A SYNOPSIS ON

CONSUMER BUYING BEHAVIOR IN ORGANIZED RETAIL SECTOR EXPLORATORY STUDY OF BIG BAZAAR AT INDORE

FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT OF DEGREE OF

MASTER OF BUSINESS ADMINSITRATION SESSION 2009-2011

SUBMITTED TO DAVI AHILYA VISHWAVIDYALAYA, INDORE (M.P) GUIDED BY: SUBMITTED BY:
STUDENT NAME

Sumer singh mouyra

ROLL NO.9165008 SPECIALIZATION HR & Marketing

DEPARTMENT OF MANAGEMENT STUDIES

Madhuban institue of professional studies, INDORE

FORMAT OF SYNOPSIS

1.

INTRODUCTION

2. REVIEW OF LITERATURE AND RATIONALE

3. 1. 2. 3. 4.

RESEARCH METHODOLOGY Objectives Hypothesis Sample plan Tools of data collection

5. ANALYSIS AND INTERPRETATION OF DATA

6.

BIBLIOGRAPHY

Introduction
Over the last few years, retail has become one of the fastest growing sectors in the Indian economy. Though the country has highest retail outlet density in the world, Indian retail sector is highly fragmented and organized retail in the country is at very nascent stage. The organized retail industry in India is expected to grow 25-30 % annually. Retailing is gradually inching its way towards becoming the next boom industry. Consumers are the major beneficiaries of the retail boom. The Indian consumer is changing rapidly. They now have a choice of wide range of products, quality and prices. Organized retailing is changing the whole concept of shopping in terms of consumer buying behavior. In such a scenario, consumer decision making is of great interest for consumer educators and marketers interested in serving the consumer (Canabal, 2002). Therefore, there is clearly a need for research on this issue in India. In this study, an attempt was made to study the consumer decision making styles in shopping malls of India. Organized retail stores are characterized by large professionally managed formats stores. They provide goods and services that appeal to customers, in an exellent ambience. This is created based on consumer preference analysis and offer good value. Retailers and marketers often seek to learn how and why people shop. The consumer decision making process is a complex phenomenon. The purchase of goods or services includes a number of factors that could affect each decision. Decision making is more complex and even more important for consumers today than in the past. Consumers are besieged by advertising, news articles, and direct mailings that provide an abundance of information, much of it with mixed messages. In addition, increases in the number and variety of goods, stores, and

shopping malls, and the availability of multi component products and electronic purchasing capabilities have broadened the sphere for consumer choice and have complicated decision making (Hafstrom et al., 1992).

The key cause for inefficiency is the poor integration between the retailer and supplier. None of the retailers, in view of ASSOCHAM has so far an automated system for information exchange with their suppliers. In developed countries, retailers practice Vendor Management Inventory (VMI) systems, where the supplier has access to the point of sales data of the retailer and plans automatic replenishments responding to the stocks available at the retailer. 8

Key Points of Indian Organised Retail Industry

1. Potential to be the third largest economy in terms of GDP in next few years . 2. It ranks high amongst the top 10 FDI destinations of the world . 3. Fastest growing tourist market in Asia. 4. World bank states, India to be worlds second largest economy after China by the year 2050. 5. Stable and investor friendly Central Government at the helm of affairs.

Formats in Indian Organized Retail Sector

Supermarkets:
A supermarket, also called a grocery store is a self- service store offering a wide variety of food and household merchandise, organized into departments. It is larger in size and has a wider selection than a traditional grocery store and it is smaller than a hypermarket or superstore.

Hypermarkets:
A hypermarket is a superstore which combines a supermarket and a department store. The result is a very large retail facility which carries an enormous range of products under one roof, including full lines of groceries and general merchandise. In theory, hypermarkets allow customers to satisfy all their routine weekly shopping needs in one trip.

Department Stores:

A department store is a retail establishment which specializes in satisfying a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice multiple merchandise lines, at variable price points, in all product categories. Department stores usually sell products including apparel, furniture, appliances, electronics, and additionally select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewelery, toys, and sporting goods. Certain department stores are further classified as discount department stores. Discount department stores commonly have central customer checkout areas, generally in the front area of the store. Department stores are usually part of a retail chain of many stores situated around a country or several countries.

Shopping malls:
A shopping mall or shopping centre is a building or set of buildings which contain retail units, with interconnecting walkways enabling visitors to easily walk from unit to unit.

Specialty Chains:
A Specialty Chains is numbers stores which are specialized in a specific range of merchandise and related items. Most stores have an extensive width and depth of stock in the item that they specify in and provide high levels of service and expertise. They differ from department stores and supermarkets which carry a wide range of merchandise.

Retail Landscape
Modern retail development in India is focused on the following cities: West North South Chennai Banglore Delhi and the National Capital Region Mumbai Pune Ahmedabad

Hyderabad East Kolkata

Leading

Indian

Retailers

Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Food Bazaar, Globus Stores Pvt. Ltd., Liberty shoes Ltd., Music World Entertainment Ltd., Pantaloon Retail India Ltd., Shoppers Stop, Subhiksha, Titan Industries, Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd, Wal-Mart Stores, Carrefour, Tesco, Boots Group, etc.

Current Scenario
A glimpse of the International Retail One of the world's largest industries exceeding US$ 9 trillion 47 global fortune companies & 25 of Asia's top 200 companies are retailers Dominated by developed countries US, EU & Japan constitute 80% of world retail sales. Biggest player in India is Pantaloon Retail India Limited.

Percentage of Organized Retail

USA - 85% Taiwan - 81% Malaysia - 55% Thailand - 40% Brazil - 36% Indonesia - 30% Poland - 20% China - 20% India - 3%

Key Trends

The existing players like Big Bazaar, Shoppers' Stop, Piramyd are expanding to smaller towns and cities. Many other business houses are planning to enter the retail sector either on their own or through partnerships. New entrants like Reliance Retail Ltd and Wal-Mart are going to enter the market soon. Even rural areas will provide a huge opportunity to be explored.

Estimates and Predictions

The industry is estimated to be more than US$ 400 billion by a study of McKinsey. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608.9 billion in 2009 from US$394 billion in2005. A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. The retail sector would generate employment for more than 2.5 million people by the year 2010, says an analysis by Ma Foi Management Consultants Ltd.

Benefits of FDI in Retail Sector

Higher competition would lead to higher quality in products and services. Better lifestyle as better products would be introduced. Exports would increase due to greater sourcing of major players. Investment in whole supply chain would increase. Technology would be upgraded in terms of logistics, production, and distribution channels. The markets of the sector would flourish and develop.

RBI (2006), Press Release 2006-2007/300 According to it Indian economy has shown an impressive growth of over 6 per cent for last five years and continues to surge ahead. GDP growth rate in 2003-04 recorded a fifteen year high of 8.5% and subsequently maintained a steady growth for the next two years. Real GDP growth accelerated from 7.5% during 2004-05 to 8.4% during 2005-06 on the back of buoyant manufacturing and services activity supported by a recovery in the agricultural sector. The central bank forcasts similar growth of 7.5 -8 % during 2006-07. With strong economic growth consumerism is increasing in thee country and India is the fourth largest economy as far as purchasing power parity is concerned, just behind USA, japan and china. Sproles and Kendall (1986) define a consumer decision making (CDM) style as a mental orientation characterizing a consumer's approach to making

choices. Broadly speaking, there are 3 types of approaches in studying consumer decision-making styles Psychographic/lifestyle approach, which identifies hundreds of characteristics related to consumer behavior. Consumer typology approach, which classifies consumers into several types. Consumer characteristics approach, which focuses on different cognitive dimensions of consumer decision making (cf. Fan et al., 1998). In the extant consumer behavior literature, most studies assume that all consumers approach shopping with certain decision-making traits that combine to form a consumer's decision-making styles. Academicians and researchers have long been interested in identifying these underlying decision styles of shoppers. For example, consumers are identified as - economic shoppers, personalizing shoppers, ethical shoppers, apathetic shoppers, store loyal shoppers, recreational shoppers, convenience shoppers, price-oriented shoppers, brand loyal shoppers, name-conscious shoppers, problemsolving shoppers, quality shoppers, fashion shoppers, brand conscious shoppers and impulse shoppers. (Bellenger and Korgaonkar 1980; Darden and Reynolds 1971; Stone 1954, Williams, Painter, and Nicholas 1978, Moschis 1976;Stephenson and Willett 1969, Gehrt and Carter 1992, Jacoby and Chestnut 1978, Lumpkin 1985). (cf. Hiu, A.Y. et al., 2001). Using the consumer characteristics approach, Sproles (1985) developed a 50item instrument to profile the decision making styles of consumers. Using data collected from 111 undergraduate women in two classes at the University of Arizona and employing a factor analysis technique, Sproles (1985) found six consumer decision-making style traits He named and described these traits: (1) Perfectionism (2) Value Conscious (3) Brand Consciousness, (4) Novelty-Fad-Fashion Consciousness (5) Shopping Avoider-Time Saver- Satisficer (6) Confused, Support-Seeking Decision-Maker. perfectionism, brand consciousness, novelty-fashion consciousness, recreational, price-value consciousness, impulsiveness, confused by over choice, and brand-loyal/habitual. (cf. Mitchell, VincentWayne, 2001). These styles are discussed in table given below Table 1: Characteristics of Eight Consumer Decision-Making Styles 1. Perfectionist/high quality-conscious consumer: decision style of consumers who systematically search for the best quality products possible. Consumers have high standards and expectations for consumer goods, and are concerned with the function and quality of products;

2. Brand consciousness: decision style of consumers concerned with getting the most expensive, well-known brands. They feel that price is an indicator of quality. 3. Novelty and fashion conscious: decision style of consumers who like new and innovative products and who gain excitement from seeking out new things. They are conscious of the new fashions and fads 4. Recreational and shopping conscious: decision style of consumers who take pleasure in shopping and who shop just for the fun of it. 5. Price conscious: decision style of consumers who are concerned with getting lower prices. They are likely to be comparison shoppers.

REVIEW OF LITERATURE AND RATIONALE

According to Sproles & Kendall (1986) identification of these characteristics among consumers "helps to profile an individual consumer style, educate consumers about their specific decision making characteristics, and counsel families on financial management". Consumer Style Inventory (CSI) developed by Sproles & Kendall (1986) was used by many researchers to study the consumer decision making styles. Some of the research are briefly described below Hafstrom et al. (1992) used the CSI to identify the decision-making styles of Korean students. They confirmed seven of the eight factors using Sproles & Kendalls analytical methods and conceptual framework. The only factor that was not confirmed was novelty fashion consciousnesses. They attributed this to possible links between brand consciousness and fashion consciousnesses among young Korean consumers. Hiu et al. (2001) administered the CSI to 387 adult consumers in China. Their findings indicate that five decision-making styles are valid and reliable in Chinese culture. These styles were perfectionist, novelty-fashion conscious, recreational, price conscious, and confused by over choice. Fan and Xiao (1998) used a modified CSI with Chinese students. They clearly identified five dimensions of consumer decision making styles: brand consciousness; time consciousness; price consciousness; quality consciousness; and information utilization. Walsh et al. (2001) confirmed seven factors of consumer decision-making styles for German consumers. These factors were - brand consciousness,

perfectionism, Recreational / hedonism, confused by over choice, impulsiveness, novelty-fashion consciousness, variety seeking. Durvasula et al. (1993) administered the CSI on 210 undergraduate business students at a large university in New Zealand. They found eight consumer decision making styles. These styles are - perfectionist, brand conscious, novelty-fashion conscious, recreational shopping conscious, price-value conscious, impulsive, confused by over-choice, and habitual/ brand loyal. Canabal, M.E. (2002) investigated the decision making styles of South Indian Consumers utilizing Customer Style Inventory. Using data collected from 173 college students from two institutions of higher education in the city of Coimbatore, South India, Canabal (2002) identified five decision making styles of South Indian. These styles are (1) Brand Conscious Style (2) High Quality Conscious / Perfectionist Style (3) Confused by Overchoice Style (4) Impulsive / Brand Indifferent Style (5) Recreational Shopper Style.

RATIONALE
To understand the customer satisfaction in Big Bazaar. To know customers mindset about Big Bazaar. To understand the difference between Big Bazaar and other organized retail stores. To know why consumers prefer Big Bazaar. To know the price difference and discounts for the same product in Big Bazaar and other retail stores. To know about different facilities provided in Big Bazaar. To know the organization culture in big Bazaar. To know the view of youngsters and adults towards Big Bazaar.

Research Methodology
Objectives

To study the consumer buying behavior in BIG BAZAR located in INDORE. To suggest appropriate strategies to consumer perception on organized retail store BIG BAZAR. To investigate the consumer decision making styles in shopping malls. To study variations in the consumer decision making styles across different demographic variables.

Hypothesis Formulation Null Hypothesis There is no significance difference between buying behavior and age. There is no significance difference between buying behavior and income.

Research Design
The study would be EXPLORATORY in nature and would carried out to identify the factors which formed the basis of Consumer Behavior in organized retail sector and on the basis of these factors a comparative analysis of different category of consumers was done.

Sample Design
Random Sampling

Tools For Data Collection

Primary Data Self Designed Questionnaire using 5 point Likert scale wherein respondents would be asked to indicate the degree of agreement or disagreement to particular statement ranging from strongly disagree to strongly agree. Secondary Data Detailed review of literature from secondary sources would provide the base for identifying the domain, selection, designing and inclusion of various measuring variables in the questionnaire for the study.

Sample Size
200

Expected Outcomes 12345Availability of all types of product Approachability Convenience Discounting One Stop Shopping

Tools For Data Analysis

Certain statistical tools like T Test, chi square test, Arithmetic Mean, Standard Deviation, etc. would be used for the purpose of data analysis.

References and Bibliography

Berman berry, evansjoel R (2007) an introduction to retailing Retail Management, pearson education (Singapore) private ltd, pp.3, eighth edition. Retail marketing in india Key Issues and challenges (2008), Marketing Mastermind, Feb 2008, pp.19 Emerging trends in retail sector, (2007) 2007 pp.30, Volume 4 no.2 Journal of IMS Group, July-Dec

Kothari, C.R, (2007). Reseach Methodology, New Age International Publishers.