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A
SYNOPSIS ON
”CONSUMER BUYING BEHAVIOR IN ORGANIZED
RETAIL SECTOR – EXPLORATORY STUDY OF BIG
BAZAAR AT INDORE”

FOR THE PARTIAL FULLFILLMENT OF THE

REQUIREMENT OF DEGREE OF
MASTER OF BUSINESS ADMINSITRATION
SESSION 2009-2011

SUBMITTED TO
DAVI AHILYA VISHWAVIDYALAYA, INDORE (M.P)

GUIDED BY: SUBMITTED BY:

STUDENT NAME
Lokesh Malakar
ROLL NO.9165218
SPECIALIZATION

Finance & Marketing

 DEPARTMENT OF MANAGEMENT STUDIES
Trasanational knowledge society group of institue, INDORE

FORMAT OF SYNOPSIS

1. INTRODUCTION

2. REVIEW OF LITERATURE AND

RATIONALE

3. RESEARCH METHODOLOGY
1. Objectives
2. Hypothesis
3. Sample plan
4. Tools of data collection
5. ANALYSIS AND INTERPRETATION OF
DATA
 6. BIBLIOGRAPHY

Introduction
Over the last few years, retail has become one of the fastest growing
sectors in the Indian economy. Though the country has highest retail
outlet density in the world, Indian retail sector is highly fragmented and
organized retail in the country is at very nascent stage. The organized
retail industry in India is expected to grow 25-30 % annually. Retailing
is gradually inching its way towards becoming the next boom industry.

Consumers are the major beneficiaries of the retail boom. The Indian
consumer is changing rapidly. They now have a choice of wide range of
products, quality and prices. Organized retailing is changing the whole
concept of shopping in terms of consumer buying behavior. In such a
scenario, consumer decision making is of great interest for consumer
educators and marketers interested in serving the consumer (Canabal,
2002). Therefore, there is clearly a need for research on this issue in
India. In this study, an attempt was made to study the consumer
decision making styles in shopping malls of India.

Organized retail stores are characterized by large professionally managed

formats stores. They provide goods and services that appeal to customers,
in an exellent ambience. This is created based on consumer preference
analysis and offer good value.

Retailers and marketers often seek to learn how and why people shop. The
consumer decision making process is a complex phenomenon. The purchase of
goods or services includes a number of factors that could affect each decision.
Decision making is more complex and even more important for consumers today
than in the past. Consumers are besieged by advertising, news articles, and
direct mailings that provide an abundance of information, much of it with mixed
messages. In addition, increases in the number and variety of goods, stores, and
shopping malls, and the availability of multi component products and electronic
purchasing capabilities have broadened the sphere for consumer choice and
have complicated decision making (Hafstrom et al., 1992).

Retail is clearly the sector that is poised to show the highest growth in
the next five years. The sector is set for a revolution, as both the present
players and new entrants are gearing up to explore the market. This
sector contributes 10% of India's GDP and the current growth rate is
8.5%. The present size of the organized retailing sector is approximately
3% and is expected to grow to 25-30% by the year 2010. There are
about 300 new malls, 1500 supermarkets and 325 departmental stores
currently under construction. Many players are coming up with huge
investments, due to which the present 12 million mom-and-pop shops
and kirana stores fear losing their business. Most predictions say that
the sector might reach to US$ 400-600 billion by the year 2010.

Global retail giants such as Wal-Mart, Tesco, Germany's Metro AG and many
others are ready to enter the retail markets. The rising demand of branded
products and increase in purchasing power have lured these companies to enter
the market.

Today’s Retail in India Comprised of organized and traditional retail formats,

Indian Retail market is estimated to be worth US$ 511 billion, and is poised to
grow to US$ 833 billion by 2013.

The organised retail that currently accounts for less than 5 per cent of the total
retail market is expected to register a compound annual growth rate (CAGR) of 40
per cent and swell to US$ 107 billion by 2013.

A report by global consultancy firm, AT Kearney said "The consumer spending in

India has increased by an impressive 75 per cent in the last four years and will
quadruple in the next 20 years." Moreover, India recently topped the Nielsen
Global Consumer Confidence study, conducted by Nielsen, a market research
company.

The biannual report revealed that Indians are "the most optimistic lot globally who
think that their country will be out of the economic recession in the next twelve
months." However the size of Organised Retail in India will exceed US$22bn
mark from current level of about US$4bn with its space requirement touching over
220mn sq. ft., by 2010, according to The Associated Chambers of Commerce and
Industry of India (ASSOCHAM). In a Paper brought out by ASSOCHAM on `Retail
Scenario in India and Its Related Issues’, it has been stated that approx. 40mn sq.
ft. is currently generating a business of about US$4bn in organized retail.
India’s vast middle-class and its almost untapped retail industry are key
attractions for global retail giants wanting to enter newer markets and India
provides for the ideal locations. Since, Delhi and its suburbs have so far seen the
growth of 100 bigger and smaller malls, roughly 600 new malls are coming up in
other metropolis and large townships in which less than 35% of retail business is
going to be transacted.

It is seen that over 1000 malls are in the pipelines for smaller townships in which
the retail sector is projected to grow at over 60% because of ample availability of
land and increased purchasing power of the folks living in those areas because of
increased economic activities. Naturally, the large players will prefer to go there
and put up their shops by sourcing their supplies from the places convenient to
them. 7

The key cause for inefficiency is the poor integration between the retailer and
supplier. None of the retailers, in view of ASSOCHAM has so far an automated
system for information exchange with their suppliers. In developed countries,
retailers practice Vendor Management Inventory (VMI) systems, where the
supplier has access to the point of sales data of the retailer and plans automatic
replenishments responding to the stocks available at the retailer. 8

Key Points of Indian Organised Retail Industry

1. Potential to be the third largest economy in terms of GDP in next few years
.

2. It ranks high amongst the top 10 FDI destinations of the world .

3. Fastest growing tourist market in Asia.

4. World bank states, India to be worlds second largest economy after China
by the year 2050.

5. Stable and investor friendly Central Government at the helm of affairs.

6. Introduction of Value Added Tax or VAT and tax reforms.

7. High degree of professionalism and corporate ethics.

8. Excellent Investment opportunities in Indian retail sector and in allied

sectors; sure and high returns on investments.

9. To invest US $130 billion for the development of infrastructure, by year

2010. 10. Bullish stock markets.

10. Hordes of foreign investors are thronging in to invest in Indian retail

markets. 12. Highly educated English speaking young workforce.
 11. 13. Vibrant and multi cultured cities.

12. 14. Huge opportunity exists, especially in semi-rural and rural areas.

13. 15. Till date the second largest employer after agriculture sector, for the
huge semi-skilled Indian population.

14. 16. Offers highest shop density in the whole world.

15. 17. Having almost 1,20,000 shops, across the length and breadth of the
country.

Formats in Indian Organized Retail Sector

Supermarkets:

A supermarket, also called a grocery store is a self- service store offering a wide
variety of food and household merchandise, organized into departments. It is
larger in size and has a wider selection than a traditional grocery store and it is
smaller than a hypermarket or superstore.

Hypermarkets:

A hypermarket is a superstore which combines a supermarket and a department

store. The result is a very large retail facility which carries an enormous range of
products under one roof, including full lines of groceries and general
merchandise. In theory, hypermarkets allow customers to satisfy all their routine
weekly shopping needs in one trip.

Department Stores:

A department store is a retail establishment which specializes in satisfying a wide

range of the consumer's personal and residential durable goods product needs;
and at the same time offering the consumer a choice multiple merchandise lines,
at variable price points, in all product categories. Department stores usually sell
products including apparel, furniture, appliances, electronics, and additionally
select other lines of products such as paint, hardware, toiletries, cosmetics,
photographic equipment, jewelery, toys, and sporting goods. Certain department
stores are further classified as discount department stores. Discount department
stores commonly have central customer checkout areas, generally in the front
area of the store. Department stores are usually part of a retail chain of many
stores situated around a country or several countries.

Shopping malls:
A shopping mall or shopping centre is a building or set of buildings which contain
retail units, with interconnecting walkways enabling visitors to easily walk from
unit to unit.

Specialty Chains:

A Specialty Chains is numbers stores which are specialized in a specific range of

merchandise and related items. Most stores have an extensive width and depth of
stock in the item that they specify in and provide high levels of service and
expertise. They differ from department stores and supermarkets which carry a
wide range of merchandise.

Retail Landscape
Modern retail development in India is focused on the following cities:

West

• Mumbai
• Pune
• Ahmedabad

North

• Delhi and the National Capital Region

South

• Chennai

• Banglore

• Hyderabad

East

• Kolkata

Leading Indian Retailers

Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Food Bazaar,
Globus Stores Pvt. Ltd., Liberty shoes Ltd., Music World Entertainment Ltd.,
Pantaloon Retail India Ltd., Shoppers Stop, Subhiksha, Titan Industries, Trent
and the new entrants penetrating the market soon will include Reliance Retail Ltd,
Wal-Mart Stores, Carrefour, Tesco, Boots Group, etc.

Current Scenario
A glimpse of the International Retail

• One of the world's largest industries exceeding US$ 9 trillion

• 47 global fortune companies & 25 of Asia's top 200 companies are retailers
• Dominated by developed countries
• US, EU & Japan constitute 80% of world retail sales.
• Biggest player in India is Pantaloon Retail India Limited.

Percentage of Organized Retail

USA - 85%
Taiwan - 81%
Malaysia - 55%
Thailand - 40%
Brazil - 36%
Indonesia - 30%
Poland - 20%
China - 20%
India - 3%

Key Trends

The existing players like Big Bazaar, Shoppers' Stop, Piramyd are expanding to
smaller towns and cities. Many other business houses are planning to enter the
retail sector either on their own or through partnerships. New entrants like
Reliance Retail Ltd and Wal-Mart are going to enter the market soon. Even rural
areas will provide a huge opportunity to be explored.

Estimates and Predictions

• The industry is estimated to be more than US$ 400 billion by a study of
McKinsey.
 • The Economist Intelligence Unit (EIU) estimates the retail market in India
to increase to US$608.9 billion in 2009 from US$394 billion in2005.
• A KPMG report says that the organized retail would grow at a higher rate
than GDP in the next five years.
• The retail sector would generate employment for more than 2.5 million
people by the year 2010, says an analysis by Ma Foi Management
Consultants Ltd.

Benefits of FDI in Retail Sector

• Higher competition would lead to higher quality in products and services.
• Better lifestyle as better products would be introduced.
• Exports would increase due to greater sourcing of major players.
• Investment in whole supply chain would increase.
• Technology would be upgraded in terms of logistics, production, and
distribution channels.
• The markets of the sector would flourish and develop.
• Employment would increase and skills & manpower will develop.
• A strong retailing sector would promote tourism.
• Economies of scale would help lower consumer prices and increase the
purchasing power of the consumer.
• In the long term it will be beneficial in the up-gradation of agriculture and
small scale & medium scale industries.

RBI (2006), “Press Release” 2006-2007/300

According to it Indian economy has shown an impressive growth of over 6 per
cent for last five years and continues to surge ahead. GDP growth rate in 2003-04
recorded a fifteen year high of 8.5% and subsequently maintained a steady
growth for the next two years. Real GDP growth accelerated from 7.5% during
2004-05 to 8.4% during 2005-06 on the back of buoyant manufacturing and
services activity supported by a recovery in the agricultural sector. The central
bank forcasts similar growth of 7.5 -8 % during 2006-07. With strong economic
growth consumerism is increasing in thee country and India is the fourth largest
economy as far as purchasing power parity is concerned, just behind USA, japan
and china.

Sproles and Kendall (1986) define a consumer decision making (CDM) style as
“a mental orientation characterizing a consumer's approach to making
choices.” Broadly speaking, there are 3 types of approaches in studying
consumer decision-making styles -
Psychographic/lifestyle approach, which identifies hundreds of characteristics
related to consumer behavior.
Consumer typology approach, which classifies consumers into several types.
Consumer characteristics approach, which focuses on different cognitive
dimensions of consumer decision making (cf. Fan et al., 1998).

In the extant consumer behavior literature, most studies assume that all
consumers approach shopping with certain decision-making traits that combine to
form a consumer's decision-making styles. Academicians and researchers have
long been interested in identifying these underlying decision styles of shoppers.
For example, consumers are identified as - economic shoppers, personalizing
shoppers, ethical shoppers, apathetic shoppers, store loyal
shoppers, recreational shoppers, convenience shoppers, price-oriented
shoppers, brand loyal shoppers, name-conscious shoppers, problem-
solving shoppers, quality shoppers, fashion shoppers, brand conscious
shoppers and impulse shoppers. (Bellenger and Korgaonkar 1980; Darden and
Reynolds 1971; Stone 1954, Williams, Painter, and Nicholas 1978, Moschis
1976;Stephenson and Willett 1969, Gehrt and Carter 1992, Jacoby and Chestnut
1978, Lumpkin 1985). (cf. Hiu, A.Y. et al., 2001).

Using the consumer characteristics approach, Sproles (1985) developed a 50-

item instrument to profile the decision making styles of consumers. Using data
collected from 111 undergraduate women in two classes at the University of
Arizona and employing a factor analysis technique, Sproles (1985) found six
consumer decision-making style traits He named and described these traits:
(1) Perfectionism
(2) Value Conscious
(3) Brand Consciousness,
(4) Novelty-Fad-Fashion Consciousness
(5) Shopping Avoider-Time Saver- Satisficer
(6) Confused, Support-Seeking Decision-Maker.

In a later study, Sproles and Kendall (1986) developed a comprehensive

instrument called Consumer Style Inventory (CSI) to measure consumer decision
making styles. The instrument was administered to 482 students in 29 home
economics classes in five high schools in the Tucson, Arizona area. (cf. Fan, J.X.,
1998). This instrument measures eight mental characteristics of consumer's
decision making: perfectionism, brand consciousness, novelty-fashion
consciousness, recreational, price-value consciousness, impulsiveness,
confused by over choice, and brand-loyal/habitual. (cf. Mitchell, Vincent-
Wayne, 2001). These styles are discussed in table given below -

Table 1: Characteristics of Eight Consumer Decision-Making Styles

1. Perfectionist/high quality-conscious consumer: decision style of

consumers who systematically search for the best quality products
possible. Consumers have high standards and expectations for consumer
goods, and are concerned with the function and quality of products;
2. Brand consciousness: decision style of consumers concerned with
getting the most expensive, well-known brands. They feel that price is an
indicator of quality.

3. Novelty and fashion conscious: decision style of consumers who like

new and innovative products and who gain excitement from seeking out
new things. They are conscious of the new fashions and fads

4. Recreational and shopping conscious: decision style of consumers who

take pleasure in shopping and who shop just for the fun of it.

5. Price conscious: decision style of consumers who are concerned with

getting lower prices. They are likely to be comparison shoppers.

6. Impulsiveness/careless: decision style of consumers who never plan

their shopping and tend to buy spontaneously. They are not concerned
about how much money they spend.

7. Confused by over choice: decision style of consumers who feel they

have too many brands and stores to choose from and who likely
experience information overload in the market. Consumers find the
marketplace confusing, view brands as alike, and seek help from friends

8. Habitual/brand loyal: decision style of consumers who are apt to have

favorite brands and stores. They shop at the same stores and tend to buy
the same brands each time.
 REVIEW OF LITERATURE AND RATIONALE

According to Sproles & Kendall (1986) identification of these characteristics

among consumers "helps to profile an individual consumer style, educate
consumers about their specific decision making characteristics, and counsel
families on financial management".

Consumer Style Inventory (CSI) developed by Sproles & Kendall (1986) was used
by many researchers to study the consumer decision making styles. Some of the
research are briefly described below -

Hafstrom et al. (1992) used the CSI to identify the decision-making styles of
Korean students. They confirmed seven of the eight factors using Sproles &
Kendall’s analytical methods and conceptual framework. The only factor that was
not confirmed was ‘novelty fashion consciousnesses. They attributed this to
possible links between ‘brand consciousness’ and ‘fashion consciousnesses
among young Korean consumers.

Hiu et al. (2001) administered the CSI to 387 adult consumers in China. Their
findings indicate that five decision-making styles are valid and reliable in Chinese
culture. These styles were perfectionist, novelty-fashion conscious,
recreational, price conscious, and confused by over choice.

Fan and Xiao (1998) used a modified CSI with Chinese students. They clearly
identified five dimensions of consumer decision making styles: brand
consciousness; time consciousness; price consciousness; quality
consciousness; and information utilization.

Walsh et al. (2001) confirmed seven factors of consumer decision-making styles

for German consumers. These factors were - brand consciousness,
perfectionism, Recreational / hedonism, confused by over choice,
impulsiveness, novelty-fashion consciousness, variety seeking.

Durvasula et al. (1993) administered the CSI on 210 undergraduate business

students at a large university in New Zealand. They found eight consumer
decision making styles. These styles are - perfectionist, brand conscious,
novelty-fashion conscious, recreational shopping conscious, price-value
conscious, impulsive, confused by over-choice, and habitual/ brand loyal.

Canabal, M.E. (2002) investigated the decision making styles of South Indian
Consumers utilizing Customer Style Inventory. Using data collected from 173
college students from two institutions of higher education in the city of
Coimbatore, South India, Canabal (2002) identified five decision making styles of
South Indian. These styles are –
(1) Brand Conscious Style
(2) High Quality Conscious / Perfectionist Style
(3) Confused by Overchoice Style
(4) Impulsive / Brand Indifferent Style
(5) Recreational Shopper Style.

RATIONALE

• To understand the customer satisfaction in Big Bazaar.

• To know customers mindset about Big Bazaar.
• To understand the difference between Big Bazaar and other organized
retail stores.
• To know why consumers prefer Big Bazaar.
• To know the price difference and discounts for the same product in Big
Bazaar and other retail stores.
• To know about different facilities provided in Big Bazaar.
• To know the organization culture in big Bazaar.
• To know the view of youngsters and adults towards Big Bazaar.
 Research Methodology

Objectives

 To study the consumer buying behavior in BIG BAZAR located in

INDORE.

 To suggest appropriate strategies to consumer perception on

organized retail store – BIG BAZAR.

 To investigate the consumer decision making styles in shopping

malls.

 To study variations in the consumer decision making styles

across different demographic variables.

Hypothesis Formulation

Null Hypothesis –
• There is no significance difference between buying behavior
and age.
• There is no significance difference between buying behavior
and income.

Research Design

The study would be EXPLORATORY in nature and would carried out to identify
the factors which formed the basis of Consumer Behavior in organized retail
sector and on the basis of these factors a comparative analysis of different
category of consumers was done.
Sample Design
Random Sampling

Tools For Data Collection

Primary Data – Self Designed Questionnaire using 5 point Likert scale wherein
respondents would be asked to indicate the degree of agreement or
disagreement to particular statement ranging from strongly disagree to strongly
agree.

Secondary Data – Detailed review of literature from secondary sources would

provide the base for identifying the domain, selection, designing and inclusion of
various measuring variables in the questionnaire for the study.

Sample Size
200
Expected Outcomes

1- Availability of all types of product

2- Approachability
3- Convenience
4- Discounting
5- One Stop Shopping

Tools For Data Analysis

Certain statistical tools like “T” Test, chi square test, Arithmetic Mean, Standard
Deviation, etc. would be used for the purpose of data analysis.
 References and Bibliography

• Berman berry, evansjoel R (2007) ‘an introduction to retailing’ Retail

Management, pearson education (Singapore) private ltd, pp.3, eighth
edition.

• ‘Retail marketing in india – Key Issues and challenges’ (2008), Marketing

Mastermind, Feb 2008, pp.19

• ‘Emerging trends in retail sector’, (2007) Journal of IMS Group, July-Dec

2007 pp.30, Volume 4 no.2

• Kothari, C.R, (2007). Reseach Methodology, New Age International

Publishers.