13536622 to study the consumer behaviour in max lifestle retail lucknow

8/8/2019 13536622 to Study the Consumer Behaviour in Max Lifestle Retail Lucknow

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ACKNOWACKNOWLLEEDGEMENTDGEMENT

Concentration, dedication and application are necessary but not sufficient to achieve an

goal. These must be awarded by guidance, assistance and co-operation of some person t

make it enable.

Many people have given their valuable time and ideas to enable me to complete th

research and the report. I am deeply indebted to all for their ideas and assistance, whil

bearing the entire responsibility for weakness in the report.

I am highly obliged to MR. NIKHIL RANJAN (STORE MANAGER) and MRS. RITA

CHATTERJI (ASSISTANT STORE MANAGER), MAX LIFESTYLE, LUCKNOW

for providing me an opportunity to undergo this project report.

I am also indebted to MR. RAZAUR RAHMAN & ALL FACULTY MEMBERS o

SRMCEM, LKO who have been a constant source of inspiration and provided guidanc

to me at every point of time.

My gratitude to all those, who RESPONDED TO MY QUESTIONNAIRE in a we

defined manner and helped me acquiring knowledge.

Lastly, I thanks all those, who have directly or indirectly, helped me in this project..

ABHISHEK PANDEY

ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW

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PGDM- I YEAR

DECLARATIONDECLARATION

I, ABHISHEK PANDEY, student of POST GRADUATE DIPLOMA IN

MANAGEMENThereby declare that the project report entitled A DETAIL STUDY O

CONSUMER BEHAVIOUR AND BUYING BEHAVIOVR OF CUSTOMERS IN MAX

STORE OF LUCKNOW CITYhas been compiled by me on the basis of my project report an

has not been submitted any where in any manner.

It is a report, which is based on various interviews, surveys that is conducted during m

project report period in LUCKNOW as a student of P.G.D.M. from SHR

RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW.

ABHISHEK PANDEY

PGDM- I YEAR


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EXECUTIVE SUMMARYEXECUTIVE SUMMARY

This study is a modest effect at understanding the consumer behavior especially i

retail store in Lucknow. Analysis to Lucknow people perception of retail store (surve

only retail channel in Zee mall). The survey was constituted in visiting of Zee Mal

Customers were interviewed by means of carefully prepared questionnaire to study an

understand customer behaviour in depth. I study also the consumer decision making i

retail store in Indian city and what effect consumer decision-making in retail store.


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PREFACEPREFACE

The sea of change can pull customers in many directions. It is our responsibility to light the wa

and take care of them before the competition does.

RETAILING Means Re-tailing to the customers so that they comeback

Retailing consists of all activities involved in selling goods and services to consumers for thei

personal, family, or household use. It covers sales of goods ranging from automobiles to appare

and food products, and services ranging from hair cutting to air travel and computer education

Sales of goods to intermediaries who resell to retailers or sales to manufacturers are no

considered a retail activity.

The retail sector in India is highly fragmented with organized retail contributing to only 2% o

total retail sales. The retail sector in developed countries was also highly fragmented at th

beginning of the last century but emergence of large chains like Wall Mart, Sears, an

McDonalds led to rapid growth of organized retail and growing consolidation of the reta

industry in the developed countries.

Organized retail is growing rapidly and we see the emergence of large organized retail chains lik

Shoppers Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over th


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country. The opportunities in retail industry in India will increase since Indian retailing is on th

threshold of a major change.

The study of retailing is very important to MBA students interested in employment opportunitie

with large retail chains.

The remarkable world of RetailThe remarkable world of Retail


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Retailing

including all

activities

involved in

selling goods or

services directly

to the finalconsumers for

personal, non

business use

Any organisation

selling to final

consumers-

whether it is amanufacture,

whole seller, or

retailer is

doing retailing.

Consumers

today can shop

for goods &

services in a

wide variety of

retail Org. The

best- known type

of retail is the

DepartmentABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW

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Retail, according to Concise Oxford English Dictionary, is "the sale of goods to the public for us

or consumption rather than for resale."

World over, the retail segment has performed exceptionally since its inception in the 20th century

Sample these facts:

Retail is currently the biggest industry in the world with sales of $7.2 trillion

Every 10th billionaire in the world is a retailer.

25 of the top 50 Fortune 500 companies are in retail.

The Indian retail story couldn't have been more different. India has approx 12 million retai

stores, more than rest of the world put together. But the per capita square feet area under retail i

just 2 sq.ft or 0.2 sq. meters with fragmented keerana stores being the predominant players.

Retailing in India has remained in the unorganized sector and largely untouched by corporate

The first decade of modern retail in India has been characterized by a shift from traditiona

channels to new formats including department stores, hypermarkets, supermarkets and specialt

stores across a range of categories.

Modern retail formats have mushroomed in metros and mini-metros, in the last few years moder

retail has also established its presence in the second rung cities. Thus, exposing the residents o

these cities to shopping options, they have never experienced before. It has been forecasted tha

the share of modern retail will increase from 2 per cent currently, to about 15-20 per cent over th

next decade.


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Increase in media penetration to 38-million cable household and 80-million TV househol

in 2001

The first decade of modern retail in India has been characterized by a shift from traditional kiran

shops to new formats including department stores, hypermarkets, supermarkets and specialt

stores across a range of categories. Modern retail formats have mushroomed in metros and min

metros. In the last few years, modern retail has also established its presence in the second-run

cities, exposing residents to shopping options like never before. However, even as moder

retailers garner share from traditional channels, there is a larger role they would be required t

play in boosting consumption levels.

Figures suggest that the total turnover of the sector is around Rs 10 lakh crores, of which 4 pe

cent is contributed by the organised sector.

During the last decade, India's middle- and high-income segment notched up an impressive 10

per cent growth. This segment has been triggering the demand for consumer goods. Increase

awareness, free access to information and choice in competing products and services are makin

customers redefine the retail business. They are on the lookout for convenience, speed, efficienc

and a wide range of products. Retailers need to explore different channels of retailing to cater t

customers' needs.

The days of brick-and-mortar's limited potential are fading and retailers need to tap the immens

opportunities that other channels offer.


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Driven by increasingly intense competition in an increasingly global marketplace, retailers mus

seek new ways of capturing the hearts and minds of consumers. The traditional levers of pric

selection and location although still important are no longer sufficient as bases fo

competitive differentiation. Retailers should be focused on improving the end-to-end shoppin

experience, boosting sales and winning customer loyalty by connecting to the shopper in ever

possible way.

Multichannel retailingis all about giving the customer a choice of which shopping channel he o

she wishes to purchase products through. The most popular shopping channels include the stores

Internet and catalogues and telemarkets (including mobile shopping).

Retailers must provide a seamless multichannel experience for their customers. For this, the

become the most valuable consumers within a retailer's customer base.

Multichannel retailing needs to be adopted:

Growmarket share

Increase customer base

Offerconvenience

Achieve cost reductions through economies of scale, supply chain efficiencies, an

logistics

Improve customer analytics


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Opennew revenue streams by cross-sell & sell ups

Reduce cycle time between order and delivery

Lowerfulfillment cost & Improve demand planning

However, going multichannel, the retailer should not ignore the critical part: the custome

Customers have become more sophisticated and expect a retailer to recognize them.

Evolution of Indian RetailEvolution of Indian Retail

Traditional Rural Retail Fairs

Traditional Family Run Convenience Stores

Traditional Rural Retail FairsTraditional Rural R etail Fairs

Traditional rural retail fairs are a very big attraction to foreign tourists. We

have the Pushkar fair in Rajasthan which brings in a lot of revenue both fromdomestic buyers and buyers from abroad. In the Pushkar fair l ive s tock l ikecamels, horses, cows, goats, and sheep are sold as well as bought. A range ofexotic i tems are also available. The traditional i tems here are handmade jewelry and other colorful memorabilia of Rajasthan.

Traditional rural retail fairs in India deal in a good number ofhandcraftsitems which are mentioned below:


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http://business.mapsofindia.com/india-retail-industry/evolution/traditional-rural-retail-fairs.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-family-run-convenience-stores.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-rural-retail-fairs.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-rural-retail-fairs.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-family-run-convenience-stores.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-family-run-convenience-stores.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-family-run-convenience-stores.htmlhttp://business.mapsofindia.com/india-retail-industry/evolution/traditional-rural-retail-fairs.html


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Hand painted wooden chest drawers

Wooden wall bra ckets

Embossed wooden table

Hand painted chairs in chowki

Wooden corner stand

Wooden Hand painted table

Embossed wooden chairs

Brown wooden stool

Camel bone Jewelry

Metal jewelry

Snake charmer puppets

Handmade candles

The Suraj Kund mela is also a huge galore of Indian traditional i tems. Thisfair is held at Haryana which is 8 kilometers from South Delhi. The fair hasbeen held for the last 20 years. The fair deals in items categorized as

Indian arts

Handicrafts

Heritage

Culture and tradit ion

Traditional rural retail fairs have a typical rural set up l ike:

Huts of mud

Thatched platforms

lamps of wood

String cots

Plainness ground

The small thatched s tores are a vibrant display of handcraft i tems. The focusevery year is on a part icular State for instance, in 2006 i t was Maharashtra. Th


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other group of i tems representing the Indian Subcontinent available thereare:

Classical

Tribal art

Folk art

As such Traditional Rural Retail fairs involve credit worthy art isans andweavers of over 350 in number and they are selected from across the country.Along with the county's r ich cultural heritage being showcased, the fair isopen to foreign traditional goods as well. The more rejuvenating side of these

fairs would be listed as under:

Indian Sweets Snacks

Indian folk music

Classical dance

Bengal t iger show

Elephant rides

Tiger show and rides

Giraffe tricks

Balloon and Clay i tems

Painting

Games

Therefore, traditional rural retail fairs are a never ending occupation and thekey to it l ies in the originality and attractiveness of the items.

Traditional Family Run Convenience Sto resTraditional Family Run Convenience Stores

Traditional family run convenience stores are too well established in Indiathan to be wiped out and besides there is uniqueness in the tradit ional i temsthat represent the sub-continent. The retai l stores in India are essentiallydominated by the unorganized sector or t radit ional s tores . Infact the tradit ionalstores have taken up 98 percent of the Indian retail market. Now stores run byfamilies are primari ly food based and the set up is as Kirana or the 'corner


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grocer' stores. Basically they provide high service with low prices. If the storesare not food based then the type of retai l i tems available are local in nature.

The traditional family run convenience stores can take pride in the fact that theKirana is the most common outlet forms for the consumers. The toughcompetition for convenience stores are coming from organized retail storesdealing in food i tems, l ike:

Apna Bazaar

Canteen s tores

Food World Subhiksha

Food Bazaar

Convenience Storesare open for long hours and is one of the formats ofthe Indian r etail stores tha t cater to basic ne eds of the consu mer. A goodexample of such would be Convenio. These s tores are found in bothresidential as well as commercial markets. The food products oft radit ional family run convenience s tores are comprised of branded aswell as non-branded i tems. The benefi ts of family run convenience s toresis that they give importance to:

Personal touch

Facilities of credit

Quick home delivery

Non-food based stock comprises of multiple and varieties of local brandsThe future of such stores as they face competition from organized sector,would depend on the fol lowing part iculars:

Place and capacity

Diligent area coverage

Disciplined work schedule

Managing turnover

Revenue from assets

Customer service and sat isfaction


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The traditional family run convenience stores serves the purpose of thehousewives who definitely wants to avoid traveling long distances to purchasedaily needs. The convenience factor in terms of i tems, among people in generalcan be highlighted as below:

Groceries

Fruits

Drug Store

Necessary statio nery

As such tradit ional family run convenience stores are here to stay and canno

be oversized by the organized retai l sector besides, i t represents the variety o

India

Indian retail industry

India retai l industry is the largest industry in India, with an employment ofaround 8% and contributing to over 10% of the country's GDP. Retail industry

in India is expected to r ise 25% yearly being driven by s trong income growth,changing l i festyles , and favorable demographic pat terns.

I t is expected that by 2016 modern retai l industry in India will be worth US$175- 200 bi l l ion. India retai l industry is one of the fastest growing industrieswith revenue expected in 2007 to amount US$ 320 bi l l ion and is increasing at arate of 5% yearly. A further increase of 7-8% is expected in the industry ofretai l in India by growth in consumerism in urban areas, r is ing incomes, and asteep rise in rural consumption. I t has further been predicted that the retai l ingindustry in India wil l amount to US$ 21.5 bi l l ion by 2010 from the current s izeof US$ 7.5 bi l l ion.

Shopping in India have witnessed a revolution with the change in the consumerbuying behavior and the whole format of shopping also al tering. Industry ofretai l in India which have become modern can be seen from the fact that thereare mult i- s tored malls , huge shopping centers , and sprawling complexes whichoffer food, shopping, and entertainment al l under the same roof.


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India retail industry is expanding itself most aggressively, as a result a greatdemand for real estate is being created. Indian retai lers preferred means ofexpansion is to expand to other regions and to increase the number of their outlets in a city. It is expected that by 2010, India may have 600 new shoppingcenters.

In the Indian retai l ing industry, food is the most dominating sector and isgrowing at a rate of 9% annually. The branded food industry is trying to enterthe India retai l industry and convert Indian consumers to branded food. Since apresent 60% of the Indian grocery basket consists of non- branded items.

India retai l industry is progressing well and for this to continue retai lers aswell as the Indian government will have to make a combined effort.

Indian organized retail marketIndian organized retail market

Indian organized retai l market is growing at a fast pace due to the boom in theIndia retai l industry. In 2005, the retai l industry in India amounted to Rs10,000 bi l l ion accounting for about 10% to the country's GDP. The organizedretai l market in India out of this total market accounted for Rs 350 bi l l ionwhich is about 3.5% of the total revenues.

Retai l market in the Indian organized sector is expected to cross Rs 1000billion by 2010. Traditionally the retail industry in India was largelyunorganized, comprising of drug stores, medium, and small grocery stores.Most of the organized retai l ing in India have s tarted recently and isconcentrat ing mainly in metropoli tan ci t ies .

The growth in the Indian organized retail market is mainly due to the change inthe consumers behavior. This change has come in the consumer due to increasedincome, changing lifestyles, and patterns of demography which are favorable.Now the consumer wants to shop at a place where he can get food,entertainment, and shopping al l under one roof. This has given Indian organizeretail market a major boost.


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Retai l market in the organized sector in India is growing can be seen from thefact that 1500 supermarkets, 325 departmental stores, and 300 new malls arebeing built . Many Indian companies are entering the Indian retai l marketwhich is giving Indian organized retai l market a boost . One such company isthe Reliance Industries Limited. I t plans to invest US$ 6 bi l l ion in the Indianretai l market by opening 1000 hypermarkets and 1500 supermarkets .

Pantaloons is another Indian company which plans to increase its retail space t30 million square feet with an investment of US$ 1 billion. Bharti Telecoms anIndian company is in talks with Tesco a global giant for a 750 million joint

venture. A number of gl obal retail gi ants such as Walmart, Carr efour, and MetrAG are also planning to set up shop in India. Indian organized retail marketwill definitely grow as a result of all this investments.

Indian organized retai l market is increasing and for this growth to continue theIndian retailers as well as government must make a combined effort.

The Global Retail Industry : An OverviewThe Global Retail Industry : An Overview

Retail has played a major role world over in increasing productivity across a wide range o

consumer goods and services .The impact can be best seen in countries like U.S.A., U.K

Mexico, Thailand and more recently China. Economies of countries like Singapore, Malaysia

Hong Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector.


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Retail is the second-largest industry in the United States both in number of establishments an

number of employees. It is also one of the largest world wide. The retail industry employs mor

than 22 million Americans and generates more than $3 trillion in retail sale annually.

Retailing is a U.S. $7 trillion sector. Wal-Mart is the worlds largest retailer. Already the world

largest employer with over l million associates, Wal-Mart displaced oil giant Exxon Mobil as th

worlds largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart ha

become the most successful retail brand in the world due its ability to leverage size, market clou

and efficiency to create market dominance. Wal-Mart heads Fortune magazine list of top 50

companies in the world. Forbes Annual List of Billionaires has the largest number (45/497) from

the retail business.


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GLOBAL RETAILGLOBAL RETAIL

19991999 20022002 20052005

Total Retail (US$ Billion)Total Retail (US$ Billion) 150150 180180 225225

Organized Retail (US$ Billion)Organized Retail (US$ Billion) 1.11.1 3.33.3 77

% Share of Organized retail% Share of Organized retail 0.70.7 1.81.8 3.23.2

Rank Retailer Home Country

1. Wal-Mart Stores, Inc. U.S.A.

2. Carrefour Group France

3. The Kroger Co. U.S.A.

4. The Home Depot. Inc. U.S.A.

5. Metro Germany

(Source: STORES / Deloitte Touch Tomahastsu)


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The factors responsible for the development of the retail sector in India can be broadl

summarized as follows:

Rising incomes and improvements in infrastructure are enlarging consumer market

and accelerating the convergence of consumer tastes. Looking at income classification

the National Council of Applied Economic Research (NCAER) classifie

approximately 500Io of the Indian population as low income in 1994-95; this

expected to decline to 17 by 2006-07.

Liberalization of the Indian economy which has led to the opening up of the market fo

consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. t

make significant inroads into the vast consumer market by offering a wide range o

choices to the Indian consumers.

Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.

The internet revolution is making the Indian consumer more accessible to the growin

influences of domestic and foreign retail chains. Reach of satellite LV. channels i

helping in creating awareness about global products for local markets. About 47% o

Indias population is under the age of 20; and this will increase to 55h by 2015. Thi

young population, which is technology-savvy, watch more than 50 TV satellit

channels, and display the highest propensity to spend, will immensely contribute to th

growth of the retail sector in the country.


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As India continues to get strongly integrated with the world economy riding the waves o

globalization, the retail sector is bound to take big leaps in the years to come. The Indian retail

sector is estimated to have a market size of about $ 180 billion; but the organised secto

represents only 2% share of this market. Most of the organised retailing in the country has jus

started recently, and has been concentrated mainly in the metro cities. India is the last large Asia

economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sol

through the super markets and departmental stores. A similar phenomenon has swept through a

other Asian countries. Organized retailing in India has a huge scope because of the vast marke

and the growing consciousness of the consumer about product quality and services. A stud

conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especiall

through increased levels of penetration in larger towns and metros and also as it begins to sprea

to smaller cities and B class towns. Fuelling this growth is the growth in development of th

retail-specific properties and malls. According to the estimates available with Fitch, close t

2Smn sq. ft. of retail space is being developed and will be available for occupation over the nex

36-48 months. Fitch expects organized retail to capture l5%- 20% market share by 2010. A

McKinsey report on India says organised retailing would increase the efficiency and productivit

of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%

the share of employment of retail in India is low, even when compared to Brazil (l4%), an

Poland (12%).


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Key Strategic Factors in RetailingKey Strategic Factors in Retailing

The key to success is identifying a superior value-promise and who is in a better position to do i

than retailers? Retailers are the closest to the point of purchase and have access to a wealth o

information on consumer shopping behaviour. Retailers have some unique advantages fo

managing brands such as continuous and actionable dialogue with consumers, control over bran

presentation at point-of-sale, control over shopping environment, display location/adjacencie

and signage. And they have used this advantage with tremendous success.

The 3 stages of evolution of the trade channel are shownThe 3 stages of evolution of the trade channel are shown

in the exhibit below :in the exhibit below :

Extended Limited Direct


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Manufacture

Depo/CNF

Distributor

Retailer

Shopper

Manufacture

Depo/CNF

Retailer

Shopper

Manufacture/ Retailer

Shopper

As seen, the role of the intermediary is being diminished gradually, which has obviou

implication of backlash of the trade channel upwards towards the suppliers. This is more severe i

countries such as India, where the channel economics in favour of the middlemen is still stron

enough given the fragmentation of the retail sector. Therefore when FoodWorld, the largest groce

in

India has a direct supply contract with over 20% of its key suppliers, it gives rise to conflict o

interest with the distribution infrastructure that suppliers have painstakingly built over the years.

Thus companies like HLL have evolved a distinct distribution channel altogether (called Moder

Trade) to service the needs of such large grocers. Even the mom and pop stores (known a

kirana shops) are affected due to this unfair back-end advantage extended by the suppiier to it

leading accounts (the emerging supermarket chains).


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The strategies adopted by the retailer to compete with branded goods are illustrated by th

following diagram. Branding the store and following a private label strategy is the key strategy

which helps the retailer to compete with branded products.

FORMAL RETAILING SECTORFORMAL RETAILING SECTOR

1. Typically large retailers

2. Greater enforcement of taxation mechanisms


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3. High level of labor usage monitoring

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Weekly MarketsVillage FairsMelas

Convenience StoresMom andPop/Kiranas

PDS OutletsKhadi StoresCooperatives

Exclusive BrandOutletsHyper/Super Markets

Department StoresShopping Malls

Traditional/PervasiveReach

GovernmentSupported

Historic/RuralReach

Modern Formats/International

Evolution of Indian retail

Source ofEntertainment

Neighborhood

Stores/Convenience

Availability/ LowCosts /

Distribution

Shopping

Experience/Efficiency

CATEGORIES OF INDIAN RETAILCATEGORIES OF INDIAN RETAIL

1. Corporate Houses


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Tatas: Tata Trent

RPG group: Food World, Health and Glow, etc

ITC: Wills Life Style

Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc.

2. Dedicated brand outlets

Nike, Reebok, Zodiac etc

3. Multi-brand outlets

Vijay Sales, Viveks etc

4. Manufacturers/ Exporters

Pantaloons, Bata, Weekender

Classifying Indian retailClassifying Indian retail

(A)Modern Format retailers

1) Supermarkets (Foodworld)

2) Hypermarkets (Big Bazaar)

3) Department Stores (S Stop)

4) Specialty Chains (Ikea)

5) Company Owned Company Operated


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(B)Traditional Format Retailers

1) Kiranas: Traditional Mom and Pop Stores

2) Kiosks

3) Street Markets


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4) Exclusive /Multiple Brand Outlets

(C)Large Indian retailers

1. Hypermarket

1) Big Bazaar

2) Giants

3) Shoprite

4) Star

II Department store

1) Lifestyle


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2) Pantaloons

3) Piramyds

4) Shoppers Stop

5) Trent

III Entertainment

1) Fame Adlabs

2) Fun Republic

3) Inox

4) PVR


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The Indian retail sector can be broadly classified intoThe Indian retail sector can be broadly classified into

a) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing sector Traditional types o

retailers, who operate small single-outlet businesses mainly using family labour, dominate thi

sector In comparison, super markets account for a small proportion of food sales in Indi

However the growth rate of super market sales has being significant in recent years becaus

greater numbers of higher income Indians prefer to shop at super markets due to higher standard

of hygiene and attractive ambience.

b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on health and beauty product

.Here also small, single-outlet retailers dominate the market .However in recent years, a few reta

chains specializing in these products have come into the market. Although these retail chain

account for only a small share of the total market their business is expected to grow significantl

in the future due to the growing quality consciousness of buyers for these products


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C) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets operate all over Indi

Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothin

and footwear stores have modern products and attractive displays to lure customers. However

with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikel

that the traditional outlets will survive the test of time.

D) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market, very few larg

and modern retailers have established specialized stores for these products. However there i

considerable potential for the entry or expansion of specialized retail chains in the country.

E) DURABLE GOODS

The Indian durable goods sector has seen the entry of a large number of foreign companies durin

the post liberalization period. A greater variety of consumer electronic items and househol

appliances became available to the Indian customer. Intense competition among companies to se

their brands provided a strong impetus to the growth for retailers doing business in this sector.

F) LEISURE & PERSONAL GOODS


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Increasing household incomes due to better economic opportunities have encouraged consume

expenditure on leisure and personal goods in the country. There are specialized retailers for eac

category of products (books, music products, etc.) in this sector. Another prominent feature of thi

sector is popularity of franchising agreements between established manufacturers and retailers.

Benefit to customer through retailer sector There has been a significant chan

in retail trading over the years, from small kiranawalas in the vicinity to big super markets

transition is happening from the traditional retail sector to organized retailing. T

unorganized sector still holds a dominant position in this industry. The organized segme

holds just about 1.2% of the current US$ 245 billion retail market, which is expected

reach about US $ 385 billion by the middle of this decade. With consumers looking

convenience with multiplicity of choice under one roof and expectations evolving over tim

consumer demand is truly the driving force for organized retailing in the country. Food a

beverages form the main chunk of the retail market. They are followed by apparel a

footwear. The Indian textile industry, the backbone of the apparel segment, has a large sh


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of the Indian economy, accounting for over 20% of industrial production as well

providing direct and indirect employment to around 65 million people. Despite the re

store density in India with regard to population being the largest, it is estimated that ov

90% of the stores are less than 500 sq. ft in size. Industry estimates put the number of ret

outlets at 12 million. This is clearly indicative of small-shop ownership crowding t

unorganized segment of retailing. While this fragmented market structure does po

significant challenges for organized retailing, potential does exist if modern information a

supply chain management systems are to support the development of convenience sho

that match customer expectations. Today trend is the development of integrated retail cu

Entertainment centers or shopping malls. An increasing number of retailers are focusing

malls now as opposed to stand-alone developments. While the number of shopping ma

has seen a massive surge in the recent past in the metros and their suburbs, the latest trend

this sector is the increasing focus on providing leisure activities such as multiplex

facilities for kids' entertainment, eateries etc. within the mall premises. Customer less t

time consumes and more entertainment with his family in malls because they with

shopping mall number of retail shop and variety of products and selected the product th

want. Good environment in mall. Less crowed and These are enclosed, air-condition

multi-level malls of at least 100,00 sq ft. Critical to these malls is the concept of t

anchor, the key outlet or store around which other outlets cluster. The most popular Indi


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anchors include Shoppers' Stop, Globus, Pantaloon, Lifestyle and hypermarkets like B

Bazaar and Giant. Cinemas also often anchor malls. Driven by the lucrative tax breaks, t

old single screen theatres are being divided into three-five smaller screens, as was done

the US, years ago. Example for wave and PVR.

Landmark GroupLandmark Group

The Landmark Group, founded in 1973 with a s ingle s tore in Bahrain has growinto one of the largest retai l conglomerates in the Middle East and is expandinrapidly in India. I t currently operates over 750 s tores across the region with retai l presence in China as well . In addit ion to i ts retai l sector, the Group haa l so d ive rs i f i ed in to l e i sure , food , ho te l s and e lec t ron ics and has c rea ted comprehens ive in frast ruc ture including i t s own logi st ic s and d i st r ibu tiodivis ion, to support i ts retai l operat ions and other businesses.

Key FactsKey Facts

35 Years of retail experience.

Turnover in excess of US$2.5bn.

Total retail space over 10 million sq ft.

Retail Presence across 12 countries: Bahrain, China, India, Jordan, Kingdom of SaudiArabia, Kuwait, Oman, Qatar, Spain, UAE, Pakistan & Egypt.

Operates over 825 stores.

Employs 24,000 personnel.


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Core Values of Landmark GroupCore Values of Landmark Group

1. Passion for excel lence We are committed to set t ing industry benchmarks be i t our product or pract ices . Our doctrine is to s tr ive and maintain the lead iwhatever we do , with s t ri c t adherence to qual i ty and de liver ing va lue fomoney.2. Integri ty in everyth ing we do - Our bus iness i s d r iven by t rus t , s t ronethics and mutual respect.

3. Empower ing peop le to s trive and de liver O ur c or e s tr en gt h i s o ue mp lo ye es. We b elie ve in g iv in g o ur p erso nne l the o ppo rtu ni ty a nrespons ibi li ty that a re in tegra l to thei r p rofes s ional deve lopment and ouGroups success .4. Adapt ing to changing market and customer needs We keep ourse lveabreast with industry trends and dynamic consumer preferences. Our offeringkeep evolving to address changing and discerning consumer needs.


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Look Good Feel GoodLook Good Feel Good

Max a value re tai l s tore for the family was launched in May 2004 in th

UAE.

With s tores that typical ly measure between 25,000 to 30,000 sq. f t , Ma

re ta i l s i t s own labe l c lo th ing for men , women and ch i ld ren as we l l afootwear and home ware.

A pioneer in the Middle East of the global t rend of del ivering quali ty an

value at very at tract ive prices , Max is being increasingly recognized as key player in the value retail format.

With 75 stores across UAE, Saudi Arabia, Jordan, Kuwait, Bahrain, Qatar

Oman & India, Max plans to expand i ts network in more potential marketwithin the Middle East , Turkey and India to build a s ignificant presencfor the brand by target ing to have 100 stores by 2009.

A g oo d s ho pp in g e xp er ie nc e a nd g re at v al ue i s a n as su ra nc e t hatranslates into making customers Look good. Feel good with Max.

Key FactsKey Facts

Established in 2004.

75 stores spread across 8 countries.

The Largest Value Fashion Chain in the Middle East

Products designed and developed exclusively for Max, by a large team ofin-house designers and buyers.


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KIDSWEAR DEPARTMENT

INFANTS SECTION: -

BOYS (SIZES) PREPACK GIRLS (SIZES) PREPACK

6-12 MONTHS 3 6-12 MONTHS 3



TOTAL 9 9

BOYS SECTION: -

SUB SECTION 1-8 YEARS PREPACK 8-14 YEARS PREPACK

SIZES SIZES

2-3 YEARS 3 8-9 YEARS 3


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TOTAL 12 12

GIRLS SECTION: -

SUB SECTION 1-8 YEARS PREPACK 8-14 YEARS PREPACK

SIZES SIZES





TOTAL 12 12

INFANTS GIRLS

TUNICV-NECKR- NECKCOLLERFRONT OPEN

SKIRTCAPRI

SHIRT

2-8 BOYS

T-SHIRTDENIM JEANSTROUSERS

CARGO


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PAINTS

CAPRI COTTON WOVEN

KNITTED DENIM

2-8 GIRLS

TUNICSKIRTST-SHIRT

HALTER NECKPOTSEGDEHALF SLEAVESCUT SLEAVESSLEAVELESSHOODED SKIRT

SPORTS CAPRILEGINGS

LEGINGSFULL LEGINGS

LONG TOPS

MINI SKIRTSCALF LENGTH SKIRTDENIM

JEANSCAPRI

STYLES: - KNIT TOP, KNIT BOTTOM, WOVEN TOP, WOVEN BOTTOM, SPEGDEE, HALTENECK TOP, DRESS, TUNIC, DENIM, CAPRI, DONGRIE, 3 PIECE PACK (SPORTS, SLEAVELESSHALF SLEAVES), 2 PIECE PACK (NIGT WEAR, SKIRTS).

ETHNIC

FUSION

KURTIROUND NECKV-NECK


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HALTER NECKMATKA NECKCUT NECKSQUARE NECKCUT SLEAVESSTEPS KURTI

SKIRTSTRAIGHT SKIRTSCRUSH SKIRTSCRUSH ANKLE SKIRTS

FABRICS: - ACOBA, COTTON, GORGET, SHIFFON, LINEN, VISCOS.

SIZES PREPACK

XS 1S 2M 2L 2

TRADITIONAL

KURTISHORT LENGTH KURTIHE KURTALONG KURTA

DUPATTACOTTONSHIFFON

SALWARPATIALANORMALCHOORIDAR

SIZES PREPACK S 2M 3L 3XL 2XXL 1


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ETHNIC WEAR BASICS: -

KURTASALWARCHOORIDARPATIALADUPATTAPANTSBASICS SLIPS

HOMES

TABLE MATTABLE RUNNERTABLE COVERDUBLE BED SHEETSINGLE BED SHEETDOUBLE BED COVERSINGLE BED COVERNAPPKINTOWEL

BATH MATSCUSHION COVERS

WESTERN WEAR

COREKNIT TOPWOVEN TOPKNIT BOTTOMWOVEN BOTTOMSKIRTS

YOUNGKNIT TOPWOVEN TOPKNIT BOTTOM


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WOVEN BOTTOMDENIM BOTTOMJACKETSHORTSSKIRTS

SPORTYJACKETKNIT TOPWOVEN TOPKNIT BOTTOMWOVEN BOTTOM

DENIMDENIM FULL LENGTHCAPRI

NIGHT WEARGOWNSSLEEPWEAR

MENSWEAR

CASUAL DENIMBOOT CUTREGULAR FITSLIMFIT

CASUAL NON- DENIMKNITTED TOP- FULL SLEAVESKNITTED TOP- HALF SLEAVESKNITTED TOP- SLEAVE LESS


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WOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVESWOVEN TOP- SLEAVE LESSWOVEN TOP- H/S BASICWOVEN TOP- F/S BASIC

FORMALWOVEN BOTTOM- FLAT FRONTWOVEN BOTTOM- PLEATEDWOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVES

INNER WEARTRUNK VALUE PACKWEST VALUE PACKY FRONT VALUE PACK

SEMI FORMALWOVEN BOTTOM- FLAT FRONTWOVEN BOTTOM- PLEATEDWOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVES

SPORTS WEARKNITTED TOP- FULL SLEAVESKNITTED TOP- HALF SLEAVESKNITTED TOP- SLEAVELESS

JACKETKNITTED TRACK BOTTOMWOVEN TRACK BOTTOMWOVEN TRACK SHORTSKNIT TRACK SHORTS

SIZES- SHIRTS T-SHIRTS DENIM REGULAR FIT SLIM FIT

39 to 44 S to XL 28 to 36 28 to 36 28 to 38

FOOTWEARMENS FOOTWEAR

CASUAL SHOES FORMAL SHOES CASUAL LACE UPS FORMAL LACE UPS


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CASUAL SLIP UPS CASUAL SLIP ONES CASUAL SANDALS FORMAL SANDALS SPORT SHOES

LADIES FOOTWEAR

H-HEAL SANDAL M-HEAL SANDAL WEDGE HEAL SANDAL FLAT SANDAL CASUAL SANDAL SPORTS SANDAL COMFORT SANDAL FORMAL SANDAL EVA SANDAL

KIDS FOOTWEAR

KIDS BOYS KIDS GIRLS

INFANT BOYS INFANT GIRLS BOTIES

STORE OPENING

1. Check the lock before unlock.

2. unlock the door at 9:30 am.

3. Switch on optimum lights on floor.


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4. Security in place with complete uniform.5. Adequate housekeeping staff sould be in store.

6. Select the housekeeping workdone, cleaning, moppng.

7. Switch on A.C. at 10:00 am.

8. Switch on the music.

9. Trials rooms are empty and clean before 10:30 am.

10.Floats issued in tills and dedicated cashier by 10:25 am.

11.Ensure that staff is complete uniform by 10:30 am.12.Merchandise well present on the floor.

STORE CLOSING

1. All the tills closed.

2. Switch off sensomatic, E.D.C. machine, music at till point.

3. Recycling of Security ags and hangers.

4. Merchandise well present on the floor.

5. Trial rooms are empty.

6. Switch off A.C.

7. Switch off all lights.

8. Lock Managers room.

9. Lock I.T. room.

10.Switch off Sensomatic on both floors and at entrance.

11.Security in place with complete uniform at back door.

12.Manager signature.

13.Security signature.

DUTIES &RESPONSIBILITIES OF STORE MANAGER


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Duties & Responsibilities

Sales Forecast ing & Budget Personnel Recruitment, selection, training, motivation and evaluation Merchandise Display, Inventory Management and merchandise reorders Handling s tore receipts , preparing bank transact ions, opening and closing

store Reviewing customer complaints Reviewing computer data forms Review of overal l operat ions and reports to top management.

DEPARTMENT MANAGERS DETAIL CHECKLIST

Cleaning and Dusting Floor cleaned and Mopped Fixture (Clean, Alignment & Breakage) Stock Replenishment

All style displayed on floor. Size cubing on all merchandise Price tickets on all merchandise Securi ty tag on al l merchandise Merchandise well presented Shelf Talkers (Clean and Properly displayed) Ensure ironing of Merchandise is in process . Trial rooms clean Cash Counters Clean (Merchandise, hangers & tags) Daily sales register updation Daily grooming check

Ensure that the adequate manpower on the floor on hourly basis Staff should try and attend each and every customer, greeting is very

important Ensure that staff is regularly interacting with the customer by giving

exceptional service for customer del ight at al l t ime Ensure the presence of one manager at any given t ime on each floor Time and again check that the villing check out is fast enough as per the

standard norms


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Ensure that the lunch breaks should s tart by 1:00 pm and finished by max

4:00 pm Ensure the presence of al l s taff on the floor in peak hours between 5:00

pm to 9:3 0 pm Time and again check on walk-ins, average bill size, sales on hourly basi

an accordingly Encourage the s taff for further improvement Ensure your morning shift staff and weekly off for the next day is

conveyed to all staff. Maintain DMs log book on daily basis & acknowledge by SM, ASM on

daily basis

CRE DETAIL CHECKLIST

Cleaning and dust ing of shelves, browsers , arms & back bars . Check at 10:30 am floor clean & mopped Fixture (Clean & Alignment) Have a walk on the floor after 10:30 am and check the replenishment

require Stock replenishment for new lines & broken sizes on the floor

Remove broken s izes from the floor i f i t is not available in back Ensure that all style displayed on floor Price tickets on all merchandise Start s ize cubing on al l merchandise Security tags on all merchandise Merchandise well presented Start i roning of merchandise at 10:00am t i l l 4:00 pm Trials rooms (clean, tokens and manned) by 10:30 am Try and attend each and every customer, greeting is very important.

Distribution Of Target In Departments

Let,


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Store target = Rs 50,00,000

Department Target = Rs. 9,50,000

Department Target in % = 19%

One Month = 8 weekends and 23 week days

One Weekend Target = Rs 9,50,000/23 = Rs 41304

Total weekend target = Rs 41304*8 = Rs 3,30,434

Total weekday target = Rs 9,50,000- Rs 3,30,434 = Rs 6,19,566

One weekday target = Rs 6,19,566/23 = Rs 26,937

CRE target (Monthly) = Rs 9,50,000/5 = Rs 1,90,000

One Weekend Target = Rs 41304

One Weekday Target = Rs 26937


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DIPSTICK PARAMETERS

Enable retai lers to f ind out about the health ofspecific area of operat ion in an instant .

Customer Transactions

Customer Conversion Ratio Return To Net Sales Transactions Per Hour Sales Per Transaction Hourly Customer Traffic

Stocks

Average Selling Price Average Stock Price Stock Turnover/Inventory Turnover Rate Percentage Inventory Costs


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Gross Margin Return on Inventory Markdown Goods Percentage Shrinkage to Net Sales

Space

Occupancy Cost Per Square Foot Sell ing Space Sales Per Square Foot Stock Per Square Foot Percentage of Selling Space

Employees

Net Sales Per Full Time Employee Labour Productivi ty Gross Margin Per Full Time Employee

Customer Conversion Ratio

Customer Conversion Ratio= Number Of Transactions x 100

Customer Traffic-Reflects Retai lers abil i ty to turn a potential customer into a buyer-Low f igure means that p romotiona l ac tiv it i es a re no t be ing converted in tsales or that the overall sales effort needs to be assessed afresh-Automatic counting mechanisms or periodic surveys of customer traffic

Returns to Net SalesReturns to Net Sales

Returns to Net Sales= Total Returns x 100

Net Sales


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-Indicat ion of Customer sat isfact ion-Increase in value is an early warning indication-Quality of merchandise is a suspect

Transactions Per Hour

Transactions Per Hour = Number Of Transactions

Number of Hours

-Hourly var ia t ions in sa les ac t ivi t ies i s important for se t t ing s tore hours anstaff schedules-Cash registers will give the time of sale

Sales Per Transaction

Sales Per Transaction= Net Sales

Number Of Transactions

-Reflects Retai lers abil i ty to turn a potential customer into a buyer-Low f igure means that p romotiona l ac tiv it i es a re no t be ing converted in tsales or that the overall sales effort needs to be assessed afresh-Automatic counting mechanisms or periodic surveys of customer traffic

Hourly Customer Traffic

Hourly Customer Traffic= Customer Traffic In

Number of Hours


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-Can be applied to an entire s tore or a s ingle department to schedule hours anestablish staff levels-Used to track customer traffic

Average Sell ing Price

Average Selling PriceTotal Values o f Good Sold

Total Quantity Sold

Average Stock PriceAverage Stock Pr ice

= Total Values of Goods in Stock

Total Quantity in Stock

-Turning stocks around efficiently yields better profits-If dai ly sales account for 2% sales i t wil l take 50 days to sel l s tock and in 36days the turnaround of the s tock is 365/50 i .e 7.3 t imes

Stock Turnover / Inventory Rate Turnover

Stock Turnover / Inventory Rate Turnover= Net Sales

Average Re tail Value of Inventory

-Indica tes how of ten the inventory i s sold and replaced in a given per iod o

time-When this ratio declines there is a possibility that the inventory is excessive

Percentage Inventory Carrying Costs

Percentage Inventory Carrying Costs


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= Inventory Carrying costs x 100

Net Sales

-Important measure as there is a r ise in inventory carrying costs due to higheinterest rates- Important to reduce s tock obso lescence and prevent b lockage of work incapital-Retai lers use this measure to t rack the percentage of their net sales representeby the fixed costs of maintaining inventory.

Gross Margin Return on Inventory

Gross Margin Return on Inventory= Gross Margin

Average Value of Inventory

- GM RO I c om pa re s t he m arg in o n s al es w it h t he o ri gi na l c os t v al ue omerchandise to yield a return on merchandise investment-Preferably the inventory i s to be valued a t cos t ra ther than re ta i l va lue as igives a bet ter indicat ion of investment

Markdown Goods percentage

Markdown Goods percentage

= Net Sales at Markdown

Total Net Sales


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- If t he ra tio i ncr ea ses, t he r et ai le r may ne ed t o ta ke a c lo ser lo ok amerchandising practices, especially pricing-Markdowns may be symptoms of other problems l ike or buying, advert is ing ostore layout .

Shrinkage to Net Sales

Shrinkage to Net Sales= Actual Inventory Book Inventory x 100

Net Sales

-Percentage of net sales lost due to shrinkage-Does not indicate cause of shrinkage but the magnitude of the problem.

Occupancy Cost Per Square Foot Selling Space

Occupancy Cost Per Square Foot Sell ing Space= Occupancy Cost

Square Feet of Selling Space

-Translates into occupancy cost per unit of selling space-In other words the amount that needs to be generated by that unit of space t justify occupancy costs-For mult i-unit retai ler i t is a useful tool to compare the performance of unit

at different locations.

Sales Per Square Foot

Sales Per Square Foot= Net Sales


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Square Feet of Selling Space

-Used to compare different departments or stores using a common standard-Important tool to decide al ternate uses of the space

Percentage of Selling Space

Percentage of Selling Space

= Selling Space x 100

Total Space-Efficiency of space utili ty- Ra ti o v ar ie s w it h m er ch an dis e a nd c an b e u se d t o c om pa re d iff er endepartments or stores.

Net Sales Per Full Time Employee

Net Sales Per Full Time Employee= Net Sales

Total Full Time Employ ees

-Average Sales generated by each full t ime employee-Can be used to set performance targets.

Labour Productivity


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Labour Productivi ty

= Total Labour Costs x 100

Net Sales

-Tracks labour costs incurred to achieve a given sales volume-Can be applied purely to sales employees

Gross Margin Per Full Time Employee

Gross Margin Per Full Time Employee= Gross Margin

Total Full Time Employees

-Gross p rof i t genera ted pe r employee, used to gauge pe rformance of saleemployees-Not the only measure but a s tart ing tool .


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THE STORE LAYOUT

The store design and layout tells a customer what the store is all about. It is a very strong tool i

the hands of the retailer for communicating and creating the image of the store in the minds of th

customers.

For a retailer store layout is:

The primary considerations that the retailer takes into account while choosing the look for hi

store are his target audience, their needs, and buying habits and the merchandise that he is goin

to sell. Creating a store image is like giving a personality to the store

For the consumer:

A store needs to be simple to navigate; it must appeal to his sensory perceptions and must create

sense of belonging, a sense of relationship, a sense of security or assurance and a sense o

pleasure in the shopping experience

Finally it is the physical attribute of the store which affects the customers sensory perceptions

and makes him relate to the store in a particular manner.

The store layout can be classified into

Grid

Race track

Free form.


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Grid layout: It is most commonly used in a supermarkets and discount stores. It Is

preferred layout in many retail stores that adopt self service.

Race track layout: This layout is popularly found in department stores. The display is in th

form of the race track or a loop with a major aisle running through the store. It links the variou

departments or the sections inside the store.

Free form layout: In a f reeform, merchandise i s a r ranged in an asymmetricamanner . I t a l lows for f ree movement and i s o f t en used in re ta i l ou t l e t s tencourage people to browse and shop.

MAX STORE LAYOUT


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Kids wear DepartmentFoot wear DepartmentWestern wear DepartmentEthnic wear andhome DepartmentAccessoriesDepartmentMenswearDepartment

CashTill

BaggageCounter700 ft2

2350 ft2

1502 ft2

2315 ft2

1805 ft2

2234 ft2

1234Pantry


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Consumer Behavior and Marketing Strategy

The study of consumers helps f irms and organizat ions improve their marketinstrategies by understanding issues such as how

The psychology of how consumers think, feel , reason, and select betwee

different al ternat ives (e.g. , brands, products);

The the psychology of how the consumer i s in f luenced by h i s o r he

environment (e.g., culture, family, signs, media);

The behavior of consumers whi le shopping or making other market in

decis ions;

Limita t ions in consumer knowledge or informat ion process ing abi l it ie

influence decis ions and marketing outcome;


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How consumer motivat ion and decis ion s trategies differ between product

that differ in their level of importance or interest that they entai l for thconsumer; and

How marke te rs can adapt and improve the i r marke t ing campaigns an

marketing strategies to more effectively reach the consumer.

Understanding these issues helps us adapt our s trategies by taking the consumeinto cons idera t ion. For example , by unders tanding tha t a number of di f ferenmessages compete for our potent ia l cus tomers a t tent ion, we learn tha t to beffect ive, advert isements must usually be repeated extensively. We also learthat consumers wil l sometimes be persuaded more by logical arguments , but ao the r t imes wi ll be persuaded more by emot ional o r symbolic appea ls . Bunderstanding the consumer, we wil l be able to make a more informed decis ioas to which strategy to employ.

One "off ic ia l" def ini t ion of consumer behavior i s "The s tudy of individualsgroups, or organizat ions and the processes they use to select , secure, use, andispose of products , services , exper iences , or ideas to sa t i s fy needs and thimpacts that these processes have on the consumer and society." Although i t i

not necessary to memorize this defini t ion, i t brings up some useful points : Behavior occurs e i ther for the individual , or in the context of a grou

(e.g. , f ri ends i nf luence w ha t k inds o f c lo thes a per son w ea rs ) o r aorganizat ion (people on the job make decis ions as to which products thfirm should use).

Consumer behavior involves the use and disposal of products as wel l a

the s tudy of how they are purchased. Product use is often of great interest o t he m ar ke te r, b ec au se t hi s m ay i nf lu en ce h ow a p ro du ct i s b es posi t ioned or how we can encourage increased consumption. Since manenvi ronmental p rob lems resu lt f rom product d isposa l (e .g . , motor o

be ing sen t in to sewage systems to save the recyc ling fee , o r ga rbagpiling up at landfills) this is also an area of interest.

Consume r behav io r i nvol ve s s ervi ce s a nd i de as a s w el l a s t angi bl

products.

The impac t o f consumer behavior on soc ie ty i s a l so of re levance . Fo

example, aggressive marketing of high fat foods, or aggressive marketin


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of easy credit , may have serious repercussions for the nat ional heal th aneconomy.

There are four main applicat ions of consumer behavior:

T he m os t o bv io us i s f or market ing s trategy i.e ., fo r making be tt emarketing campaigns. For example, by understanding that consumers armore recep t ive to food adver t i s ing when they a re hungry , we l ea rn tschedule snack adver t i sements la te in the af ternoon. By unders tandin

that new products are usual ly in i t ia l ly adopted by a few consumers anonly spread la ter, and then only gradual ly, to the res t of the popula tionwe lea rn tha t (1 ) companies tha t in t roduce new produc t s mus t be we lf inance d s o t ha t t he y c an s ta y a fl oa t unt il t he ir p roduct s bec ome commercia l success and (2) i t i s important to please ini t ia l cus tomerss ince they wi ll in tu rn in fluence many subsequent customers b ranchoices.

A second appl ica t ion i s public policy. I n t he 1980s , A c c u t a ne , a ne amiracle cure for acne, was introduced. Unfortunately, Accutane resultein severe birth defects i f taken by pregnant women. Although physician

w ere i ns truc te d t o w arn t he ir f emal e pat ie nt s o f t hi s, a numbe r s ti became pregnant while taking the drug. To get consumers at tent ion, thFedera l Drug Administ ra tion (FDA) took the s tep of requir ing tha t vergraphic pictures of deformed babies be shown on the medicine containers

Social market ing involves get t ing ideas across to consumers ra ther thas el li ng s omet hi ng . M ar ty F is hbei n, a marke ti ng p ro fe ss or, w en t osabbat ica l to work for the Centers for Disease Control t rying to reducthe inc idence of t ransmiss ion of diseases through i l legal drug use . Th bes t solut ion, obvious ly, would be i f we could get i l legal drug users ts top. This , however, was deemed to be infeasible. I t was also determinethat the pract ice of sharing needles was too ingrained in the drug culturto be s topped. As a resul t , us ing knowledge of consumer a t t i tudes , DrFishbein crea ted a campaign tha t encouraged the c leaning of needles ibleach before sharing them, a goal that was believed to be more realistic.

As a f ina l benef i t , s tudying consumer behavior should make us be t t econsumers . Common sense sugges ts , for example , tha t i f you buy a 6l iquid ounce bot t le of laundry detergent , you should pay less per ouncthan if you bought two 32 ounce bott les . In pract ice, however, you ofte


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pay a size premium by buying the larger quanti ty. In other words, in thicase , knowing this fac t wi l l sens i t ize you to the need to check the unicost labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust ith is course i s the consumer. However , we wi l l a lso need to analyze our owfi rms s t rengths and weaknesses and those of compet ing f i rms. Suppose , foexample, that we make a product aimed at older consumers, a growing segmentA competing firm that targets babies , a shrinking market , is l ikely to considereposi t ioning toward our market . To assess a competing firms potential threawe need to examine i t s asse ts (e .g . , technology, pa tents , market knowledge

awareness of i ts brands) against pressures i t faces from the market . Final ly, wneed to assess condit ions ( the marketing environment) . For example, al thougwe may have deve loped a p roduc t tha t o f fe r s g rea t appea l fo r consumers , recession may cut demand dramatically.

Segmentation

Segmentation is important in consumer analysis because understanding thconsumer will allow us segment the market more meaningfully.

Segmentation basically involves dividing consumers into groups such tha

members of a group (1) are as similar as possible to members of that samgroup but (2) differ as much as possible f rom members other segmentsThis enables us then to "treat" each segment differentlye.g., by:

Providing different products (e.g. , some consumers l ike cola taste

while others prefer lime)

Offering d i fferent pr ices ( some consumers wi ll take the cheapes

product available, while others will pay for desired features)

Distr ibut ing the products where they are l ikely to be bought by thtargeted segment.

Culture

Culture is par t of the external influences that impact the consumer. Thais, culture represents influences that are imposed on the consumer by otheindividuals.


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The defin it ion of culture i s "That complex whole which include

knowledge, belief, art , morals, custom, and any other capabili t ies anhabits acquired by man person as a member of society."

Culture has several important characteristics:

(1) Culture i s comprehensive . ( 2) Cul tu re i s learned rather than beinsomething we are born with. (3) Culture is manifested within boundarieof acceptable behavior . (4) Conscious awareness of cul tural standards il imited. (5) Cultures fal l somewhere on a continuum between stat ic andynamic depending on how quickly they accept change.

Different perspectives exist in different cultures on several issues; e.g.:

Monochronic cultures tend to value precise scheduling and doing onth ing a t a t ime; in polychronic cultures, in contrast , promptness ivalued less, and multiple tasks may be performed simultaneously(See text for more detail).

Space is perceived different ly. Americans wil l feel crowded wherpeople from more densely populated countries will be comfortable.

Symbols differ in meaning. For example, while white symbols puriti n t he U .S. , i t i s a sy mb ol of d ea th i n Ch in a. Co lo rs t ha t arconsidered masculine and feminine also differ by culture.

In terms of etiquette, some cultures have more rigid procedures tha

others. In some countries, for example, there are explicit standards ato how a gif t should be presented. In some cul tures, gif ts should b

presented in pr ivate to avoid embarrassing the recipient ; in othersthe g if t should be made pub li cly to ensure tha t no percept ion osecret bribery could be made.

The United States has undergone some changes in i ts predominant culturover the last several decades. Again, however , i t should be kept in minthat there are great var ia t ions wi th in the cul ture . For example , on thaverage, Americans have become less materialistic and have sought morleisure; on the other hand, the percentage of people working extremellong hours has a lso increased. The text d iscusses changes in values imore detail .

Demographics and Social Stratification


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Demographics are c lear ly t ied to subculture and segmentat ion . Herehowever, we shift our focus from analyzing specific subcultures to tryinto understand the implications for an entire population of its makeup.

Several issues are useful in the structure of a population. For example, isome rapidly growing countr ies, a large percentage of the populat ion iconcent rated among younger generat ions . In countries such as KoreaChina, and Taiwan, this has helped st imulate economic growth, while icer tain poorer countr ies, i t puts pressures on society to accommodate aincreasing number of people on a f ixed amount of land. Other countr iesuch as Japan and Germany, in con tras t, exper ience p roblems with "graying" society, where fewer non-retired people are around to support aincreasing number of aging seniors . Because Germany actually hoveraround negat ive population growth, the German government has issuelarge financial incentives, in the forms of subsidies, for women who havchildren . In the United States, popula t ion growth occurs both throug

b ir ths and immigra tion . S ince the number o f b ir ths i s not g rowing problems occur for f i rms that are dependent on populat ion growth (e.gGerber, a manufacturer of baby food).

Family Decision Making

The Family Life Cycle . Individuals and families tend to go through a "lifcycle." The simple life cycle goes from

child/teenager ---> young single ---> young couple* ---> full nest

---> empty nest ---> widow(er).

*For purposes of th is d iscussion , a "couple" may e i ther be marr ied omerely involve living together. The breakup of a non-marital relationshi

involving cohabitation is similarly considered equivalent to a divorce.In r ea l l if e, thi s s itua tion i s, o f course, a b it more compl icated . Foexample, many couples undergo divorce. Then we have the scenario:

full nest ---> single parent

Family Decision Making : Individual members of families often servd iff er en t r ol es i n d ec is io ns t ha t u lt ima te ly d raw o n sha red f am il


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resources. Some individuals are information gatherers/holders, who seeout information about products of relevance. The decision maker(s) havthe power to determine issues such as:

whether to buy;

which product to buy (pick-up or passenger car?);

which brand to buy;

where to buy it ; and

when to buy.

Group Influences

Humans are inherent ly social animals, and individuals great ly inf luenceach other.

A useful framework of analysis of group influence on the individual is thso cal led reference group the term comes about because an individuauses a relevant group as a standard of reference against which oneself i

comp ar ed . Ref er en ce g ro up s com e i n s ev er al di ff er en t fo rms . Thaspirat ional reference group r efer s to those o ther s aga inst whom onwould l ike to compare oneself . For example, many f irms use athletes aspokespeople, and these represent what many people would ideally l ike t

be. Associative reference groups include people who more real ist ical lrepresent the individuals current equals or near-equalse.g., coworkersneighbors, or members of churches, clubs, and organizations. Finally, thdissociative reference group includes people that the individual would nol ike to be like. For example, the store l i terally named The Gap came abou

because many younger people wanted to actively dissociate from parentand o th er o ld er and "un co ol " p eo pl e. The Qua li ty P ap er back Boospecifically suggests in i ts advertising that i ts members are "a breed apartfrom conventional readers of popular books.

Diffusion of Innovation


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The d if fusion o f innovat ion r efer s to the t endency o f new product s

practices, or ideas to spread a mong people. Usually, when new products oideas come about , they a re only adopted by a small g roup o f peoplinitially; later, many innovations spread to other people. The bell shapecur ve f requ en tly i ll us tr at es t he r at e o f ado pt io n o f a n ew p ro du ctCumulative adoptions are reflected by the S-shaped curve. The saturatio

point is the maximum proport ion of consumers l ikely to adopt a producIn the case of refr igerators in the U.S. , the saturat ion level is near ly onhundred percent of households; i t well below that for video games thateven when spread out to a large part of the population, will be of interes

to far from everyone.

Some cultures tend to adopt new products more quickly than others, baseon several factors:

Modernity: The extent to which the cul ture is receptive to newthings. In some countr ies , such as Br i ta in and Saudi Arabiatradition is greatly valuedthus, new products often dont fartoo well . The United States, in contrast, tends to value progress

Homophily: The more similar to each other that members of cul ture are, the more l ikely an innovation is to spreadpeoplare more likely to imitate similar than different models. The twmost rapidly adopting countr ies in the World are the U.S. anJapan . Whi le the U.S . interes ting ly scores very low, Japascores high.

Physical distance: The greater the dis tance between people , thless likely innovation is to spread.

Opinion leadership: T he more opi ni on l ea de rs a re val ue d a nrespected, the more l ike ly an innovat ion i s to spread. The s tyle oo pi ni on l ea de rs m od er at es t hi s i nf lu en ce , h ow ev er. I n l esinnovative countries , opinion leaders tend to be more conservativei .e . , to reflect the local norms of resis tance.

Perception


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Background . O ur perce pt ion i s a n a pp roxi ma ti on o f r ea li ty. O ur b ra iat tempts to make sense out of the s t imuli to which we are exposed. This workwell , for example, when we "see" a fr iend three hundred feet away at his or hecorrect he igh t; however, our pe rcept ion i s somet imes "off"for examplec er ta in s ha pe s o f i ce c re a

13536622 to study the consumer behaviour in max lifestle retail lucknow

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