for half the total market for TV sets, Fans, Pressure cookers, bicycles, washing soap and tooth powder where
FMCG products in rural products in rural markets is growing much faster than the urban counterpart.
In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted into substantial
increase in the purchasing power of the rural communities. Because of green revolution, the rural areas are consuming a large
quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has
emerged. However, often, rural marketing is confused with agricultural marketing - the latter denotes marketing of produce of the
rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or
processed inputs or services to rural producers or consumers.
The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last fifty years. The FMCG sector is a
cornerstone of the Indian economy. This sector touches every aspect of human life. Indian FMCG market has been divided for a
long time between the organized sector and the unorganized sector. Unlike the US market for FMCG which is dominated by a
handful of global players, India’s Rs. 460 billion FMCG market remains highly fragmented with roughly half the market going to
unbranded , unpackaged home made products. This presents a tremendous opportunity for makers of branded products who can
convert consumers to buy branded products.
Globally, the FMCG sector has been successful in selling products to the lower and middle-income groups, and the same is true in
India. Over 70% of sales are made to middle class households today and over 50% is in rural India. The sector is excited about a
burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also
with a near saturation and cutthroat competition in urban India, many producers of FMCGs are driven to chalk out bold new
strategies for targeting the rural consumer in a big way. MART, the specialist rural marketing and rural development consultancy,
has found that 53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural areas. Of two million BSNL
mobile connections, 50 per cent went to small towns and villages; of 20 million Rediffmail subscriptions, 60 per cent came from
small towns; so did half the transactions on Rediff's shopping site. According to a study by Chennai-based Francis Kanoi
Marketing Planning Services Pvt Ltd, the rural market for FMCG is worth Rs.65,000 crore, for durables Rs 5000 crore, for
tractors and agri-inputs Rs.45,000 crore and two-and four-wheelers, Rs.8000 crore. In total, a whopping Rs.123,000 crore. This
could be doubled if corporate understood the rural buying behaviour and got their distribution and pricing right.
IMPULSE TO GO RURAL
There are many reasons that have urged the FMCG companies to enter the uncharted territory of rural India. Some of the
attractions are discussed below:
Large Population
The rural Indian population is large and its growth rate is high. Over 70% India is one billion and population lives in around
627,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the much-needed volumes and
help the FMCG companies to bank upon the volume driven growth.
Rising Rural Prosperity
India is now seeing a dramatic shift towards prosperity in rural households. To drive home the potential of rural India just
consider some of these impressive facts about the rural sector. As per the National Council for Applied Economic Research
(NCAER) study, there are as many ‘middle income and above’ households in the rural areas as there are in the urban areas. There
are almost twice as many ‘lower middle income’ households in rural areas as in the urban areas.
Growth in Market
The purchasing power in rural India is on steady rise and it has resulted in the growth of the rural market. The market has been
growing at 3-4% per annum adding more than one million new consumers every year and now accounts for close to 50% of
volume consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than urban markets.
548 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Effectiveness of Communication
An important tool to reach out to the rural audience is through effective communication. “A rural consumer is brand loyal and
understands symbols better. This also makes it easy to sell look - alike". The rural audience has matured enough to understand the
communication developed for the urban markets, especially with reference to FMCG products. Television has been a major
effective communication system for rural mass and, as a result, companies should identify themselves with their advertisements.
Advertisements touching the emotions of the rural folks, it is argued, could drive a quantum jump in sales.
IT Penetration in Rural India Today there are over 15 million villagers in India who are aware of the Internet and over 300,000
villagers have used it! Ten years back, history was created with Public Call Office phone booths (essentially manually operated
payphone facilities), opening in every corner of the country. Web connectivity through various types of communication hubs will
surely affect the currency of information exchange. As the electronic ethos and IT culture moves into rural India, the possibilities
of change are becoming visible.
IMPACT OF GLOBALIZATION
The impact of globalization will be felt in rural India as much as in urban. Nevertheless, it will be slow. It will have its impact on
target groups like farmers, youth and women. Farmers, today 'keep in touch' with the latest information and maximize both ends.
Animal feed producers no longer look at Andhra Pradesh or Karnataka. They keep their cell phones constantly connected to
global markets. Surely, price movements and products' availability in the international market place seem to drive their local
business strategies
Opportunities

Rapid improvement in Infrastructure is attracting companies to shift focus from urban to rural market.




In 50 years only 40%, villages connected by road, in next 10 years another 30%.
More than 90 % villages electrified, though only 44% rural homes have electric connections.
Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD.
Social Indicators have improved a lot between 1981 and 2001



Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%)
Percentage of BPL families declined from 46% to 27%
Rural Literacy level raised from 36% to 59%

Low penetration rates in rural so there are many marketing opportunities.

Marketers can make effective use of the large available infrastructure






Post offices - 1, 38,000
Haats (periodic markets) - 42,000
Melas (exhibitions) - 25,000
Mandis (agri markets) - 7,000
Public distribution shops - 3, 80,000
Bank branches - 32,000
The above facts emphasizes the change in the thinking of some the FMCG companies who are late to the party. The
companies, which have been reluctant to realize the potential of rural markets has no other way, but to make strategies to enter
rural markets at an earliest. The mantra for success can be further augmented by the Four a Framework (Affordability,
Acceptability, Accessibility & Awareness). These factors will go a long way in providing the company with market value
coverage along with a steady source of revenues. The companies, which are going to keep in mind the above stated factors, are
sure to emerge as winners in the rural markets.
Rural Vs Urban Consumers – Challenges
The biggest mistake a FMCG company can make while entering the rural India is to treat it as an extension to the existing urban
market. However, there is a vast difference in the lifestyles of the rural and urban consumers. The rural Indian consumer is
economically, socially, and psycho graphically different from his urban counterpart. The kind of choices that an urban customer
takes for granted is different from the choices available to the rural counterparts. The difference in consumer behavior in essence
stems from the way of thinking with the simple thought process of the rural consumer in contrast to a much more complex urban
counterpart. On top of this there has hardly been any research into the consumer behavior of the rural areas, whereas there is
considerable amount of data on the urban consumers regarding things like - who is the influencer, who is the buyer, how do they
549 | P a g e
ISSN (P):2279-0934, (O):2279-0942
go and buy, how much money do they spend on their purchases, etc. On the rural front, the efforts have started only recently and
will take time to come out with substantial results. Therefore, the primary challenge is to understand the buyer and his behavior.
Even greater challenge lies in terms of the vast differences in the rural areas, which severely limits the marketer’s ability to
segment, target and position his offerings. The population is dispersed to such an extent that 90% of the rural population is
concentrated in villages with population of less than 2000. Therefore, the geographical spread is not as homogeneous as it is with
the urban areas owing to vast differences culture and education levels. Also with agriculture being the main business of rural
sector, the purchasing power of rural consumer is highly unpredictable which can lead to high variations in demand patterns. One
more gray area that needs to be probed into is the importance of retailer in rural trade. Rural consumer’s brand choices are greatly
restricted and this is where the retailer appears. The rural customer generally goes to the same retailer to buy goods. Naturally,
there is a very strong bonding in terms of trust between the two. Also with the low education levels of rural sector the rural buying
behavior is such that the consumer does not ask for the things explicitly by brand but like "laal wala sabun dena" or "paanch rupey
waali chai dena". Now in such a scenario the brand becomes subservient to the retailer and he pushes whatever brand fetches him
the greatest returns. Thus, as there is a need to understand the rural consumer, similarly need is there to study the retailer, as he is
a chief influencer in the buying decision.
KEY POSITIVES
•
Growth Potential: Rural penetration levels are still low. In addition, according to estimates, only about 7% to 8% of
the total food production (US$ 75 bn) is consumed in processed form. This speaks for itself, highlighting the scope for
growth. The planned development of roads, ports, railways and airports, will increase FMCG penetration in the long
term.
•
Increasing Focus: Companies are increasingly focusing on key products and brands, cost efficiencies and rural markets
to grow. This is a sign of market sophistication, both from the manufacturer's point of view as well as the consumer's
point of view.
•
The India Advantage: Owing to India's cost advantage, many MNC companies have started using their Indian
operations as their manufacturing base. Alternatively, some Indian companies have tested foreign shores like
Bangladesh, Sri Lanka [Images], the Middle East and Pakistan among others.
•
Favorable Tax Structure: The introduction of VAT at the start of FY06 is a long term positive for the FMCG sector.
This had been a long pending demand of the FMCG sector. Post this; the tax ambiguity will be reduced, benefiting the
sector.
•
Modern Trade Growth Robust: Modern retailing stores are the future and are growing at exponential rates. With the
modernization of the retail sector, rapid growth in sales of supermarkets, department stores and hypermarkets is
inevitable due to the growing preference of the affluent and upper middle classes for shopping at these types of retail
stores. Since FMCG companies have tied up with these retailers, growth for FMCG companies will also be faster.
KEY NEGATIVES
•
Increasing Competition: New entrants in the sector have heightened competition in key segments like soaps and
detergents, putting pressure on profitability.
•
Infrastructure: The infrastructure for free transport of goods is not adequate in the country. In addition, the fall in
agricultural output continues to cast on FMCG sector's prospects in the short term.
•
Unorganized Threat: A large part of the branded market continues to be threatened by spurious goods and illegal
foreign imports, which remain a challenge for large companies, particularly during times of cyclical downturns.
NEED OF FMCG IN RURAL AREAS
After years of growth derived primarily from the urban markets, the FMCG companies have now realized that India lies in its
rural villages. So much so, that rural marketing has become the latest marketing mantra of most FMCG majors. With extensive
competition not only from MNCs but also from the numerous regional players and the lure of an untapped market has driven the
marketers to chalk out bold new strategies for targeting the rural consumer in a big way. To gauge the extent of shift in focus of
the FMCG giants just sample this: recently Godrej Consumer Products Ltd (GCPL) did something that it had not done before; it
introduced smaller pack sizes of some of its soaps and put them on the market for Rs 5. In addition, FMCG giant HLL has just
launched a green variant of Lifebuoy soap, which, it hopes will be a winner in the rural areas. Also, do not be too surprised if you
village folk having their hair washed and dyed as they are only taking advantage of the live demonstrations conducted by
Chennai-based CavinKare Products. Therefore, it is clear that rural markets have caught the eyes of FMCG marketers and it is
being targeted through experiments in a big way.
550 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Over 70% of India is 1 billion plus population lives in around 627,000 villages in rural areas. This simply shows the great
potentiality rural India has to bring the much-needed volumes and help the FMCG companies to bank upon the volume–driven
growth. In addition, the rural market has been growing steadily over the years and is now bigger than the urban market for
FMCG’s (53% share of the total market) with an annual size in value terms currently estimated at around 50,000 crores. It is a
definite boon in disguise for the FMCG majors who have already reached the plateau of their business curve in urban India and
are desperately seeking new ways to increase sales.
To drive home the potential of rural India just consider some of these impressive facts about the rural sector. As per the National
Council for Applied Economic Research (NCAER) study, there are as many 'middle income and above' households in the rural
areas as there are in the urban areas. There are almost twice as many 'lower middle income' households in rural areas as in the
urban areas. At the highest income level, there are 2.3 million urban households as against 1.6 million households in rural areas.
According to the NCAER projections, the number of middle and high-income households in rural India is expected to grow from
80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute
size of rural India is expected to be double that of urban India. However, despite the high rural share in these categories, the rural
penetration rates are low, thus offering tremendous potential for growth.
Thus, it becomes amply clear that rural India has to be the hot target in future for FMCG companies as it presents a plethora of
opportunities, all waiting to be harnessed. Many of the FMCG companies are already busy formulating their rural marketing
strategy to tap the potential before competition catches up. All biggies in the industry be it HLL, Marico, Colgate-Palmolive or
Britannia, are showing deep interest in rural India. However not everything is all rosy and there exist some gray areas in the rural
strategies.
RURAL MARKETING-CHALLENGES AND OPPORTUNITIES
The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries
consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an
important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages
which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest
towns, etc. The rural market certainly offers a big attraction to marketers, it would be naive to think that any company can easily
enter the market and walk away with sizable share. Actually, the market bristles with variety of problems. The main problems in
rural marketing are:
Physical Distribution and Channel Distribution
The problems of physical distribution and channel management adversely affect the service as well as the cost aspect. The
existent market structure consists of primary rural market and retail sales outlet. The structure involves stock points in feeder
towns to service these retail outlets at the village levels. However, it becomes difficult maintaining the required service level in
the delivery of the product at retail level.
Underdeveloped People and Under Developed Market
Even today about 75 districts in the country are drought prone and no new technology worth the name has percolated to increase
the living standard of the living of these people. In addition, the farmer with small agriculture land holding has also been unable to
take advantage of the new technology. The no. of the people below poverty line has not decrease in appreciable manner. Thus, the
rural market largely are the characterized by underdeveloped people and hence underdeveloped market.
Lack of Proper Physical Communication Facility
Nearly 50 % of the villages do not have road even today. Most villages in the eastern part of the country are inaccessible during
monsoon season, hence the distribution effort put by the manufacture prove expensive and sometimes of no consequence. To be
effective the products have to be physically moved to places of the point of consumption or place of purchase.
Many Dialects and Languages
Even assuming that media are available for communication, the number of language and dialects vary widely from state to state,
region to region and probably district to district. The massage has to be delivered in local language and dialects. Even though the
numbers of recognized language are only 16, the no. of dialects is estimated to be around 850.
Low Per Capita Incomes
Even though about 35 – 37 % of the gross domestic product is generated in the rural areas, it is shared by 66% of the population.
Hence, the per capita income is low, compared to urban areas. This apart, the distribution of the incomes is highly skewed, since
the land-holding pattern, which is the basic asset is highly skewed. Thus, the rural population presents a highly heterogeneous
scene. These aspects require very careful consideration while evolving distribution strategy for the rural market.
551 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Logistics, Storage, Handling and Transport
It has been seen that the transportation facility is poor in rural areas. A leading company, which distribute its consumable product
in rural areas use bullock carts and camel back for the physical distribution and transportation of goods in to inaccessible areas. In
some villages, there may not be a shop from where product can be made available to a rural consumer. Thus, willingness to enter
the rural market alone is not sufficient, but identification of shopkeeper, offering them credit assuring periodic supply and
motivating them also become very crucial.
Market Organization and Staff
The size of market organization and the staff is very important, to have an effective control. Comparative to the rural market will
involve large marketing organization and staff. How many manufacturers and marketing men can afford such huge investment in
term of personnel and keep an effective control on it, need examination.
Product Positioning
In a highly heterogeneous market, product positioning become very difficult, otherwise the product range will be too wide. A
wide product range will give rise to distribution problems. Even company like broke bond have packets priced from 50 paise
onwards. The very product positioning limits the market only to such segments of farmers. While positioning is possible in of
durables, positioning is difficult in consumables. Therefore, this warrant designing new products or redesigning the existing one
to suit the rural wants habits and need, based on the purchasing power
Low Level of Literacy
The literacy rate is low in the rural areas as compared to the urban areas. This again leads to problems of the communication for
the promotion purpose. Print medium becomes ineffective and to the extent irrelevant in the rural areas since its reach is poor and
so is the level of literacy. The dependence should be more on electronic media – cinema, Radio and television. While access to the
television advertisement is very expensive so radio and cinema appears easy. In addition, counterfeiting product with look-alike
name and symbol cut the revenue of the producer of genuine product.
OPPORTUNITIES
The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last fifty odd years. The FMCG sector is a
cornerstone of the Indian economy. This sector touches every aspect of human life. Indian FMCG market has been divided for a
long time between the organized sector and the unorganized sector. Unlike the US market for FMCG which is dominated by a
handful of global players, India’s Rs. 460 billion FMCG market remains highly fragmented with roughly half the market going to
unbranded, unpackaged home made products. This presents a tremendous opportunity for makers of branded products who can
convert consumers to buy branded products.
Globally, the FMCG sector has been successful in selling products to the lower and middle-income groups, and the same is true in
India. Over 70% of sales are made to middle class households today and over 50% is in rural India. The sector is excited about a
burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also
with a near saturation and cutthroat competition in urban India, many producers of FMCGs are driven to chalk out bold new
strategies for targeting the rural consumer in a big way. MART, the specialist rural marketing and rural development consultancy,
has found that 53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural areas. Of two million BSNL
mobile connections, 50 per cent went to small towns and villages; of 20 million Rediffmail subscriptions, 60 per cent came from
small towns; so did half the transactions on Rediff's shopping site.
According to a study by Chennai-based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is worth
Rs.65,000 crore, for durables Rs 5000 crore, for tractors and agri-inputs Rs.45,000 crore and two- and four-wheelers, Rs.8000
crore. In total, a whopping Rs. 1,23,000 crore. This could be doubled if corporate understood the rural buying behaviour and got
their distribution and pricing right.
GROWTH OF FMCG SECTOR IN INDIA
The Indian FMCG market offers a level playing ground for both domestic and international players. All Indian brands and
international brands enjoy higher acceptance in the urban market, the rural market is often dominated by the regional and local
producers. The Consumer Market, and especially Fast Moving Consumer Goods (FMCG) sector in rural and semi-urban India is
estimated to cross $20 billion by 2018 and $100 billion by 2025, according to an AC Nielsen survey. Some of the most popular
consumer goods included fruit drinks, shampoos and biscuits are among the most bought items in rural and semi-urban India and
will continue to be so. It also revealed that growth in the FMCG sector in rural India increased 3.5 times from 2000 to 2010, as
compared to 3.2 times in urban India.
552 | P a g e
ISSN (P):2279-0934, (O):2279-0942
In the Annual Global Investor Conference, 2011, conducted by Motilal Oswal, it is stated that the FMCG sector in India has
registered a Compound Annual Growth Rate (CAGR) of 11.2% from 2000 to 2010, with an average annual volume growth of
8.5%. This growth has been attributed to factors like, increased consumption, rise in income levels, changes in lifestyles and
demographic changes. The conference-highlighted data from an AC Nielsen survey stated that the rural sector in India accounts
for about 33% of the total revenue every year. It also stated that the FMCG sector stood at $30 billion in 2010. Food occupies the
major chunk in this sector, with about 52%, followed by nonfood 45% and Over the Counter (OTC) by 3%.According to Booz &
Company, the Indian FMCG sector is expected to grow between 12% to 17% by 2020 and would reach a market size of 4,000 to
6,200 billion. According to a study by McKinsey Global Institute (MGI), incomes in India are likely to grow 3 times over the next
two decades and India will become the world's fifth largest consumer market by 2025.
Market share movements indicate that companies such as Marico Ltd and Nestle India Ltd, with domination in their key
categories, have improved their market shares and outperformed peers in the FMCG sector. This has been also aided by the lack
of competition in the respective categories. Single product leaders such as Colgate Palmolive India Ltd and Britannia Industries
Ltd have also witnessed strength in their respective categories, aided by innovations and strong distribution. Strong players in the
economy segment like Godrej Consumer Products Ltd in soaps and Dabur in toothpastes have also posted market share
improvement, with revived growth in semi-urban and rural areas.
Penetration level and per capita consumption in many product categories is very low compared to world average standards
representing the unexploited market potential. Mushrooming Indian population, particularly the middle class and the rural
segments, presents the huge untapped opportunity to FMCG players. Growth is also likely to come from consumer 'upgrading' in
the matured product categories like processed and packaged food, mouth wash etc. A distinct feature of the FMCG industry is the
presence of international players through their subsidiaries (HLL, P&G, Nestle), which ensures innovative product launches in the
market from their parent's portfolio. The Rural FMCG Market of India is on the verge of registering substantial expansion across
the country. The Indian Rural FMCG market is mostly unorganized and it is generally dominated by small time retailers. The
organized FMCG market is only confined to the urban areas of India. Rural India mostly depends on agriculture, directly or
indirectly for livelihood. Further, almost 68% of Indian population lives in rural India in around 6,00,000 villages. Rural India
offers tremendous growth prospects for FMCG industry. Facilitation of better rural infrastructure like roads, telecommunication,
electricity, supply chain, and transportation would propel the growth of Rural FMCG Market of India. The FMCG sector, which
offers tremendous growth prospects are food and beverage sector, health care and personal care. Presently, rural India accounts
for 34% of total FMCG consumption, but it accounts for more than 40% consumption in major FMCG categories like as personal
care, hot beverages, and fabric care.
CONCLUSION
In the end, it is certain that FMCG companies will have to really gain inroads in the rural markets in order to achieve double-digit
growth targets in future. There is huge potential and definitely, there is lot of money in rural India but the smart thing would be to
weigh in the roadblocks as carefully as possible. The companies entering rural market must do so for strategic reasons and not for
tactical gains as rural consumer is still a closed book and it is only through unwavering commitment that the companies can make
a dent in the market. Ultimately, the winner would be the one with the required resources like time and money and with the muchneeded innovative ideas to tap the rural markets.
A mention of rural India may conjure up an image of abject poverty in the minds of many people. This, however, does not hold
true in the case of a few fast moving consumer goods (FMCG) companies that have over the years been giving their rural
operations a renewed thrust. Why would these companies be tapping into the rural markets in the first place? First, let us look at
the distribution networks of three leading FMCG companies in India - Hindustan Lever Limited, Colgate Palmolive and Britannia.
These three companies are market leaders in their core areas and much of their success has to do with the intricate marketing
networks they have developed over the years. Hindustan Lever, as would be expected, has the largest reach in terms of the
markets serviced. Colgate, on the other hand, has adopted a concentrated approach by focusing on fewer markets. Britannia,
compared to the first two, has a much smaller reach.
Colgate and Britannia now derive 35% and 30% respectively of their turnover from rural markets. Britannia and Colgate, apart
from Hindustan Lever, are the only FMCG companies in India that derive over 30% of their revenues from rural markets.
Britannia has rejuvenated its rural thrust by the launch of Tiger biscuits, while Colgate has been attempting to woo the rural
masses by offering low priced products in convenient packaging. The success of these companies has as much to do with
understanding the psyche of the rural family as it have to do with a rural distribution network. A typical rural family is a price
conscious consumer and this is where the key to success lies.
REFERENCES
1.
Goplalaswamy, T. P. (2003). Rural Marketing (2nd ed.). Excel Books.
2.
Kashyap, Pradeep, & Raut, Siddhartha. (2006). The Rural Marketing Book. Biztantra Publications.
553 | P a g e
ISSN (P):2279-0934, (O):2279-0942
3.
Krishnamacharyulu, C. S. G., & Ramakrishnan, Lalitha. Rural Marketing: Text and Cases (2nd ed.). New Delhi:
Pearson Education.
4.
Ramkrishnan, Ruchika. Rural Marketing in India: Strategies and Challenges. New Delhi: New Century Publications.
5.
Ibid.2.
6.
Nabi, M. K., & Raut, C. K. (1995, February-March). Problems and Imperatives of Rural Marketing in India. Indian
Journal of Marketing, 16.
7.
Rajagopal. (1998). Rural Marketing: Development, Policy, Planning & Practice. Jaipur: Rawat Publication.
8.
Anand, & Hundal, B. S. (2008). Perceptions of consumers towards promotional schemes for durables: a study in Punjab.
Journal of Consumer Behavior, 3(2), 17-31. The ICFAI University.
9.
Anand, Sandeep, & Krishna, Rajnish. (2008). Rural brand preference determinants in India. In Proceedings of
Conference on Marketing to Rural Consumers – Understanding and tapping the rural market potential, IIMK, (pp.
1-5).
10. Arens, F. William. (2006). Contemporary Advertising (10th ed.). New York: McGraw-Hill/Irwin.
11. Bhatt, Rajeshwari G., & Jaiswal, M. C. (1986). A study of an advertising impact and consumer reaction. Indian
Journal of Marketing, 18, 9-16.
12. Bijapurkar, Rama. (2000, September 18). The Marketing in India. The Economic Times, 6.
13. Bijoor, Harish. (2005, July 4). Creating brand strategies for rural India. Deccan Herald.
14. Bishnoi, V. K., & Bharti. (2007). Awareness and consumption pattern of rural consumers towards home and personal
care products. In Proceedings of Conference on Marketing to Rural Consumers, IIMK, (pp. 93-106).
15. Dhunna, Mukesh. (1984). An analysis of consumer behavior—a case study of soft drinks. Indian Journal of
Marketing, 14, 26-28.
16. FICCI Technopak. (2009). In Proceedings of the Conference on Fast Moving Consumer Goods. FMCG Sector The
Road Ahead, Massmerize, (pp. 3-12).
17. Jha, Mithileshwar. (2003). Understanding rural buyer behaviour. IIMB Management Review, 15(3), 89-92.
18. Kashyap, Pradeep, & Raut, Siddharth (2007). The Rural Marketing Book. Biztantra.
19. Khatri, M. (2002, July-August). Challenges in rural marketing. Strategic Marketing.
20. Kothari, C. R. (2004). Research Methodology Methods and Techniques (2nd ed.). New Delhi: New Age International
(P) Limited 152-232.
21. Retrieved from http://interscience.in/IMR_Vol2Iss3/paper4.pdf
22. Retrieved
from
http://www.vsrdjournals.com/MBA/Issue/2012_02_Feb/Web/5_KC_Behura_584_Research_Communication_Feb_2012
.pdf
23. Retrieved from http://www.mbaskool.com/business-articles/marketing/5690-rural-marketing-challenges-opportunitiesand-beyond.html
24. Retrieved from www.info.shine.com
25. Retrieved from www.scribd.com
26. Retrieved from www.fmcg-marketing.blogspot.com
27. Retrieved from www.independent.academia.ed
28. Retrieved from http://www.ruralgov-ncaer.org
*****
554 | P a g e
ISSN (P):2279-0934, (O):2279-0942
STUDY ON VISUAL MERCHANDISING FOR HOME FURNITURE RETAIL STORE
Vandana Gupta24
ABSTRACT
With the increasing competition in the market the need to capture new customers and retain existing customers in the retail
market is increasing, this requires differentiation and value addition to the retail setting, Visual Merchandising acts as a value
addition and a differentiating factor between various retail settings. This study is to find the needs and effects of visual
merchandising in Retail formats in home furniture industry. The study shows how different factors of visual merchandising
have an impact on the purchase frequency and the purchase decision of the customer. The project deals with components of
Visual Merchandising and its influence on customer purchasing decision. The study is conducted at Evok store, Delhi. The
study is based on how the visual merchandising components such as Color and Lighting, Props and Decorative items, Fixtures
and Hardware, Store Design and Display and overall ambience of the store plays a crucial role in influencing the purchase
decision making of the customer. The ambience of the store is a very important element in Visual Merchandising as it
influences consumers in purchase decision. The report also analyses the efficiency of visual merchandising in Evok stores,
which is one of the leaders in home furniture retail market.
KEYWORDS
Visual Merchandising, Home Furniture, Retail Market, Purchase Frequency, Purchase Decision etc.
INTRODUCTION
The Principal cause behind this study is to find the needs and effects of visual merchandising in Retail format, with special
reference to the Home Furniture Industry. Therefore by analyzing the outcomes, finding out about what can be done in future to
help the marketer to understand influences of various components of Visual Merchandising on the buying behavior and overall
success of the Retail Company.
We made the assessment on two basis:


The Relation of purchase frequency and different components of Visual Merchandising
Impact of Visual Merchandising as a catalyst in purchase decision.
Hindware Home Retails Private Limited - Evok is a brand, which fits our research criteria to the maximum as it has recently
entered into the home furniture retail market and is in development phase. The Research conducted is focused on Evok as a Home
Furniture Retail Brand and all the primary data collected is from existing Evok Customers.
“Visual Merchandising is everything the customer sees, both exterior and interior, that creates a positive image of the business
and results in attention, interest, desire and action on part of the customer”.
There is a growing recognition of the need for an effective Visual Merchandising. However, even as it continues to grow, the
understanding of Visual Merchandising impact and effectiveness is still in its infancy. The project deals with components of
Visual Merchandising and its influence on customer purchasing decision. The study is conducted at Evok store, Delhi. The study
is based on how the visual merchandising components such as Color and Lighting, Props and Decorative items, Fixtures and
Hardware, Store Design and Display and overall ambience of the store plays a crucial role in influencing the purchase decision
making of the customer.
The methodology followed is questionnaire method with a total sample size of 150 respondents. The data is tabulated and
graphically represented based on the response obtained through questionnaire. Major research findings are presented and suitable
recommendations are made in order to improve the understanding of visual merchandising and imply positive effects of visual
merchandising. The ambience of the store is a very important element in Visual Merchandising as it influences consumers in
purchase decision.
OBJECTIVES OF STUDY
a)
b)
To examine the impact of Visual Merchandising in costumer buying decisions.
To examine the efficiency of Visual Merchandising in Home Furniture Retails Store (Evok) in Delhi/NCR Region.
24Assistant
Professor, Department of Marketing, Amity Business School, Noida, Uttar Pradesh, India, [email protected]
555 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Visual merchandising is defined as “the presentation of a store and its merchandise in ways that will attract the attention of
potential customers and motivate them to make purchases” (Diamond & Diamond, 2003).
Before using the term, visual merchandising, display was used to describe the job of a “window trimmer” who produced visual or
artistic aspects of the merchandising presentation (Cahan & Robinson, 1984; Diamond & Diamond, 2003).
Today’s visual merchandising emphasizes the total store environment including merchandise presentation, store design and
image, mannequins, props and materials, lighting, graphics, and signage (Cahan & Robinson, 1984; Diamond & Diamond, 2003).
Visual merchandising is therefore concerned with both the visual and the marketing functions of the store environment to enhance
the store image and to increase sales (Cahan & Robinson, 1984; Diamond & Diamond, 2003).
Walters and White (1987) emphasized that visual merchandising should arouse consumers’ interest about products and stimulate
them to buy more products.
Using theme-oriented props in the retail store, visual merchandising may increase mood, which can influence purchasing
(Tyreman & Walton, 1998). For example, Sears stores displayed men’s dress shirts with typewriters, globes, and old law books to
create the feeling of the professional office (Tyreman & Walton, 1998).
Theme-oriented props help consumers understand how and/or where they will use the products; the way the products are
displayed influences consumers’ feeling about the product (Tyreman & Walton, 1998). In addition, visual merchandising must
coordinate the entire merchandising, in-store design, and space allocation (Walters & White, 1987).
Sometimes, improper elements incompatible with consumers’ expectations can hurt store image (Cahan & Robinson, 1984;
Walters & White, 1987). Thus, the quality of visual merchandising is thought to be very important to increase sales as well as to
enhance the image of the store (Cahan & Robinson, 1984; Walters & White, 1987).
“Visual Merchandising is everything the customer sees, both exterior and interior, that creates a positive image of the
business and results in attention, interest, desire and action on part of the customer”
Sources: Visual Merchandising for retailers by Holly BastowShoop, North Dakota State University Dale
Zetocha, North Dakota State University.
Gregory Passewitz, the Ohio State University Merchandising and display are an important part of the marketing plan, and should
have a reasonable budget allocated - even for a retailer operating on a shoestring.
In today's competitive retail environment a retailer cannot afford to consider merchandising as a 'frill'. Everyone is competing for
the customers' dollar. There are more choices out there for consumers than ever before. Posters covering the door and windows,
hand lettered signs, lack of lighting and untidy displays send the message that your business is not serious. If your store looks like
a bargain basement, customers will expect bargain basement prices and may draw the conclusion that your product is poor quality.
This judgment may have little to do with the product itself, but be the result of poor presentation. Melanie McIntosh, a retail
consultant and founder of Inspire Retail Solutions, a British Columbia firm that helps retailers create strong, professional business
images that attract customers.
Research Hypothesis (s)
H0. : Visual Merchandising has a favorable impact on consumer buying decision.
H1. : Visual Merchandising does not have a favorable impact on consumer buying decision.
 Research Design : Descriptive Research,
 Sampling Technique : Convenience Sampling,
 Sample Area : Exit Evok customers at Faridabad Store,
 Sample Size : 150,
 Data Collection : Primary Data,
 Software used for compilation of Data: MS Excel.

Data Collection: The data collected is Primary data. A Questionnaire was prepared to collect the data. Primary data was collected
from 150 respondents through a closed ended questionnaire. Convenient sampling was used to collect the answers for the
questions of the questionnaire.
556 | P a g e
ISSN (P):2279-0934, (O):2279-0942
DATA ANALYSIS
Graph-1
Graph-2
Graph-3: Relation of Purchase Frequency and Opinion on Store Display
557 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-4: Relation of Purchase Frequency and Importance of Store Ambience
Graph-5: Relation of Purchase Frequency and Customer Rating on Store Design and Display
558 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-6: Relation of Purchase Frequency and Customer Rating on Colors and Lighting
Graph-7: Relation of Purchase Frequency and Information Provided by Signs
559 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-8: Relation of Purchase Frequency and Finding the Desired Product
Graph-9: Relation of Purchase frequency and Visual Merchandising as a Sales Pushing Factor
560 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-10: Relation of Purchase Frequency and Display Window Changing Frequency (weekly)
Graph-11: Relation of Purchase frequency and Store Professionalism
561 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-12: Relation of Purchase Frequency and Store Purchases
Graph-13: Relation between Products Purchased and Role of Visual Merchandising in Finalizing Purchase Decision
562 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Graph-14
FINDINGS

















About 67% of the customers of Evok were involved in some activity leading to furniture purchase, this shows that
majority of the customers came with a motive to buy something specific from Evok.
Almost half the customers were repeat customers showing that Evok products, services and displays were able to pull
the customer back to the stores for repeat purchases.
The customer opinion about the store display was very positive, and both repeat customers and new customers liked the
store display, which is a very positive sign.
Almost all the customers believed that the ambience of the store is as important as the quality of products and services
offered,97% of the repeat customers felt that the ambience of the store if important, almost haft the customer base being
repeat customers indicates Evok has been successful in maintaining a nice store ambience.
Majority of the customers had a positive rating towards the store design and layout, with frequent customers having
higher expectations from the display standards, the positive rating are thus shown by a high return customer ratio.
Colors and lighting forms an integral part of the Visual Merchandising, majority of the customers had a positive
response towards the colors and lighting used in the store, frequent purchasers show a higher positive response towards
the lighting and colors used also indicating that colors and lighting have a positive impact on the customer loyalty.
Signage’s form an integral part of Visual Merchandising, the signs displayed were able to provide basic information to
the customers, and this area can be improved upon by Evok.
Product display and Visual Merchandising layout helps in easier product mapping, majority of the customers were able
to find the product they desired for, which helped in boosting the purchase decision on a sub-conscious level.
Almost 3/4th of the customers agreed that the way the products were displayed and the different combinations and
designs used helped them in making their purchase decision.
Display windows are an integral part of Visual Merchandising, which helps the stores to pull its potential customers and
help increase the overall footfall of the store, a majority of the customers believed that regular updates to the display
windows is important as it may also indicate availability of fresh stock.
Majority of the customers agreed that the store should be in such a condition that it shows professionalism
Almost three quarters of the products purchased were Small Decorative items for homes, the remaining purchases were
furniture/kitchen/beds purchases.
The repeat customers mostly purchased decorative items but a small percentage of them also purchased
furniture/beds/kitchen systems
Customers presently engaged in renovating activities majorly purchased furniture/beds/kitchen systems.
Almost all the customers who purchased decorative items from Evok believed that the Visual Merchandising had a
major role in influencing their purchase decision
Majority of customers who purchased furniture / beds / kitchen solutions from Evok believed that the Visual
Merchandising had a very positive impact on their purchase decision.
From the above results, Hypothesis H0: Visual Merchandising has a favorable impact on consumer buying decision is
true.
563 | P a g e
ISSN (P):2279-0934, (O):2279-0942
LIMITATIONS







The research was restricted to Evok store in Delhi only, with a sample size of 150 the results are based on this small
number only.
Convincing the people to fill the questionnaire was difficult.
Data given by the customers may not be 100% accurate.
The analysis of the project is based on the observations and interpretations based on sample survey.
The respondents were from the same geographical location actual preferences might be different.
The research was based on primary collection of data so there may be chances of human error and biasness.
Manual scanning chose the people chosen to fill the questionnaire.
RECOMMENDATIONS







Surveys should be undertaken from the oldest customers of how to make the stores more customers effective. This will
increase the interaction with the customers and make them feel important.
An immediate change to the signs of the store should be done in order to provide more information to the customers.
As we, all know that the ambience of the stores indirectly affects the purchasing of the customers coming in the stores.
It also becomes essentially important, to keep a check on the Visual Merchandising of the store.
As per the answers in the questionnaire, the display windows should be changed regularly, so as the customers get a
feeling of fresh and upgraded products in the store.
Awareness about the extra services provided about evoke is very important for the customers to be fully aware of.
The staff becomes an integral part of the customer orientation store. A good aware and educated staff brings in more
customers. Therefore, the staff should be trained more and more about the brand and its products so that the staff
members can help the customers with their queries.
Last but not the least, Evok has done justice in almost all customer areas but still there is a sense of improvement. An
indirect or direct connect should be maintained with the customers so that they feel as a part of the brand.
CONCLUSION







Evok as a Home Furniture Retail store has been very successful in implementing and maintaining Visual Merchandising
in its stores.
The customers liked the ambience, colors used, the amount of lighting, and the professionalism of Evok stores, as Evok
was able to maintain a good standard of quality in these fields, many customers were repeat customers.
Customers purchasing home furniture expect to get a vast range of products which are easily accessible in the store and
a good amount of information be provided about the product.
Window Displays are an integral part of Visual Merchandising and customers expect the window displays to be
changed on a weekly basis, displaying new product placement ideas and designs.
Furniture is a slow moving product, and the purchase frequency is very less, because of this a need and desire for a
certain product is required which can only be done by displaying the product in such a way that a desire for the product
is raised.
Customers would desire decorative items when they can relate to the products in with their house setting; Visual
Merchandising ensures that decorative products are displayed in such combinations that a desire for them is generated.
The placement of the furniture, designs and combinations used helped the customers in making the purchase decision.
Hypothesis H0: Visual Merchandising has a favorable impact on consumer buying decision. Is true.
REFERENCES
1.
Babin, B. J., Hardesty, D. M., & Suter, T. A. (2003). Color and shopping intentions: The interviewing effect of price
fairness and perceived affect. Journal of Business Research, 56(7), 541-552.
2.
Baker, J., Levy, M., & Grewal, D. (1992). An experimental approach to making retail store environmental decisions.
Journal of Retailing, 68, 445-460.
3.
Baker, J., Parasuraman, A., Grewal, D., & Voss, G. B. (2002). The influence of multiple store environment cues on
perceived merchandise value and patronage intentions. Journal of Marketing, 65, 120-141.
4.
Beliizzi, J. A., Crowley, A. E., & Hasty, R. W. (1983). The effects of color in store design. Journal of retailing, 59, 2145.
5.
Bellizzi, J. A. & Hite, R. E. (1992). Environmental color, consumer feelings, and purchase likelihood. Psychology and
564 | P a g e
ISSN (P):2279-0934, (O):2279-0942
6.
Bitner, M. (1992). Service scapes: The impact of physical surroundings on customers and employees. Journal of
7.
Cahan, L., & Robinson, J. (1984). A practical guide to visual merchandising. Linda. Canada: John Wiley & Sons, Inc.
8.
Colborne, R. (1996). Visual merchandising: The business of merchandise presentation. Albany. NY: Delmar
Publishers.
9.
Donovan, R. J., & Rossiter, J. R. (1982). Store atmosphere: An environmental psychology approach. Journal of
Retailing, 58 (1), 34-57.
10. Helen, Vaid. (2003). Branding. Brand strategy, design and implementation of corporate and product identity. Cassell
Illustrated.
*****
BANKS & ACCOUNT DETAILS
Bank Details for Online Transactions
Important Instructions to remember in case of:
NEFT Transfers / Online payments:
Please forward us the ‘Automatic Receipt / Acknowledgement Receipt’ generated, soon after you make online
(NEFT) transfer in any of below mentioned banks. Forward the slip on [email protected],
[email protected]

Cash Deposit:
Please forward us the scanned copy of bank’s deposit slip, received after depositing the cash in our account /
or send us the photocopy of the same along with Declaration & Copyright Form;

Demand Draft:
Please forward us the scanned copy of demand draft. You are directed to keep a photocopy of the Demand
Draft with you for future references and to liaison with us.
Note: We don not accepts ‘Cheques’ in any conditions from researchers and paper submitters.
The said information is needed to complete formalities against your submission.
Name of Bank: UCO Bank
Title of Account: Pezzottaite Journals,
Current Account Number: 07540210000878,
District: Jammu,
State: Jammu & Kashmir [India],
Branch: Talab Tillo,
IFSC Code: UCBA0002502 (used for RTGS & NEFT
transactions),
Contact: +91-(0191)-2100737.
Name of Bank: Oriental Bank of Commerce
District: Jammu,
Branch: Trikuta Nagar,
IFSC Code: ORBC0100681 (used for RTGS & NEFT
transactions),
Contact: +91-(0191)-2472173.
Details for Demand Drafts
All the Demand Drafts must be made in favour of ‘Pezzottaite Journals’ payable at ‘Jammu, India’ and to be send at:
Editor-In-Chief
(Mobile): +91-09419216270 – 71
565 | P a g e
ISSN (P):2279-0934, (O):2279-0942
EMPLOYMENT CONDITIONS OF RETAIL SALES PERSONNEL
IN VISAKHAPATNAM CITY
Dr. K. Satyanarayana25 Dr. K. Hari Hara Raju26
ABSTRACT
The Indian retail sector is highly fragmented with 97% of its business being run by unorganized retailers like the traditional
family run stores and corner stores. The organized retail however is at a very nascent stage though attempts are being made to
increase its proportion to 9-10% by year 2010 bringing in a huge opportunity for prospective new players. The sector is the
largest source of employment after agriculture, and has deep penetration into rural India generating more than 10 per cent of
India’s GDP. In recent years, there has been a sea change in the employment scenario all over the globe. The retail industry is
one of the biggest employers in the world. In India, it is second largest employment provider after agriculture. The retail sector
has been growing very fast with several national and international associations. Even the large-scale business enterprises have
also been entering into retailing activity. They have provided employment to millions and it is expected that these enterprises
will generate more number of jobs in the future. This paper examines the prevailing employment conditions and training of the
employees in retail sector.
KEYWORDS
Retail Industry, Employment Conditions, Training, Unorganized Sector etc.
INTRODUCTION
Retailing in India is one of the pillars of its economy and accounts for 14 to 15 per cent of its GDP. The Indian retail market is
estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest
growing retail markets in the world, with 1.2 billion people.
India’s retailing industry is essentially owner managed small shops. In 2010, larger format convenience store and supermarkets
accounted for about 4 per cent of the industry, and these were present only in large urban centers. India’s retail and logistics
industry employs about 40 million Indians (3.3% of Indian population). Until 2011, Indian central government denied foreign
direct investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores
or any retail outlets. Even single-brand retail was limited to 51per cent ownership and a bureaucratic process.
In November 2011, India’s central government announced retail reforms for both multi-brand stores and single-brand stores.
These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Walmart, Carrefour
and Tesco, as well single brand majors such as IKEA, Nike, and Apple. The announcement sparked intense activism, both in
opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the
retail reforms on hold until it reaches a consensus.
In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail
market with 100 per cent ownership, but imposed the requirement that the single brand retailer source 30 per cent of its goods
from India. Indian government continues the hold on retail reforms for multi-brand stores.
In June 2012, IKEA announced it has applied for permission to invest $ 1.9 billion in India and set up 25 retail stores. Fitch
believes that the 30 per cent requirement is likely to significantly delay if not prevent most single brand majors from Europe, USA
and Japan from opening stores and creating associated jobs in India.
OBJECTIVES OF STUDY
To examine the prevailing employment conditions and training of the employees in retail sector.
A research design is considered as the framework or plan for a study that guides as well as helps the data collection and analysis
of data. Present study is an analytical descriptive in nature and based on empirical study. The data was collected from both
primary and secondary sources.
25Senior
Lecturer, Department of Commerce, SKBR College, Andhra Pradesh, India, [email protected]
Doctoral Fellow, Department of Commerce and Management Studies, Andhra University, Andhra Pradesh, India,
[email protected]
26 Post
566 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The primary source of data is respondents concerned and collected by using a questionnaire. The secondary sources include
books, articles, periodicals, newspapers, various reports and website etc.
The survey approach has been adopted in the present study to collect the primary data.
Sampling Design
The sampling units considered the present study are general, textiles, jewellery, and electronics and electrical retail shops. A total
of 540 respondents is comprised of 310 sales personnel in general business shops which include fancy, kirana, footwear, books &
stationary and medical stores 45 in textile shops, 45 in Jewellery shops and 140 electronics & electrical shops in Visakhapatnam
city.
Sampling Procedure
Proportionate stratified random sampling technique has been adopted for collection of data. Personnel interview has been used for
collection of primary data in order to have accuracy of the data.
Statistical Tools Used
The primary data have been interpreted with the help of simple statistical tools such as simple percentages, ranking method and
ANOVA test is used find the average significance difference in the opinion of the respondents belonging to the four working
categories.
ANALYSIS AND DISCUSSION
A. Employment Conditions
Nature of Employment
Table-1
Category
General
Textiles
Jewellery
Electronics & Electricals
Total
Purely
Temporary
203 (65.5)
36 (80.0)
45 (100.0)
131 (93.6)
415 (76.9)
Nature of Employment
On
Permanent
Probation
0 (0.0)
107 (34.5)
0 (0.0)
9 (20.0)
0 (0.0)
0 (0.0)
0 (0.0)
9 (6.4)
0 (0.0)
125 (23.1)
Total
310 (100.0)
45 (100.0)
45 (100.0)
140 (100.0)
540 (100.0)
Nature of employee employment conditions of the four categories is furnished in table no.1. It is evident from the table that the
nature of employment of the respondents is of two type’s temporary and permanent base. Around 77 per cent of the total sample
respondents are working on purely temporary base and 23 per cent are working on permanent base. It is clear from the table that
according to the category wise analysis cent percent of the jewellery and 93.6 per cent of the electronics and electrical, 80 per cent
of the textiles and 65.5 per cent of the general respondents are working on temporary basis. Among categories about 34.5 Per cent
of general, 20 per cent of textiles and 6.4 per cent of electronics and electrical respondents are permanent employees.
It is observed that most of the informal small business segments in the Visakhapatnam city are providing temporary base
employment because there is no need of skilled and highly experienced persons for this sector. At the same time, they have to pay
high wages and other allowances to permanent workers. Moreover, a whopping majority of the respondents are facing job
insecurity. Thus, it is suggested that proper job security should be provided to the employees to lead a better life and concentrate
on work.
Mode of Recruitment
In the organized sector, the job seekers get some guidance in securing a job either from the employment exchange or the
prospective employer himself or through newspaper advertisements, etc. However, in the case of informal sector, the situation is
different. There are no formal avenues such as employment exchanges and advertisements to know the information relating to job
opportunities. However, some business units advertise in newspapers inviting applications from job seekers. Owing to lack of
information, the job seekers have to depend upon their friends, relatives and others for securing jobs in the informal sector. As
such, an attempt is made here to know the mode of recruitment of the respondents.
567 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-2
Category
General
Textiles
Jewellery
Total
Mode of Recruitment
Personal Reference by Reference by
Reference
Paper
Contact &
Friends &
Existing
Total
by Unions Advertisement
Effort
Relatives
Employees
44 (14.2)
127 (41.0)
77 (24.8)
0 (0.0)
62 (20.0)
310 (100.0)
17 (37.8)
5 (11.1)
12 (26.7)
0 (0.0)
11 (24.4)
45 (100.0)
16 (35.6)
13 (28.9)
11 (24.4)
0 (0.0)
5 (11.1)
45 (100.0)
25 (17.9)
89 (63.6)
24 (17.1)
0 (0.0)
2 (1.4)
140 (100.0)
102 (18.9)
234 (43.3)
124 (23.0)
0 (0.0)
80 (14.8)
540 (100.0)
The mode of recruitment of the respondents has been described in table 2. The sources of information about recruitment is
categorized into five broad types, viz., (1) personal contact, (ii) advices of friends and relatives and (iii) reference by existing
employees, iv)reference by union and (v) paper advertisement. None of the respondents got employment through employment
exchanges. The job opportunities were mostly bagged by them through their friends and relatives 43.3 per cent. About 23 per cent
of the total sample respondents were recruited via reference by existing employees, personal contact and effort recorded 18.9
percent and through paper advertisement 14.8 per cent respectively. Majority of the general 41.0 percent, electronics, and
electrical 63.6 percent respondents are recruited through reference by friends and relatives, textiles 37.8 per cent and jewellery
respondents 35.6 percent are recruited by personal contact and effort.
It is concluded that mode of recruitment in small business segments and unskilled works are made through reference by friends
and relatives, existing employees and personal contacts. The proportion of the sample respondents who got employment through
friends and relatives were high in general and electrical and electronics. It is observed that the mode of recruitment of respondents
through paper advertisement is meager. Due to lack of formal avenues such as employment exchanges and advertisements, the job
seekers have to depend upon their friends, relatives and others for securing jobs in the informal sector. Thus, the concerned
business entrepreneurs have to advertise the vacancies, which are more useful to the job seekers and dynamic workers.
Selection Criteria
Table-3 Criteria for Selection of Employees
Particulars
Qualification
Previous Sales Experience
Communication Skills
Good Behavior
Any others
1
2
3
4
5
Weight Rank
81 (405)
66 (264)
81 (243) 312 (624)
3 (1536)
437 (2185) 83 (332)
20 (40)
1 (2557)
22 (110) 350 (1400) 168 (504)
2 (2014)
41 (164) 291 (873) 208 (416)
4 (1453)
540 (540)
5 (540)
Selection criteria of employees by the employer are depicted in table 3. Scoring method is followed to find out the respondent’s
opinion on the selection criteria. It is observed from the table that a majority of the sample respondents are selected basing on the
previous sales performance and experience and it acquired first rank with 2557 score. Communication skills have occupied
second rank with 2014 score.
Qualifications occupied 3rd rank with 1536 score and good behavior 4th rank with 1453 score. It is concluded that pervious sales
experience and communication skills are playing dominant role in selection procedure because these two tools are very important
to attract the customers.
It is clear from the table that the majority of the employers are giving preference to the experienced workers. In fact, a fresher may
show more enthusiasm towards work and increase the sales of the organization. Hence, it is suggest that employer can also give
opportunities to freshers, and then later they become experienced.
Duties and Responsibilities of Respondents
The duties and responsibilities of the employees in this sector cannot be defined clearly. The same holds good even in the case of
workers working in shops and establishments.
568 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-4: Duties and Responsibilities of Respondents
S. No.
Particulars
1
Sales
2
Display of articles
3
Keeping articles in right place
4
Assisting customers in selection
5
Advising the customers
540
372
540
252
188
Percentage
100
68.9
100
46.7
34.8
Table 4 reveals about the job duties and responsibilities of the respondents. Sales, display of articles, keeping articles in right
place, assisting customers in selection and advising the customers are the major duties and responsibilities of the respondents at
the work place. It is observed from the study that cent percent of the respondents are discharging duties of sales and keeping
articles in right place. Around 69% of the respondents are displaying the articles, 46.7% are assisting customers in selection and
34.8% of the respondents are advising the customers in purchasing the products. It could be concluded that all the works
discharged by the respondents are related to the sales promotion, helping the other workers and customer services. This type of
working conditions lead to less work mobility.
Opinion on Job Duties
Table-5
S. No.
Statements
Your employer indicate the duties
1
at the time of joining the work
2 Relevant to qualification
3 Difficult to discharge
4 More mental strain is involved
5 Clear to understand and easy to discharge
6 More physical strain is involved
General
Textiles
Jewellery
238 (76.8)
11 (24.4)
45 (100)
80 (57.1)
291 (93.9)
0 (0)
159 (51.3)
310 (100)
67 (21.6)
45 (100)
0 (0)
24 (53.3)
45 (100)
9 (20)
45 (100)
6 (13.3)
25 (55.6)
45 (100)
0 (0)
139 (99.3)
14 (10)
76 (54.3)
140 (100)
7 (5)
Perceptions of respondents regarding awareness on job duties is given in table 5. Among the four categories, around 77 per cent of
the respondents working in the general business have awareness about the “employer indicating the duties at the time of joining
the work”. The percentage of respondents in textiles, jewellery and electronics and electrical regarding this statement is recorded
by 24.4%, cent percent and 57.1% respectively. Interestingly, the enquiry revealed that cent percent of textiles and jewellery
respondents have agreed that the job is relevant to their qualification. Around 94% of general business respondents and 99.3% of
electrical and electronics respondents have agreed the above statement. At the outset nobody in textile and general business
respondents are facing any difficulties in discharging the duties. However, about 13.3% of jewellery and 10% of electronics and
electrical respondents are facing some sort of difficulty in discharging the duties. Among the four categories, around 51 to 56% of
the employees have awareness on more mental strain is involved in the work. It is interesting to note that cent percent of the total
sample respondents of all the categories are awarded of the factor clear to understand and easy to discharge duties. However,
around 5 to 22 per cent of respondents in all the categories have experienced more physical strain in the work.
The above table concludes that more than 94% of the respondents of all categories educational qualifications are relevant to their
job and cent percent of the respondents revealed that the job is clear to understand and easy to discharge. Moreover, more than
50% of the respondents of all categories are facing more mental strain. Obviously, all the respondents are awared of the listed
statements in the table regarding job duties. This indicates the magnitude of work interest of the respondents. In addition, it is
higher in jewellery respondents.
Perception on Job Information
Table-6
Category
General
Textiles
Jewellery
Total
Adequate
280 (90.3)
41 (91.1)
45 (100.0)
132 (94.3)
408 (92.2)
Perception
Inadequate
30 (9.7)
4 (8.9)
0 (0.0)
8 (5.7)
42 (7.8)
Total
310 (100.0)
45 (100.0)
45 (100.0)
140 (100.0)
540 (100.0)
569 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-6 (a): Opinion about your Job Information
Category
General
Textiles
Jewellery
n
310
45
45
140
Mean
.81
.82
1.00
.89
S.D
.592
.576
.000
.466
F-value
P-value
Decision
2.097
.100
N.S
Adequate information about the job to the job seekers is very useful to determine that whether the job is suitable are not. In
addition, it can reduce strain and pain while discharging their duties. Fortunately, information source is now available through
media and other informal sources to the job seekers. Respondents’ perception on job information is carried out and shown in table
6. About cent percent of the jewellery, respondents got adequate information on the job. Followed by 94.3 per cent of electronics
and electrical, 91 per cent of textile and 90.3 per cent of general respondents have adequate information regarding the present job.
Thus, it can be stated that a majority of the total sample respondents 92.2 per cent have adequate information regarding the job.
This can reduce strain and pain while discharging their duties and the employer also tried to pass the information regarding work
in the proper manner to the workers.
The table concludes that cent percent of jewellery respondents had adequate information about the job because gold smith work is
a skillful work were they need full information to perform their job and it is also proved in this study.
The above ANOVA table depicts that there is no significant difference in the opinion of the respondents belonging to all the four
categories regarding job information as their F-test value (2.097) and the corresponding P-value (0.10) is found to be insignificant
at 5% level of significance. Hence the Hypothesis is accepted and both the variables are independent each other. Further, the
Average opinion score (1.00) of Jewellery respondents is greater than the remaining three categories which shows that this
category respondents have more positive opinion about their job information.
Problems Faced while Discharging Duties
Discharging duties to the customers is a difficult task. Patience, good communication, dealing with smile, motivation, inspiration
better skills, obedience and politeness are essential to satisfy the customers and the employers. With adequate experienced they
can manage the employer and customers. Sometimes, employees may face personal problems like financial and family related
problems. Thus, they have to act multi personality roles as a good employee, obedient customer to increase sales and a good
family member.
Table-7
Problems/Rank
Customers problem
Management problem
Family members problem
Transport problem
Finance problem
1
21 (105)
337 (1685)
182 (910)
2
149 (596)
83 (332)
182 (728)
104 (416)
3
143 (429)
187 (561)
189 (567)
21 (63)
-
4
144 (288)
125 (250)
185 (370)
86 (86)
5
83 (83)
228 (228)
83 (83)
168 (168)
Weight Rank
3 (1501)
5 (1039)
4 (1352)
1 (2476)
2 (1666)
The researcher asked the respondents regarding various problems faced by them. Problems like customers’ problem, management
problem, family members’ problem, transport problem and finance problem in discharging duties are illustrated in table7.
Ranking method is followed to easily understand the problems. It is identified that transport is the major problem of the
respondents, which is recorded with first rank followed by financial problems 2 nd rank, dealing with customers 3rd rank, family
problems 4th rank and last rank is given to the management problem. It may be concluded that a majority of the respondents are
belonging to weak financial background, hence they are unable to purchase own vehicles for their personal and official purposes.
That is the reason why the respondents are depending on public and private transport. As such, they are severely facing transport
problem.
Changing the Job Position
Changing of job for several times lead to uncertainty in discharging the duties and its effects on production and take time to adjust
in new position. Sometimes the employee may also feel dissatisfaction. However, changing of job position may be acceptable
while the employee feels bore due to long time working in the particular work. Thus, the employer should manage the workers
basing on the possibilities like nature of work, employee interest and employer needs. Moreover shifting of employees from one
job to the other job in the same line is not uncommon. An attempt is made here to elicit the sample respondent’s behaviour of
moving from employer to employer.
570 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-8
Category
General
Textiles
Jewellery
Total
Once
176 (56.8)
43 (95.6)
21 (46.7)
52 (37.1)
292 (54.1)
Number of Times the respondents changed their job
Twice
Thrice
Four Times No Change
80 (25.8)
20 (6.5)
0 (0.0)
34 (11.0)
0 (0.0)
0 (0.0)
0 (0.0)
2 (4.4)
18 (40.0)
6 (13.3)
0 (0.0)
0 (0.0)
48 (34.3)
20 (14.3)
14 (10.0)
6 (4.3)
146 (27.6)
46 (8.5)
14 (2.6)
42 (7.8)
Total
310 (100.0)
45 (100.0)
45 (100.0)
140 (100.0)
540 (100.0)
It could be observed from the data shown in table 8 that, out of the total sample respondents, around 54 per cent of the
respondents changed their job position once. Among categories it is recorded by 95.6 per cent in textiles, 56.8 per cent in general
business, 46.7 per cent in jewellery and 37.1 per cent in the case of electronics and electrical business respondents changed once
their job position. Further, about 27.6 per cent of the total sample respondents changed their job twice. Among the category wise
respondents, it is observed that 40 per cent in jewellery, 34.3 per cent in case of electronics and electrical respondents and 25.8
per cent in general business changed their job position. About 8.5 per cent of the total sample respondents have changed their job
position thrice. Four times changing the job has identified in electronics and electrical respondents by 10 per cent only. It is
interesting to note that about 42 respondents i.e. 7.8 per cent of them did not change their present job.
It could be concluded that changing of job position is common in the selected business respondents and it is higher in textiles
business. It is better to the employee and employer to evaluate the reasons why the employee leaving the present work. They have
to find the ways and means with collective bargaining to continue the same work. Otherwise, both has to face new faces and new
work environment.
TRAINING
Training and its Methods
Every organization needs to have well trained and experienced people to perform the activities that are entrusted to them. If the
current or potential job occupant can meet this requirement, training is not important. However, when this is not the case, it is
necessary to raise the skill levels and increase the versatility and adoptability of employees. There is a saying in China that if you
wish to plan for a year, sow seeds, if you wish to plan for ten years, plant trees, if you wish to plan for a lifetime, develop a man.
This highlights the importance of training requirements of employees. Training is the process whereby people learn the skills,
knowledge, attitudes and behavior needed in order to perform their job effectively.
Employee training and development is not only an activity that is desirable but also an activity that an organization must commit
resources to, if it is to maintain a viable and knowledgeable work force. According to Dunn and Stephns training refers to the
organization efforts to improve an individual’s ability to perform job or organizational role, where as development refers to the
organization’s efforts (and individuals own efforts) to enhance an individual ability to advance in his organization to perform
additional job duties. With this background, the following paragraphs focus their attention on training of employees in the retail
sector. Training is of several types among them “on-the-job training” and “pre-job” training is the important methods.
Table-9
Category
General
Textiles
Jewellery
Total
YES
20 (6.5)
0 (0.0)
0 (0.0)
0 (0.0)
20 (3.7)
Training
NO
290 (93.5)
45 (100.0)
45 (100.0)
140 (100.0)
520 (96.3)
Total
310 (100.0)
45 (100.0)
45 (100.0)
140 (100.0)
540 (100.0)
Table 9 describes about the training taken by the sample respondents. It is observed from the table that only 3.7 per cent that is 20
respondents in the general business have undergone training regarding their work.
It is recommended that every organization needs to have well trained and experienced people to perform the activities that are
entrusted to them. However, the selected business organization felt that the current or potential job occupant could meet this
requirement; as such, training is not important. However, giving training to employee furnishes potential work to the organization.
571 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Methods of Training
Table-10
Category
Methods of Training
On-The Job Training
20 (100.0)
0 (0.0)
0 (0.0)
0 (0.0)
20 (100.0)
Pre-Job Training
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
General
Textiles
Jewellery
Total
Both
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
Total
20 (100.0)
0 (0.0)
0 (0.0)
0 (0.0)
20 (100.0)
The researcher asked the respondents about the method of training under gone and the results are illustrated in table 10. As said
above, only 20 members have undergone training and the method followed is on-the job training method.
Skills Learned Through Training
Table-11
Skills/Rank
Communication skills
Pleasing manners & etiquette
Skills required for better
performance for job
Awareness of legislation
measures relating to profession
Ways of avoiding role conflict
Ways of keeping up of
interpersonal relations
Any Other
1
20 (140)
-
2
20 (120)
3
-
4
-
5
-
6
-
7
-
Weight Rank
1 (140)
2 (120)
-
-
20 (100)
-
-
-
-
3 (100)
-
-
-
20 (80)
-
-
-
4 (80)
-
-
-
-
20 60)
-
-
-
-
-
-
20 (40)
-
5 (60)
6 (40)
-
-
-
-
-
20 (20)
-
7 (20)
Respondents learned a variety of skills regarding their work in on-the job training method. These are classified into seven
categories and presented in table 11 by giving ranks. This training method provided communication skills, which ranked first and
followed by pleasing manners and etiquette 2nd rank, skills required for better performance for job 3 rd rank, awareness of
legislation measures relating to profession 4th rank, ways of avoiding role conflict 5th rank, ways of keeping up of interpersonal
relations 6th rank and others 7th rank.
It is observed that the employer provided on-the job training method to the employees mainly to the communication skills and
Pleasing manners and etiquette. These two parameters are very important to the respondents in dealing with the customers. He or
she has to properly communicate the customer regarding pros and cons of the product and he or she should have pleasing manners
to attract the customers. It may be inferred that pre-job training is found to be useful mostly to the people who are carrying
professional works or jobs.
Opinion on Usefulness of Training
Table-12
Category
General
Textiles
Jewellery
Total
High
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
Opinion
Medium
Low
20 (100.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
20 (100.0)
0 (0.0)
Total
20 (100.0)
0 (0.0)
0 (0.0)
0 (0.0)
20 (100.0)
Respondent’s opinion on usefulness of training is denoted in table 12. All the 20 respondents of the general business said that the
training is useful at medium level.
572 | P a g e
ISSN (P):2279-0934, (O):2279-0942
It is observed and as said above, the employer provided on-the job training method to the employee in the general business mainly
to the communication skills and pleasing manners and etiquette. However, no other business segments have not given training to
their employees, which may reduce work strain and pain to the workers while discharging the duties. Thus, there is a need to
provide the training facilities to the remaining business respondents.
REFERENCES
1.
Dunn, & Stephns, E. C. (1972). Management of Personnel—Man-Power Management and Organisation Behaviour.
New York: McGraw Hill Book Company.
2.
(2007, March 19). Retailing in India Unshackling the chain stores (ICRIER Begins Survey of Indian Retail Sector).
The Economist. Retrieved on 29 May, 2008 from http://www.economist.com/displayStory.cfm?story_id=11465586
3.
Davis, Langdon. (2010). Retail Market Report, 14.
*****
BANKS & ACCOUNT DETAILS
Bank Details for Online Transactions
Important Instructions to remember in case of:
NEFT Transfers / Online payments:
Please forward us the ‘Automatic Receipt / Acknowledgement Receipt’ generated, soon after you make online
(NEFT) transfer in any of below mentioned banks. Forward the slip on [email protected],
[email protected]

Cash Deposit:
Please forward us the scanned copy of bank’s deposit slip, received after depositing the cash in our account /
or send us the photocopy of the same along with Declaration & Copyright Form;

Demand Draft:
Please forward us the scanned copy of demand draft. You are directed to keep a photocopy of the Demand
Draft with you for future references and to liaison with us.
Note: We don not accepts ‘Cheques’ in any conditions from researchers and paper submitters.
The said information is needed to complete formalities against your submission.
Name of Bank: UCO Bank
District: Jammu,
Branch: Talab Tillo,
IFSC Code: UCBA0002502 (used for RTGS & NEFT
transactions),
Contact: +91-(0191)-2100737.
Name of Bank: Oriental Bank of Commerce
District: Jammu,
Branch: Trikuta Nagar,
IFSC Code: ORBC0100681 (used for RTGS & NEFT
transactions),
Contact: +91-(0191)-2472173.
Details for Demand Drafts
All the Demand Drafts must be made in favour of ‘Pezzottaite Journals’ payable at ‘Jammu, India’ and to be send at:
Editor-In-Chief
Jammu and Kashmir, India.
(Mobile): +91-09419216270 – 71
573 | P a g e
ISSN (P):2279-0934, (O):2279-0942
ANALYSING ATTITUDE OF WORKING WOMEN IN INDIA TOWARDS
ORGANIZED AND UNORGANIZED RETAILING
Rohit Singh Tomar27 Dr. B. B. S. Parihar28
ABSTRACT
Purpose: In India, percentage of working women is increasing in the work force. Their view in purchasing decision is now
more important than before. Simultaneously number of organized retailers in India has increased significantly. Therefore
working women shopping behaviour and their influence on retailing cannot be denied. This has prompted us to find out
attitude of women towards organized retailing and unorganized retailing and further comparing the same on the basis-selected
factors of retailing.
Design/Methodology / Approach: In this exploratory research, I conducted survey on 150 working women of Agra, Gwalior
and National Capital Region. The survey was conducted at the various organized retail outlets including chain stores,
departmental stores, hypermarket etc.
Research Limitation / Implications: Small sample size of 150 working people representing few cities is not sufficient to
represent large world population. Research requires more diversified sample. Use of non-probability sampling is less suitable
way to conduct research.
Practical Implications: Both organized retailers and unorganized retailers could make their sales strategies after knowing the
attitude of working women towards the same.
Conclusion: Unorganized retailers should work upon the selected factors to promote revisit of the working women. While
organized retailers should work up on the delivery channels to increase the frequency of visit of working women.
KEYWORDS
Working Women, Organized Retailing, Unorganized Retailing, Attitude etc.
INTRODUCTION
Economic, demographic and social changes in India have lead to an increase in the large number of women work force. Women
are performing about 30-40 per cent of the estimated 480 million jobs. Unfortunately, women occupy only about 5 per cent (7-10
million) work in organized setup and only 3 percent of senior management positions. Though the proportion of women working
in the organized set-up is small, in absolute terms this number is bigger than the female workforce of several other nations. A
woman who contributes to the family finances is even more empowered in decision-making. According to a UNICEF report,
‘When a woman brings income or assets into the household, she is more likely to be included in decisions on how the resources
will be distributed’. This will result in a big shift in the consumption and shopping behaviour of this segment paving the way for
several opportunities for consumer goods and service provider companies, marketers, retailers, etc. Therefore, women shopping
behaviour and their influence on the retailing cannot be denied. Both number of organized retailers and working women in India
have grown significantly in last decade. This prompts us to find out the attitude of working women towards organized retailing
and unorganized retailing and further comparing the same based on selected factors of retailing.
Customer preference of a retail shop depends upon certain factors, which are - store image, quality of merchandise, discounts and
special offers, merchandise assortment, shopping convenience, and physical facilities. The above factors are chosen based on the
following intensive review of literature.
One factor that has been associated with increasing frequency of visits to a shopping center is shopping center image. Store image
has been identified as an important determinant of consumer store preference (Clarkson et al., 1996; Clark et al., 1997; Wakefield
and Baker, 1998; Erdem et al., 1999; Hernandez & Bennison, 2000). Research supports the influence of image on consumers’
choice of a shopping destination and its inclusion in a consideration set (Finn and Louvier, 1996; Korgaonkar et al., 1985; Roy,
1994; Sit et al.2003; Stanley and Sewall, 1976; Steenkemp and Wedel, 1991). Gautschi (1981) incorporated image characteristics
into Huff’s (1964) model and determined that these characteristics were important to consumers in choosing between shopping
centers. Shopping center image has been found to be influenced by the presence of specific anchor stores and other physical
characteristics; image was then found to be related to measures of shopping center visits (Finn and Louvier, 1996). Dennis et al.
27Lecturer,
Amity Business School, Amity University, Madhya Pradesh, India, [email protected]
Professor & Head, Department of Management, R. B. S. Management Technical Campus, Uttar Pradesh, India,
[email protected]
28
574 | P a g e
ISSN (P):2279-0934, (O):2279-0942
(2002) suggest that shopping center image can be considered brand image and develop a scale measuring brand image, which is
associated with a relatively larger trade area. Evidence suggests that store image can lead to increased visits to stores, implying
that shopping center image should also be associated with increased shopping center visits. Darley and Lim (1999) find that store
image was related to increased frequency of store visits for a specific type of retailer (i.e. second hand stores). At an aggregate
level, being chosen more often and inclusion in the consideration set implies that shopping center image is related to a greater
frequency of shopping center visits. Research supports a link between image and frequency of shopping center visits (Darley and
Lim, 1999; Nevin and Houston, 1980). The common thread through these studies is a lack of emphasis on the intervening
variables between shopping center image and the frequency of shopping center visits. Some research suggests that image is a type
of attitude (Doyle and Fenwick, 1974; James et al., 1976; Steenkemp and Wedel, 1991). Attitude is defined as an evaluative
appraisal with some degree of favor or disfavor (Perugini and Bagozzi, 2001) while shopping center image is defined as the total
of consumers’ perceptions of a shopping center based on functional and emotional attributes (Houston and Nevin, 1980). Thus,
shopping center image can be considered a factor-influencing attitude. We need to find out the difference between the attitude
towards organized retailing and unorganized retailing of working women because of store image. Therefore our first hypothesis
is:
H1: μ1 = μ2 (i.e. There is no significant difference between organized and unorganized retailing for working women as
far as the store image as a preference factor is concerned).
Quality of merchandise is a store preference factor as well. Dick and Basu (1994), Anderson and Fornell (1994), Iacobucci et al.
(1995), and Rust and Oliver (1994, p. 6, “quality is one dimension on which satisfaction is based'') we view service quality as an
antecedent to satisfaction. Bolton and Drew (1994, p. 176) point out “customer satisfaction...depends on preexisting or
contemporaneous attitudes about service quality”.' Bitner et al. (1994) and Anderson et al. (1994) also point to this link by
suggesting that improved service quality will result in a satisfied customer and suggest that to a large extent this relationship is
intuitive Zeithaml et al. (1996) suggest that a customers' relationship with a company is strengthened when that customer makes a
favorable assessment about the company's Service quality and weakened when a customer makes negative assessments about the
company's service quality. They argue that favorable assessment of service quality will lead to favorable behavioral intentions like
“praise for the company'' and expressions of preference for the company over other companies. Danaher and Rust (1994) and
Dabholkar et al. (1996) suggest that service quality is associated with likelihood of recommending a product or service. Dick and
Basu (1994) also view perceived service quality as a cognitive antecedent of relative attitude because service quality will
influence the accessibility, centrality, and clarity of attitudes. Thus, quality of merchandise can be considered a factor-influencing
attitude. We need to find out the difference between the attitude towards organized retailing and unorganized retailing of working
women because of quality of merchandise. Therefore our second hypothesis is:
far as the quality of merchandise as a preference factor is concerned).
Low price and product assortments were found as important store choice criteria in the empirical work of Arnold et al. (1997) and
Seiders & Tiger). In the analysis of retail strategies, Bnoun and Helies-Hassid (1995) break own the variables explaining retailers
positioning into four headings: the store, the assortment (Size, product range, style, brand policy, presentation), pricing policy
(overall price level, price range) & services. Finn and Louviere (1996) showed that among the list if nine store image items, wide
assortment and low prices accounted favorable. There is significant relationship between the quality and range of products (Bell,
1996). According to Mazursky and Jacoby, 1986 price, assortment range, perceived quality, customer service and convenient
location are most decisive factors of choosing an outlet. Certain factors work for product assortment or likely to influence
retailer’s choice of product variety (Lancaster, 1991). McKenna (1989) stated that consumer live in an era of diversity where they
demand more product assortments. Increasing the assortment size is more important than changing and improving the ambience
(Koelemeijer & Oppewal, 1999). In a research Dhar et al. (2001) find out best performing retailer are also those who provide
broader assortments. Wide store assortments are viewed as an appealing store image attribute valued by customers (Hoch et al.,
1999). We need to find out the difference between the attitude towards organized retailing and unorganized retailing of working
women because of merchandise assortment. Therefore our third hypothesis is:
far as the merchandise assortment as a preference factor is concerned).
Various researchers also support discounts and special offers as they justified them to be the factor responsible for customer visit
to organized retail outlet. Price promotions are an important tactic used to influence consumer behavior in grocery retailing both
with regard to retailer and with regard to manufacturer. Various discounts and special offers are money-based, Product-based, Gift
- prize or merchandise-based. Reduced price, Extra product, Extra free, Buy one, get one free, Coupon, Rebates are the options
fall under various discounts and special heads.
far as the discount & special offers as a preference factor is concerned).
The choice of a store is very much influenced by location (Fotheringham, 1988; Meyer and Eagle, 1982). Hutcheson and Mutinho
(1998) found that shoppers used a combination of the quality of staff and “the occurrence of low prices and the frequency of
575 | P a g e
ISSN (P):2279-0934, (O):2279-0942
promotions” in choosing a store. The role of ambience in store choice has also been found significant. Kotler (1973) has proposed
atmospherics as an important part of retail marketing strategy. It is also found that the shoppers determine the value of the
merchandise based on monetary as well as non-monetary costs (Zeithaml, 1988). It was found that recreation (a non-monetary
value) was the major driver for visiting a regional shopping centre (Treblanche, 1999).
The shopping experience, as created by the store environment, has been found to play an important role in building store
patronage. Along with the merchandise, it triggered affective reaction among shoppers (Baker et al., 1992). It also contributes to
creating store patronage intentions (Baker et al., 2002). Leszczyc and Sinha (2000) indicated that store choice was a dynamic
decision and could be conceptualized as a problem of deciding when and where to shop. Store choice has also been found
dependent on the timing of shopping trips as consumers may go to a local store for short “fill-in” trips and to a more distant
grocery store for regular shopping trips (Kahn and Schmittlein, 1989). Both these decisions are influenced by shopper
characteristics and consumption patterns (Leszczyc et al., 1979; Kim and Park, 1997).
Physical facilities like presence of food corners, clean toilets, proper temperature inside the retail outlet, parking facilities, sales
man guidance, retail space, music, appropriate color combination , Fragrance , light , children playing facilitates , events at
shopping centers and other hedonic pleasure are very important factors which could not be ignored by the retailers as they
promote customers visits at organized shopping centers. Hedonic orientation reflects the potential entertainment value of shopping
and the enjoyment arising from the experience (Hirschman and Holbrook, 1982). Utilitarian orientation is concerned with
efficient and timely purchasing to achieve goals with minimum irritation. These shopping orientations have both subjective and
objective aspects and they are essentially considered as more abstract constructs than product attributes (Keller, 1993) because
they are extracted from both qualitative and quantitative factors (Babin et al., 1994). Music played in the US lingerie chain,
Victoria’s Secret was more influential on decision making than the product itself (Morrison, 2001).
In-store music affects product choice North et al. (1997). A correlation was found between music, emotion and purchases –
customers were more favorably disposed to a product when in a good mood (Gardner, 1985). Supermarket sales increased 38 per
cent with slow music compared to fast music (Milliman, 1982). The Journal of the American Medical Association also recognizes
the influence of Smell is particularly powerful as it allows the brain to be occupied with other thoughts. Knasko (1989) and
Lipman (1990) found ambient aromas increased customer dwell time. Empirical findings indicate that convenience is significantly
related to customer satisfaction and behavioral intentions (Andaleeb and Basu 1994), consumer switching behavior (Keaveney
1995), and customer perceptions and retention (Rust, Lemon, and Zeithaml 2004). From a resource allocation perspective, a
convenient offering conserves customers’ time and effort and thereby facilitates a satisfied customer’s ability to fulfill his or her
intent. In this capacity, convenience functions less as an input to evaluation and more as an ongoing barrier that encourages or
discourages repurchase behavior (Seiders et al., 2005). Convenience has been conceptualized as a multidimensional construct that
has particular importance for retail patronage behavior (Seiders, Berry, and Gresham 2000). From the above literature review, we
could say that brand image, store image, discount and special offers, Merchandise assortment, shopping convenience, and
physical facilities are some preference factors, which influence customers to prefer organized retailing. We need to find out the
difference between the attitude towards organized retailing and unorganized retailing of working women because of shopping
convenience and physical facility. Therefore, our fifth and sixth hypotheses are respectively:
far as the shopping convenience as a preference factor is concerned).
far as the physical facilities as a preference factor is concerned).
In this exploratory research, I conducted survey on 150 workers of Agra, Gwalior and National Capital Region. The survey was
conducted at the various organized retail outlets including chain stores, departmental stores, hypermarket etc. and various other
localities of the above regions. All the data required for the purpose was obtained from the primary sources, on requirement basis
secondary data is also referred. The data collection method used to obtain the desired information from primary sources has been
the direct interview and the instrument used has been a questionnaire. Questionnaire designed consist of questions on the workers
preference of organized and unorganized retailing on the basis selected factors. Non-probability based judgmental sampling have
been used to collect data. Individual working women who visit retail outlet of any format is considered as sampling unit.
RESULT & DISCUSSION
Store Image as a Preference Factor
It can be observed from the ensuing Table - I that as far as “Store Image” is concerned, in case of organized retailing, combined
mean & combined S.D. for various mean scores are 3.70 and 1.08 respectively; and in case of unorganized retailing, combined
mean & combined S.D. for various mean scores are 3.27 and 0.78 respectively.
576 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-1: Comparison of Store Image as a Factor of Preference to
Organized & Unorganized Retailing for workers
Store Image
Mean
(Organized Retailing)
Score
Q.1A. I enjoy visiting branded
4.20
stores.
Q.2A. I frequently visit
3.00
branded stores.
Q.3A. I prefer to shop at the
3.90
branded stores.
Combined Mean
3.70
Combined S.D.
S. D.
1.04
1.16
1.03
Store Image
(Unorganized Retailing)
Q.1B.
I
enjoy
visiting
conventional stores.
Q.2B. I frequently visit
Q.3B. I prefer to shop at the
Mean
Score
S. D.
3.30
0.71
3.56
0.70
3.00
0.94
3.27
1.08
0.78
Further, in this case Z- test is applied to test the first null hypothesis:
Now test statistic,
z
x1  x 2
= 4.43, i.e. Z cal. = 3.95
s12 s 22

n1 n 2
At 5% level of significance, for two-tailed test, the critical value of Z, Z tab. = 1.96.
Since, Z cal. > Z tab., So we reject the null hypothesis and conclude that there is a significant difference between organized and
unorganized retailing for working women as far as store image as a preference factor is concerned.
Quality of Merchandise as a Preference Factor
Again, the ensuing Table II shows that as far as “Quality of Merchandise” is concerned, in case of organized retailing, combined
Table -2: Comparison of Quality of Merchandise as a Factor of Preference to
Organized & Unorganized Retailing for Working Women
Quality of Merchandise
Mean
Score
Q.4A. CPOR is due to the
availability
of
quality
4.09
merchandise.
3.64
durability of the merchandise.
3.84
ingredients of the merchandise.
warranties and after sales
4.04
services offered.
Combined Mean
3.90
Combined S.D.
S. D.
0.60
0.85
0.77
0.84
Quality of Merchandise
(Unorganized Retailing
Q.4B. CPUR is due to the
availability
of
quality
merchandise.
durability of the merchandise.
ingredients of the merchandise.
warranties and after sales
services offered.
Mean
Score
S. D.
2.93
0.88
2.87
0.83
3.13
0.90
2.97
0.95
2.98
0.79
0.89
Further, in this case Z- test is applied to test the second null hypothesis,
Now test statistic,
z
x1  x 2
= 13.39, i.e. Zcal. = 9.48
s12 s 22

n1 n 2
577 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Since, Z cal. > Z tab., so we reject the null hypothesis and conclude that there is a significant difference between organized and
unorganized retailing for working women as far as store image as a preference factor is concerned.
Discounts and Special Offers as a Preference Factor
Analysis of data in Table III reveals that as far as “Discounts and Special Offers” as a preference factor is concerned, in case of
organized retailing, combined mean & combined S.D. for various mean scores are 3.71 and 0.92 respectively; and in case of
unorganized retailing, combined mean & combined S.D. for various mean scores are 3.2 and 0.86 respectively.
Table-3: Comparison of Discounts and Special Offers as a Factor of Preference to
Discount & Special Offers
Q.8A. CPOR is because of
the economical pricing of the
merchandise.
the discounts offered.
the special offers.
wide
variety
of
the
merchandise available.
Combined Mean
Combined S.D.
Mean
Score
S.D.
3.30
1.04
3.89
0.90
3.44
0.86
4.19
0.89
Discount & Special Offers
Q.8B. CPUR is because of the
economical pricing of the
merchandise.
Q.9B. CPUR is because of the
discounts offered.
Q.10B. CPUR is because of
the special offers.
wide
variety
of
the
3.71
Mean
Score
S.D.
3.30
0.89
3.17
0.79
3.27
0.90
3.06
0.87
3.2
0.92
0.86
Further, in this case Z- test is applied to test the third null hypothesis,
Now test statistic,
z
x1  x 2
= 4.95, i.e. Zcal. = 4.95
s12 s 22

n1 n 2
unorganized retailing for working women as far as discounts and special offers as a preference factor is concerned.
Merchandise Assortment as a Preference Factor
From the ensuing Table IV we can easily observe that as far as “Merchandise Assortment” as a preference factor is concerned, in
case of organized retailing, combined mean & combined S.D. for various mean scores are 4.18 and 0.76 respectively; and in case
of unorganized retailing, combined mean & combined S.D. for various mean scores are 2.88 and 0.88 respectively.
Table-4: Comparison of Merchandise Assortment as a Factor of Preference to
Merchandise Assortment
looks and designs of the
latest and fashionable
Combined Mean
Combined S.D.
Mean
Score
S.D.
4.20
0.67
4.16
0.84
Merchandise Assortment
looks and designs of the
latest and fashionable
4.18
Mean
Score
S.D.
2.94
0.80
2.82
0.96
2.88
0.76
0.88
578 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Further, in this case Z- test is applied to test the fourth null hypothesis,
Now test statistic,
z
x1  x 2
= 13.68, i.e. Zcal. = 13.68
s12 s 22

n1 n 2
unorganized retailing for working women as far as merchandise assortment as a preference factor is concerned.
Shopping Convenience as a Preference Factor
It can be observed from the ensuing Table V that as far as “Shopping Convenience” in case of organized retailing, combined
Table-5: Comparison of Shopping Convenience as a Factor of Preference to
Shopping Convenience
Mean
Score
Q.14A. As there is fast
checkout at the store, so there
is CPOR.
Q.15A. As it is easy to move
through the store, so there is
CPOR.
Q.16A. As it is easy to park
vehicles at the store, so there
is CPOR.
professional and friendly staff
at the store.
the proximity of the store.
Combined Mean
Combined S.D.
S.D.
3.56
1.02
4.06
0.72
3.96
0.94
3.46
0.77
3.40
1.02
Shopping Convenience
Q.14B. As there is fast
checkout at the store, so there
is CPUR.
Q.15B. As it is easy to move
through the store, so there is
CPUR.
Q.16B. As it is easy to park
vehicles at the store, so there is
CPUR.
professional and friendly staff
at the store.
the proximity of the store.
3.69
Mean
Score
S.D.
3.12
0.82
2.68
0.89
2.50
0.98
3.14
0.90
3.50
1.04
2.99
0.89
0 .93
Further, in this case Z- test is applied to test the fifth null hypothesis,
Now test statistic,
z
x1  x 2
2
1
= 6.67 i.e. Zcal. = 6.67
2
2
s
s

n1 n 2
unorganized retailing for working women as far as shopping convenience as preference factor is concerned.
Physical Facilities as a Preference Factor
Again, the ensuing Table VI shows that as far as “Physical Facilities” is concerned, in case of organized retailing, combined mean
& combined S.D. for various mean scores are 3.97 and 0.87 respectively; and in case of unorganized retailing, combined mean &
combined S.D. for various mean scores are 2.79 and 0.81 respectively.
579 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-6: Comparison of Quality of Physical Facilities as a Factor of Preference to
Organized & Unorganized Retailing for Women
Comparison of Quality
of Physical Facilities
Q.19A. CPOR is due to store
layout and design.
Q.20A. CPOR is because of the
store architecture.
Q.21A. As there is proper
lighting inside and outside the
store, so there is CPOR.
Q.22A. As the physical facilities
at the store are appealing, so
there is CPOR.
Combined Mean
Combined S.D.
Mean
Score
S.D.
4.17
0.78
3.80
0.84
3.82
0.81
4.10
1.04
Comparison of Quality
of Physical Facilities
Q.19B. CPUR is due to store
layout and design.
the store architecture.
Q.21B. As there is proper
lighting inside and outside the
store, so there is CPUR.
Q.22B. As the physical
facilities at the store are
appealing, so there is CPUR.
3.97
Mean
Score
S.D.
2.54
0.72
2.82
0.83
3.10
0.76
2.70
0.92
2.79
0.87
0.81
Further, in this case Z- test is applied to test the sixth null hypothesis,
Now test statistic,
z
x1  x 2
2
1
= 10.31, i.e. Zcal. = 10.31
2
2
s
s

n1 n 2
unorganized retailing for working women as far as physical facilities as preference factor is concerned.
CONCLUSION AND SUGGESTIONS
It could be seen that the working women have a relatively favorable store image of the organized retailing than the unorganized
retailing. Working women finds that the quality of merchandise in organized retail sector shops is better than the unorganized
retail sector shops. Moreover, they feel that organized retail shops provide durable products with better ingredients along with
warranties and after sales services. Organized retailers are providing better discounts and special offers with wide variety of the
products than that of unorganized retailers.
Working women prefer organized retailing due to the looks and the design offered by the organized retailing sector along with
latest fashion item. While they feel that, the same is lacking in the unorganized retailing. Working women prefer organized retail
shops, as they are more convenient than the unorganized retail shops. Moreover they find it easy to move in organized retail
shops, with better parking space, fast checkouts, friendly and professional staff as compared to unorganized retail shops, and
hence they prefer organized retail shops.
Working women finds that store layout and design, architecture and lightning are better in organized retailing than in organized
retailing. More appealing physical facilities, makes organized retailing more preferred than unorganized retailing for working
women. Even though working women visits more frequently conventional store than organized stores. This could be because of
paucity of time. May be for working women proximity is more important for the purchase of daily need goods. Therefore,
unorganized retailers should work upon the above factors to promote revisit of the working women. While organized retailers
should work up on the delivery channels to increase the frequency of visit of working women.
REFERENCES
1.
Andaleeb, Syed Saad, & Basu, Amiya K. (1994). Technical complexity and consumer knowledge as moderators of
service quality evaluation in the automobile service industry. Journal of Retailing, 70, 367–381.
2.
Anderson, E. W., & Fornell, C. A. (1994). Customer satisfaction research prospectus. Services marketing: new
directions in theory and practice. Thousand Oaks, CA: Sage Publications, 241–268.
580 | P a g e
ISSN (P):2279-0934, (O):2279-0942
3.
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: findings
from Sweden. J Mark, 58, 53–66.
4.
Arnold, S. (1997 , July). Shopping habits at Kingston departm ent stores: wave III: three y ears
afterWal -Mart’s entry into Canada (Report No. 3 ). Kingston: Queen’s Universit y School of
Business.
5.
Babin, Barry J., William R. Darden, & Mitch, Griffin. (1994). Work and/or Fun: Measuring Hedonic and Utilitarian
Shopping Value. Journal of Consumer Research, 20(4), 644-656.
6.
Baker, J., & Grewal, D. (1992). An experimental approach to making retail store environmental decisions. Journal of
Retailing, 68, 445-60.
7.
Baker, J., Grewal, D., Levy, Parasuraman, A., & Glenn, B. (2002). The influence of multi-store environmental clues on
perceived merchandise valve and patronage intentions. Journal of Marketing, 66,120-141.
8.
Bell, S. (1999). Image and consumer attraction to interurban retail areas: An environmental psychology approach.
Journal of Retailing and Consumer Services, 6(2), 67-78.
9.
Benoun, M., & Helies-Hassid, M. L. (1995). Distribution: Acteurs et strategies. Economica. Paris.
10. Bitner, M. J., & Mohr, L. A. (1994, October). Critical Service Encounters: The Employee’s Viewpoint.
of Marketing, 58, 95-106.
Journal
11. Bitner, M. J., & Hubbert, A. (1994). Encounter Satisfaction. In Rust, R. T. and Oliver R. L. eds., Service Quality: New
Directions in Theory and Practice. Thousand Oaks, CA: Sage Publications Inc.
12. Bolton, R. N., & Drew, J. H. (1994). Linking customer satisfaction to service operations and outcomes. Services
quality: new directions in theory and practice, 173-200. Thousand Oaks, CA: Sage Publications.
13. Clarkson, R. M., Clarke-Hill, C. M., & Robinson, T. (1996). UK supermarket location assessment. International
Journal of Retail & Distribution Management, 24(6), 22-23.
14. Dabholkar, P. A. (1996). Consumer evaluations of new technology-based self-service options: an investigation of
alternative models. International Journal of Research in Marketing, 13(1), 29-51.
15. Danaher, Peter J., & Roland, T. Rust. (1994, January-February). Determining the Optimal Level of Media Spending.
Journal of Advertising Research, 34, 28-34.
16. Danaher, Peter J., & Roland, T. Rust. (1996). Indirect financial benefits from service quality. Quality Management
Journal, 3(2), 63-75.
17. Darley, W. K., & Lim, J. S. (1999). Effects of store image and attitude toward second-hand stores on shoppin frequency
and distance travelled. International Journal of Retail and Distribution Management, 27(8), 311-318.
18. Dennis, C., Murphy, J., Marsland, D., Cockett, T., & Patel, T. (2002). Measuring image: Shopping centre case studies.
International Review of Retail, Distribution and Consumer Research, 12(4), 355-373.
19. Dick, A., & Basu, K. (1994). Customer loyalty: towards an integrated framework. Journal of the Academy of
Marketing Science, 22(2), 99-113.
20. Dhar, S. K., Hoch, S. J., & Kumar, N. (2001). Effective category management depends on the Category. Journal of
Retailing, 77(2), 165-184.
21. Doyle, P., & Fenwick, I. (1974). How store image affects shopping habits in grocery chains. Journal of Retailing, 50,
39–52.
22. Finn, A., & Louviere, J. J. (1996). Shopping center image, consideration, and choice: anchor store contribution. Journal
of Business Research, 35(3), 241-251.
23. Fotheringham, A. S. (1988). Consumer store choice and choice set definition. Marketing Science, 7(3), 299‐310.
581 | P a g e
ISSN (P):2279-0934, (O):2279-0942
24. Gardner, M. P. (1985). Mood states and consumer behavior: A Critical Review. Journal of Consumer Research, 12
(3), 281-300.
25. Gautschi, D. A. (1981). Specification of Patronage Models for the Retail Centre Choice. Journal of Marketing
Research, 18, 162-174.
26. Hirschman, E. C., & Holbrook, M. B. (1982). Hedonic Consumption: Emerging concepts, methods and propositions.
Journal of Marketing, 46(1), 92-101.
27. Hoch, S. J., Bradlow, E. T., & Wansink, B. (1999). The Variety of Assortment. Marketing Science, 18(4), 527-546.
28. Houston, M. J., & Nevin, J. R. (1980). Retail shopping area image: structure and congruency between downtown
areas and shopping centers. Monroe, 677.
29. Huff, D. L. (1964). Defining and Estimating a Trade Area. Journal of Marketing, 28(3), 34-38.
30. Hutcheson G. D., & Mutinho, L. (1998). Measuring preferred store satisfaction using consumer choice criteria as a
mediating factor. Journal of Marketing Management, 14, 705-720.
31. Iacobucci, D., Ostrom, A., & Grayson, K. (1995). Distinguishing service quality and customer satisfaction: the voice of
the customer. Journal of Consumer Psychology, 4(3), 277-303.
32. James, D. L., Durand, R. M., & Dreves, R. A. (1976). The use of a multi-attribute attitude model in a store image study.
J Retail, 52, 23–32.
33. Keaveney, Susan M. (1995, April). Customer Switching Behavior in Service Industries: An Exploratory Study. Journal
of Marketing, 59, 71–82.
34. Keller, K. L. (1993, January). Conceptualizing, measuring, and managing customer-based brand equity. J Mark, 57, 1–
22.
35. Khan, J. R., & Jain, D. C. (2005, November). An Empirical Analysis of Price Discrimination Mechanism and Retailer
Profitability. Journal of Marketing Research, XLII, 516-524.
36. Kim, Byundo-Do-and Park, Kyundo. (1997). Studying Patterns of Grocery Shopping Trips. Journal of Retailing, 73(4),
501-517.
37. Knasko, S. (1989). Ambient odor and shopping behavior. Chemical Senses, 14(5), 719.
38. Koelmeijer, K., & Oppewal, H. (1999). Assessing the Effects of Assortment and Ambience: A Choice Experimental
Approach. Journal of Retailing, 75(3), 319-345.
39. Korgaonkar, P. K., Lund, D., & Pnce, B. (1985). A structural equations approach toward examination of store attitude
and store patronage behavior. Journal of Retailing, 61, 39-60.
40. Kotler, P. (1973-74). Atmospheric as a marketing tool. Journal of Retailing, 21, 48-64.
41. Lancaster, K. (1991). L'analyse economique de la variety de produits: Une revue de la ltiterature. Recherche.
42. Leszczyc, P. T. L., Sinha, A. & Timmerman, H. J. P. (2000). Consumer store choice dynamics. Journal of Retailing,
76(3).
43. Lipman, J. (1990, January 9). Scents that encourage buying couldn’t smell sweeter to stores. The Wall Street Journal,
5.
44. Mazursky, D., & Jacoby, J. (1986). Exploring the development of store images. Journal of Retailing, 62(2), 145-165.
45. McKenna, R. (1989, September-October). Marketing in the Age of Diversity. Harvard Business Review, 6-25.
46. Meyer, R. J., & Eagle, T. C. (1982, February). Context induced parameter instability in a disaggregate‐stochastic model
of store choice. Journal of Marketing Research, 62‐71.
582 | P a g e
ISSN (P):2279-0934, (O):2279-0942
47. Milliman, Ronald E. (1982). Using background music to affect the behavior of supermarket shoppers. Journal of
48. Morrison, M. (2001). In Proceedings of Australia and New Zealand Marketing Academy Conference (2001) on the
power of music and its influence on international retail brands and shopper behavior: A Multi Case Study Approach.
49. North, A. C., Hargreaves, D. J., & McKendrick, J. (1997). In-store music affects product choice. Nature, 390(6656),
132.
50. Perugini, M., & Bagozzi, R. P. (2001). The role of desires and anticipated emotions in goal-directed behaviors:
Broadening and deepening the theory of planned behavior. British Journal of Social Psychology, 40, 79-98.
51. Rajpal, A., & Singh, P. (2010). The Emerging Women Workforce of India: A Silent Revolution in the Making.
Technopak Perspective, 03, 65-72.
52. Roy, Abhik (1994). Correlates of Mall Visit Frequency. Journal of Retailing, 70(2), 139–161.
53. Rust, Roland T., Katherine, N. Lemon, & Valarie, A. Zeithaml. (2004, January). Return on Marketing: using customer
equity to focus marketing strategy. Journal of Marketing, 68, 109–127.
54. Seiders, K., Simonides, C., & Tigert, D. J. (2000). The impact of supercenters on traditional food retailers in four
markets. International Journal of Retail and Distribution Management, 28(4/5), 181-195.
55. Seiders, Kathleen, Leonard, L. Berry, & Larry, Gresham. (2000). Attention retailers: How convenient is your
convenience strategy?. Sloan Management Review, 49(3), 79–90.
56. Seider, K., Voss, G. B., Grewal, D., & Godfrey, A. L. (2005). Do satisfied customer buy more? Examining moderating
influence in a retailing context. Journal of Marketing, 69, 26-43.
57.
Sit, J., Merrilees, B., & Birch, D. (2003). Entertainment-seeking shopping centre patrons: the missing segments.
International Journal of Retail and Distribution Management, 31(31), 80-94.
58. Steenkamp J.-B. E. M., & Wedel, M. (1991). Segmenting retail markets on store image using a consumer-based
methodology. J Retail, 67(Fall), 300–320.
59. Treblanche, N. S. (1999). The perceived benefit derived from visits to a super regional shopping centre. South African
Journal of business, 30(4), 41-46.
60. Zeithaml, V. A., Berry, L., & Parasuraman, A. (1996, April). The behavioral consequences of service quality. J Mark,
60, 31–46.
61. Zeithaml, V. A., & Bitner, M. J. (1996). Services Marketing (1st ed.). New York. NY: McGraw-Hill.
*****
Pezzottaite Journals invite research to go for publication in other titles listed with us. The contributions can be conceptual,
theoretical and empirical in nature, review papers, case studies, conference reports, relevant reports & news, book reviews and
briefs; and must reflect the standards of academic rigour.








583 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CORPORATE SOCIAL RESPONSIBILITY IN ORGANIZED RETAIL:
AN INSIGHT INTO THE INITIATIVES OF FUTURE GROUP
Amresh Kumar29
ABSTRACT
Purpose: The purpose of the study is to expand the existing body of knowledge concerning the communication of CSR
through sustainability reports by Future group. This paper aims at identifying and determining the communication of CSR
done by the retail chain Future group and a critical comparison of the future group with the global retail giant Wal-Mart.
Design / Methodology / Approach: A thorough literature review was done to understand the beginning of CSR in general
and in the retail sector and the communication mode used in organized retail sector, specifically Future group and Wal-Mart.
An unstructured questionnaire (for interview) was designed to understand the CSR practices of Future group and
communication of the same to its various stakeholders.
Findings: CSR practices in Indian retail industry specifically in future group are in a formative stage, characterized by being
unstructured, informal and sometimes, inconsistent. For example, Future group does not bring out sustainability report / CSR
report and dedicated personnel to drive CSR activities are lacking. In contrast, Wal-Mart tends to be more open and sensitive
towards CSR, appeared to be more proficient in their stakeholder relations, exhibited higher CSR transparency and structured
CSR more consistently. Our analysis revealed that Wal-Mart’s distinct higher interest levels towards global issues, while the
Indian retailer in focus Future group emphasizes on local issues. CSR activities pertaining to environmental sustainability
(reduction of energy consumption and waste management) need to be focused upon.
Research Limitations / Implications: Since the results covers only for Future Group with the respondents (employees) from
the northern central region of India, hence the study may vary with national context, size, company, suggesting future research
opportunities.
Practical Implications: The result will not only help students in understanding the CSR practices in retail but also help the
Future group in becoming more enthusiastic and forthcoming towards its CSR communication to the various stakeholders.
The comparison between Future group and Wal-Mart will throw light on scope for improvement.
KEYWORDS
CSR, Sustainability Report, CSR Communication, Organized Retail, Future Group, Stakeholders etc.
INTRODUCTION
According to the most famous management guru of our time Philip “CSR is a commitment to improve community well being
through discretionary business practices and contributions of corporate resources.” Corporate Social Responsibility is no longer
an option for corporate and so the broad business environment has jumped into quick action and moved towards adoption of CSR
as a part of business strategy. Organizations irrespective of their size, field of operation, native country and legal mandates are
inclined towards some form of CSR. This may be happening because of pressure from the external environment, societal
expectations, intrusive media reporting or growth in the number and intensity of the pressure groups leading to an internal
industry demands, but its presence and relevance cannot be denied. With the movement of large companies towards
communicating their CSR there is bound to be a ripple effect and smaller organization in lesser-developed countries than US are
likely to show a bent towards communicating CSR to their stakeholders.
The primary role played by CSR in retails industry is to ensure sustainable development companies investing in CSR are able to
maintain a balance between the following three areas of development- Social, ecological and economical. These three forces are
entwined with one another and do not operate in isolation. A good economical development cannot take place if the environment
suffers and the social system is disturbed. Environmental problems can only be solved if the economy growth production takes
place where it is eco-efficient and when the global poverty can be reduced. Social fairness and therefore the balance between
different economically developed countries cannot be reached if the economy is lame and living standards is in danger. CSR
integrates these three factors into a seamless unit.
In India, the involvement of the corporate sector CSR has picked up after 1991 as 63% of the organizations stared CSR during
1991-2005. For most companies, CSR was a way to improve the public perception of the company. Though the initial thrust for
CSR was for increased brand equity, as the practices became more mature, companies started to realize that there were a whole lot
of other areas where CSR would give a competitive advantages in their long-term growth strategy. Future Group is one of India’s
29
Research Scholar, Department of Management, Birla Institute of Technology, Noida, Uttar Pradesh, India,
[email protected]
584 | P a g e
ISSN (P):2279-0934, (O):2279-0942
retail pioneers with multiple retail formats. The collective impact on business is staggering: Around 300 million customers walk
into their stores each year and choose products and services supplied by over 30,000 small, medium and large entrepreneurs and
manufacturers from across India. In addition, this number is set to grow. Future Group employs 35,000 people directly from every
section of our society. They source their supplies from enterprises across the country, creating fresh employment, affecting
livelihoods, empowering local communities and fostering mutual growth. They believe in the „Indian dream‟ and have aligned
their business practices to their larger objective of being a premier catalyst in India’s consumption-led growth story. Working
towards this end, they are ushering positive socio-economic changes in communities to help the Indian dream fly high and the
‘Sone Ki Chidiya’ soars once again. This approach remains embedded in their ethos even as Future group rapidly expand their
footprints deeper into India. They are proud of their Indianness. Their belief in inclusiveness for long-term sustainable growth and
economic prosperity evokes trust among consumers, employees, suppliers, partners, shareholders and the community.
According to a research paper in the Global Business Review by Ruchi Tewari et al, CSR is an extremely fluid term with varied
definitions and understandings. It has been understood as firms „voluntarily integrating the social and environmental expectations
and concerns of stakeholders into their operations and their interactions with stakeholders‟, to being as broad as „the idea of social
responsibility supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society
which extend beyond these obligations. CSR reflects two key approaches- a shareholder approach based on the view that the
social responsibility of business is to increase the profits and a stakeholder approach, which focuses on a multiple number of
stakeholders‟, who are directly or indirectly affected by the decisions and the actions of the organizations.
Friedman (1970) conjectured that “there is one and only one social responsibility for a business, to use its resources and engage in
activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free
competition without deception or fraud.” He concluded that there is no role for CSR.
However, Woodward et al. (2003) argued that CSR measures could help improve the cost structure of an enterprise, among other
things. Mintzberg (1983) claimed that CSR could appear in various forms. The purest form is when CSR is practiced for its own
sake. Firms expect nothing back from their CSR activities and they become socially responsible because that is a novel strategy
for corporations to behave. Moore (2003) argued that there is a tension between social and economic endeavors and by becoming
socially responsible, firms are actually working to ease this tension. He concluded that if CSR is properly applied in business
practices, then it must not be at the service of greater profitability. In accordance with Moore, Goyder (2003) articulated his
concern that many firms are taking CSR as mere compliance with expectations. According to Goyder, “compliance CSR” will
make firms tell stakeholders what they want to hear, so that firms are seen as fitting into society’s template. This is opposite to
real CSR or what Goyder calls “conviction CSR”, in which firms truly believe in a set of purposes and values that have
convictions to act on them.
Through CSR, communication organizations are able to enter the public vogue; present legitimacy claims and creates positive
relationships with the public that can influence economy and institutional operating environment (Bostdorff and Vibbert, 1994)
and delineate the rights, roles and responsibilities. Since CSR reports are a very recent form of CSR communicating even in the
developed countries and are still gaining ground in the developing countries, the GRI (Global Reporting Initiative) provides
training and help in preparing the sustainability reports to the extent that templates for filling in information are extended by GRI
which facilitate the organizations in learning about themselves and communicating effectively. Therefore, small organizations in
developing nations can also employ GRI guidelines and publish sustainability reports, which will lead to a level playing field and
create neutral grounds for both large and small organizations of the developed and developing nations. For such reasons the
pressure to publish sustainability reports is growing both from the governmental agencies and peer companies operating in the
same industry along with the nongovernmental organizations (NGO).
In their research, Kai Hockerts and MetteMorsing, shed light on a very new but important aspect of CSR i.e. Corporate Social
Innovation. The term “corporate social innovation” was first introduced by Rosabeth Moss Kanter (1999) who argued that firms
should use social issues as a learning laboratory for identifying unmet needs and for developing solutions that create new markets.
Practitioners increasingly take up the term corporate social innovation. Patrick Cescau CEO of Unilever for example defines
corporate social innovation as a way of "finding new products and services that meet not only the functional needs of consumers
for tasty food or clean clothes but also their wider aspirations as citizens.” Four levels of innovation are explained in this research
paper. These four levels help to interlink CSR and innovation. The four levels are as follows: (1) Institutional Level: Innovation
and Legitimacy, (2) Individual Level: The Social Entrepreneur, (3) Organizational level: Stakeholder-driven Innovation, (4)
Global level: Sustainability Innovation.
Based on the research paper by Jan Jonker & Michel van Pijkeren, the CSR strategies have been divided into two: Outside-in
strategies versus Inside- out strategies. An outside -in strategy is grounded in a risk orientation and is shaped through issue-based
management. The needs and expectations of relevant and legitimate stakeholders are perceived and lead to specific managerial
actions. Those actions are focused on minimizing and mitigating risks and accompanying costs of especially reputation damage.
The inside - out strategy is not based on actions derived from environmental expectations and risks but grounded the identity and
underlying values of the organization. These values blended into a mission for the organization create a starting point to
implement a customized CSR strategy. This strategy is focusing on aligning all functional areas in the organization towards a
585 | P a g e
ISSN (P):2279-0934, (O):2279-0942
leading mission based on historical „roots‟ interwoven with corporate values. Such a dimension and subsequent strategy fosters
employee pride and (internal) motivation, which in return are expressed towards stakeholders leading to, improved reputation.
Sourav Mukherji & Kunal Basu in their research paper titled- CSR practices among Indian Retailers , have noticed that CSR
practices by Indian retailers were in a formative stage, characterized by being unstructured, informal and sometimes, inconsistent.
For example, none of the studied Indian retailers released CSR reports and only one of the retailers had dedicated personnel to
drive CSR activities. CSR activities that we witnessed among the Indian retailers were focused more on inclusivity rather than on
environmental management.
The future group was taken as the company for the research project as it is the largest company in the retail sector and the project
required the analysis of the CSR activities of a company in the retail sector in India. This is a descriptive study where data was
collected through personal interviews with the employees of Future group who are the internal customers of the organization and
have the knowledge of the CSR communication initiated by company. The objective of the interview was to identify and
determine the communication of CSR done by the retail chain Future group
FINDINGS AND DISCUSSIONS
The employees who were interviewed had some knowledge about CSR but not as extensively as we had thought. Relationship
with clients and suppliers was given most significance in the area of social responsibilities and Governance and dialogue with the
stakeholders was given least importance. It was founded that a company may move to adopt CSR practices if there was ethical
motivation of top management. Whereas, to promote corporate image their preference was Public relations than adopting CSR
practices. Future group has realized significant operations in the field of System of governance transparency and relationship with
investors and shareholders and practices of responsible business, in that order. Future group is not very diverse in the field of
CSR, though the survey findings indicate a tilt towards ethic code. When asked what problem has the company faces recently, the
answer was overtime. Future group has been adopting several measures to reduce environmental impact like energy saving, water
saving, sustainable packaging. Donation to organizations having social or environmental utility is one of the listed actions taken
by Future group towards the community. Transparency in the market is an essential part of CSR. Future group keeps transparency
intact by giving Clear information about products or services, Investigation about client’s customer satisfaction, Selection and
evaluation of suppliers, Registration of complaint by costumer etc. The findings indicated that the employees think that the main
benefits for adoption of measures for social responsibility are improving relations with suppliers, institutions, donors, community
and least important one was increase efficiency. Future group employees who were surveyed opinionated that the problems
related to the development of initiatives in the field of social responsibility by the company can be High costs, Business benefits
not immediate, Lack of knowledge, Lack of institutional assistance (in the order of importance). The activity that is considered to
be realized in the next five years is communicating the company’s performance in CSR and sustainability to its stakeholders.
Corporate Social Responsibility and its Communication through Sustainability Reports: Comparative Findings between WalMart and Future Group.
US companies are not as heavily regulated as those in other developed nations are, and corporate responsibility is not addressed as
a regulatory compliance issue but rather from a social and moral choice perspective. Corporate activities encompassing corporate
responsibility in the US go beyond environmental, legal and workplace issues to ones that best enhance a company’s external
reputation. Philanthropy and employee engagement – aka employee volunteerism – are key areas of a company’s corporate
responsibility platform. Interestingly, US companies are much more explicit in their public statements on a commitment to
corporate responsibility than their peers elsewhere, particularly Europe. However, the lack of definition has led to confusion on
terminology – ranging from social responsibility to sustainability, community investment and corporate citizenship and confusion
as to what they mean. For some companies corporate responsibility is defined as philanthropic giving, while others include
business activities ranging from raw material sourcing to employment practices. Nevertheless, corporate responsibility is more
widely understood, accepted and practiced within mainstream companies. In this case study, we are taking the global retail giant –
Wal-Mart. The Companies Bill 2013 has mandated that organizations of a certain financial strength spend 2% of their net profit
on corporate social responsibility (CSR). This reflects the face of reality as it shows that only a handful of companies meet the 2%
criterion (or come close) as of now. Fewer still have well-structured, sustainable and far-reaching CSR programs.
Presently, in India companies confuse Philanthropy and Charity with Corporate Social Responsibility (CSR) when in fact these
are quite different. Philanthropy and Charity are significant but limited in their efficacy and scale to achieve the desired progress
in Sustainable and Inclusive Development. In this respect, CSR can be the quintessence of Business Strategy, an important tool in
All-Modern Companies and figures as a central tenet in decision-making processes. Very few companies are taking CSR practices
as seriously and importantly as their counterparts in Western countries. The number of companies reporting their CSR practices in
accordance with the Global Reporting Initiative (GRI) framework is even lesser. The reason being the limitation of resources in
terms of awareness, time and cost.
Wal-Mart being a giant in the global retail world is aware of its Corporate Social Responsibilities. It works in diverse fields when
it comes to CSR. Areas like community initiatives, disaster relief, ethics, talent development; volunteerism, Environmental
consciousness etc. are the playing field for Wal-Mart in CSR context. It’s working world wide to minimize poverty and
586 | P a g e
ISSN (P):2279-0934, (O):2279-0942
environmental issues and making world a better place to live and thrive. Most importantly, it publishes its Sustainability reports
annually in order to connect its CSR works with the stakeholders and communicating to them the same. On the other hand, we
have Future group. It is an Indian privately held corporation that runs chains of large discount department stores and warehouse
stores. Its retail branch includes Big Bazaar, Brand Factory, Central, Pantaloons, e zone, Home Town. In the turf of CSR, Future
group is still developing as compared to Wal-Mart. It works on a few general CSR issues like Inclusive growth where it aims for a
harmonious society where the entire population can enjoy a better quality of life. Another issue it curtails to is Community driven
Development and lastly, Environmental Responsibilities. Future group has no sustainability reports through which it can
communicate it is working in the area of CSR to the stakeholders.
RECOMMENDATIONS
After conducting the study, a very important aspect came into picture. The aspect dealt with the investment required to conduct
CSR activities. In western economies, the government supports CSR and the companies have huge budget dedicated to just these
activities. Therefore, Future group can initiate a program that compel the government to support CSR activities and allocate
substantial amount to carry on such activities at a required scale. According to the comparative findings between Future Group
and Wal-Mart and their CSR activities and communication, we realized that in order to move ahead in the field of CSR, Future
group needs to move beyond the three aspects that it has included in its CSR bouquet i.e. Inclusive Growth, Community Driven
Development and Environmental Responsibilities, and branch out into aspects like Energy, waste products, associates, ethics etc.
Wal- Mart annually publishes a Global Sustainability Report.
Future group should also publish one and communicate their work in the field of CSR to their stakeholders. PR is an essential part
of the marketing communication and image building for any organization. Therefore, by taking CSR as a part of their essential
business working, Future group can build a positive image of itself by being socially responsible and communicating their work in
the field. CSR is not just another form of indirect expense but is important for protecting the goodwill and reputation, defending
attacks and increasing business competitiveness. This mentality need to be instilled in the business. Future group need a
specialized CSR teams that formulate policies, strategies and goals for their CSR programs and set aside budgets to fund them.
These programs will be determined by social philosophy, which have clear objectives, are well defined, and are aligned with the
mainstream business. The Delhi- NCR office of Future group is in Gurgaon, Haryana where women, especially those who work in
that area, have reported many cases of misbehaving. Future group can do a lot more towards the safety of the women. CSR is not
a company centered process or initiation but Future group can join hands with Non-governmental organizations (NGOs) and use
their expertise in devising programs, which address wider social problems.
CONCLUSION
Since retail industry consist of a whole chain of supplier and retailer thus it becomes a responsibility of the retailers to convince
their suppliers to be socially responsible. This will lead to a phenomenon, which will necessitate the competitors of the parent
company to become socially responsible due to common suppliers. Thus, it becomes the responsibility of the retailer to make the
whole supply chain understand the need of being socially responsible. Various companies are doing this by following practices
like vendor development 5‟s technique to reduce waste, environmental friendly policies. Companies now are moving towards
strategies CSR than just CSR because this gives them an even stronger motive to follow it. Further, along the continuum these
companies will fully integrate CSR throughout their business model. Looking into the trends on can easily see the increasing role
of stakeholders in the process. The concept of CSR has been shifted from the shareholders view to stakeholders view. In future
thus, stakeholders will have a much greater say in the dialogues governance and other management decision.
REFERENCES
1.
Banerjee, S. B. (2003). Who sustains whose development? Sustainable development and the reinvention of nature.
Organization Studies, 24(1), 143-180.
2.
Clarke, T. (1998). The stakeholder corporation: A business philosophy for the information age. Long Range Planning,
31(2), 182-194.
3.
Donaldson, T. (1999). Response: Making stakeholder theory whole. Academy of Management Review, 24(2), 237-241.
4.
Elkington, J. (1999). Cannibals with Forks: The Triple Bottom Line of 21st Century. Business Oxford: Capstone.
5.
Freeman, R. E. (1999). Divergent stakeholder theory. Academy of Management Review, 24(2), 233-236.
6.
Friedman, A. L., & Miles, S. (2002). Developing stakeholder theory. Journal of Management Studies, 39(1), 1-21.
7.
Hockerts, K., & Morsing, M. (2000). Corporate social responsibility in the innovation process (A literature review).
Copenhagen Business School (CBS): Center for Corporate Social Responsibility.
587 | P a g e
ISSN (P):2279-0934, (O):2279-0942
8.
Jones, T. M. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management
Review, 20(2), 404-437.
9.
MacGregor, S. P., Spinach, X., & Fontrodona, J. (2007). Social innovation: Using design to generate business value
through corporate social responsibility. Spain. University of Gerona: IESE Business School.
10. Mahoney, J. (2004). Resource-based Theory, Dynamic Capabilities, and Real Options, Economic Foundations of
Strategy. Foundations for Organizational Science, Sage Publications, pp. 167-169.
11. McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of
Management Review, 26(1), 117-127.
12. Mendibil, K., Hernandez, J., Espanich, X., Garriga, E., & Macgregor, S. How can CSR practices lead to successful
innovation in SM Es?. Spain. U. K.: University of Strathclyde, IESE Business School.
13. Mitchell, R., Agle, B., & Wood, D. (1997). Toward a theory of stakeholder identification and salience: defining the
principle of whom and what really counts. Academy of Management Review, 22(3), 853-886.
14. Mukherji, Sourav et al. (2010- ongoing). CSR Practices among Indian and UK Retailer. SAID Business School.
15. Morhardt, J. E., Baird, S., & Freeman, K. (2002). Scoring corporate environmental and sustainability reports using GRI
2000, ISO 14031 and other criteria. Corporate Social Responsibility and Environmental Management, 9(1), 215–233.
16. Norman, W., & Macdonald, C. (2004). Getting to the bottom of Triple Bottom Line. Business Ethics Quarterly, 16(2),
45-59.
17. Prahalad, C. K. (2004). The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Philadelphia:
Wharton School Publishing.
18. Prahalad, C. K., & Hammond, A. (2002). Serving the world’s poor, profitably. Harvard Business Review, 80(9), 48-57.
19. Sternberg, E. (1996). Stakeholder theory exposed. The Corporate Governance Quarterly, 2(1), 4-8.
20. Swann, P., & Birke, D. (2005). How do creativity and design enhance business performance? A framework for
interpreting the evidence. DTI think piece, University of Nottingham, Business School.
21. Tewari, Ruchi (et al.). (2012). Corporate Social Responsibility: Communication through sustainability reports by Indian
and multinational companies. Global Business Review. SAGE Publications.
22. Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management
Journal, 18(7), 509-533.
23. Tidd, J. (2006). A Review of Innovation Models. University of Sussex: Science and Technology Policy Research Unit.
24. Waldman, David, Siegel, S., D., & Javidan, M. (2006). Components of CEO transformational leadership and corporate
social responsibility. Journal of Management Studies, 43(8), 1703-1725.
25. Wood, D. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691-718.
26. KPMG India. (2008). Corporate Social Responsibility- Towards a Sustainable Future (Online).
27. (2012). Wal-Mart global responsibility report. Retrieved from http://www.iimb.ernet.in/research/sponsored-researchprojects/csr-practices-among-indian-and-uk-retailers
28. (2013). Future
overview.html
group
Sustainability.
Retrieved
from
http://www.futuregroup.in/sustainability/sustainability-
29. Ghosh, Labonita. (2013, January 3). How India Inc can make their CSR spends count. Economics Times.
30. Tiwari, Rajesh. (2011, September 1). Corporate Social Responsibility: The need and the strategy. Retrieved from
http://www.iccsr.org/knowledge.html
31. Business for social responsibility. Retrieved from www.bsv.org
*****
588 | P a g e
ISSN (P):2279-0934, (O):2279-0942
RURAL & URBAN RETAILING STRATEGIES
WITH SPECIAL REFERENCE TO FABMART, INDIA
Suresh R.30 Dr. M. Senthil31
ABSTRACT
Immense liberalization of the FDI policy in the past decade has been one of the key factors for transforming India from a
closed economy into one of the favoured destinations for foreign investments. In the post liberalization scenario, India is
considered a premium destination for foreign investment. Though the country is likely to attract foreign direct investment
(FDI) to the tune of USD 2.5-3 billion in the next five years due to the policy effect 51 percent foreign stake in multi-brand
retail, there is going to be a paradigm competition amongst the big retailers both from the domestic and foreign arena. A new
norm is being defined in the Indian consumer market every day. With far-reaching socio-economic changes that India has
undergone in the last decade, the drivers in urban and rural India are maturing fast. While the world’s largest retailer Walmart
will have its strong market strategies to leverage a much stronger customer base, Indian retailers have already started breaking
their brain boxes to unwind strategies that can set trends in countering the power of foreign big wigs to attract huge chunk of
customers for their part. In this context, amidst pondering upon the specific retail strategies adapted by major Indian retailers
to counter the foreign power, this paper endeavors also to bring insight into FabMart Retail Strategies.
KEYWORDS
Rural Retailing, Foreign Direct Investment, Multi Brand Retail, Fab-Mart, Retailers etc.
INDIAN RETAIL MARKET
A. Introduction
India is the most preferred new destination for global retailers and it topped the list in a survey, done by property agents CB
Richard Ellis of 323 international retailers about the markets they entered for the first time last year. According to its study, New
Delhi was ranked as the fourth most popular city for new retail entrants at city level, which covered 75 countries, in terms of
international retailers present in a country. India’s larger format convenience stores and supermarkets accounted for a little over 4
percent of the industry, and most of these were present only in large urban geography. According to A T Kearney's Global Retail
Development Index (GRDI) 2012, India has emerged as the fifth most favorable destination for international retailers, outpacing
UAE, Russia, Indonesia and Saudi Arabia. A T Kearney’s report also says India remains a high potential market with accelerated
retail growth of 15-20% expected over the next five years.
B. Overview





Indian Retail Market has grown at CAGR of 10% in the past six years.
The Indian retail market is currently estimated at USD 396 billion.
Food segment contributes largest part of total value of retail market, followed by fashion, leisure & entertainment and
fashion accessories.
India's organized retail space is evolving fast and achieved penetration level of 7%, which signifies huge potential
growth.
Indian luxury market currently stands at USD 3.5 billion and expected to grow to make India the twelfth-largest luxury
retail market in the world by 2015.
C. Industry Composition
Chart-1
Retail Industry
Organized Retailing
(7%)
Unorganized Retailing
(93%)
30Research
31Professor
Scholar, Alagappa Institute of Management, Alagappa Univeristy, Tamil Nadu, India, [email protected]
& Dean (CDC), Alagappa Institute of Management, Alagappa Univeristy, Tamil Nadu, India, [email protected]
589 | P a g e
ISSN (P):2279-0934, (O):2279-0942
D. Major Segments:







Food & Consumer durables,
Leisure and entertainment,
Health, beauty and pharma,
Books and music,
Fashion & Fashion accessories,
Furniture, &
Telecom.
E. Major Indian Retailers and their Store Brands
Major
Indian Players
STORE BRANDS
Landmark (books and music), Croma (multi-brand electronics), World of Titan (watches), Tanishq
(jewellery), Titan Eye+ (eye wear), Westside (lifestyle retail store), Star Bazaar (hypermarket
chain),Fashion Yatra (family fashion store).
Central (shopping mall), Big Bazaar (hypermarket), Pantaloons (fashion outlet), Blue Sky
(sunglasses),Brand Factory (multi-brand readymade garments), KB's Fair Price (essential products),
Navaras (jewellery), Planet Store (multi-brand sports and lifestyle speciality retail), all (fashion
garments), Ethnicity (Indian ethnic wear), Home Town (home needs), eZone (electronics), Furniture
Future Group
Bazaar (home furniture), Electronics Bazaar (under Big Bazaar, electronics stores), Home Bazaar
(satellite version of Home Town), Collection I (lifestyle furniture), Gen M & One Mobile (mobile
phones), M-Port (electronics), Shoe Factory (footwear) and Depot (books and music).
Reliance Fresh (neighborhood store), Reliance Mart (supermarket), Reliance Super (mini-mart),
Reliance Digital (consumer durables and information technology), Reliance Trends (apparel and
accessories), Reliance Wellness (health, wellness and beauty), iStore (Apple products), Reliance
Reliance
Footprint (footwear), Reliance Jewels (jewellery), Reliance TimeOut (books, music and entertainment),
Group
Reliance AutoZone (automotive products and services) and Reliance Living (home ware, furniture,
modular kitchens and furnishings).
Spencers (multi-format retail store), Music World (music and home video store) and Books & Beyond
RPG Group
(book store).
Shoppers Stop (clothing, accessories, fragrances, cosmetics, footwear and home furnishing store),
Crossword (bookstore), InorbitMall (fashion, lifestyle, food and entertainment) and Hyper City
Raheja Group
(hypermarket).
Tata Group
INTERNATIONAL RETAILERS STRATEGIES: OVERVIEW
A.
Differentiation by Unique Customer Experience
Some of the features that highlight the international retailer product are the standardization in the product mix as well as
stores format and sales promotions which is retained similar across the globe and it is this that builds the brand visibility and
loyalty
Most of the luxury brands have begun to catch on to the modern generation and create a platform to reflect the ultra modern
cultures. The luxury brand customers therefore are made to feel exclusive and enjoy their shopping experience with which their
brand loyalty is strengthened. This approach can however be taken by individual brand owners and high end luxury brands that
Indian retail industry is second largest employer after Agriculture employing more than 35 million people with wholesale
trade generating additional 5.5 million employments more.
can afford to spend their investments in this area.
B.
Extending Product Mix and building new Brands
In trying to expand sales, the retailers have begun to expand the product mix as well as build new complementary brands.
Most of the fashion brands like Gucci, Diesel, Nike, Reebok etc have started marketing fashion accessories related to their
main line of products.
Besides extension of product lines, the retailers have also begun to expand the market through additional brands. Introducing
additional brands helps the retailers in many ways. Apart from the above brand specific strategies, international retailers have also
begun to embark on buying new companies with similar brands or entering into new line of business altogether in order to fuel
their business expansion and market extension.
590 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Chart-2: Emerging Dimensions of Retail Industry
Retail
New Formats
Changing Focus Areas
Strategic Approaches
IT Based Sophisticated Technologies
Innovative Shopping Experiences
Transition of Indian Retail into a High-Tech Industry
MAJOR INDIAN RETAILERS’ STRATEGIES
A. Future Group's Strategy
With a growth strategy tempered with localization and an inclusive business model, Future Group is the only pure play local
retailer poised to lead India’s consumption story with sustainable value creation. Future Group’s multi-format retail strategy
captures almost the entire consumption basket of Indian customers. As modern retail drives new demand, efficiency and
consumption in new categories, our strategy is based on our deep understanding of Indian consumers. We understand the varied
buying behaviour of the Indian consumer across regional ethnicities and are constantly innovating to craft strategies that address
the subtle differences.
1.
Customer Orientation
The bottom line in each of our retail success stories is "know your customer".
An insight into the soul of Indian consumers - how they operate, think, dream and line - helps us innovate and create
differentiating functionally.
2.
Continuous Innovation
As India's largest retailer, we understand the importance of innovation. We rethink strategies and realign businesses
with increasing agility to provide diverse customer groups with refreshingly different retail experiences.
3.
Collaborative Transformation
Creating a collaborative environment combining our strengths with our suppliers and vendors helps us create immense
value for our customers, which in turn foster mutual growth.
4.
Future Group’s Beliefs about India
Modern Indian retail rests on the strength of two pillars – scale and efficiencies. As front-runners in both areas, Future
Group firmly believes that its core responsibility lies in providing protection to customers from the overall rate of
inflation. While the scale and size of its operations helps it improve efficiencies, it also ensures to deliver greater value
to its customers.
Future Group's strategy is aimed at achieving inclusive, sustained and profitable growth with three levers
591 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Future Group’s retail thrust is focused on four principal verticals of Food, Fashion, General Merchandise and Home. These four
categories together accounts for nearly 65% of the consumption in the country and represent mass consumer aspirations. Creating
retail pure play through divestment and demerger of non-retail businesses to concentrate its efforts on these verticals are key
strategies.
B. Reliance Retail Changing Strategies
The evolution of the retail sector in India in the recent past years has made companies to change their market strategies more
frequently. Until recently, Reliance Retail has been focusing on smaller format stores, but given with the kind of momentum in
the growth of larger format stores, Reliance is now stepping up its presence on big-box stores or hypermarkets that are built on
about 60,000-80,000 sq ft to stock everything from food to apparel to furniture.
1.
Reliance Retail: Present Scenario
Presently Reliance Retail has total of 1,300 stores in its array as against 1,100 stores in November 2011 located across
18 states and operates over 6.5 million sq ft of retail space. Reliance Retail now has 22 formats ranging from
hypermarkets to specialty stores.
2.
Reliance –A brand to reckon with in retail
Reliance Retail launched its first wholesale format at Ahmadabad, Gujarat, ‘Reliance Market’ to cater to kirana
stores, restaurants and institutional buyers
Reliance Retail, a brand that offers everything from clothing, to optics, footwear, food, groceries, jewellery, digital
products, is planning to rise up to Rs 4,500 crore from its parent company, Reliance Industries is planning to open new
stores. Reliance Retail is already host to 100 optic stores in partnership with Grand Vision, brought Hamleys, and
considered the world's most wonderful toyshop, to India. The brand also opened ‘i-store’ under Reliance Digital, a onestop shop for all Apple products and services.
3.
Reliance Retail: Poised to become number one Retailer in India
Reliance Industries Ltd, with the market capitalization standing highest in the country, is enroute to becoming the
number one retailer in India, within seven years after it diversified into this sector from its stronghold refining and the
petrochemicals business. Recent financial results announced claims Rs 10,800 crore as revenue by its retail arm for the
year ending March 31, a 42 per cent steep growth. The most recent addition by the Reliance Retail is Quicksilver, an
outdoor lifestyle company and the first of this kind of store is located at Phoenix Mills, Mumbai.
FAB-MART
A. Company Profile in a Nutshell
FabMart, an Indian retail venture founded by Alphonse Reddy an Engineer from BITS and a management graduate from
INSEAD, in 2011, is part of MRPL (Madanapalle Retail Private Limited). FabMart is headquartered in Bangalore, Karnataka.
FabMart’s vision mission is to cater the Tier 3 & 4 cities and towns & villages of India. Fabmart utilizes the technology-enabled
features ‘TouchStop’ and ‘CyberShop’ affiliates to serve its customers. It is similar to how Flipkart makes use of Postal Service's
registered post or Speed Post to deliver products in remote areas.
Fabmart has developed a unique business model called ‘Ru-BAN’ model through which the company will tie up with retailers in
various small towns, who will book orders by displaying merchandise using a touch-screen tablet with Internet connectivity
provided by the it. The most distinct proposition of FabMart is that the whole shopping experience for customers is completely
seamless by including local retailers as a part of the model. The same partners/affiliates serve as front-end sales affiliates and
delivery partners in the towns. FabMart already has a presence in 20 Indian towns and is expected to increase its reach to 1000
towns by 2013.
B. FabMart’s unique Business Model
1.
‘Ru-Ban model’
FabMart is the pioneer of Ru-Ban model aimed at connecting the demand in the towns and villages with the supply
from the cities. The general perception by Indians is that a cash transaction is always safer than an online transaction.
More than 90% of the retail transactions in India are in cash. The idea of online shopping is still relatively new for
smaller Indian towns and thus, they are not too comfortable to pay for a product before they have a physical feel of it.
Penetration of internet in smaller towns is still very poor with a vast majority has scarce or no access to it.
592 | P a g e
2.
ISSN (P):2279-0934, (O):2279-0942
Uniqueness:
The uniqueness of this model vests in putting the power back in the hands of the retailers in the small towns. The
business model of FabMart taps the rural markets and is expected to make online shopping in Indian towns easy.
FabMart uses an e-catalog called the Touch Shop device, which is an Android based tablet that has the details and list of
all the products that the company offers. Apart from the local store collect, it also offers multiple payment methods like
credit card, debit card, net banking, Cheque and Cash on Delivery.
3.
‘Local Store Collect’
FabMart is also known for its 'local store collect, wherein customers who do not prefer using a credit card or a Debit
Card for an online transaction can opt to pay and collect the product ordered from a local retailer. In this model, the
product instead of being shipped to the customer's address is sent to a retail partner who then collects the money and
delivers the product to its rightful owner. This offline transaction model also works the other way round wherein a
customer can place an order with the retailer (if not online) to purchase products being sold. A similar delivery method
is used by Argos, a UK based retail group
4.
Products of FabMart
FabMart has a variety of products for customers and listed category-wise:

Men's and Women's fashion including footwear, bags, accessories, personal care electronics, apparel, and health
products.
 Baby & Kids related products for infants, pre-scholars, kids, and kid’s sports products, among others.
 Personal electronics & Home appliances including phones & accessories, cameras & camcorders, MP3 players,
digital photo frames, computers & accessories, and home appliances.
C. FabMart extends RU-BAN retail model to Tamil Nadu
Opinion View
“We are on an expansion mode and we are launching in Chennai in the state of Tamil Nadu. We had an overwhelming response
from our recent launch in Andhra Pradesh last month where, in a span of twenty-five days we had over 100 enquiries and after
carrying out our due-diligence, we were able to appoint 20 FabMart Franchisees and the rest will be appointed in the coming few
weeks.”
Alphonse Reddy, CEO, FabMart.Com
With the aim to address the demand-supply need of retail that exists in smaller towns in India FabMart.Com, a Madanapalle
Retail Pvt. Ltd. venture, introduced in Chennai, Tamil Nadu, a new retail model. This model follows the successful launch of the
retail concept in the state of Andhra Pradesh in September 2012. FabMart.Com a finalist at the India Retail Forum 2012 for the
Best Retail Innovation award, introduced ‘RU-BAN’ the retail model that is aimed at bridging the retail gap between ‘rural-urban’
India. FabMart.Com will integrate the business of retail with the social fabric of small towns empowering the retailer in rural
markets (or smaller towns) and provide local consumers with a choice of products that are otherwise available only in metros and
larger Indian cities. Consumers in smaller towns are excited and have been increasingly demanding a similar shopping experience
(in terms of brands, product range, special offers) to those of their counterparts in larger cities. Similarly, some of the big brands
have been looking for an entry into smaller towns.
D. Technology Enablement
The RU-BAN business model brings the retailers, brands and consumers together on a single technology-enabled platform,
placing the smaller retailer at the center of FabMart.Com business model. The retailers book the orders from their customers using
a touch-screen tablet as a device. The customer returns in a few days to collect the product, thereby eliminating concerns around
security of online transactions or the use of credit cards, creating a win-win situation for FabMart.Com, the retailer, the brand
owner and the consumer. Through this process, FabMart.Com has put the retail power back in the hands of the small local retailer.
This is achieved by empowering them with technology as an enabler and by providing the retailer training on customer focus and
dealing in branded products.
E. Growth and Market Focus
FabMart.Com business strategy has an aggressive expansion drive to appoint more than 100 franchisees in Tamil Nadu and total
of 750 retailers across South India this year. Across multiple locations, this number is expected to increase to 2,500 by 2013 and
further, to 12,000 franchisees by end of 2014. Following the expansion in Tamil Nadu, FabMart.Com plans to enter Karnataka,
and eventually across India.
593 | P a g e
ISSN (P):2279-0934, (O):2279-0942
CONCLUSION
FabMart.Com a new visionary portal, a retail venture for online retailing has come up with a unique model with the aim to bridge
the rural customers with the urban services through the best use of vastly dynamic technological support. It is a challenging
business model endeavoring to integrate branded retail with the social fabric of emerging India. FabMart’s RU-BAN model has
made it business presence stronger in Andhra Pradesh though is at the nascent stage at many states that it has entered in, still is
striving with much bolder steps to leverage the goodwill of the small retailers in the rural segment to establish a much stronger
foothold in the fast emerging Indian markets.
REFERENCES
1.
(2012, January). Highlights of Indian Retail Industry. Big Strategic Management Consultants, 3-13.
2.
Retrieved from www.Futuregroup.In
3.
Rahman, Tazyn. (2012, February). Organized retail industry In India – Opportunities and Challenges. IJRFM, 2(2), 1427.
4.
Srivastava, Smriti. (2012, February). Marketing Strategies Adopted By Retailers In Retail Store: A Case Study Of Max
Lifestyle Store-Phoneix Mall, Lucknow. IJRFM, 2(2), 12 -21.
5.
Chaturvedi, Vijit, & Yadav, S. D. (2012, April). Rural Marketing- An Emerging Avenue for Encashing Sustainable
Marketing Advantage. Summer Internship Society, III(1), 33-47, 77 – 89.
6.
Deloitte. (2011, September). Indian Retail Market–Embracing a new Trajectory. Retrieved from www.deloitte.com/in
7.
Sharma, M. N., & Rathore, Singh Seema. (2011, December). The Scenario of Retail Market in India: An Analysis. IMS
Manthan, VI(2), 18 – 26.
8.
Retrieved from www.wikipedia.com
9.
Retrieved
markets
from
www.business-standard.com/article/companies/reliance-retail-changes-strategy-looking-at-evolving-
10. Retrieved from http://www.rediff.com/money/slide-show/slide-show-1-reliance-industries-closer-to-being-no-1-retailer
11. Retrieved from http://www.indiaretailing.com.
12. Retrieved from http://www.wikipedia.com.
13. Retrieved from http://www.indiaretailnews.com
*****








594 | P a g e
ISSN (P):2279-0934, (O):2279-0942
RURAL TRANSFORMATION AND SELF-HELP GROUPS: A CASE STUDY
Dr. S. Kayarkanni32
ABSTRACT
Rural women possess abundant resources to take up enterprises. She has the benefit of easy availability of arm and livestock
based raw materials and other resources. Hence, she can effectively undertake both the production and processing oriented
enterprises. Entrepreneurship development among rural women helps to enhance their personal capabilities and increase
decision-making status in the family and society as a whole. This study discusses the role of Self Help Groups in women
entrepreneurship in Vellapatti village of Tuticorin town.
The present study is based on both primary and secondary data. Primary data have been collected by conducting a survey
among 75 sample respondents from 9 Self Help Groups in different areas of Vellapatti village of Tuticorin town. Secondary
data have been collected from books, journals, newspapers, internet and periodicals. Percentage analysis, averages, standard
deviation, chi square test and probability analysis were used. The data relates to the month of July 2013.
The study showed that majority of them, about 93.33 percent of the sample respondent’s opinion about performance of SHGs
is good and 6.67 percent of the respondent’s opinion is moderate. None of the respondents has bad opinion about the
performance of SHGs. The study reveals that 17.33 percent of the sample respondent’s suggestions to improve the
performance of SHGs are to provide more loans, whereas 60 percent and 22.67 percent of the sample respondents’ suggestion
is to provide loan at right time and to provide loan at lesser rate of interest. The present study undertaken in Vellapatti village
reveals that SHGs have made a tremendous impact on social dimensions of women members.
KEYWORDS
Rural Transformation, Self Help Groups, Rural Women, Entrepreneurship Development, Poverty Reduction, Decision
Making, Microfinance etc.
INTRODUCTION
The micro finance institutions are playing a dominant role in empowerment of women. The expansion of micro finance through
self-help group model is high in south India and it has been largest in Tamilnadu. Empowerment (Bashin & Dhar, 1998) is an
ongoing and dynamic process, which enhances women’s and any other marginalized and alienated group abilities to change the
structures and ideologies that keep them subordinate. It is the process of making present power structures more inclusive,
including all women and men, senior citizen, dalits, indigenous people and people with disabilities.
Empowerment is therefore clearly concerned with power and particularly with the power relations and distribution of power
between individuals and groups. Rural women possess abundant resources to take up enterprises. She has the benefit of easy
availability of arm and livestock based raw materials and other resources. Hence, she can effectively undertake both the
production and processing oriented enterprises. Entrepreneurship development among rural women helps to enhance their
personal capabilities and increase decision-making status in the family and society as a whole. This study discusses the role of
Self Help Groups in women entrepreneurship in Vellapatti village of Tuticorin town.
STATEMENT OF PROBLEM
Micro credit has emerged as a financial strategy to reach the urban and the rural poor. Whether micro credit schemes routed
through Self Help Groups have proved to be a great success in Tuticorin town too as claimed elsewhere, is a matter worth
probing. Evaluation of the impact of SHGs on the beneficiary members has assumed crucial importance. In other words, whether
micro credits dispensed through Self Help Groups in Tuticorin town has really helped the beneficiaries in raising their level of
living through pursuit of gainful micro ventures, is a problem that merits detailed study. The present study is undertaken
essentially to assess this impact.
SCOPE OF STUDY
The study of women members in SHGs in Tuticorin town throws light on the status of women, social impact created by SHG. The
need of the day is the empowerment of women in all the walks of life through SHG. This study addresses the social impact in
various dimensions and its impact on Self Help Group members. Thus, the present study is supposed to benefit the different
constituencies of Self Help Group mechanism.
32
Associate Professor, Department
[email protected]
of
Economics,
Sri
Parasakthi
College
(Autonomous),
Tamil
Nadu,
India,
595 | P a g e
ISSN (P):2279-0934, (O):2279-0942
OBJECTIVES OF STUDY
The study was conducted with the following specific objectives:



To evaluate the role of Self Help Groups in women entrepreneurship in Vellapatti village.
To assess the perception of beneficiaries about the role of SHGs.
To evaluate the working of the SHGs in Vellapatti village.
The present study is based on both primary and secondary data. Primary data have been collected by conducting a survey among
75 sample respondents from 9 Self Help Groups in different areas of Vellapatti village of Tuticorin town. Eight respondents were
selected from each Self Help Group. Random sampling technique was used to select the respondents. Secondary data have been
collected from books, journals, newspapers, internet and periodicals. While selecting Self Help Groups the criteria adopted here is
that, the SHG should have a linkage with banks. The structured questionnaire was personally administered by direct contacts with
members. Special care has been taken to avoid bias in their answers to various questions and encouraging them to answer queries.
Percentage analysis, averages, standard deviation, chi square test and probability analysis were used. The data relates to the month
of February 2013.
LIMITATIONS OF STUDY
In carrying out the present study, the following limitations were evidenced:



It is a micro level study covering only limited Self Help Groups in Vellapatti village of Tuticorin town.
Survey is a time consuming process but the time to collect the data for research was very less.
The validity of certain data provided by the SHG members is at the best only moderate as many of them are illiterates or
unaware of the purpose of existence of SHGs.
PROFILE OF STUDY AREA: VELLAPATTI VILLAGE
Vellapatti is a small fishing village in the southern part of Gulf of Mannar, situated 10 km north of Tuticorin town, Tamil Nadu,
India. Total population of this village is 1031, consists of 522 males and 509 females. There is one middle school run by a private
RC mission – coaches in Tamil medium with 6 teachers & 162 students. Panchayat Board runs one balwadi. Students for other
studies go to Thoothukudi by private vans and public transport. The village is having two churches for worship and one
playground. Vellapatti panchayats consists of one panchayat president, one secretary, one vice-president, one clerk and one
sweeper. For A grade panchayats, government allotted fund for construction of house for the poor people. Every year panchayats
constructed 13 to 15 houses for the poor people. Therefore, for 75 persons who are living below poverty line is getting free houses
in the year 2010 – 2011. There are 9 Self-Help Groups for women in this village. Almost all of them belong to single caste and
religion. Hence, there is communal harmony.
Table-1: Demographic Classification of Respondents
Age Wise
Young (15-30)
32
Middle (30-45)
38
Old (45-60)
5
Total
75
Educational Qualifications
Illiterate
9
Primary
15
Secondary
40
Hr. Sec
8
Graduate
3
Total
75
Percentage
42.67
50.67
6.67
100.0
12.0
20.0
53.33
10.67
4.0
100.0
A total of 75 respondents were surveyed. From the table, it is revealed that the percentage of middle age respondents is more i.e.,
50.67%. As per the survey middle age groups involvements is higher than that of old and young aged groups in the study area.
596 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Education makes a difference in articulation of opinions. About 20% of the respondents had primary education, about 53.33% had
high school education, about 10.67% possessed higher secondary level education and only about 4% had pursued degrees.
Further, 12% remained illiterate.
Table-2: Type of Ownership of Sample Families
Type
Percentage
Sole Proprietary
67
89.33
Partnership
8
10.67
75
100.00
Total
From the table, it is revealed that 89.33 percent of the sample units are functioning as sole proprietorship and 10.67 percent are
partnership firms. Majority of the sample units run by women entrepreneurs belong to the sole trader type.
Table-3: Natures of Business Premises
Nature
Rent
Own
14
55
Percentage
19.67
73.33
Lease
6
8.00
Total
75
100
The table reveals that 73.33 percent of the sample respondents have their own house utilizing a part of the house as business
premises, where as 19.67 percent had taken building on rent and 8 percent of respondents had taken building on lease. Majority of
the respondents running their business in their own shed.
Table-4: Reasons for Entering into Particular Field
Reason
Bored at home
High Profitability
Less Competition
3
5
14
Percentage
4.00
6.67
18.67
Previous Experience
Growing Area
22
31
29.33
41.33
Total
Sources: Primary data
75
100
The study revealed that 18.67 percent of the sample respondents were entered this field because of less competition in the area,
41.33 percent are because of growing area. Whereas 29.33 percent and 6.67 percent of the sample respondents were entered this
field because of previous experience and high profitability. Only 4 percent of them stated that they join the SHG was bored at
home.
Table-5: Capital Investments into Business
Capital
Investment
Less than 5000
5000-10000
10000-15000
Percentage
36
20
14
48.00
26.67
18.66
15000 and Above
Total
5
75
6.67
100.00
As could be seen from the data, 48 percent of the sample respondents were invested Rs. less than 5000/-. Whereas 26.67 percent
and 18.66 percent of the respondents invested capital of Rs 5000/- to 10000/- and Rs. 10000/- to 15000/- respectively. In addition
to this, 6.67 percent of the respondents have invested capital above Rs. 15000/-.
597 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Table-6: Monthly Turnover from Business
Turnover
Less than 2000
10
2000-3000
21
3000-4000
36
4000 and Above
8
Total
75
Percentage
13.33
28.00
48.00
10.67
100
The table reveals that 13.33 percent of the respondents said that their monthly turnover was less than Rs 2000/-.Where as 28
percent and 48 percent of the respondent’s monthly turnover was Rs 2000/- to 3000/- and 3000/- to 4000/- respectively. Only
10.67 percent of the sample respondent’s monthly turnover was Rs. above 4000/- and average monthly turnover of the sample
respondents in the study area was about 18.75 and standard deviation was about 12.92285.
Table-7: Profit Margins from Business
Turnover
5% to 10%
12
10% to 15%
17
15% to 20%
39
20% and Above
7
Total
75
Percentage
16.00
22.67
52.00
9.33
100
Among the respondents, 16 percent of the sample respondents said that profit margin is within 5 percent to 10 percent. Whereas
22.67 percent and 52 percent of the respondents said that, the profit margin is within 10 percent to 15 percent and 15 percent to 20
percent respectively. Those who are more than 20 percent profit margin are 9.33 percent and average percent profit margin from
the business of the sample SHG women in the study area was about 18.75 and standard deviation was about 14.61164.
Table-8: Impact of Training (%)
Impact of Training
After Joining SHG
Agree
1 (1.33)
17 (22.67)
Neutral
2 (2.67)
13(17.33)
Managerial Efficiency
5 (6.67)
Bank Linkage
Total
8 (10.67)
31 (41.33)
Linkage with Government
Marketing Linkage
Total
Disagree
1 (1.33)
10 (13.33)
4 (5.33)
40 (53.33)
1 (1.33)
6 (8.00)
12 (16.00)
2 (2.67)
18 (24.00)
9 (12.00)
26 (34.67)
19 (25.33)
75 (100)
Note: Chi-square test: Value = 8.154, df = 6, Significance = 0.22703664
The microfinance stakeholder have also facilitated by various agencies to undergo several training particularly marketing activity,
managerial efficiency, linkage with Government and bank etc., An enquiry into motivational agencies to participate in various
training was made and observed that nearly half of them have been motivated. Out of 75 respondents, all the respondents have
undergone training. From the above table it is clear that 53.33% of respondents had given 1st preference to marketing activity
followed by 25.33% respondent with bank linkage. It was revealed that 16% with 3 rd preference of enhance managerial efficiency
followed by active participation with Government. The chi-square test value was 8.154 with a significance level of 0.227, and
thereby establishing a statistically significant relationship between impact of training and preferences of after joining SHGs in
Vellapatti village.
Table-9: Financial Improvements
Financial Improvement
Increases the family income
Provides the finance for various purposes
Increases the savings habit
Total
34
18
23
75
Percentage
45.33
24.00
30.67
100
598 | P a g e
ISSN (P):2279-0934, (O):2279-0942
The table reveals that 30.67 percent of the sample respondent’s opinion about financial improvement through SHG has increased
the savings habit. Whereas 45.33 percent and 24 percent of the sample respondent’s opinion is that SHG has increased their
family income and SHG provides finance for various purposes.
Table-10: Opinions about Performance of SHGs
Opinion
Percentage
Good
70
93.33
Moderate
5
6.67
75
100.0
Total
The study showed that majority of them, about 93.33% of the sample respondent’s opinion about performance of SHGs is good
and 6.67% of the respondent’s opinion is moderate. None of the respondents has bad opinion about the performance of SHGs.
Table-11: Suggestions to Improve the Performance of SHG
Suggestions
Provide more Loan
Provide loan at right time
13
45
Percentage
17.33
60.00
Provide loan at lesser rate of interest
17
22.67
75
100.0
Total
The table reveals that 17.33 percent of the sample respondent’s suggestions to improve the performance of SHGs are to provide
more loans, whereas 60 percent and 22.67 percent of the sample respondents’ suggestion is to provide loan at right time and to
provide loan at lesser rate of interest.
CONCLUSION
The present study undertaken in Vellapatti village reveals that SHGs have made a tremendous impact on social dimensions of
women members. Microfinance has been one of the few effective tools for poverty reduction over the past years. Through the
creation of self-help groups, poor people can safely deposit money and accumulate funds for future investments or emergencies as
well as access loans for productive purposes leading to higher incomes. SHGs would continue to produce revolutionary results in
the study area if the organization promoting microfinance programmes pay more attention to the existing and new groups for a
visible success. Thus, we can conclude that being a member of Self Help Group women is economically empowered.
REFERENCES
1.
Das, Rimjim Mousumi. (2001, February). Micro finance through SHGs: A boon for the rural poor. Kurukshetra, 43.
2.
Bashin, & Dhar. (1998). Joining Hands to Develop Women Power”, a report of South Asian Workshop on Gender
and Sustainable Development. Bangladesh: Koitta.
3.
Della-Guista, M., & Philip, C. (2006). Women entrepreneurs in Gambia: Challenges and opportunities. Journal of
International Development, 18(8), 1051-1064
4.
Bais, Singh Santhosh. (2010). Development of Women Entrepreneurship in Hyderabad Karnataka Region in Karnataka.
Journal of IPM Meerut.
5.
Ganapathi, R., & Sannasi, S. (2008). Women Entrepreneurship the Road Ahead. Southern Economist, 46(18), 36-38.
6.
Vaidyanathan, R. (2004, July 1). Successful of unorganized services. The Hindu Business Line.
7.
Retrieved from www.entrepreneur.com
8.
Retrieved from www.myownbusiness.org
*****
599 | P a g e
ISSN (P):2279-0934, (O):2279-0942
SUSTAINABILITY THROUGH URBAN FARMING: A CASE STUDY ON
PRIYANKA AMAR SHAH - WOMAN ECOPRENEUR
Himani Grover33 Supreet Wahee34
ABSTRACT
There were times when women were perceived to be the homemakers with little to do with business and economy.
Nevertheless, in the contemporary world, more and more women are taking up entrepreneurial activity especially in medium
and small-scale enterprises. Women entrepreneurship has been recognized as an important contributor to economic growth
and well-being of community. The growing recognition of green perspectives provides foundation for the creation and growth
of realistic and commercially booming ecopreneurial business ventures. The awakening of consumers has resulted in the
movement for safe, organic and natural way of living. The increasing awareness regarding organically grown products
amongst urban Indians has led to the development of Organic Food Market in India. The present study aims to address the
sustainability issues under urban farming and discusses the business model adopted by Priyanka Amar Shah – Woman
Ecopreneur towards sustainability through case study methodology. The paper highlights the various advantages of urban
farming and integration of a policy initiative that would advocate the role of urban farming towards the sustainable
development of the economy.
KEYWORDS
Sustainability, Urban Farming, Ecopreneurship, Priyanka Amar Shah, Economic Development etc.
INTRODUCTION
There were times when women were perceived to be the homemakers with little to do with business and economy. Nevertheless,
in the contemporary world, more and more women are taking up entrepreneurial activity especially in medium and small-scale
enterprises and encompass approximately 1/3 of all entrepreneurs worldwide. Women entrepreneurship has been recognized as an
important contributor to economic growth and well-being of community. It is a step taken in right direction breaking down gender
barriers. Women entrepreneurs create new jobs for themselves and others and provide society with different solutions to
management, organization and business problems. The sensitive nature of women, the increasing environmental problems, and
their causes are making these entrepreneurs demand more environment friendly ways of doing business. One such environment
friendly approach is Ecopreneurship, which is an emerging concept and is believed to be an innovative form of business that
effectively help generate profits and utilize green issues as the core competitive advantage of the business assuring global
sustainable development.
The business models addressing to green issues help to increase productivity while reducing resource use in a manner that is
beneficial to human health as well as promotes the sustainability of non-human species. In the scope of this paper, sustainability
refers to as “the development that meets the needs of the present without compromising the ability of future generations to meet
their own needs” Brundtland Commission (United Nations, 1987). In general, sustainability refers to the act of reducing the
negative effects on economical, environmental and social issues. Sustainability policies enable each sector to provide its own,
distinct actions because of how it relates to environmental and social issues and the actions it is committed to taking in relation to
these issues (UNEP FI Guide to Banking & Sustainability, 2011).
The growing recognition of green perspectives provides foundation for the creation and growth of realistic and commercially
booming business ventures. The awakening of consumers has resulted in the movement for safe, organic and natural way of
living. One of the areas where this movement seems spreading its wings is in the field of agribusiness. According to a survey, the
Indian economy is still quite dependent on agriculture, it contributes nearly 14% of the country’s gross domestic product, and
almost 60% of the population is dependent on agriculture. According to "India Organic Food Market Forecast & Opportunities,
2017", Indian organic food market is anticipated to grow at a significant CAGR of around 19% during 2012-2017. In India,
majority of the demand for organic foods is originating from Tier I cities such as Mumbai, Delhi, Chennai, Bangalore, Gurgaon
and Pune. The increasing awareness regarding organically grown products amongst urban Indians has led to the development of
Organic Food Market in India.
OBJECTIVES OF RESEARCH


To study the sustainability issues addressed by urban farming.
To study the business model adopted by Priyanka Amar Shah – Woman Ecopreneur towards sustainability.
33Assistant
34Assistant
Professor, Bharati Vidyapeeth Institute of Management & Research, New Delhi, India, [email protected]
Professor, Bharati Vidyapeeth Institute of Management & Research, New Delhi, India, [email protected]
600 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Case Study methodology is used in the paper. The paper highlights the journey of a woman Ecopreneur who based on her own
beliefs and ideas created a platform to promote sustainable urban farming while keeping a balance between her family, personal
interest, social contribution and business.
Urban Farming
The increasing health consciousness and increasing disposable income among Indians is ceaselessly increasing the demand for
organic food. As a result, urban dwellers has opted for a practical solution by engaging themselves into a venture of growing
vegetables, fruits, medicinal and aromatic plants and flowers within their premises in response to their daily consumable demand
as well as to improve the quality of meals. This is what came to be known as urban farming. It is a part of Urban Agriculture,
which ensures the growth of healthy consumables using natural resources and urban waste, which is free from pesticides.
Urban farming has considerably become popular in recent years due to the growing concerns about environment, which is an
integral part of sustainable development. It has the ability to radically improve economic growth, increase food quality and build
healthier communities thereby addressing the major issues of sustainability. In addition to providing food security, urban farming
contributes to local economic development, poverty alleviation and social inclusion, as well as to the greening of the city and the
fertile reuse of urban wastes.
Urban farming helps to solve problems of urban waste disposal by converting it into a productive resource for growing fruits and
vegetables. Compost-making initiatives collects the urban waste, mix them with dead leaves & converts it to useful high-quality
fertilizer which when added to the farm helps the urban dwellers get access to fresh and nutritious food thereby enhancing the
quality of the food. Unlike industrial farms, urban gardens are cultivated and harvested with minimal mechanization and do not
use oil-based fertilizers. The consumables obtained are not only rich in proteins but are also available at price lower than what is
available in the market. Growing own food also enables household save a substantial part of their income they spend on food. It
also reduces energy consumption and pollution associated with transportation. In addition to production for their own
consumption, large amount of food is also sold in the market which further creates employment and provides income for urban
poor thereby, contributing to the economic development of the country.
Urban farming helps to improve community’s livelihood by making use of degraded open spaces and vacant land, which are often
used as informal waste dumpsites and are a source of health problems. Such zones are turned into productive green spaces,
enhances the artistic value of the urban landscape, increasing overall quality of life. Gardens also provide a space for meditation
and community gathering. Rooftop and patio gardens create peaceful places for relaxation or contemplation, the act of gardening
is great exercise that improves physical as well as mental health: reducing risk of obesity, heart disease, and diabetes. Moreover,
vegetation in open spaces helps in filtering the air as the leaves of plants and tress absorb the dust and particles, until rain or
watering, before returning them to soil. Furthermore, plants also absorb harmful carbon dioxide from the air and release oxygen,
which is essential to human life. Thus, urban farming not only impacts people’s lives, but also environmental sustainability.
The trend of organic food that was initiated in the developed regions such as Europe and North America has expanded to
developing countries like India and China. This trend is seen by many Indian businesses as an opportunity to create domestic
organic food market and redefine the way, business is conducted. It is this business opportunity that gave birth to iKheti, a
venture started by Priyanka Amar Shah in 2011 as a conservatory of her own ideas and way of living. iKheti is a platform for
individuals & communities that help them grow healthy consumable crops within their premises & promote sustainable urban
farming.
Priyanka Amar Shah
Priyanka, an alumnus of Welingkar Institute of Management, completed her MBA degree in Business Design. She did her
Masters in Commerce (M.Com) from Mumbai University. She is an energetic full of life and fun-loving person and liked to be
called an Ecopreneur. She started iKheti with an aim to enhance the experience of urban farmers by being the one stop shop for
customized services and specialized products and promote sustainable urban farming. She has been an animal activist since
childhood and was working part time as an art and craft teacher for a municipal school. iKheti is her 1st venture, which emerged
out of her passion for animals & nature. The co-owner couple, Sharad Shah, a practicing Chartered Accountant and Priyanka
Amar Shah started off with growing “mirchi” & “nimbu” and soon that turned into their full time source of veggies and herbs.
Priyanka says that the food they grew at home tasted much better and felt healthier than the ones they bought from the market.
Idea Generation
The concept of iKheti was born as a project at the Welingkar Institute of Management, Mumbai where the students were given a
platform to present their business ideas to experts from different sectors. “The idea of iKheti was well appreciated by them at the
show. It was there when one of them mentioned about the Business Reality Show, UTV Bloomberg ‘The Pitch’, where it was
selected as one of the 5 best entrepreneurship ideas”, says Priyanka. She also got the opportunity of exhibiting this innovative
workable design solution to Her Excellency, The Ex-President of India Smt. Pratibha Patil. She decided to choose social sector
601 | P a g e
ISSN (P):2279-0934, (O):2279-0942
because of her belief that that today’s youth have the added responsibility of working towards the betterment of the society as a
whole and iKheti is a community enterprise with a social impact. Taking the idea of the project to entrepreneurial level and
making it a commercial activity was suggested by her brother during a family dinner. Priyanka believes that commercial activities
and ventures should leave the planet a better, safer and more beautiful place for the generations to come. This belief led her on to
the path of Ecopreneurship. Her biggest challenge at this point of time was to organize this unorganized market of urban farming.
Most of the people in urban India are unaware about this concept of growing consumables at home and even if they are aware,
they either do not have time or find it a tedious task to grow and maintain the produce. People in urban areas generally fill their
open spaces by buying plants & herbs from small nurseries or local gardeners. Growing edibles from such plants is impossible
because they might contain harmful fertilizers. Therefore, iKheti basically encourages people to grow consumable crops within
their premises by offering customized services and specialized products to enhance the experience of ‘urban farmers’. It is a
professionally organized venture as compared to small nurseries and local gardeners.
Business Model of iKheti
iKheti is a unique concept, where “I” stands for ‘innovation’ with an eye on eco sustainability. It also stands for the ‘intention’ of
keeping societal needs at the core of the business and to bring benefits to the society by reducing carbon footprints and improving
food quality. It is a professionally managed service that applies the principles of design thinking to derive multiple benefits to
meet the diverse range of goals and objectives at individuals, corporate and social levels. iKheti offers best specialized products
in the market to meet the needs of urban farming like seeds, saplings and plants, gardening equipments, pots and containers, soil
and organic manure, garden accessories. It has also innovated wide range of services which helps an individual achieve the
desired experience of urban farming like consultancy services, mail services, waste management services, urban farming
workshops for educational institutions, corporate, societies etc. In addition, it has also ventured with individuals and even
corporate and helping them in ‘green-vamping’ their rooftops & patio gardens. Some of these include restaurants, finance
companies and other business houses.
An individual or a corporate interested in green-vamping their premises contacts iKheti. The iKheti team visits the place and
identifies the spots where the planters could be installed. The plant preferences of the client and the plant suitable as per
environmental factors are installed at the identified place and raw materials are supplied. The cost of the planters varies depending
upon the type of planter demanded by the customer. It ranges from Rs. 200-12000 where 200 being the cost of simple potter and
12000 being the cost of designer potters. These potters are either manufactured in-house or bought from the local vendors
depending upon the requirement. The cost of seeds, saplings, fertilizers, herbs and other plants varies between Rs. 30-1000. After
installation, periodic follow-up and maintenance of the same becomes the responsibility of the iKheti team which is done every
week by visiting the clients’ place. The enterprise has also created an online platform where the iKhtei team can interact and solve
the problems of their clients without physically being present there. At the corporate level, Green-Vamping & patio gardens helps
to de-stress employees as they can be engaged in various team-building activities related to gardening. Moreover, the organic
produce (vegetables, fruits, herbs) can further be used in the canteens. In addition to this, the business also generates revenue
through sale of seeds/saplings, planters & gardening tools, engagement & Installation fee for designing & landscaping,
maintenance services, and conducting workshops on urban farming.
Priyanka started the venture with her meager savings of Rs. 1, 00,000 and gradually caught up with few private investors for the
initial funding. She also worked part-time as an I.T. consultant to support the business. The enterprise further envisages its
infrastructure development by opening up nurseries, offices and expanding its business in Tier II cities. It also plans to expand its
clientele to educational institutions by setting patio gardens on their huge terraces in an attempt to bring the students close to
nature by making them environment friendly and conscious about protecting the environment. The enterprise has already begun
diversifying into corporate landscaping and soon wishes to imbibe edible landscaping too. The duo are promoting their venture
through usual channels like social media platforms like Face book, through exhibitions and workshops, besides relying on word of
mouth to generate business. Soon they are also going to launch their online shopping cart, which will enable them to provide their
products and services across India.
iKheti envisages that good health, innovation and productivity will soon be an inherent part of our lifestyle. So the need of the
hour is to introduce a larger audience to the urban agriculture movement by simplifying the diverse world of gardening and
providing them basic information. This move will act as a stepping-stone for the user to become a participant in the urban
agriculture movement. “The concept of iKheti, the one stop shop for customized services and specialized products to promote
sustainable urban farming was not only unique in itself but the detailed planning, its macro–to-micro level impact on society and
environment were certainly found very impressive”, says Priyanka.
CONCLUSION
Owing to the rapid depletion of natural resources and ecological imbalance, there is a need of having an alternative agriculture
method which can function in an eco-friendly system while sustaining and increasing the productivity & quality of the crop. The
conventional agricultural practices and technological advancements, particularly in terms of the use of chemical fertilizers and
pesticides, are not only harmful for human health but also for other living organisms.
602 | P a g e
ISSN (P):2279-0934, (O):2279-0942
Urban farming or Organic farming, as it is sometimes called, is both a significant component of the national agricultural sector
and an essential ingredient of city space. Therefore, in order to maintain the momentum of the ‘movement’ there is a need to
create an integrative policy that would advocate the role of organic farming in enhancing local ecosystem, reducing the harmful
pace of humankind. The policy should be designed in such a way that it provides support to small farmers by providing access to
information, technology, inputs and building their expertise so that they can make a significant contribution towards the wellbeing of mankind and sustainability of the environment.
REFERENCES
1.
Mallesh, Mariappa Tigali. (2011).
http://metastudio.org/resources/9
Organic
Farming
-
The
need
of
the
hour.
Retrieved
from
2.
Pastakia, A. (2002). Assessing Ecopreneurship in the context of a developing country: The case of India. GMI, pp. 93108.
3.
Retrieved from http://www.ikheti.co.in/
4.
Retrieved from http://www.huffingtonpost.com/joseph-redwoodmartinez/urban-agriculture-in-delhi_b_3231174.html
5.
Retrieved from http://www.ruaf.org/node/513
6.
Retrieved from ftp://ftp.fao.org/docrep/fao/010/a1471e/a1471e00.pdf
7.
Retrieved from http://urpl.wisc.edu/ecoplan/content/lit_urbanag.pdf
8.
Retrieved from
212204521.html
9.
Retrieved from http://environment.nationalgeographic.co.in/environment/photos/urban-farming/
http://www.prnewswire.com/news-releases/india-organic-food-market-forecast--opportunities-2017-
10. Retrieved from http://social.yourstory.in/2013/06/ikheti-bringing-sustainable-farming-in-urban-households/
11. Retrieved
from
http://blogs.welingkar.org/index.php/achievements/student-achievements/priyanka-amar-bringsaccolades-and-cheer-to-weschool-as-the-dreams-of-ikheti-begin-to-turn-into-reality
12. Retrieved from http://www.uniapply.in/articles/item/12557-step-towards-greenery-ikheti
13. Retrieved from http://www.hindustantimes.com/StoryPage/Print/1067178.aspx
14. Retrieved from http://www.aclimateforchange.org/profiles/blogs/ecopreneurship-can-modernize
15. Retrieved from http://i.unu.edu/media/unu.edu/page/24842/icsdnra-2011_fomba_ecopreneur.pdf
16. Retrieved from http://ic.ucsc.edu/~rlipsch/EE80S/Ecopreneur.pdf
17. Retrieved from http://umu.diva-portal.org/smash/get/diva2:280302/FULLTEXT01
18. Retrieved from http://www.greenprof.org/wp-content/uploads/2010/06/A-Framework-for-Ecopreneurship.pdf
*****
FOR PAPER SUBMISSION & CLARIFICATION OR SUGGESTION, EMAIL US @:
[email protected]
[email protected]
Editor-In-Chief
Jammu Tawi – 180002,
Jammu and Kashmir, India.
(Mobile): +91-09419216270 – 71
603 | P a g e

a comparative study of online retail (e

Transcription

Similar documents

Retail Leasing Opportunity

Enterprising Eastern Perthshire Ltd

View Marketing Brochure

Construction of a Nurse network

list

sweet floam - imagearea.co.uk

EUROPEAN AGRICULTURE FUND FOR RURAL DEVELOPMENT

Listing Flyer - Former Crusty`s Pizza

Newsletter

marketing/selling points: release date 11.16.04