Analyzing the factors of Visual Merchandising in Automobiles in Pune, India

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1 Analyzing the factors of Visual Merchandising in Automobiles in Pune, India Dr. E. B. Khedkar Dean, Faculty of Management, Savitribai Phule Pune University (University of Pune) & Director, Dr. D Y Patil School of Management, Charholi, Lohegaon, Pune. (India) Abstract The present study explore the factors of visual merchandising in the automobile sector especially in cars/bikes showroom in Pune city of Maharashtra in 2015.Visual merchandising was very common in retail and fashion industry but the study attempted to find out whether visual merchandising techniques adopted by car/bike marketers can increase the purchase intention. Survey method was adopted to carry out the work with questionnaire as tool for the survey. The key finding from the research shows that visual merchandising is equally important and has a positive of impact towards driving the purchase intention of customer during car/bike purchase. Since in this highly competitive market visual merchandising is attempted by all marketers the study also reveals the key factors under visual merchandising that drives customer purchase intention. These were proper display, design of showroom, attractive entrance, and proper positioning of offers and variants related information appealing visual merchandising themes to attract present and potential customers. Keyword Visual Merchandising, design, display, theme Introduction Visual merchandising is very common term in retail sector and often used as a synonym for display in retail sector. It is with respect to product management and is concerned with presenting the product within the store in a finest possible way. Visual merchandising technique is a combination of marketable approach with a proposed design approach within the store to support product management objectives and to maximize the efforts of the buying. It also contributes to the tactical aims of the retailer conveying out a clear messages to consumers about what they can expect from the dealer. Visual merchandising is quite common technique in retail stores, fashion stores and home furnishings stores. It also creates a positive impact on purchase of products and on customer s mind. The different ways or techniques of putting things in usual days or in special occasions attracts customer towards store. The concept of visual merchandising has come a long way. Earlier visual merchandising only means pilling up the latest stock in table and displaying or models posing in windows. In recent times with highly competitive market merely placing stuffs or stocks will not attract customer nor will increase purchase. Individual creativity in portraying the product with an artistic flair plays an important role in display of product. Visual merchandising should include all characteristic of visual impact of its store and its products (Garvey 2010). It s all about the art of making the customer feel how the seller wants them to feel. Visual merchandising is the arrangement of props, fixtures, mannequins and backdrop to influence a customer to enter the store and make a purchase. (Diamond 1993) The fixture of product in the store should be in such a way that it accentuate the visual and other sensory elements to capture attention, stimulate the senses through music, scents and provides the customer a wonderful buying experience to push sales. It should covers all areas from front of the store to the insertion and location of each product inside the store.(sebastian 2008).This study endeavors to find out the changing scenario of Visual merchandising in automobile industry (cars & Bikes showrooms) and to find out different elements, techniques and displays employed by these showroom across Pune city. Theoretical Background & Literature review > RJSSM: Volume: 05, Number: 6, October 2015 Page 46

2 Visual merchandising is a skill of displaying the things in an eye-catching way so that it could attract the interest of the customer and persuade them to buy the product. It is the optimum use of visual effects which stimulates the customers for purchase which also means that it is a way to communicate with prospective customer. Visual statements in the store windows or displays attract the customer in first view towards the store and since in highly competitive market where similar fashions and trends are available, creating a distinctive impression on the customer is the primary and important basis for the survival of a any seller. So the display must be in such a manner that it effectively conveys and focus on store s image. This way of portraying the items and conveying to customer is also depicted as silent salesperson (Gopal, 2006; Martin, 2007; and Pooja, 2010). An effective and creative visual merchandising technique which can make difference and enhances the business is a team effort involving management, merchandising manager, visual merchandiser, sales associates and so on. This is actually done based on merchandising themes. Merchandising themes are planned in advance in conjunction with the festive seasons, store promotion and arrival of new merchandise. Visual merchandising is more related to retail merchandising and can be mentioned as synonym of retail merchandising. From various literatures and research articles reviewed on visual merchandising few factors emerged out which were to be considered while designing a store. These are: a. Creating sections considering various categories of product that will be available in the store. b. Designing a plan for the store in such a way that it should reveal most of the product in the store. c. The outline of the store should be premeditated in such a manner that the flow of traffic within the store can be regulated; and d. The Front elevation is an important factor while designing/planning the store. (Ernest, 1987; Ellen, 2007; and Michael et al., 2008). Visual merchandising uses elementary design philosophies while working with various materials and colors. A successful visual display is made in a variety of forms like: themes, colors, mannequins, forms, fixtures, hangings, poles or stands, platforms, paintings, wall-decoration, fabrics, table cloths, banners, tables, furniture, lighting effect, accessories, props and music (Gini, 2005; Kisholo, 2008; and Vedamani, 2010). Visual Merchandising in India When compared with western countries, visual merchandising in India is still at its emerging stage. In western countries, it is very much well thought-out and given significant consideration in the planning activities. But in India, it is in the initial stage but emerging out very actively. Indian marketers have recognized the importance of visual merchandising in catching the attention of the customers, increasing the footfalls, providing unique shopping experience, and creating the actual purchase (Images Retail, 2008; and Retail Biz, 2009). Retail companies are progressively spending more on both the environment and the fixtures and stylish fittings; emphatic lighting and digital signage for an positive appeal and fascinating feel. According to the industry estimates, an average of lakhs is being spent per store. While most brands and retailers outsource work to design houses both local and international, Future group has its own in-house design company, Idiom, which employs approximately 200 people who are constantly working on designing innovative ideas. Globally, the store design concepts are changed once in two to three years. In India, most of them do it in once in five years. The store concept is changed when the market reaches saturation level (Srinivasan, 2006; The Economic Times, 2006; and Kishore, 2007). Understanding the various factors of visual merchandising in retail and fashion industry the study will try to focus on whether these factor that are considered important in these industries creates a similar impact on automobile sector also. Objectives The study aims to achieve the following objectives: > RJSSM: Volume: 05, Number: 6, October 2015 Page 47

3 a. To understand the attitude of consumers towards visual merchandising during car/bike purchase. b. To determine and analyze the factors of visual merchandising that influence purchase decision of cars/bikes. Research Methodology & Analysis This study is exploratory in nature. The area selected for this study is Pune, Maharashtra and is done in early Pune is a cosmopolitan city inhabited by people belonging to different categories and from various parts of country. The cost of living varies from medium to high and people are more inclined towards four-wheeler and specifically two wheeler purchases due to inconvenient transport and issues in commuting through local transport. Non-probability convenience sampling method was selected for the study. The respondents are Individuals who went for purchase of two-wheelers and four-wheeler. A sample size of 100 respondents across 15 showrooms in Pune was selected for the study. Data was collected through a questionnaire survey. The respondents were asked to rate their answers on a 5- point Likert type scale ranging from 1 Highly disagree to 5 Highly Agree. For validating this method, a pilot study for testing the questionnaire was conducted. This reveals the weaknesses of the questionnaire, if any. The validation for reliability of the questions in the questionnaire Cronbach Alpha is used for reliability and validity. The value of Cronbach Alpha is 0.74 which supports the reliability attribute of the questionnaire. The data was analyzed and interpreted using basic descriptive statistics, and exploratory factor analysis. Data Analysis The demographic details and descriptive statistics calculated from the data showing the age, gender, occupation and qualification of the sample are presented in Table 1. Table 1: Descriptive Statistics Age (Years) No. of Respondents Percentage > Gender Male Female Occupation Business Employed Students Qualification Undergraduate Graduate Postgraduate Factor Analysis Results The specifics of the factor analysis are as follows: Variables included: All the variables/factors have been included in the analysis. The total variables considered for the study were > RJSSM: Volume: 05, Number: 6, October 2015 Page 48

4 Extraction method: The minimum Eigen value is kept at 1.00 and the exact number of factors is specified. The default method of Principal components, which is also the most frequently used method, is retained. Rotation method: This is used to arrive at factors as distinct from each other as possible. While an orthogonal solution results in factors not highly correlated with each other, an oblique solution produces factors highly correlated with one another. Here, we are using an orthogonal solution with the default value, Varimax. Table 2: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..730 Bartlett's Test of Sphericity Approx. Chi-Square df 45 Sig..000 The KMO and Barlett s tests were included in the analysis to judge whether or not the given dataset is suitable for running a successful factor analysis. The table reveals that the Barlett's test of sphericity is significant, standing at a value of 45 degrees of freedom and a significance level of 0. This implies from the perspective of Bartlett's test, performing factor analysis here is feasible. However, the results of Bartlett's test usually tend to be significant. Hence, there was the need to involve the Kaiser-Meyer-Olkin Measure of Sampling Adequacy test. This is a far more discriminating test to decide the suitability of factor analysis and scope for further analysis. The table above reveals that the KMO value stands at which depicts that sample is good enough to support the case for factor analysis. Table 3: Communalities Initial Extraction VM helps in purchase decisions Prefer showroom where VM is done attractively Showroom entry attracts for puchase Design of showroom is important in making purchase decision Merchandise theme increase the purchase intention Attractive placing of cars & bikes increase purchase decision Good ambience creates and induce purchase Range of variants and proper display augment purchase intention Tend to buy on impulse Offers related to purchase displayed properly increase purchase Extraction Method: Principal Component Analysis. > RJSSM: Volume: 05, Number: 6, October 2015 Page 49

5 The communalities indicate the amount of variance in each variable that is accounted for by the factors. Likewise, the Initial (communalities) column lists the estimates of the variance in each variable accounted for by all components or factors. In this table, the Principal Component communalities as seen in the third column under Extraction range from.236 to.741. A smaller value indicates a variable that does not fit well with the factor solution. This is true for Good ambience creates and induces purchase (Q7). The remaining variables are considered for further analysis since most of their variance is accounted for by the factors. (The Initial column will always have the value 1.00) Table 4: Total Variance Explained Initial Eigen values Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings % of Cumulative % of Cumulative % of Cumulative Component Total Variance % Total Variance % Total Variance % Extraction Method : Principal Component Analysis. The table 4 above presents the factors that were extracted from the analysis. Under the column labelled Rotation Sums of Squared Loadings, only those factors that met the cut-off of the chosen extraction method are shown. Here, since we had kept the default Eigen value at 1, three factors are shown with Eigen values greater than 1. The column labeled % of variance column explains how much of the total variability in all the variables can be accounted for the factors. Here, Factor 1 accounts for percent of the variability in all 10 variables, Factor 2 accounts for percent, Factor 3 for percent. Thus, our search for factors culminates at three. Table 5: Rotated Component Matrix a Component VM helps in purchase decisions Prefer showroom where VM is done attractively Showroom entry attracts for purchase Design of showroom is important in making purchase decision > RJSSM: Volume: 05, Number: 6, October 2015 Page 50

6 Merchandise theme increase the purchase intention Attractive placing of cars & bikes increase purchase decision Good ambience creates and induce purchase Range of variants and proper display augment purchase intention Tend to buy on impulse Offers related to purchase displayed properly increase purchase Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 5 iterations. The Rotated Component Matrix above displays the factor loadings for each variable. The factor that each variable loaded most strongly on has been highlighted for quick reference. Based on these factor loadings, we will try and figure out what could be the factors that potentially stand for: The variables that are loaded strongly on Factor 1 concentrates more on proper and attractive visual merchandising so display arises as important factor in visual merchandising. The Factor 2 though varies across design and theme. So we can say that artistic and creative way of visual merchandising enhances purchase intention. Similarly, the factors 3 strongly support the fact that visual merchandising is helpful in purchase decision of car/bikes. Conclusion: The study shows that visual merchandising plays a significant role in car/bike purchase decision of the consumers. Customers expectations change periodically and the sellers must realize the significance of these expectations and offer them a congenial environment to attract and retain them. The customers now demand for better display of products in innovative and creative way. The research is undertaken to understand whether visual merchandising is equally important for car/bikes showroom. The results and the factors associated clearly depicts that visual merchandising is very important to augment the purchase of cars/bikes. In the marketer s approach, visual merchandising assists in creating an innovative platform to present merchandise in congenial environment, thereby making it a long-lasting impact on the customer and recall value. The most significant aspect of visual merchandising that crop up from the study were proper display, design of showroom, attractive entrance, and proper positioning of offers and variants related information. So this study also supports the fact that car/bikes marketers should allocate certain percentage of their sales for visual merchandising. It gives a competitive advantage and facilitates in creating an overall image of the store, increase momentum, and there is no doubt that visual merchandising will play a significant and crucial role in increasing the purchase intention. References: 1. Ellen D (2007), Fashion Retailing: A Multi-Channel Approach, 2nd Edition, Pearson. 2. Ernest H R (1987), Retail Merchandising: Concepts, Dynamics and Applications,Merrill Publishing 3. Gini S F (2005), Fashion: From Concept to Consumer, 7th Edition, Pearson. 4. Gopal V V (2006), Important of Visual Display & Layout in Driving Foot Balls, Marketing Mastermind, pp > RJSSM: Volume: 05, Number: 6, October 2015 Page 51

7 5. Images Retail (2008), Store Visit: Shoppers Stop, February, pp Kisholo R (2008), Background Music: A Tool to Boost Sales in Organized Retail, Marketing Mastermind, pp Kishore B (2007), The Adverse Impact of Wall Mart, Indian Management, Vol. 46, No. 2007, pp Martin M P (2007), Visual Merchandising and Display, 5th Edition, Fairchild. 9. Michael L W, Barton A and Pandit A (2008), Store Layout, Design and Visual Merchandising, Retail Management, 6th Edition, Tata McGraw Hill, p Pooja D K (2010), Visual Merchandising: A Silent Salesman of Retailers,Marketing Mastermind, February, pp Retail Biz (2009), The Loot : Giving You the Best Value for Money, July, p Srinivasan (2006), World Class Shopping in Coimbatore Too, The Hindu Property Plus. 13. The Economic Times (2006), On the Store Front, March 13, p Vedamani G G (2010), Retail Management Functional Principles and Practices, 3 rd Edition, Jaico Publishing House. > RJSSM: Volume: 05, Number: 6, October 2015 Page 52