RESEARCH PROJECT REPORT

ON

A STUDY ON BUYING BEHAVIOR OF CUSTOMERS IN

BIG BAZAAR VS LOCAL KIRANA STORES

Executive Summary
The changing pattern of consumerism in India over time has created a demarcation among the
consumers based on different behavioral parameters. This separates the consumer base of Big
Bazar from the local kirana store buyers, there are some similarities too. The study deals with
identifying the factors which generally affects the shopping behavior of the people towards a
particular form of buying. The factors include both "in store" and "out store" parameters. Also
intragroup segmentation has been done to get a proper view. Intragroup comparison include
segmentation within a group according to age, place of living, family income level and education
level. This study will guide the organized as well as unorganized retail sector to find a new
dimension in their mechanism by looking at the influencing parameters in this booming retail
market along with the cut throat competition in the current market.

OBJECTIVES OF THE STUDY

1. The current study aims to differentiate the buyers of local kirana stores from
the buyers of Big Bazaar based on certain identified factors.
2. It also compares the relative importance of different factors affecting buying
pattern based on a particular group as well it focus on identifying the factors
which discriminate between different groups.
3. The other key objective of the current study is to get a new dimension with
regards to the new age buyers and their Buying behavior with the results and
findings.

CHAPTER 1
Introduction to Indian retail industry
Introduction to Indian retail industry:
The sea of change can pull customers in many directions. It is our responsibility to light the way
and take care of them before the competition does.
RETAILING Means Re-tailing to the customers so that they comeback.
Retailing consists of all activities involved in selling goods and services to consumers for their
personal, family, or household use. It covers sales of goods ranging from automobiles to apparel
and food products, and services ranging from hair cutting to air travel and computer education.
Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not
considered a retail activity.
The Indian retail story couldn't have been more different. India has approx 12 million retail
stores, more than rest of the world put together. But the per capita square feet area under retail is
just 2 sq.ft or 0.2 sq. meters with fragmented kirana stores being the predominant players.
Retailing in India has remained in the unorganized sector and largely untouched by corporate.
The first decade of modern retail in India has been characterized by a shift from traditional
channels to new formats including department stores, hypermarkets, supermarkets and specialty
stores across a range of categories.
Modern retail formats have mushroomed in metros and mini-metros, in the last few years
modern retail has also established its presence in the second rung cities. Thus, exposing the
residents of these cities to shopping options, they have never experienced before. It has been
forecasted that the share of modern retail will increase from 2 per cent currently, to about 15-20
per cent over the next decade. To begin with, retailers today will have to support the large retail
infrastructure in terms of Malls and Superstores that are being created. The challenge for leading
retailers shall therefore shift from diverting demand to creating demand.
With all the modern stores offering convenience in terms of an assortment of products, ambience,
service and innovative products, the paradigm shall shift from competing with the kirana stores
to an in-house demand creation. Relevant experiences from consumer goods companies, which
have successfully crafted an explosion in demand in their sectors, through innovation, consumer
driven strategies, will be head runner. Times are changing. With the GDP at an all time high and
income levels shooting through the roof, the average Indian consumer has never had it so good.
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The propensity to consume has reached peaks that had never been scaled before. Credit cards are
flashed with disdain and shopping baskets are getting bigger all the time. Here are some factors
that indicate the potential of retail in India:

At 271 million, one of the largest consuming base in the world, forming 27% of the total
population.

A high spending community below 45 years comprises 81 percent of the population.

A young population with 54% population below 25 years

Increased literacy from 44% in 1965 to 70% in 2003

Increase in working women from 1.3 million in 1961 to 4.8 million in 1998.

The first decade of modern retail in India has been characterized by a shift from traditional
kirana shops to new formats including department stores, hypermarkets, supermarkets and
specialty stores across a range of categories. Modern retail formats have mushroomed in metros
and mini-metros.
In the last few years, modern retail has also established its presence in the second-rung cities,
exposing residents to shopping options like never before. However, even as modern retailers
garner share from traditional channels, there is a larger role they would be required to play in
boosting consumption levels. Figures suggest that the total turnover of the sector is around Rs 10
lakh crores, of which 4 percent is contributed by the organised sector.
The retail sector in India is highly fragmented with organized retail contributing to only 2% of
total retail sales. The retail sector in developed countries was also highly fragmented at the
beginning of the last century but emergence of large chains like Wall Mart, Sears, and
McDonalds led to rapid growth of organized retail and growing consolidation of the retail
industry in the developed countries.
Organized retail is growing rapidly and we see the emergence of large organized retail chains
like Shoppers Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over the
country. The opportunities in retail industry in India will increase since Indian retailing is on the
threshold of a major change.
India retail industry is the largest industry in India, with an employment of around 8% and
contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25%
yearly being driven by strong income growth, changing lifestyles, and favorable demographic
patterns. It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200
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billion. India retail industry is one of the fastest growing industries with revenue expected in
2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 78% is expected in the industry of retail in India by growth in consumerism in urban areas, rising
incomes, and a steep rise in rural consumption. It has further been predicted that the retailing
industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5
billion.
Shopping in India have witnessed a revolution with the change in the consumer buying behavior
and the whole format of shopping also altering. Industry of retail in India which have become
modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and
sprawling complexes which offer food, shopping, and entertainment all under the same roof.
India retail industry is expanding itself most aggressively, as a result a great demand for real
estate is being created.
1.1 Traditional Convenience Stores:
Traditional convenience stores are too well established in India than to be wiped out and besides
there is uniqueness in the traditional items that represent the sub-continent. The retail stores in
India are essentially dominated by the unorganized sector or traditional stores. Infact the
traditional stores have taken up 98 percent of the Indian retail market. Now stores run by families
are primarily food based and the set up is as Kirana or the 'corner grocer' stores. Basically they
provide high service with low prices. If the stores are not food based then the type of retail items
available are local in nature.
The traditional family run convenience stores can take pride in the fact that the Kirana is the
most common outlet forms for the consumers. The tough competition for convenience stores are
coming from organized retail stores dealing in food items, like:

Apna Bazaar

Canteen stores

Food World

Subhiksha

Food Bazaar

Convenience Stores are open for long hours and is one of the formats of the Indian retail stores
that cater to basic needs of the consumer. A good example of such would be Convenio. These
stores are found in both residential as well as commercial markets. The food products of
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traditional family run convenience stores are comprised of branded as well as non-branded items.
The benefit of family-run convenience stores is that they give importance to:

Personal touch

Facilities of credit

Quick home delivery

Non-food based stock comprises of multiple and varieties of local brands.

The future of such stores as they face competition from organized sector, would depend on the
following particulars:

Place and capacity

Diligent area coverage

Disciplined work schedule

Managing turnover

Revenue from assets

Customer service and satisfaction

The traditional family run convenience stores serves the purpose of the housewives who
definitely wants to avoid traveling long distances to purchase daily needs. The convenience
factor in terms of items, among people in general can be highlighted as below:

Groceries

Fruits

Drug Store

Necessary stationery

As such traditional family run convenience stores are here to stay and cannot be oversized by the
organized retail sector besides, it represents the variety of India.
1.2 Indian organized retail market:
Indian organized retail market is growing at a fast pace due to the boom in the India retail
industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about
10% to the country's GDP. The organized retail market in India out of this total market accounted
for Rs 350 billion which is about 3.5% of the total revenues.
Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010.
Traditionally the retail industry in India was largely unorganized, comprising of drug stores,
medium, and small grocery stores. Most of the organized retailing in India have started recently
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and is concentrating mainly in metropolitan cities. The growth in the Indian organized retail
market is mainly due to the change in the consumers behavior. This change has come in the
consumer due to increased income, changing lifestyles, and patterns of demography which are
favorable. Now the consumer wants to shop at a place where he can get food, entertainment, and
shopping all under one roof. This has given Indian organized retail market a major boost.
Retail market in the organized sector in India is growing can be seen from the fact that 1500
supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian
companies are entering the Indian retail market which is giving Indian organized retail market a
boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in
the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloons is
another Indian company which plans to increase its retail space to 30 million square feet with an
investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global
giant for a 750 million joint venture. A number of global retail giants such as Walmart,
Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market
will definitely grow as a result of all this investments
Classifying Indian retail:
(A)Modern Format retailers
1) Supermarkets (Foodworld)
2) Hypermarkets (Big Bazaar)
3) Department Stores (Shoppers Stop)
4) Specialty Chains (Ikea)
5) Company Owned Company Operated (BP)

(B)Traditional Format Retailers:

1) Kiranas: Traditional Mom and Pop Stores
2) Kiosks
3) Street Markets
4) Exclusive /Multiple Brand Outlets

(C)Large Indian retailers

1. Hypermarket
1) Big Bazaar
2) Giants
4) Star
II Department store
1) Lifestyle
2) Pantaloons
3) Piramyds
III Entertainment
1) Fame Adlabs
2) Fun Republic
4) PVR

Consumer behavior and retailing decisions

3. Consumer behavior and retailing decisions:
Consumer behavior refers to the mental and emotional process and the observable behavior of
consumers during searching, purchasing and post consumption of a product or service. Consumer
behavior involves study of how people buy, what they buy, when they buy and why they buy. It
blends the elements from psychology, sociology, sociopsychology, anthropology and economics.
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It also tries to assess the influence on the consumer from groups such as family, friends,
reference groups and society in general. Buyer behavior has two aspects: the final purchase
activity visible to any observer and the detailed or short decision process that may involve the
interplay of a number of complex variables not visible to anyone.
Factors Affecting Consumer Buying Behavior
Consumer buying behavior is influenced by the major three factors:

Social Factors

Psychological Factors

Personal Factors.

A. Social Factors
Social factors refer to forces that other people exert and which affect consumers purchase
behavior. These social factors can include culture and subculture, roles and family, social class
and reference groups.
B. Psychological Factors
These are internal to an individual and generate forces within that influence her/his purchase
behavior. The major forces include motives, perception, learning, attitude and personality.
C. Personal Factors
These include those aspects that are unique to a person and influence purchase behavior. These
factors include demographic factors, lifestyle, and situational factors.
Consumer decision-making process generally involves five stages:

Information Search

Problem Recognition

Purchase Action
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Alternative Evaluation

Post purchase Actions

Consumer Attribute affecting choice of format between organized and unorganized Retail

3.1 Retail outlet selection and brand selection:

There are three fundamental patterns, which a consumer can follow and they
could be:
(I) Brand first, retail outlet second
(ii) Retail outlet first, brand second
(iii) Brand and retail outlet simultaneously.
A consumer wanting to buy a car may collect information on brands and purchase it from a retail
outlet based on his perception of price offered or after sales service provided by the outlet
(typically, search for information on brands is followed by retail outlet selection in durables). In
certain product categories, especially where `category killers' exist, consumers may think of the
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retail outlet initially and then the brands (television, refrigerator and audio products retailed
through outlets like Vivek and Co. in the South, could be an example).
One more dimension may be to compare brands in the evoked set at retail outlets which also
exist in an evoked set of their own. This is highly possible, especially in the Indian context where
dealers develop a social relationship with consumers, especially in semi-urban and rural areas.
Primary research could be used to discover the specific sequence involved in a situation of this
kind. A `brand first' dimension may need feature-based advertising and a `retail outlet first'
dimension may require a set of point-of-purchase (POP) materials and special training to sales
personnel to recognize the needs of consumers.
Brand first and outlet second: The brand was probably thought of by the consumers because(i) the consumers may not have developed a relationship with any retailer which is strong enough
to get into the `evoked retail set' or
(ii) the brand has got into the evoked set because of advertising or positive word of mouth. Local
advertising with the mention of brand names which have already got into the evoked set would
enable consumers to be `pulled' to the outlet. Primary research may be required to identify the
brands in the evoked set.

NEED FOR STUDY

This study will contributes to the understanding that consumers and retailers in most cases have
different perceptions in relation to store image and shopping habits, justifying the need for
consumer marketing research, which is important in helping retailers, implement in a real
marketing orientation. The study will examines the choice of format the consumer has when he
or she decides to buy a particular product and also describes the development of organized retail
in the future, focusing on aspects with potential effect on purchasing behavior among the
consumers. The focus is on consumer expectations. The questions were formulated to capture the
overall behavior of the consumers and with the help of the survey questionnaire the analyses was
done. An attempt has been made to explore the way organized retail has dramatically changed
not only the Indian traditional retailing structure but also the consumption behavior.
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SCOPE

The project took about two months to finish which included how much customer are aware of
organized and unorganized retail markets and how well they differentiate both kinds of retail
markets in India.

LIMITATIONS

There was a limited time period.

Restricted to a limited area in Mumbai Mulund Area
Explaining customers about organized and unorganized retail markets took time.
Limited numbers of customers were chosen for survey process.
The responses given by respondents were not always accurate because the respondents

gave the response according to their understanding.

Sometimes the respondents are not willing to fill the questionnaire and hence the
resultant may not be correct.

RESEARCH METHODOLOGY
Sampling Design:
1. Sampling unit Respondents of (few malls)
2. Size of sample 30 respondents
3. Sample Method Random Sampling
4. Types of questionnaire Close ended
Type of Data:
Data type collected for analysis is PRIMARY i.e. data has been observed and recorded by the
researchers for the first time to their knowledge. Data collected through journals, newspapers &
internet is SECONDARY type.
Method of data collection:
This study is a research which utilizes interrogation and observation method for data collection.
Secondary data was obtained from intensive analysis & observation. The primary data are those,
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which are collected afresh and for the first time, and thus happen to be original in character. The
secondary data, on the other hand, are those which have already been collected by some one else
and which have already been passed through the statistical process. Method employed to collect
data is Questionnaire. This is a simple survey conducted by filling in questionnaire from the
people who visit malls.
Collection of the Primary data:
As this study is of descriptive type, the primary data has been collected through Questionnaire.

ANNEXURE

QUESTIONNAIRE
A STUDY ON CONSUMER BUYING BEHAVIOUR OF CONSUMERS IN BIG
BAZAAR VS LOCAL KIRANA STORES
NAME:
AGE

................................................
:

OCCUPATION:

................................................
................................................

1) Are you aware of organized and unorganized retail sector?

a) Yes
b) No
2) What kind of retail stores do you like to visit?
a) Organized
b) Unorganized
3) If organized why?
a) Variety

b) Better services
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c) Assortment of product
4) If unorganized why?
a) Convenient
c) Home delivery

d) Economical
b) Credit facility
d) any other..............................

5) How often do u go for purchasing?

a) Daily b) Once a week c) Once a month
6) Where do you like to purchase your FMCD products?
a) Organized b) Unorganized c) Both
7) Where do you like to shop for your products?
a) Local outlets
b) Brand outlets
c) Shopping Malls
d) others..........
8) What was your last purchased product?
a) FMCG b) FMCD C) Others....................
9) How is your experience on your last purchased product?
a) Highly satisfied
b) Satisfied
c) Dissatisfied
d) highly dissatisfied
10) What is your reason for satisfaction/dissatisfaction?(tick either satisfied/dissatisfied and
answer)
a) Variety
b) Convenient
c) Assortment of products
d) Economical

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