A STUDY ON CUSTOMER PERCEPTION OF ORGANISED RETAIL STORES IN CHENNAI WITH SPECIAL REFERENCE TO CONVENIENCE STORES Background of the study

The word 'retail' is extracted from the French word 'retailer' meaning 'to cut a piece off' or 'to break bulk'. In simple terms it involves activities whereby products or services are sold to final consumers in smaller quantities. Retailing began several thousand years ago with peddlers hawking their wares at the earliest marketplaces. It is extremely competitive, and the failure rate of retail establishments is relatively high. Price is the most important arena of competition, but other factors include convenience of location, selection and display of merchandise, attractiveness of the establishment, and reputation. The diversity of retailing is evident in the many forms it now takes, including vending machines, door-to-door marketing. Retailing in more developed countries is big business and better organised than what it is in India. Report published by McKinsey & Co. in partnership with Confederation of Indian Industry (CII) states that the global retail business is worth a staggering US $ 7 trillion. The ratio of organised retailing to unorganized in US is around 80 to 20, in Europe it is 70 to 30, while in Asia it comes to around 20 to 80. Hence there lies a great scope in India. In India the scenario is quiet unique, organised retailing accounts for a mere 5% of the total retail sector. Although there are around 5 million retail stores in India, 90% of these have a floor space area of 500 sq.ft. Or less. The emergence of organised retailing in India is a recent phenomenon and is concentrated in the top 100 urban towns and cities. and telephone sales, direct-mail

ORGANISED RETAIL SCENARIO IN INDIA Historical Indian retail market consisted of weekly markets, village fairs and melas and the 19th century gave birth to the retail outlets which took the form of convenience stores, Mom and Pop stores/ kirana stores. This helped the consumers on to stick to a particular store for their day to day requirements and also avail the credit purchasing facility. And in the 1980s people have seen the new formats like supermarket, departmental stores and discount stores entering into the Indian retail space. In less than a decade hypermarkets have gained all the applause of the retail market and stood above all the other formats by bringing in the concept of one stop shopping. This stood as an opening door for the new generation of the retail industry. And very soon the malls became the trend setters in the new millennium. This has coined the term of shoppertainment (shopping and entertainment) which can be attributed to the changing life styles of the people. The growth factors of organized retail in India are:

Increase in per capita income which in turn increases the household consumption Demographical changes and improvements in the standard of living Change in patterns of consumption and availability of lowcost consumer credit

Improvements in infrastructure and enhanced availability of retail space Entry to various sources of financing Retail market in the organized sector in India is growing can be

seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian companies are entering the Indian retail market which is giving Indian organized retail market a

boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloon is another Indian company which plans to increase its retail space to 30 million square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global giant for a 750 million joint venture. A number of global retail giants such as Wal-Mart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market will definitely grow as a result of all this investments. Indian organized retail market is increasing and for this growth to continue the Indian retailers as well as government must make a combined effort. Chennai is the capital of Tamil Nadu has been gradually developing in the areas of organised retailing. Chennai has been the city where the concept of organised retailing had its origin in the state. It was this city, which saw the rise of Indian retail chains like Food World, Nilgiris, and Saravana Bhavan etc. It was Spencer Plaza that has changed the concept of retailing in Chennai and brought in the first organised mega format for retailing. The Mall, located on Anna Salai road, was developed by Mangal Tirth Estate Limited and has become an important retail cum office destination in the city over the years. Promoted by the ETA group, Chennai City Centre was recently inaugurated on Dr Radha Krishnan Salai. The mall has an area of 3, 00, 000 sqft and out of which 2, 00,000 sqft is for shopping and multiplex theatre. The remaining1, 00,000sft is for office space. The Ampa Mall on Nelson Manickam Road, with 4, 00,000 sft BUA is coming up on a 3 acre property on Nelson Manickam road and Poonamallee High Road. Keeping in view the fast pace of development of commercial and residential developments in the city, the numbers of malls coming up in the city are very few. There are speculations of development of malls

towards the southern part of the city by many private developers as well as malls as part of township projects. Two upcoming malls will add approx 8 lakh sft of retail space in the city. Chennai has a huge demand for organised malls due to increase in the number of IT companies entering the city. Other major cities in the state like Coimbatore, Madurai and Trichy are gradually understand the significances of organised retailing and started to grow step by step due to changes in the demographic and psychographic attitude of customers.

Statement of the Problem Organised retailing is an emerging area of study in our state.It is an innovative area of study. Rare researches were conducted in this area. This study will explore the feasibility of the research area. The study deals with location of the consumer perspective. Every organised retailer should design an effective marketing tools that will create awareness and attract maximum percentage of target customer in the market. The study is conducted to identify present marketing practices of organised retailers from customer point of view. The study is also conducted to know the reach of marketing activities of retailers to the target customer. The study also helpful to find out the role of marketing mix to design an effective marketing plan that will turn maximum number of new customers towards the retailers. The study also conducted to identify the area of weakness of marketing practices and present valuable suggestion to the organised retailers in order to prepare them for future challenges due to unavoidable competition from domestic and International market. Review of Literature International Journal of Retail & Distribution Management Year: 2008 Volume: 36 The research presented here aims to build a picture of the changes in retail taking place in India. India is poised to become a retail power house. The paper looks at the changing scene in the retail sector in view of many MNCs and large industries entering into this segment. Emergence of modern Indian retail: an historical perspective The paper seeks to capture the history of the evolution of modernformat food and grocery retail in India. Its focus is on the time period

from 1971 to 2001. The research is primarily exploratory in nature. Primary research included depth interviews, focus groups and survey through questionnaire with organized retailers, unorganized retailers, consumers, fast-moving consumer goods manufacturers, channel members and opinion-leaders. Secondary research involved a review of the existing literature on Indian retail available at that time. Wal-Mart in India: a success or failure? The main purpose of this paper is to explore the challenges that Wal-Mart may face as it expands into the Indian retail market. WalMart's failures in Germany and South Korea are analyzed to identify learnings that could be utilized in the Indian expansion. The key findings of the study are that Wal-Mart faces many ownership as well as locational disadvantages while expanding in India. These significant challenges need to be well-understood and suitably addressed for success in the Indian market. Asia Pacific Journal of Marketing and Logistics -

Year: 2008 Volume: 20 This study aims to examine empirically how consumers' attitude towards retail stores gets affected by situational, consumer, store and product characteristic variables when they face out-of-stock situations. Results showed that six of the independent variables considered, namely, shopping attitude of respondent, store loyalty (SL), perceived store prices, store distance, shopping frequency, and brand loyalty (in order of importance of impact) significantly influenced consumers' attitude towards retail store in out-of-stock. European Journal of Marketing Year: 1990 Volume: 24

Given the current economic and marketplace pressures on retailers to maximise the productivity of their marketing expenditures, the marketing budgeting practices of retailers are examined. Results of the study reported here show that most of the retailers used relatively unsophisticated methods to determine the level (total amount) of marketing budget and that marketing expenditure allocation decisions of retailers were, ad hoc, leading to possible imbalances in the marketing expenditure mix and ineffectiveness of the total marketing effort. A considerable gap between marketing budget theory and practice in retailing is suggested. Scope for research to demonstrate the effectiveness of sophisticated approaches to budget setting in the retailing context is outlined. Marketing Intelligence & Planning Year: 2006 Volume: 24 To show why retail marketing strategists and planners need to develop long-term relationships capable of building business partnerships based on mutual trust. To show how the relationship marketing principle underpins the implementation of retailing strategy. A successful retailing strategy will be embedded within a customer-driven general business strategy. Marketing managers should plan to develop and sustain longterm trust-based working relationships, which take into account organizational and national values. is a Successful vital partnership in the arrangements depend on mutuality and resilience, as well as trust. Marketing The intelligence ingredient formulation and implementation of plans to achieve these goals. organizational resilience value system framework proposed here can be used by marketing planners to link organization learning to relationship marketing, and thereby establish a customer relationship management policy that

provides

the

organization

with

sustainable

competitive

advantage Research in Global Strategic Management

Year: 2004 Volume: 10 This case study analyzes Wal-Marts market entry and expansion in the Mexican market. Todays Wal-Mart has become the largest retailer in Mexico. The case discusses all the current issues of this debate within the perspectives of growing the international firm and other internationalization issues. The case also evaluates the global retailing industry and its changing competition. Within the current circumstances, it is expected that Wal-Mart will continue to grow in Mexico and the NAFTA region. On the other hand Wal-Mart may face heightened competition and will be challenged by Mexican and other international retailers. The significance of this work lies in its timeliness and relevance to the ongoing debate of NAFTArelated boom and internationalization in the retailing industry. Research Gap Studies were earlier conducted to know the changes in retail industry in India. The study looks at the changing scene in the retail section in the view of many MNCs and large industries entering into India. This was due to the reason that India poised to becoming a retail power house. A study was also conducted about retailing in India during 1971 to 2001. It focused on the history of the evolution of modern format of retail in India. Primary research included depth interviews, focus groups and survey through questionnaire with organized retailers, unorganized retailers, consumers,

fast-moving

consumer

goods

manufacturers,

channel

members and opinion-leaders. Wal-Mart being an International market leader in Retailing Industry, its success or failure was in India was studied. The study comprised the challenger that Wal-mart faces in Indian market. The key findings of the study are that WalMart faces many ownership as well as locational disadvantages while expanding in India. A study on Understanding consumer's attitude towards retail store in stock out situations was conducted. It aims at examining empirically how consumers attitude towards retail stores gets affected by situational, consumer, store and product characteristics variables when they face out of stock situations. Results showed that six of the independent variables considered, namely, shopping attitude of respondent, store loyalty (SL), perceived store prices, store distance, shopping frequency, and brand loyalty (in order of importance of impact) significantly influenced consumers' attitude towards retail store in out-of-stock. A study on retail marketing strategy was conducted to know why retail marketing strategists and planners need to develop long-term relationships capable of building business partnerships based on mutual trust. To show how the relationship marketing of principle on underpins mutuality the and implementation partnership retailing depend strategy. Successful

arrangements

resilience, as well as trust. Marketing intelligence is a vital ingredient in the formulation and implementation of plans to achieve these goals.

A comparative study was conducted to identify the influence of country and product on retailer operating practices to examine the extent to which retailer's country of origin and product assortment influence retailer operating practices. This study focuses on the Marketing practices in retail industry in Tamilnadu. The study throws light on the present scenario of retail industry in Tamilnadu. The scope of the study is limited to Marketing practices in terms of Advertising, Sales promotion, offers, POP. The study finds the impact of accessibility of retail store, product variety, price range, processing time, courtesy of sales person and physical evidence on consumers of organised retail industry as compared to unorganized. Scope of the study The study covers the retailing in major cities of Tamilnadu Chennai, Coimbatore, Madurai, and Trichy (Large no. of. Organized retailing located in Trichy Compare to other corporations in Tamil Nadu). The study brings out the importance of promotion activities carried out be retailing industry. The factors considered to study the marketing scenario of retailing are accessibility, variety of products, promotional activities, physical evidence, Sales force, and time factor. Objectives of the Study To trace the present scenario of organised retailing in India general and Tamil Nadu in particular. To study the avenues of accessibility Tamil Nadu To analysis the products and promotional activities practiced in organised retailing of organised retailing in

To make an comparative analysis of products offered in organised retailing and unorganised retailing To evaluate the sales personal involved in organised retailing To call out the problems of customers faced by organised retailing and recommend for model organised retail stores.

Methodology A Research Design is a blue print or a map showing how to carry out a research. The Research design used for this study is Analytical study. Sampling Procedure The sampling technique used for the study is Non random sampling. Under non random sampling convenient sampling is adopted for the study. Sample unit The sample units are middle class and Upper Middle Class families who are customers of organised convenience retail stores. The sample unit is selected from various districts of Tamilnadu. Sample size Around 1000 samples from this population will be selected for the study. Pilot Study A preliminary study is conducted to find out the drawback of the research design and changes in will be made accordingly. The Pilot study is done to pretest the research before fully implementing it. Pre-test of Questionnaire Questionnaires will be circulated among few respondents, researchers and experts to find out any changes can be made in that to make it more effective. Types of data

The data includes both Primary and Secondary Data for the analysis and interpretation.

Sources of data The Primary data is collected through Questionnaire and secondary data is from Journals, Magazines, and Govt Publication etc. Statistical Tool The analysis is done through ANOVA test, Correlation, Regression, Chi-square, Weighted Average Methods. Limitation The study limits to the State of Tamilnadu and hence the result of the study cant be generalised to other states of the country. Time plays a vital role since there is rapid growth and change in the Retail industry. Contour of study The evolution of the organised retail stores and the detail design of the research is presented in the chapter I The II chapter avenues of accessibility of organised retail stores is given The III Chapter discusses the products and promotion activities practiced in organised retailing The comparison between the organised retail stores products and unorganised retail store products presented in the IV chapter Appraisal of sales personnel is analysed and depicted in the chapter V

Problems faced by the consumers in organised retailing is given in the VI Chapter The last chapter but not the least, is provided as new model for organised retailing stores with suitable findings.