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A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS

SUBMITTED IN THE PARTIAL FULFILLMENT OF MASTERS IN BUSINESS ADMINISTRATION. (PTU 2009-2011)

Under Supervision Of Mr Pranjal GJIMT

Submitted By: Ankur Gulbadhar MBA 4th Semester

ACKNOWLEDGEMENT

It gives me immense pleasure, to express my unfeigned and sincere thanks and gratitude to my supervisor Mr.Pranjal for his valuable guidance sustained, encouragement and constructive critic at every stage of work, without which it would have never been accomplished.

I acknowledge with thanks the cooperation and help received from the management of retail outlets. I thank them for providing me with the opportunity to converse with the customers of their outlets and gather relevant data and other information. I acknowledge with thanks the unsolicited cooperation and help provided by the department, library and administrative staff of Gian Jyoti Institue of management and technology Mohali I owe special thanks for the help and support received from the faculty of department and colleagues.

Ankur Gulbadhar

CERTIFICATE OF COMPLETION

This is to certify that the Final Project report entitled A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS Submitted to Punjab technical university in the partial fulfillment of the requirement for degree of MBA, is a work carried out by Ankur Gulbadhar Under my supervision and guidance.

Project Guide: Mr.Pranjal

DECLARATIONI hereby declare that the Major Project Report, which is entitled A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS is Compiled and submitted by me is my original frame work. I have not copied the data from any previous report. However, my Project Guide Mr. Pranjal helped me at various points while preparing this report.

Ankur Gulbadhar

LIST OF TABLES4.1 4.2 4.3 4.4 T-Test Group Statistics Independent sample tests Reason to go to retail store Reason to go kiryana store 56-60 61 62 63

LIST OF GRAPHSGraph No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 Graph Name Gender Age Occupation Income Age and Store Type Gender and Store Type Occupation and Store Type Income and store type Awareness level Visited once Visit in last two times Page No. 48 48 49 49 50 50 51 51 52 53 54

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Executive SummaryThis study titled Study on consumer behavior and satisfaction: a comparison of retail stores and kiryana shops was carried out to have an understanding of the consumer perception pertaining to the Retail Stores (Organized Retail) vis--vis Kiryana Stores (Unorganized Retail) and to analyze the important determinants of store choice. Further it was seen from the results and final findings that different variables that influence the choice of stores. Among the governing factors, General Store Attributes Dimension, Appearance Related Dimension, Salesperson Service Dimension, Physical Aspects, Reliability, Personal Interaction, Problem Solving, Policy, Location, Convenience of Shopping, Sales Personnel Service are statistically significant.

During project I covered mohali city and find out the major competitors of Spencer like Reliance fresh, 6-Ten, and other unorganized stores like kiryana stores like Amrit Confectioners, Sital departmental store, H.S. departmental store, gill store, P.D.store and then try to find out the reason why people go over there and I basically took 10 factors on which they rank the reason to retail store and kiryana store differently and then try to find the satifaction level of the customer towards product range, cleanliness, prices, discount provided by the retail and kiryana stores . I came with major finding that young generation people prefer more to retail stores rather than old people and in this fast growing competition we do not have enough time to go to store buy themselves and so people prefer home delivery more which is provided by kiryana stores

TABLE OF CONTENTS

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ACKNOWLEDGEMENT List of Tables List of Graphs Executive Summary

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CHAPTER 1: INTRODUCTION.. 1.1 INTRODUCTION-INDIAN PERSPECTIVE .9 1.1.1 Retail in India: Room for Everyone.. 16 1.1.2 Retail Formats..19 1.1.3 Retail Market Trends 26 1.1.4 Potential Roadblocks to the Retail Growth Story. 28 1.1.5 Urban Vs Rural Retail Trends..29 1.1.6 SWOT Analysis32 1.1.7Conclusion34 CHAPTER 2: 2.1 LITERATURE REVIEW35 2.2 PURPOSE OF THE STUDY39 CHAPTER 3: RESEARCH METHODOLOGY41 3.1 RESEARCH OBJECTIVES..42 3.2 PROBLEM DEFINITION..43 3.3 RESEARCH DESIGN43 3.4 METHOD OF DATA COLLECTION45 3.5 SAMPLING45 3.6 STATISTICAL TECHNIQUES USED46 3.7 LIMITATIONS OF THE STUDY46

CHAPTER 4: DATA INTERPRETATION AND ANALYSIS48

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4.1 RESPONDENTS PROFILE49 4.2 Z- TEST56 CHAPTER 5: FINDINGS AND SUGGESTIONS 64 5.1 FINDINGS 65 5.2 SUGGESTIONS67 5.3 DIRECTIONS FOR FUTURE RESEARCH..68 References69 Annexures Annexure A: Questionnaire71

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CHAPTER 1 INTRODUCTION

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1.1

INTRODUCTION-INDIAN PERSPECTIVE After leading the IT bandwagon, India is poised to grow as a retail hub. It is

imperative to sustain the modernization of the retail sector and dispel the myth that the game is big vs. small or traditional vs. modern or organized vs. unorganized or local vs. foreign. What is needed is to create an appropriate environment to propel retail., That aptly sums up the importance the retail sector has assumed in Indias economic scenario today. Retail is seen as the next booming industry after IT. The Indian retail market is the fifth largest retail destination globally. It was ranked second after Vietnam as the most attractive emerging market for investment in the retail sector by AT Kearney's seventh annual Global Retail Development Index (GRDI), in 2008. A report by global consultancy firm, AT Kearney said "The consumer spending in India has increased by an impressive 75 per cent in the last four years and will quadruple in the next 20 years." Moreover, India recently topped the Nielsen Global Consumer Confidence study, conducted by Nielsen, a market research company. Retailing in India can be classified under two broad headings: Organized and unorganized currently, the size of Indian retail sector is US$ 328 billion with unorganized retail accounting for a lions share of the market. Organized retailing contributes to roughly around 4% of the whole market. The top ten cities account for 96% of total organized retail, of which the top six cater to 82%. The rise in the disposable income of the Indian consumer is driving the revolution of the Indian retail industry. Indian retailing industry has seen phenomenal growth in the last five years. Organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly in the growth of Indian retail sector.

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The growth in Indian retailing is likely to rest on key determinants such as (i) Government policy, (ii) Infrastructure development, (iii) GDP growth, (iv) Employment scenario and (v) Changes in the retailing supply chain. The share of organized retail is expected to rise significantly because more than $30 billion of investment is being planned by both domestic and foreign players in retail space in the coming five to seven years. As per estimates, 92% of these investments are slated for urban areas whereas 8% for rural. Of the urban investments, majority share of investments is slated for the hypermarket (38%) and supermarket (21%) formats while 62% of urban investments are expected to go to A-type or above cities. A break-up of expected urban investments in different formats and cities is given below in Table 1:

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Table 1: Format-wise urban investments in retail expected in next 5 years Format Hypermarket Supermarket Specialty Store Cash n Carry Department Stores %Share 38 28 22 16 2 Source: FICCI Retail Report 2007

Source: FICCI Retail Report 2007 With roughly 60 percent of the total population below 30 years of age, favorable demographics are expected to drive consumption across categories. The purchasing power of a young consuming middle class has been talked of considerably since the time of economic liberalization in 1991. Also, the growth in the income amongst the Indian households has been on an increase witnessing a significant growth of 3.7% for the middle income households during 2002-06. Also depicted in Figure1 is the increasing number of working women population across the major cities of the country. This trends points toward increasing number of dual income households which further leads to increased purchasing power of the consumers

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Figure 1

Figure 2

Source: NSSO; AC Nielsen; IRS-2002; KPMG Analysis

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With various factors impacting growth in retail, some segments are bound to grow faster than others. For instance, increasing affluence is driving growth in the watches and jewelry segment, while awareness of health is driving growth in lifestyle pharmaceuticals. However, food and grocery is expected to see the highest growth with clothing emerging as the second fastest growing segment. Despite Food and Grocery being the fastest growing retail segment in India today, only 8% of it is in the organized retail segment, which offers a huge opportunity for malls to exploit. Presently, this segment is being catered to by the unorganized players, notably the kiryana stores.

Figure 3

Source: FICCI KPMG Retail Survey, 2005

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According to the recent report by McKinsey & Company titled 'The Great Indian Bazaar, Organized Retail Comes of Age in India', India's overall retail sector is likely to grow to US$ 450 billion by 2015. Another McKinsey report 'The rise of Indian Consumer Market', estima