Factors Affecting the Customer Satisfaction in Retail Market in India (With Special Reference to Delhi and NCR Customers) Dhiresh Kulshrestha

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1 Vol.3 No. 1, (2014) Received: Feb.2014; Accepted: May 2014 Factors Affecting the Customer Satisfaction in Retail Market in India (With Special Reference to Delhi and NCR Customers) Dhiresh Kulshrestha Associate Professor - Department of Management Institute of Professional Studies-Gwalior M.P. id: drdhireshkulshrestha@gmail.com Abstract Although producers may sell directly to consumers, it reduced the price of the product and increase profit of manufacturer because of deduction in the expenditure on the middleman, but such method of physical distribution of goods to ultimate customers are inconvenient, and time consuming as compared to the job performed by a expert retailer in the distribution channel. The manufacturers depend on the retailers to sell their products to the ultimate consumers and provide them a satisfactory distribution method. Customer satisfaction is very crucial for any business because satisfaction is effective tool to bring customers back and get positive response about business from the customers along with others, who may then try the product you offer for themselves and in their turn become loyal customers. In starting phase the retail industry in India was mostly unorganized; however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow around 30 every year after FDI increasing. Key words: Customer satisfaction,, Post reform period, distribution channel, FDI policy Introduction After economic reform the retail sector grow very fast especially in the last decade in Indian Economy. The Indian retail industry is the fifth largest in the world and one of the fastest growing industries in India. Retail industry includes organized and unorganized sectors. In starting phase the retail industry in India was mostly unorganized; however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow around 30 every year after FDI increasing. Retailing includes all the activities involved in 12 selling goods or services directly to final consumers for personal, non business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing [2]. There are the following types of retailers by marketing strategy: As there is a though competition among the manufacturer it is the customer satisfaction which provide the comparative advantage and retail sector can play a crucial role in the present competitive world to satisfied the customer because they have direct contact with final consumer. Customer satisfaction depends on the offer s performance in relationship to the buyer s expectation [3].

2 Losing profitable customers can dramatically affect a firm s profits. The cost of attracting a new customer is estimated to be five times the cost of keeping a current customer happy. The key to retaining customers is relationship marketing. To keep customers happy, marketers can add financial or social benefits to products, or create structural ties between the company and its customers [2]. The present study premises that the use of a single standard of comparison is not enough to compare the customer satisfaction in retail sector. The major factors directly affecting the customer satisfaction are, Price benefits, Delivery service, Shopper assistant behavior, Right quality and quantity and Credit facility. Materials and Methods The study is based on the primary data collected from 200 customers from Delhi and National Capital Territory. The respondents were selected in such a way that they are customers of retail sector. The people who were not purchasing goods from retail sector are not included in area of study. The primary data was collected through a questionnaire. They seriously consider the factors before answering the questionnaire in order to find out the most significant factors which influence the respondents while arranging customer satisfaction in retail sector, Garrett s ranking technique is used. As per this method, respondents have been asked to assign the rank for all the factors and outcome of such ranking have been converted into score value with the help of the following Formula: Where, Rij = Rank given for the ith factor by jth respondents Nj = Number of factors ranked by jth respondents. The percentage position of each rank thus obtained was converted into scores by referring to the table given by Henry Garret. for each factor the scores of individual respondents for whom scores are added the mean score for all the factors are ranked by arranging in ascending order which ultimately reflects the customer satisfaction in retail sector in India. Results and Discussion Table 1 reflects the different age groups of customers purchasing home loan from retail sector. On the basis of findings from the Table 1, it is clear that people from the age group of 26 to 34 are the most potential and the important customers for the retail sector. Total 36 per-cents of the respondents belong to this category. Comparison of Age Profile of Table 1 Distribution of by Age Age Above Above Above Above Comparison of Income Group Profile of Table 2 indicates the response of the respondents from different income groups. 13

3 It is clear that people from income group above 9 lakh per annum, only 12 per-cent respondents are going towards the retail sector banks. Table no. 2 shown that important and potential customer is above 3 lakh and under Rs 6 lakh income group so there is a need to focus more on this income group. Table 2 Distribution of respondents by income group In Lakh Under Above Above Above Respondent s Gender The Indian economy society is male dominated. Maximum of the family liabilities are fulfilled by the males. They arrange the goods and services for various purposes. The total percentage of male respondents is 56 per-cents and number of women respondents taking home loan is slightly low and they are only 44 per-cent. It reveals that males are dominating in retail sector as compared to the females but this gap is slightly low(table- 3). Table 3 Distribution of respondents by Gender Gender Male Female Respondent s Occupation Table 4 shows the different occupations of the respondents, who purchase goods from retail sector. The customers belong to different occupation but the housewife dominates. It is clearly reflected by the Table. The total percentage of the housewife respondents are 36 per-cents. The 10 per-cent respondents of retail sector are professionals. The above table reflects the housewife is leading customers of retail sector and professionals are comparatively low. Table 4 Distribution of respondents by Occupation Occupation Public Sector Bank House wife employee Business man Professionals Others Respondent s Education Table 5 reveals that metric to graduation is the leading customer group when we compare the education level of the customer in retail sector, 38 of the respondent belongs to this group out of the total respondent. There are others which carry 27, may be illiterate or below metric etc. Table 5 Distribution of respondents by Education Education Post graduation Graduation Metric to Graduation Others

4 Customer s Awareness about Offers Given by Retailer The different offers are provided by retail sector on purchasing of goods but these offers are very complicated and not easy to understand. The Table 6 shows that 68 per-cent respondents are aware about the offer of retail sector. It shows that either salesman does not clearly explain all offers to customers or they are very complex in nature and not easy to understand. 32 percent respondents represent this problem so it is required in favor of customers that retailer have to reduce the complexity of offers. Table 6 Awareness about Offers Given by Retailer Gender Public Sector Bank Yes No Customer s Perception about the Retail Sector The Table 7 shows that most of the respondent s perception about the retail sector is excellent and good. 74 per-cents of the total respondents have this perception. Average and below average perception of respondents is comparatively low and it is only 26 per-cents. Table 7 Customer s Perception about pinion of the Customers Excellent Below Average Table 8 Factors Affecting Customer Satisfaction in : The factors influencing the customer s satisfaction in the retail sector are given in Table 8. These factors are Price benefits, Delivery service, Shopper assistant behavior, Right quality and quantity, Credit facility. The 200 respondents assigned rank to the factors, which are affecting the customer satisfaction in retail sector. The respondents give IST, IIND and IIIRD rank to the factors, which shows most of the customers are highly satisfied, satisfied or average satisfied, it is of the total ranks. IVTH and VTH rank which is representing dissatisfied and highly dissatisfied customers. These factors get only of total ranks, it is relatively low. It means the satisfaction levels are high and dissatisfaction levels are low in retail sector [5]. Table 8 Factor influence retail sector. Rank Factor I II III IV V Total Price benefits Delivery service Shopper assistant behavior Right quality and quantity Good Average Credit facility

5 Ranking of Ranking of Private-Sector bank Table 9 is formed on the basis of Table 8 with the help of Henry Garrett s ranking (total score 11622, mean score 58.11) and the IIND rank given to the price benefit involved (total score 10956, mean score 54.78). given III RD rank to the shopper assistant behavior (total score is 10464, mean score 52.32) IVTH rank is given to the credit facility by respondents (total score 10458, mean score 52.29). Table 9 Ranking of Private-Sector bank Sl. Factors Private Sectors Bank No Total Mean Rank 1. Price benefit 2. Delivery service 3. Shopper assistant behavior 4. Right quality and quantity 5. Credit Facility References Score II I V III IV The ranks provided to various factors which affect the customer satisfaction in the retail sector are shown in the Table 9: technique (explained earlier). According to table the retail sector respondents give the IST rank to the right quality and quantity VTH rank is delivery service (total score is 10386, mean score 51.93). No doubt the right quality and quantity score is very high so it is providing the maximum satisfaction to the respondents in there retail sector and delivery service is providing less satisfaction as compare to others [4]. 3. Kotler, Philip, and Kevin lane Keller (2009), Marketing Management, 13th ed. (New Delhi: Prentice -Hall of India). 4. Ogden Harold J., and Ronald E. Turner (1996), Customer Satisfaction with Delivery Scheduling, Journal of Marketing Theory and Practice, Vol. 4, No. 2, pp Sullivan Don o, and John McCallig (2009), Does Customer Satisfaction Influence the Relationship between Earnings and Firm Value? Marketing Letters,Vol. 20, No. 4, pp Bolton, Ruth N. (1998), A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction, Marketing Science, Vol. 17, No. 1, pp Kotler, Philip (2003), Marketing Management, 11th ed. ( New Delhi : Prentice - Hall of India). 16