Research Project

on

Attracting New Customers for Food &

Grocery Outlet Chain
Submitted

by

Group – 9

NAME ROLL NO

Mahesh Menon 23
Ashwin Patel 33
Anindita Mukherjee 26
Deval Trivedi 53
Jofy James 36

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Table of contents

Sr. No. Particulars Page

1 Abstract 3

2 Introduction 3

3 Related Literature 5

4 Research Problem 7

5 Research Hierarchy 7

6 Objective of Research 8

7 Variables 9

8 Concept Map & Hypothesis 11

9 Sample Design & Data collection Tool 13

10 Data Analysis 15

11 Conclusions 17
12 Recommendations 18

13 References 19

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 Abstract
The research proposal involves study of various variables and its effect on attracting
new customers to a retail chain. Various variables like price, ambience, and location
were studied and a research was conducted on the effect of Branding on attracting
new customer. The objective of the research was to study the effect of Branding on
attracting new customers. The effect of other variables studied by other researcher
was not taken in to account. Branding improved customer attraction to a particular
outlet chain compared to a retail chain without Branding. A hypothesis was
developed based on the facts available and a research was conducted. The
conclusions from the research were used to give suitable recommendations to the
sponsor.

Introduction
As more and more players enter the organized retails market, the competition to gain
more and ore market share is increasing tremendously. There are various parameters
that are taken in to consideration while deciding on a preferences shopping at a
particular retail chain. With new schemes, new products and everyday low pricing
policies retail chains are trying to grab more and more market share. Price being the
most critical and important variable while deciding on a particular retail chain there
were other variables studied to analyze their effect on consumer decision for a
particular retail plan. Branding for a retail chain involves various aspects like type of
promotions, innovations, type of communication, etc. Increasing competition from
unorganized retail shops and new organized retail chain, it becomes critical for a
retail companies’ survival to search newer customer base and newer markets. Hence

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they need to come out with various means to attract new customer that do not
currently buy goods from their Retail chains. To decide on various newer attributes
to be added so as to attract new customer, the retail chain also needs to understand
the effect of each parameter on the outcome of attracting new customer. Also, there
has to be appropriate measurable methods to come at a conclusion based on various
measurable values like, Number of foot falls, increase in sales from existing
customer base or new customers etc.

All retail chains showcasing majority of the products available, it becomes critical
for the marketer and the communications (Advertising, Branding & PR) team to
come out with a new innovative Branding exercise and it becomes important for the
sponsors to understand the effect of Branding on getting new customers.

The focus of the research was analyzing the effect of branding on attracting new
customer with other variables keeping constant. It could be a well known fact about
the positive effect of Branding on various product segments like luxury good, High
Involvement products and various consumer goods. However the effect of Branding
on existing customers is different from those with new customers attraction. Hence
the extent of effectiveness of Branding on attracting new customers or retention of
existing customer could be different. There are various factors which influence the
outcome of customer attraction on Branding exercise. The Lifestyle and culture
plays a crutuial role in the effectiveness which needs to be studied at later stage.

Overview

In this research we develop a research model understands consumer perception on

Branding as an important parameter to decide on the retails chain for shopping. We

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also incorporated various Branding activities and see the effect of these activities on
attracting new customer and measure the outcome through various measurable ways
like increased foot fall, increase in sales from new customers, increase in Company
image etc.
In our research, we conducted a survey among a defined sample list and analysed
their perception on effectiveness of Branding for them to prefer a particular retail
chain. However this is a consumer perception which needs to be tested on-field to
see the actual outcome of Branding.
The experimental results provide strong clues that Branding exercise would result in
a difference in consumer attraction with change in Brand image.

Related Literature

A better price fairness perception has improved customer attraction and loyalty1

Loyalty and fairness are major research topics in the marketing literature. However,
research examining how customer loyalty and fairness perceptions affect each other
was lacking. Results indicate that loyalty has a positive effect on fairness
perceptions when price increases are low, though no such effect is found when price
increases are high. Also, justifiable reasons for price increases lead to increased
fairness perceptions when price increases are low, but any reason offered when price
increases are high increases fairness perceptions. Whether distributive or procedural
fairness influences post customer loyalty in the presence of price increases is
dependent on both the level of the price increase and the reason offered for the price
increase.
Store atmosphere has a significant effect of the customer perception about the
Behaviour of sales person and directs the future interactions2

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This research built a conceptual model to show how customers’ perceptions of
dining environments influence behavioral intentions through emotions in the upscale
restaurant setting. A structural equation modeling analysis revealed that facility
aesthetics, ambience, and employees had significant effects on the level of customer
pleasure while ambience and employees significantly influenced the level of arousal.
In addition, pleasure and arousal had significant impacts on behavioral intentions,
and pleasure appeared to be the more influential emotion of the two. Implications for
restaurateurs and academic researchers are also discussed.

There is a significant improvement in customer retention and new customer

attraction due to improved service and product quality level3
This study investigates the effect of being customer oriented on service performance
perceptions and outcome behaviors. Specifically, the focus is on identifying the
influence that being perceived as a customer-oriented firm has on consumer quality
perceptions, customer satisfaction, and service value. The impact of being customer
oriented on consumers’ outcome behaviors is also investigated. Responses from
consumers indicated that customer orientation is directly related to customers’
evaluations of employee service performance, physical goods, and servicescapes.
Indirect effects on organizational quality, customer satisfaction, value attributions,
and outcome behaviors are also reported.

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 Research Problem
There have been stagnant sales among all the existing stores of the retails chain.
With increasing number of competitors, thought the market size would be growing,
but is taken up by newer entrants. The price tight competition also does not allow to
reduce the price further to get new customer or to increase sales.

There is decreasing foot fall at various branches of retails chain.

A research conducted by the retail chain showed the analysis that there is very poor
Brand recall among the targeted consumer group, regarding the retails chain.

Research Hierarchy

Management is facing a question on the various reasons for the above problem.
What are the reasons for stagnant sales & decreasing footfall? How do we improve
the situation and what the root causes for the above problem? To understand the
problem and analyze the situation, the Retail chain has conducted a research to
understand various reasons for the problem and how the problem can be resolved.
What are the various variables that can solve the problem? How can the sales and
foot fall be increase? The research question that arises is, can change branding create
a difference in attracting new customers? This research question needs to be studied
and various details to be analyzed and various recommendations to be given to the
retail chain.

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 Objective of Research

To study the effect of Brand image on attracting new customers

Based on the research hierarchy the research firm had the objective to study the
effect of Branding on attracting new customers. This is to be done along with
analysis of the consumer perception on preference of a retails chains based on their
Brand image. The objective of the research was to study consumer perception on
Brand image as a parameter for them to buy from a particular retail outlet. The was
to be followed by a change in Brand building exercise to evaluate the extent of
customer attraction and see if there is significant improvement in consumer
attraction due to change in brand image.
The objective was to evaluate various parameters of Brand building that has effect
on consumer acquisition and the level of influence of each of the parameters of
Brand Building on Consumer attraction.

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 Variables

As we are to study the effect of Brand image on attracting new customers. The
various parameters related to branding are changes and its effect on the outcome
attracting new customer is studied, which is the dependent variable. Branding
becomes an independent variable whose effect is to be analyzed on the dependent
variable.

The various control variables whose magnitudes were to be kept constant during the
research were service, accessibility and quality of product. The effect of these
variables was not studied and they were kept constant for all the consumer
perception and Brand Change process.

The moderating variables whose effects on the dependent variable were studied
along with the independent variables are advertising and Promotions.

The various intervening whose effect on the dependent on the variable can not be
analyzed as these variable can not be controlled. The various intervening variable are
culture, political and consumer physche.

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Independent Dependent
Variables Variables
Extraneous Variables

Control Moderating Intervening

Variables Variables Variables

Brand Service Advertising Culture New customer

attraction

Accessibility Promotion Political

Quality of Consumer
products Physche

Operational Definition

Brand Image:

Value, Innovation, Trust , Quality, Perception.

Attracting new Customers:

Increase in footfalls, increase in sales from new customers/ new

markets, Customers response to Promotions.

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 CONCEPT MAP
Concept Map
Service
Advertisements
Quality
Accessibility

Attracting
Branding Customers -
Price

Consumer Promotions
Behaviour

Hypothesis

Based on the related literature and past research done on the project, we need to
derive an Hypothesis and test the same to check if the assumed hypothesis is
acceptable or not.

We hypothesise that there is no significant difference in the new customer attracting

due to change in brand image. Brand image is not a very important parameter for
customers to visit a Retail Shop. As found in related literature Price & accessibility
plays a crucial role in retails shop preference. Consumers do not take the Brand
image of the company in to account as they decide the shop to purchase F & G
items.

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Null Hypothesis :

H0 = There is no significant improvement in attracting new customer due to

improved Brand image

However there is a 2nd school of thought which says that similar to other product
where Branding plays a crucial role, Branding could be a very important parameter
for Retail Shop selection. Branding gives consumer sense on confidence in the retail
chain., increase top of mind recall and creates brand awareness which inturn
increases customer base.

Alternate Hypothesis

H1 = There is a significant increase in customer attraction due to improved brand

image

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Sampling Design

Technique Random Sampling

Population 1.5 lakh
Sample size 100
Actual required 3000 (2 % of the Population)

Sample Characteristics:

a) Male & Female ratio: 35 : 65

b) Age group: 25-60 yrs
c) Location: Residents (Thakur village)
d) Survey Venue Retail, Kirana Stores & 3 large societies

Sampling Tools :

a) Checklist

Data Collection Tool

The data collection tool was send to 100 sample consumers for their perception
on the reason they prefer a particular type of retail outlet.
The tool was in the form of the checklist and was in easy answerable form to get
instant and easy response from the consumer. The checklist was prepared to
know consumers perception if brand building exercise would improve consumers
attraction at the retail outlet chain.

Based on the response from consumers the data is analysed suing chi square
technique to evaluate the validity of hypothesis and arrive at a suitable
conclusion.

The various parameters that were included were independent variables, Control
variables, Moderate variable which has an effect on the attraction of consumers
to a retail chain. The results were analyzed to arrive at a consumer perception on
their preference of a retail chain due to Brand building activity by retail outlet.

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 The checklist prepared to get an idea on consumer perception on various
variables that can affect consumers attractions are as follows.

1. Does the success of attracting new customers driven by F&G brand strategy.
Agree Disagree

2. Do customers get attracted to an F& G store due to PRICE.

Agree Disagree

3. Do customers get attracted to an F& G store due to QUALITY.

Agree Disagree

4. Do customers get attracted to an F& G store due to SERVICE.

Agree Disagree

5. Do customers get attracted to an F& G store due to lucrative PROMOTIONS.

Agree Disagree

6. Do customers get attracted to an F& G store due to good ACCESSIBILITY.

Agree Disagree

7. Does word of mouth attract new customers to the F& G store.

Agree Disagree

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Data Analysis

Table :1 OBSERVED FREQUENCY FROM DATA

Agreed Disagreed Total

Brand image
High 36 14 50

Brand Image
Low 20 30 50

Total 56 44 100

Table :2 EXPECTED FREQUENCY FROM DATA

Agreed Disagreed Total

Brand image
High 45 14 59

Brand Image
Low 15 26 41

Total 55 45 100

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Data Analysis:

For the current analysis there are two rows and two columns hence the degree of
freedom for the given system is 1. With 5 % level of Cofidence we take the table
value of Chi and compare it with the observed experimental value.

Degree of Freedom ( r -1)*( c-1) =1

Table Value of CHI-Square at = 3.84

1 degree of freedom
at 5 % level of Significance

The experimental is calculated using the Chi square formaul to arrive at a value
of 7.11

Our Calculated Value of = 7.11

CHI-Square

As the experimental value of Chi square is higher then the table value the null
hypothesis is; there is no significant difference in customer attraction due to
Brand building, is rejected. Hence, we say that there is significant difference in
consumer acquisition due to change in Brand image.

Hence the null hypothesis is rejected and alternate Hypothesis is accepted.

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Conclusion
As we started the research with a problem of declining foot falls various
branches of retails chain and hence studied the effect of Branding on attracting
new customers. After the study we found out that there is a significant increase in
number of new customers due to brand image.

Hence branding is very important and can add significant value when it is
well recognized or has positive thoughts in the minds of consumers. A brand
signals to the customer the source of the product — and protects both the
customer and producer from competitors who would attempt to provide products
that appear to be identical.Brand image may be the best, single marketable
investment a company can make. Creating or revitalizing a positive brand image
is a basic component of every business — and lays a foundation on which
companies can attract new customers.

Branding is advertising that continues on far after an advertising campaign,

if done right. Branding is having future and present customers remember your
company name and/or logo and what business doesn't want that? Consumer
perception about the Brand image of a retails chain shows that higher the
branding activity higher is the preference of consumer to shop from the retail
outlet.

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Recommendations

The following are the recommendation which will help in branding and attracting
new customers.

 Think of new ways to get your brand out to the younger consumers so that
your brand equity will go up even as they age

 Will also want to keep an eye on your brand equity to see if it is falling out
of favor with your consumers.

 By defining who your brand is, you create the foundation for all other
components to build on. Your brand definition will serve as your
measuring stick in evaluating any and all marketing materials and
strategies.

 How can you package your brand so that it is an integral part of your
business and represents a strong identity this will help in attracting new
customers

 To achieve your brand marketing goals it is important that you know your
target market inside and out

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References

1) “Price fairness perception and customer loyalty in retail context”, William Martin
& Nicole Ponder, Dept of Marketin
2) “Store atmosphere effects on customer perception”, Natalie Hedrick & Harmen
Oppewal, Dept of Marketing, Monach University.
3) “Customer Orientation” , Journal of Service research, Vol3, No. 3, 241-251,
Michael Bardy, Boston College

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