Comparison of Consumer Behavior

A Comparative Study of the Consumer Behavior Pattern of Organised Departmental Retail Chain Shoppers and Local Kirana Store
Buyers
Subhajit Bhattacharya1, Subhayu Majumdar2
1
Assistant Professor, Department of Marketing, Xavier Institute of Service, Ranchi, tobesubho@gmail.com 2 Student, Department of Finance, Xavier Institute of Social Service, Ranchi, suvamajumder@gmail.com
Abstract: The changing pattern of consumerism in India over time has created a demarcation among the consumers based on different behavioral parameters. This separates the consumer base of organized retail chain segment from the local kirana store buyers segment, there are some similarities too. The study deals with identifying the factors which generally affects the shopping behavior of the people towards a particular form of buying. The factors include both "in store" and "out store" parameters. Also intragroup segmentation has been done to get a proper view. Intragroup comparison include segmentation within a group according to age, place of living, family income level and education level. This study will guide the organized as well as unorganized retail sector to find a new dimension in their mechanism by looking at the influencing parameters in this booming retail market along with the cut throat competition in the current market. Keywords: consumer behavior in retail, consumer behavior in organized retail chains, consumer behavior in local kirana stores, statistical analysis of consumer behavior in retail marketing mix.
1.
INTRODUCTION
Across the globemany research have been formerly done in the related lines of thought as compare to the current research. Mostly the topic has been covered by the different researcher are considering the areas like Procurement and inventory management in modern and traditional retailers, Investment pattern in retail outlets, Costs in value addition made by retail outlets, Cost and Returns in retail trade, Factors influencing consumer behavior to purchase in retail outlets. Which have drawn the attention of researchers and academicians regarding the different aspect of retail business strategies and operations. To start with Rees (1992) has observed that the factors infusing consumer behaviour concerning to the buying of food items is rather complex and one should take in to account factors like flavour, texture, appearance etc. Ragavan (1994) has pointed out that regular availability, quality of the commodity, cost price, weighing and billing, accessibility and range of merchandising as the factors in the order of importance which influences purchase of vegetables
by respondents from modern retail outlets. Hugar & Vijay Kumar (1996) has researched that the features like gender and education level of consumers have a significant effect on quantity and frequency of purchase. Price had a significant influence in the lower income group segment however this was not the case with people from higher income groups. Sundar (1997) studied the factors regarding store image and its impact on potential buyers. Manivannan and Raghunanthan (2004) have done the research no demographic factors affecting consumer behaviour in connection departmental store buying. Rajesh Shinde (2007) in his study on recent facets of consumer behaviour in connection with buying the fast moving consumer goods (FMCG) product. He has shown that buying pattern to be more accurate the factors are considered by a consumer during purchasing largely depends on the nature of goods and many other correlated factors associated with buying intention .Sezen (2004) has argued that while retailers develops the pricing strategy then they also observes other factors relating to goods which are sold from the specific retail outlets. Kainth (1994) has examined the consumer preference for apples in different income groups. In his study on Consumption of Apples: Consumers towards view pattern and determinants. Chung et al. (1998) study exposed the factors impelling the furniture and fixture retailer buying decisions. Sanjaya et al (2002) have observed the purchasing behaviour for branded fine rice in examined that the quality and image of the brand were significant factor for favoring it and also claimed price was not the most significant factor for the well-off people. Burke (2001) has established a brand equity index comprised of three factors such as image, value and loyalty. Image and value helps in pull in new customers while loyalty and value retaing customer. Rathore (2012) has studied the main drivers of the retail uprising in India and how this insurgency changes the purchasing behavior of the customer, he has also explained that increase in disposable income of the middle class, infrastructure development and changing customer choice in retail sector. Raut and Dash (2011) have pointed out the various aspect of segmentation and the consumer behavior aspect of retail buyers in India.
National Conference on Paradigm for Sustainable Business: People, Planet and Profit 1
A Comparative Study of the Consumer Behavior Pattern of Organised Departmental Retail Chain Shoppers and Local Kirana Store Buyers
The current research will however lay stress on the consumer behavior for the Purpose of getting a new dimension with regards to the new age buyer segment and their shopping behavior in connection with proper managerial implication. 2. OBJECTIVE OF THE STUDY
pre- test schedule to identify the important factors affecting the consumer behavior pattern. In this study this statistical technique has been used to identify the factors which discriminate between two groups of shoppers. In this study mostly Likert scale has been used. Different hypothesis have been used in different stages of the study. Dichotomous scale has also been used in certain cases along with nominal scales. The analysis has been done using SPSS version 17.0. In determining the importance of a particular factor felt by a respondent the following scaling technique has been used where 5 is Very important and 1 is Not at all important. In determining what the consumers actually receive the scaling has been done in the following manner where 5 is Excellent and 1 stands for Bad The factors in the study are homogeneous for each of the categories namely the local kirana store buyers, the organized retail chain shoppers and the ones who shop from both the categories. 4. ANALYSIS & RESULTS
The current study aims to differentiate the buyers of local kirana stores from the buyers of organized departmental retail chain based on certain identified factors. It also compares the relative importance of different factors affecting buying pattern based on a particular group as well it focus on identifying the factors which discriminate between different groups. The other key objective of the current study is to get a new dimension with regards to the new age buyers and their shopping behavior with the results and findings. 3. METHODOLOGY
The study is based on the sample of 150. The sample of 150 has been taken from the population of places where there is a considerable concentration of both local kirana stores and organized departmental retail chains. With the fast growing Indian economy and changing income pattern of the Indian consumers the organized retail chains have widened their operations in the following regions like metropolitan cities, State capitals but not metropolitan Cities and any town or city other than Metropolitan or State Capital.Any town or city other than Metropolitan or State Capital however does not include villages which are under the purview of Panchayats and other very small towns where the income level of the people are extremely low and whose demography does not match with the above mentioned pattern of buying. Metropolitan Cities these include top most metros which include Kolkata, Delhi, Chennai, Mumbai. State Capitals but not Metropolitan Cities- these include state capitals. (Though not all the state capitals have been included some included ones are-Ranchi, Bhubaneswar, Patna, Raipur, Gandhinagar. Town or city other than Metropolitan or State Capital includes cities like Jamshedpur, Bilaspur, Allahabad etc.) .To fulfill the objectives related consumer behaviour of the retail outlet shoppers and local kirana store buyers, a simple random sampling technique was used. The sample include people from varied geographic location, with varied demographic identities like place of living and other factors which include education level, age, family income etc. The nature of the data is primary in nature. Source of the data include filling in of the questionnaire prepared. The survey was carried out inline by distributing the questionnaire through e-mails and social networking sites. Also personal interview method with different consumers was used in the
The result has been generally divided in to three parts. The first part deals with establishing relationship between certain factors. The existence of significant relationship is checked for personal factors like age, gender, place of living, educational qualification etc with the factors/ attributes which are discussed below: Accessibility Reason for preferring kirana stores Variety of products. Ambience in case of departmental retail chains and cleanliness, display space etc. in case of local kirana store is perceived to be same. Price discounts & credit facilities available. Relationship with the shopkeeper in case of local kirana store and behaviour of the sales personnel assisting the consumers in case of departmental retail chains is perceived to be the same. Touch, see and feel factor.
The existence of relationship implies the responses of the groups defined according to each factor are not homogeneous. In this study we focus ourselves only on the differences based on the consumer behavior of local kirana store buying and departmental retail chain shoppers. Though the study also deals with buyers who buy both from local kirana stores as well as from departmental stores but still we focus on the differences independently rather than taking both of them at the same. The part of the study which consists of buyers from both retail buying segment and local
kirana store buying only deals with the basic facts associated with it and a basic comparison based on the data. The first part of the study deals with establishing relationship between different demographic segments based on age, demography, psychography ,etc and the factors which generally affect the buying pattern. This establishing relationship has been done for both local kirana store segment and departmental retail shoppers segment. The second part of the study deals with finding out the point of difference in the consumer behavior pattern of the two segments based on the factors taken in to account. The third part of the study as said earlier consists of the basic facts regarding the buyers who buy from both local kirana stores and departmental retail chains.
Data Analysis : H0: There is no significant relationship between the segments and the buying pattern. H1: There is a significant relationship between the segments and the buying pattern. Important and Significant Relationships and Reason for Preference towards Kirana Stores Reason for preference towards kirana stores has a significant relationship with age and education level of the consumers at 5% and 10% level of significance respectively. This can be shown by the following graph:
It can be clearly shown from the above figure that the preferences are different for different age groups. For the age group 1525&26- 35convenience is the most important reason for the majority, however for the 36- 45 its personal relationship and for the group 46 and above both convenience and discounts credits and offers are equally important.
The education pattern also shows a similar heterogeneous pattern among age groups. Preference about accessibility of kirana stores has a significant relationship with age at 10% level of significance (p value 0.093).
From the above graph it can be seen that for most of the persons belonging to the age group 15- 25 accessibility is important, however for the age group 26- 35 and the latter ones accessibility is very important. Preference towards variety of products has a significant relationship with age grouping at 1% level of significance (p-value 0.006) which can be inferred from the graph below.
Most of the consumers of the age group 15- 25 perceive variety of products in kirana stores to be important, so is the case with the latter age groups except 46 and above feel that variety of products as not very important as well. Perception/ Expectation about ambience in a local kirana store is related to the income level at 10% level of significance (pvalue 0.073) . This study reveals the fact the preferences are different for each group which is demonstrated in the following graph.
The 1st income group perceives it to be moderately important, the second one is important, 3 group perceives it to be very important. Perception about price discounts and other facilities are dependent on the income level of the consumers at 5% level of significance (p-value 0.042) Relationship with shopkeeper has a relation with place of living of the consumers at 5% level of significance. The bulk of the persons living in metropolitan cities and all cities or towns other than metros or state capitals agree to the fact and the persons living in the state capitals but not metros bulk of the population strongly agree to the fact that relationship with the shopkeeper is giving them a feel of repurchase which is given by the graph below.
Perception about the variety of products offered depends upon the gender group. From the graph below it is clear that bulks of the males have ranked this as very good but females have ranked it good. So their perception can be further enhanced to excellence by providing a better variety of products for both females and males
Ambience perceived at the departmental store has a significant relation with gender. The graph below shows that the bulk males feel that the ambience of the departmental stores is very good while females feel that its good.
Importance of ambience as felt by people has a relationship with the age groups. Only the age segment 46 and above has the bulk perception that ambience is very important, bulk of the other segments have stated ambience as either important or moderately important which is given below in the graph.
Additional facilities provided and its effectiveness has a significant relation with gender. Bulk of the males and females both feel that the additional facilities provided is good which is suggested by the graph below.
Importance of additional facilities as felt by the shoppers of departmental stores has a significant relation with gender rather than any other segmentation according to location of stay, annual family income, age etc and the pattern is given below.
Inability of the persons to stand in long queues which is very common in departmental stores has a significant relation with gender and the pattern of response is given below.
5.
FACTORS DISCRIMINATING CONSUMER BEHAVIOUR
St ep Entere d Ambie nce rcvd Acces blty Rcvd Stati stic .747 df 1 1 df 2 1
Wilks' Lambda Exact F Stati df stic 1 24.3 1 65 23.2 00 2
In this part of the study we have basically dealt with the differences between the two groups of shoppers which can be differentiated as Local Kirana Store Buyers & Departmental Retail Chain Shoppers based on two basic factors. These are: a. b. Customer Perception/ Expectation Differences. Actual Service Received Differences.
df3 72.0 00 72.0 00
df2 72.0 00 71.0 00
Si g. .0 00 .0 00
.605
At each step, the variable that minimizes the overall Wilks' Lambda is entered. a. b. c. d. Maximum number of steps is 10. Minimum partial F to enter is 3.84. Maximum partial F to remove is 2.71. F level, tolerance, or VIN insufficient for further computation.
One of the major focuses of our study is to discriminate between the two groups of buyers based on their behaviour. To identify the behavioural differences discriminant analysis has been used. However when we first used the test the data was varying from multivariate normality. So in order to apply the same we deleted one observation to make the sample size of the two groups equal. Box's M is highly sensitive, so unless p < .001 and your sample sizes are unequal, ignore it. However, if significant and you have unequal sample sizes, the test is not robust (Tabachnick & Fidell, 2001). If there are many DVs and great discrepancy between cell sample sizes, then there is more potential for distortion of the alpha levels. A close look should be kept at the sample sizes and sizes of the variances and covariances for the cells: If cells with larger samples have larger variances and covariances, then the alpha level is conservative and the null hypothesis can be rejected confidently. If cells with smaller numbers produce larger variances then beware - the significant test is too liberal. If there is a non-significant result, the null hypothesis can be confidently retained, but significant results are suspect. 6. VARIABLES ENTERED
This was the difference based on what service they receive. In the data about their expectation without any need to delete observations originally follows a multivariate normal as is suggested by the Box M, which is given below:
Test Results Box's M F 1.276 Approx. df1 df2 Sig.
1.258 1 15552.000 .262
Use or Pillai's criterion instead of Wilk's lambda or if there is a large n, or randomly deleting cases from the sample to equalise the numbers in each group, assuming power can be maintained at a sensible level. SPSS provides Pillai's trace just above Wilks's Lambda. After deleting one observation randomly we get the following box M result:
Test Results Box's M F Approx. df1 df2 Sig. 9.818 3.174 3 933120.000 .023
Variables entered in the analysis are the ones which qualifies at the step which minimizes the overall Wilks Lambda and discriminated between the two groups. Here clearly Ambience & Accesibility are the ones which discriminate between the group. Logically the ambience of the departmental stores are very much different than the local kirana stores and so is the accessibility of the departmental stores when compared to local kirana stores. The concentration on the local kirana stores is better than that of departmental stores.
Tests null hypothesis of equal population covariance matrices.
early we accept the null hypothesis of equal population covariance and hence multivariate normality at 1% level of significance. However only one variable has been entered which is the variety perceived. Logically the variety in departmental stores is better than in case of local kirana stores. The customer perception about variety is also the same as is reflected by the result. However this variable too does not strongly differentiate local kirana stores from the departmental retain chains because the wilks lambda is quite high. 7. ANALYSIS OF MANN WHITNEY U TEST FOR EXPECTED SERVICE
Accesblt y Percvd Ambienc e Prcvd Variety Prcvd 406.000 Price, dis, etc prcvd 598.500 Relatio n Prcvd 538.000
b. Minimum partial F to enter is 3.84. c. Maximum partial F to remove is 2.71. d. F level, tolerance, or VIN insufficient for further computation. Mann Whitney U Test In this test we have analyzed the set of data based on fact that the Likert Scale data is Ordinal in nature. The results of the Mann Whitney Test are given as follows: Expected/ Perceived Service: The customer perceptions about the importance of the factors as felt by them differ only in case of variety for the two different groups of buyers.This means that the perceptional pattern of the persons who shop from the local kirana stores and departmental retail chains perceive the difference between the two only in terms of variety of products available in the two (at 5% level of significance). In this case the null hypothesis is H0: Median of both the groups are equal. H1: Median are unequal. Clearly the difference between the groups is significant only in case of variety perceived since we reject the null hypothesis (since 0.001< 0.05) at 5 % level of significance. In order to judge the nature of difference we look at the graphs for two groups.
Mann558.000 543.500 Whitney U Wilcoxo 1261.00 1246.50 nW 0 0 Z -1.492 -1.596 Asymp. .136 .111 Sig. (2tailed) a. Grouping Variable: V11
1109.00 0 -3.274 .001
1301.50 0 -1.009 .313
1241.00 0 -1.721 .085
At each step, the variable that minimizes the overall Wilks' Lambda is entered. a. Maximum number of steps is 10.
Above graph shows the perception pattern of consumers for variety of products available in local kirana stores.
The above shows the perception pattern of consumers for variety of products available in departmental retail chains. Comparing the two graphs we see that the variety of products is perceived to a very important parameter by the bulk for departmental stores. Nobody has ranked it to be not so important but in case of local kirana stores the bulk has ranked variety as Important but not Very important, some (2.70%), though a very minor percentage have even ranked it not so important. So it can be said that the importance of the variety of products for departmental retail chain buyers is more important than the variety perceived by local kirana store buyers. 8. ANALYSIS OF MANN WHITNEY TEST FOR ACTUAL SERVICE RECEIVED:
What the consumers actually receive can be best differentiated between the two groups of buyers in terms of Ambience, Relationship, Accessibility as is indicated by the results of the Mann Whitney U test.
Test Statisticsa Accesblty Rcvd Mann-Whitney U Wilcoxon W Z Asymp. Sig. (2-tailed) a. Grouping Variable: V11 480.500 1183.500 -2.403 .016 Relation Rcvd 472.000 1175.000 -2.507 .012 Price, dis, etc rcvd 602.500 1305.500 -.940 .347 Ambience rcvd 308.500 1011.500 -4.272 .000 Variety Rcvd 570.000 1273.000 -1.334 .182
Clearly we reject the null hypothesis for the following factors at 5% level of significance (since p- value< 0.05). Accessibility Received For local kirana stores the accessibility received by the consumers is majorly very good followed by excellent and good respectively as is suggested by the graph below
In case of accessibility of departmental chains same is the case however some have ranked the accessibility received as bad and ok too which is given by the figure below
9.
BEHAVIOUR OF SALES PERSONS:
Major bulk has given the ranking of very good for relationship/ behaviour of sales personnel of local kirana stores followed by good, excellent and ok as is given in the figure as follows.
However in case of departmental retail is a bit different. Most of the people have ranked good rather than very good.
Ambience Received
Most of the consumers shopping from the local kirana stores have have rated the ambience there to be ok some (5.41%) have even rated it bad. The pattern of response is given as follows.
But for the persons who buy from departmental retail chains bulk of them has ranked ambience to be good followed by very good and some even excellent. Nobody has rated the ambience to be bad. The pattern is given as follows. Both Departmental Retail Chains and Local Kirana Store Buyers
From the graph above it is clear that in most of the cases people prefer monthly buying from departmental retail chains. Consumers who buy from both departmental retail chains and local kirana stores generally visit the departmental retail stores once a month because of the accessibility problem.
From the graph above it is clear that in most of the cases local kirana stores are used for daily buying purpose. The reason for this may be the better accessibility factor which is leading the consumers to go for daily buying purpose from local kirana stores. The question then remains then why do they ever need to visit retail departmental stores once a month. This may be due to the fact that the departmental retail chains have a wider variety of goods available. Also the kirana stores are used for buying items which are regularly required and cannot be stored for a long time however departmental retail chains are used for buying materials which are for long term use may more one month more than one month may be. The generally grocery can be of two types: 1. Grocery for daily consumption. 2. Grocery for monthly consumption. Depending upon the nature of the grocery local kirana store or departmental retail chains are selected. Also from the point of view of the departmental retail chain shoppers it can be said that the most important factor which affects the buying decision according to the most of the persons is Prices & Discounts which is given by the graph below.
Thus the departmental retail chains must keep the following factor in mind while designing the pricing strategy. The importance of the differences in the consumer behaviour pattern for the two groups of buyers is can be very much useful for identifying the consumer behaviour pattern. However the most important part of the study is the reconciliation and matching of the results. Very surprisingly the results given by the Discriminant Analysis (taking in to account interval nature of the data) and Mann Whitney U Test (taking into account ordinal nature of the data) give similar results. This shows the overall validity of the study. 10. OVERALL RESEARCH FINDINGS 1. Quite a few factors both for departmental retail chains and local kirana stores has a significant relationship with segments according to age, gender & place of living (as suggested by the chi square test). The consumer perception pattern given in terms of the ranking/ importance of the factors can be discriminated based on variety of products alone. The ranking of the other factors are more or less similar across the two groups (as suggested by the result of the discriminant analysis). The actual service received given in terms of the ranking/ importance of the factors can be discriminated based on ambience received and accessibility (as suggested by the result of the discriminant analysis). The consumer perception pattern given in terms of the ranking/ importance of the factors can be discriminated based on variety of products alone. The ranking of the other factors are more or less similar across the two groups (as suggested by the result of the MannWhitney U Test). The actual service received given in terms of the ranking/ importance of the factors can be discriminated based on ambience received, relationship/ behaviour and accessibility (as suggested by the result of the Mann- Whitney U Test). 11. MANAGERIAL IMPLICATIONS AND END NOTES There is a clear difference between the local kirana store buyers and departmental retail chain shoppers can be identified based on different segments. Both the two groups i.e. local kirana stores and departmental retail chains should focus on the proper segmentation techniques and they should closely identify the perceptions among the different segments.
The buyers of the modern complex market is having different preferences the Indian retail sector should focus on the factors which have a significant relationship with the segmenting variables like age, gender, place of living, annual family income, highest educational qualification etc. Working upon the factors according to the needs of the consumers will give an edge. The unique strategy must be formulated which intergrade pricing decision, ambience planning, merchandising management and promotional as well as branding exercise for the long run sustainability. REFERENCES
[1] Bawa, R.S. and Kainth, G.S., 1989, Cost and returns analysis of rice milling industry. Indian Journal of Agriculture Economy ., 44 : 326-327. [2] Bulent Sezen, 2004, Expected profit approach used in discount pricing decisions perishable products. Indian Journal of Retail and Distribution Management, 32 (4) : 223-229. [3] Burke, R., 2001, Brand equity measurement and management.< www.bulcer.com/bmr/brand-equity.html> [4] Chung, Parrylhsiung, L.U. and Chunhsen, 1998, Domestic marketing channels of furniture in Taiwan Qrarterly J. Expt. Forest of Nat. Taiwan Univ., 12 (4) : 251-267. [5] Hugar, L.B. and Vijay Kumar., H.S., 1996, Dynamics of consumer behavior in vegetable marketing. The Bihar Journal of Agric. Mktg., 4 (4) : 345-351 [6] Manivannan, L. and Raghunathan, P.N., 2004, Changing scenario of purchasing pattern and the utilization of departmental stores. Indian Journal of Marketing, 34 : 26-28. [7] Manmath Raut and Dr Saroj Kumar Dash (December 2011), The Factors predicting Buying Behavior in Organized Retailing: A Study with Special Reference to Malls in Noida and Greater Noida. International Journal of Business and Management Tomorrow Vol. 1 No. 3 [8] Nisha Rathore, A Study On Consumer Behavior Towards Organized And Unorganized Retailing, Abhinav (National Monthly Refereed Journal of Research In Commerce & Management) volume No.1, Issue No.8 , ISSN 22771166(August 2012) [9] Ragavan, R., 1994, A study on the consumer response towards franchise vegetable outlets- A case of Just picked, (Unpublished.). M.Sc. (Agri) Thesis, Tamil Nadu Agril. Univ, Coimbatore. [10] Rajesh Shinde, 2007, Recent Facets of consumer behaviour A case of rural market. Indian Journal of Marketing,, 37 : 1924. [11] Rees, A. M., 1992, Factors influencing consumer choice. Journal of the Society of Dairy Technology 45 (4) : pp. 112116. [12] Sanjaya S. Gaur and Abdul Waheed, K., 2002, Studyo f buying behavour of branded rice. Indian Journal of Marketing, pp. 33-38. [13] Sundar, K., 1997, Store image of Saravana Bava Supermarket in Cuddalore district (A critical study) Indian Journal of Marketing, XXIV (4-6) : 25-30.
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Comparison of Consumer Behavior

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A Comparative Study of the Consumer Behavior Pattern of Organised Departmental Retail Chain Shoppers and Local Kirana Store

FACTORS DISCRIMINATING CONSUMER BEHAVIOUR

Wilks' Lambda Exact F Stati df stic 1 24.3 1 65 23.2 00 2

df3 72.0 00 72.0 00

df2 72.0 00 71.0 00

1.258 1 15552.000 .262

Tests null hypothesis of equal population covariance matrices.

1109.00 0 -3.274 .001

1301.50 0 -1.009 .313

1241.00 0 -1.721 .085

BEHAVIOUR OF SALES PERSONS:

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