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INTERNATIONAL JOURNAL OF MANAGEMENT (IJM) International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976

6510(Online), Volume 4, Issue 1, January- February (2013) ISSN 0976 6367(Print) ISSN 0976 6375(Online) Volume 4, Issue 1, January- February (2013), pp. 85-94 IAEME: www.iaeme.com/ijm.html Journal Impact Factor (2012): 3.5420 (Calculated by GISI) www.jifactor.com

IJM
IAEME

A STUDY OF IMPACT OF MERCHANDISE VARIETY AND ASSOSTMENT ON SHOPPING EXPERIENCE OF CUSTOMER SIN CONVENIENCE STORES IN ORGANIZED RETAIL IN INDIA
VIJAY.R.KULKARNI Assistant Professor Sinhagad Institute of Management and Computer Application Pune, Maharashtra E-mail: vijaykulkarni@simca.ac.in

ABSTRACT The study is about finding the impact of merchandize variety and assortment on shopping experience of customers in convenience stores format in organized retail in India. The study was conducted at Pune during October 2012. Exploratory Research Design is used for the study. The sample size is 159 respondents. Survey method is used with customer intercepts at Convenience stores and the data was collected with a structured questionnaire. Ratio scale was used for Income and Age and for all other variables Nominal Scale was used. The data was analyzed with SPSS 17 version and tools like Cronbach Alpha, Kaiser-MeyerOlkin Measure of Sampling Adequacy and Chi-Square. The findings of the study are 1) Availability of fresh fruits and vegetables 2) Freshness of fruits and vegetables 3) Chances of getting all the products 4) Availability of wide variety of national brands have impact on customer satisfaction and happiness 5) Customer happiness due to availability of products he intends to buy results in good shopping experience and 6)Customers who are satisfied due to availability products which gets translate into wonderful shopping experience for them recommend the stores to others. Key Words: Customer Experience, Store Image, Intention to recommend 1. INTRODUCTION As a sequel to Globalization and in its quest to be the part of Globalization process Government of India initiated the liberalization process setting in process reforms across the board. The reforms and the subsequent all round growth in the economy resulted in change in the demographic profile of Indian society, improvement in the technologies of production processes and entry of multinationals across the board thereby increasing the threshold of
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) quality. This coupled with competitive prices due to intense competition has definitely resulted in benefit and well being of the consumers at large. However this is the beginning only and the Indian businesses have a long way to go since the bench marks of customer expectations keep on increasing on a continuous basis. For decades Indian consumer has faced non availability of products at the right place and at the right time. The basic need of the customer is availability of products of his/her choice. The customers expectation when he visits convenience stores is availability of variety and assortment so that he can buy all his requirements under one roof. Therefore all things being equal availability of right blend of variety and assortment are become a critical element of convenience stores sales mix in delivering customer satisfaction and positive shopping experience. The retailers therefore need to be alert to the situation that today they are not confronted with traditional docile customer but a highly informed and vibrant customer who when faced with the situation of lack of availability of products at the right place and right time when he intends to buy may shift to other retailers. The situation is much tougher in India due to the presence of neighbourhood kirana stores who are going out of the way to serve their customers. 2. LITERATURE REVIEW The ability to satisfy heterogeneous customer preferences in a cost-efficient manner is a key facet of traditional retail competition. Along with physical location and price, the selection of products that a store offers to its customers, i.e., the assortment is an important factor driving store choice. A larger assortment increases the probability that the store will be able to deliver exactly the product a customer desires. Even if a customers tastes are not well defined, her perception of variety in a stores assortment may drive her purchasing decisions.1 Variety is the number of different merchandize categories a retailer sells whilst assortment refers to the number of different items in a merchandize category. The freshness of a product stimulates repeat visits from the customer. Convenience retailers are businesses with high turnover, resulting in constantly replenishing stockpiles. Goods are generally not long enough in the stores to become obsolete. Consumers can therefore expect to buy goods that are fresh and that have not met their expiration date.. The brands that a store offers can contribute to customer loyalty. Brands are often linked to certain qualities which the customer often find attractive or repelling. Consumers with pleasant association will often go out of their way just to purchase a specific brand. Brands that are associated with higher quality and status symbols are also able to attract consumers to specific retailers even though they are more expensive than the competing brands.2 Perhaps the most vexing problem facing retailers is the challenge of getting the right merchandise in the right quantities to the right stores at the time that customers want it. Beginning with the consumer, Mantrala et al. (2009) examine previous research and conclude that it is difficult to predict what customers will want because they enjoy flexibility. Consumers rarely know what they really want when they buy, and then their choices change over time because they often buy now and consume later, As their goals change (see Puccinelli et al. 2009), they may not actually buy their first choice first. That is, even if a retailer has a consumers first choice, he or she might not buy it ultimately. At the same time, too much choice can be frustrating and confusing, so retailers must balance having a wide enough assortment that consumers do not shop elsewhere, but not so wide that they are overwhelmed.3 The number of available options can influence consumer choice in multiple ways. Decades of research suggest that choice increases satisfaction (e.g., Langer
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
and Rodin 1976) band that larger assortments increase the likelihood that consumers will find an option that matches their preferences (Baumol and Ide 1956; Lancaster 1990). People actively seek variety (see Kahn and Ratner [2005] for a review), whether to satisfy the need for stimulation (Berlyne 1960) or for other reasons, and larger assortments help consumers satisfy these needs.4 This study has reviewed the major forms of varied consumer behavior (i.e., direct and derived) and indicates that each can require a different type of retail assortment strategy. It also presents a framework delineating the major factors and dimensions which define the arena in which retailers must develop their assortment strategies. Additionally, evidence is presented which indicates that the shape of the utility function for assortment size is bell-shaped for both the consumer and the retailer. Hopefully this paper will increase our understanding of the dynamic interplay between the numerous forms of a consumers varied behavior (especially variety seeking) and their subsequent implications for the retailers assortment strategies. Rather than treat each of these activities in isolation as has been done in past research, this paper suggests the need for their integration. Viewing the consumers need for varied behavior and assortment size decisions as opposite side of the same coin should lead to more effective marketing strategies by increasing our understanding of each area.5 Consumer heterogeneity was also found to influence the effect of assortment on shoppers store choice. Unobserved heterogeneity, reflected in the distribution of household level response parameters, was much greater for assortment than for the other determinants of store choice. While shoppers uniformly prefer lower prices and shorter travel distances, our analysis of parameter heterogeneity and assortment elasticities suggests that shoppers prefer different assortment characteristics. Specifically, unlike most consumers, a substantial minority prefer stores that offer more SKUs/brand, more sizes/brand, and more unique SKUs but fewer different brands. Our analysis of heterogeneity covariances reveals that response to assortment is correlated to response to travel distance (r=0.43). Thus, the less importance a household assigns to assortment, the more it values conveniences and vice versa. This finding is consistent with the tradeoff promulgated by Bamoul and Ide (1956) and Brown (1978). The heterogeneity in assortment response suggests that retailers should not necessarily match each others assortment levels. Ideal assortment levels could differ substantially between retailers depending on the preferences of their customers.6 Together the results of these experiments all suggest that the congruence or incongruence between the internal organization inside the consumers heads and the external organization of the assortment provided by the stores influences how consumers perceive th variety offered. This work contributes to the existing literature on the application of categorization theory to consumer domains ( e.g., Sujan 1985, MeyersLevy and Tybout 1989, Goodstein 1003), by examining the role of internal categorizations schemas in the evaluation of the external structure of an assortment. This work also contributes to the perceived variety literature (e.g., Broniarczyk, Hoyer & McAlister 1998, Hoch, Bradlow and Wansink 1999, Kahn and Wansink 2004) that suggests consumer perceptions of variety are dependent on more than just the actual number of individual items in the assortment. Retailers should be aware of several factors in order to try and get consumers to perceive more variety in their assortments.7 This study, a collaborative efforts with a Dutch retailer, shows that reducing the variety of an item may actually boost sales. In this case the retailer offered fewer types of detergent items. While initially lowering sales for the short term, the effort did not lessen sales in the long run. The reduced selection may have also aided consumers; they found it easier and quicker to make a selection when the variety was reduced. The reduced sales are caused initially by former buyers who purchase fewer items in the category. But sales losses are offset by new buy new buyers attracted by the streamlined selection.8 Assortment is a specific type of product set. A set is any grouping of products or items, and an assortment is a product set in which the items come from the same product category. Although consumers' product assortments are claimed to be important for understanding consumer behaviour, they have rarely been studied. There are some related but quite different areas of study, such as stockpiling behaviour. Both stocks and assortments are sets of products from the same product category that are owned by a consumer. However, while stocks consist of items that have not yet been used, and which are perfect substitutes (e.g. stocks of sugar or paperclips), assortments consist of heterogeneous products, which have the same overall usage goal but different specific applications 87

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
and which are used on and off. Assortments can exist for both durables and nondurables (e.g. assortments of soft drinks or biscuits), and although this study will focus on durable product assortments, it can be easily extended to nondurable assortments9. 3. RESEARCH OBJECTIVES For the purpose of the study the following objectives are formulated 1. To find out whether the availability of large variety of fruits and vegetables results in Customer Satisfaction and Happiness 2. To find out whether Freshness of the fruits and vegetables results Customers Satisfaction and Happiness. 3. To find out whether chances of getting all the products the customer is planning to buy results in Customers Satisfaction and Happiness. 4. To find out whether the happiness due to availability of products results in overall satisfying shopping experience for the customers 5. To find out whether availability of wide variety of national brands results in Customers Satisfaction and Happiness. 6. To find out whether customer satisfaction due to availability of variety and merchandize results in retail store image building in customers mind. 7. To find out whether customers intend to recommend the stores to other customers due to Satisfaction and Happiness due to availability of variety and merchandize.
4. RESEARCH METHODOLOGY

For the purpose of the study Exploratory Research Design is used. The sample size for the study is 159 respondents. Convenient Sampling method is used. Interview method is used for this study through intercepts at the convenience stores. A structured Questionnaire with close ended questions is designed and used. Effort was made to interview respondents across the various demographic variables. Nominal scale is used. The study is conducted at Pune during October, 2012 Kaiser-Meyer-Olkin Measure of Sampling Adequacy .749 Cronbach Alpha 5. DATA ANALYSIS TOOLS Based on the data collected through an exhaustive questionnaire the following analysis has been done using appropriate statistical tools like: Frequencies Tables/ Percentages Pie Charts KMO and Bartlett's Test-Test for Sample Adequacy Cronbach Alpha-Test- Scale Reliability Chi-Square Test .805

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
6. RESEARCH HYPOTHESIS For the purpose of the study the following Hypothesis are formulated Hypothesis 1 Ho: Availability of large variety of fruits and vegetables does not result in Customer Satisfaction and Happiness H1: Availability of large variety of fruits and vegetables results in Customer Satisfaction and Happiness Hypothesis 2 Ho: Freshness of the fruits and vegetables does not result in Customers Satisfaction and Happiness. H1: Freshness of the fruits and vegetables results in Customers Satisfaction and Happiness Hypothesis 3 Ho: Chances of getting all the products the customer is planning to buy does not result in Customer Satisfaction and Happiness. H1: Chances of getting all the products the customer is planning to buy results in Customer Satisfaction and Happiness. Hypothesis 4: Ho: Customers Happiness due to availability of products does not contribute to overall positive shopping experience for the customers H1: Customers Happiness due to availability of products contributes positively to overall shopping experience for the customers Hypothesis 5: Ho: Availability of wide variety of national brands results in Customers Satisfaction and Happiness. H1: Availability of wide variety of national brands results in Customer Satisfaction and Happiness. Hypothesis 6: Ho: Customers do not intend to recommend the stores to other customers due to Satisfaction and Happiness due to availability of variety and merchandize H1: Customers intend to recommend the stores to other customers due to Satisfaction and Happiness due to availability of variety and merchandize Hypothesis 7: Ho: Overall satisfaction based on shopping experience due to availability of variety and merchandize does not result in image building of the store H1: Overall satisfaction based on shopping experience due to availability of variety and merchandize results in image building of the store. 89

International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
7. DATA ANALYSIS

Table No. 1. Demographic Profile of Respondents (Source: Field Survey)


Parameters Gender Male Female Total Age 20-25 26-35 30-45 46-55 55-65 65+ Total Type of Family Joint Nuclear Total 1-2 3-4 5-6 7-8 9-10 10+ Total No of Children 0 1 2 3 4 5+ Total Educational Qualification HSC Graduate Post Graduate Post Graduate + Total Parameters Mother Tongue 48 30.2 Marathi 111 69.8 Hindi 159 100.0 Gujrathi Malayalam 49 30.8 Kannada 52 32.7 Telugu 42 26.4 Sindhi 13 8.2 Punjabi 2 1.3 Marwari 1 .6 Bengali 159 100.0 Total Occupation 57 35.8 Student 102 64.2 House wife 159 100.0 Employee 21 13.2 Doctor 83 52.2 Engineer 33 20.8 Retired 8 5.0 Total 8 5.0 No of Earning Members 6 3.8 1 2 159 100.0 3 42 26.4 4 63 39.6 Total 40 25.2 Income PM (000S) 8 5.0 20-50 K 4 2.5 51-70K 2 .1.2 71-90 K 91-110 K 159 100.0 110-130K+ 9 5.7 Total 32 20.1 Social Status 85 53.5 Middle Class 33 20.8 Higher Middle Upper Lower 159 100.0 Upper Middle Upper Upper Total Which one of the following stores you visited last? 22 13.8 D.Mart 23 14.5 Big Bazaar 13 8.2 Any Other 2 1.3 Total Frequency % Frequency 103 30 8 3 4 1 1 3 4 2 159 27 24 83 17 4 4 159 38 97 18 6 159 66 36 16 12 29 159 86 54 4 14 1 159 16 71 12 159 % 64.8 18.9 5.0 1.9 2.5 .6 .6 1.9 2.5 1.2 100.0 17.0 15.1 52.2 10.7 2.5 2.5 100.0 23.9 61.0 11.3 3.8 100.0 41.5 22.6 10.1 7.5 18.2 100.0

34.0 2.5 8.8 .6 100.0 10.1 44.7 7.5 100.0

Spencer's Reliance Fresh More Kmart

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) Table No. 2 Descriptive Statistics
Availability of large variety of fruits & vegetables Freshness of the fruits and vegetables Chances of getting all the products I am planning to buy Availability of wide variety of national brands Happiness due to availability of products I need Image building Intention to recommend the store to others Overall satisfaction based on shopping experience Source: Field Survey N 159 159 159 159 159 159 159 159 Range 6 6 6 6 6 4 6 6 Mini mum 3 3 3 3 3 4 3 3 Maxi mum 9 9 9 9 9 8 9 9 Mean 6.22 6.15 6.40 6.42 6.42 6.72 6.81 7.01 Std. Deviation 1.698 1.635 1.567 1.600 1.576 .880 1.499 1.389 Variance 2.882 2.673 2.456 2.561 2.485 .774 2.247 1.930

Table 3. ANOVA Sum of Squares Availability of large variety of fruits & vegetables Between Groups Within Groups Total 78.538 376.758 455.296 88.309 334.068 422.377 89.663 298.375 388.038 124.148 280.456 404.604 88.618 303.986 392.604 11.420 110.844 122.264 188.809 166.147 354.956 df 6 152 158 6 152 158 6 152 158 6 152 158 6 152 158 6 152 158 6 152 158 Mean Square 13.090 2.479 14.718 2.198 14.944 1.963 20.691 1.845 14.770 2.000 1.903 .729 F 5.281 Sig. .000

Freshness of the fruits and Between Groups vegetables Within Groups Total Chances of getting all the products I am planning to buy Availability of wide variety of national brands Happiness due to availability of products I need Satisfaction of getting all the products during the visit results in image building of the store Intention to recommend the store to others Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total

6.697

.000

7.613

.000

11.214

.000

7.385

.000

2.610

.020

31.468 1.093

28.789

.000

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) The Table value of F @.05 Significance level & df 6/152 is 2.12. The calculated value of F is more than the Table value as can be seen from the Table for all the Experience Characteristics. Therefore it can be inferred that the Sample Means are different.
Table No. 4 Results of Chi Square Test

Alternative Hypothesis (P =0.05)

H1a: Availability of large variety of fruits & vegetables * Overall satisfaction based on shopping experience H1b: Freshness of the fruits and vegetables 80.865a * Overall satisfaction based on shopping experience H1c: Chances of getting all the products I 89.008a am planning to buy * Overall satisfaction based on shopping experience H1d: Availability of wide variety of national 119.328a brands * Overall satisfaction based on shopping experience H1e: Happiness due to availability of 95.299a products I need * Overall satisfaction based on shopping experience H1f: Satisfaction of getting all the products 48.205a during the visit results in image building of the store * Overall satisfaction based on shopping experience H1g: Intention to recommend the store to 261.550a others * Overall satisfaction based on shopping experience Findings

Pearson DF ChiSquare 64.164a 36

SigniTable Alternate Ficance Value Hypothesis (2 sided) .003 51 Accepted

36

.000

51 Accepted

36

.000

51 Accepted

36

.000

51 Accepted

36

.000

51 Accepted

24

.002

36.42 Accepted

36

.000

51 Accepted

1. Availability of large variety of fruits and vegetables results in Customer Satisfaction and Happiness 2. Freshness of the fruits and vegetables results in customer Satisfaction and Happiness.

3. Chances of getting all the products the customers intend to buy results in Customer Happiness and Satisfaction. 4. Customers Happiness due to availability of products contributes to overall shopping experience 5. Availability of wide variety of national brands results in Customer Happiness and Satisfaction.
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) 6. Due to satisfaction as a result of getting all the products customers tend to recommend the stores to others. 7. Overall satisfaction based on shopping experience due to availability of variety and Merchandize leads to building positive store image in the minds of the customers

8. CONCLUSIONS & IMPLICATIONS FOR RETAILERS The research study makes a systematic effort to fulfil the research objectives. The retail industry in India is on upswing. Government of India finally got through with entry of global retailers in multi brand retailing in the country with reservations from some States for the entry of multi brand retailing. However sooner or later all states will give in and multi brand retail will have pan India presence. With their matured experience in managing all aspects of retailing with excellence, ensuring low cost structures and supply chain management skills, the retailers are going to carve out a niche for themselves in India in short span of time. This in addition to the neighbouring kirana stores is going to pose severe challenges to the organized retailers. It is a proven fact that Customer satisfaction cannot be viewed in isolation but calls for integrated approach. Other things being equal consistent availability of merchandize variety and assortments are going to be the cornerstone for success for the retailers. Indian retailers need to take cognizance of the same and gear up to ensure customer satisfaction by meeting customer requirements of products and services on an ongoing basis. Merchandize variety and assortment are differentiating and essential feature because of which the retailers are known for. Therefore it is a critical element of the retailers strategy to identify with the target markets needs, choose the right product/sales mix which aligns with the organizational objectives. The variety, range and assortment are necessary requirements for the customers to patronize a particular retail store. Customers may visit a new store as a trial visit but their conversion to repeat and regular customers largely depends on the retailers success in making quality merchandize variety and assortment and differentiate the offerings from the other retailers on an ongoing basis. Ensuring customer satisfaction is the necessary basic but only satisfaction is not the end in itself but on the contrary it is a new beginning in the customer-retailer relationship. For the retailer to survive and grow the retailers needs to have clientele which is dedicated and committed. Hence in order to achieve their objectives of growth and profits retailers need to factor in these objectives in their strategies, indentify the needs of their target customers, and consistently ensure that the customers needs are met better than the competitors and create and retain a whole generation of dedicated and loyal customers for the life time. 9. REFERENCES 1. Preneet singh, Harry Groenevelt & Nils Rudi, Product variety and supply chain structures. http://faculty.insead.edu/rudi/personal/documents/ProductVarietySupplyChainstructures.pdf 2. Chapter4.Store choice and store loyalty. Ujdigispace.uj.ac.za/bitstream/handle/10210/302/Cahpteer4.pdf?sequence 3. Journal of Retailing Volume 85, Issue 1, March 2009, Pages 1-14, Enhancing the Retail Customer Experience. www.sciencedirect.com/science/article/pii/S0022435909000025
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) 4. Aner Sela, Jonah Berger & Wendy Liu*. Variety, Vice, and Virtue: How Assortment Size Influences Option Choice. JOURNAL OF CONSUMER RESEARCH, Inc. Vol. 35 April 2009 5. Moshe Handelsman and J.Michael Munson: On Integrating Consumer Needs for Variety with Retailer Assortment Decisions. Advances in Consumer Research Volume 12, 1985 Pages 108-112 6. Richard A. Briesch, Pradeep K. Chintagunta & Edward J. Fox. http://efox.cox.smu.edu/personal/assortment .pdf 7.Andrea Morales, Barbara E. Kahn, Leigh McAlister, Susan M. Broniarczyk: Perceptions of Assortment and Variety. The Effects of Congruency between Consumers Internal and Retailers External Organization. https://mercury.smu.edu.sg/rsrchpubupload/Kahn B_PerceptionsAssortmentsVariety.pdf 8.Laurens M.Sloot, Dennis Fok & Peter.C Verhoef: The Short-and Long-Term Impact of an Assortment Reduction on Category Sales. https://www.msi.org/publications/publication.cfm?pub=910Etrca 9. Van Herpen & Rik Pieters. The Evaluation of Consumers Product Assortments. European Advances in Consumer Research Volume 4 Pages 89-96. http://www.acrwebsite.org/search/view-conference-proceeding.aspx?Id=11121 10. C.R.Kothari. Research Methodology, Methods & Techniques by, Second revised edition, 2010, New Age International (P) Ltd, New Delhi, India. 12. Schiff man & Kanuk, Consumer Behaviour, 9th Edition, , Pearson. 13. Anantnarayan & Jayashree Nimagadda. A Hand Book of Research Process, -2009 edition, Macmillan Publishers India Limited, New Delhi, India. 14. S.C.Gupta, Fundamentals of Statistics, sixth revised and enlarged edition, 2010, Himalaya Publishing House, Mumbai, India. 15. Richard I Levin & David.S. Rubin, Statistics for Management, Seventh edition, Pearson Education. 16. Vijay.R.Kulkarni, A Comparative Study Of Customer Perceptions Of Store Atmospherics Of Spencers Vs Reliance Fresh International Journal of Management (IJM), Volume 3, Issue 2, 2012, pp. 370 - 380, Published by IAEME. 17. Dr. S.Muthumani, Dr. S.Dhinesh Babu and Dr. N.Kannan, Retail Shopping Behaviour Of Consumers In Trichy City, International Journal of Marketing & Human Resource Management (IJMHRM), Volume 1, Issue 1, 2012, pp. 1 - 10, Published by IAEME.

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