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Running Head: PERCEPTION TOWARDS ACCEPTANCE OF SHIKHAR APP

A STUDY ON FACTORS AFFECTING PERCEPTION OF RETAILERS

TOWARDS ACCEPTANCE OF RETAILERS' APPLICATION (SHIKHAR)

(Unilever Nepal Limited)

Business Research Project Report

Submitted to

Kathmandu University School of Management (KUSOM)

in partial fulfillment of the requirements for the

Master of Business Administration (MBA)

By

Bijay Timilsina

KU Registration Number: 021602-17

Roll No. 17337

MBA Spring 2017

Under the Supervision of

Asst. Prof. Sabina Baniya Chhetri

February, 2019

PERCEPTION TOWARDS ACCEPTANCE OF SHIKHAR APP 2

DECLARATION

I hereby declare that this business research project entitled ‘A Study on

Factors Affecting Perception of Retailers towards Acceptance of Retailers'

Application’, submitted to Kathmandu University School of Management (KUSOM)

is the result of an original research carried out in the year 2019. It is my original

work, to the best of my knowledge and belief, it contains no material previously

published or written by any other person which to a substantial extent has been

accepted for the award of any other degree of a university or other institution except

where due acknowledgement is made.

Bijay Timilsina

Registration Number: 021602-17


ACKNOWLEDGEMENT

First and foremost, I humbly express my sincere gratitude to Asst. Prof.

Sabina Baniya, my supervisor of Comprehensive Business Research for her proper

guidance, constructive advices, encouragement and valuable time.

I am also highly indebted to Mr. Sudarshan Swaminathan (Head - Customer

Development), Mr. Abhishekh Joshi (National Sales Manager), Mr. Ejaz Islam (Area

Sales Manager, Valley), Ms. Sumana Bajracharya (Human Resources Business

Partner) and all other team members of Customer Development (CD) Department of

Unilever Nepal Limited for providing me the permission to conduct research at the

organization and constantly providing me the needed information. I also express my

gratitude towards the retailers of Kathmandu Valley who helped me a great deal by

participating in research process and providing their valuable opinion and responses.

I would also like to thank Kathmandu University School of Management

(KUSOM) for providing such a magnificent opportunity to apply the theoretical

knowledge in the practical world and learn from it.

Last but not the least; I would like to thank all our teachers and staffs of

KUSOM and everyone who has helped directly or indirectly in the completion of this

research study.

Bijay Timilsina

February, 2019


EXECUTIVE SUMMARY

Introduction of technology in sales is a new concept for Nepalese fast moving

consumer goods industry. Innovative ways to manage and grow market share of a

company through the use of technology in the form of mobile application can be a

subject of interest for any FMCG company. However, Nepalese retail market has not

experienced any such technology that can help company as well mass retailers to

benefit from such initiation.

The major purpose of this study is to identify the major factors that shape the

perception of Nepalese retailers towards the acceptance of retailers' app called

Shikhar launched by Unilever Nepal Limited. By identifying and exploring those

factors, the study intends to determine whether the mobile application is appropriate

for transforming the sales function of UNL or not.

The study has been based on qualitative approach to data collection and

analysis whereby Focused Group Discussion (FGD) has been done to collect relevant

information. The participants of FGD are the secondary customers of UNL (retailers)

who represent all other mass retailers of Kathmandu valley. The participants have

been selected through convenience sampling method. The content of FGD has been

transcribed and data has been analyzed by following scissors-and-sort technique.

From the data analysis, it has been found that the major concerns of retailers

for accepting Shikhar application are their level of knowledge and familiarity with

such technology, their personal readiness to adopt innovative solutions for sales

function, attitude towards Shikhar (based on ease of use, relative advantage from app,

and social image as a result of using the app), and the retailers' confidence in

themselves being able to break status quo in terms of traditional sales pattern and shift

to innovative ways of transforming sales.


Finally, suggestions and subsequent action plan that could push retailers

towards accepting Shikhar app have been provided to Unilever Nepal Limited.


TABLE OF CONTENTS

DECLARATION ............................................................................................................ 2

ACKNOWLEDGEMENT .............................................................................................. 3

EXECUTIVE SUMMARY ............................................................................................ 4

TABLE OF CONTENTS ................................................................................................ 6

LIST OF TABLES .......................................................................................................... 8

LIST OF FIGURES ........................................................................................................ 9

LIST OF ABBREVIATIONS ....................................................................................... 10

CHAPTER I .................................................................................................................. 11

INTRODUCTION ........................................................................................................ 11

1.1 Background of the project ....................................................................................... 11

1.2 Problem statement ................................................................................................... 12

1.3 Objectives of the project ......................................................................................... 13

1.4 Significance of the project ...................................................................................... 13

1.5 Scope and Limitations of the project ...................................................................... 14

1.6 Organization of the project report ........................................................................... 14

CHAPTER II ................................................................................................................. 16

METHODOLOGY ....................................................................................................... 16

2.1 Research Design...................................................................................................... 16

2.1.1 Purpose of the study ............................................................................................. 16

2.1.2 Type of Investigation ........................................................................................... 16

2.1.3 Study Setting ........................................................................................................ 16

2.1.4 Extent of Researchers' Interference ..................................................................... 16

2.1.5 Unit of Analysis and Time Horizon ..................................................................... 16

2.2 Population and Sampling Design ............................................................................ 17


2.3 Data Collection Method .......................................................................................... 17

2.4 Data Analysis Method............................................................................................. 17

CHAPTER III ............................................................................................................... 19

DATA ANALYSIS AND FINDINGS ......................................................................... 19

3.1 Descriptive Statistics ............................................................................................... 19

3.2 Data Analysis .......................................................................................................... 21

3.3 Conceptual Framework ........................................................................................... 25

3.4 Review of Conceptual Framework ......................................................................... 26

3.4.1 Introduction .......................................................................................................... 26

3.4.2 Review of Theoretical Perspective ...................................................................... 26

3.4.3 Review of Theories .............................................................................................. 28

CHAPTER IV ............................................................................................................... 31

CONCLUSION, SUGGESTIONS AND ACTION PLAN .......................................... 31

4.1 Conclusion .............................................................................................................. 31

4.2 Suggestions ............................................................................................................. 32

4.3 Action Plan.............................................................................................................. 33

REFERENCES ............................................................................................................. 35

ANNEXURE................................................................................................................. 37


LIST OF TABLES

Table No. Title of Table Page Number

Table 3.1 Demographics & Descriptive Statistics of Respondents 20

Table 5.1 Action Plan Development for Solution Implementation 34


LIST OF FIGURES

Figure No. Title of Figure Page Number

Figure 3.1 Conceptual Framework of the Study 25


LIST OF ABBREVIATIONS

CD Customer Development

DSR Daily Sales Representatives

FGD Focused Group Discussion

FMCG Fast Moving Consumer Goods

KUSOM Kathmandu University School of Management

MBA Masters of Business Administration

MOC Monthly Operating Cycle

MRP Maximum Retail Price

RS Re-distribution Stockist

TAM Technology Acceptance Model

TPR Temporary Price Reduction

TPS Transaction Processing System

TSI Territory Sales In charge

TUR Total Unit Rate

UNL Unilever Nepal Limited


CHAPTER I

INTRODUCTION

1.1 Background of the project

Today, market has been experiencing a continuous advancement in

technology. For a Fast Moving Consumer Goods (FMCG) company, it has become

more challenging to attract and retain the attention of retailers towards products and

services provided by the company. Introducing innovation in the way sales is done is

one of the crucial factors for companies to generate higher sales volume than

competitors which is only possible by transforming the way traditional sales

mechanism has been administered.

Increasing market size of a company is solely dependent on how much sales it

can generate from its secondary customers i.e. wholesalers and retailers in the market.

This matter of concern is way too challenging for the companies to comprehend the

interests and desires of modern day retailers. Retailers demand for easy access to

information relating to price of products, schemes, offers, and discounts, and other

company policies regarding order placement for products. However, not all

innovations are accepted by consumers (here secondary customers of a FMCG

company). In Nepalese context, the development of technology has been taking place

quite well in recent years. However, with huge population having access to smart

phones and mobile internet services, the use of mobile applications to place order for

a company's products are not observed in the market till date.

The use of Transaction Processing System (TPS) which is retailer app

(Shikhar) for the secondary customers of Unilever Nepal Limited (UNL) is targeted to

transform the functioning mechanism of sales by leveraging technology in FMCG

market. The purpose of Shikhar app is to generate sales orders from retailers whereby


they would be facilitated as they could place orders for the company products as and

when out of stock.

The initiation from Unilever Nepal Limited to transform the way sales have

been done in the present context via the development and use of application named

'Shikhar' for its secondary customers (retailers) can be a step forward and an

innovative way sales functions in a FMCG market. However, this type of mobile

application for retail markets of FMCG is first of its kind in Nepalese market. Taking

reference from acceptance rate of other mobile applications, mainly digital payment

platforms and online shopping apps, there may be various factors that might influence

the secondary customers of UNL to accept the retailers' app, Shikhar. From the study

in international markets (mainly markets of Hindustan Unilever Limited in India) , it

is found that there are various factors that shape the perception of retailers towards the

acceptance of such innovation in terms of generating sales for a company. Those

factors that are relevant in international market need to be empirically studied in

Nepalese context before reaching to a conclusion. This study thus aims at identifying

various factors that guide and shape the perception of Nepalese retailers towards the

acceptance of innovative mobile platform like Shikhar application.

1.2 Problem statement

The acceptance of technology and innovation in retail stores for placing orders

becomes pivotal for any organization as there are instances when innovation in system

is resisted by consumers and this might lead to unwanted consequences for any

organization like UNL. The significance of innovation relies on the acceptance and

adoption of new ideas rather than just the emergence of new ideas.

Different attributes are responsible to drive retailers towards the acceptance

and use of innovative products, service or system. Consumers resist innovation due to


perception of different risks associated with the use and dismissal of innovative

products and services. Here, the researcher is primarily concerned with identifying

different factors that shape the perception of retailers in accepting retailers'

application. For this a single statement of problem was framed – what are the

determinants of retailers' acceptance towards sales transformation via use mobile

application Shikhar?

More specifically, the present researcher was concerned to assess and evaluate

various factors that make retailers accept or reject the innovative products like

Shikhar in terms of making use of digital platform for driving sales of UNL. Taking

this into account, the research tries to address the following questions:

What are the factors influencing the perception of retailers towards the

acceptance of retailers' app?

What drives a retailer to break from his/her status quo and accept a new

product innovation?

1.3 Objectives of the project

The objectives of the research are as follows:

To know the factors that influence retailers to accept Shikhar application

in terms of generating sales.

To assess the factors that drives a retailer to break from his/her status

quo for accepting Shikhar app and identify the relationships between

these factors and acceptance of Shikhar app.

1.4 Significance of the project

This report on ‘A Study on Factors Affecting Perception of Retailers towards

Acceptance of Retailers' Application’ focuses on identifying the factors that are linked


with creating impact on the tendency to accept new products to assist sales function of

UNL . By knowing various independent and moderating variables, Unilever Nepal

Limited can embrace the inclusion of the outlined factors to ensure that retailers do

not show reluctance to accept the products that are not familiar to them. Innovation

like Shikhar apps goes in vain if it is not accepted and adopted by retailers. The

exploration of different variables that are directly or indirectly linked with shaping the

perception for accepting retailers' app also brings insights on how to drive the

behavior of retailers towards the use of technology in transforming the sales of UNL

as well as other companies operating in similar industry in the market.

1.5 Scope and Limitations of the project

This research aims at identifying and exploring the factors that determine the

perception of retailers towards acceptance of retailers' application. It is primarily done

in partial fulfillment of the requirement of Masters of Business Administration

(MBA) degree of Kathmandu University School of Management (KUSOM). Though

this is an applied research, the findings of the research are applicable to other

organizations of similar nature. The major limitations of the project is that this study

is confined to some selected retail outlets of Kathmandu Valley which might not

reflect the true picture of retailers scattered all over Nepal. Similarly, this is a

qualitative research and thus the output generated might differ from retailer to retailer.

Finally, this research has further scope for quantitative study using statistical tools to

test the validity of the variables identified.

1.6 Organization of the project report

This report is divided into four chapters which are as follows:


Chapter I: Introduction

This chapter deals with the background of the study, problem statement and

research objectives as well as research significance, scope, and limitations.

Chapter II: Research Methodology

This chapter deals with different methodological paradigms related to the

study.

Chapter III: Data Presentation and Analysis

This chapter includes the presentation, analysis, and diagnosis of the data

along with important findings of the study. It also explores literatures to review the

conceptual framework thus outlined and discusses about product innovation,

acceptance and theories relevant to these concepts.

Chapter IV: Summary, Suggestions, and Action plan

This chapter presents the major closing remarks and the implications of the

study to marketers and other researchers for similar future study.


CHAPTER II

METHODOLOGY

The study has been shaped using the following research methodology:

2.1 Research Design

2.1.1 Purpose of the study

The purpose of this study is to explore the potential factors that shape the

perception of retailers towards acceptance of innovative mobile application named

Shikhar for transforming the way sales function has been implemented throughout

secondary customers of UNL.

2.1.2 Type of Investigation

This is an exploratory study since the variables impacting the research need to

be identified and explored.

2.1.3 Study Setting

The study setting for this research is field study as the discussion was

conducted outside their natural work setting.

2.1.4 Extent of Researchers' Interference

There has been minimum level of interference from the researcher as the

researcher needed to direct the discussion in a particular direction (as and when the

discussion went out of context). However, the study has been done with due

consideration to biases that might exist. The researcher has not manipulated any

situation entirely to collect the data.

2.1.5 Unit of Analysis and Time Horizon

The unit of analysis for the study is retailer as an individual. The participants

of the FGD represent an individual. The study is completed at one instance of time.


The study automatically comes to an end when responses from the participants are

obtained. So, this is a cross-sectional study.

2.2 Population and Sampling Design

The entire retailers of Nepal are the population of the study. Due to time and

resource constraints, the study has been conducted using a Focused Group Discussion

(FGD) with 5 retailers of Kathmandu Valley which has been selected by using non-

probability sampling method. The respondents are selected at ease of the researcher so

this is convenience sampling.

2.3 Data Collection Method

The data has been collected with the help of semi-structured questionnaires in

FGD from a total of 5 retailers which comprised of 3 male and 2 female retail outlet

owners. The FGD with the retailers have raised several issues encouraging the

participants to express their views regarding the acceptance and use of Shikhar

application. Similarly, the features and operating mechanism of the application has

been explained to all the respondents to generate more accurate and reliable response

towards the acceptance of retailers' application.

2.4 Data Analysis Method

The analysis and interpretation of FGD typically requires great deal of

judgment and care on the side of researcher, be it qualitative or quantitative research.

The analysis of qualitative data relies on the research question and the purpose of data

collection. The present study typically followed transcribing the responses from the

participants of discussion. The responses were audio-taped for transcription and for

any future reference. Similarly, scissors-and-sort technique was used to identify those

sections relevant to the research questions. Short phrases have been used as codes. By


coding important sections of the transcribed data, the major themes and issues have

been identified and extracted. Those major themes and issues are presented as major

findings of the study.


CHAPTER III

DATA ANALYSIS AND FINDINGS

For most participants, pertinent issues relating to acceptance and use of

Shikhar app involved the operational difficulties arising due to resource costs like cost

of using internet, availability of smart phone that supports the application, etc. The

most common mention was the need for knowledge about the technology and relative

benefits that the retailers would get from using the technological platform.

Respondents were of the view that sales function associated with such mobile

application might work in the days to come; however, they also felt the necessicity of

some amount of financial benefits in the form of Temporary Price Reductions (TPR)

as a result of using the application.

Participants were aware of the digital technology being used by Daily Sales

Representatives (DSRs) for taking orders from them. This also made the discussion

easy as the retailers were already used to the Isquare application being used by DSRs

for order taking from the retailers. In addition to the issues related to familiarity and

complexity of using Shikhar application, participants mentioned issues such as their

ability to use the digital platform, necessary resources to operate the app, and their

own level of enthusiasm to use the app.

3.1 Descriptive Statistics

The participants were inquired about their general demographic information

and other knowledge regarding Shikhar app before formally beginning the focused

group discussion. These are presented in the following table:


Table 3.1: Demographics and Descriptive Statistics of Respondents

Measure Items Frequency Percentage

Age

25-30 yrs 1 20 %

31 – 35 yrs 2 40 %

35 years and above 2 40 %

Item Total 5 100.0 %

Gender

Male 3 60 %

Female 2 40 %


Level of Education

Below Grade 10 2 40 %

Intermediate 2 40 %

Undergraduate 1 20 %


Prior Knowledge about Shikhar

Yes 0 0 %

No 5 100 %


The above table shows that the participants have no prior information and

knowledge about retailers' app Shikhar going to be tested and implemented by the

company, if proved successful. The respondents of FGD included 60 percent of male

participants and 40 percent of female participants. Similarly, from the above table it

can be inferred that majority of the respondents have no higher education (those at

intermediate or undergraduate have also not completed their education because of

some reasons). The age group of the participants however shows that they might be

interested in learning about some new ideas.


3.2 Data Analysis

The second session started with an FGD whereby the participants described

the use of such mobile application came with multiple difficulties such as English

language used in the app, complex process for placing orders, etc. They, at this point

of time, did not seem much interested in making use of any mobile apps for

transforming the sales function of UNL. Specifically, the findings from the FGD on

this issue are presented as below:

a. Product Familiarity

Participants were concerned with the knowledge and personal experience of

using any such mobile applications in their day-to-day activities. There were very few

retailers who mentioned digital technology currently being used by them. The

participants emphasized on the importance of product knowledge to break their status

quo and accept innovative products.

Mr. A said, "I do not have much interest in using such mobile applications for

any purpose. In my view, lack of knowledge about such technologically advance

platforms can be hindrance for accepting such application. It is of no meaning if I

have no idea about the product and have no prior experience of using such systems."

When asked about any personal experience of such mobile applications, Mrs.

D said," If I hear about any new system, I look for ways to try and experiment with it."

Also, from the discussion, it was found that receptiveness to new ideas,

promptness to try new things, decision-making about new ideas, and degree of

temptation to try innovative products at personal level determines the likeliness of

trial and adoption of such innovative applications.

Mr. E said, "I seek for information about any new mobile applications with my

daughter and learn the ways to operate and comprehend its functions in detail."


However, Mr. B said that he doesn’t like to accept anything that is completely new

and has not been familiar with prior to accepting it completely.

b. Compatibility of use

Many participants acknowledged that they need to be updated with technology

to transform the traditional ways of placing orders and gathering information about

product prices, schemes, portfolio, claims on Monthly Operating Cycle (MOC), etc.

However, from the discussion, it can be deduced that retailers do not completely feel

compatible with use of application like Shikhar.

Ms. C said, "I feel that the DSRs do not completely explain about the schemes

and offers ongoing on the MOC and focus only on those products that generate high

values. So, I think Shikhar application is something I should start using for my own

benefit." Other participants also agreed to this point of Ms. C.

Mr. E added, "I think I need to have this application installed in my mobile so

that I can know if I am cheated on product prices during schemes provided by the

company."

Mr. B expressed his views that mobile application for retailers like him would

not fit well with the level of comprehension and understanding. He added, " I do not

feel need for such system at this point of time."

Participants also mentioned about their existing interest and whether their

longing for accepting such mobile application makes a better match with their

lifestyle and values. Mr. A said, "I doubt whether such application would be

compatible with my existing needs and experiences or not."


c. Attitude towards the product

Respondents agreed that Shikhar application, if accepted and used needs to be

simple enough for retailers to operate. They mentioned that coming up with such

innovative platform is not completely enough to accept and use the application.

Therefore, expectations from retailers about the ease of use, relative benefits they

would get from the app, fairness in communication of schemes and offers, and the

degree of social image (if the app is used) need to be fulfilled to shape positive

perception about the use of Shikhar application.

Mrs. D said," The system needs to be very simple so that retailers easily

understand the steps for using the app. I think the use of English language can be a

great hindrance for successful implementation of this type of mobile application."

Mr. A said," The images of the products and the prices, both Total Unit Rate

(TUR) for retailers and Maximum Retail Price (MRP) that can be charged to

customers, most be clearly visible and in larger fonts so that I do not feel difficult to

know about product portfolio and the respective prices."

Mr. E pointed to the importance of app as it would offer retailers like him to

make selection across large product categories easier and also give retailers privilege

of ordering products anytime as per their convenience which helps them in demand

and stock planning as well.

Similarly, Mr. B said," I still do not perceive this application as necessary.

However, if all other retailers start using it, I cannot isolate myself from the market

trend."

Ms. C said," If it comes to enhancing my image among the retailers and

signals my personal uniqueness among people, I can think of giving Shikhar


application a try. But, this should not add any extra financial and intellectual burden

on me."

d. Personal Enablers of Change

Participants expressed mixed opinions regarding their readiness to accept

Shikhar application. They mentioned that the degree of accepting and using such

systems depends on individual level of innovativeness. In addition to this,

participants also focused on the availability of necessary resources to use Shikhar

application. Also, they mentioned about the presence of someone else (be it DSRs,

family members, or any one available) to get necessary guidance and help to operate

the application.

Mr. B said," I have no one in my family that could help me learn this type of

system. I feel that this platform is out of my control."

Mrs. D said," This type of system would not be any issue for me since I have

installed Wi-Fi and could get help from my husband if I encounter any difficulties

using this type of applications."

Similarly, Mr. E said," I think those who use social media in mobile would not

have that much difficulty to understand the operation of this type of application."

Ms. C said," If this type of technology facilitates me to get better outcomes

than I am getting at present, I would definitely try and accept Shikhar application."

Therefore, from the discussion, it is apparent that people understand the

importance of new system to transform the ways of traditional sales function. They

also believe that use of technology would facilitate them in making orders anytime,

anywhere as per their convenience, search from a rich catalogue of UNL brands and

categories and get notified about the latest schemes and offers that are running.

However, participants of discussion are skeptical about user friendliness, ease of


operation, and relative advantage of accepting such retailers' application called

Shikhar designed and developed by Unilever Nepal Limited. The discussion also

pointed to the necessicity of trial ability of such technology before full phase

implementation for the retailers in the market.

3.3 Conceptual Framework

After the study, it is observed that the perception of retailers towards the

acceptance of Shikhar application is affected by four major variables as explained in

chapter four of the study. The following conceptual framework has been developed:

Figure 3.1 Conceptual Framework of the Study

From the above conceptual framework, it can be concluded that the perception

of retailers towards acceptance of Shikhar app can be made positive if they are

Familiarity

Knowledge

Innovativeness

Compatibility

Attitude

Complexity

Relative Advantage

Social Image

Personal Change Enablers

Acceptance of Shikhar App

Independent Variables Dependent Variable


provided required information about the functions and operating procedures of app.

They also need to be motivated towards giving Shikhar app a try and experiencing

added benefits from it.

3.4 Review of Conceptual Framework

3.4.1 Introduction

There are various literatures carried out to identify factors that lead to

innovative product acceptance internationally but few studies have been carried out in

Nepal to know about the influence of different variables that have an impact on

determining the perception of consumers (here referred to as retailers in case of UNL)

towards his/her tendency to accept innovation in terms of sales function via mobile

application like Shikhar developed by Unilever Nepal Limited. This chapter explores

the reviews done in various contexts of different countries to know about influence of

social factors towards moderating favorable attitude ultimately leading to product

acceptance. Literatures considering social influences and other factors like product

attributes, compatibility, personal factors that affect innovative product acceptance are

explored. This chapter commences with the general study of product innovation and

innovation acceptance by consumers in context of mobile applications through the

analysis of literature. The study further explores a range of drivers towards acceptance

in which the role of social factors is emphasized.

3.4.2 Review of Theoretical Perspective

Conceptual Understanding of Product Innovation

Innovation has been the recent focus to thrive well in the competition. Rogers

(2003) has stated that innovation is a product, idea, practice or even processes that are

perceived to be new by individuals. Innovation focuses on originality, newness or

uniqueness and it brings opportunities for organizations to grow, expand and progress


in the market (Wang & Ahmed, 2004). Lavinsky (2013) states how product

innovation helps to create new products which can be a valuable asset for the

company to differentiate itself from the competitors. He further explains on how

product innovation ,if carried out properly, can lead to better outcomes while stating

the possibility that excessive product innovation may not always bring good results

for the companies (Lavinsky, 2013).

Innovation is even more substantial in realms of technology that also includes

the instance of growing mobile applications. Nevertheless, innovation and invention

are often used synonymously in technological field that is stated to be correct. Roger

(2003) has created distinction between invention and innovation such that invention

focuses on processes to create new ideas while innovation is more inclined towards

adoption of new ideas. He asserts that invention turns into innovation only if certain

consumers start adopting it. Furthermore, Carayannis et. al (2003) place distinction

between technology and innovation such that technology is like a procedure or

methodology to facilitate innovation, For instance, use of technology has created to

product innovations like different mobile applications for digital payment.

Moon and Kim (2001) mention about how the need for innovation alters

depending on whether the underlying objective for purchase is utilitarianism or

hedonic. In utilitarianism approach, the focus is on cognitive and rational aspects

while for hedonic, the pleasure or happiness factor matters. For acceptance of

innovation through technology like mobile applications, the hedonic factors are seen

to creating substantial impact.

Conceptual Understanding of Consumer Acceptance

The acceptance of product innovation becomes pivotal for organization as

there are instances when innovation in product is not preferred by consumers and this


leads to detrimental consequences for organization. Roger (2003) depicts on how

significance of innovation relies on acceptance adoption of new ideas by consumer

rather than just the emergence of new ideas. Yang et. al. (2012) consider various

factors such as user held perceptions of beliefs, attitudes and external stimuli that

impact on the acceptance of innovative products. For accepting products that

individuals have never seen or experienced, they look forward for other factors rather

than just the evaluation of the product such as the feelings associated with seeing or

using the product, the influence of referrals and superiority feeling associated with the

products compared to other products.

3.4.3 Review of Theories

There are different models studied under the acceptance and adoption of

product innovation of models. Most models, however, focus on why innovations are

accepted and to which level these innovations are accepted. Different literatures have

presented models that depict the factors leading to acceptance of product innovation

and the relationship between these factors and product acceptance.

a. Theory of Planned Action

This theory of planned behavior was developed by Icek Arjen and it focuses

that ‘Intentions to perform behaviors of different kinds can be predicted with high

accuracy from attitudes towards the behavior, subjective norms, and perceived

behavioral control; and these intentions, together with perceptions of behavioral

control, account for considerable variance in actual behavior’ (Arjen, 1991). Theory

of Planned behavior highlights intentions as the core nugget and indeed the

motivation to perform certain behaviors. By influencing on the intentions, behavior

can be affected and modified. Increase in intensity of intentions, according to theory

of planned behavior, will lead to increase in acceptance behavior.


The theory of planned behavior focuses on three factors to influence intentions and

the acceptance behavior:

Firstly, the attitude towards the new products affects the intentions to accept it.

Favorable attitude towards innovation strengthen the acceptance intentions.

Next factor is the normative belief that depicts the impact of social pressure

from the environment. Positivism from other individuals, families and society

towards the new products make acceptance intentions strong.

Finally, the perception of difficulty and complexity towards the use of new

products affects the acceptance intentions and unlike the above two factors,

this factor of perceived behavioral control also influences the actual

acceptance behavior.

Researchers use theory of planned behavior to study about intention and actual

behavior towards acceptance of new products.

b. Motivational Theories

Rao & Troshani (2007) mention on how motivational theories can be used to

comprehend the acceptance level of consumers for product innovation, mostly in case

of technological associated product like mobile applications. The extrinsic and

intrinsic motivation that motivational theories mention affect the intentions towards

product acceptance and hence its usage.

c. Technology Acceptance Model (TAM)

In addition to theory of reasoned action, the technology acceptance model

accepts two more factors to understand the consumer behavior. These two factors

include perceived usefulness and perceived ease of use such that the former considers

the extent to which a person believes the usage of product will contribute to the


improvement of individual’s performance while latter reflects the degree to which the

product is easy to use. The inclusion of these two factors helps to identify consumer’s

tendency towards product acceptance. This model, TAM is widely used to understand

acceptance of technological innovative products while the limitation of this model is

that it does not include the important factor of social influence (Rao & Troshani,

2007).

d. Innovation Diffusion Theory

Innovation diffusion is defined as “the process by which an innovation disseminates

over time among the members of a social system” (Rogers, 2003). Rogers (2003)

further explains the five characteristics in innovation diffusion that creates impact on

the acceptance of products:

Relative advantage: Perception of innovation better than other preceding technologies

Complexity: Perception of technology as being difficult to use or understand

Compatibility: Perception of innovation as being consistent with the existing values,

needs or experiences of potential adopters

Trial ability: The degree to which an innovation may be experimented with on a

limited basis prior to adoption

Observability: Results of innovation easily visible and communicable to others

Likewise, the extent to which the communication is flown to the consumer

about the product also affects the likely acceptance of the product innovation. Social

influence is another crucial factor that creates influence on acceptance of products

such that the kind of relationship or networks within the social system and the

communication within this system can have influence on the perception of individuals

and their tendency to accept new products (Rogers, 2003).


CHAPTER IV

CONCLUSION, SUGGESTIONS AND ACTION PLAN

4.1 Conclusion

The study was primarily focused at identifying the components that shape the

perception of retailers towards acceptance of technology in sales function. By

identifying the variables that make retailers accept innovation in the form of retailers'

mobile application (Shikhar), the study tried to explore if the retailers would react

positively to the initiation of Unilever Nepal Limited to implement retailers' app in the

near future. Ultimately, the study tried to identify the factors that would push the

retailers towards use of mobile application for making orders for UNL products.

From the study, it can be concluded that retailers are mainly concerned with

the relative benefits they would get from using any technology like Shikhar app and

the operational difficulties that might create challenges for accepting the system.

Similarly, some other factors like retailers' level of innovativeness and readiness to

experiment new system thereby breaking their status quo and the belief that they can

learn to comprehend and accept such application determine the success of Shikhar

application in retail markets of Nepal. It appears that people are unknown about any

such system which could transform sales function for the company. Rather, people are

used to traditional method of placing orders and gaining information about products

from the sales representatives alone.

It can also be concluded that the retailers need to be trained and guided to

make them feel compatible with accepting and using such technology in sales. Also, it

can be concluded that attitude and perception of retailers depends on other retailers

purchasing UNL products using the application. Therefore, the study concludes that

retailers have somewhat positive attitude towards Shikhar application provided that it


does not give them any financial burdens and is not that much difficult to operate.

Meanwhile, the study concludes that Unilever Nepal should also identify possible

measures to make the retailers know about the product in a simplified and cost

effective means.

4.2 Suggestions

In order to make the retailers comfortable enough to develop positive

perception towards the use of retailers' application (Shikhar) in the days to come,

Unilever Nepal needs to consider some actions that break the status quo of the

retailers and induce them towards using Shikhar. For this, the researcher has proposed

the following suggestions to the company:

Unilever Nepal should produce informative contents in the form of posters and

templates that can be circulated to the retailers for making them more familiar

with the ways of operating the application. This helps the company to drive

the behavior of retailers towards developing positive associations with the use

of technology in placing order for its products.

Perception of retailers can shaped positively only when they feel themselves

compatible with the use of application. For this, the company should appoint

one independent DSR for each Re-distribution Stockist (RS) to help retailers

understand the added benefits they would get from using the app over

traditional method of placing orders and communicating with the RS via

DSRs.

The company should produce video contents such as YouTube tutorials that

can be easily understood and implemented by retailers with weak educational

background or experience of using such advanced systems.


Unilever Nepal should incorporate Nepali language in its application since

there are many retailers in the rural RSs who don’t understand English as a

medium of operating the application.

The company, if economically viable, should provide certain offers to those

retail outlets that place their orders via Shikhar application to motivate and

push them towards using the app.

In addition to the above suggestions to the company, supervisors and Territory

Sales In-charge (TSI) must be circulated in field marketing such that they

make retailers know about the relative advantages of Shikhar like demand and

stock planning features, easy and convenient order placing as and when

required, and removal of information asymmetry between the retailers and the

company.

All the above mentioned suggestions would direct the behavior of retailers in

shaping positive perception towards the use of Shikhar thus breaking their status quo

and implementing Shikhar for transforming the sales function of the company. For

this, the variables identified through discussions with the retailers should be addressed

by the company.

4.3 Action Plan

Considering the aforementioned findings of the study, the following

implementation plan has been laid down:

34

Table 4.1 Action Plan Development for Solution Implementation

Action Objective of Action Important Activities Tentative

Budget

Time Frame Result Expected

Training and

Guidance

To provide basic application

related knowledge and skills

to retailers

DSR circulation from

respective RSs

Nrs. 30,000 2 months Be able to operate Shikhar

effectively

Infomercials

Development

To make retailers confident

and revise (when necessary)

about their action of using

app regularly

Video tutorials in

social media like

YouTube and

Facebook

Nrs. 25,000 1 month Understand the function of app

completely

Reduce behavioral complexities

associated with using the app

Other

Campaigns

To communicate Shikhar's

value to the retailers

To motivate retailers

towards using Shikhar

Posters and pamphlets

Brochures

Awareness campaigns

Nrs. 50,000 3 months Purchase orders from retailers via app

Increased concern for adopting

technology in sales function

35

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Commerce Research, 2 (2)


ANNEXURE

Annexure – I: Participants' Information

S.No. Name of Participant Outlet Name Address

1. Mr. A Dhakal Kirana Stores Sallaghari

2. Mr. B Nilbarahi Ratna Stores Bode

3. Ms. C Subidha Mart Duwakot

4. Mrs. D Om Cosmetics Purano Thimi

5. Mr. E Hamro Kirana Pasal Bode

Annexure – II: Sample Questionnaire

a. Have you heard of Shikhar application from any sources prior to this discussion?

b. Have you used any other mobile application for any utility purposes? If yes, what

were the reasons behind using that?

c. What factors might influence a retailer to use order placing platform like Shikhar?

d. Would you use Shikhar if your neighboring retailer starts using it?

e. What external factors do you think might affect the perception towards retailers'

app?

f. Would you be ready to move from traditional method of sales to technology

enabled system like Shikhar?

g. Do you think that using Shikhar would be burdensome for you?

h. Do you have any limitations in terms of necessary resources to operate Shikhar?

i. Please suggest any improvement measures to the company regarding retailers'

app.

j. Are you ready to accept Shikhar app now?

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