Introduction to the Subject
Consumer Perception
Perception is defined as the process by which an individual select, organise and interprets stimuli into a meaningful and coherent picture of the world. Two individual may be exposed to the same stimuli under the same time apparent condition but how each person recognizes, selects and organizes and interprets these stimuli is highly individual process based on each persons’s own needs, values and expectations. A person do not act and react on the basis of objective reality because reality is a phenomenon based on that person’s need, want, value and personal experience. Consumer perception is basically refers to the buying perception of an individual that how a person perception change to see a particular stimuli and after that how their buying behavior also changed.. So for the marketer, perception are much more important then the knowledge of objective reality. So for the marketer it’s not more that what they shows to their target market, it’s is more important that what target market think about their showing object. So it’s necessary to understand the influencing factor of consumer perception which forces to change their buying behavior.
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Industry Overview
The Indian retail market, which is the fifth largest retail destination globally, has been ranked as the most attractive emerging market for investment in the retail sector by AT Kearney’s eighth annual Global Retail Development Index (GRDI), in 2009. As per a study conducted by the Indian Council for Research on International Economic Relations (ICRIER), the retail sector is expected to contribute to 22 per cent of India’s GDP by 2010. With rising consumer demand and greater disposable income, the US$ 400 billion Indian retail sector is clocking an annual growth rate of 30 per cent. It is projected to grow to US$ 700 billion by 2010, according to a report by global consultancy Northbridge Capital. The organised business is expected to be 20 per cent of the total market by then. In 2008, the share of organised retail was 7.5 per cent or US$ 300 million of the total retail market. A McKinsey report, ‘The rise of Indian Consumer Market’, estimates that the Indian consumer market is likely to grow four times by 2025. Commercial real estate services company, CB Richard Ellis’ findings state that India’s retail market has moved up to the 39th most preferred retail destination in the world in 2009, up from 44 last year. India continues to be among the most attractive countries for global retailers. Foreign direct investment (FDI) inflows as on September 2009, in single-brand retail trading, stood at approximately US$ 47.43 million, according to the Department of Industrial Policy and Promotion (DIPP). India’s overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic country with high growth rates, consumer spending has risen sharply as the youth population (more than 33 percent of the country is below the age of 15) has seen a significant increase in its disposable income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also, organised retail, which is pegged at around US$ 8.14 billion, is expected to grow at a CAGR of 40 per cent to touch US$ 107 billion by 2013. The organised retail sector, which currently accounts for around 5 per cent of the Indian retail market, is all set to witness maximum number of large format malls and branded retail stores in South India, followed by North, West and the East in the next two years. Tier II cities like Noida, Amritsar, Kochi and Gurgaon, are emerging as the favoured destinations for the retail sector with their huge growth potential. Further, this sector is expected to invest around US$ 503.2 million in retail technology service solutions in the current financial year. This could go further up to US$ 1.26 billion in the next four to five years, at a CAGR of 40 per cent.
(Websource:-http://www.dare.co.in/opportunities/retail-franchising/the-growth-of-private-labels.htm)
Moreover, many new apparel brands such as Zara, the fashion label owned by Inditex SA of Spain, UK garment chain Topshop, the Marc Ecko clothing line promoted by the US entrepreneur of the same name and the Japanese casual wear brand Uniqlo are preparing to open outlets in India. The India Retail Industry is the largest among all theindustries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast pacedindustries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof. A large young working population with medium age of 24 years, nuclear families in urban areas, along with increasing working women population and emerging opportunities in the services sector are going to be the key factors in the growth of the organized Retail sector in India. The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations.
Current status of the Indian Retail Sector:-
Current status:-US$ 400 billion with annual growth rate of 30 per cent.
Projected to grow to US$ 700 billion by 2010
Expected: – US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018 with ( (CAGR) of 10 percent
According to Indian Council for Research on International Economic Relations (ICRIER), the retail sector is expected to contribute to 22 per cent of India’s GDP by 2010.
(Web source: – http://www.ibef.org/industry/retail.aspx)
Company overview
Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri business, financial services, retail and manufacturing. Bharti Airtel, a group company, is one of Asia’s leading providers of telecommunications services with operations in India and Sri Lanka, spanning mobile services, telemedia services and enterprise services. Bharti Airtel has always been at the forefront of the telecom revolution, transforming the sector with its world-class services built on leading edge technologies. In the area of financial services, Bharti has been partnering with AXA of France to offer life insurance, general insurance and asset management services. Bharti Retail, a wholly owned subsidiary of Bharti Enterprises operates multiple-format consumer friendly stores, while Bharti Walmart is a B2B joint venture with Walmart, for wholesale cash and carry and back-end supply chain management operations.
Other businesses in the group are Beetel for communication and media devices, and FieldFresh Foods Private Limited, a joint venture with Del Monte Pacific Limited to offer fresh fruits and vegetables, and processed food in India as well as international markets. Bharti Retail (Pvt.) Limited, a wholly owned subsidiary of Bharti Enterprises. As part of its plans to provide a world-class retailing experience to consumers across India, the Company has planned an investment of $US 2 to 2.5 billion by 2015. Bharti Retail plans pan-India operations and is looking at approximately 10 million square feet of retail experience across all cities in India with a population of over one million. It plans to employ 60000 people, will include ex-servicemen and women and provide multi dimensional career opportunities for youth of India. Bharti Retail will launch its retail outlets in multiple consumer friendly formats, which will include Hypermarkets and Supermarkets. For the small store format, Bharti Retail is also looking at partnering with existing local store owners across India through a franchise model. Bharti Retail proposes to serve all regular shopping requirements of an average Indian household. This will include all food and grocery categories, fresh fruits and vegetables, meat and poultry, dairy products, staples, FMCG and processed foods, electronics and appliances, clothing and footwear, furniture and furnishing, and other household articles. Bharti Retail will keep adding to the product portfolio in line with consumer aspirations, references and trends in the international market. Mr. Rajan Bharti Mittal, Joint Managing Director, Bharti Enterprises said, After revolutionising the Indian telecom sector, retail will be the next big focus area for Bharti. Organised retail, which currently accounts for only 3% of the total market, has tremendous growth potential in the fast expanding Indian economy. Not only will it benefit millions of consumers but also farmers, small manufacturers and artisans. The sector will also offer enormous direct and indirect employment opportunities while attracting huge investments in building the supply chain infrastructure, adding to the economic growth of India, especially in rural areas. Bharti with its in-depth understanding of the Indian consumer, experience of running all India operations, ability to attract & grow talent and capability to deliver a great experience at affordable prices, is uniquely placed in the Indian retail sector.
Bharti Wal-Mart neighborhood supermarket opened shop under the brand name “Easy Day”. The launch was a very low profile one mainly to put-off resistance from local vendors. [Learning from Reliance and Wal-Mart’s lessons Also, Sunil Mittal promoter of Bharti group who hails from the strictly vegetarian Marwari community will face resistance from them because of stocking meat in Easy Day stores.
Product Range in Easy Day stores:
Bakery products
Food and Beverages
Home & Personal Care
Dairy Products
Frozen – Vegetarian, Non-Vegetarian[Meat] and Chilled Non-Vegetarian
Grains & Pulses
Meat and Poultry Items
All the three stores are single floor stores with cash counter and bakery section at the entrance. Each category of the product was marked separately. Products were effectively displayed with price tags. In Easy Day stores having Home & Personal Care (Toothpaste, Soap, etc] and Food & Beverages (Pepsi, Fruit Juice, Cereals) are sold at a discount between 1% to 5% only.
Need & Scope of the study:-
The scope of the study was confined to the customers in Jalandhar, Punjab state. The immediate customers for the company are the middle class. The study was emphasized on the perception of consumer regarding easyday brand. It will help easyday to target its customer more precisely because this will help easyday management to know there customer in detail. It will also help to the perception of customers regarding their competitors.
As this research is conducted on customer of Jalandhar city so it will be not more fruit full to implement the finding of this research in other city than Jalandhar city because we know that consumer behavior changes according location. So conclusion may be applicable in Jalandhar city and may not be true for the whole.
Objective of the study:-
Primary objective:-
To know the factor which influence the consumer perception for purchasing in the easy day retail
Secondary objective:-
To know the effect of branding in retail on purchasing decision of consumer.
To study the factors that can help the easyday in their growth and development.
REVIEW OF LITERATURE
Jha, (2008) has analyzed that how Reliance Company is lagging behind in the era of cutthroat competition .company is unable to make good relationship with corporate clients. Main rival Bharati easyday is trying to capture more market share with their new ideas and plan. As other retailers are concern the company should become liberal on his policies. Company should give the clients more facilities so that they may became new clients and may continue through it. The company also needs a proper marketing wing to operate well in these areas and accomplish the goal, mission and vision of the company.
Lal, (2000) has analyzed that building store loyalty through store brand, that the role of a store brand in building store loyalty through a game theoretic analysis. In a market in which a segment of consumers is sensitive to product quality and consumers’ brand choice in low-involvement packaged goods categories is characterized by inertia. The quality store brands can be an instrument for retailers to generate store differentiation, store loyalty, and store profitability, even when the store brand does not have a margin advantage over the national brand.
Wilcox, (1998) has analyzed that understanding price competition between national brands and private labels in a duopolistic channel structure, Narasimhan and find that manufacturer profits increase as national brands are more differentiated and the cross price sensitivity in private label price variations is smaller, while retailer profits increase as stores are differentiated and the cross price sensitivity in private label price variations is higher. Interestingly, we also find that total channel profit increases as the retailers become leaders (over manufacturers).
Pauwels and Shuba (2004) has analyzed that who Benefits from Store Brand Entry? find that two beneficial effects of store brand entry: high unit margins on the store brand itself and higher unit margins on the national brands. This increase in unit margins implies that the retailer strengthens its bargaining position vis-à-vis national brand manufacturers. However, store brand entry only rarely yields category expansion and does not create store traffic or revenue benefits. Second, consumers do not obtain lower prices on all national brands, only on some second-tier brands. However, they benefit from enlarged product assortment and intensified promotional activity that lowers average price paid for two out of four categories. For the manufacturers, store brand entry is typically beneficial for premium-price national brands, but not for second-tier national brands. Often, premium brands experience lower long-term price sensitivity and higher revenues, where as second-tier brands experience higher long-term price sensitivity and lower revenues.
Schutte (1969) has analyzed that Consumer willingness to purchase new store brand, find that the customer willingness to buy new store brand differs between product group. It is lowest for the product group associated with high social risk. Premium store brand are preferred for these categories. The influence of price is small and nonlinear from consumer point of view. Private brand has a large impact on customer perception due to availability of product in a one roof; less price and greater quality that shape the mind of consumer to go for private brand. So the drivers influencing customer attitude towards specific store brand depend upon the respective store brand product group.
Hoch and Montgomery(2007) has analyzed that Long term growth trends in private label market share, find that high percentage of categories private labels have exhibited substantial long-term positive growth trends. This contrasts with national brands that have grown in far fewer categories and also show negative growth in many other categories due to the leading national brand is not the same across all geographic markets or even within the same market.
Tang (1993) has analyzed that Store Choice and Shopping Behavior: How Price Format Works find that how customers view the shopping process. The utility-based framework is developed and presented from an extensive analysis of the behavior of real shoppers. One attractive feature of the framework is its parsimony. Several recent examples of successful retail practice were interpreted with respect to the model. Retail practitioners and strategists can use our framework to develop a richer understanding of the following important retailing issues: (a) the shopping utility evaluation and response sensitivities of different consumer segments, (b) how consumer segments perceive and respond to different retail price formats, (c) the relative competitive position of a store in different segments, and (d) the likely impact of a change in retail strategy on the fixed and variable shopping cost perceptions of different consumer groups
Chintagunta (2003) has analyzed that Understanding Store Brand Purchase Behavior across Categories find that important activities for the supermarket retailers are the creation and maintenance of their store brands. A well-developed private label program could not only contribute directly to retailer profitability but also have positive indirect effects such as better bargaining power with the manufacturer and building store loyalty. Given their strategic importance, it is imperative for retailers to understand the behavior of their store brand buyers.
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Paraguay (2010) has analyzed that store brand and national brand promotion attitudes antecedents Universidad de Chile, Retailers compete against national manufacturers by launching store brands. National manufactures regularly use brand promotions to fight store brands back. Relating to price impact both store brand attitude and national brand promotion attitude, but the strength of some of these relationships differ. Other shopper characteristics like brand loyalty and store loyalty, have similar negative and positive effects, respectively. These slight differences suggest that promotions of national brands might be a good tool for fighting back store brands, but manufacturers need to design and target these promotions carefully in order to avoid head-to-head competition.
Vishwanathan(2008) has analyzed that low-literate consumer shopping behavior in retail settings, retailing decisions are likely to be based on implicit assumptions about literate consumer behavior, (Journal of research of consumer by Roland Gau and Madhubalan vishwanathan, (Issue on 15, 2008) told about the perception of low literate consumer that how low literate consumers perception empowered in the retail environment. The low literate consumer when find positive environmental effect in store brand, self esteem maintaince and avoidance behavior by the employee on retail store then their perception ready to purchase for a particular product.
RESEARCH METHODOLOGY
Research Design:- I am conducting descriptive research method to gather customer perception. As this data will be primary data so I have to conduct survey.
Sampling design:- As population is large so we can’t conduct census method so we have to go for sampling method. In sampling method I will prefer convenience sampling in easyday because it will reduce time and money in data collection. The customer who is coming for shopping in easyday will be eligible for research
Data collection method:- The primary data are first hand data which is generated specially for the pursueing research project. I am collecting primary data by preparing questionnaire for my research project. I will do ‘pilot study’ for testing the questionnaire. The pilot survey will help in making certain changes in the final questionnaire so that it can be more effective. A structured questionnaire will be then prepared for the respondents in order to collect the data.
Scaling technique:- I will be using likert scale, semantic scale and dichtomas in questionnaire.
.Sampling unit:- It refers to the individuals who are to be surveyed in the study and it is the customer who is consuming or who has bought products are surveyed. The consumer which is going for shopping in easyday of Model town, Rajendra nagar, Garha road in Jalandhar, (Punjab).
SAMPLE SIZE:- It refers to the number of people surveyed for this topic, in the study 150 people are surveyed and responses drawn.
Secondary data:( Exploratory research):-
The secondary data can be defined as data collected by someone else for purposes other than solving problem being investigation and previously meant for another purpose. . I have used company database, magazines, journals, paper and internet for the collection of data. It helps us to better determine our problem and formulate an appropriate research design.
ANALYSIS AND INTERPRETATION:-
STATISTICAL TOOLS USED
The main statistical tools used for the analysis and interpretations of data in this project are:
Anova.
Multidimensional scaling
To know the consumer perception towards easyday.
Frequency distribution
How many users of the brand may be characterized as brand loyal.
What percentage of market consists of heavy users, medium users, light users and non users?
How many customers are familiar with new product offering?
What is the income distribution of brand users?
LIMITATIONS OF THE STUDY:-
Total coverage of the study is limited to the few customers for buying products at Jalandhar.
Sample size of the study is restricted to 150 customers only.
Most of the respondents hesitate to give information but how ever an attempt is made to collect the data systematically.
Time is the one constraint of the survey.
Money constraint is also there.
So many biasness’ during taking the respondent response
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