TO STUDY THE CONSUMER BUYING BEHAVIOR TOWARDS ORGANIZED FMCG RETAIL OUTLETS.

SHAIK BILAL AHMED

ROLL NO: 13325580164 IMA 24-E

INTRODUCTION Every business conducted for the purpose of selling or offering for sale; any good, wares and merchandise, other than as a part of wholesale business to the final consumer can be defined as retail business. Retail is the second largest business in the United States both in number of establishments and the number of employees. The US retail industry generates $ 3.8 trillion in retail sales annually ($ 4.2 trillion if food service sales are included), approximately $11,993 per capita. The retail sector is also one of the largest worldwide. Wal-Mart is the worlds largest retailer and the worlds largest company with more than $ 312 billion (USD) in sales annually. Wal-Mart employs 1.3 million associates in the United States and more than 400,000 internationally. The second largest retailer in the world is finances Carrefour. What Is Retailing? Retailing is all the activities involved in selling goods and services directly to final consumers for their personal non business use. The word retail is derived from the French word retailer, meaning to cut a piece off or to break bulk. A retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end user customers, usually in a shop, also called a store. Retailers are at the end of the supply chain. Marketers see retailing as a part of their overall distribution strategy.

TYPES OF RETAILING
Retailing can be classified under two heads: Store Retailing Non- Store Retailing

Store Retailing Retail stores come in a variety of shapes and sizes, and new retail types keep emerging. They can be classified by one or more of several characteristics: Amount of service Product line Relative prices Control of outlets Type of store cluster

1) Amount of service: Different products require different amounts of services and customer service preferences vary. Self service retailers: Customers are willing to perform their own Locate Compare - Select process to save money. Today self service is the basis of all discount operations, and typically is used by sellers of convenience goods (such as super markets) and nationally branded; fast moving shopping goods (such as catalog showrooms).

Limited service retailers: Retailers such as Sears and J.C Penrey, provide more sales assistance because they carry more shopping goods about which consumers need information. Their increased operating costs result in higher prices. Full service retailers: Like specialty stores and first class department stores, have sales people to assist customers in every phase of the shopping process. Full service stores usually carry more specialty goods for which customers like to be waited on. They provide more liberal return policies, various credit plans, free delivery, home servicing and extras such as lounges and restaurants.

2) Product line: Retailers can also be classified by the depth and breadth of their product assortments. The depth of a product assortment refers to the number of different versions of each product that are offered for sale. The breadth of the assortment refers to the number of different products that the store carries. Specialty stores carry a narrow product line with a deep assortment within that line. Examples include; stores selling sporting goods, books, furniture, electronics, flowers or toys. Today specialty stores are flourishing due to the increasing use of market segmentation, market targeting and product specialization. A department store carries a wide variety of product lines. Each line is operated as a separate department managed by specialist buyers and merchandisers. Super markets are large, low cost, low margin, high volume, Self service stores that carry a wide variety of food, laundry and household products. Convenience stores are small stores that carry a limited line of high turnover convenience goods. These stores located near residential areas and remain open long hours, seven days
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a week. Convenience stores much charge high prices to make up for higher operating costs and lower sales volume. But, they satisfy an important consumer need. Super stores, combination stores and hyper markets are all larger than the conventional super market. Many leading chains are moving towards super stores because their wider assortment allows prices to be 5-6 % higher than conventional super markets. Combination stores are combined food and drug stores. Examples are A & Ps fam ily marts and Wal Marts - super centers. Hyper markets combine discount, super market and warehouse retailing, and operate like a warehouse. 3) Relative prices: Retailers can also be classified by the prices they charge. Most retailers charge regular prices and offer normal quality goods and services at a higher price. Retailers that feature low prices include: Discount stores sell standard merchandise at lower prices by accepting lower margins and selling higher volume. Occasional discounts or specials do not make a store a discount store. A true discount store regularly sells its merchandises at lower prices, offering mostly national brands, not inferior goods. 4) Control of outlets: About 80 % of all retail stores are independents accounting for 2/3 of retail sales. Other forms of ownerships include the corporate chain, the voluntary chain and retailer cooperative, the franchise organization, and the merchandising conglomerate. The chain store is one of the most important retail developments of this century. Corporate chains appear in all types of retailing, but they are strongest in department, variety, food, drug, shoe, and womens clothing stores. The size of corporate chains allows them to buy in large quantities at lower prices, and chains gain promotional economies because their advertising costs are spread out over many stores and over a large sales volume.

The voluntary chain is a wholesaler - sponsored group of independent retailers that engage in group buying and common merchandising. The retailer cooperative is a group of independent retailers that set up a jointly owned central wholesale operation and conduct joint merchandising and promotion efforts. A franchise is a contractual association between a manufacturer, wholesaler, or service organization (the franchiser) and independent business people (the franchisees) who buy the right to own and operate one or more units in the franchise system. Merchandising conglomerates are corporations that combine several different retailing forms under central ownership and share some distribution and management functions. Examples include: Dayton Hudson and J.C Penney.

5) Types of store cluster: More stores today cluster together to increase their customer pulling power and to give consumers the convenience of one stop shopping. Central business districts: A central business district comprises of banks, departed stores, specialty stores, and movie theatres. A shopping center is a group of retail business planned, developed, owned and managed as a unit. Non Store Retailing Although most goods and services are sold through stores, Non store retailing has been growing much faster than store retailing. Traditional store retailers are facing increasing sales competition from catalogs, direct mail, telephone, home TV shopping shows, on line computer shopping services, home and office parties and direct retailing approaches. Non store retailing includes; direct marketing, direct selling and automatic vending.
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RESEARCH OBJECTIVES
1. To study the Consumers Perceptions towards various aspects of Mega Marts. 2. To study the different demographic, psychographics and situational variables which are affecting the selections of retail outlets. 3. To know the Products knowledge & promotional tools adapted by Organized Retailers in Delhi 4. Understanding the needs of the customers. 5. To study various parameters taken into consideration by customers, while making a buying decision. 6. To study the satisfaction level of consumers for Organized FMCG Retail outlets likeHyper City, D-Mart, Big Bazaar, Reliance Super, Vishal Mega Mart. 7. To study about the changes those customers wants in these Organized FMCG Retail Outlets. 8. To study about the quality, services, product range provided by these Organized FMCG Retail Outlets. 9. To undertake a comparative analysis of Indian consumer buying habits at Local KiranaWalasv/s Organized Retail Formats in the city. 10. To suggest improvements to these Organized FMCG Retail Outlets in the city.

INDIAN RETAIL INDUSTRY

Retailing in India is one of the significant contributors to the Indian economy and accounts for 35% of the GDP. However this sector is in a fragmented state with over 12 million outlets operating in the country and only 4 % of them being larger than 500 sq. ft. in size. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market size. Thus, India has the highest number of outlets per capita in the world with a variety spread retail network but, with the lowest per capita retail space (@ 2 sq. ft. per person as compared to 16 sq. ft. per person for USA). The Indian retailing industry is currently estimated $ 205 billion (Rs. 930,000 crores) and is expected to grow at 5% p.a. The current size of the organized retail market is $ 6 billion (Rs. 28,000 crores), thereby a mere 3% of the total retailing market with a projected growth rate of 25-30 % p.a. and it became $ 8 billion (Rs. 35,000 crores) by 2005 and $ 24 billion (Rs. 100,000 crores) by 2010, with its contribution to total retailing sales likely to rise to 9% by decade end.

INDIAN RETAIL MARKET

The retail sector in India is highly fragmented and mostly owner-runMom and Pop outlets. The entire sector is dominated by smallretailers consisting of local Kirana shops, general stores, footwear andapparel shops, hand-cart hawkers andpavement vendors. Thesetogether form the unorganized retail or traditional retail. Accordingto the Investment Commission of India (ICI) estimates, there are over 15million such Mom and Pop retail outlets in the country.

In terms oftotal sales, one can find a wide range of estimates and this definitelyreflects lack of sound official government data. ICI had estimatedIndian retail sales figure at US$262bn for 2010, although marketestimates ranged from US$200bn to as high as US$386bn for that year. Various agencies have made efforts to project the growth rate ofthe total retail market till 2013 and the figures hover around 13-15.5 percent

Emerging Trends in Indian Retail Industry Tier II phenomenon Small towns with a population of 0.5 to 1 million ( likeSurat, Lucknow, Dehradun, Vijayawada, Bhopal, Indore, Vadodara, Coimbatore, Nasik, Bhubaneswar, Varanasi and Ludhiana etc.), are witnessing a defined increase in disposable income coupled with high aspiration levels leading to enhanced spending on consumer goods along with lesser aversion to credit. With consumption in metros with already being exploited (85% of retail sales as of now), these Tier II areas are fresh targets and are expected to contribute 20-25 % of organized retailing sales. Retailers are introducing contemporary retail formats such as Hyper markets and Super markets in these new pockets of growth. Mall development activities in these small towns is also picking up, creating quality space for retailers to fulfill their aggressive expansion plans. Keeping in view the relatively smaller size of the market, the average size of a retail mall in Tier II cities ranges between 1,00,000-120,000 sq. ft. in comparison with the larger metros where a number of malls measure over 5,00,000 sq.ft. Entry of International Players The fight today is not between big Organized Retail Stores (3%) and unorganized Kirana shops (97%), but its between global giants like; Wal-Mart, Tesco and shoppers stop, pantaloons. Entry of these global players will impact the way Indian retailers operate, as much as it will change the way Indian consumers live and do their shopping. They will no longer be just dependent on their local Kirana shop for their everyday needs. They could just shop once a week or once a month at comparatively cheaper rates and remain hassle free. Indian retailer will also need to quickly come to terms with the market realities. On one hand they will fight size factor and the other hand great efficiencies. Emergence of New Retail Formats

Currently the new sector in India is populated with the traditional mom & pop stores and some 1,000 odd supermarkets under organized retail chains. A daring few ventured into the organized hypermarkets with successful results and this format is being fast replicated by other players. This experience indicates that the Indian Consumer has matured to the next level of shopping experience. Given the Indian conditions and the vast diversity a single format may not be possible for the national presence, but region specific formats may evolve. An interesting fact is that of lack of presence of organized retail chains in the rural/semi-urban centers as over 60% of Indian population is still in these parts. An ideal no-frills model to start with would be ideal for the rural markets; this would help to take them to the next level of the supermarket experience. Specialty Malls Keeping in mind the astonishing pace with which new supply is expected to enter the market, many mall developers in a bid to offer a distinctive value proposition, are planning to develop specialty malls. These niche developments shall emerge as one - stop destinations in their chosen product categories. The Delhi - based Aerens Group has developed Gold Souk, an exclusively jewellery mall that is already operational in Gurgaon and has ambitious plans to replicate the concept across the country. Further a number of analogous developments like a wedding mall by omaxegroup, Automobile Mall, etc. are also in the offering. In line with international trends, Home Malls offering the entire range of building and interior decor solutions are also coming up in various parts of the country including Pune (Ishanya promoted by Deepak fertilizers and petrochemicals corporation Ltd.), Gurgaon & Kolkata. Price Correction Fallout of the surge in mall development activity shall be that developers will be forced to offer retailers prime real estate spaces at costs lower than those prevailing today, as the space required by retailers to fulfill their expansion plans is likely to be lesser than offered. This correction could result in a more structured retail real estate market that would allow retailers a higher margin on their real estate investments, thereby enabling them to expand faster. Further, the relatively over served cities could witness higher activity, as real estate space becomes more affordable, thereby, reducing the break even period for
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retailers. Moreover, under - served markets could provide enough margins to retailers to compensate for loss of margins in some of the over served markets. Transformations and Innovations of Supply Chain and Transportation Logistics To counter the unbeatable advantages of convenience of a hop, skip and a jump access and home delivery, organized retailers seem to have just one option offer attractive prices to the consumer. A successful retailers winning edge will therefore come from sourcing how best it can leverage its scale to drive merchandise costs down, increase stock turns and get better credit terms from vendors. Efficient supply chains can achieve this objective and fuel demand. The supply chain in India is full of inefficiencies a result of inadequate infrastructure, too many middlemen, complicated laws and an indifferent attitude. More Use of Technology Retailing; as discussed before is at a nascent stage in India. The complicated information systems and underlying technologies are in the process of being established. Most grocery retailers like Food World have started tracking consumer purchases through CRM. The lifestyle retailers through their affinity clubs and reward clubs are establishing their processes. The traditional retailers will always continue to exist but organized retailers are working towards revamping their business to obtain strategic advantages at various levels market cost, knowledge and customer. With differentiating strategies value for money, shopping experience, variety, quality, discounts, advanced technologies, change in the equilibrium with manufacturers and a thorough understanding of the customer behavior, the ground is alls et for the organized retailers.

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Community Involvement Footfalls in most malls are observed to be significantly higher on weekends. To ensure regular walk-ins on weekdays, mall developers have started to focus on involving the local community. They have recognized that their centers need to be entertaining, and that shoppers want their malls and town centers to blend with and reflect their own communities. Their philosophy today is thus to create a center where people would want to stay well beyond their shopping time to enact the rituals of urban life. Activities like karate classes and painting competitions for children pull their salary earning parents to visit the mall. For example, South - dale Mall, USA contains a school, an auditorium, an ice skating rink and even a zoo for the same reason. Dandia and Navratre parties at Ansal Plaza and Festival Parties at other malls also have the same objective. The present best example would be the Infinity &Inorbit Mall within our locality is trying to offer the complete family solutions with the delicious food courts to advanced gaming zones.

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AN INVESTIGATION OF CONSUMER BROWSING BEHAVIOR

Browsing behavior is a significant form of consumer behavior which can occur independently of specific purchase occasions. The focus of the present study is upon a different aspect of non-purchase consumer behavior-browsing. Most of us at one time or another has visited a retail store without a particular purchase in mind. Such browsing may be done 'for the fun of it," to see new developments in a product class, or perhaps just to fill time while waiting. Given the pervasiveness of browsing behavior among consumers, it is surprising that this element of consumer behavior has received so little research attention. For purposes here, browsing is defined as the examination of a store's merchandise for recreational or informational purposes without a current intent to buy. As defined, browsing is both a form of leisure activity and a form of external search behavior. Browsing can provide a consumer with a way to spend a rainy afternoon and in addition it can add to the individual's store of information concerning new product developments, brand differences, or sale prices. Furthermore, the search aspect of browsing may be pleasurable in and of itself. The browser can satisfy his/her curiosity motives and add to feelings of self-esteem through the acquisition of product-specific or marketplace expertise.

Consumer Attitude

Consumer attitude helps the organization to understand the purchasing pattern of consumer. For example customer wants to buy from local Kirana store (Mom & Pop store) because of location is convenience for them. If the retailer comes to know what exactly is the reason of purchasing so the retailer can change his store accordingly, because the main reason for the existence of retailer is customer and I have to change according to customer.

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Consumer Attitude is very important in Retail consumer attitude means the behavior which a consumer shows while purchasing. The consumer shows different consumer attitude because of different names Demographics Psychographic Situation The main aim of this project is to find out The Attributes that customers keep in mind while purchasing from Organized Retail Outlets. Location Ambience Pricing Quality Variety Customer Services A Fair World Allowing foreign direct investment in multi-brand retail has been a vexed issue for many years now. It returned to the public domain when the commerce ministry came up with a discussion paper in July, inviting views from all stakeholders. Last month, worlds largest retailer Wal-Marts CEO, Mike Duke flew down to the country, days before US President Barack Obamas visit, to hard sell the benefits of international competition in multi-brand retailing to Indian consumers as well as small grocers. While commerce and industry minister Anand Sharma and the Planning Commission have supported FDI in retail, those opposing the idea include micro, small and medium enterprises (MSME) ministry and communications & IT ministry, besides different associations of small retailers. The biggest fear is that the arrival of the likes of Wal-Mart, Carrefour and Tesco will lead to a huge loss of jobs in traditional retail sector, which is considered the secondlargest employer in the country after agriculture with more than 20 million people across some 12 million shops and accounting for more than 95% of total sales.

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THE LATEST NIELSEN STUDY ALLAYS THAT FEAR The Indian shopper, it says, flits across formats to buy different items from each store type. For instance, they visit neighborhoodpaan shops for salty snacks and chocolates, chemists for deodorants and milk beverages, and modern trade outlets for branded grocery and liquid toilet soap. While modern trade is driving sales of premium household and food categories, traditional trade has begun selling more personal grooming products such as hair conditioners, fragrances, deodorants and hair dyes than ever before. Diapers, liquid soap, washing products and squashes are selling equally big from both the channels. Grocers Grow Smarter Price is a big factor though,of all the shoppers who participated in the Nielsen study, nearly 40% said they know the prices of most items in bothmodern and traditional trade formats, while 45% said they notice a difference in prices between the two formats.

Big retailers have an edge here, thanks to their ability to check operational costs, bargain hard with suppliers and launch private labels. According to another Nielsen study, modern retail dropped prices by more, or increased them by less, for more product categories than traditional retailers, or kiranas, between the October-December 2009 quarter and the January-March 2010 quarter. Small grocers too now offer decent discounts to consumers, thanks to joint purchases and tie-ups with top consumer product companies such as Hindustan Unilever, Procter & Gamble, Godrej Consumer Products, Dabur and Marico. BharatiyaUdyogVyaparMandal, the biggest association of mom-and-pop stores in the country with more than 5 million members, has formed city-centric associations to negotiate directly with manufacturers and do away with any middlemen. This has helped kiranas offer 5-20 % discounts on MRP of branded products like detergents, shampoos, soaps, oil and atta.
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They are helped by FMCG players, which are facing increased competition from private labels, or own-brands, of big retailers and are under constant pressure to increase retailers margins. Programmes such as Hindustan Unilevers Perfect Store and Daburs Parivar adopt kiranas and teach them category management and effective merchandising to make them more engaging and presentable. Stores are a reflection of the aspirations of any society, says Godrej Consumer Products executive vice-president, marketing, TarunArora. Although modern trade is roughly around 6% of total retail, traditional stores have learnt a lot from it and consumer companies have become catalyst in the process, resulting in the emergence of crossover shoppers, he adds. All this has left consumer the winner. She gets never-before bargains from modern retail and never-before service from small grocers. Attitude of kirana owners has changed a lot, especially in areas where catchments of modern retailers and mom & pop stores are the same, says Ashwin Merchant, a Mumbai-based independent marketing advisor. The countrys largest retailer Future Groups director, food strategy, Damodar Mall says that any format, whether traditional or modern, that meets consumer needs effectively will do well. Modernization of all trade is in favour of the consumer, he adds.

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CONCLUSION
From above survey we conclude that The main factors that affect the retail business in location Indians Consumers are price sensitive they seek value for money so price also matter for Indian customers. The purchasing pattern of the people in one location is totally different from other location. Customers service is not so much important in grocery retail, Quality & Price matter a lot The reason for which people prefer to buy from organized retail store is variety of product available under one roof and customer has not to move from one shop to another shop for his/her daily needs. Most of the people use to purchase their daily needs whenever they require.

I can conclude my points.

1. The main factor that affects the retail business is the Location. 2. Indians are price sensitive they seek value for money so price also matter for Indian customers. 3. The purchasing pattern of the people in one location is totally different from other location in Country. 4. Customer service is not so much important in grocery retail, quality & price matter a lot. 5. The reason for which people prefer to buy from organized retail store is variety of products available under one roof and customers has not to move from one shop to another shop for his/her daily needs 6. Most of the people use to purchase their daily needs whenever they require. 7. Organized Retail is still a new concept in India and holds a lot of potential in coming years.

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Suggestions
I have asked some of the customers to give suggestion to make it better place for shopping. Some of the valuable suggestions are as follows: Pricing of products should be low inside the outlets as compared to outside stores. Most of the customer suggested that the fruits and vegetables must be fresh in stores otherwise its not worth. Non- vegetarian & some of the vegetarian items should not be frozen for many days because it loses its nutritious contents. Credit facility must be provided to the customer just like local Mom & Pop (Kiranawala) provides. CSAs should be well trained to provide good customer service. Big brands must improve service quality as its name is big (reputed) in the market. There must be enough number of POS and all must be in working conditions during peak hours because customer has to wait in queue. All items must be in enough quantity some time customer finds some items out of stock (butter milk, curd, butter etc.) More discounts schemes should be available in the other stores as like Big Bazaar. Home delivery service system should be started.

RECOMMENDATIONS
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 As people prefer to buy from local kirana store because of location so the company has to open its new stores at very main location in the city because the most important thing in Retail is well structured Layout at right location. As per the survey conducted most of the people came to know about organized outlets because of good PR so company must put more emphasis on this channel of communication and promotion means through print media. As Indian customers are Price Sensitive and at the same time Quality oriented so a good combined strategy should be used. As customer prefer to buy fruits and vegetables on daily basis, grocery items on monthly basis, beverages and snacks on weekly basis and ready to eat food whenever they require so companies must have all the items on shelves accordingly. People dont prefer to buy frozen foods and mostly prefer to eat homemade foods, outlets should try to avoid freezing the foods for many days in store to save inventory cost. Many customers recommended that the CSAs should be well trained about the products and should approach the customer from front to increase the sale of the store. As most of the customers are from middle & lower income group, so there should be merchandises according to their needs. Most of the crowd visit retail stores as a leisure time activity so retail stores should use some strategy to generate some income from such people. As women do maximum purchasing and visiting the store, store should carry items which can increase the attention of the women.

BIBLIOGRAPHY
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Economic times retail news (December 4, 2010)

Article by Knight Frank Research http://retail-guru.com/indian-consumers-are-crossover-shoppers-nielsen-study/

http://www.indianbusiness.nic.in/economy/retail.htm http://www.thoughtsofanordinaryman.com/2008/06/review-reliance-super-mumbai.html http://www.financialexpress.com/news/bharti-launches-easy-day-stores-inludhiana/297827/ http://bigbazar.com http://www.retailindustry.about.com/ http://hindubusinessline.com http://www.indiaretailbiz.com/blog/2008/04/17/wal-mart-backed- bharti-enters-retailwith-debut-of-every-dat-chain-in -India-launches-3-convenience-stores in ludihana/ http://www.magportal.com http://www.vishalmegamart.net www.ril.com www.reliancefresh.info

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