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CONSUMER BEHAVIORTOWARDS ORGANISED
RETAIL SECTOR.
Submitted in partial fulfillment of the requirements for
Post Graduate Diploma in Management (PGDM) under the
guidance of
Prof. Vijaylaxmi Tripathi.
By
B.P. Prabhu Raj
[2011033]

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ACKNOWLEDGEMENT
With these acknowledgements, I intend to express my gratitude and
appreciation in thanking all of the people who contributed their time and
effort to making this report possible.
First of all with limitless modesty, I would like to thank my mentor Prof.
Vijaylaxmi Tripathi. Her professional input, guidance and supervision
contribute to the successful completion of my final project dissertation.
The knowledge that I have gained in the area will hopefully be of helpful
in my future career and I also hope that the dissertation will be interesting
and useful for other students, researchers and people that want to learn
more about the chosen area.

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Executive Summary:
Retail is the final step in the distribution of the merchandise-the last link in the supply
chain-connecting the bulk producers of the commodity to the final consumers.
Retailing covers diverse products such as foot apparels, consumer goods, financial
services and leisure. The organized retail sector is expected to grow by 6% by 2010
and touch a retail business of $17 billion as against its current growth level of 3%.As
India moves towards the service oriented economy ,a rise in this percentage is
expected. The number of the retail outlets is growing at about 8.5% annually in the
urban areas and in towns with population between 1,00,000 to 1 million. Organized
retailing is witnessing a wave of players entering the industry. They are
experimenting with the various retail formats.
This research project was undertaken with the view to analyze the latest trends in the
Indian retail sector with reference to the changing trends of the buying behavior of the
consumers.

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TABLE OF CONTENTS
1.Objective………………………………………………………………….5
2.Introduction………………………………………………………………6
2.1 Introduction…………………………………………………………….7
2.2 Overview……………………………………………………………….8
2.3 Indian Economy……………………………………………………….10
2.4 Retail industry growth…………………………………………………16
3.Literature review…………………………………………………………18
4.ReserachMethodology……………………………………………………20
5.Analysis and Result……………………………………………………….24
6.Suggestions and recommendations……………………………………….29

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1.OBJECTIVE OF RESEARCH STUDY
2. INTRODUCTION

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INDUSTRY EVOLUTION
2.1Introduction
Retailing in India is receiving global recognition and attention and this emerging
market is witnessing a significant change in its growth and investment pattern. It is
not just the global players like Wal-Mart, Tesco and Metro group are eying to capture
a pie of this market but also the domestic corporate behemoths like Reliance, KK
Modi , Aditya Birla group, and Bharti group too are at some stage of retail
development. Reliance, announced that it will invest $3.4 billion to become the
country's largest modern retailer by establishing a chain of 1,575 stores by March
2007. The last couple of years have been rosy for real estate developers and the
retailers are finding suitable retail space in prominent locations.
The industry is buoyant about growth and the early starters are in expansion mood.
There is increased sophistication in the shopping pattern of consumers, which has

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resulted in big retail chains coming up in most metros; mini metros and towns being
the next target. Consumer taste and preferences are changing leading to radical
alteration in lifestyles and spending patterns which in turn is giving rise to new
business opportunities. Companies need to be dynamic and proactive while
responding to the ever-changing trends in consumer lifestyle and behavior.
Retailing in India is currently estimated to be a USD 200 billion industry, of which
organized retailing makes up 3 percent or USD 6.4 billion. By 2010, organized retail
is projected to reach USD 23 billion and in terms of market share it is expected to rise
by 20 to 25 per cent. The report also predicts a stronger retailer growth than that of
GDP in the coming five years.
The generic growth is likely to be driven by changing lifestyles and by strong surge in
income, which in turn will be supported by favorable demographic patterns. Rapid
growth in international quality retail space brings joy to shoppers and shopping malls
are becoming increasingly common in large cities, and announced development plans
project at least 150 new shopping malls by 2008. The number of department stores is
growing at a much faster pace than overall retail, at 24 per cent annually.
Supermarkets have been taking an increasing share of general food and grocery trade
over the last two decades.
Development of mega malls in India is adding new dimensions to the booming retail
sector. Shopping experience in the nation of shopkeepers is changing and changing
very fast. There is significant development in retail landscape not only in the metros
but also in the smaller cities. Even ITC went one step ahead to revolutionize rural
retail by developing ‘Choupal Sagar’ a rural mall. On one hand there are groups of
visionary corporate working constantly to improve upon urban shopping experience
and on the other hand some companies are trying to infuse innovative retail
experience into the rural set up.
2.2Overview
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

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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 Pantaloon Retail, RPG Retail, Shoppers Stop, Westside
(Tata Group) and Lifestyle International.
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, were
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.
 Traditionally retailing in India can be traced to
– The emergence of the neighborhood ‘Kirana’ stores catering to the
convenience of the consumers
– Era of government support for rural retail: Indigenous franchise model
of store chains run by Khadi & Village Industries Commission
 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's
and Grasim first saw the emergence of retail chains
 Later Titan successfully created an organized retailing concept and established
a series of showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a shift from
Manufactures to Pure Retailers.

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 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and
Music World in music; Crossword and Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers,
– mainly in urban areas, with facilities like car parking
– targeted to provide a complete destination experience for all segments
of society
 Emergence of hyper and super markets trying to provide customer with 3 V’s -
Value, Variety and Volume
 Expanding target consumer segment: The Sachet revolution - example of
reaching to the bottom of the pyramid.
 At year end of 2010 the size of the Indian organized retail industry is
estimated at Rs. 14,00,000 crore .
2.3 THE INDIAN ECONOMY:
• GDP growth for the year 2007-08 ended at 8.4%.
• Tops AT Kearney list of emerging markets for global retailers to enter.
• 2nd Fastest growing economy in the World
• Fourth in terms of Purchasing Power Parity next only to USA, China and Japan.
• 50% of the total GDP led by services such as IT, telecommunications, healthcare
and retailing.
• Reserves crossed the $150 bn mark, showcasing India as one of the top ten
holders of Foreign exchange reserves.
• Over 3.9 mn tourists visited India this year, up from 3.0 mn last year.
Past
In the early days of grocery retailing in America, an assistant fetched all items from
shelves behind the merchant's counter while customers waited in front of the counter
and indicated the items they wanted.

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In addition, most foods and dry groceries did not come in the individually wrapped
consumer-size packages and an assistant had to weigh and wrap the precise amount
desired by the consumer. American retailers found these practices were by nature very
labor-intensive and therefore quite expensive. The shopping process was slow, as the
number of customers who could be attended to at one time was limited by the number
of clerks employed in the store.
In 1916, first Piggly Wiggly store opened in Memphis, Tennessee and developed a
self-service grocery store. The Great Atlantic and Pacific Tea Company (A&P) was
another successful early grocery store chain in Canada and the United States, and
became common in North American cities in the 1920s. The general trend in retail
since then has been to stock shelves at night so that customers, the following day, can
obtain their own goods and bring them to the front of the store to pay for them.
Although there were higher risks of shoplifting, the costs of appropriate security
measures ideally outweighed by the increased economies of scale and reduced labor
costs.
Early self-service grocery stores did not sell fresh meats and produce and it was only
after 1920s these stores stated selling perishable items like meats and vegetables.
According to the Smithsonian Institution, a former Kroger employee, Michael J.
Cullen, opened the first true supermarket in the United States on August 4, 1930,
inside a 6,000 square foot (560 m²) former garage in Jamaica, Queens in New York
City. The King Kullen store, operated under the slogan "Pile it high. Sell it low." At
the time of Cullen's death in 1941, there were seventeen King Kullen stores in
operation.
By 1950s, these supermarkets frequently issued trading stamps as incentives to
customers. Today, most chains issue store-specific "membership cards," "club cards,"
or "loyalty cards". These typically enable the cardholder to receive special members-
only discounts on certain items at checkout.

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Present
Present day supermarkets are much larger and offer a wide variety of food and
household merchandise, organized into departments. They typically comprises meat,
fresh produce, dairy, and baked goods departments along with shelf space reserved for
canned and packaged goods.
Most supermarkets also sell a variety of other household products that are consumed
regularly, such as alcohol (where permitted), household cleaning products, medicine,
clothes, pet supplies and some sell a much wider range of nonfood products.
The traditional suburban supermarket occupies a large amount of floor space, usually
on a single level, and is located near a residential area for convenience of their
consumers. Its basic appeal is the availability of a broad selection of goods under a
single roof at relatively low prices. Other advantages include ease of parking and the
convenience of shopping hours that extend far into the evening or even 24 hours a
day. These supermarkets usually make massive outlays of newspaper and other
advertising and often present elaborate in-store displays of products. These
supermarkets often are part of a corporate chain that controls the company owned as
well franchised stores and supplies to these stores are made by large centralized
distribution centers (CDC).
Supermarkets usually offer products at low prices but certain products typically staple
foods such as bread, milk and sugar are often sold on less than their usual market
price to attract more consumers. Usually there are two pricing strategies; Every Day
Low Price (EDLP) and High Low (HL); and to maintain a profit, supermarkets
attempt to make up for their lower margins in EDLP items by selling more of higher-
margin HL items.
Most supermarkets are similar in design and layout and fresh vegetables tends to be
located near the entrance of the store. Milk, bread, and other essential staple items are
usually situated toward the rear of the store to reduce thawing and to maximize the
customer's time spent in the store, strolling past other items and capitalizing on
impulse buying. Supermarkets use stock rotation, the practice of moving products
with an earlier sell-by date to the front of a shelf so they get picked up and sold first.

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Many stores also place consumer durable items and toys near the checkouts to attract
families with children waiting in checkout queues.
In the United States, major-brand supermarkets often demand slotting fees from
suppliers in exchange for premium shelf space and/or better positioning (such as at
eye-level, on the checkout aisle or at a shelf's "end cap"). This extra supplier cost (up
to $30,000 per brand for a chain for each individual SKU) may be reflected in the cost
of the products offered. Some critics have questioned the ethical and legal propriety of
slotting fee payments and their effect on smaller suppliers.
More and more every day facilities like banks, cafés, childcare centers/creches, photo
processing, video rentals, pharmacies, and/or gas stations are being added to bigger
supermarkets to provide their customers one stop shop convenience. A larger full-
service supermarket like this combined with a department store is sometimes known
as a hypermarket.
Indian-owned supermarket Subhiksha is one of the first and the largest retail chain in
the country. Started in 1997 as a single store entity in South Chennai, it is now present
nationally across 1000 outlets and spread across more than 90 cities selling everything
from vegetables to mobile phones.
India's largest private-sector company, Reliance Industries Limited (RIL) also
ventured into the retailing business in 2006 by opening the fresh food "Reliance
Fresh" chain of stores in major cities across India. Other major supermarkets include
6Ten, Spencer and More. Many other supermarket brands have joined the race but
supermarkets in India are still fragmented and struggling to provide a delightful
experience to its customers. Supply-chain constraints, unorganized real estate
markets, irrational tax structures and shortage of quality retail professionals are some
of the factors which are holding back the growth of organized retail in India specially
in supermarkets sector.

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a. RPG GROUP: Spencer & CompanyLimited is another large retail
group in the country withsupermarkets,music stores,
and the beauty and health chain—Health & Glow.
Food world, operated by Food World Supermarkets
Limited, while Health &Glow by the RPG Group. It
is also Planning IPO, will have 450-plus Music
World, 50-plus Spencer's Hyper covering 4 mn sq.ft
by 2010.
b.SUBHIKSHA SUPERMARKET: Subhiksha was immensely popular in the South,
particularly in Chennai, where it sold groceries and
pharmaceutical products below the MRP. It expected
to earn a total turnover of Rs 1,200 crore in 2008-09
as it planned to expand outside Tamil Nadu and
Pondicherry. It planned for 550 stores in the next five
years.
c. Aryaas: They were more focused into bakery’s later
on considering the changes in the market they
entered into retail stores
d. LIFESTYLE: Investing Rs.400 crore-plus ($90 mn) in next
five years on Max Hypermarkets & value
retail stores, home and lifestyle centers.
e. Arasan This stores are located in Nagercoil and

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Tirunelvelli which aims at targeting the
general upper middle class through super
market in various region of the south

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2.4 RETAIL INDUSTRY GROWTH:
.
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
2004 2005 2006 2007 2008 2009 2010
growth(cr)
growth(cr)

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3.LITERATURE REVIEW

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1.Retail in India is largest industry. It account for over 10 percent of GDP growth and about 8
percent of employment. Retail sector of India is one of the fastest growing sector with 5
percent compounded annual growth rate. India’s huge middle class base &its untapped retail
industry are key attraction for global retail giants planning to enter newer markets. Driven by
changing lifestyles, strong income growth and favorable demographic patterns Indian retail
is expect to grow 25 percent annually .It is expected that retail in India could worth US
dollars 175-200 billion by 2016.
2.As the nature of study is survey. Nature of the data is primary by questionnaire to
customers. The same study particularly in Kanyakumari, Nagercoil and Tirunelvelli location.
3.Theoritical concept is taken from different books as mentioned in references. The other
information is taken from different web sites .other data are taken from different sources are
mentioned in references.
4. Organized retail in India had not evolved till early 1990s . Until then the industry was
dominated by the unorganized sector .It was sellers market ,with a limited no. of brands &
little choice available to customers. Lack of trained manpower ,tax laws & govt. regulations
all discouraged the growth of organized retail in India during that period. Lack of consumers
awareness & restriction over entry of foreign players into the sector also contributed to the
delay in the growth of organized retailing. Foundation of organized retailing was laid by
Kishore Biyani of Pantaloons Retail India Ltd
5.A perfect business model for retail is still in evolutionary stage . Procurement is very vital
cog in the retail wheel . The retailer has to fight issues like fragmented sources ,
unpredictable availability unsorted food provision & daily fluctuating prices as against
consumer expectations of round the year . Steady prices , sorted & clean food & fresh stock
at all times.
6. Factors that are driving the Indian retail sector are increasing young working population
,increasing working women population, hefty pay packets , increase in disposable income ,
customers aspirations & low share of organized retailing.

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7. But there is a flip side to the boom in the retail sector. It is feared that the entry of global
business giants into organized retail would make redundant the neighborhood kirana store
resulting in dislocation of traditional economic structure . Also the growth of retail in India is
not hurdle free.
8. Trained human resources for retail is another big challenge . The talent base is limited &
with the entry of big giants in retail sector in India it is expected it will lead to the cat fight
for talent . This has resulted in big salary hikes for middle and top management level &
thereby eroding the profit margin.
9. Retail offers the great growth to Indian economy. If the above challenges are tackled
prudently retail sector can provide employment to million people in India.

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4.Research Methodology

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Research Statement
Research always starts with a question or problem .its purpose is to question through
the application of the scientific method .it is a systematic and intensive study directed
towards a more complete knowledge of the subject studied. Marketing research is the
function which links the consumer, customer and public to the marketer through
information – information used to identify and define marketing opportunities and
problems generate, refine, and evaluate marketing actions, monitor marketing actions,
monitor marketing performance and improve understanding of market as a process.
Market research specifies the information required to address these issues, designs,
and the method for collecting information, manage and implemented the data
collection process, analyses the results and communicate the findings and their
implication.
have prepared this project as exploratory one, as the objective of the study demands
the answers to the question related to find the consumer response brand recall in
South. region .I have took the help from a questionnaire for the solution which shows
that the data source is primary I have targeted 60 respondents.
Research Design:
Exploratory research design was used for this project. The main purpose of this
research is to interact with customers and to know the reasons for consumer loyalty
shift and what are the expectations of consumer’s.
Research Instruments Used:
Methods used under this kind of research design are:
 Developing plans for the research
 Structured questionnaire
 Survey
 Analyzing and interpreting the results.
Here the method of research-based survey is used.

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Sample Design
Sampling is done to figure out the parameters, which decide our sampling techniques
and the sample size to be adopted. It is the process of selecting units from population
of interest so that by studying the samples one can fairly generalize the results to the
population from which the results were chosen. This would further help the whole
research to reach the final solution.
Sampling Unit:
Respondents Segments:
a. Males(35 in no.) and Females(25 in no.)
Sample Size – 60
Sampling Design: Random and Convenience Sampling within defined respondent
segment
Methods Of Data Collection:
Data collection used for the specific purpose of the research was first hand data called
primary data. It is the first hand data, which is collected through interviewing the
customer directly. The method that was used for obtaining primary data was
collection through questionnaires. Questionnaires filled were by about 60consumers
Secondary data is mainly collected from internet & books.

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TABLE. 2
DATA
COLLECTION
PRIMARY
DATA
 QUESTIONNAIRE
 WEBSITES
 Books
SECONDAR
Y DATA

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5.ANALYSIS & RESULT

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(a)Gender wise distribution of respondent
(b) Age Group
Result shows that out of 60, 21 were between 16-25yrs, 18 were between 26-35,12
were between 36-45yrs & 9 were above 45 yrs
Male(35)
Female(25)
0
5
10
15
20
25
16-25yrs
26-35 yrs
36-45 yrs
46 & above

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(C) What is your family size?
Number of Family members Number of Respondents
2 13
3 17
4 21
5 9
(d) Salary Range of the respondents
(e) Purpose of visiting the retail outlet
0
5
10
15
20
25
2 Members
3 Memebers
4 Memebers
5 Members
0
5
10
15
20
5000-15000(18)
15000-25000(20)
25000-35000(12)
above 35000(10)

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(f) From where did you come to know about the retail outlet?
(g) Purchasing time of the customers
0
5
10
15
20
25
leisure time activity(19
Childrens Demand(7)
Purchase of special
product(10)
Purchase of general
product(24)
0
2
4
6
8
10
12
14
16
18
Family(15)
Friends(18)
Print Media(10)
TV(8)
Other(9)
First week of the
month(16)
Mid month(10)
End of month(7)
Whenever
Required(27)

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(h) Reasons for shopping in retail outlets
(i) Most prominent problem faced by the customer in retail outlets
Better Quality
Reasonable Price(5)
Product Range(22)
Time Saving(8)
Others(10)
0
5
10
15
20
25
30
LongQueues(29)
Need free home
delivery(25)
Range is not
complete(6)

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6.Suggestions and recommendations:

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1.There must be enough number of POS and all must in working
conditions during peak hours because customer has to wait in queues.
2.All items should be in enough quantity as customers sometimes find
some items out of stock.
3.As per survey conducted most of the people came to know about retail
outlets from their friends so the outlets should focus more on customer
satisfaction.
4.Many of the people visit retail outlets as a leisure time activity so retail
outlets should develop strategies to earn from them somehow.

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7.CONCLUSION

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 Most of the customers are youngsters.
 Nuclear family contributing towards the growth of the retail sector
in India.
 Range of the products offered by retail outlets helps in attracting
the customers.
 The main purpose of visiting these retail outlets is to buy general
products/
 People of middle class and upper middle class are frequent
customers and they spend good amount of their income.

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BIBLOGRAPHY
BOOKS:
 KOTLER PHILLIP,KELLER KELVIN
Marketing Management
 KUMAR ARUN AND MEENAKSHI N
Marketing Management
INTERNET:
www.yorku.ca/rkenedy/critical_skills/student/nick_ashby_ppt_prestns/how_to_write_
an_introduction.ppt+how+to+write+introduction&hl
www.livemint.com/Big-Bazaar-plans-to-open-15-st.
www.financialexpress.com/news/Future-Group-to-hive-off-Big-Bazaar/
www.scribd.com
www.thehindubusinessline.com/iw/2005/12/25/stories/

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Annexure
Questionnaire:
1.Gender (M/F)
2.Age(Tick the appropriate one)
(a)16-25yrs
(b)26-35 yrs
(c)36-45 yrs
(d)Above 45 yrs.
3.What is your family size?
(a) 2
(b) 3
(c) 4
(d) 5
4.What is your family income?
(a) 5000-15000
(b) 15000-25000
(c) 25000-35000
(d) 35000 and above
5. Purpose of visiting the retail outlet
(a) Leisure time activity.
(b) Children’s demand
(c) Purchasing special products

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(d) Purchasing general products
6. From where did you come to know about the retail outlet?
(a)Family
(b)Friends
(c)Print Media
(d)TV
(e)Other
7. Purchasing time of the customers
(a)First week of the month
(b)Mid month
(c )End of the month
(d)Whenever required
8. Reasons for shopping in retail outlets
a) Better quality
b) Reasonable price
c) Product range
d) Time saving
e) Others

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9.Most prominent problem faced by the customer in retail outlets
a) Long queues
b) Need for home delivery
c) Range is not complete