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PROJECT REPORT

ON

Study of Consumer Buying Behavior at Pakiza, Indore

INSTITUTE OF MANAGEMENT STUDIES

DEVI AHILYA VISHWAVIDYALAYA, INDORE (M.P.)

Submitted To

Ms. Ranu Gupta

ByPriyanka GuptaM.B.A ( Marketing Management )3rd Sem. (Sec-B)


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DECLARATION

I Priyanka Gupta class of 2009-2011, a fulltime bonafide student of first yearof Master of Business Administration(MBA) Programme of Institute ofManagement Studies, DAVV, Indore. I hereby certify that this Project Report iscarried out by me and the report submitted is the true work of mine underthe guidance of the Ms. Ranu Gupta ( An Honorable Faculty for ConsumerBehavior).

PRIYANKA GUPTA

Table of Contents


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Indian Retail Industry

Retailing

Company Profile

Major Players In The Market

Objective Of The Study

Consumer Buying Process

Consumer Buying Behavior

Factors affecting Buying Decision Process

Research Methodology

Data Analysis And Interpretation

Facts And Findings

Recommendations

Limitations Of The Study

Questionnaire

Indian Retail Industry

The Indian retail industry is the fifth largest in the world. Comprising of organizedand unorganized sectors, India retail industry is one of the fastest growingindustries in India, especially over the last few years. Though initially, the retail

industry in India was mostly unorganized, however with the change of tastes andpreferences of the consumers, the industry is getting more popular these days andgetting organized as well. With growing market demand, the industry is expectedto grow at a pace of 25-30% annually. The India retail industry is expected to growfrom Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010.


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Growth of Indian Retail

According to the 8th Annual Global Retail Development Index (GRDI) of ATKearney, India retail industry is the most promising emerging market forinvestment. In 2007, the retail trade in India had a share of 8-10% in the GDP(Gross Domestic Product) of the country. In 2009, it rose to 12%. It is alsoexpected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is expected togrow to US$ 700 billion by 2010. By the same time, the organized sector will be20% of the total market share. It can be mentioned here that, the share of organizedsector in 2007 was 7.5% of the total retail market.

Major Retailers in India

Pantaloon:

Pantaloon is one of the biggest retailers in India with more than 450 stores acrossthe country. Headquartered in Mumbai, it has more than 5 million sq. ft retail spacelocated across the country. It's growing at an enviable pace and is expected to reach30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's firsthypermarket Big Bazaar. It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group

Tata group is another major player in Indian retail industry with its subsidiaryTrent, which operates Westside and Star India Bazaar. Established in 1998, it alsoacquired the largest book and music retailer in India Landmark in 2005. Trentowns over 4 lakh sq. ft retail space across the country.

RPG Group


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RPG Group is one of the earlier entrants in the Indian retail market, when it cameinto food & grocery retailing in 1996 with its retail Food world stores. Later it alsoopened the pharmacy and beauty care outlets Health & Glow.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300Reliance Fresh stores and Reliance Mart are quite popular in the Indian retailmarket. It's expecting its sales to reach Rs. 90,000 crores by 2010.

AV BirlaGroup

AV Birla Group has a strong presence in Indian apparel retailing. The brands like

Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's alsoinvesting in other segments of retail. It will invest Rs. 8000-9000 crores by 2010.

Retail formats in India

Hypermarts/supermarkets: large self-servicing outlets offering products from avariety of categories.

Mom-and-pop stores: they are family owned business catering to smallsections; they are individually handled retail outlets and have a personaltouch.

Departmental stores: are general retail merchandisers offering qualityproducts and services.

Convenience stores: are located in residential areas with slightly higherprices goods due to the convenience offered.

Shopping malls: the biggest form of retail in India, malls offers customers amix of all types of products and services including entertainment and foodunder a single roof.

E-trailers: are retailers providing online buying and selling of products and

services. Discount stores: these are factory outlets that give discount on the MRP. Vending: it is a relatively new entry, in the retail sector. Here beverages,

snacks and other small items can be bought via vending machine. Category killers: small specialty stores that offer a variety of categories.

They are known as category killers as they focus on specific categories, such


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as electronics and sporting goods. This is also known as Multi Brand Outletsor MBO's.

Specialty stores: are retail chains dealing in specific categories and providedeep assortment. Mumbai's Crossword Book Store and RPG's Music Worldare a couple of examples.

Challenges facing Indian retail industry

The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options

Shortage of trained manpower Low retail management skill

The Future

The retail industry in India is currently growing at a great pace and is expected togo up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3trillion by the year 2018 at a CAGR of 10%. As the country has got a high growthrates, the consumer spending has also gone up and is also expected to go up furtherin the future. In the last four year, the consumer spending in India climbed up to

75%. As a result, the India retail industry is expected to grow further in the futuredays. By the year 2013, the organized sector is also expected to grow at a CAGRof 40%

Retailing

In the background of high consumerism and income of the urban consumers, in

recent year there are a number of companies have expressed their interest towardsretail sector outlets. As a result numbers of shopping malls have started theiroperations in metro and urban areas. Pantaloon, big bazaar, Vishal Mega Mart,Reliance Fresh are the best known examples of retail sector outlets in India.

Retailing is the interface between the producer and the individual consumer buyingfor personal consumption. This excludes direct interface between the manufacturer


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and institutional buyers such as the government and other bulk customers. Aretailer is one who stocks the producers goods and is involved in the act of sellingit to the individual consumer, at a margin of profit. As such, retailing is the last linkthat connects the individual consumer with the manufacturing and distributionchain. Some of the key features of retailing include:

Selling directly to customers without having any intermediaries

Selling in smaller units / quantities, breaking the bulk Present in neighborhood or in the location which is quite convenient to the

customers. Very high in numbers

Recognized by their service levels Fitting any size and or location

It is assumed that due to the entry of a number of retail outlets in the urban and

semi urban areas, the mindset of the existing customers have undergone drasticchanges. Besides it is also reported that the traditional retailing such an age oldGrocery shops have directly faced competition with the organized retailing sector.

In some parts of the country, it is reported that the traditional retails are resistingthe entry of organized shopping malls. For instance the traditional retails ofBhubaneswar with the active support of the consumers at large didnt allowreliance Fresh to start outlet initially.

Company Profile

About Pakiza

Pakiza Retail Projects were founded in 1975, at the dawn of an age where in theretailing was not so developed in the whole central India. Over the year itexpanded horizons to serve masses, corporate, institutions and cream genre of the


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society and beyond.

Pakiza (A multibrand Reasonable Priced Departmental Store) located at Indore,presently running for departmental stores in 1,60,000 sq. ft. of total area. Pakiza, isknown for One Stop Solution for Apparel, textile, FMCG & other households

products. Pakiza is owned and operated by family, who devotes their full time inthis business only and are quite sensitive towards Owners Commitment.

Mission

Pakizas Mission is to give the discriminating shopper what they are looking for,whether it be Economy, Comfort or Style, in an atmosphere that is comfortable,exciting and satisfying.

In Indore, Pakiza currently circle our customers with value-added products andservice through 3 (Three) retail business units first at Santha Bazaar, 2nd at RegalSquare, MG Road and 3rd shopping complex at AB Road. The 1st retail outlet is a15000 sq. ft. showroom catering to mostly masses, rural and customer of old cityarea, 2nd outlet at MG Road is 45000 Sq. Ft. departmental store catering to higherand highere middle class of new city area, where as the new mall with 90000 Sq.Ft. caters the need of modern township. Each of these businesses is dedicated to

providing out customers with the highest-quality, most effective products, variety,prices and services.

Major Players in the Market

Big Bazaar


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Big bazaar is owned and operated by Future Bazaar India Ltd., a subsidiaryof Pantaloon Retail (India) Limited. As part of Indias largest retail chain, itenjoys the benefits of buying in bulk for the entire group and keeps themargins low, so that customers get a great range of products at great prices.


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Pantaloon Retail (India) Limited led by Kishore Biyani is the country'slargest retailer. It owns and operates multiple retail formats includingPantaloons, Big Bazaar, Food Bazaar, Central, E-Zone, Fashion Station,Depot and many others. Pantaloon Retail was selected as the Best of Best

Retailers in Asia by Retail Asia-Pacific Top 500 magazine in 2006.BigBazaar was awarded the CNBC-Awaaz Consumer Awards in 2006 and theReaders' Digest Platinum Brand Award 2006. Further details on PantaloonRetail are available on www.pantaloon.com

Vishal Megamart

Vishal Megamart is Indias first hyper market which is having 126 showrooms in

83 cities / 20 states. Vishal is one of fastest growing retailing groups in India. Its

outlets cater to almost all price ranges. The showrooms have over 70,000 products

range which fulfills all your household needs, and can be catered to under one roof.

It is covering about 2059292 lac sq. ft. in 18 states across India. Each store gives

you international quality goods and prices hard to match. The group had a turnover

of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership of Mr. Ram

Chandra Aggarwal. The group had of turnover Rs 2884.43 million for fiscal 2006

and Rs. 6026.53 million for fiscal 2007. The Vishal stores offer affordable family

fashion at prices to suit every pocket.

Easy day


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Bharti Retail Ltd, a subsidiary of Bharti Enterprises, launched Easy Day, thecompany's first food and grocery store, at Ludhiana in western Punjab. The storescover an approximate area of 2,500 to 4,500 square feet.

Mega more

Aditya Birla Retail Limited is the retail arm ofAditya Birla Group, a USD 28

billion Corporation. The Company ventured into food and grocery retail sector in

2007 with the acquisition of a south based supermarket chain. Subsequently

Aditya Birla Retail Ltd. expanded its presence across the country under the brand

"more." with 2 formats Supermarket & Hypermarket.

Supermarket

more. for you - Conveniently located in neighbourhoods, more. supermarkets cater


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to the daily, weekly and monthly shopping needs of consumers. The product

offerings include a wide range of fresh fruits & vegetables, groceries, personal

care, home care, general merchandise & a basic range of apparels. Currently, there

are over 600 more. supermarkets across the country.

Hypermarket

more.MEGASTORE - is a one-stop shopping destination for the entire family.

Besides a large range of products across fruits & vegetables, groceries, FMCG

products, more.MEGASTORE also has a strong emphasis on general merchandise,

apparels & CDIT.

Currently, eight hypermarkets operate under the brand more.MEGASTORE in

Mysore, Vadodara, Aurangabad, Indore, Bengaluru, Mumbai, New Delhi and

Hyderabad.

Objective Of The Project


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Six Stages to the Consumer Buying Decision Process (For complex decisions).Actual purchasing is only one stage of the process. Not all decision processes leadto a purchase. All consumer decisions do not always include all 6 stages,determined by the degree of complexity.The 6 stages are:

1.Problem Recognition--difference between the desired stateand the actual condition. Deficit in assortment of products. Hunger--Food. Hungerstimulates your need to eat. Can be stimulated by the marketer through productinformation. I.E., see a commercial for a new pair of shoes, stimulates yourrecognition that you need a new pair of shoes.

2.Information search-- Internal search: memory. External search: if you need more information. Friends and relatives (word

of mouth). Marketer dominated sources; comparison shopping; publicsources etc. A successful information search leaves a buyer with possible

alternatives, the evoked set.

3.Evaluation of Alternatives--need to establish criteria for evaluation, features thebuyer wants or does not want. Rank/weight alternatives or resume search. Maydecide that you want to eat something spicy, Indian gets highest rank etc. If notsatisfied with your choices then return to the search phase. Can you think ofanother restaurant? Look in the yellow pages etc. Information from different


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sources may be treated differently. Marketers try to influence by "framing"alternatives.

4.Purchase decision--Choose buying alternative, includes product, package, store,method of purchase etc.

5.Purchase--May differ from decision, time lapse between 4 & 5, productavailability

6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. CognitiveDissonance, have you made the right decision. This can be reduced by warranties,after sales communication, etc. After eating an Indian meal, may think that reallyyou wanted a Chinese meal instead.

Consumer Buying Behavior

Types of consumer buying behavior are determined by:


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Level of Involvement in purchase decision. Importance and intensity ofinterest in a product in a particular situation.

Buyers level of involvement determines why he/she is motivated to seekinformation about a certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, productsvisible to others, and the higher the risk the higher the involvement. Types of risk: Personal risk Social risk Economic risk

The four type of consumer buying behavior are:

Routine Response/Programmed Behavior--Buying low involvement

frequently purchased low cost items; need very little search and decisioneffort; purchased almost automatically. Examples include soft drinks, snackfoods, milk etc.

Limited Decision Making--Buying product occasionally. When you needto obtain information about unfamiliar brand in a familiar product category,

perhaps. Requires a moderate amount of time for information gathering.Examples include Clothes--know product class but not the brand.

Extensive Decision Making/Complex high involvement, unfamiliar,expensive and/or infrequently bought products. High degree ofeconomic/performance/psychological risk. Examples include cars, homes,computers, education. Spend alot of time seeking information and deciding.Information from the companies MM; friends and relatives, store personneletc. Go through all six stages of the buying process.

Impulse buying, no conscious planning.

Factors Affecting Buying Decision Process :

A consumer, making a purchase decision will be affected by the following threefactors:


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Selective Distortion-Changing/twisting current received information,inconsistent with beliefs.

Advertisers that use comparative advertisements (pitching one productagainst another), have to be very careful that consumers do not distort thefacts and perceive that the advertisement was for the competitor.

Selective Retention-Remember inputs that support beliefs, forgets those thatdon't. Average supermarket shopper is exposed to 17,000 products in ashopping visit lasting 30 minutes-60% of purchases are unplanned. Exposedto 1,500 advertisement per day. Can't be expected to be aware of all theseinputs, and certainly will not retain many. Interpreting information is basedon what is already familiar, on knowledge that is stored in the memory.

Ability and Knowledge--

Need to understand individuals capacity to learn. Learning, changes in aperson's behaviour caused by information and experience. Therefore tochange consumers' behaviour about your product, need to give them newinformation re: product...free sample etc. When making buying decisions,

buyers must process information.Knowledgeis the familiarity with theproduct and expertise.

Inexperience buyers often use prices as an indicator of quality more than

those who have knowledge of a product. Learningis the process throughwhich a relatively permanent change in behavior results from theconsequences of past behavior.

Attitudes--

Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living.....Drive perceptions

Individual learns attitudes through experience and interaction with otherpeople. Consumer attitudes toward a firm and its products greatly influence

the success or failure of the firm's marketing strategy. Attitudes and attitudechange are influenced by consumers personality and lifestyle. Consumersscreen information that conflicts with their attitudes. Distort information tomake it consistent and selectively retain information that reinforces ourattitudes. There is a difference between attitude and intention to buy (abilityto buy).


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Personality--All the internal traits and behaviours that make a personunique, uniqueness arrives from a person's heredity and personal experience.Examples include:

o Work holismo Compulsivenesso Self confidenceo Friendlinesso Adaptabilityo Ambitiousnesso Dogmatismo Authoritarianismo Introversiono Extroversiono Aggressivenesso Competitiveness.

Traits affect the way people behave. Marketers try to match the store imageto the perceived image of their customers. There is a weak association

between personality and Buying Behaviour; this may be due to unreliablemeasures. Nike ads. Consumers buy products that are consistent with theirself concept.

Lifestyles--Lifestyles are the consistent patterns people follow in their lives.EXAMPLE healthy foods for a healthy lifestyle.

Social Factors

Consumer wants, learning, motives etc. are influenced by opinion leaders, person'sfamily, reference groups, social class and culture.

Opinion leaders--

Spoke s people etc. Marketers try to attract opinion leaders...they actually use(pay) spokespeople to market their products. Michael Jordon (Nike,

McDonalds, Gatorade etc.)

Roles and Family Influences--Role...things you should do based on theexpectations of you from your position within a group. People have manyroles. Husband, father, employer/ee. Individuals role are continuing tochange therefore marketers must continue to update information. Family isthe most basic group a person belongs to. Marketers must understand:


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o that many family decisions are made by the family unito consumer behaviour starts in the family unito family roles and preferences are the model for children's future family

(can reject/alter/etc)o family buying decisions are a mixture of family interactions and

individual decision makingo family acts an interpreter of social and cultural values for the

individual.

The Family life cycle: families go through stages, each stage creates differentconsumer demands.

Reference Groups--

Individual identifies with the group to the extent that he takes on many ofthe values, attitudes or behaviours of the group members. Families, friends,sororities, civic and professional organizations. Any group that has a

positive or negative influence on a persons attitude and behaviour.

Membership groups (belong to) Affinity marketing is focused on thedesires of consumers that belong to reference groups. Marketers get thegroups to approve the product and communicate that approval to itsmembers. Credit Cards etc.!!

Aspiration groups (want to belong to)Disassociate groups (do not want to belong to)Honda, tries to disassociate from the "biker" group.

The degree to which a reference group will affect a purchase decisiondepends on an individuals susceptibility to reference group influence andthe strength of his/her involvement with the group.

Social Class--An open group of individuals who have similar social rank.Social class influences many aspects of our lives. Social class determines to

some extent, the types, quality, and quantity of products that a person buysor uses.Lower class people tend to stay close to home when shopping; donot engage in much repurchase information gathering. Stores project definiteclass images. Family, reference groups and social classes are all socialinfluences on consumer behaviour. All operate within a larger culture.

Culture and Sub-culture--


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Culture refers to the set of values, ideas, and attitudes that are accepted by ahomogenous group of people and transmitted to the next generation. Culturealso determines what is acceptable with product advertising. Culturedetermines what people wear, eat, reside and travel.

Research Methodology

To achieve the said objectives a comprehensive study has been made on crucial

areas of Customer satisfaction. A detailed Questionnaire has been developed andemployed on the selected.

Research Methodology: Survey Method

Research Instrument: Questionnaire


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Contact Method: Personal Interview

Data Collection

The data collection is of two types. They are:1. Primary data2. Secondary data

Primary data:-

The Primary data collection is done through a structured questionnaire, whichcontains open and closed questionnaire

Secondary data:-

Secondary sources are the other important sources through which the data were

collected. Includes internet, websites, journals, articles, and the reports maintainedby Pakiza.

Sample size:

By using convenient random sampling technique 100 customers are selected forthe purpose of the study. Direct questionnaire is used to survey the customers Sample size 50 Data Collection :Primary data Through Questionnaire

Secondary Datafrom the website of Pakiza

Segmentation: Demographic and Behavioral.

Target group: Age group of 15- 45 years.

Positioned market: Santha Bazaar, M.G.road, A.B.road.

Data Interpretation of the Questionnaire

1. How often do you visit Pakiza?a. Twice a week

b. Weeklyc. Monthlyd. Dailye. Yearlyf. In festive seasons


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Twice a

week

6%

Weekly

14%

Monthly

24%

Daily

0%

Yearly

26%

In festiveseasons

30%

Twice a week

Weekly

Monthly

Daily

Yearly

In festive

seasons

Interpretation: The customers interviewed at Pakiza are mostly coming in thefestive season where they shop for the whole family and get prepared for thefestivals. The monthly and yearly shoppers are also very large in numbers that are

attracted by the shopping offers delivered by the Pakiza.

2. What do you mostly shop for at Pakiza?

FMCG

Garments

Accessories Home furnishing


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FMCG

32%

Garments

30%

Accessorie

s

16%

Home

Furnishing

22%

FMCGGarments

Accessories

Home Furnishing

Interpretation : The customers that shopps generally from Pakiza are looking atthe lowest price they could get in the FMCG as well as garments. Therefore it isknown for its Pakiza Rate Price at FMCG and Garments. Thus the customers getthe maximum benefit while they shop for these two sections.

3. Preference of shopping?

Quality Brand

Price One stop shop


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Family

Members

51%

Friends

22%

Sales Man19%

Not

Influenced

by anyone

8%

Family Members

Friends

Sales Man

Not Influencedby

anyone

Interpretation : Customers buying decision is being influenced majorly by thefamily members and thus plays a major role while performing the purchase action.The friends even play the very important role while making purchases and thushelp to form the mindset about a particular purchase.

6. Do you ever find that you are not satisfied with the shopping you had done?

Yes

No


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Society members

Family

Members

30%

Friends

23%

Society

Members

47%

Family Members

Friends

Society Members

Interpretation : The reference group plays a very important role while after thepurchase process get over and then post purchase evaluation of the items getstarted. Majority of the customers get influenced by their society members inwhich they live and the responses are then taken from their family members. Thuscustomers play very evaluative role while before going for re-purchase Decision.

8. How likely are you to recommend Pakiza to a friend or relative? Wouldyou say the chances are?

Excellent Good Fair


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Poor

Excellent

20%

Good

40%

Fair

31%

Poor

9%

Excellent

Good

Fair

Poor

Interpretation : Good and fair are the major responses of the customers to theirrelatives after shopping from Pakiza. Thus it increases the brand image of thePakiza in the minds of their local customers.

9. What amoumt of bill do you get whenever you shop from Pakiza?

Rs. 500-1000

Rs. 1000-1500

Rs. 1500-2000

More than Rs. 2000


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The target Customers Of Pakiza belongs to the middle and lower classpeople of the society. Their monthly income mostly lies in between 5,000-20,000 Rs.

The customers became loyal after shopping from a considerably large time

from Pakiza The Customers are finding value for money products at Pakiza

They are in the opportunity to catch the offers and discounts at Pakiza Higher Income Expenses Occur at the festive Season which major

contributes to the garments section.

Some of the Re- purchase behavior is highly affected by the social class ofthe customers.

Post purchase evaluation does not produce the cognitive dissonance in mostof the customers as the terms and products delivered are very clear in theminds of the customers.

Limitations of the study


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The project has some limitations because it is totallybased on efforts of

individuals. Peoples may be careless and may not give correct answer to the

questions,because of so many reasons. It is totally based on personal efforts of

individuals.

Some consumers are not interested in filling questionnaire.

In the Festive Season, as the respondents are very busy in their own festivepreparation, it is quite difficult to take their more time for interviewing theirexperiences for shopping.

The respondents are collected from the selected area of the market.Therefore the areas should be explored.

The number of respondents should be increased for detailed comparative

study. Time is being the factor of restriction.

Recommendations


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Pakiza retail should include more of its branded quality at a reasonable priceso that people will more become brand aware.

Pakiza should continuously deliver the value for money concept to theircustomers.

Pakiza should increase the training part of their sales employee to influencethe consumer buying behavior.

The new and innovative ideas of promotion can not only increase the footfallof the customers but also increase the sales and will generate revenue.

The more convenience to the customers should be delivered.

Pakiza should deliver a lifetime shopping experience to their customers.

Questionnaire


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7. After shopping from Pakiza with whom do you discuss your shopping and takeresponses?

Family members

Friends

Society members

8. How likely are you to recommend Pakiza to a friend or relative? Would yousay the chances are?

Excellent Good Fair

Poor

9. What amoumt of bill do you get whenever you shop from Pakiza?

Rs. 500-1000

Rs. 1000-1500

Rs. 1500-2000

More than Rs. 2000

10. Have you ever opted for any other supermarket like Big Bazaar, easy Day, Ormore mega store for shopping?

Yes

No

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