Indian retail market

The Indian retail sector is witnessing tremendous growth with the changing

Demographics and an improvement in the quality of life of urban people . The

Growing affluence of India's consuming class, the emergence of a new breed

Of retail entrepreneurs and a flood of imported products in the food and

Grocery space has driven the current retail boom in the domestic market.

An effort is being made to understand the effect of point of purchase (POP) sales promotion on consumer behavior. It is a very basic study in order to find what general consumers think and perceive about point of purchase of promotion inside the stores.

POP promotion has been one of the major influences on buying behavior of retail consumers across the globe and also a major source of revenue to the retail outlets.

In USA alone an average of $3 trillion per year is spent on POP promotion by various companies. As the retail sector in India is slowly witnessing growth it is better to have insight into this matter.

The main focused to understand the basic perception of consumers about POP promotion and does it really effects the buying decision making process.Introduction

Retail is Indias largest industry, accounting for over 10 per cent of the countrys GDP and around 8 per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. But because of the heavy initial investments required, break even is difficult to achieve and many of these players have not tasted success so far. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations.

Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median 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 growth drivers of the organized retail sector in India.

Retailing today is not only about selling at the shop, but also about surveying the market, offering choice and experience to consumers, competitive prices and retaining consumers as well.The Indian retail industry is no more nascent today. There has been a significant change in retail trading over the years, from small kiranawalas in the vicinity to big super markets; a transition is happening from the traditional retail sector to organized retailing. The unorganized sector still holds a dominant position in this industry.

With consumers looking at convenience with multiplicity of choice under one roof and expectations evolving over time, consumer demand is truly the driving force for organized retailing in the country. Food and beverages form the main chunk of the retail market. They are followed by apparel and footwear.

Despite the retail store density in India with regard to population being the largest, it is estimated that over 90% of the stores are less than 500 sq. ft in size. Industry estimates put the number of retail outlets at 12 million. This is clearly indicative of small-shop ownership crowding the unorganized segment of retailing. While this fragmented market structure does pose significant challenges for organized retailing, potential does exist if modern information and supply chain management systems are deployed to support the development of convenience shops that match customer expectations.Growth in Organized Retailing

The organized segment of the retail industry has grown past the 1% share during the year, from 0.6% of the market three years back. The establishment of supermarkets and convenience stores has been a great effort to communicate the advantages of organized retailing to customers. With supermarkets like Apna Bazaar, Sahakari Bhandar, 9 to 9, Food World and Margin Free shops providing easy access to goods at reduced prices, with few even providing a constant supply of foreign goods, the organized sector does attract the bargain hunter's attention.Food and clothing still account for the largest proportion of consumer spending. Together they account for about 60% of the estimated US$ 275 billion household expenditure. With the hospitality sector expected to grow at a compounded annual growth of about 13% during the next three years, the food retailing ventures can certainly be looked at to spread further across cities.Apart from the food segment, home improvement stores are the upcoming segment. Outlets like Gautier, Wonder Living, Bombay Bazaar, etc. have penetrated across metropolitan areas and leading Class A cities of the country. Research estimates that the total space for shopping malls is likely to go up from 50 lakh sq ft to 75 lakh sq ft during the year. India's per capita retail space is the lowest in the world at just about 2 sq. ft. Compare this with the US figure of 16 sq. ft. Therefore, the industry's need for real estate, which is on the rise, could well be justified. A significant fallout of the emergence of malls will be the trend of smaller retailers upgrading their establishments and emulating practices from the `mall experience'.Retail as an Investment Option

Despite the huge presence of the unorganized sector, the Indian retail industry is attractive for international players. It is favoured over China's among the developing countries due to a slew of laws in the communist country at various levels. Though the market hasn't seen big time players of the developed nations yet, the fact that Indian per capita retail space is among the lowest, is expected to provoke people to look at retail as a potential business arena. The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behaviour being favourable to the growing organized segment of the business. Space, ambience and convenience are beginning to play an important role in drawing customers.With the Indian per capita income on the rise and the distribution of consumption expenditure expected to remain fairly stable, the current segments of food and apparel is likely to remain attractive. Upgradation of traditional grocery stores to present quality food products in ways and methods adopted in North America and Europe can help in communicating value and attracting customers.Technology Advantage

Technology in the retailing industry has provided a new dimension. The introduction of point of sale equipment, bar codes and huge storage capacity for billing and payment database has facilitated the management of large set-ups with ease. Operations can be recorded in a structured and systematic manner, providing detailed analysis of the sales and volume of transactions. Electronic transactions have increased the volume of sales in the country. Flexibility in the mode of payment and cashless transactions have helped in driving sales. Communication assists in maintaining a competitive advantage in retaining and attracting customers. The introduction of new technology may be intricate for retailers, but the convenience and cost effectiveness create the need for new advancements. Large stores need to monitor inventories and expenses of establishments. With automated machines and high-end computers making the task simpler, the focus of retailers can stay on retaining customers with new strategies. Security systems also do help for a safer shopping, for retailers as well as customers, providing immense mental relief. Such technological advancements are only now coming into India and the need for it has been acknowledged. The point of sale (POS) applications will provide for quicker consumer check-out and multiple payment options like credit cards.

Organized retail formats prevalent globally

Supermarkets: Self-service 4000-20000 sq ft stores with shopping carts

typically focused on regular groceries, household goods and personal care

products. Tesco, Ahold and Safeway are key players in this format.

Hypermarkets: Huge stores over 40000 sq ft situated outside the town with

ample parking space aimed for bulk purchases stocking electronics, furniture

and clothing. Carrefour is the global major in this format.

Mass merchandisers: Large destination stores that sell everything at

competitive prices. They have cross-country chain operations with centralized

sourcing and a hub-and-spoke distribution. Makro and Sam's Club are

leading players in this format.

Discounters: Aimed at bargain buyers offering less choice but deep discount

on bulk sourcing deals through controlled inventory. Aldi is the world leader

in this format.

Convenience Stores: Small stores located at convenient points like petrol

stations working round the clock.

Specialties Stores: These stores offer consultative shopping experience

with skill that cannot be duplicated.

Mom-and-Pop Stores: Traditional small family owned format.

Objectives

To understand the general buying behaviour of Indian retail consumers To understand the general perception of Indian consumers about the Point Of Purchase promotion in retail sector. To suggest and recommend the retailing companies about more effective POP promotion

Need and Importance of the Study:As Indian retail sector is growing at a tremendous rate and competition is growing stiffer and stiffer with profit margin falling lower limits. It is necessary for the companies to new and better ways to gain customer delight. As earlier told POP promotion is also a avenue of income for the retail companies.

The above reasons clearly show the importance of the need and importance the study.

RESEARCH METHODOLOGYResearch is common parlance refers to a search for knowledge. Once can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact research is an art of science investigation.

DEFINITION

The advances learners dictionary of current English lays down the meaning of research as a careful investigation or inquiry through search for new fact in any branch of knowledge. REDMAN and MORY define research as a systematical effort to gain new knowledge.

Research design

The research design is the determination and statement of general research approach of strategy adopted for the particular product. It is the heart of the planning which the design adheres to the research objected which will ensure that the need will be served.

Descriptive adoptive has been followed in the study as it is invested to produce accurate descriptive of various relevant to the decision faced without demonstrating that some relationship exits with the variable. It is used to measure the behavior variables of people of subject who are under the study.

Area of the study

The area of the study is Jalandhar.

Methods of data collection

The primary and secondary methods are used to collect data.

Primary data

The primary data has been collected by using questionnaire.

Secondary data

The secondary data are collected from internet.

Sampling technique

The sampling technique used in the study is non-probability sampling. In the research to administer the questionnaire, sample chosen was on the basis of convenience sampling.Sampling size

Sampling size taken in the study is 200 respondents.

Q1. Where do you shop regularly?

Response Table ResponseNo of respondent%age of respondent

Convenient store 4824%

Super market7839%

Departmental store5829%

If any other168%

Total

200

100%

INTERPRETATION:

From the above table of the data containing the data of 200 respondents surveyed 48 people still prefer to shop in convenient stores while 78 have expressed that they like to shop in supermarkets and 58 respondents like to shop in departmental stores. About 16 respondents have chosen other options like wholesale merchants etc.Q2. How frequently do you go for shopping?

Response Table

ResponseNo of respondent%age of respondent

Twise in a week3216%

Once in a week7638%

Once in fifteen days6834%

If other specify2412%

Total200100%

INTERPRETATION:From the above table of the data containing the data of 200 respondents surveyed 32 people prefer to shop twice in week while 76 have mentioned that they generally shop once in week and 68 respondents like to shop once in fifteen days. About 24 respondents have confirmed that they would like to shop only once in a month.

Q3. How do you usually buy the product?Response TableResponseNo of respondent%age of respondent

Go with list10050%

Look for established brand3216%

Deciding on shop floor6030%

If other ,specify84%

Total200

100%

INTERPRETATION:From the above table of the data it is quite clear that 50 percent of respondents go with a list for shopping . While 16 percent decide based on the brand availability and 30 percent decide on shopping floor. Only 4 percent choose other options like sales persons advice etc. Q4. Do you like to observe various promotions in the retail store?

Response TableResponseNo of respondent%age of respondent

Very much like to observe4422%

Like to observe7236%

Sometimes likes to observe6834%

Do not like to observe168%

Total

200100%

INTERPRETATION:The above graph clearly shows that majority do observe point of purchase sales promotions. As 44 respondents very much like to observe and 72 like to observe with 68 people saying that sometimes they do give attention to POP promotion. Only 8 percent have mentioned that they do not like to observe POP promotion. Q5. What do you think about promotions in the retail store?


very helpful in buying decision4824%

Helpful in buying decision6834%

Somewhat helpful6834%

Not at all helpful168%

Total200100%

INTERPRETATION:From the above table of the data containing the data of 200 respondents surveyed 48 people perceive that POP promotions are very helpful in deciding what to buy. Where as 34 agree that POP promotions are help full in deciding what to buy. Nearly 34% say that sometimes POP promotions are helpful while 8% say that POP promotions are not at all helpful.Q6. If you have to decide about buying something on shop floor, which of the following factors influence your decision in order of importance? Please rank (1 to 5).

RANK NO 1.


Reputation of company or brand name12261%

Most visible brand2613%

Lowest price3216%

Salesperson advice1005%


Total200100%

INTERPRTATION:From the above table of the data containing the data of 200 respondents surveyed nearly 61% rank reputation of company as their first preference while purchasing a product, where as 13% percent rank most visible brand in the store as number one .Low price, Sales persons advice and others were ranked one by 16%, 05%, 05% respectively. RANK NO 2Response TableResponseNo of respondent%age of respondent



Lowest price7437%



Total200100%

INTERPERTATION:From the above table of the data containing the data of 200 respondents surveyed nearly 21% rank reputation of company as their second preference while purchasing a product, where as 27% percent rank most visible brand in the store as number two .Low price and Sales persons advice were ranked second by 37% and 15% respectively. None have rated other reasons in their second choices RANK NO 3Response TableResponseNo of respondent%age of respondent



Lowest price4220%



Total

200100%

INTERPERTATION:From the above table of the data containing the data of 200 respondents surveyed only 9% rank reputation of company as their third preference while purchasing a product, where as 44% percent rank most visible brand in the store as number three .Low price, Sales persons advice and others were ranked one by 20%, 22% and 05% respectively. RANK NO 4Response TableResponseNo of respondent%age of respondent

Reputation of company or brand name10 5%


Lowest price5427%



Total200100%

INTERPERTATION:From the above table of the data containing the data of 200 respondents surveyed only 55% rank sales persons advice as their fourth preference while purchasing a product, where as 27% percent rank lowest price as number four .Reputation of company brand visibility and others were ranked fourth by 05%, 08% and 05% respectively.Q7. Do you make unplanned (impulsive) purchases based on the attractive promotions inside the retail store?


Yes ,always2010%

Yes, sometimes10050%

Not at all5427%

No response2613%

Total200100%

INTERPRETATION:From the above table of the data containing the data of 200 respondents surveyed most of the people(50%) do agree that they do make impulsive purchasing sometimes. While 10% people say that most of times they shop on impulse and . About 13% did not respond to this question.

Q8. If answer to question number 7 is Yes, can you recall any such promotional offers you have seen recently?


One8241%

Two2010%

Three0603%

No response1206%

Total12060%

INTERPERTATION:From the above table of the data containing the data of 120 respondents who answered Q7 affirmatively it is observed that most of people (41%) could recall at least one promotion which had made them to buy some products impulsively. While 10% could recall two such promotions and 03% could recall even three . O6% percent could not recall any such promotions.Q9. Which type of promotion at the retail store catches your attention?


Attractive visuals5427%

Giving slogans4020%

information about product10050%

If other0603%

Total200100%

INTERPERTATION:From the above table of the data containing the data of 200 respondents 27% people refer to promotions that have attractive visuals as most attention catching. While 20% refer to promotion with benefit giving slogans as most attractive. But nearly 50% of respondents find promotions with information about product, company, price as more attractive promotion .While 3 % specified other type promotions as more attractive.Q10. Your Occupation:


Housewife2814%

Student4623%

Service5628%

Business7035%

If other00%

Total200100%

INTERPERTATION:From the above table of the data containing the data of 200 respondents surveyed most of the samples (35%) belong to business community with housewives being14%, 28% belonging to the service class.

Q11. Age group:


Indian retail market

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