Study on Impact of Retailing strategies on Consumer behaviour towards

slow moving products.

(With Reference to Big Bazaar at Vijayawada)

Proposal for Management Thesis Submitted to

K L University Business School

Submitted by

Sateesh Sunkara

Reg no: 09102017

Under the Guidance

Vijay Kumar Reddy P V.

Asst Prof,

KLUBS, KL UNIVERSITY,

Vaddeswaram GUNTUR Dist.

KONERU LAKSHMAIAH UNIVERSITY

Koneru Lakshmaiah University Business School

Vaddeswaram Green fields Guntur District

ACEDAMIC YEAR 2009-2011

CERTIFICATE

This is to certify the project report entitled “ ” is a bonafied

work carried out by Sateesh.Sunkara (09102017) under my guidance and

supervision in partial fulfilment of the requirements for the award of

MASTER OF BUSINESS ADMINISTRATION.

Project Guide Head of the Department

P V Vijay Kumar Reddy Asst Professor Sheela Srivatsava

A study on Impact of Retailing strategies on Consumer behaviour towards

slow moving products.

(With Reference to Big Bazaar at Vijayawada.)

Proposal Submitted to

K L University Business School

Submitted on: Evaluated by:

Signature of the Student Signature of Faculty Supervisor

Marks Allotted: Attested by HOD. KLUBS

ACKNOWLEDGEMENT

Appendix A

Title and Proposal Approval Form

The MBA Program (The Class of 2009 - 2011)

Part – A

(Please fill in Capital Letters only)

Enrollment No. 0 9 1 0 2 0 1 7

Name of the Student SATEESH.SUNKARA

Elective courses selected

Semester III

Brand Management

International Marketing

International Financial Management

Financial Derivatives

Semester IV

SAPM

FSM

CB

SDM

Sectoral Elective Course RETAILING

SIP Details

Sector: MARKETING Company Name: INDIAN OIL CORPORATION LIMITED

SIP Title: SELIING OF 300 FLEET CARDS FOR IOCL IN A PERIOD OF 8 WEEKS

Product/Function: XTRAPOWER FLEET CARDS

Target Achievement: 300/300.

Name of the Faculty Supervisor

Mr. P V Vijay Kumar Reddy

Functional Area of the Supervisor

Rationale for Proposed Research Project (min. 500 words) – (Enclose Separate sheets): The student

should write about the relevance of the topic in current business environment, placement

opportunities based on the topic under study, its relation to the electives chosen by the student, etc.

Part B

Title of Management ThesisEffect of Retailing strategies on consumer behavior towards slow moving products

Relevant Functional Area RETAILING

1. Proposal of the Management Thesis (1,500 – 2,500 words) – (Enclose Separate Sheets): The Proposal of the Management Thesis should provide an introduction giving an overview of the topic and its importance, problem definition stating the objectives and scope of work, proposed methodology for achieving the objectives of the research project, probable sources of literature review, sampling plan, etc.

2. Schedule for implementation of Management Thesis: A weekly schedule should be presented. It includes literature survey, research methods, design of questionnaire, sampling plan, collection of data, analysis of data, tabulation, research findings, conclusion, etc. (Enclose Separate Sheets)

Date: Signature of the Student

(For Office Use Only)

Review by Faculty Supervisor (Detailed comments of Faculty Supervisor on the Proposal and the title are

documented here.) (Enclose separate sheets if necessary)

Faculty Supervisor Head of the Department Director

Date: Date: Date:

CONTENTS

NOMENCLATURE

Introduction:

About Big Bazaar in Vijayawada:

Pantaloon is one of the biggest retailers in India with more than 450 stores across the country.

Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the

country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year

2010. In 2001, Pantaloon launched country's first hypermarket ‘Big Bazaar’. It has the

following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar

Home Solutions: Hometown, Furniture Bazaar, Collection-i

Consumer Electronics: e-zone

Shoes: Shoe Factory

Books, Music & Gifts: Depot

Health & Beauty Care: Star, Sitara

E-tailing: Futurebazaar.com

Entertainment: Bowling Co.

Indian retail sector is witnessing one of the most hectic Marketing activities of all times.  The

companies are fighting to win the hearts of customer who is God said by the business

tycoons. There is always a ‘first mover advantage’ in an upcoming sector. In India, that

advantage goes to “BIG BAZAAR”. It has brought about many changes in the buying habits

of people. It has created formats, which provide all items under one roof at low rates, or so it

claims.

The large and growing young working population is a preferred customer segment.

Big Bazaar specifically targets working women and home makers who are the primary

decision makers.

COMPANY PROFILE

Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail

formats in both the value and lifestyle segment of the Indian consumer market.

Headquartered in Mumbai (Bombay), the company operates over 10 million square feet of

retail space, has over 1000 stores across 61 cities in India and employs over 30,000 people.

The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a

uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch

and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality

and Central, a chain of seamless destination malls. Some of its other formats include, Depot,

Shoe Factory, Brand Factory, Blue Sky, Fashion Station, all, Top 10, m bazaars and Star and

Sitara. The company also operates an online portal, futurebazaar.com. A subsidiary company,

Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions

store, Collection selling home furniture products and E-Zone focused on catering to the

consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year 2007 by the US-

based National Retail Federation (NRF) and the Emerging Market Retailer of the Year 2007

at the World Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business group catering to the

entire Indian consumption space.

Future Group is one of the country’s leading business groups present in retail, asset

management, consumer finance, insurance, retail media, retail spaces and logistics. The

group’s flagship company, Pantaloon Retail (India) Limited operates over 10 million square

feet of retail space, has over 1,000 stores and employs over 30,000 people.

Future Group is present in 61 cities and 65 rural locations in India. Some of its leading retail

formats include, Pantaloons, Big Bazaar, Central, Food Bazaar, Home Town, eZone, Depot,

Future Money and online retail format, futurebazaar.com.

Future Group companies includes, Future Capital Holdings, Future Generally India Indus

League Clothing and Galaxy Entertainment that manages Sports Bar, Brew Bar and Bowling

Co. Future Capital Holdings, the group’s financial arm, focuses on asset management and

consumer credit. It manages assets worth over $1 billion that are being invested in developing

retail real estate and consumer-related brands and hotels.

The group’s joint venture partners include Italian insurance major, Generali, French retailer

ETAM group, US-based stationary products retailer, Staples Inc and UK-based Lee Cooper

and India-based Talwalkar’s, Blue Foods and Liberty Shoes.

Opportunity in Indian Retail:

Favourable demographic and psychographic changes relating to India’s consumer class,

international exposure, availability of quality retail space, wider availability of products and

brand communication are some of the factors that are driving the retail in India. Over the last

few years, many international retailers have entered the Indian market on the strength of

rising affluence levels of the young Indian population along with the heightened awareness of

global brands, international shopping experiences and the increased availability of retail real

estate space.

Development of India as a sourcing hub shall further make India as an attractive retail

opportunity for the global retailers. Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M,

Karstadt-Quelle, Sears (Kmart), etc stepping up their sourcing requirements from India and

moving from third-party buying offices to establishing their own wholly owned / wholly

managed sourcing & buying offices shall further make India an attractive retail opportunity

for the global players.

Manufacturers in industries such as FMCG, consumer durables, paints etc are waking up to

the growing clout of the retailers as a shift in bargaining power from the former to the latter

becomes more discernible. Already, a number of manufacturers in India, in line with trends in

developed markets, have set up dedicated units to service the retail channel. Also, instead of

viewing retailers with suspicion, or as a ‘necessary evil’ as was the case earlier,

manufacturers are beginning to acknowledge them as channel members to be partnered with

for providing solutions to the end-consumer more effectively.

Though lucrative opportunities exist across product categories, food and grocery,

nevertheless, presents the most significant potential in the Indian context as consumer

spending is highest on food. Further, ‘wet groceries’ i.e. fresh fruits and vegetables is the

most promising segment within food and grocery though initially all retailers foraying in to

this segment had to face had wide spread protest from traders, small shop keepers.

The next level of opportunities in terms of product retail expansion lies in categories such as

apparel, jewellery and accessories, consumer durables, catering services and home

improvement. These sectors have already witnessed the emergence of organized formats

though more players are expected to join the bandwagon. Some of the niche categories like

Leisure and entertainment (Books, Music and Gifts in particular) offer interesting

opportunities for the retail players.

Currently the fashion sector in India commands a lion’s share in the organised retail pie. This

is in line with the retail evolution in other parts of the world, where fashion led the retail

development in the early stages of evolution and was followed by other categories like Food

& Grocery, Durables etc. Fashion across lifestyle categories makes up for over 50 per cent of

organised retail and with the kind of retail space growth that India is witnessing we can

certainly foresee a very healthy prospect for the fashion industry.

As nations become richer, their people start appreciating luxury goods and fine dining. India

has over one million such people and this number is expected to triple by 2010. A recent

report divides consumers for luxury goods into four categories – luxuriated: source of

affluence is largely traditional and inherited; New rich: adequate spending power and are

acquiring orientation to luxury; Getting there: acquiring spending power and spend mainly on

education, housing and large automobiles; Mid-affluent: are also acquiring orientation to

luxury but unlikely to indulge beyond a limit.

The most important categories for luxury goods consumers are housing, travel, education,

higher end automobiles, electronics and other home improvement products besides fashion,

lifestyle and fine dining. The most important reason for luxury retail not taking off in India so

far has been the lack of luxury retail environment. The presence has been primarily confined

to luxury hotels’ with shopping plazas.

Objectives of study:

To evaluate the retailing strategies adopted towards slow -moving products. How these retailing strategies have impact on consumer behaviour in buying process

towards these slow-moving products. Impact of slow moving products on volume of sales.

Description of problem:

Problem that retailers face is handling of slow-moving products and developing relevant

retailing strategies for such slow-moving products.

Slow-moving products lead to Lean retailing, which in turn have effect on maintaining

inventory.

Reasons for slow-moving of products:

Changes in consumer Lifestyles,

Procurement of products in larger quantities,

Over pricing,

Assortment and Display ,

Unavailability of required size, models, colours,

Improper definition of Merchandise.

Justification and significance of study:

This study helps firms and organizations improve their marketing strategies by understanding

issues such as how

The psychology of how consumers think, feel, reason, and select between different

alternatives (e.g., brands, products, and retailers);

The behaviour of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome; 

How consumer motivation and decision strategies differ between products that differ

in their level of importance or interest

How marketers can adapt and improve their marketing campaigns and marketing

strategies to more effectively reach the consumer.

Helps the company in developing strategies for lean retailing in the store.

Review of Literature:

Introduction

New products are proliferating, and research shows that the most successful among them

have clearly benefited from customers’ ease in learning the benefits and applications of those

products quickly, in finding out how the devices actually work, and in sharing their

knowledge with friends. In fact the very success of a tiny percentage of new products (more

than 95 per cent do not succeed) underlines the reality that marketers need to teach customers

and find ways to advance their learning. If not, these marketers risk having their products

languish.

Consumer Motive

Consumer motive is defined as “internal impulses that when simulated initiate some type of

response.” Consumers are continuously reacting to their internal impulses as well as the

external environment. Since internal impulses and the external environment also interact,

resulting in psychological motivations to fulfil needs and wants, Mustafa KARADENİZ

Journal of Naval science and Engineering. 2010, argue that consumer motives are known to

be the drivers of behaviour that bring consumers to the retail store.

Hence from the past studies it is obvious that companies have to develop and implement

strategies to reduce the slow movement of products in their stores based on the preferences

and lifestyles of customers. Innovation of strategies has to be in all the aspects like product,

price, place, and promotion strategies to retain the existing customers as well as to attract new

customers.

Reasons for slow movement of products

Changes in consumer Lifestyles,

Over Procurement,

Over pricing,

Assortment and Display,

Unavailability of required size, models, colors,

Improper definition of Merchandise.

Research Methodology

Data Collection:

Specification of target population: All customers who visit the non-moving products in the

store. A product category is selected based on the observation made from the store, and the

strategies and customer behaviour with impact of those strategies for selected category is

studied. Selected non-moving products and those customers will be the target population for

this study.

Type of Universe: Universe selected is the total population visiting Big Bazaar Retail store.

Sampling Unit: for this study the unit selected is non-moving products like new brands and

obsolescence products.

Sample Design: Sample designs are basically of two types viz., non-probability sampling and

probability sampling.

Random sampling: For this study random sampling is adopted.

Systematic sampling: In systematic sampling only the first unit is selected randomly and the

remaining units of the sample are selected at fixed intervals. Although a systematic sample is

not a random sample in the strict sense of the term, but it is often considered reasonable to

treat systematic sample as if it were a random sample.

Size of sample: Sample size collected is 100 people who purchase these slow-moving

products.

Types of Data:

The primary data are those which are collected fresh and for the first time, and thus happen

to be original in character. The data collected through questionnaires and personal interviews

and through observations made in the store comes under primary data.

The secondary data, on the other hand, are those which have already been collected by

someone else and which have already been passed through the statistical process.

Primary Data collection methods:

Observation method: Observation becomes a scientific tool and the method of data collection for

the researcher, when it serves a formulated research purpose, is systematically planned and recorded

and is subjected to checks and controls on validity and reliability. Under the observation method, the

information is sought by way of investigator’s own direct observation without asking from the

respondent.

Interview Method: The interview method of collecting data involves presentation of oral-

verbal stimuli and reply in terms of oral-verbal responses. This method can be used through

personal interviews and, if possible, through telephone interviews.

Filling up of Questionnaire: This method of data collection is quite popular, particularly in

case of big enquiries. It is being adopted by private individuals, research workers, private and

public organisations and even by governments. In this method a questionnaire is sent (usually

by post) to the persons concerned with a request to answer the questions and return the

questionnaire. A questionnaire consists of a number of questions printed or typed in a definite

order on a form or set of forms. The respondents have to answer the questions on their own.

Questionnaire development

Scale construction approach

Likert type

Excellent Very good Good Average Poor.

Sample size estimation: Estimated sample size is about 150. Due to time constraint this limited sample is selected.

Hypothesis formulation:

Null Hypothesis: Retailing Promotional strategies have impact on customer

behaviour in their buying process towards slow-moving products, without bias

towards price, quality, fashion update, brand, and loyalty.

Alternative Hypothesis: Retailing Promotional strategies have impact on customer

behaviour in their buying process towards slow-moving products, with bias towards

price, quality, fashion update, brand, and loyalty.

Empirical Study

Choice of statistical procedure:

Inferential analysis: is concerned with the various tests of significance for testing hypotheses

in order to determine with what validity data can be said to indicate some conclusion or

conclusions. It is also concerned with the estimation of population values. It is mainly on the

basis of inferential analysis that the task of interpretation (i.e., the task of drawing inferences

and conclusions) is performed.

Statistical Procedure:

Chi Square as a Non-Parametric Test:

(i) First of all calculate the expected frequencies on the basis of given hypothesis or on the

basis of null hypothesis. Usually in case of a 2 × 2 or any contingency table, the expected

frequency for any given cell is worked out as under:

Expected frequency of any cell = (Row total for the row of that cell) *

(Column total for the column of that cell)

___________________________________________

(Grand total)

(ii) Obtain the difference between observed and expected frequencies and find out the squares

of such differences i.e., calculate (Oij – Eij)2.

(iii) Divide the quantity (Oij– Eij)2 obtained as stated above by the corresponding expected

frequency to get (Oij – Eij)2/Eij and this should be done for all the cell frequencies or the

group frequencies.

(iv) Find the summation of (Oij – Eij)2/Eij values or what we call ∑(Oij-E ij)2 /Eij.

This is the required χ2 value.

The χ2 value obtained as such should be compared with relevant table value of χ2

and then the inference can be drawn as stated below

Comparing calculated and table values of χ2, if we find that calculated value is less than the

table value and as such could have arisen due to fluctuations of sampling. The result, thus,

supports the hypothesis and if the calculated value of χ2 is much higher than this table value

the result of the experiment does not support the hypothesis.

Calculations:

Bias

Elements

Observed

Frequency

(Oi)

Expected

Frequency

(Ei)

(Oi-Ei) (Oi-Ei)2

(Oi-Ei)2/Ei

Price 54 34 20 400 11.76

Quality 46 34 12 144 4.2

Fashion Update 33 34 -01 1 0.029

Brand 16 34 -18 324 9.529

Store Loyalty 25 34 -13 169 4.9

∑ (Oi-Ei)2/Ei = 30.418

Hence the Calculated value of χ2 is 30.418. Since the degree of freedom here is (n-1) = (5-1)

= 4, The table value of for 4 degrees of freedom at 5 per cent level of significance is 9.488.

Comparing calculated and table values of χ2, we find that calculated value is greater than the

table value and as such could have arisen due to fluctuations of sampling. The result, thus,

rejects the NULL hypothesis and it can be concluded that the Retailing Promotional strategies

have impact on customer behaviour in their buying process towards slow-moving products,

with bias towards price, quality, fashion update, brand, and loyalty.

Questionnaire

Gender Male Female

Marital Status Married Unmarried Divorced

Number of children ______________

Income per Month

a. 0-10,000 b. 10,000-15,000 c. 15,000-20,000 d. above 20,000

Family Type

a. Small Family b. Joint Family.

Is the store located conveniently?

o Yes

o No

o To some extent

How do you come to know about the promotional offers?

o Reference groups

o News Papers

o Announcements

o Advertisements

What does u feel about the pricing of products under promotional offer?

o Over priced

o Satisfactorily priced

o Reasonably priced

What do you feel about the Product range and Models available in the products

under promotional offer?

o Excellent

o Very good

o Good

o Average

o Fair

Which promotional offer do you feel more attracting?

o Buy 1 get 1 free

o Flat 50% off on selected range

o Buy 1 at MRP & avail 15% off on 2nd one

What do you prefer more in your purchase decision?

o Promotional Offers

o Fashion & Models availability

o Brand Preference

You visit store on

o Regular basis

o Knowing about the promotional offers

o Store loyalty

Your satisfaction about overall fashion range updating

o Excellent

o Very good

o Good

o Average

o Fair

What do you feel about uniqueness of products here?

o Highly unique

o Unique to some extent

o Similar to other stores

Overall satisfaction with this store and their promotional strategies

o Excellent

o Very good

o Good

o Average

o Poor

Data tabulation and Interpretation:

Demographic :

Gender

Male Female

Series1 67 33

515253545556575

Gender

Num

ber

Data is collected from a sample of 100 people of which 67% is collected from males

and 33% is collected from females.

Income per Month

0-10,000 10,000-15,000

15,000-20,000

above 20,000

Se-ries1

17 17 47 32

2.5

12.5

22.5

32.5

42.5

Income Group

NUm

ber

From collected data it is obvious that most of BigBazaars’s customers fall under

income group of 15-20,000 income per month. And next is the group having above

20,000 income per month.

Customers Opinions:

How do you come to know about the promotional offers?

Reference groups

Newspa-pers

An-nounce-ments

Advertise-ments

Se-ries1

45 37 11 7

2.5

12.5

22.5

32.5

42.5

About Promotional Offers

Num

ber

From this it is known that people come to know about the promotional offers more from

reference groups and news papers

So more concentration is needed on communication.

What does u feel about the pricing of products under promotional offer?

Over Price satisfactory Reasonable

Series1 34 54 12

5

15

25

35

45

55

Pricing

Num

ber

Many of Customers feel that pricing is satisfactory for the products under promotional offers

and 34% of people from sample feel that they are overpriced. And only 12% of people feel

that they price reasonably.

What do you feel about the Product range and Models available in the products

under promotional offer?

Excellent Very Good

Good Average poor

Series1 0 44 46 10 0

2.57.5

12.517.522.527.532.537.542.547.5

Product Range

Num

ber

Product range and models available in the store are found in a range of good to very

good range and not to excellent range. Under promotional offers, products of good

range are available.

What do you prefer more in your purchase decision?

Promotional Offers

Fashion & Models

Brand Pre-fer

Se-ries1

27 43 30

2.512.522.532.542.5

Preference in Purchase decision

Num

ber

Interpretation:

3339999999999999999

Your satisfaction about overall fashion range updating

excel-lent

very-good

good aver-age

poor

Se-ries1

1 47 51 1 0

5

25

45

Overall Fashion Range

Num

ber

Overall satisfaction with this store and their promotional strategies

Excellent Very good

Good Average Poor

Series1 0 39 52 9 0

51525354555

Overall SatisfactionN

umbe

r

Findings and suggestions:

Conclusions and recommendations:

Research Plan:

Project Schedule: Scheduled for a period of 8 weeks from September to November.

Major Phases Involved:

Phase-1

Title and Proposal submission -14 Oct

Evaluation -18, 19, 20 Oct

Review of Literature , submission of articles -18 Oct

Results -20 Oct

Phase-2

Submission of Interim -8 Nov

Interim presentation -15, 16 Nov

Evaluation of Interim thesis -18 Nov

Phase-3

Submission of Final Thesis -29 Nov

Final presentation -1, 2, 3, 4 Dec

Evaluation of Final Thesis -8 Dec

Final Result -9 Dec.

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1978.

Bellenger, Danny N., and Greenberg, Barnett A., Marketing Research—a Management

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Cochran, W.G., Sampling Techniques, 2nd ed. New York: John Wiley & Sons., 1963.

Cooley, William W., and Lohnes, Paul R., Multivariate Data Analysis, New York: John

Wiley & Sons.,1971.

Croxton, F.E., Cowden, D.J., and Klein, S., Applied General Statistics, 3rd ed., New Delhi:

Prentice-Hall of India Pvt. Ltd., 1975.

Dass, S.L., Personality Assessment Through Projective Movie Pictures, New Delhi: S. Chand

& Co. (Pvt.) Ltd., 1974.

Davis, G.B., “Introduction to Computers,” 3rd ed., McGraw-Hill International Book Co.,

1981.

Deming, W. Edwards., Sample Design in Business Research, New York: John Wiley & Sons.,

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Helm S. (2004) ‘Customer Valuation as a Driver of Relationship Dissolution’,

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Ostle, Bernard, and Mensing, Richard W., Statistics in Research, 3rd ed., Ames Iowa: The

Iowa State University Press, 1975.

Profitability of Relational Customers’, Journal of Relationship Marketing.