A

COMPREHENSIVE PROJECT REPORT

ON

“Consumer Buying Behavior

Towards

The Organized FMCG Outlets”

Submitted to

S.R. LUTHRA INSTITUTE OF MANAGEMENT

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

 

In

 

Gujarat Technological University

 

UNDER THE GUIDANCE OF

Faculty Guide: Company Guide:

Mr. Ankur Mehta Mr. Tushar Patel

Lecturer Marketing Manager

 

(Big Bazaar Surat)

 

Submitted by

 

Mr. Dwirang N. Dhandhukiya

[Batch No. 2011-13, Enrollment No. 117500592095]

MBA SEMESTER III

S.R. LUTHRA INSTITUTE OF MANAGEMENT - 750

MBA PROGRAMME

Affiliated to Gujarat Technological University

Ahmedabad

December, 20121Students’ Declaration

I, Mr. Dwirang N. Dhandhukiya hereby declare that the report for Comprehensive

Project entitled “ To Study The Consumer Buying Behavior Towards The Organized

FMCG Outlets” is a result of my own work and my indebtedness to other work

publications, references, if any, have been duly acknowledged.

Place: Surat

Date: _____________

__________________(Dwirang N. Dhandhukiya)

2

Institute’s Certificate

Certified that this Comprehensive Project Report Titled “ To Study The Consumer

Buying Behavior Towards The Organized FMCG Outlets” is the bonafide work of

Mr. Dwirang Dhandhukiya (Enrollment No.117500592095), who carried out the

research under my supervision. I also certify further, that to the best of my

knowledge the work reported herein does not form part of any other project report or

dissertation on the basis of which a degree or award was conferred on an earlier

occasion on this or any other candidate.

Place: Surat

Date: 05/01/2013

___________________

(Mr. Ankur Mehta)

Lecturer

___________________

(J.M. Kapadia) I/C Director3PREFACE

It is said that “knowledge is power” but “applied knowledge is power seems to be a correct statement”.

In this modern world, theoretical study has value without its practical application

.practical knowledge is more powerful than the knowledge of books. In today‘s business world, practical Knowledge plays important role keeping this in mind M.B.A. Course involves comprehensive report for eight months which provide Practical knowledge and experience to the student in the field of Management.

This comprehensive report is prepared on Big Bazaar and includes about consumer buying behaviors towards the organized FMCG outlet.

I have acquired a lot of knowledge by doing this study and will always remain thankful to the college, university and the team of Big Bazaar who helped me in accomplishing this task.4ACKNOWLEDGEMENT

It is often said that the thing we had seen is more effective than the thing we have heard about. It proved true with me during the industrial training in a well established Retail organized outlet Big Bazaar.

I have studied a lot about the consumer buying behavior towards the FMCG products in Retail organized outlet but during my training at Big Bazaar, I gone through various experiences that often occur in one or the other Retail industry.

Gujarat Technical University has arranged a very effective syllabus which includes this Industrial training.

For this unforgettable and very beneficial training, I want to thank my college for giving such opportunity. I have learnt a lot of things during this training.5EXECUTIVE SUMMARY

Retailing is the final step in the distribution of merchandise-the last in the supply chain connecting the bulk productions of commodities to the final consumers. Retailing covers diverse products such as foot apparels, consumer goods, financial services and leisure. The organized retail sector has grown to 6% by 2010 and touch a retail business of $ 17 billion. As India moves towards the services oriented economy, a rise in this percentage is expected. The number of retail outlets is growing at about 8.5% annually in the urban areas and in towns with population between 1 lacks to 1 million; the growth rate is about 4.5%. Organized retailing with retail formats. Yet, Indian retailing has still not been able to come up with many successful formats that can be scaled up and applied across India. Some of the notable exceptions like Big Bazaar, Reliance Retail & D-Mart who scaled their format across the country.

The research project is undertaken with a view to analyze the method trends in buying behavior of consumers towards organized FMCG Retail Outlets. The aim is to understand the effect of increasing income levels of consumers on the organized retail industry to understand the consumer Psychology, Attitude and Browsing behavior to study the existing customer’s suggestions and to recommend valuable suggestion & recommendations.6TABLE OF CONTENTS

Students’ DeclarationInstitute’s CertificatePrefaceAcknowledgementExecutive Summary

Sr.   

Particulars 

PageNo.

       

No.1. Introduction

   

01       

2. Industry Profile 

07         

 

a. Retailing 07 

 

b. Indian Retail Industry 11 

 

c. Emerging Trends in Indian Retail Industry 12 

 

d. Emergence of New Retail Formats 12 

       

3. Company Profile 

15       

 

a. Company Profile 15 

 

b. SWOT 

18 

       

4. Review of Literature 

22       

5. Research Methodology 

24       

 

a. Problem Statement 24 

 

b. Research Objective 24 

 

c. Research Design 25 

   

i.Type of Design   

   

ii.Sampling   

   

iii.Data Collection   

   

iv.Tools for Analysis   

   

v.Limitations of the Study   

         

6. Bibliography   

27           

7

1. INTRODUCTION

Consumer is the king and hence it is the consumer who determines what a business is, therefore a sound marketing program was started with a careful analysis of the habits, attitudes, motives and needs of consumers. In particular, a marketer should find answer to the questions: What are the kind’s products the customers buy? Why they buy them? How they buy them? When they buy them? Where they buy them? How often they buy them?

CUSTOMER BUYING BEHAVIOUR

In today’s world purchases made by a customer is to satisfy his or her needs. All the behavioural activities carried out by a customer during and after the purchase of a

product are termed so as “buyer behaviour”. In this article we will come across the origin of buying ideas, what is buyer behaviour, how consumer buy, why consumer buy, types, Decision process and what motives them.

WHAT IS BUYER BEHAVIOUR?

Our economy gets stronger depending upon the wealth of goods and services produced within the country. A huge number of alternative suppliers are present for almost all the products today: substitute products are available to consumers, who make decision to buy products. Therefore the main objective of the seller is please the consumer at all times. In order to be successful, sellers need to identify the customer, what they buy, when they buy, why they buy and how they buy.

A buyer making a purchase of a particular product or a particular brand can be termed as “product buying motives” and the reason behind the purchase from a particular seller is known as “patronage motives”

When a person gets his pay packet, and if he is educated, along with his wife he prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they could have purchased some items, which were not in the budget, and thus there arises a deviation from the budgeted items and expenditure. All these behavioural changes within human beings during the period of purchasing can be termed as “buyer behaviour”.8Consumer buys according to his/her needs:

1. Consumer desire is recognized

The first step the consumer determines that he is not satisfied (i.e., consumer’s perceived actual condition) and would be keen in improve his/her situation (i.e., consumer’s perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumer’s needs. Marketers are particularly good at this through advertising; in-store displays and even the intentional use of scent (e.g., perfume counters).

2. Information to be searched

The next step is to undertake a search for information on possible solutions. The sources used to acquire the information may be minimized to the maximum like remembering the information from previous experiences (i.e., memory) or the consumer may extend considerable effort to collect information from outside sources (e.g., Internet, friends, other buyers etc.). How much amount of effort each consumer directs toward searching depends on factors? Such as: the importance of satisfying the need, similarity with available solutions, and the time available to collect the information.

3. Options are evaluated after use

Consumers’ efforts may result in a set of options from which a choice has to be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of Possible solutions to their needs (i.e., product types) while at level two, the consumer may be evaluating the particular product or service (i.e., brands) within each solution. For example, if a consumer wants to replace his 100cc bike with a150-200cc bike he has got plenty of options like PULSAR, KARIZMA, APPACHE, UNICORN, FZ, R15 etc….

4. Purchase

In most of the cases the solution chosen by the consumer will match with the product. However, this may change at the actual time of purchase. The “intended” purchase may be altered at the time of purchase for many reasons such as: the product isout-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase (e.g., friend is critical of purchase).95. Evaluation after-purchase

Once the purchase is over an evaluation of the decision is made. If the product performs below the consumer’s expectation then he/she will re-evaluate the satisfaction with the decision, which at its extreme and it may result in the consumer returning back the product. While in less extreme situations the consumer will retain the purchased product but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly branded products. To help the consumers to ease the concerns with their purchase evaluation, marketers need to be receptive and also take initiative steps to encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address the purchasers’ concerns.

Why Consumers Buy:

Purchases are made to satisfy the needs of the consumers. Some of these needs are basic and needed for survival, while other needs are not required for survival and vary depending on the purchaser’s taste and preferences. It probably makes more sense to classify needs that are not a necessity as wants or desires. In fact, in many countries where the standard of living is very high, a large portion of the population’s income is spent on wants and desires rather than on basic needs.

For example, in planning for a family vacation the mother may make the hotel reservations but others in the family may have input on the hotel choice. Similarly, a father may purchase snacks at the grocery store but his young child may be the one who selected it from the store shelf. So understanding consumer purchase behaviour

involves not only understanding how decisions are made but also understanding the dynamics that influence purchases.

TYPES OF CONSUMER PURCHASE BEHAVIOR

A consumer is faced with purchase decision daily. But not all decisions are given equal importance. Some decisions are more complex than others and thus they require more effort by the consumer. Other decisions are fairly like a routine and thus they require only little effort. In general, consumers face four types of purchase decisions:

Minor New Purchase – these purchases represent something new to a consumer but in the customer’s mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group).

Minor Re-Purchase – these are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options (i.e., consumer is brand loyalty).

Major New Purchase – these purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the10consumer has little or no previous experience making these decisions. The consumer’s lack of confidence in making this type of decision often (but not always) requires the consumer to engage in an extensive decision-making process.

Major Re-Purchase - these purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the product.

For marketers it is important to understand how consumers treat the purchase decisions they face. If a company is targeting customers who feel a purchase decision is difficult (i.e., Major New Purchase), their marketing strategy may vary greatly from a company targeting customers who view the purchase decision as routine. In fact, the same company may face both situations at the same time; for some the product is new, while other customers see the purchase as routine. The implication of buying behaviour for marketers is that different buying situations require different marketing efforts

Consumer Buying Decision Process

“Nothing is more difficult and therefore, more precious, than to be able to decide is” quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this reason that the marketers are bound to have a full knowledge of the consumer – buying decision process.

However the actual act of purchasing is only one stage in this process and the process is initiated at several stages prior to the actual purchase. Secondly even though we find that purchase is one of the final links in the chain of process, not all decision processes lead to purchase. The individual consumer may terminate the process during any stage. Finally not all consumer decisions always include all stages. Persons engaged in extensive decision making usually employ all stages of this decision process. Whereas those engaged in limited decisions making and routine response behaviour may skip some stages. The consumer decision process is composed of two parts, the process itself and the factors affecting the process.

Economic Factors affecting the buyer behaviour

1. Disposal personal income:

The economists made attempts to establish a relationship between income and spending. Disposal personal income represents potential purchasing power that a buyer has. The change in income has a direct relation on buying habits.

2. Size of family income:

The size of family and size of family income affect the spending and saving patterns. Generally large families spend more and short families spend less, in comparison.113. Income expectations:

The expected income to receive in future has a direct relation with the buying behaviour. The expectation of higher or lower income has a direct effect on spending plans.

4. Propensity to consume and to save:

This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give importance to present needs, then they dispose of their income. And buyers spend less if they give importance to future needs.

5. Liquidity of Fund:

The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily convertible into cash, e.g. bonds, bank balances etc.,

6. Consumer Credit:

“Buy now and pay later” plays its role effectively in the rapid growth of markets for car, scooter radio, furniture and the like.

Economic model suggests behavioural hypothesis: Lower the price of the product, higher the sales. Lower the price of substitute products; lower the sales of the main product Higher the real income, higher the sales of the product. Higher the promotional expenses, higher the sales.

Internal influences of buyers: psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, feelings, demographics.

Consumer behaviour concern with consumer need consumer actions in the direction of satisfying needs leads to his behaviour of every individual depend on thinking process.

External influences of buyers’ culture: sub-culture, Locality, royalty, ethnicity, family, social class, reference groups, lifestyle, and market mix factors

Types of Consumer Buying Behaviour

Level of Involvement in purchase decision. Importance and intensity of interest in a product is a particular situation.

Buyers’ level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk could be classified as: Personal risk, Social risk and Economic risk.12FMCG

Fast Moving Consumer Goods sector (FMCG) or Consumer Packaged Goods sector(CPG) refers to sectors that satisfies the elementary needs of a consumer other than grocery, ranging from packaged foodstuff, dairy products, cooking oil, bread, butter, cereals, beverages like tea coffee, pharmaceuticals, confectionery, biscuits, glassware, stationary items, watches, toiletries, detergents, shampoos, skin care products, cosmetics, toothpaste, dish washing liquid, shaving cream, razor, batteries, shoe polish, energy drinks, soft drinks, clothing, furniture and household accessories to electronic goods like cell phones, laptops, computers, digital cameras etc. These are usually categorized as Fast Moving Consumer Electronics or FMCEs. We know that a major part of a consumer’s monthly budget is spent on these goods.

FMCG sector in India has grown in a phenomenal pace experiencing the changes in the taste and preference of the consumers during the last decade owing an increase in their incomes. Large scale and low cost production, modern retailing strategies, branding and maintenance of intense distribution network have given FMCGs an edge over others in raising hovering revenues. At present Indian FMCG sector is worth Rs. 1300 billion and expected to be around a whopping value of Rs. 4000 to

Rs. 6000 billion by 2020. Thus we can see a huge job opportunities in the field of FMCG and its closest rival retailing sector in the field of marketing, retailing, operations, advertising, supply chain, logistics, human resources, product packaging and development, finance, operations, general management, supervising and so on.

Hindustan Unilever Limited (HUL), Gujarat Co- operative Milk Marketing Federation Ltd (GCMMF), Indian Tobacco Company (ITC), Nestlé India and Dabur India Limited are the oldest FMCG companies in India. Globalization has broadened the list of FMCG Companies in India. Foreign players like Cadbury, Godfrey Phillips, Johnson & Johnson, Procter & Gamble (P&G), Gillette, Pepsi Co, Britannia and Reckitt Benckiser, have registered a firm presence in India for last so many years now. Among other Emami, Asian Paints (India), Marico Industries Ltd., Colgate-Palmolive (India) Ltd., Henkel Spic, Modi Revlon, GlaxoSmithKline, Nirma Ltd and Godrej Consumer Products Ltd., lead the FMCG Companies chart in the country.

The top contenders that take initiative in brand positioning and establish their products in the market are these leading FMNCG companies. Product differentiation, portable & attractive package styling, tag lines and punch lines in advertising, competent marketing and innovative product promotion strategies are very important for this industry to perform well. Due to high competition this sector’s pressure on margins is very high that makes advertisement a prerequisite for this sector. FMNCG companies play a very vital role in bringing up the advertisement industry to such great height in India today and bringing up innumerable job opportunities and also helping the growth of the economy.132. INDUSTRY PROFILE

Every business conducted for the purpose of selling or offering for sale; any good, wares and merchandise, other than as a part of “wholesale business” to the final consumer can be defined as retail business.

Retail is the second largest business in the United State both in number of establishments and the number of employees. The US retail industry generates $ 3.8 trillion in retail sales annually ($ 4.2 trillion if food services sales are included), approximately $ 11,993 per capita. The retail sector is also one of the largest worldwide.

Wal-Mart is the world largest retailer and the world’s largest company with more than $ 312 billion (USD) in sales annually. Wal-Mart employs 1.3 million associates in the United States and more than 400,000 internationally. The second largest retailer in the world is Finances Carrefour.

What is Retailing?

Retailing is all the activities involves in selling goods and services directly to final consumers for their personal non personal business use.

The word retail is derived from the French word retailer, meaning to cut a piece off or to break bulk. A retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end users customers, usually in a shop, also called a store. Retailers are at the end of the supply chain.

TYPES OF RETAILING

Store RetailingNon-Store Retailing

Store Retailing

Retail stores come in a variety of shapes and sizes, and new retail types keeps emerging. They can be classified by one more of several characteristics:

Amount of serviceProduct lineRetail pricesControl of outletsTypes of stone cluster141)Amount of Service:

Different products require different amounts of services and customer service preferences vary.

Self service retailers:

Customers are willing to perform their own “Locate – Compare – select” process to save money. Today self service is the basis of all discount operations, and typically is used by sellers of convenience goods (such as super markets) and nationally branded; fast moving shopping goods (such as catalog showrooms).

Limited service retailers:

Retailers such as Sears and J.C Penrey, provide more sales assistance because they carry more shopping goods about which consumers need information. Their increased operating costs result in higher prices.

Full service retailers:

Like especially stores and first class department stores, have sales people to assist customers in every of the shopping process. Full service stores usually carry more specially goods for which customers like to be waited on. They provide more liberal return policies, various credit plans, free delivery, home servicing and extra such ad lounges and restaurants.

2)Product line:

Retailers can also be classified by the depth breadth of their product assortments. The depth of a product assortment refers to the number of different versions of each product that are offered for sale. The breadth of the assortment refers to the number of different products that are the store carriers.

Especially stores carry a narrow product line with a deep assortment within that line. Examples include; store selling sporting goods, books, furniture, electronics, flowers or toys. Today especially stores are flourishing due to the increasing use of market segmentation, market targeting and product specialization.

A department store carries a wide variety of product line. Each line is operated as a separate department managed by specialist buyers and merchandisers.

Super markets are large, low – cost, low – margin, high – volume, self – service stores that carry a wide variety of food, laundry and household products.15Convenience stores are small stores that carry a limited line of high turnover convenience a week. Convenience stores much charge high prices to make up for higher operating costs are lower sales volume. But, they satisfy an important consumer need.

Super stores, combination stores and hyper markets are all larger than the conventional super market. Many leading chains are moving towards super stores because their wider assortment allows prices to 5-6% higher than conventional super markets. Combination stores are combined food and drug stores. Examples are A & P’s family warehouse retailing, and operate like a warehouse.

3)Relative prices:

Retailers can also be classified by the prices they charge. Most retailers charge regular prices and offer normal quality goods and sen-ices at a higher price. Retailers that feature low prices include:

Discount stores sell standard merchandise at lower prices by accepting lower margins and selling higher volume. Occasional discounts or specials do not make a

store a discount store. A true discount store regularly sells its merchandises at lower prices, offering mostly national brands, not inferior goods.

4)Control of outlets:

About 80 % of all retail stores are independents accounting for 213 of retail sales. Other forms of ownerships include the corporate chain, the voluntary chain and retailer cooperative, the franchise organization, and the merchandising conglomerate.

The chain store is one of the most important retail developments of this century. Corporate chains appear in all types of retailing, but they are strongest in department, variety, food, drug, shoe, and women's clothing stores. The size of corporate chains allows them to buy in large quantities at lower prices, and chains gain promotional economies because their advertising costs are spread out over many stores and over large sales.

The retailer cooperative is a group of independent retailers that set up a jointly owned central wholesale operation and conduct joint merchandising and promotion efforts.

A franchise is a contractual association between a manufacturer, wholesaler, or service organization (the franchiser) and independent business people (the franchisees) who buy the right to own and operate one or more units in the franchise system.16Merchandising conglomerates are corporations that combine several different retailing forms under central ownership and share some distribution and management functions examples include: Dayton Hudson and J.0 Penney.

5)Types of store cluster:

More stores today cluster together to increase their customer pulling power and to give consumers the convenience of one stop shopping.

Central business districts: A central business district comprises of banks, departed stores, Specialty stores and movie theatres.

A shopping centre is a group of retail business planned, developed, owned and managed as a unit.

Non - Store Retailing

Although most goods and services are sold through stores, Non - store retailing has been growing much faster than store retailing.

Traditional store retailers are facing increasing sales competition from catalogs, direct mail, telephone, home TV shopping shows, on line computer shopping services, borne and office panics and direct retailing approaches.

Non - store retailing includes: direct marketing, direct selling and automatic vending.17INDIAN RETAIL INDUSTRY

Retailing in India is one of the significant contributors to the Indian economy and accounts for 35% of the GDP. However this sector is in a fragmented state with over 12 million outlets operating in the country and only 4 % of them being larger than 500 sq. ft. in Size. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market Size. Thus, India has the highest number of outlets per capita in the world with a variety spread retail network but, with the lowest per capita retail space (@ 2 sq. ft. per person as compared to 16 sq. ft. per person for USA).

INDIAN RETAIL MARKET

The retail sector in India is highly fragmented and mostly owner-run "Mom and Pop" outlets. The entire sector is dominated by small retailers consisting of local Kirana shops, general store, footwear and apparel shops, hand-cart hawkers and pavement vendors. These together form the "unorganized retail- or "traditional retail”. According to the Investment Commission of India (I0) estimates, there are over 15 million such "Mom and Pop" retail outlets in the country.

In terms of total sales, one can find a wide range of estimates and this definitely; Oleos lack of sound official government data. ICI had estimated Indian retail sales figure at US $262 billion for 2010, although market estimates ranged from US $200bn to as high as US $386bn for that year. Various agencies have made efforts to project the growth rate of the total retail market till 2013 and the figures hover around 13-15.5 percent18Emerging Trends in Indian Retail Industry

'Tier II' phenomenon

Small towns with a population of as to I million (like Surat, Lucknow, Dehradun, Vijayawada, Bhopal, Indore, Vadodara, Cointhatore, Nasik, Bhubaneswar, Varanasi and Ludhiana etc.) are witnessing a defined increase in disposable income coupled with high aspiration levels leading to enhanced spending on consumer goods along with lesser aversion to credit. With consumption in metros with already being

exploited (85% of retail sales as of now), these Tier II areas are fresh targets and are expected to contribute 29-25 % of organized retailing sales.

Entry of International Players

The tight today is not between big Organized Retail Stores (3%) and unorganized Kirana shops (97%), but it's between global giants like; Wal-Mart, Tesco and shoppers stop. pantaloons. Entry of these global players will impact the way Indian retailers operate. as much as it will change the way Indian consumers live and do their shopping. They will no longer be just dependent on their local Kirana shop for their everyday needs. They could just shop once a week or once a month at comparatively cheaper rates and remain hassle free. Indian retailer will also need to quickly come to terms with the market realities. On one hand they will fight size factor and the other hand great efficiencies.

Emergence of New Retail Formats

Currently the new sector in India is populated with the traditional mom & pop stores and some I.000 odd supermarkets under organized retail chains. A daring few ventured into the organized markets with successful results and this format is being fast replicated by other players. This experience indicates that the Indian Consumer has matured to the next level of shopping experience. Given the Indian conditions and the vast diversity a single format may not be possible for the national presence. but region specific formats may evolve. An interesting fact is that of lack of presence of organized retail chains in the rural/semi-urban centers as over 60% of Indian population is still in these parts An ideal no-frills model to start with would be ideal for the rural markets; this would help to take them to the next level of the supermarket experience.19Specially Malls

Keeping in mind the astonishing pace with which new supply is expected to enter the market, many mall developers in a bid to offer a distinctive value proposition. are planning to develop 'specialty malls'. These niche developments shall emerge as one - stop destinations in their chosen product categories. The Delhi - based Antes Group has developed Gold Souk, an exclusively jewellery mall that is already operational in Gurgaon and has ambitious plans to replicate the concept across the country. Further a number of analogous developments like a 'wedding mall ‘by omaxe group. 'Automobile Mall', etc. are also in the offering. In line with international trends, tome Malls' offering the entire range of building and interior decor solutions are also coming up in various parts of the country including Pune ('Ishanyi promoted by Deepak fertilizers and petrochemicals corporation Ltd.), Gurgaon & Kolkata.

Price Correction

Fallout of the surge in mall development activity shall be that developers will be forced to otter retailers prime real estate spaces at costs lower than those prevailing today, as the space required by retailers to fulfil their expansion plans is likely to be lesser than offered. This correction could result in a more structured retail real estate market that would allow retailers a higher margin on their real estate investments, thereby enabling them to expand faster.

Transformations and Innovations of Supply Chain and TransportationLogistics

To counter the unbeatable advantages of convenience of a hop, skip and a jump access and home delivery, organized retailers seem to have just one option — offer attractive prices to the consumer. A successful retailers winning edge will therefore come from sourcing — how best it can leverage its scale to drive merchandise costs down, increase stock turns and get better credit terms from vendors. Efficient supply chains can achieve this objective and fuel demand. The supply chain in India is full of inefficiencies — a result of inadequate infrastructure, too many middlemen, complicated laws and an indifferent attitude.

More Use of Technology

Retailing; as discussed before is at a nascent stage in India. The complicated information systems and underlying technologies are in the process of being established. Most grocery retailers like Food World have started tracking consumer purchases through CRM. The lifestyle retailers through their 'affinity clubs' and 'reward clubs' are establishing their processes. The traditional retailers will always continue to exist but organized retailers are working towards revamping their business to obtain strategic advantages at various levels market cost, knowledge and customer. With differentiating strategies — value for money, shopping20experience, variety, quality, discounts, advanced technologies, change in the equilibrium with manufacturers and a thorough understanding of the customer behaviour, the ground is alls et for the organized retailers.

Community Involvement

Footfalls in most malls are observed to be significantly higher on weekends. To ensure regular walk-ins on weekdays, mall developers have started to focus on involving the local community. They have recognized that their centers need to be entertaining, and that shoppers want their malls and town centers to blend with and

reflect their own communities. Their philosophy today is thus to create a center where people would want to stay well beyond their shopping time to enact the rituals of urban life. Activities like karate classes and painting competitions for children pull their salary earning parents to visit the mall.21

3. INTRODUCTION TO THE COMPANY

History

Big Bazaar was launched in September, 2001 with the opening of its first four stores in Calcutta, Indore, Bangalore and Hyderabad in 22 days. Within a span of ten years, there are now 161 Big Bazaar stores in 90 cities and towns across India. By September 2012 BIG BAZAAR will have two more stores in North east namely SILCHAR and JORHAT in Assam.

Big Bazaar was started by Kishore Biyani, the Group CEO and Managing Director of Pantaloon Retail India. Though Big Bazaar was launched purely as a fashion format including apparel, cosmetics, accessory and general merchandise, over the years Big Bazaar has included a wide range of products and service offerings under their retail chain. The current formats include Big Bazaar, Food Bazaar, Electronic Bazaar and Furniture Bazaar. The inspiration behind this entire retail format was from Saravana Stores, a local store in T.Nagar, Chennai

The stores are customized to provide the feel of mandis and melas, while offering the modern retail features like Quality, Choice and Convenience. As the modern

Indian family's favourite retail store, Big Bazaar is popularly known as the "Indian Wal-Mart".

On successful completion of ten years in Indian retail industry, in 2011, Big Bazaar has come up a new logo with a new tag line: ‘Naye India Ka Bazaar’, replacing the earlier one: 'Isse Sasta Aur Accha Kahin Nahin'.22Strategy

3-C Theory

According to Kishore Biyani's 3-C theory, Change and Confidence among the entire population is leading to rise in Consumption, through better employment and income which in turn is creating value to the agricultural products across the country. Big Bazaar has divided India into three segments:

India one: Consuming class which includes upper middle and lower middle class (14% of India's population).

India two: Serving class which includes people like drivers, household helps, office peons, liftmen, washer men, etc. (55% of India's population) and

India three: Struggling class (remaining 31% of India's population).

While Big Bazaar is targeted at the population across India one and India two segments, Aadhaar Wholesale is aimed at reaching the population in India three segment. With this, Future Group emerged as a retail destination for consumers across all classes in the Indian society.

Operations

Most Big Bazaar stores are multi-level and are located in stand-alone buildings in city centers as well as within shopping malls. These stores offer over 200,000 SKUs in a wide range of categories led primarily by fashion and food products.

Food Bazaar, a supermarket format was incorporated within Big Bazaar in 2002 and is now present within every Big Bazaar as well as in independent locations. A typical Big Bazaar is spread across around 50,000 square feet (4,600 m2) of retail space. While the larger metropolises have Big Bazaar Family centres measuring between 75,000 square feet (7,000 m2) and 160,000 square feet (15,000 m2), Big Bazaar Express stores in smaller towns measure around 30,000 square feet (2,800 m2).

Big Bazaar has the facility to purchase products online through its official web page, and offers free shipping on some of their products.23Innovations

Wednesday Bazaar

Big Bazaar introduced the Wednesday Bazaar concept and promoted it as “Hafte Ka Sabse Sasta Din”. It was mainly to draw customers to the stores on Wednesdays, when least number of customers are observed. According to the chain, the aim of the concept is "to give homemakers the power to save the most and even the stores in the city don a fresh look to make customers feel that it is their day".[6]

Sabse Sasta Din

With a desire to achieve sales of Rs 26 Crore in a one single day, Big Bazaar introduced the concept of "Sabse Sasta Din". The idea was to simply create a day in a year that truly belonged to Big Bazaar. This was launched on January 26, 2006 and the result was exceptional that police had to come in to control the mammoth crowd. The concept was such a huge hit that the offer was increased from one day to three days in 2009 (24 to 26 Jan) and to five days in 2011 (22-26 Jan).

Maha Bachat

Maha Bachat was started off in 2006 as a single day campaign with attractive promotional offers across all Big Bazaar stores. Over the years it has grown into a 6 days biannual campaign. It has attractive offers in all its value formats such as Big Bazaar, Food Bazaar, Electronic Bazaar and Furniture Bazaar - catering to the entire needs of a consumer.[7]

The Great Exchange Offer

On February 12, 2009 Big Bazaar launched "The Great Exchange Offer", through with the customers can exchange their old goods in for Big Bazaar coupons. Later, consumers can redeem these coupons for brand new goods across the nation.24SWOT ANALYSIS OF Big Bazaar

Strengths:-

India's biggest conglomerate.

First to start retail trend in India.Market value US $ 35 billion

Turnover of US $ 27 billion in 2010.

Generating 1 million jobs Reaching annual sales of US 525 billion by 2011

Free membership card to its customer.

Firsthand knowledge of retail business.

Small retailers are powerful lobby that made RIL to take on international giants.

Latest software and technology used like SAP, Retail used by wall mart except Big Bazaar.

Weakness:-

Lack of detailed region specific customer data. Less data on spending pattern.

Lack of trained personnel at all level.

Insufficient ERP.Sr:N1

Insufficient stock

No proper system to solve customer complaints regarding products.

Opportunities:-

India ranks 1" for top international destination for retail investment.

U.S $350 billion retail market

96% market share is held by 12 million family run shops.

4th largest economy in purchasing parity terms after US, China & Japan.

Retail sector will grow 35% in 2013

Food retailing is expected to grow to US $ 1.6 billion

Apparel to increase by 9.5% by 2012

Threats:-

Wal-Mart

Reliance Group – Reliance Fresh

Aditya Birla Group – Peter England People Shop, more

Tata Group – Westside, Tanishq Store, Titan Store, Star India Bazaar, Landmark, Croma.25

Reliance Fresh is the convenience store format which forms part of the retail business of Reliance Industries of India which is headed by Mukesh Ambani. Reliance plans to invest in excess of 250 billion in the next 4 years in their retail division.[citation needed] The company already has in excess of 1000 Reliance Fresh outlets across the country.[citation needed] These stores sell fresh fruits and vegetables, staples, groceries, fresh juice, bars and dairy products.

A typical Reliance Fresh store is approximately 3000–4000 square feet and caters to a catchment area of 2–3 km.

History

After launch, in a dramatic shift in its positioning and mainly due to the circumstances prevailing in UP, West Bengal and Orissa, it was mentioned recently in news dailies that Reliance Retail is moving out of stocking fruits and vegetables. Reliance Retail has decided to minimise its exposure in the fruit and vegetable business.

The company may not stock fruit and vegetables in some states. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly due to political reasons, and partly due to its inability to create a robust supply chain. This is quite different from what the firm had originally planned.

When the first Reliance Fresh store opened in Hyderabad last October[citation needed], not only did the company say the store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its “farm-to-fork"theory[citation needed]. The idea the company spoke about was to source from farmers and sell directly to the consumer, removing middlemen out of the way.26Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends, Reliance Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various formats that Reliance has rolled out.[citation needed]

In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of Apple Specialty Stores branded as iStore, starting with Bangalore.

Controversy

Recently their stores in Jharkand faced the ire of mobs of local vegetable vendors. They vandalised and attacked the stores claiming that they were stealing their livelihoods.27

D Mart, the R K Damani-promoted retail chain, is planning to go national in the next couple of months, by opening stores in ‘key’ cities such as Bangalore, Delhi and Hyderabad. The nine-year-old chain would add at least 25 stores in the next one year to its existing 33 stores in Maharashtra and Gujarat, said an executive with D Mart. The retailer recently opened a 25,000 sq ft store in Hyderabad. R K Damani is one of the biggest stock market investors in the country.

“We will open stores wherever we find the right opportunity. We will mostly focus on key cities,” said the executive.

Though D Mart was among the few retailers who owned properties rather than leasing these out, it is also looking at taking properties on rent to increase its footprint.

D Mart’s expansion plan coincides with the plans of other retail majors, such as Bharti Retail and Reliance Retail, who have already hit the expansion trial, following recovery in economy and consumer spending.

“We want to be good at what we do. We know we want to match up to the competition, if we need to survive and grow,” the executive added. For instance, D Mart does not retail its private labels, as it does not have the scale to do so, while retailers such as Kishore Biyani’s Future Group, Aditya Birla Retail and Reliance Retail have invested in private labels.

According to consultants, D Mart’s slow expansion became a boon for it as last year’s economic slowdown proved painful for retailers, especially for the mid-size ones, as customers curbed spending to save cash.

“They (mid-size retailers) expanded too much, too fast. That is the reason they went down. If they (D Mart) can grow slowly, they can do well,” said Anand Raghuraman, partner and director at Boston Consulting Group.28

4. Review of Literature

Mohammed Ismail El-Adly (2007) “Shopping malls attractiveness: a segmentation approach” this paper focuses on the six factor that influence the consumer of the mall like comfort, diversity, entertainment, mall essence, luxury and

convenience. It explains about three different types of mall shoppers a) Relaxed shoppers b) demanding shoppers c) pragmatic shoppers. Here segments were differentiated based on the behaviour of shopper, demographics and attractiveness of the mall.

ZafarU.Ahmed,MorryGhingold and Zainurin Dahari( 2007) Malaysian shopping mall behavior: an exploratory study. In their study showed that the students in the Malaysia mainly visited the mall for interior looks, products of interest available in the malls, one stop shopping solution and able to socialize with their friends. The study also revealed that the student or people with younger generation had more inclination towards the shopping mall when compared to an older population. Postsecondary students from the Klang Valley were seen to have stayed more time in malls and visited frequently. It was expected that they were visiting about 6 times every 2.5 visit to the mall. Out of these people about 1/3 of the people had visited more than three different shopping mall in the last 30 days. It means that the shopping behaviors of the shoppers of mall in Malaysia were similar to the behaviour of shoppers of the mall in western countries.

Ching-Jui Keng, Tseng-Lung Huang and Taipei, Taiwan Li-Jie Zheng (2007) Modelling service encounters and customer experiential value in retailing An empirical investigation of shopping mall customers in Taiwan: The researcher in this study found that the personnel interaction actually optimistically influenced that perception of efficiency and excellent value. Encounters in the physical environment affect the perception of aesthetic and playfulness and all dimensions of customer experimental value. The study will divide the service encounters into 2 dimensions- physical environment encounters and personal interaction encounters. Further the pragmatic study showed that customer experiential value mediated the relation between the consumer behaviour intentions and service encounters.

Sumeet Gupta, Kavita Jain and Divya Jain (2009) “Customer Retention Strategies for Organized Retailers in Semi-Urban Markets” In this research the researcher studies the factor that will keep bring the back the consumer to shop at the same organized retail store again and again. They found that the constraint- based relationship and dedicated based relationship has a huge influence to get the shopper keep coming back. The organized retailers should make sure that the shoppers are rewarded for loyal be providing incentives and also improve the enjoyment and convenience for the shoppers while shopping.29Jabir Ali and Sanjeev Kapoor (2010) “Buying behaviour of consumers for food products in an emerging economy” In this research the researcher showed that the consumers had following priority while choosing a shopping place like cleanliness/freshness of food products, price, variety, quality, non-seasonal availability and packaging. Shoppers preferred to shopping market, where there were additional services available, children’s attraction, basic amenities and

the place should be affordable. Results of the study suggested that the grocery items and food items are purchased in loose from nearby outlets and the fruits and vegetable are purchased more than once in a week because they were of perishable nature and the grocery very purchased quite less often.

Yusniza Kamarulzaman, and Frankie Lee Chee Lih (2010) studied “Attracting Shoppers to Shopping Malls: The Malaysian Perspective” In this research showed that the perceived value of the shoppers is based on the characteristics of the shopping mall. These are subjective and sometimes influenced by the visitor’s characteristics like the location, lifestyle, social class, price sensitivity and the situation of the buyers. A different result is expected if the above mention factor is included in the study for evaluating the shopper’s behaviour. In this study we are mainly focusing on the characteristics domain of the shopping mall. The branding of the mall will also affect the preferences of the shoppers. It is a attractive concept of research. In the future research on shoppers behaviour we can consider the intrinsic measures of a shopper to better understand the shopper behaviour. This study actually will help the foreign investors as well as analyst and researcher in the field of retail in Malaysia.30

5. Research Methodology

In order to accomplish the objective of the study, it is essential to articulate in manner in which it is to be conducted. The research study was conducted in Surat, the area where maximum research work was carried out is Piplod, as all the outlets are present in the close vicinity and it was feasible are for me.

Problem Statement

How consumer attitude change towards the FMCG product while they are

purchasing it from organised outlets or unorganised outlets?

Primary Objectives

To study the consumer buying behaviour towards the FMCG organised outlets.

To study the Consumers Perceptions towards various aspects of Mega Marts.

Secondary Objectives

To study the different demographic, psychographics and situational variables which are affecting the selections of retail outlets?

To know the Products knowledge & promotional tools adapted by Organized Retailers in Surat city.Understanding the needs of the customers.

To study various parameters taken into consideration by customers, while making a buying decision.

To study the satisfaction level of consumers for Organized FMCG Retail outlet Big Bazaar.

To study about the changes those customers wants in these Organized FMCG Retail Outlets.

To study about the quality, services, product range provided by these Organized FMCG Retail Outlets.

To undertake a comparative analysis of Indian consumer buying habits at Local Kirana Walas v/s Organized Retail Formats in the city.To suggest improvements to these Organized FMCG Retail Outlets in the city.31Research Design

The research is descriptive in nature. The study is aimed at describing the existing phenomenon of Consumer Buying Behaviour. For that matter I will consult various magazines, newspapers, books, reference materials and internet.

Primary Data

Questionnaire Survey: A questionnaire survey was conducted for the purpose of the study. The questionnaire was designed to find out the Consumers Buying Behaviour at organized FMCG Retail Outlets. Collected information was analyzed under the light of the literature and survey.

Secondary Data

Secondary data is the data which are already exists. Secondary data was collected mainly through the internet, company websites and some are taken from books and articles.

Sampling design

“Convenience sampling Method” we are using because customers at the outlets selected as per my convenience.

Sampling Element: the basic elements were studied mainly through the customers visiting the selected retail outlets and the person in charge of the stores.

Sample size: 300 customers, customers from each mega mart were personally interviewed and were asked to fill up the questionnaire.

Tools Used For Data Collection

Specially ‘Structured Questionnaire’

Customer’s perception towards different aspects of Mega marts were compared by using help of likert scale, ranking based on model and multiple choice based questions were also used.32

Limitation of the Study

The area undertaken in research is Piplod only. But to do a completer research, a wide area is required, so the area is also a constraint of the study.

While collecting data some of the respondents are not willing to fill the

questionnaire, so they might not fill their true behavior. This can also be a constraint of the study. It may be possible that some of the respondents may furnish wrong bias data.33

BIBLIOGRAPHY

Ahmad Jamal, 2002 "Customer Satisfaction and Retail Banking: An Assessment of Some of the Key Antecedents of Customer Satisfaction in Retail Banking", International Journal of Bank Marketing, Volume 4 No 5, page no. 146.

Kotler and Armstrong (1999), Principal of Marketing

Vavra, TG. (1995) “Selling after the sale” Banking marketing

AJMS bank employees

www.finance.google.com

www.wikeipedia.com

www.google.com