Understanding and Implementing Consumer Preferences are Vital for Sustainable Unorganized Sector

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1 Volume-4, Issue-2, April-2014, ISSN No.: International Journal of Engineering and Management Research Available at: Page Number: Understanding and Implementing Consumer Preferences are Vital for Sustainable Unorganized Sector Prof. Vivek Shaurya 1, Prof. Shailesh Pandey 2 1 Assistant Professor, Sinhgad Institute of Management and Computer Application, INDIA 2 Assistant Professor, Sinhgad Institute of Management and Computer Application, INDIA ABSTRACT The changing retail scenario is bound to look beyond traditional retailers. This change is because of the further change in factors like consumer taste, increasing disposable income and propensity to spend more. Due to these factors becoming more prominent, unorganized sectors growth has been expected to grow only at 10 percent annually. Despite this, a greater chunk of retailers are from unorganized sectors. Unorganized retailers should take a note of this and generates their marketing tactics on the basis of changing preferences of consumers. This sector is still predominating in smaller towns and urban areas. It gives different kind of benefit like credit facility in lean phases, proximity with the customer house and so on. Generally these kirana shops are the family business of these small retailers which they are running for more than one generation. In this paper it explores how preferences and choices for a retail outlet are not mere necessity for unorganized retailers but even more than that to react on. Real estate, location and labor costs are the favorable factors with unorganized sectors. Factors that draw consumer to stores are space, ambience, convenience for parking and an array of choices under one roof. Decision making is more complex for them. The data has been collected with the help of structured questionnaire containing close and open ended questions. The primary data was gathered from 100 customers selected purposely from Pune city. SPSS has been used extensively for analyzing the data collected. retailers are impacting unorganized retailing structure. There are various example of retail outlet with small kirana store being located in various convenient locations. At the other end of spectrum there are large hyper marketers and mega stores offering a range of products, often at lower price with less personalized service. Some of the key players in the Indian retail market, with a dominant share are: 1) Pantaloon Retail Ltd, a Future group venture: Over 12 mn sq. ft. of retail space spread over 1,000 stores, across 71 cities in India. 2) Shoppers Stop Ltd: Over 1.82 mn sq. ft. of retail space spread over 35 stores, in 15 cities. 3) Spencer s Retail, RPG Enterprises: Retail footage of over 1.1 mn sq. ft. with approx 250 stores, across 66 cities. 4) Lifestyle Retail, Landmark group venture: Has approximately 15 lifestyle stores and 8 Home centers. II. MARKET SIZE By 2012, the total market size reached US$ 518 billion, thereby registering a compound annual growth rate (CAGR) of 7 per cent since Keywords: Unorganized Retail, Preferences, Organized Sector, Kirana store I. INTRODUCTION The Indian retail industry is estimated to be worth around US$ 500 billion currently. Home to one of the top five retail markets in the world, India offers immense scope of growth and opportunities in this arena. The complete emporium of retail is divided into two parts: organized and Unorganized. The unorganized retails sectors in India refer to traditional retailing format of pavement vendors, mobile vendors and local kirana shops. The entry of multinational companies and organized III. MARKET BREAKUP In 2012, Food and Grocery accounted for nearly 60 per cent of total revenues in the retail sector. 29

2 IV. REVIEW OF LITERATURE Adil Zia, Khalid Mohammad Azam (2013) in their research has found fifteen dimensions out of this eleven have positive impact on shopping experience which are,'acknowledgement, place to enjoy, store service quality, returns and exchange, shopping convenience, reliability, transactions, merchandise, product variety and store appearance and four which have negative impact on shopping experience in unorganized retail are Shopping time, complain handling ; physical aspect and loyalty programs lead to negative impact on shopping. According to the author all aspect of retail outlet are count by the customer while shopping from the outlet. Mitul Deliya,Bhavesh Parmar and Dr. K. K. Patel(2012) have studied the impact of organized retailers on unorganized retailers and found that there is a decrease in footfall of the customer visiting unorganized retail due to emergence of more organized retailers and majority of middle class is buying from unorganized retailers. According to Rama Venkatachalam and Arwah Madan(2012) the customers does not change their criteria to buy groceries either from organized or unorganized retailers. On quality and display of the products organized are more preferred by customers than unorganized retailers. Price has also been one criterion to choose a retailer by customers. Dr. Seema S. Shenoy, Dr. Sequeira and Dr. Devaraj, K. (2013) the author has discussed India as a business opportunity for global retailers. The evolution of Indian retail has been discussed in the paper. The organized sector current situation has been also concluded as growing at a frenzied pace. From a simple activity of selling in small markets to a more sophisticated task of bidding on-line, retailing has showcased several successful forms and facets. India has been discussed as a young nation having 60 population within 35 years and a huge market. Urvashi Gupta (2012) in her study have discussed that the organized retailer are suffering with their billing facility problems which need to be changed solved as earliest and other facility like home delivery services, comprehensive credit scheme need to started soon to increase the sales whereas proper shelf display is a need for unorganized retailers. The product assortment needs to be increased to offer a wide range of variety to the customers. Prof. Vijay Shrimali and Mrs. Chitra Maheshwari (2013) have discussed the emerging organized retailing and changing taste and preference of the customers which is complementary to each other. The author has said that though the presence of unorganized retailer is high in the country but the organized retailer can be ignored by them. U. Dineshkumar and P.Vikkraman (2012) according to the author organized retail outlets provide better quality of service, product range as compared to the unorganized retail outlets. Services provided by the organized retailers are leading to customer satisfaction. Visual merchandising, fast check out and home delivery services provided by organized retailers are helping organized retailers to generate more business. The parking facility is a major issue with most of the organized retailers. According to Panneerselvam S. Indian organized retail sector is growing; so the role of supply chain becomes all the more important because the retailing activity is possible if the product has reached to the shelf. Growth of the organized sector is also improving the supply chain of our country. R.K.Srivastava (2013) in his paper on comparative study, branding of the retail store is actively followed in South Africa but in India retailers perceives it as a part of business. Security system on purchase & prevention of theft is good in South Africa than Indian system and it has to be developed as a prime concern. Pandya Amit R and Bariya Kameshvari J. (2012) has found for the staple items, more than 60 customers are preferring to go to unorganized retail outlets whereas less than 40 respondents preferred to go to organized retail outlets. Time spent by customer at organized retail is more than the unorganized retailers. It has been seen in the finding that higher income group prefers organized retailers.barganning is a factor which is attracting more customers towards unorganized retailers. Lakshmi Narayana K, Ajata Shathru Samal and P Nagaraja Rao (2013) have found that unorganized retailers which are nearby organized retailers are affected in terms of profit and volume. The major factors that attract unorganized retailers to consumers are proximity, goodwill, credit sales, bargaining, loose items, convenient timings, and home delivery. V. RESEARCH METHODOLOGY Primary data for this research was collected through questionnaire survey. To understand and implement consumer preferences are vital for sustainable unorganized sector; a questionnaire was formulated and the data was collected from the customers from various retail outlet in Pune. In the questionnaire, almost all the questions are closed ended. To know the importance of variable we have kept 5 point rating scale (1- Least 30

3 important and 5- Most important). However, before the questionnaire was conducted, a pilot study was done in order to measure the construct and validity of questionnaire. The sample consisted of respondents from various consumers are listed below. VI. ANALYSIS & DISCUSSION Sample Characteristics Frequency Age Gender Male Female Marital Married Unmarried Members in Family Qualification Graduate PG PG Occupation Student House wife Service Businessman Retired

4 Others Family income per month(000 s) Below 20 k k k Residence URBAN RURAL Data collected were analyzed through IBM SPSS 21.0 package. The results of the analysis are described in the following sub sections: Cronbach Alpha Reliability Analysis The value of Cronbach s alpha coefficient is.784 (Table 2) which is closer to 1.0; this shows the internal consistency of the items in the scale. Factor Analysis seeks to find the latent factors that account for the patterns of co linearity among multiple metric variables. Two Tests in Factor Analysis: a) Barlett s Test of Sphericity b) Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO) Exploratory factor analysis The results from Table 1 shows that value of KMO statistic is high (.732) and Bartlett s test of Sphericity is significant (sig=.000), which reveals that data is appropriate for factor analysis (Table 1). The table of communalities represents the application of Principal Component Analysis to the attributes measuring service quality by different respondents. Communality is the amount of variance a variable shares with all other variables being considered. This is also the proportion of variance explained by the common factors. (Table 3) The total variance explained table shows (Table 4) all the factors extractable from the analysis along with their Eigen values, the percent of variance attributable to each factor and the cumulative variance of the factor and the previous factors. The total variance shown in this Table, accounted for by all of the five components, however, the remaining factors are not significant. The Rotated Component Matrix (Table 5) reveals five factors (which represent the five broad perceptual dimensions of service quality) derived from 17 variables. From Table 4 it is observed that the Eigen values greater than 1.0 (default option) resulted five factors being extracted. This is also depicted through the Screen plot (a plot of the Eigen values against the number of factors in order of extraction). H1: There is an association between the occupation and their buying decision base for acceptance of debit/credit card In table 7, Pearson Chi square is is much lesser than 0.05, hence, we may conclude that There is an association between the occupation and their buying decision base for acceptance of debit/credit card H2: There is an association in terms of importance between family income per month and longer opening hour facility In table 9, Pearson Chi square is is much lesser than 0.05, hence, we may conclude that There is an association between the family income per month and longer opening hour facility H3: There is an association between residence type and display of the product In table 11, Pearson Chi square is is much lesser than 0.05, hence, we may conclude that There is an association between the residence type and display of the product 32

5 Table 1 - KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling.732 Adequacy. Approx. Chi-Square Bartlett's Test of Df 136 Sphericity Sig..000 Table 2 - Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items Table 3 - Communalities Initial Extractio n. Price is promotional offers are Timely availability of the products is Location Convenience given is Display of the products is 6.Cleanliness of the store is 7. Behavior of retailers buying behavior is. 8. Facility of Home Delivery is. 9.Timing of Home Delivery is

6 10.Acceptance of Debit /Credit Cards is 11. Credit facility given by the retailer is. 12.Making product available on demand is 13. Availability of Product category is. 14.Availability of desirable products on outlet is 15. A Chance given to bargain to customer is Parking Facility is Longer opening hours facility is Extraction Method: Principal Component Analysis. Componen t Total Table 4 - Initial Eigen values of Varianc e Cumulativ e Total Variance Explained Extraction Sums of Squared Loadings Tota of Cumulativ l Varianc e e Rotation Sums of Squared Loadings Tota of Cumulativ l Varianc e e

7 Extraction Method: Principal Component Analysis. 35

8 Table 5 Rotated Component Matrix a Component Price is.803 promotional offers are.832 Timely availability of the products is Location Convenience given is.731 Display of the products is Cleanliness of the store is 7. Behavior of retailers buying behavior is. 8. Facility of Home Delivery is. 9.Timing of Home Delivery is 10.Acceptance of Debit /Credit Cards is Credit facility given by the retailer is Making product available on demand is Availability of Product category is Availability of desirable products on outlet is A Chance given to bargain to customer is.689 Parking Facility is

9 Longer opening hours facility is.606 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations. VII. EXTRACTED FACTORS FROM THE STUDY Service Components offered by Retailers P s of Retailing USP of Unorganized Retailers External Factors 11. Credit facility given by the retailer Price 8. Facility of Home Delivery Display of the products 12.Making product available on demand 13. Availability of Product category promotional offers Timely availability of the products 9.Timing of Home Delivery 15. A Chance given to bargain to customer Parking Facility 14.Availability of desirable products on outlet Parking Facility Longer opening hours facility Table 6 - Occupation * 10.Acceptance of Debit /Credit Cards is Cross tabulation 10.Acceptance of Debit /Credit Cards is Occupatio n Not at All Importa nt Not Importa nt Very Importa nt Importa Neutral nt Total Student Count within 10.Acceptan ce of Debit /Credit Cards is House wife Count

10 within 10.Acceptan ce of Debit /Credit Cards is Service Count within 10.Acceptan ce of Debit /Credit Cards is Businessm an Count within 10.Acceptan ce of Debit /Credit Cards is Retired Count within 10.Acceptan ce of Debit /Credit Cards is Others Count within 10.Acceptan ce of Debit /Credit Cards is Total Count

11 within 10.Acceptan ce of Debit /Credit Cards is Table 7 - Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association N of Valid Cases 285 a. 19 cells (63.3) have expected count less than 5. The minimum expected count is.14. Table 8 - Family income per month(000 s) * Longer opening hours facility is Cross tabulation Longer opening hours facility is Not at All Important Not Important Neutral Important Very Important Total Family Below Count income per month(000 s) 20 k within Longer opening hours k 40-80k facility is Count within Longer opening hours facility is Count within Longer opening hours facility is Count

12 within Longer opening hours facility is Total Count within Longer opening hours facility is Table 9 - Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association N of Valid Cases 285 a. 9 cells (45.0) have expected count less than 5. The minimum expected count is.92. Table 10 - Residence * Display of the products is Crosstabulation Display of the products is Not at All Not Important Important Neutral Important Very Important Total Residence URBAN Count within Display of the products is RURAL Count within Display of the products is Total Count

13 within Display of the products is Table 11 - Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square a Likelihood Ratio Linear-by-Linear Association N of Valid Cases 285 a. 2 cells (20.0) have expected count less than 5. The minimum expected count is VIII. CONCLUSION & MARKETING IMPLICATIONS The direct conclusion from this research paper will be vital for unorganized and organized retailers. There are clues which give direction to unorganized retailers for doing small changes which will further strengthen the retail process. It is well known that the consumer residing in rural or urban areas have different reasons to shop from particular shoppers. Some retailers can easily transform with the help of technology. The survey concluded that India's organized and unorganized retail sectors can co-exist and flourish. The growth in the Indian organized retail market is mainly due to the change in the Consumer s behavior. This change has come in the consumer due to increased income, changing, lifestyles, and patterns of demography which are favorable. Now the consumer wants to shop at a Place where he can get food, entertainment, and shopping all less than one roof. This has given Indian organized retail market a major boost. While on the other hand the traditional stores are shops where the various product available are the range of product really required by the customers. They cautiously take care of the choice of the customers and bring the product which is demanded by them. They try to satisfy them with the wide range and at the same time maintain a good relationship to retain them and consequently convert them into their loyal customer IX. SCOPE FOR FUTURE RESEARCH The scope of the research is limited to study of the unorganized retailers in Pune area within the context of given importance to some selected variables. The future researches can focus other factors that may be a critical or influencing factor in the purchase of unorganized retail products. The geographical scope of the research was limited to Pune region, thus the further researchers can raise the geographical scope of the study. BIBLIOGRAPHY [1] Azam, A. Z. ((January 2013)). Unorganized Retail Shopping Experience in India:An Empirical Investigation. Pacific Business Review International Volume 5 Issue 7, [2] Chitra, P. V. (Sept 2013 ). Unorganized Retail industry at its Inflection point. GRA - GLOBAL RESEARCH ANALYSIS Volume: 2 Issue: 9 ISSN No , [3] Dr. Seema S. Shenoy, 2. S. (June, 2013). THE SAGA OF INDIAN RETAIL AVALANCHE. International Journal of Development Research Vol. 3, Issue, 06,, [4] Gupta, U. (Nov 2012). Changing Consumer Preferences From Unorganized Retailing Towards Organized Retailing: A Study in Jammu. Journal of Emerging Knowledge on Emerging Markets Vol. 4 [2012], Art. 10, [5] J., P. A. (2012). A STUDY ON CONSUMER BEHAVIOUR OF ORGANIZED AND UNORGANIZED 41

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