A REPORT

ON

Consumer perception& Media habits of consumers

By:Akriti Jain

09BS0000143

Organization:-

Aditya Birla Retail Limited(More.Megastore)

A Report

1

On

Consumer perception & Media habits of consumers

By:

Akriti Jain

09BS0000143

Organization:-Aditya Birla Retail Limited

(more.Megastore)

ICFAI BUSINESS SCHOOL, MUMBAI

16.4.10

ABSTRACT

The project is all about the consumer behaviour, their buying habits, tastes & preferences, perceptions and their expectations from Aditya Birla Retail’s

hypermarkets more.Megastore. The basic objective underlying this project is to analyze the response of the consumer buying & media habits as to what marketing communication is the most effective and draws the maximum customer footfalls to the stores.

A research was conducted at Thane based on the primary data which was collected directly from respondents using data collection methods like survey interview questionnaires. This research entailed meeting up customers at more.Megastore at Thane in Mumbai and conducting in-depth interviews for around 10 minutes. The interviews were a direct involvement between me and the customers. The detailed discussion helped to probe out the hidden perception and satisfaction level of the customers. The objective of this project is also to help the company find out the areas where it loses its customers to other competitors like DMart, Big Bazaar, Reliance Retail, Star Bazaar (Tata enterprise) & Hypercity. Thane being a developing area it has all these big retail brands in its vicinity. The data collected has been analyzed by using Microsoft Excel from which the highest and lowest ratings can be known for all the category products which include FMCG, General Merchandise, Apparel& Footwear, Fruits& vegetables and Consumer Durables& Information Technology.

The interpretation of the data collected would help the company to focus on the weak points and formulate a strategy to improve its customer handling and marketing mediums as the store at Thane has opened recently.

A similar kind of survey by conducting exit interviews would take place at more.Megastore in Aurangabad which will consist of the consumer behaviour and their media habits.

While the Bangalore more.Megastore has less number of customer footfalls in the Apparel& Footwear, General Merchandise and Consumer durables section so a questionnaire has been prepared in order to perform the interview at Bangalore.The project also includes the day to day marketing activities of more.Megastore across all locations. Marketing communications are the means by which a company attempts to inform, persuade, and remind consumers – directly or

indirectly- about the products and services they sell. In a sense, marketing communications represent the “voice” of the company and its brands and are a means by which it can establish a dialogue and build relationships with consumers. Marketing communications also perform many functions for consumers. They can tell or show consumers how and why a product is used, by what kind of person, and where and when. Consumers can learn about who makes the products and what the company and brand stand for; they can also get an incentive or reward for trial or usage. Marketing communications allow companies to link their brands to other people, places, events, brands, experiences, feelings, and things. They can contribute to brand equity- by establishing the brand in memory and creating a brand image- as well as drive sales and even affect shareholder value. The advertising and marketing at a hypermarket is done via various channels like newspaper inserts and direct mailers, hoardings, bus panels and radio jingles. To publicize its stores ABRL follows almost all the mediums across locations. The offers & promotions are communicated to the customers via daily advertisements in newspapers and radio. A direct mail or a newspaper is a direct form of marketing

INTRODUCTION

The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 25-30% annually. The India retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010.

Major Formats of In-Store Retailing in India:

Format Description The Value Proposition

Branded StoresExclusive showrooms either owned or franchised out by a manufacturer.

Complete range available for a given brand, certified product quality

Specialty Stores Focus on a specific consumer need, carry most of the brands available

Greater choice to the consumer, comparison between brands is possible

Department Stores

Large stores having a wide variety of products, organized into different departments such as clothing, house wares, furniture, appliances, toys, etc.

One stop shop catering to varied/ consumer needs.

SupermarketsExtremely large self-service retail outlets

One stop shop catering to varied consumer needs

Discount Stores

Stores offering discounts on the retail price through selling high volumes and reaping economies of scale

Low Prices

Hyper- mart

Larger than a supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city

Low prices, vast choice available including services such as cafeterias.

Convenience stores

Small self-service formats located in crowded urban areas.

Convenient location and extended operating hours.

Shopping MallsAn enclosure having different formats of in-store retailers, all under one roof.

Variety of shops available to each other.

The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have transformed the face of Retailing in India. With a growth over 20 percent per

annum over the last 5 years, organized retailing is projected to reach US$ 23 Billion by 2010.

The Indian retail industry though predominantly fragmented through the owner -run “Mom and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely Big Bazaar(Future Group), Star Bazaar (Tata Group), more.Megastore(Aditya Birla Retail Limited), Hypercity(Raheja’s), Reliance Retail etc.

Given the attractiveness of the Indian retail sector, foreign retailers like Wal-Mart, Carrefour SA, Europe's largest retailer and Tesco Plc, the UK's largest retailer, are keen to enter this growing market, despite the Indian retail sector being closed to foreign direct investment (FDI).

In the last few years, Indians have gone through a dramatic transformation in lifestyle by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste. Modern retailing satisfies rising demand for such goods and services with many players entering the bandwagon in an attempt to tap greater opportunities.

There has been an increased shift in the Consumption habits of consumers in India

Beverages

Rise in coffee drinkers. More fruit drinks and bottled water. Wines and Liquor sales on rise.

Processed food consumption

Increasing ready to eat food. Growing premium foods. Increasing private label. From “packaged as stale” to “packaged is hygienic and high quality”. Increased tendency towards disposability. Shift from price consideration to design and quality.

Lifestyle

Frequent eating out.

Growing health and dietary supplements. Growing organic produce. Greater focus on looking and feeling good.

With robust economy, sustained GDP growth and booming stock exchange, there are several emerging sectors in India waiting to be tapped . . .organized retail is at the forefront of these opportunities

Organized retail in India is still in its infancy...

With just 2% organized retail in India ….India is a big opportunity.

The major drivers of this change in India are due to the following reasons:

The demographic population

Company profile

Aditya Birla Retail Limited is the retail arm of the Aditya Birla Group, a US$29.2 billion group in the league of Fortune 500 companies.

The retail business of the Aditya Birla Group started with a simple mission, ‘to change the way Indians shop’, and to achieve this goal, the team started with the understanding of the consumer - her needs, her expectations and her areas of dissatisfaction. Striving to fulfill this growing need of the Indian consumer by offering a solution to the inconvenience, inconsistency and the lack of variety that she experiences in her everyday shopping ritual, the organization has articulated a vision;

The two pillars from which the vision is formulated are

1. Customer Centricity 2. Being the Employer of choice.

Retail presence

The Aditya Birla Group entered the Retail segment in May 2007 with the launch of its Supermarkets.

This was soon followed by the launch of the hypermarkets under the brand name more.Megastore. Currently ABRL has 6 Hypermarkets & is looking forward for many other launches this year. Spread over 50,000 sq.ft. more.Megastore is a one-stop shop destination for the entire family. Apart from a large range of offerings of over 25,000 products across fruit & vegetables, non-vegetarian, groceries, FMCG products, the hypermarkets also have a strong emphasis on general merchandise, apparels & CDIT. Now, Aditya Birla Retail has six hypermarkets operating under the brand ‘more.MEGASTORE’.

The growth of Aditya Birla Retail was also fuelled by the acquisition of South based Trinethra super retail and Fab Mall in Dec ‘06.The supermarket chain under the brand name more. has over 632 stores spread across 12 Indian states.

Strategy& customer offerings

Product Range

more.Megastore hypermarkets offers a range of products that make the entire shopping experience a fun-filled enjoyable process for the whole family – from the husband, to wife, to kids and also senior citizens. We offer a wide range of assortment of over 25000 products, ranging from fruits & vegetables, non-vegetarian, groceries, FMCG products, General merchandise, imported range, Apparels and CDIT.

more.Megastore - the hypermarkets cover a large and spacious area with everything you could need from tea to treadmills, without hopping from one shop to another.

Delivering quality & value through private labels:

More.Megastore provides customers a wide choice of products under their private labels. The objective is to offer choice at attractive price points to customers for their different needs. Their endeavor is to build trust and credibility amongst consumers by offering products at the right price ensuring “value for money”. Also, since quality is the most authentic platform to compete with leader brands, they have set stringent quality norms for their private labels and rigorously abide by them. All their manufacturer partners are the best in their class.

The private label portfolio strategy has two key objectives:

1. To provide great value to the customers by offering them strong brands at unbeatable prices.

2. To create differentiation and loyalty across stores.

The first private label product was launched by Aditya Birla Retail Limited in July 2007. The portfolio today covers 54 categories and has over 300 products in processed food, home care and personal care, and an additional 200 products in 5 categories of staple products such as Cereals, Flour, Pulses, and Sugar/Salt/Spices & Edible Oil.

In 2008, the company was conferred the Golden Spoon Award for the Most Admired Private label Food & Grocery Brand.

Currently, Aditya Birla Retail Limited has 6 brands within the Home and Personal Care category: more. Enriche, 110%, Pestex, Paradise and Germex and 4 brands in the Food category: more. , Feasters, Kitchens Promise and Best of India.

ABRL offers 100% satisfaction on the quality of its product & service offerings and the selection of in-house brands are competitively priced without compromising on quality.

Clubmore.

Clubmore. is the membership program from Aditya Birla Retail Limited and is available for customers across both more.Megastore hypermarkets and more. supermarkets. The membership reward program reinforces the company’s commitment of consistently adding value to the customer shopping experience. Members not only earn reward points on their shopping but are also entitled to special benefits and discounts, besides the regular offers and promotions. As Clubmore.members they receive exclusive SMS alerts for special offers on products and services. Recently, the Clubmore. program achieved a membership base of one million members in a short span of 18 months.

People

Aditya Birla Retail Ltd. currently has over 10,500 employees. The business is led by Mr. Thomas Varghese, Chief Executive Officer. The key functions are headed by professionals with vast retail experience in India & globally. The Human resources initiatives are all structured with the belief that satisfied and engaged employees

create satisfied and loyal customers and form the core of the customer centric philosophy of the organization.

PROJECT DESCRIPTIONThe managers who believe that customers are the company’s “true profit centers” are traditional organizations and obsolete organizations in thinking and working. But successful marketing companies are just the reverse. They do not see the customers as only the profit centers but also as an asset that they need to take care of. Aditya Birla Retail Limited is one such company.

Perception is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. Each individual has a different and a unique way of observing things and interpreting them.

The same is applied to the customers of more.Megastore. The estimated size of the Indian retail market is around US $ 300 billion and the cumulative market share of supermarkets and hypermarkets in India is less than 4%. But still there are many major players in the Indian retail market like- Reliance Retail, Tata, Future Group, Hypercity etc. But the difference lies in the perception. Why does a customer stay loyal to a particular brand and not to other? Understanding a customer, how he perceives the value provided to him at more.Megastore and how does this perception helps the company to retain the customer is of prime importance to the company.

My project deals with understanding this perception of customer for various product & services offered at more.Megastore hypermarkets. The customers’ decision to be loyal or to be disloyal depends on the sum total of a large number of small encounters with the company. These encounters need to result in positive outcome and should lead to some memorable customer experience. In my project I would be covering the store at Thane, Aurangabad and Bangalore, interacting with the customers to find out what goes wrong at grass root level.

Why are the customers not happy with more.Megastore? What are the minor flaws that the company is not able to catch? What are the areas of improvement that ABRL needs to work upon? What are the basic marketing strategies that the customers follow while choosing their place of shopping? What are the factors that compel the customers to switch from more.Megastore to other hypermarkets? Are the customers satisfied with the prices, billing counters, staff, ambience and variety of the products offered at more.Megastore?

Methodology of the project

POPULATION

Since this project deals with knowing the perception of customers towards more.Megastore an in-depth interaction and deep study of the customers of ABRL is a must. The customers of all categories are included for the interaction. An important thing to note here is that all of the customers are being interviewed at the store and a primary data is collected. The interview is done in the form of an exit interview that is when a customer gets free from shopping at the store.The classes of customers targeted are mostly middle class or lower middle class.

SAMPLE DESIGN

A sample is a subject chosen from a population for investigation. The sampling used while conducting the survey was Random sampling. A random sample is one

The sample size is of a 100 customers and the customers to be targeted lie between the age of 18 to 55 yrs.

In the Thane Exit interview the maximum footfall was during the late evening and early morning time. And the maximum people who were interviewed were between the age group of 21 years to 40 years mostly housewives.

RESEARCH DESIGN

The design involved in this study is the questionnaire technique. There will be different questionnaires designed for different stores depending on the condition of the store, like Thane being a newly launched store the questionnaire used consists of the consumer buying behaviour and media habits the same will be used for Aurangabad. But for Bangalore the questionnaire used will focus more on the categories of Apparel& Footwear, Consumer Durables and General Merchandise as these sections at the Bangalore hypermarket have fewer customer footfalls than the other sections.

The study addressed the following research objectives that cover the information needs-

To understand potential customers in terms of: Demographic profile Current shopping behavior across different store formats Current purchase behaviour with regards to different product categories Consumer attitudes, psychographics

DATA COLLECTION

The method for data collection, as mentioned above, is via comprehensive questionnaire and in-depth interaction with the customers for around 10 minutes. The data from all the locations will be pooled separately for an individual analysis of the stores. Since my project involves these three stores at Thane, Aurangabad and Bangalore, I have done the Thane exit interviews at the store.

The analysis of the data would entail the use of Microsoft Excel. Following are the activities for data collection:

a) Conducting in-Depth Interviewsb) Questionnaires These were the methods for primary data collection.

Customer satisfaction means customer retention. A highly satisfied customer generally stays loyal longer. A company would be wise to measure the customer satisfaction regularly.

It is very important for a company to know

1) Who Is A Customer?

A customer is a buyer or purchaser or user of the paid products of an individual or organization, mostly called the supplier or seller. This is typically through purchasing of goods & services.

M. K. Gandhi said: “A customer makes it possible to pay our salary, whether we are a driver or an office employee.”

He is a definite part of it. A customer is not an interruption of the work. He is the purpose of it. A customer does the company a favor by allowing the company to serve him. A customer deserves courteous and attentive treatment. A customer is not dependent on the business; the business is dependent on him. A customer brings his wants and it is the job of the business to satisfy his needs properly and profitably.

2) Why Are Customers Important For A Business?

The customers are very important and play a crucial role in any process ofmarketing. Today, customers are the kings of the market because they determine the success of a business. Customer loyalty and customer preference are built by the products and the services offered to the customers and they seek for the more benefits and money’s worth for the amount they spend. That is where the concept of customer preference and consumer behavior comes because the customers make the marketers to rethink about designing the products and services. They have to think about the market segmentation, market strategies, consumer behavior, consumer’s tastes, consumer’s lifestyle etc also. It provides them growth, profitability and creativity with lot of inventions. “NO Customers NO Business”

3) What if the perception of the customer is not studied?

The failure by the companies to study the perception of the customers makes them complacent about the needs and the wants of the customer. This does not allow them to have an idea about what the competitor is doing in his field. The company then feels that the existing policies are the best and does not try to innovate. This leads to the loss of dynamism and ultimately the loss of the customer base.

The following diagram shows in a cyclical form that how failure to understand the customers’ perception can lead to the loss of the customer base.

Marketing Myopia

Failureto Anticipate

Competition

Lack of Innovation

Dynamism Lost

Declining customer

base

FAILURE TO UNDERSTAND CUSTOMER PERCEPTION

4) What are the categories of customers in ABRL?

ABRL customer is:-

• Value Seeker• Open to change with a modern orientation• Quality Conscious• Well informed• Seeks service• Wants a complete shopping experience

5) What does ABRL do to handle the Customer Perception?

Nearly all the key players of the retail industry provide the same kind of products and follow the same strategy of maximizing the customer base. The difference lies in understanding the value attached to each customer, learning and understanding their perception. ABRL has been successful to set itself apart from its competitors by using certain different strategies like:-

a) With the launch of a value proposition “Everyday lowest prices guaranteed” it is clearly articulated that consumers will always get lowest prices everyday at more.megastore and a complete value for money compared to any other store.

b) With the competition intensifying in the Indian retail market, ABRL needed to find a way to focus on developing new schemes & promotions that could set it apart from the competition and strengthen its customer relationships. It thus acquired a south based brand Trinethra super retail & Fab mall, with this ABRL captured a large group of customers in South India.

c) Also, with the launch of its private label ABRL enabled the customers to buy products with good quality at unbeatably low prices. The private label portfolio today covers 54 categories and has over 300 products in processed food, home care and personal care, and an additional 200 products in 5 categories of staple products such as Cereals, Flour, Pulses, and Sugar/Salt/Spices & Edible Oil.

6) Why is customer perception important for a business like ABRL?

For every retail organization it is important to know what the customers think about their store, their prices, the look of the store, the store personnel etc. and most importantly whether they are better than their competitors or not.The Exit Interviews done at Thane framed a clear picture as to what all needs to be done in order to maintain the sales as well as the goodwill of the company.

My project on customer perception and customers media habits would help the company to know what the customer thinks about more.Megastore and what all activities does the company need to take up for brand communication. How far are the customers satisfied? This survey at the lower level would provide the company with the knowledge of the loop holes so that it can formulate policies at the higher level that are beneficial to the customers help retain their customer base and survive in the already saturated and competitive telecom market. With the help of this project the company can monitor the customer loss rate and can contact the customers who have left or switched over.

REFERENCES

WWW.MORESTORE.COM

Business Marketing& Planning - Subhash C. Jain