See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/373106937

A Study on Factors Influencing to Store Loyalty and their Impact on Customer

Satisfaction in Organised Retail Outlets of India in General and Special
Reference to Vijayawada Town

Article · August 2023

CITATION READS

1 2

4 authors, including:

Venkateswarlu denduluri
Lakireddy Bali Reddy College of Engineering
5 PUBLICATIONS   2 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Venkateswarlu denduluri on 14 August 2023.

The user has requested enhancement of the downloaded file.

 International Journal of Business and Management Tomorrow Vol. 2 No. 10

A Study on Factors Influencing to Store Loyalty and their

Impact on Customer Satisfaction in Organised Retail
Outlets of India in General and Special Reference to
Vijayawada Town
Sri D Venkateswarlu, Asst.Professor*, School of Management Studies, Lakireddy Balireddy College of Engg.,
Mylavaram, Krishna
Prof.A.Lakshmanaswamy, Professor & Head, School of Management Studies, Lakireddy Balireddy College of
Engg., Mylavaram, Krishna
Sri K Chinni Krishna, Asst. Professor, Department of MBA, Sri Sarathi Institute of Engineering & Techology,
Nuzvid, Krishna

Abstract
Organized retail in India represents a large untapped market that is likely to see excellent growth in the coming
years. New entrants have huge predictions to see large returns. However, they must become accustomed
themselves to the unique state of retail in India where enough support not exists for infrastructure and
regulations. They must also understand the tastes and feelings of the Indian consumer who has only recently
started treating retail arrangement as a form of leisure, convenient and entertaining destination. Identifying and
satisfying the customer lead to improved customer retention. When the Retailer consistently satisfies the
customer then he would become loyal to the retailer and in turn he supports the retailer by various means like
introducing new customers, becoming prospective buyer at the time of launching new products, placing the
retailer in a comfortable situation unlike new customers, where the retailer has to invest more time and money to
observe post purchase behaviour of new customer. The Indian consumer has undergone an identical
transformation. Just a decade or two ago, the Indian consumer saved most of his income and purchased the

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 1

 International Journal of Business and Management Tomorrow Vol. 2 No. 10
minimum essentials and rarely indulged in new purchases. The products which are being treated as luxurious
during the previous decades turn to be essential goods now like refrigerators, Electronic appliances i.e. rice
cookers, washing machines and packaged food items. The present paper is aimed to understand the influence of
store loyalty and customer satisfaction on organized retailing with respect to customer‟s age, gender, income
and occupational level. Basing on the results arrived; we have come to a conclusion that there is significant
difference in customer satisfaction with respect to customer‟s age, gender, and income and occupation level.
The study further reveals that the behavioral patterns of the customers are to be effectively utilized with marked
and distinctive innovative strategies to build a strong and desired store loyalty for a long lasting relationship
impacting customer satisfaction outperforming its competitors.

Keywords: Customer Satisfaction, Convenient Shopping, Malls and Super Markets, Organized Retail, Store
Loyalty.

1. Introduction
The retail sector in India is observing a huge revamping exercise as conventional markets make way for new
formats such as departmental stores, hypermarkets, supermarkets and specialty stores.. The sector is at a
transition where the growth of organized retailing and growth in the consumption by the Indian population is
going to take a higher increase flight. The Indian population is viewing a noteworthy change in its ageing
population. Organized retail is on all-time sky-scraping in India. The growth is heightened by various dynamics
such as availability of professionals, increased frequency of travelling, enormous exchange of discussions about
latest products by mobile phones irrespective of destination, media proliferation, various brands which are
gaining value thereby enhancing industry growth, availability of various funding opportunities, regulations like
VAT implementation to make processes simple, sea change in demographics of country and international
exposure. The retail sector is one of the fastest growing ones in India, contributing as the world's second largest
consumer market. The Indian consumer market is estimated to grow at 13% annually from $322 bn
(Rs.17,71,000 crores) in 2006-07 to $590 bn(Rs.32,45,000 crores) in 2011-12. Organized retail, which
constituted a low 4% of total retail in 2006-07, is estimated to grow at 45-50% per annum and attain a 16%
share in coming years

2. Innovative Strategies of Indian Retailers

There are various types of innovative strategies being identified by retailers and those strategies are not chalked
out with formal approaches but with spontaneous identification and understanding of customer needs and their
aspirations. The idea was to en cash the marriage season by positioning together a bunch of articles most likely
to attribute on every young couple‟s wish list: a television set, 3G mobile phone, laptop, MP3 players, digital
cameras… all compress together to fit the budgets that range from Rs.10K to Rs3lakhs. Of course, heavy
discounts are usually playing key role during the festive season. So, whether it is customized electronics or
appliances packages for young couple or newly wedded couple or else a family pack suits to variety of
requirements to minimise the burden of customer in selecting the products thus the retailers are leaving no stone
unturned.in catching the customer. The idea is to get consumers to spend more during the festive season,
traditionally considered a time when families with the most modest means release their cash reserves. With real
inflationary pressure and a downturn on the stock market, retailers are worried that consumers may cut down or
postpone optional spending such as buying jewels and clothes during tough times. So, retailers are going out of
their way to attract consumers with innovative offers, which are over and above the traditional offering of price
discounts, freebies and easy and flexi payment options. “India is one of the largest consumers of gold, so there is
a tendency for upward fluctuation in gold prices during the peak season,” says Saumen Bhaumik, head of retail
at Tanishq India, adding that up to 30% of gold purchased from Tanishq stores during the peak season is pre-
booked through the company‟s scheme.

Retailing has increased more international flavour because of cross cultural and social interactions between the
countries and making more ethnic groups. Retailing is a energetic part of our varying society and a major basis
of creating working opportunities for the educated youth. Experts say that innovations help retailers stand out in
the crowd. “It helps attract consumers… Retail innovations such as these are a call to action,” says Gibson
Vedamani, chief executive, Retailers‟ Association of India.Retail chains such as Reliance Digital, the
information technology and consumer durables arm of Reliance Retail Ltd, Salora Retail Ventures Ltd, Future
Group‟s Home Solutions Retail Ltd and Vishal Retail Ltd, among others, are either offering products from
television sets and digital cameras to microwave ovens and refrigerators at a cost poorer than the highest retail
price or bundling a number of products along with free gifts to attract customers. Consumer durables retailers
earn an average margin of around 10-12% across product categories as per experts. Some categories such as
mobile phones offer lower margins. Most of theretailers are bearing the cost of the promotions and offers by
compromising the margins they get from manufacturers. Also, as volumes help them to reach their monthly
targets, Retailers are giving more focus to bulk deals by compromising on their margins. “Retailers are building
on the opportunity which the festive season offers, even if it means letting lose the margins to some extent, since

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 2

 International Journal of Business and Management Tomorrow Vol. 2 No. 10
they deal with a lot of brands and huge volumes,” Anil Rajpal, vice-president of consumer goods and retail,
KSA Technopak, a New Delhi-based retail consultancy, said.

3. Retailing Industry in India and Govt. Initiatives

From the Retailers‟ point of view, the focus of the leading consumer durables brands will be to offer value for
money instead of playing up the discount part. This was based on the realization experienced by the retailer that
only Value for money spent by the customer to purchase a product would give long lasting satisfaction rather
than offering discount to products. Top retailers have an assumption that offering huge discounts to their
products sends wrong signals to the customers that they themselves are accepting to diminish the value of their
own product .“The industry is seeing a healthy trend where the consumers are opting for products which provide
value for money. Most of the leading industry players are talking about features and the USPs (unique selling
propositions) of the product, others will also follow soon,” said Suresh Khanna, secretary general of the
Consumer Electronics and Appliances Manufacturers Association.

The first half of the year was difficult as increasing input costs put pressure on margins. Profitability suffered as
retailers could not pass on the entire burden of high input costs to consumers by way of price hikes. “Most
retailers are also offering to the consumers on their private label items to create volumes. “Consumers can look
forward to a discount in the range of 10-35% across product categories on the MRP if they buy our private label
items. We are also extending the discounts on the branded products as given by the companies,” said Kushagra
Seth, head of marketing at Vishal Retail.Retailers such as Reliance, Vishal and E-Zone already sell a wide range
of electronics items under their own brand names. Croma is likely to soon jump on the fashion.Future Group‟s
Home Town is all geared up for Diwali. “For Dussehra, Hometown is giving free gifts, which will be followed
by cash-back offers around Diwali,” Mahesh Shah, chief executive officer of Home Town, said. The idea behind
cash-back offer is to make the customer to revisit the show room for his regular purchases so that he/she would
be habituated to the environment for repeat purchases.

4. Review of Literature
A retailer must be able to satisfy their customers‟ needs and wants (La Barbara and Mazursky, 1983). According
to Hokinson (1995), the aspects include friendly employees, courteous employees, conversant employees,
compassionate employees, clearness in billing, billing timeliness, aggressive pricing, service value and goods
value make customer‟s tobe loyal to a specific retail stores. The importance of customers has been painted by
many research scholars and intellectuals. Zaire (2000) said “Customers are the purpose of what we do and rather
than their dependence on us and being seller we very much depend on them. The customer is not the source of a
problem but he is the solution of the same, we shouldn‟t perhaps make a wish that customers „should go away
and we cannot bear his demands” because our opportunity and our protection will be put in danger without a
customer. That is the main reason why organisations today are focusing on customer contentment, faithfulness
and withholding. Customer faithfulness on the other hand, according to Anderson and Jacobsen (2000) is
actually the result of an organisation producing an attractive offer for a customer so that they will continue or
augment their purchases from the organisation. Customers‟ needs state the Felt deficiency of a customer (Kotler,
2000). Whereas customers‟ wants, according to Kotler (2000) refer to “the form taken by human needs as they
are shaped by culture andindividual personality. Customer satisfaction does have a positive effect on an
organisation‟s profitability. Kotler (2000) distinct satisfaction as “a person‟s feelings of pleasure of comparing a
product‟s perceived performance (or outcome) in relation to his or her expectations”. Coldwell (2001): Zairi
(2000): “There are numerous studies that have looked at the impact of customer satisfaction on repeat purchase,
loyalty and retention. They all convey a analogous message in that all satisfied customers are most likely to
share their experiences with other people to the order of perhaps five or six people. Equally well, dissatisfied
customers are more likely to tell another ten people of their unfortunate experience. Furthermore, it is important
to realise that many customers will not complain and this will differ from one industry sector to another. Lastly,
if people believe that dealing with customer satisfaction/complaint is costly, they need to realise that it costs as
much as 25 per cent more to trace new customers”. Few more authors state customer retention is “the practice
of working to satisfy customers unfailingly with the intention of developing long-term relationships with them”.
Hoyer and MacInnis (2001) said that satisfaction can be associated with feelings of delight, happiness, relief and
excitement. .There are also many factors that affect customer satisfaction. According to Hoyer and McInnis
(2001), satisfied customers form the substance of any successful business as customer satisfaction leads to
repeat purchase, brand loyalty, and positive word of mouth.

5. Objectives of the Study

 To understand the influence of store loyalty and satisfaction of customers on organized retailer
 To find out any difference in age, sex, income and occupation with regard to customer satisfaction in
dealing with organized retailer

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 3

 International Journal of Business and Management Tomorrow Vol. 2 No. 10

6. Hypotheses
In the light of the above discussions and views mentioned, the following hypotheses are formulated:
H1: There is significant difference in age groups with regard to customer satisfaction by dealing with
organized retailers
H2: There is significant gender difference with regard to customer satisfaction by dealing with organized
retailers
H3: There is no significant difference in age,sex, income and occupation with regard to customer
satisfaction by dealing with organized retailers

7. Research Methodology
Matching with the objectives of the present study, the relevant data has been gathered from primary as well as
secondary sources.

Subjects and Variables Studied

The sample of the study comprised 67 customers in different age groups, different occupational levels , different
incomes which would decide the affordability of the customers

Primary Source / Instruments Used

The primary data is sourced through a well-structured questionnaire consisting of 26 items to be responded by
different types of customers who are visiting regularly various organized retail malls in Vijayawada. Total 67
customers are contacted who are approaching various retails marts like Reliance fresh, Shoppers stop, Spencer,
E City and Big Bazar. They have clearly explained and asked them to give their rating to each question (total 26
questions) on a 5 point scale (.Strongly agree to be of score 5, Agree to be of score 4, Neutral to be of score 3,
disagree to be of score 2 and Highly disagree to be of score 1) about their loyalty and satisfaction level on
different factors like checkout time, assistance provided , goods convenient location, external/ Internal design of
show room, ethical concerns, excitement and information transparency and parking facilities of the retailers
which would increase the association with the retailer in a longer tenure.

Secondary Source
The secondary sources used for the study include various literatures, magazines, E Journals and relative web
sites etc.

TABLE :1
Age group(Years) Respondents in each group Total score of each age group Mean S.D.
19-28 35 3263 93.23 11.31
29-38 19 1708 89.89 9.72
39 and above 13 1227 94.38 12.78
Total respondents 67

Results: Presents the Means and SD scores of different age group customers who are approaching organized
retail stores for their purchases in Table :1

Table:1Presents the value of Means, SDs of different age groups of customers to find out which group has
more satisfaction in dealing with the Organized retailers
Age groups
Stat.tool 19-28 29-38 39& above
N 35 19 13
Mean 93.23 89.89 94.38
S.D. 11.31 9.72 12.78

Source: Primary data

Discussions : As per the obtained mean and SD scores , The age group of 39 years and above has more
customer satisfaction (Mean= 94.38 and SD= 12.78) towards organized retail management than the age groups
of 19-28 (Mean= 93.23 and SD= 11.31) and 29-38( Mean=89.89 and SD= 9.72) .

Hypotheses Testing
Test of Hypothesis 1: There is significant difference in age groups with regard to customer satisfaction by
dealing with organized retailers

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 4

 International Journal of Business and Management Tomorrow Vol. 2 No. 10
Table:2
Results: To make comparative analysis we have titled the age groups as A, B and C. A represents the age group
19-28, B represents the age group 29-38 and C represents the age group 39 and above. We have made
combinations like A-B,A-C, and B-C to have a comparison between the different age levels.

Table:2 Presents t-test value for each combination i.e. A- B , A-C and B-C
S.No. Stat.tool A-B A-C B- C
1 N 35 19 35 13 19 13
2 Mean 93.23 89.89 93.23 94.38 89.89 94.38
3 S.D. 11.31 9.72 11.31 12.78 9.72 12.78
t 1.08@ 0.31@ 1.13@
Source : Primary data @= insignificant

Discussions: Based on t test results obtained for each combination (A-B 1.08@, A-C 0.31@ and B-C1.13@) is
insignificant, the 1st hypothesis which is predicted that there is significant difference between age groups with
regard to customer satisfaction found to be not accepted as unwarranted. It means the perceptions, expectations;
understanding and ideologies of different aged people visiting the organized retail marts are one and the same
and clearly shows there is no significant difference.

Test of Hypothesis 2: There is significant gender difference with regard to customer satisfaction by dealing
with organized retailers

Table 3:
Results: To make comparative analysis we have titled the gender groups as Group A& GroupB. Group A
represents Male persons visiting the organized Retailer and Group B represents the female persons visiting the
organized retailer

Table 3: Presents t-test value to know the gender difference between Males (GroupA) and females
(GroupB)
Stat. tool Male (group A) Female (group B)
N 39 28
Mean 91.33 92.07
S.D. 14.87 11.60
t 0.22 @
Source: Primary data @= insignificant

Discussions : Based on t test result obtained between the above two groups is insignificant , the 2 nd hypothesis
which is predicted that there is gender difference with regard to customer satisfaction while visiting the
organized retailers found to be not accepted as unwarranted by results. . Hence, It has been proven that there
is no gender difference between the customers to visit the retailer marts in assessing, understanding,
experiencing, evaluating and ultimately to derive satisfaction from them.

Test of Hypothesis 3: There is no significant difference in age,sex, income and occupation with regard to
customer satisfaction by dealing with organized retailers

Table 4:
Reports: the scores of different age groups, sex, their income levels and Occupation levels have been taken in
table 4 to know the difference.
Table 4: Present Chi-square value

Age(in Incom Occupatio Gran

years) e (in n d
Rs.) total
Gender 19 39 58&abov 9K- 20K 30K Emp. Self.Emp
Differenc - - e 19K - abov .
e 38 58 29K e
Male 28 10 1 22 9 6 15 22 114
Femal 26 1 1 19 6 5 17 13 87
e
Total 54 11 2 41 15 11 32 35 201

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 5

 International Journal of Business and Management Tomorrow Vol. 2 No. 10
Calculation of Chi-square test
Frequency observed(fo) Frequency Estimated(fe) fo-fe (Fo-fe)2 (fo-fe)2/fe
28 114x54/201=30.63 -2.63 6.92 0.22
10 114x11/201=6.24 3.76 14.14 0.26
1 114x2/201=1.13 -0.13 0.02 0.02
22 114x41/201=23.25 -1.25 1.56 0.07
9 114x15/201=8.50 0.50 0.25 0.03
6 114x11/201=6.24 -0.24 0.06 0.00
15 114x32/201=18.15 -3.15 9.92 0.55
22 114x35/201=19.85 2.63 6.92 0.29
26 114x54/201=23.37 2.63 6.92 0.29
1 114x11/201=4.76 -3.76 14.14 2.97
1 114x2/201=0.86 0.14 0.02 0.02
19 114x41/201=17.75 1.25 1.56 0.09
6 114x15/201=6.49 -0.49 0.24 0.04
5 114x11/201=47.85 -42.85 1836.12 38.37
17 114x32/201=13.85 3.15 9.92 0.72
13 114x35/201=15.15 -2.15 4.62 0.30
X2 46.18@@

Discussions : : Based on results obtained Chi-square value is 46.18 (significant 0.01 level)., the 3rd hypothesis
which is predicted that there is no significant difference in age, income and occupation with regard to customer
satisfaction by dealing with organized retailers is found to be not accepted as unwarranted by results. . Hence,It
has been proven that there is significant difference in age, sex, income and occupation levels of customers.

8. Conclusion
Based on the above study, there is no age limitation to pose difference in Store loyalty and customer satisfaction
and even the gender difference does not show any discrimination on store loyalty and customer satisfaction. It
means, the customers who prefer organized retailing whether male or female almost equally contribute to raise
the business volumes of organized retailers. But, with regard to their income levels and occupational exposure,
there is significant difference in loyalty and satisfaction between the customers. It may be presumed that less
income customer might be less loyal to a specific retailer due to non-affordability to purchase high priced
products so that this low level customer may not be reaping optimum benefits as in the case of high income
customer, Whereas high income customer might be more loyal and satisfied to that retailer as he has economic
freedom to afford a specific price to purchase the product. Hence, the factors like availability of required quality
goods conveniently at one place, good management relations, transparency in transactions, customer friendly
environment are influencing to Store loyalty and eventually it raised the satisfaction of customers in organized
retail out lets.

Sri D Venkateswarlu, Sri K Chinni Krishna, Prof.A.Lakshmanaswamy,

Asst.Professor*, Asst. Professor, Professor & Head,
School of Management Studies, Department of MBA, School of Management Studies,
Lakireddy Balireddy College of Engg. Sri Sarathi Institute of Engineering & Lakireddy Balireddy College of Engg.
Mylavaram, Krishna, Techology, Mylavaram, Krishna
Andhra Pradesh Nuzvid, Krishna Andhra Pradesh
Andhra Pradesh

References
Books
 Philip Kotler, P., 2006. Marketing Management, Prentice Hall older shoppers: a phenomenological investigation.J. of India Pri vate
Limited, New Delhi. Consumer Marketing, 25(5): 294-301.
 Jasola, M., 2007. Emerging Trends in Retail Sector. J. J. Consumer Marketing, 20(6): 516-525.

Journals & Other Articles

 Anand, K.S. and P.K. Sinha, 2009. Store format Indian Consumers: choice between traditional and choice in an evolving market: role
of affect, organized Retail. http://ssrn.com/abstract=994238.
 Jain, R. and S. Bag dare, 2009.Determinants of Retail Formats keeping pace with the shoppers‟ Customer Experience in New Format
Retail Stores.J. mood. The journal of Indian Management and Marketing & Communication, 5(2): 34-44. Strategy,11(4).
 Dalwadi, R., H.S. Rathod and A. Patel, 2010. Key 2010.Exploring consumers‟ preferences with regardRetail Store Attributes
Determining Consumers‟ to department and specialist food stores. Perceptions: An Empirical Study of Consumers of International J.
Consumer Studies, 34: 169-178.

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 6

 International Journal of Business and Management Tomorrow Vol. 2 No. 10
 Herpen, E.V. and R. Pieter‟s, 2000. Assortment Variety: of Retail, Distribution and Consumer Research Attribute -- Versus Product
Based. Available at 19(5): 505-534. SSRN:http://ssrn.com/abstract=246956.
 Brennan, D.P. and L. Lundsten, 2000. Impacts of Strategies for Organized Retailers in Semi-Urban Large Discount Stores on Small
US Towns: Reasons Markets.ICFAI University J. Marketing and for Shopping and Retailer Strategies. International J. Management,
VIII (2): 24-37.
 Mittal, A. and R. Mittal, 2008. Store Choice in the Experience Management in Retailing: An Organizing Emerging Indian Apparel
Retail Market: An Empirical Framework. J. Retailing, 85(1): 1-14.
 A. C. Toyin, A. C. David & S. Michael,2008- Drivers of Customer Loyalty in a Retail Store Environment. Journal of Service Science,
. 1 (1): 35-47.
 M. Osman,1993- A Conceptual Model of Retail Image Influences on Loyalty
 Patronage Behaviour. The International Review of Retail, Distribution and Consumer Research, . 9: p. 149-166.
 J. Bloemer& K. D. Ruyter, On the Relationship Between Store Images,
 Store Satisfaction and Store Loyalty. European Journal of Marketing, 1998. 32 (5/6): p. 499-513.

ISSN: 2249-9962 October|2012 www.ijbmt.com Page | 7

View publication stats