A STUDY OF CONSUMER

PERCEPTIONS TOWARDS

ORGANISED RETAIL IN

JALANDHAR
THE INDIAN RETAIL SCENE

The India Retail Industry is the largest among all the industry, accounting for over 10 per
cent of the country’s GDP and around 8 per cent of the employment. The Retail Industry in
India has come forth as one of the most dynamic and fast paced industries with several
players entering the market. But all of them have not yet tasted success because of the heavy
initial investments that are required to break even with other companies and compete with
them. The India Retail Industry is gradually inching its way towards becoming the next boom
industry.
The total concept and idea of shopping has undergone an attention drawing change in terms
of format and consumer buying behavior, ushering in a revolution in shopping in India.
Modern retailing has entered into the Retail market in India as is observed in the form of
bustling shopping centers, multi-storied malls and the huge complexes that offer shopping,
entertainment and food for all under one roof. A large young working population with
medium age of 24 years, nuclear families in urban areas, along with increasing working
women population and emerging opportunities in the services sector are going to be the key
factors in the growth of the organized Retail sector in India. The growth pattern in organized
retailing and in the consumption made by the Indian population will follow a rising graph
helping the newer businessmen to enter the India retail industry
In India the vast middle class and its almost untapped retail industry are the key attractive
forces for global retail giants wanting to enter into newer markets, which in turn will help the
India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually.
Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail
Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is
already a US$ 16.7 billion business , growing at over 20 per cent per year. The future of the
India Retail Industry looks promising with the growing of the market, with the government
policies becoming more favorable and the emerging technologies facilitating operations.
The Indian government have allowed 51% foreign direct investment (FDI) in the India retail
sector to one brand shops only. This has made the entry of global retail giants to organized
retail sector in India difficult. This is a challenge being faced by the Indian organized retail
sector. But the global retail giants like Tesco, Wal-Mart, and Metro AG are entering the
organized retail sector in India indirectly through franchisee agreement and cash and carry
wholesale trading. Many Indian companies are also entering the Indian organized retail sector
like Reliance Industries Limited, Pantaloons, and Bharti Telecoms. But they are facing stiff
competition from these global retail giants. As a result discounting is becoming an accepted
practice.

STRATEGIES TRENDS AND

OPPORTUNITIES
Retailing in India is gradually inching its way toward becoming the next boom industry. The
whole concept of shopping has altered in terms of format and consumer buying behavior,
ushering in a revolution in shopping in India. Modern retail has entered India as seen in
sprawling shopping centers, multi-storied malls and huge complexes offer shopping,
entertainment and food all under one roof. The Indian retailing sector is at an inflexion point
where the growth of organized retailing and growth in the consumption by the Indian
population is going to take a higher growth trajectory. The Indian population is witnessing a
significant change in its demographics. A large young working population with median age
of 24 years, nuclear families in urban areas, along with increasing workingwomen
population and emerging opportunities in the services sector are going to be the key growth
drivers of the organized retail sector in India.
GROWTH OF RETAIL SECTOR
IN INDIA
Retail and real estate are the two booming sectors of India in the present times. And if
industry experts are to be believed, the prospects of both the sectors are mutually dependent
on each other. Retail, one of India’s largest industries, has presently emerged as one of the
most dynamic and fast paced industries of our times with several players entering the
market. Accounting for over 10 per cent of the country’s GDP and around eight per cent of
the employment retailing in India is gradually inching its way toward becoming the next
boom industry.

RETAILING FORMAT IN INDIA

Malls:
The largest form of organized retailing today. Located mainly in metro cities, in proximity to
urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and entertainment, all under a
common roof. Examples include Shoppers Stop, Pyramid, and Pantaloon.
Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword,
RPG's Music World and the Times Group's music chain Planet M, are focusing on specific
market segments and have established themselves strongly in their sectors.

Discount stores:-
As the name suggests, discount stores or factory outlets, offer discounts on the MRP through
selling in bulk reaching economies of scale or excess stock left over at the season. The
product category can range from a variety of perishable/ non-perishable goods.

Department stores:-

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs.
Further classified into localized departments such as clothing, toys, home, groceries, etc.
Departmental Stores are expected to take over the apparel business from exclusive brand
showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in
Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India.

Hyper superstores:-

Large self-service outlets, catering to varied shopper needs are termed as Supermarkets.
These are located in or near residential high streets. These stores today contribute to 30% of
all food & grocery organized retail sales. Super Markets can further be classified in to mini
supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of
3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

ConvenienceStores:

These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock
a limited range of high-turnover convenience products and are usually open for extended
periods during the day, seven days a week. Prices are slightly higher due to the convenience
premium

MBO’s :
Multi Brand outlets, also known as Category Killers, offer several brands across a single
product category. These usually do well in busy market places and Metros.

RECENT TRENDS

• Retailing in India is witnessing a huge revamping exercise as can be seen in the graph
• India is rated the fifth most attractive emerging retail market: a potential goldmine.
• Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade)
makes up 3 percent or US$ 6.4 billion
• As per a report by KPMG the annual growth of department stores is estimated at 24%
• Ranked second in a Global Retail Development Index of 30 developing countries
drawn up by AT Kearney.

• Multiple drivers leading to a consumption boom:

 o Favourable demographics
o Growth in income
o Increasing population of women
o Raising aspirations: Value added goods sales
• Food and apparel retailing key drivers of growth
• Organized retailing in India has been largely an urban
• Phenomenon with affluent classes and growing number of double-income households.
• More successful in cities in the south and west of India. Reasons range from
differences in consumer buying behaviour to cost of real estate and taxation laws.
• Rural markets emerging as a huge opportunity for retailers reflected in the share of the
rural market across most categories of consumption
o ITC is experimenting with retailing through its e-Choupal and Choupal Sagar
rural hypermarkets.
o HLL is using its Project Shakti initiative leveraging women self-help groups to
explore the rural market.
o Mahamaza is leveraging technology and network marketing concepts to act as
an aggregator and serve the rural markets.
• IT is a tool that has been used by retailers ranging from Amazon.com to eBay to
radically change buying behaviour across the globe.
RETAIL SALES IN INDIA

CHALLENGES & OPPORTUNITIES

Retailing has seen such a transformation over the past decade that its very definition has
undergone a sea change. No longer can a manufacturer rely on sales to take place by ensuring
mere availability of his product. Today, retailing is about so much more than mere
merchandising. It’s about casting customers in a story, reflecting their desires and aspirations,
and forging long-lasting relationships. As the Indian consumer evolves they expect more and
more at each and every time when they steps into a store. Retail today has changed from
selling a product or a service to selling a hope, an aspiration and above all an experience that
a consumer would like to repeat.
For manufacturers and service providers the emerging opportunities in urban markets seem to
lie in capturing and delivering better value to the customers through retail. For instance, in
Chennai CavinKare’s LimeLite, Maricoï’s Kaya Skin Clinic and Apollo Hospitals Apollo
Pharmacies are examples, to name a few, where manufacturers/service providers combine
their own manufactured products and services with those of others to generate value hitherto
unknown. The last mile connect seems to be increasingly lively and experiential. Also,
manufacturers and service providers face an exploding rural market yet only marginally
tapped due to difficulties in rural retailing. Only innovative concepts and models may survive
the test of time and investments.
However, manufacturers and service providers will also increasingly face a host of specialist
retailers, who are characterized by use of modern management techniques, backed with
seemingly unlimited financial resources. Organized retail appears inevitable.

Retailing in India is currently estimated to be a US$ 200 billion industry, of which organized
retailing makes up a paltry 3 percent or US$ 6.4 billion. By 2010, organized retail is
projected to reach US$ 23 billion. For retail industry in India, things have never looked better
and brighter. Challenges to the manufacturers and service providers would abound when
market power shifts to organized retail.

Objectives of the Study

Primary Objective
• To study the perception of people towards various aspects of organised retail.

Secondary objective
1. To identify the factors which will motivate the Indian consumer to shift
towards organized retail from unorganized retail sector in textile sector.
2. To study effect of CRM towards customer satisfaction of organized retail.

Sampling
• Sample Size – 200 customers/consumers
• Sample Unit – Consumers in the age group 18 to 50 years
• Sampling Technique – convenient sampling will be used for the purpose of
project.
Tools of Data Collection
Primary Data
1) Questionnaires,
2) Surveys,
3) Approaching the outlets directly.
Secondary Data
1) Books
2) Magazines
3) Newspapers
4) Blogs

Scope of the study

1. It will extend to the actual field study of these outlets in Jalandhar.
2. It will give information of prospective customers.
3. Help us gain independent knowledge about the consumer perception towards
organised retail.
4. The study can help the companies get additional research information.
5. The study will give the overall picture of whole organized retail of India.
6. The study is confined and it includes only four major states of Punjab i.e. Jalandhar
Amritsar Phagwara and Ludhiana.
7. Also helpful in further research.
8. New retails are opening in various cities of Punjab.
9. It will extend to the actual field study of these outlets in Jalandhar.
 Need of the study
• Retail sector is growing in India.
• Economy is growing at an increasing rate
• People disposable income is growing (Punjab).
• New retails are opening in Punjab.
• Competition is getting intense day by day.

Review of literature
Sherrie La Vere (1977) This paper attempts to reveal the successful practices of three
unique retail operations. Shows that the companies reviewed have a history of success but
are also known for finding new ways to evaluate and value innovation. All three
organizations are different in their configurations of environment, historical evolution, and
merit structure, yet in their uniqueness they have similarities of visionary leadership,
management that interfaces with leaders and workers on the front lines, empowerment to
these workers, and practices of continually institutionalizing new approaches. In these cases,
the originators of the businesses impart a continuity and cohesiveness that cannot be
underemphasized. These are not stagnant workplaces. These enterprises are in a constant
state of renewal; rapid changes in the world are embraced and addressed rather than resisted.
Brenda Sternquist (1988) The Korean government has played an important role in the
development of the domestic retailing industry. Korean manufacturers were nurtured until
they were able to compete with manufacturers throughout the world. Korean retailers are
now caught in the domestic market between the powerful Korean manufacturers and foreign
retail competitors who have themselves learned to be competitive by going head to head
with world-class retailers. Manufacturers, rather than retailers, have dominated the Korean
distribution industry. Korean retailing is characterized by large department stores owned by
the chaebols, and small, inefficient family-centered operations. In contrast to the department
store’s decline in sales, the growth of discount stores is the strongest trend in Korean
retailing. The government has chosen the manufacturing sector for aggressive development.
The result has been a world competitive, export intensive manufacturing sector and a weak,
inefficient retail sector. We use state as strategist in retailing (SSR) model to explain how
dimensions and stages of government involvement affect retailing. Alison Balchin (1994)
In this a small research study undertaken in the retail industry, providing a very timely
consideration of the choices and circumstances of those who work on a part-time basis.
Considers the reasons given by workers for choosing part-time work, the costs involved and
the extent to which part-time workers are aware of these when making their decision. The
research considers the role of trade unions in enhancing awareness of legal entitlements in
view of the recent House of Lords ruling. Erica J. Betts (1996) In spite of the ubiquity of
seasonal and other retail “sales”, they have been curiously neglected within the marketing
literature. This is most surprising, given their impact on profit-margins, brand/store images,
supplier-retailer relationships and consumer behaviour. Since 1980, the effects of
comparison price advertising on consumer behaviour have received growing attention from
researchers, although much of this literature has been at the individual product level and
confined to groceries. Builds on this research in the specific context of store wide “sales”,
where the impact of reductions extends far beyond the sum of individual price changes.
Based on focus groups and preliminary surveys of “sale” shoppers, develops and tests a
typology of motivations. Presents a taxonomy of responses to “sales”, illustrating alternative
behavioral responses. Concludes with a model of the “attitude problem” brought about by
recession, overcapacity, overuse of the strategy and growing scepticism on the part of
consumers. Hayley Myers (1996) This considers the direction of the international
expansion of European food retailers, and suggests that international retail studies have been
criticized for a lack of empirical research. Discusses the results of a survey which sought the
views of the main board directors of all major food retail companies based in six European
Union countries: France, Germany, Italy, The Netherlands, Spain and the UK. Observation
of previous international activity reported in the literature suggests that the direction of
international retail expansion is primarily determined by three factors of geography, culture
and economic development. Considers the observable trends in the light of the empirical
results presented. Presents these findings within a conceptual framework which suggests
that, over time, retailers move from a reluctant, through cautious, to an ambitious stage in
their international development. Analyses and discusses respondents’ propensity to
internationalization and proposes a conceptual development. Neil Wrigley (1997) This
research Provides a preface to the two-part paper on “British food retail capital in the USA”
reprinted from International Journal of Retail & Distribution Management. Updates that two-
part paper with an account of Sainsbury’s experience with its US food retail businesses in
1997, and reflects on the firm’s. Ralf Schellhase (2000) This study provides an orientation
system for measuring customer satisfaction is developed. Reveals dimensions of satisfaction
experienced by retailers, taking account of the relevant literature, empirical studies on the
satisfaction of retail organizations with their suppliers and the results of discussions with
experts. These are verified according to empirical criteria and quantified in respect of their
contribution to delivering satisfaction to retailers. Approaches on which to base activities
can be identified from the findings, allowing suppliers of branded articles to give their
customers greater customer satisfaction. Stéphane J.G. Girod(2002) The study supports the
Burt and Spark's model and makes explicit the practice of human resource for branding. The
study demonstrates that it was the alignment between the vision of Oxfam's top management
and its new customer-oriented culture, two elements of its core substance mediated to
customers by store employees, which has enabled an improved customers' perception of the
brand. The study also seeks to elaborate upon the Burt and Spark's model by specifying an
ascending feedback loop starting from customers' perception of Oxfam brand and enabling
the creation of a suitable culture and vision again mediated by store employees. Astrid
Jonas (2005) This paper inquires into the tendency of German food retailers to market
organic products as private-label (PL) products. Interviewed processors of the 62.7 per cent
produce organic PL. Retailers sell organic PLs, because they care about “food safety”, “retail
as a brand” and “health”, hoping to reach new customers. Requests for entry fees, investment
grants and equipment allowances are less important for processors of organic PLs than for
those not producing PLs. However, PL producers have to meet other conditions imposed by
retailers and feel slight more dependent on few customers. Stephan Zielke (2007) The
purpose of this paper is to identify factors influencing customers' willingness to purchase
new store brands. The paper finds that customers' willingness to buy new store brands
differs between different product groups. It is lowest for product groups associated with high
social risk. Accordingly, premium store brands are preferred for these categories. The
influence of price is small and nonlinear. Furthermore, the attitude towards a specific store
brand has a large impact on customers' willingness to purchase, while the attitude toward
store brands in general is less important. The drivers influencing customers' attitude towards
specific store brands depend on the respective product group. Simone Guercini (2007) The
aim of this paper is to analyze the role of market knowledge embodied in sales outlet
management and in particular to investigate in a static way the role of cognitive sources in
relation, to the structural characters of the retail enterprise and its sales outlet on the one
hand (the latter understood as a commercial product), and to performance (expressed as
revenue achieved by the sales outlet) on the other hand. The analysis demonstrates the
presence of an association between cognitive sources and sales outlet performance values in
the sample analyzed. In particular a relation was observed between performance and event
organizing and relative level of perception, and also between performance and importance
attributed to the satisfaction questionnaire. This phenomenon can be interpreted as a
tendency towards qualitative growth of the sales outlet, associated with awareness of the
need to resort to alternative and complementary cognitive sources in order to become more
competitive. Anirban Sengupta (2008) The study says that Emergence of modern retail in
India is not just a result of increasing consumer buying power – manufacturers and
unorganized retailers also have an important role to play in this process at the macro-level.
At the micro-level, the trigger came from diverse angles like entrepreneurial desire to
provide better service to consumers, social desire to provide relief to the masses in the form
of lower prices, desire to capitalize on emerging business opportunities being provided by
the changing business environment, etc Leela Rani (2008) Results showed that six of the
independent variables considered, namely, shopping attitude of respondent, store loyalty
(SL), perceived store prices, store distance, shopping frequency, and brand loyalty (in order
of importance of impact) significantly influenced consumers' attitude towards retail store in
out-of-stock. Youngsun Park (2008) The main aim of this paper is to provide research
propositions that explain global retailers' international expansion. Global retailers are
considered to be conceptualized-standardized retail formats. Seven propositions are provided
for further examination. These propositions are related to unique retail concept, private
brands, unique capability, internalization advantages, pioneering advantages, resource
availability, governance resources, and growth experience. Malaika Brengman (2009) The
purpose of this paper is to identify the main determinants of fashion store personality, as
perceived by the shopper. It aims to discover factors that are responsible for specific store
personality trait perceptions in order to understand how these humanlike personality traits
are induced in a retailing context. The findings reveal that the store environment and store
design particularly is an important factor in determining the personality of fashion stores.
Also, other factors such as corporate social responsibility, reputation, service level, the
salespeople, the merchandise sold, price/quality perceptions and the consumer base
determine perceptions of “genuineness”, “solidity”, “sophistication”, “enthusiasm” and
“unpleasantness”. Miguel Hernández-Espallardo (2009) The purpose of this paper is to
explore the circumstances under which the retailers' use of the buying group's brand name
may benefit them. The data show that the retailer's use of the buying group's brand name is
more capable of improving the retailer's economic satisfaction with the buying group when
differentiation is perceived to be a source of competitive advantage, when environment is
perceived as more dynamic and when the retailer is strategically integrated in the
relationship with the buying group. Cecilia Maria Castelli (2010) The purpose of this paper
is to assess the use of alignment practices between manufacturers and retailers; it focuses on
the Italian fashion industry. The paper gives an overview of the extent to which fashion
retailers in Italy pursue channel alignment; it suggests a relationship between the degree of
alignment and two relevant drivers (channel type and lifecycle phase).