A

Research Project Report

On

STUDY OF CUSTOMER PREFERENCE TOWARDS BIG BAZAAR

Submitted in Partial Fulfillment of the requirements for

Master of Business Administration

(Affiliated to Dr. A. P. J. Abdul Kalam Technical University, Lucknow)

ACADEMIC SESSION

(2024-2025)

Submitted By: Ayush Tyagi Under the Guidance of

Student Name: Ayush Tyagi Faculty Mentor’s Name

I.T.S- Mohan Nagar Dr. Gurpreet Kaur

Enrollment No: 2300380700043

Batch: (2023 -2025)

INSTITUTE OF TECHNOLOGY & SCIENCE, GHAZIABAD

GT Road, Mohan Nagar, Ghaziabad-201007
www.its.edu.in

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 CERTIFICATE OF ORIGINALITY

I, Mr. Ayush Tyagi, Roll No. 2300380700043 certify that the Project Report, entitled “Study
of Customer Preference towards retail market” is completed by me and it is an authentic
work carried out by me at Institute Of Technology & Science, Ghaziabad. The matter
embodied in this project work has not been submitted earlier for the award of any degree
or diploma to the best of my knowledge and belief.

Ayush Tyagi

Enrollment No.
Date:

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 INSTITUTE OF TECHNOLOGY & SCIENCE, GHAZIABAD

CERTIFICATE

This is to certify that Mr. Ayush Tyagi MBA (2023-25 Batch) a student of the
Institute of Technology and Science has undertaken the project (KMBN 408) on “Study
of Customer Preference towards retail market ”. The project has been carried out by the
student in partial fulfillment of the requirements for the award of MBA, under my
guidance and supervision.

I am satisfied with the work of Mr. Ayush Tyagi

Signature of the Faculty Mentor

Date:

Name of the faculty mentor

Designation:

Countersigned

HOD

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 ACKNOWLEDGEMENT

It’s a privilege to express my sincere indebtedness and profound sense of gratitude to my

report guide Dr. Gurpreet Kaur (Faculty of MBA Dept.) whose active association,
constant encouragement, untiring support and generous efforts enabled me to layout the work
of this report. This report would never have taken this final shape without her watchful help.

I would like to thanks my parents for their valuable & moral support.

All other faculty members, who all courteously responded to my queries and guided me in
giving the final shape to the report.

Ayush Tyagi
MBA –IVth Sem.
Roll No. 2300380700043

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 EXECUTIVE SUMMARY

The Indian retail market, characterized by its vibrant diversity and rapid evolution, is
undergoing a monumental transformation fueled by technological advancements, shifting
consumer behaviour, and the influx of both domestic and international players. This research
project investigates the dynamic landscape of customer preferences in India's retail sector and
examines how retailers can adapt to meet changing expectations across demographics,
geographies, and product categories.

Retail in India spans a wide spectrum—from traditional mom-and-pop kirana stores and
bustling street markets to glitzy malls and cutting-edge e-commerce platforms. The
convergence of factors such as increased internet penetration, rising disposable income,
digital payment adoption, and an expanding middle-class population has created a complex
yet promising ecosystem for retail growth. As competition intensifies, understanding
customer preferences is no longer optional—it's a strategic imperative.

This report employs a mixed-method research design that integrates quantitative data
collected through structured surveys and qualitative insights gathered from in-depth
interviews. The study covers consumers from metropolitan cities, tier-2 towns, and semi-
urban areas to ensure broad demographic representation. The goal is to capture nuanced
insights into what drives consumer decisions across categories like groceries, apparel,
electronics, and personal care products.

Key focus areas include:

 Purchase drivers: price, quality, brand, convenience, and service
 Format preferences: online vs. offline vs. hybrid models
 Demographic variables: age, gender, income, location
 Behavioural trends: loyalty, promotional sensitivity, impulse buying

The analysis reveals that Indian consumers are becoming increasingly discerning. While price
sensitivity remains a major consideration, there is growing emphasis on product quality,
brand value, and service excellence. Digital platforms are witnessing unprecedented growth,
particularly among tech-savvy youth, while trust and personalized service continue to be
strongholds of traditional retail.

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Among the notable findings:
 A significant portion of millennials and Gen Z consumers prefer shopping online,
driven by convenience and better deals
 Brand loyalty is prevalent among higher-income groups, especially in electronics and
apparel
 Tier-2 and tier-3 city consumers are price-conscious but responsive to value-oriented
promotions and local branding
 Hybrid shopping—researching online and purchasing offline or vice versa—is
increasingly common

The report concludes with strategic recommendations for retailers:

1. Embrace omni-channel retailing to bridge the gap between online convenience and
offline experience
2. Leverage data analytics to personalize offerings and predict consumer needs
3. Invest in customer relationship management (CRM) to build loyalty
4. Focus on regional customization in marketing and product mix
5. Promote sustainable practices and ethical branding to align with evolving consumer
values

In sum, this comprehensive study provides a roadmap for retailers and marketers to navigate
the ever-evolving terrain of the Indian retail market. By aligning business strategies with
customer preferences, companies can not only increase profitability but also build lasting
brand equity in one of the world’s most dynamic consumer markets.

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 INDEX

S.NO TABLE OF CONTENT PAGE NO.

1. EXECUTIVE SUMMARY 5-6

2. INTRODUCTION 8-49

 Trend in Retail market

 Introduction to Consumer preference
 Why is consumer preference important ?
 How to determine consumer preference
 Consumer Behaviour

3. OBJECTIVES OF THE STUDY 50

4. SCOPE OF THE STUDY 52

5. REVIEW OF LITERATURE 53-56

6. RESEARCH METHODOLOGY 57-59

7. PRESENTATION AND DATA ANALYSIS 60-66

8. FINDINGS 67

9. LIMITATIONS OF THE STUDY 68

10. RECOMMENDATION & SUGGESTION 69

11. CONCLUSION 71

12. ANNEXURE 72

13. BIBLIOGRAPHY 76

INTRODUCTION
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Every business conducted for the purpose of selling or offering for sale any goods, wares, or
merchandise, other than as a part of a "wholesale business" to the final consumer can be
defined as retail business

Retail is the second-largest industry in the United States both in number of establishments
and number of employees. The U.S. retail industry generates $3.8 trillion in retail sales
annually ($4.2 trillion if food service sales are included), approximately $11,993 per capita.
The retail sector is also one of the largest worldwide.

Wal-Mart is the world's largest retailer and the world's largest company with more than $312
billion (USD) in sales annually. Wal-Mart employs 1.3 million associates in the United States
and more than 400,000 internationally. The second largest retailer in the world is France's
Carrefour.

WHAT IS RETAILING?

Retailing is all the activities involved in selling goods and services directly to final
consumers for their personal, non-business use.

The word retail is derived from the French word retailer, meaning to cut a piece off or to
break bulk. A retailer buys goods or products in large quantities from manufacturers or
importers, either directly or through a wholesaler, and then sells individual items or small
quantities to the general public or end user customers, usually in a shop, also called store.
Retailers are at the end of the supply chain. Marketers see retailing as part of their overall
distribution strategy.

“Retailing today is not only about selling at the shop, but also about surveying the market,
offering choice and experience to consumers, competitive prices and retaining consumers as
well”

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Retailing is the final step in the distribution of merchandise - the last link in the Supply Chain
- connecting the bulk producers of commodities to the final consumers. Retailing covers
diverse products such as foot apparels, consumer goods, financial services and leisure.

A retailer, typically, is someone who does not effects any significant change in the product
except breaking the bulk. He/ She are also the final stock point who makes products or
services available to the consumer whenever require. Hence, the value proposition a retailer
offers to a consumer is easy availabilities of the desired product in the desired sizes at the
desired times.

In the developed countries, the retail industry has developed into a full-fledged industry
where more than three-fourths of the total retail trade is done by the organized sector. Huge
retail chains like Wal-Mart, Carr four Group, Sears, K-Mart, McDonalds, etc. have now
replaced the individual small stores.

Types of Retailing:

Retailing can be classified under two heads: -

A. Store Retailing

B. Non-store Retailing
A. Store Retailing: -

Retail stores come in a variety of shapes and sizes, and new retail types keep emerging. They
can be classified by one or more of several characteristics: -

1) Amount of service
2) Product line
3) Relative prices
4) Control of outlets
5) Type of store cluster

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 1. AMOUNT OF SERVICE: -

Different products require different amounts of service, and customer service preferences
vary: -

a. Self-Service Retailers:

Customers are willing to perform their own "locate-compare-select" process to save money.
Today, self-service is the basis of all discount operations, and typically is used by sellers of
convenience goods (such as supermarkets) and nationally branded, fast moving shopping
goods (such as catalog showrooms).

b. Limited Service Retailers:

Retailers such as Sears and J. C. Penney, provide more sales assistance because they carry
more shopping goods about which consumers need information. Their increased operating
costs result in higher prices.

c. Full Service Retailers:

Like specialty stores and first-class department stores, have salespeople to assist customers in
every phase of the shopping process. Full service stores usually carry more specialty goods
for which customers like to be waited on. They provide more liberal return policies, various
credit plans, free delivery, home servicing, and extras such as lounges and restaurants.

2. PRODUCT LINE:

Retailers can also be classified by the depth and breadth of their product assortments. The
depth of a product assortment refers to the number of different versions of each product that
are offered for sale. The breadth of the assortment refers to the number of different products
that the store carries.

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Specialty stores carry a narrow product line with a deep assortment within that line.
Examples include stores selling sporting goods, books, furniture, electronics, flowers, or
toys. Today, specialty stores are flourishing, due to the increasing use of market
segmentation, market targeting, and product specialization.

A department store carries a wide variety of product lines. Each line is operated as a separate
department managed by specialist buyers and merchandisers.

Supermarkets are large, low-cost, low-margin, high-volume, self-service stores that carry a
wide variety of food, laundry, and household products.

Convenience stores are small stores that carry a limited line of high-turnover convenience
goods. These stores located near residential areas and remain open long hours, seven days a
week. Convenience stores must charge high prices to make up for higher operating costs and
lower sales volume, but they satisfy an important consumer need.

Superstores, combination stores, and hypermarkets are all larger than the conventional
supermarket. Many leading chains are moving toward superstores because their wider
assortment allows prices to be 5-6% higher than conventional supermarkets'. Combination
stores are combined food and drug stores. Examples are A&P's Family Marts and Wal-
Mart's Super centers. Hypermarkets combine discount, supermarket, and warehouse
retailing, and operate like a warehouse.

3. RELATIVE PRICES:

Retailers can also be classified by the prices they charge. Most retailers charge regular prices
and offer normal quality goods and customer service. Some offer higher quality goods and
service at higher prices. Retailers that feature low prices include:
Discount Stores:

Sell standard merchandise at lower prices by accepting lower margins and selling higher
volume. Occasional discounts or specials do not make a store a discount store. A true

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discount store regularly sells its merchandise at lower prices, offering mostly national brands,
not inferior goods.

4. CONTROL OF OUTLETS:

About 80% of all retail stores are independents, accounting for 2/3 of retail sales. Other forms
of ownership include the corporate chain ,the voluntary chain and retailer cooperative, the
franchise organization, and the merchandising conglomerate.

The chain store is one of the most important retail developments of this century. Corporate
chains appear in all types of retailing, but they are strongest in department, variety, food,
drug, shoe, and women's clothing stores. The size of corporate chains allows them to buy in
large quantities at lower prices, and chains gain promotional economies because their
advertising costs are spread out over many stores and over a large sales volume.
The voluntary chain is a wholesaler-sponsored group of independent retailers that engages in-
group buying and common merchandising.

The retailer cooperative is a group of independent retailers that set up a jointly- owned central
wholesale operations and conduct joint merchandising and promotion efforts.
A franchise is a contractual association between a manufacturer, wholesaler, or service
organization (the franchiser) and independent businesspeople (the franchisees) who buy the
right to own and operate one or more units in the franchise system.
Merchandising conglomerates are corporations that combine several different retailing forms
under central ownership and share some distribution and management functions. Examples
include Dayton-Hudson and J. C. Penney.

TYPE OF STORE CLUSTER: -

Most stores today cluster together to increase their customer pulling power and to give
consumers the convenience of one-stop shopping: -

a. Central Business Districts: -

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A central business district comprises of banks, department stores, specialty stores, and movie
theatres.

b. Shopping Center: -
Is a group of retail businesses planned, developed, owned, and managed as a unit.

B. NON-STORE RETAILING:

Although most goods and services are sold through stores, non-store retailing has been
growing much faster than store retailing.

Traditional store retailers are facing increasing sales competition from catalogs, direct mail,
telephone, home TV shopping shows, and on-line computer shopping services, home and
office parties, and other direct retailing approaches.
Non-store retailing includes direct marketing, direct selling, and automatic vending.

ORGANIZED V/S. UNORGANIZED RETAIL

Organized Unorganized

Owner usually not the operator Owner usually the operator

Supply chain management No SCM dependent on distributors &
suppliers
Automation Virtually no automation

Presence of store brand Absence of store brand

Wider assortment &range of Lesser range & assortment of products

products
Large scale operations Small scale operations

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INDIAN RETAIL INDUSTRY:

Retailing in India is one of the significant contributors to the Indian economy and accounts
for 35% of the GDP. However, this sector is in a fragmented state with over 12 million
outlets operating in the country and only 4% of them being larger than 500 sq ft in size. This
is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total
retail market size. Thus, India has the highest number of outlets per capita in the world with a
widely spread retail network but with the lowest per capita retail space (@ 2 sq ft per person
as compared to 16 sqft per person for USA).

The Indian retailing industry is currently estimated at $205 b (Rs.930,000 crores) and is
expected to grow at 5% p.a. The current size of the organized retailing market is $6 b (Rs.28,
000 crores), thereby, a mere 3% of the total retailing market with a projected growth rate of
25 – 30% p.a. and is estimated to become $8 b (Rs.35,000 crores) by 2005 and $24 b
(Rs.100,000 crores) by 2010, with its contribution to total retailing sales likely to rise to 9%
by decade end.

EMERGING TRENDS IN INDIAN RETAIL INDUSTRY:

‘Tier-II’ Phenomenon: -

Small towns with a population of 0.5 – 1 million {like Surat, Lucknow, Dehra Dun,
Vijaywada, Bhopal, Indore, Vadodara, Coimbatore, Nasik, Bhubaneswar, Varanasi,and
Ludhiana etc}, are witnessing a defined increase in disposable income coupled with high
aspirational levels leading to enhanced spending on consumer goods along with lesser
aversion to credit. With consumption in metros already being exploited {85% of retail sales
as of now}; these Tier-II areas are fresh targets and are expected to contribute 20-25% of
organized retailing sales.

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Retailers are introducing contemporary retail formats such as hypermarkets and supermarkets
in these new pockets of growth. Mall development activity in these small towns is also
picking up, creating quality space for retailers to fulfill their aggressive expansion plans.
Keeping in view the relatively smaller size of the market, the average size of a retail mall in
Tier-II cities ranges between 100,000 – 120,000 square feet in comparison with the larger
metros where a number of malls measure over 500,000 square feet.

Entry of International Players: -

The fight today is not between Big organized retail stores (3%) and Unorganized Kirana
Shops (97%), but it’s between global giants like Wal-Mart, Tesco and Shopper’s Stop,
Pantaloons. Entry of these global players will impact the way India Retailers operate, as
much as it will change the way Indian consumers live and do their shopping. They will no
longer be just dependent on their local Kirana shop for their everyday needs. They could just
shop once a week or once a month at comparatively cheaper rates and remain hassle free.
Indian retailer will also need to quickly come to terms with the market realities. On one hand
they will fight size factor and on the other hand great efficiencies

Emergence of New Retail Formats: -

Currently the retail sector in India is populated with the traditional mom-and-pop stores and
some 1000 odd supermarkets under organized retail chains. A daring few ventured into the
Hypermarket segment with successful results and this format is being fast replicated by other
players. This experience indicates that the Indian consumer has matured to the next level of
shopping experience. Given the Indian conditions and the vast diversity a single format may
not be possible for the national presence, but region specific formats may evolve. An
interesting observation is that of lack of presence of organized retail chains in the rural/semi-
urban centers as over 60% of Indian population is still in these parts. An ideal “no frills”

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model to start with would be ideal for the rural markets; this would help to take them to the
next level of supermarket experience.

Specialty Malls: -

Keeping in mind the astonishing pace with which new supply is expected to enter the market,
many mall developers, in a bid to offer a distinctive value proposition, are planning to
develop ‘specialty malls’. These niche developments shall emerge as one-stop destinations in
their chosen product categories. The Delhi-based Aerens Group has developed Gold Souk, an
exclusive jewellery mall that is already operational in Gurgaon and has ambitious plans to
replicate the concept across the country. Further, a number of analogous developments like a
‘Wedding Mall’ by Omaxe Group, ‘Automobile Mall’ etc., are also in the offing. In line with
international trends, ‘Home Malls’ offering the entire range of building and interior décor
solutions are also coming up in various parts of the country including Pune (‘Ishanya’
promoted by Deepak Fertilizers and Petrochemicals Corporation Ltd), Gurgaon & Kolkata.

Price Correction: -

Fallout of the surge in mall development activity shall be that developers will be forced to
offer retailers prime real estate spaces at costs lower than those prevailing today, as the space
required by retailers to fulfill their expansion plans is likely to be lesser than offered. This
correction could result in a more structured retail real estate market that would allow retailers
a higher margin on their real estate investments, thereby enabling them to expand faster.
Further, the relatively over-served cities could witness higher activity, as real estate space
becomes more affordable, thereby, reducing the break-even period for retailers. Moreover,
under-served markets could provide enough margins to retailers to compensate for loss of
margins in some of the over-served markets.

Traditional Retailers in Malls : -

The abundant supply of retail space has provided retailers with the leeway to experiment with
newer formats and product categories. Even traditional retailers like Benzer, Study by Janak,
Mehrason’s Jewellers etc., are being pushed to modern retailing formats like shopping malls.
Mall developers shall have sufficient incentive to operate on a revenue-sharing pricing model

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as many of these traditional retailers can generate higher sales per square foot as compared to
the larger-format department stores, which shall translate into higher revenue realizations for
developers.
Transformation & Innovations of Supply Chain and Transportation logistics
To counter the unbeatable advantages of convenience of a hop, skip and a jump access and
home delivery, organized retailers seem to have just one option - offer attractive prices to the
consumer. A successful retailer's winning edge will therefore come from sourcing - how best
it can leverage its scale to drive merchandise costs down, increase stock turns and get better
credit terms from vendors. Efficient supply chains can achieve this objective and fuel
demand.

More use of Technology: -

Retailing, as discussed before, is at a nascent stage in India. The complicated information

systems and underlying technologies are in the process of being established. Most grocery
retailers like Food World have started tracking consumer purchases through CRM. The
lifestyle retailers through their `affinity clubs' and `reward clubs' are establishing their
processes. The traditional retailers will always continue to exist but organized retailers are
working towards revamping their business to obtain strategic advantages at various levels -
market, cost, knowledge and customer. With differentiating strategies - value for money,
shopping experience, variety, quality, discounts, advanced technologies, change in the
equilibrium with manufacturers and a thorough understanding of the consumer behavior, the
ground is all set for the organized retailers.

Community Involvement: -

Footfalls in most malls are observed to be significantly higher on weekends. To ensure

regular walk-ins on weekdays, mall developers have started to focus on involving the local
community. They have recognized that their centers need to be entertaining, and that
shoppers want their malls and town centers to blend with and reflect their own communities.
Their philosophy today is thus to create a center where people would want to stay well
beyond their shopping time to enact the rituals of urban life. Activities like karate classes and
painting competitions for children pull their salary-earning parents to visit the mall. For

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example, South-dale Mall, USA contains a school, an auditorium, an ice-skating rink and
even a zoo for the same reason. Dandia and Navratre parties at Ansal Plaza and Festival
parties at other malls also have the same objective.

THE RETAIL MARKETING REVOLUTION - AN INTRODUCTION

“Any business that directs its marketing efforts towards satisfying the final consumer based
upon the organization of selling goods and services as a means of distribution”.

By 2010, the list of India's top 10 retailers will have at least 5 Indian corporate. Retail
Marketing will go through a tremendous change in India this millennium. It will change
India's cities, its people, and its households. The Indian consumer is reportedly the largest

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spender in Singapore and London. It is, therefore, strange that there have, so far, been few
efforts to present the product in the right kind of environment in India.

Indeed, the right shopping experience does induce Indian consumers to spend more. This is
evident from the experiences of retail-outlets like Music World, Big Bazaar, Spencer’s,
Crosswords, The Home Store, Ebony, Bigjo’s, Saboos, Standard, Nanz, Vijay Store and
Janaki Das & Sons, Westside etc.

FACTORS AFFECTING RETAIL MARKETING:

The development of organized retail is dependent on the efforts of several agencies and
institutions. A glimpse of the last 2 decades of the previous century proves illuminating.
Large-format retailing started with outlets like Vivek's and Nalli's in Chennai and Kidskemp
in Bangalore, and, at another level, with manufacturer-retail brands like Bata, Bombay
Dyeing, and Titan.

Government: -The first among these is the government. In a country as big as India and with
as many states as ours, it is imperative that the Central government and all state governments
bring in Value Added Taxation or a unified taxation system to ensure that the tax-regimes are
the same across the country.

The laws governing retail real estate should also be looked into, so that it is possible to
develop retail-estate beyond the city-limits. Apart from providing entertainment and retail
opportunities, this will also decongest the city center and facilitate the development of
suburbs. The relevant rules should also be amended to allow retail-stores to operate 7 days a
week, 12 hours a day.

1. Nuclear Families: - Given the hours most urban consumers keep at work, and
keeping in mind the increase in the number of nuclear families, this may, indeed,
make sense. This will also help people enjoy their evenings, out at malls.

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 2. Developers: - The second group, whose participation is essential in making retail a
boom-sector in this millennium, comprises developers. Most properties are developed
without considering the end user; thus, we sometimes find high-ceilinged offices and
low-ceilinged retail stores. Often, the shopper's convenience is not taken into
consideration while the property is constructed.

3. Manufacturers: - There's a lot at stake here: even so early in the 21st Century, India
is too large a market to be ignored by transnational retail giants. From the
manufacturing company's perspective, the focus should be on producing good
products, and forging relationships with organized retail. Manufacturers need to draw
a plan of producing quality products and tie in with retailers. Indeed, the birth of
organized retail will also engender the creation of private labels and store-brands.
Thus, if a manufacturing company lacks the resources to build a brand, it can supply
to a retail-chain that has the resources to create a brand of its own.

4. Indian Consumers: - And even as these developments were taking place, the Indian
consumer became more mature. Customer-expectations zoomed. Thus, at the
beginning of the New Millennium, retailers have to deal with a customer who is
extremely demanding. Not just in terms of the product-quality, but also in terms of
service, and the entire shopping experience.

Today, the typical customer who shops in a retail outlet compares the time spent at the check-
out counter with that at an efficient petrol station, and the smile of the counter-person to that
decorating the face of a Jet Airways' crew member. To cope with the new customer,
manufacturers have to focus on product quality and brand building. And retailers, in turn,
have to focus on the quality of the shopping experience.

In this millennium, like in the last, customers will want to spend time with their family and
friends. They may like to visit an outlet on weekends where everything will be available
under one roof. India will benefit from these developments because of increased consumption
through retailing and the corresponding increase in employment created by retailing.

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Retail organizations exhibit great variety and new forms keep emerging. There are store
retailers, non store retailers, and retail organizations.

Consumers today can shop for goods and services in a wide variety of stores. The best-known
type of retailer is the department store. Japanese department stores such as Takashimaya and
Mitsukoshi attract millions of shoppers each year. These stores feature art galleries, cooking
classes, and children’s playgrounds.

The success of the retail stores, therefore, depends on customers’ reaction to the retailing mix
which influences the profits of the store, its volume of turnover, its share of the market, its
image and status and finally its survival.

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TRENDS IN RETAIL MARKETING:

At this point, I can summarize the main development retailers and manufacturers need to take
into account as they plan their competitive strategies.

In India the trends are mainly in three sectors. These sectors are: -

Trends in retail marketing-

Urban Suburban Rural

New retail forms and combinations continually emerge. Bank branches and ATM counters
have opened in supermarkets. Gas stations include food stores that make more profit than the
gas operation. Bookstores feature coffee shops.

The electronic age has significantly increased the growth of non store retailing consumers
receive sales offers in the mail and over television, computers, and telephones, to which they
can immediately respond by calling a toll-free number or via computer.

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Competition today is increasingly intertype, or between different types of store outlets.
Discount stores, catalog showrooms, and department stores all compete for the same
consumers. The competition between chain superstores and smaller independently owned
stores has become particularly heated. Because of their bulk buying power, chains get more
favorable terms than independents, and the chains’ large square footage allows them to put in
cafes and bathrooms.
Today’s retailers are moving toward one of two poles, operating either as mass merchandisers
or as specialty retailers. Superpower retailers are emerging. Through their superior
information systems and buying power, these giant retailers are able to offer strong price
savings. These retailers are using sophisticated marketing information and logistical systems
to deliver good service and immense volumes of product at appealing prices to masses of
consumers.

Many retailers are even telling the most powerful manufacturers what to make; how to price
and promote; when and how to ship; and even how to reorganize and improve production and
management. Manufacturers have little choice: They stand to lose 10 to 30 percent of the
market if they refuse.

Technology is becoming critical as a competitive tool. Retailers are using computers to

produce better forecasts, control inventory costs, order electronically from suppliers, send e-
mail between stores, and even sell to customers within stores. They are adopting checkout
scanning systems, electronic funds transfer, and improved merchandise-handling systems.

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RETAIL MARKETING IN INDIA:

There are various ways of making goods available to consumers like:

1. Company to distributor to wholesaler to retailer to consumer

2. Company to salesperson to consumer

3. Company to consumers (online/ phone/ catalog ordering)

These three are among the most common ways of making the goods available to consumers.
But in India the three layered system of distributor, wholesaler and retailer, forms the
backbone of the front-end logistics of most of the consumer-good companies.

There are a number of reasons behind this fragmented retail market. Some of the major
reasons being:

1. Poverty and lower literacy levels.

2. Low per capita income.

3. Savings focused and less indulgence mindset.

4. Poor infrastructure facilities like roads etc.

5. Restrictions on intra-state good movement.

6. High taxes.

7. No exposure to media.

8. High import duties on imported goods.

9. FDI in retailing is not allowed.

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 10. Retailing is not considered as a business or industry by the government.

11. Hitherto none of the business schools in India were offering specialized courses on
retailing.

CUSTOMER PREFERENCE IN RETAIL MARKETING (BIG BAZAAR)

Consumer Preference Introduction :-

Consumer preference is defined as the subjective tastes of individual consumers, measured by

their satisfaction with those items after they’ve purchased them. This satisfaction is often
referred to as utility. Consumer value can be determined by how consumer utility compares
between different items.

Consumer preferences can be measured by their satisfaction with a specific item, compared to
the opportunity cost of that item since whenever you buy one item, you forfeit the
opportunity to buy a competing item.

Why Is Consumer Preference Important?

Because consumer preference determines what products people will buy within their budget,
understanding consumer preference will give you an indication of consumer demand. This
information will help to ensure that you have enough product to meet demand and will help
you determine the price for your product.
If, for example, your company makes dresses, knowing what women prefer in a dress will
help you determine which colors and fabrics will sell better than others, as well as whether
shorter hemlines will sell better than longer hemlines. If your products are comparable to
more expensive brands, you may be able to sell them at a higher profit. On the other hand, if
your competitors offer similar dresses for less money that are also preferable to yours, you

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may need to reduce production, change the design or reduce your profit to ensure you aren't
left with too much inventory at the end of the season.
As the preference for one product over another increase, one product may outsell the other
even if the price is much higher. However, when the preference is negligible, then price and
availability become the determining factors over which one will sell better.

How to Determine Consumer Preference

To determine what consumers prefer, you have to give them similar products to compare.
When offering them two or more products to evaluate, each product should be complete.
Asking them to compare apples to oranges is fair, but asking them if they would rather have
six apples or two oranges is not. One preference that does not change when evaluating
commodities is that consumers always prefer more to less. As well, if consumers prefer
product A over product B, and they prefer product C to product A, then it is always safe to
assume they prefer product C over product B, too.

A common way to determine consumer preferences is to create a consumer panel. A

company may do this itself or by hiring a market research organization. The panel is typically
selected based on the demographics you hope your product will appeal to. There are four
different ways to determine preferences with a consumer panel.

1. Preference Tests
Preference testing is useful when you want to compare one product to another. The
consumers are given two or more products and asked which they prefer. Once their
preferences, or lack of preference, are recorded, you can then analyze the results to determine
which product is preferred. You cannot, however, determine how much each product was
liked using this method.

26
 2. Acceptance Tests
Acceptance testing can determine how much a product is liked. Instead of stating which
product is preferred compared to others, the consumers are asked to give a score to each
product based on their like or dislike for it. This test is also called hedonic ranking. Usually,
the scoring system is based on a nine-point scale, ranging from extreme like to extreme
dislike, with neither dislike or like in the middle. Depending on the products being evaluated,
you can ask for different scores for different properties, such as physical appearance, color or
other attributes.

3. Ranking Tests
A third way of determining consumer preferences is to use a ranking test. Ranking tests are
usually best for comparing consumer preference between three or more products, which the
panel ranks according to their preference. A ranking test does not reveal how much more
consumers like one product over another

How to Cater to Consumer Preference

Anyone selling consumer products must be aware of the demand for those products and how
consumer preference affects that demand. Small business owners seldom have the budget to
conduct thorough study panels, but there are other ways to determine consumer preference in
your market. Subscribing to trade publications and creating news alerts for trends in your
market online can help you leverage the studies that have been conducted by larger
organizations at no cost to you.
The most direct way to determine consumer preferences is to listen to your current customers.
Consider each online review, each email and each complaint as a sort of case study of your
target market. If you sell blue handbags and you get feedback from numerous customers
asking if you have the same item in red, this could be an indication that many others would
prefer red handbags as well. If you have developed an email list of your customers and
prospects, it may be worthwhile to solicit their opinion on the colors you could offer them. As
well, online surveys are an inexpensive way to determine preferences.

Automate (and personalize) communications using lead nurturing.

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Marketing automation is a bit of a paradox in that it personalizes your communications
by automating them. And how exactly does that work, you may ask? By collecting buyer
demographics and recording activities and behavior, marketing automation can tell you a lot
about your consumers’ interests. This information can be used to segment, target, and
personalize your communications in ways that you never could before.

Create and promote objective content like buyers guides.

When consumers are researching a product or service, they’ll often consult buyers guides for
an unbiased look at all of their options (but keep in mind that while unbiased, each buyers
guide will cater to the strengths of the company that created it). Having a buyers guide of
your own readily available on your website means that consumers can consult it whenever
they want during their research process. And better that they use your buyers guide than one
of your competitor’s, right?
CONSUMER BEHAVIOR

Options: Consumers are more likely to choose an alternative after a relatively inferior
option is added as a choice. For example, Simonson says, participants in one study were
given a choice between $6 and an elegant Cross pen. A second group chose among $6, the
same Cross pen, and a second pen that was clearly less attractive than the Cross pen. As was
predicted, the addition of the unattractive pen increased the share of the Cross pen at the
expense of the $6.

Alternatives: Consumers prefer alternatives that are compromise choices. Given a choice
between two alternatives, one priced lower than the other, the addition of a third choice,
priced higher than both, will increase the market share of the more expensive of the original
two. This finding suggests that companies can increase their overall sales and shift purchases
to higher-margin items by carefully designing the sets of alternatives that their customers
consider.

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 Floor Displays: Buyers are averse to choosing the lowest-quality alternative in sets of
three or more choices. One of the implications of this finding is that marketers of well-
known, high-priced brands should encourage retailers to organize floor displays by model
type, whereas marketers of lesser-known, lower-priced brands should prefer organization by
brand.

Brands: Consumers who think about the possibility that their purchase decisions will be
wrong are more likely to choose better-known brands. In a test case, Simonson showed that
consumers debating between a better-known, more expensive brand and a lesser-known, less
expensive brand expect to feel greater regret if they err by choosing the cheaper option.
Indeed, after thinking about the possibility of regret, consumers were more likely to select the
better-known brand. Kodak film has capitalized on this finding with an advertising campaign
that asks consumers to consider how they would feel if they bought cheap film and their
pictures didn't turn out.

Preferences: Consumers tend to select variety when buying multiple products for
consumption at a later time. In each of three weeks, Simonson asked a group of respondents
to select one of six familiar snacks for immediate consumption. A second group was asked to
pick three snacks -- one for immediate consumption and one for each of the next two weeks.
Both groups were told that they could pick the same snack as many times as they wished.
Those in the first group tended to select the same snack all three times, whereas most in the
second group selected three different snacks.

Product Modifications: Modifying a product with a feature or premium that is of little or

no value to the consumer, even without raising the price, may actually decrease sales. When
consumers are uncertain about their preferences, a product that offers an unneeded add-on
(such as an offer to purchase a Pillsbury Doughboy collector's plate) provides them with a
reason for rejecting it.

While marketing professionals can use these findings to influence consumer decision making,
consumers, too, can benefit by understanding their own behavior. "One of the points of our
research is to inform consumers about some of the factors that influence their decisions,"
Simonson says. "With such knowledge, they may be able to make better, more thoughtful
decisions."

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BIG BAZZAR: -

Big Bazaar is both big and a bazaar. It is unlike, say, a Walmart or even a Food world. Big
Bazaar is almost an air-conditioned version of any Indian bazaar. It is a slightly orderly and
organized version of, say Chick pet for Bangalore guys or Dadar for Mumbai. There is a huge
crowd which can move in almost any direction. You can buy anything (pretty much
everything is available at Big Bazaar). It is not a place where you can browse through at
leisure and pick up a few things here and there. This is a place if you are serious about your
shopping. And the worst part is at the checkout counter, where the line can stretch as much as
a line for a famous Ganpati Pandal or a cricket match. Parking is a pain too.

But, the place ticks. In both Hyderabad and Bangalore, the outlets don’t have a place for
customers to stand esp. on weekends. Customers wait outside it some before it opens in the
morning. Bombay is slightly better. Big Bazaar offers good prices-Really good prices. Prices
that tempt. Apart from simple price chopping, there are deals (2 for the price of 1 or prices
reduced on a combination etc). The perception of Big Bazaar is that it facilitates some serious
savings on grocery shopping. And it works. And make no mistake; it attracts the well heeled
as much as it attracts Raju from across the street. That has worked for Big Bazaar is that it
has been able to connect with the customers in the right manner. They had filled a need gap
which was there in the market. Apart from that, their competence in providing products at
lowest prices and great quality in an ambience much better than what the customers were
used to, has also contributed to their success.

The focus is on continuing to provide very high ‘value for money’ to customers by providing
exciting offers throughout the year. It will be facilitated by constantly working on its buying
and supply chain efficiencies. Having already achieved economies of scale and size, they
intend to better their gains by opening new stores regularly.

One of the key philosophies of Mr. Biyani that is highly followed is ‘Rewrite rules, retain
values.’ In essence, it means they don’t take anything as fixed. They are constantly on the
lookout for finding new ways and means to improve the current state of affairs. Thus,

30
innovation is a very important aspect of their working strategy. The other very important
philosophy is that of Indians. All their concepts and formats as well as the way they go about
things are very Indian. The way Big Bazaar is designed and the way the whole concept has
developed reflects a sense of Indians.

This is a well articulated print advertisement campaign for Big Bazaar to highlight their
unique marketing strength, ‘extreme low price’. However, even before this idea has been
exercised to highlight a product by placing it in a stark different environment. Nevertheless,
this advertisement campaign is very well crafted out. Further, the ad is not at all confusing
and it straight way conveys the message without loosing focus.

Like the marketing strength of the company, this campaign is too cost effective. Further, the
ad has the capacity to attract immediate people’s attention. The tag line of the ad is
‘Surprisingly Inexpensive’. The ad has been created by Mudra DDB Communication.

The company recorded around one million foot fall from 26 th to 28th January this year in
2007,which were termed as “SABSE SASTE 3 DIN”,”MAHA SAVING OFFER”, which
was 43 crore last year.

This was a special print advertisement of Big Bazaar prepared for women’s day sales
promotion, where through the advertisement it is shown that forget about the common
females even all Hindu goddesses are busy in shopping at BIG bazaar and celebrating their
day.

This was the print advertisement that Big Bazaar came out with which was regarding its
exchange offer sales promotion, where an old man is hiding himself behind sofa, because
now every old thing can be exchanged with new one at Big Bazaar.

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 SWOT ANALYSIS OF BIG BAZAAR

STRENGTHS: -

1. Prime location

2. Large floor space allowing for better visual merchandising

3. Large area also allows stocking a large variety of products under one roof.

4. Experienced and competent management.

5. Highly trained and motivated sales force.

6. Brand equity.
7. A large scale operation in various cities throughout the country allows them to reap
the benefits of “economies of scale”.

WEAKNESSES: -

1. Large scale of operations sometimes acts as a barrier to personalized customer

relations.

2. Large scale operations lead to reduced flexibility by increasing the amount of

overheads and a huge commitment in terms of fixed costs.

3. A large organization structure leads to delayed decisions. This can prove fatal for a
business in the dynamic fashion industry. Mumbai, this fact sometimes results in
delayed decisions in adapting to changing market trends.

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33
OPPORTUNITIES: -

Apart from the metros, cities like Ahmedabad, Pune, Lucknow, Indore and Coimbatore have
shown substantial retail presence. Most sport modern retail formats like supermarkets,
department stores and specialty chains. These markets are expected to show exponential
growth in the next few years. Thus Food Bazaar has the opportunity to explore new markets.

According to the Consumer Outlook study, consumers are generally satisfied with the service
that organized retailers extend to them. More importantly, they are increasingly regarding
these organized retailers as providing `value-for-money’.

THREATS: -

The time when retailers had to worry about competition only from their peers down the street
has come to an end. Food Bazaar is now facing increased competition in the form of
international retail chains that are making a beeline towards the highly potential Indian
markets. Moreover many big Indian business houses are also vying a space in the Indian
retail scene

34
 BIG BAZAAR STRUCTURE

35
Reliance Retail
Reliance Retail is the retail arm of Reliance Industries Limited and is currently the largest
and most diversified retailer in India. It operates across multiple verticals including grocery,
fashion, electronics, pharma, and online commerce.

D-Mart, operated by Avenue Supermarts Ltd., is one of India's most successful retail chains,
founded in 2002 by value investor Radhakishan Damani. It follows a focused, low-cost
business model that prioritizes operational efficiency and value for money. D-Mart
specializes in offering essential household items, groceries, personal care products, and
limited apparel at consistently low prices through its everyday low pricing (EDLP) strategy.
One of its core strengths is its preference for owning rather than renting store properties,
which helps reduce rental costs in the long run. The company operates with tight inventory
control, high stock turnover, and minimal advertising expenses, resulting in high profitability
and lean operations. Though it has begun experimenting with an online platform called “D-
Mart Ready,” its reach in the digital space remains limited, and its expansion is conservative,
focused on maintaining profitability rather than rapid scale.

Major Brands: Reliance Fresh, Reliance SMART, Trends, Reliance Digital, AJIO, Jio mart.

SWOT Analysis of Reliance Retail:

Strengths:
 Extensive financial backing and operational scale.
 Omnichannel presence through Jio mart and partnerships with WhatsApp.
 Strong supply chain and tech infrastructure.
Weaknesses:
 Complexity in managing diverse formats.
 Regulatory scrutiny due to market dominance.
Opportunities:
 Expansion into rural and tier-3 markets.
 Launch of more private labels and health-focused categories.
 Strategic acquisitions of regional retail brands.
Threats:
 Intense competition from Amazon, Flipkart, and D Mart.
 Shifting consumer habits and digital disruptions.

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D Mart (Avenue Supermarkets)
D Mart is a highly efficient, value-focused retail chain founded by Radhakrishan Damani.
Known for its 'Everyday Low Price' strategy, it is a favourite among cost-conscious Indian
families.
Reliance Retail, a subsidiary of Reliance Industries Ltd., was launched in 2006 and has
rapidly become India’s largest and most diversified retail company. Unlike D-Mart’s single-
format, value-focused approach, Reliance Retail operates across multiple formats and sectors,
including grocery (Reliance Fresh, Smart), fashion (Reliance Trends, Ajio), electronics
(Reliance Digital), pharmacy (Net meds), and online commerce (Jio Mart). Its strategy is
aggressive and acquisition-driven, with investments in both domestic and international
brands. A major differentiator is its omnichannel model, integrating digital platforms with
physical stores to provide a seamless customer experience. Reliance Retail also leverages its
telecom arm, Jio, to digitally empower local Kirana (neighborhood) stores, creating a unique
supply chain ecosystem. With deep financial backing from its parent company, Reliance
Retail is positioned for rapid growth and disruption across Indian retail. However, its vast and
diverse portfolio also brings challenges in operational integration and maintaining consistent
service quality across formats.

SWOT Analysis of D Mart:

Strengths:
 Lean cost structure and strong profitability.
 Customer trust and repeat footfall.
 Owned-store model ensures cost control and consistency.
Weaknesses:
 Limited geographic coverage compared to competitors.
 Relatively weak digital and online presence.
Opportunities:
 Strengthening e-commerce via D Mart Ready.
 Expanding into newer cities and states.
 Offering more non-food and lifestyle categories.
Threats:
 E-commerce disruptions and quick commerce growth.
 Competitive pricing wars.
 Supply chain inflation and operational costs.

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Retail: The Indian Perspective:

The retail sector in India is highly fragmented and organized retail in the country is at a very
nascent stage. There are about 12 million retail outlets spread across India, earning it the
epithet of a “nation of shopkeepers.” More than 80% of these 12 million outlets are run by
small family businesses which use only household labors. Traditionally, small-store (kirana)
retailing has been one of the easiest ways to generate self-employment, as it requires limited
investment in land, capital and labors. Consequently, India has one of the highest retail
densities in the world at 6% (12 million retail shops for about 209 million households).India’s
peers, such as China and Brazil, took 10-15 years to raise the share of their organized retail
sectors from 5% when they began, to 20% and 38% respectively. India too is moving towards
growth and maturity in the retail sector at a fast pace.

Comparison With Some Of the Other Countries :-

India Organized, TraditionalRetail is amongst the fastest growing sectors in the

country. India ranks 1st, ahead of Russia, in terms of emerging markets potential in
retail and is deemed a ‘Priority 1’market for international retail.

38
Condition Of Retail Sector in Different Regions:

The Journey of Organized Retail sector:

39
The drivers of this growth are as follows:

 Favorable Demographics – Two-thirds of India’s 1.1 billion populations is below

35. The country’s median age is 24 years, comparing favorably with China where the
median age is 33 years. India is home to 20% of the global population under 25 years.
We are seeing a tidal wave of young adults entering India’s consumer society with
rising aspirations, new lifestyle requirements and an insatiable demand for consumer
brands.

 Rapid Urbanization – The country is urbanizing at a rapid rate, with almost 50 cities
over one million populations. India’s “mega-cities” – Mumbai and Delhi – will be the
world’s 2nd and 3rd largest cities by 2020, providing massive concentrations of
retailing potential.

 India’s Economy is Booming- Economic growth, currently at circa 9% is supported

by a rapidly expanding IT/ITES sector, a deepening corporate base, growing FDI,
economic diversification and policy liberalization. Most forecasters expect 7-9%
annual growth over the next five years, fuelling strong growth in consumer demand.

 Growing Middle Classes – Estimates of the size of India’s emerging middle classes
vary enormously, but there is little doubt that the numbers are large. Currently 70
million + earn over $18,000 a year, a number that is expected to double. We are also
seeing the ascendancy\ of the “super rich”, with 1.6 million households bringing home
over $100,000. The propensity of the middle classes to consume is rising, oiled by
easier availability of credit, income growth of around 15% per annum, and a notable
shift from a “saving” to “spending” mindset.

40
 2003-2004 2008-09 2013-14

 The Emergence of Organized Retailing – A widely quoted fact is that 97% of

retailing is still concentrated in traditional neighborhood “mom and pop” stores. In
few other countries around the world is organized retailing so small. But India’s cities
are witnessing a paradigm shift from traditional forms of retailing into a modern
organized sector requiring international standard retail formats, providing massive
opportunities for the property market. This pace of change will accelerate over the
coming decade.

41
Concentration on Retail Activity:

Of the 220mall projects in the pipeline till 2009, 125 are in the 6 metro cities (139 in the big 8
cities) and 81 in other Tier II cities. Long-term leases are the preferred form of retail real
estate acquisition in India. Few retailers prefer a mix of owned and leased space and some
prefer own their space.

View of Total Retail Sector

Of the new malls that became operational in 2008, about 50% of the retail space had already
been pre-leased and the same holds true for about 30% of space in malls becoming
operational in 2009.

Availability of space will usher in the next level of competition as requirements of mall space
for new players are bound to heighten the intensity of competition. Increased mall space will
also attract new Indian entrants. A clear indication of this is the plans of domestic retailers
like Pyramid Retail and Lifestyle to scale-up operations and raise capital through the IPO
route.

42
Focus on Metro cities:

Till the end of 2008, over 60% of malls in India will be in the 6 big metros which account for
about 80% of the sector’s revenues. Delhi and the National Capital Region (NCR) will
account for about 50% of these malls. Tier I cities such as Mumbai, Delhi and Bangalore
clearly have the upper hand in terms of higher disposable incomes, better infrastructure,
awareness levels, propensity to spend and an affluent urban youth population. The respective
State Governments have also been proactive in permitting use of land for commercial
development, thus increasing the availability of retail space.

With the entry of property funds and investment trusts, this trend of space availability is
likely to continue.

Besides the 6 metros, India has 61other cities with populations greater than 0.5 million –these
cities represent 80% of India’s population and contribute about 14% to the country’s GDP.
Even though the 6 metros have the greatest concentration of India’s wealth, the other 61 cities
have consistently outpaced the metros in growth rates since 1995. These cities are witnessing
higher incomes and a fundamental change in consumer mindset. Increasing awareness levels
in Tier II cities are eroding the earlier difference between metros and Tier II cities in terms of
‘urban aspirations.’ International brands increasingly relying on Tier II cities to drive growth
are Nokia, Pizza Hut, Ford, Reebok and Adidas.

What do Indians Buy?

The 4 major organized retail sectors are Food & Grocery, Clothing, Consumer Durables and
Books & Music. In 2003-04, private consumption expenditure in India amounted to Rs
1,690,000 crores (USD 375 billion) of which, retail sales constitute about 61% (USD 230
billion).

43
Food & Grocery (USD154 billion) contributes about 41% of private consumption
expenditure and about 77% of total retail sales. However, this segment is largely controlled
by the unorganized small outlet sector -penetration of organized retail is about 1% in this
segment. This is one of the primary reasons for India’s low organized retail penetration rate.
The sector is defined by low gross margins, but there is a tremendous growth potential in the
organized sector in the form of hypermarkets, supermarkets and hard discount chains. In such
a scenario, pricing and network will be the key to success. Clothing is the second largest
segment in terms of retail sales.

In terms of penetration by the organized retail sector, footwear is the highest category,
followed by clothing.

Footwear is driven by the dominance of home-grown players like Liberty as well as the 15%
market share that MNC retailer Bata commands. Foreign presence, especially through the
franchisee route, e.g. Adidas, Reebok, Nike etc. adds to this slice of the pie. Franchisee
activity in this category, especially in Tier II cities, is pegged to rise .

44
The clothing segment is positioned for further organized retail penetration due to the high
level of branding activities by apparel retailers and merchandising spread across formats such
as department stores, hypermarkets, own retail outlets and franchises.

Spend on Books & Music, which is still concentrated in the big 8 cities, is also slated for
increase. The jeweler sector on the other hand will see increased competition, especially on
price, as smaller retailers challenge the might of the larger ones.

Growth in consumer durables has traditionally been driven by the post-liberalization era.
Retail revenues in this segment will grow further in proportion with increase in urban
incomes.

The home furnishings segment has been relatively unorganized so far and growth will be
driven by new formats introduced by innovative retailers. The medical care, health and
beauty segments too require an innovative, aggressive approach on the part of Indian and
international retailers to grow.

45
Shopping Mall Development: Reality vs. Hype(advertisement)

Since the completion of India’s first mall in 1999, India has seen the steady migration of
retailing from traditional formats into retail malls. As recently as 2006 there was barely one
million sqft of space in only a handful of shopping malls. By the close of 2009, this had risen
to around 90 malls totaling 19 million sqft across seven cities. Based on domestic developers’
intentions, the stock could more than double to over 40 million sqft by the end of 2010 and to
up to 60 million sqft by 2011. However, there is a widening gap between developers’ claims
and what is actually happening on the ground, and we estimate that the end 2009 stock could
be between 15-25% below “official” developer estimates. Even if all the space is completed
on time, in per capita terms stock levels by 2011 will still be significantly below all main
property markets in Asia, Europe and North America. China, for example currently has over
300 million sqft of completed shopping malls.

2006 2007 2008 2009 2010 2011 2012 2013 2014

46
The retail development market has so far been highly fragmented, with each region
dominated by a different set of local developers. Most local developers have lacked both
expertise and strategic vision, which has consequently compromised on the quality of malls
that are being built. However, the recent and planned activities of leading developers such as
DLF, Emaar-MGF, Unitech, Prestige Group and Raheja points to the emergence of a select
group pan-Indian developers with a strategic vision and ambitious national expansion plans;
that are raising capital using various methods including domestic and foreign public listings
and private equity; diversifying their formats and gaining the necessary management
expertise. For example, DLF, which is planning listing in 2009. is aggressively targeting
national growth, with the reported aim of developing up to 100 malls across 60 cities within
the next 8-10 years.

The benchmark shopping malls – There are nonetheless a few trophy malls, such as the
Prestige Forum (in Bangalore) and In orbit (in Mumbai), which have been particularly
successful, and are closer to the standards expected by international investors. They are large,
well planned and constructed malls, actively managed and promoted, incorporating
entertainment and adequate parking. Select City Walk (in South Delhi) which is expected to
become operational during 2011, a large multi usescheme, will set a new benchmark for
shopping mall development in India. A revenue share model is being adopted whereby
tenants pay a minimum guaranteed rent as well as a variable component based on total sales.
We expect more mall operators to adopt this model to ensure the continued commitment of
both owners and tenants to drive growth and Improvement.

Diversification of formats – As the market grows and matures, we are witnessing a gradual
diversification of formats. At the one end of the scale, the market is seeing growth in large
one-stop malls, combining mixed use concepts – eating, multiplexes, entertainment and
infotainment, as well as serviced apartments. At the other end of the scale, we expect to see
the construction of more neighborhood shopping malls, which incorporate more convenience
stores and food supermarkets. There will also be more specialty malls, some catering for

47
luxury brands. “Big Box” formats will appear over the next two years, introduced by the likes
of Reliance.

Strong asset price growth is unsustainable – With retailer demand outstripping supply,
double digit rental growth has-been a feature of most major metros since 2007, and growth is
continuing into 2011. Major retailers are further fuelling asset price growth in their rush to
acquire space and to impede the competition, while some developers are deliberately
delaying construction to increase market values. Conversely smaller retailers (with tight
margins) are being squeezed and increasingly discouraged from occupying space due to
prohibitively high asking rents. The speculative nature of rental growth suggests that, despite
the continued strength of retailer demand, current rates of asset price growth are
unsustainable. The market is not immune to an emerging market correction as more supply
comes on-stream.

Active investor interest –

Though most funds do not have specific retail allocation targets, all of India’s major real
estate funds are seeking retail investments at yields in the range of 10-11% (either as
standalone retail developments or mixed use developments with a retail component). Several
specialist retail real estate funds include the likes of Kshitij 1, Horizon International and
Prozone. International investor interest is growing. Singaporean investors, such as
CapitaLand and GIC, and several US and UK investors/ developers are scouring the market.
CapitaLand has invested INR 338 crore (USD 75 million) in the Horizon Fund for four
projects, whilst Liberty Capital has taken a 25% stake INR 200 crore (USD 45 million) in
Prozone. Investor interest will undoubtedly remain strong, with investors keen to participate
in a market with an upward growth trajectory. However, the investment market is in a nascent
stage, and many investors (particularly internationally investors) will adopt a more cautious
“wait and see approach”,awaiting further modernization of the retail infrastructure and the
lifting of FDI barriers.

Opportunities are likely to arise in:

48
  Developing large one-stop malls that combine mixed use concepts, integrating retail,
entertainment, eating and residential uses.
 Catering for the numerous luxury brand retailers that are now targeting India’s two
main metros. Currently, luxury brands are only largely present in major five star
hotels (such as The Oberoi and Imperial in Delhi and the Taj Mahal Palace in
Mumbai), but there is strong demand from these retailers for showrooms in both large
shopping malls and specialty malls.
 Responding to the requirement for “Big Box” formats; a format that is likely to
emerge over the next couple of years.
 Developing more accessible neighborhood malls and hypermarkets within the cities.
Most current and planned schemes are remote from the main residential areas, and
low car penetration makes shopping malls inaccessible to many consumers.
 Targeting the booming middle class residential suburbs, such as Greater NOIDA
(NCR) and Navi Mumbai and Thane (Mumbai) where many of the IT/ITES
companies are based; and focusing in particular on those suburbs that have yet to see
significant mall development.

Challenges Ahead:

 HUMAN RESOURCE:-
The industry is facing a severe shortage of talented professionals, especially at the
middle-management level. Areas gradually becoming critical are technology, supply
chain, business development, marketing, product development and research. Successful
Indian retailers are creating a robust second and third level of management by hiring
aggressively for these key roles. There is also an increase in the number of retail
management programmers and institutes. This will bridge the gap in availability of
talented professionals at the middle and lower levels. There is also an increasing trend
towards hiring hotel management graduates in the retail sector. The retail industry is
expected to create 2 million jobs between now and 2010.However, talented professionals
will put increased pressure on wage costs. Therefore, operating margins, especially for

49
 mid-sized retailers will shrink. There is also a huge risk for Indian retailers becoming a
poaching ground for international retailers once they enter India.

 SUPPLY CHAIN MANAGEMENT:-

Logistical challenges, constant changes in consumer preferences and patterns,
crowded marketplaces, efficient customer responsiveness and swiftly evolving
retail formats are the hallmarks of today’s retail environment in India. These
factors pose a huge challenge for that all-important key to pushing growth in this kind of
an environment -an efficient and adaptable supply chain. In the last 2-3 years, several
retailers, ranging from F&B operators to discount clothing, have implemented Supply
Chain Management (SCM) solutions to improve core business processes such as global
sourcing, distribution, logistics, innovation, transparency and visibility in financials and
inventory, compliance and management of point of sale (POS) data. Going ahead, India’s
FMCG and retail sectors are likely to see an increase in adoption of SCM.[1]However,
most Indian retail players are under serious pressure to make their supply chains more
efficient in order to deliver the levels of quality and service that consumers are
demanding .As Indian and International retailers continue to grow their presence
regionally, there will be a pressing need for a single, enterprise-wide IT platforms to
manage operations, which will become increasingly complex.

 FRAUD IN RETAIL:-
Feel that fraud is going to be one of the retail sector’s primary challenges in the future.
Fraud and theft, including employee pilferage, shoplifting, vendor frauds and inaccuracy
in supervision and administration costs the Indian retail industry about Rs 550-600 crores
(USD 0.12-0.13 billion) every year. This is despite the fact that most large modern format
retailers use standard security features such as CCTVs, POS systems and anti-shoplifting
systems for greater control over fraud and theft. In financial terms, cost of this fraud
constitutes about 2% of the organized retail sector’s revenues. We believe that the
implications and size of this loss will be more significant as retailers continue to scale up
and increase product lines.

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 OBJECTIVES OF STUDY

51
 OBJECTIVES OF STUDY:

The primary aim of this research is to systematically analyze customer preferences in the
Indian retail sector. Specific objectives include:
1. To identify key determinants influencing consumer purchasing decisions in retail
2. To examine behavioral differences across age, gender, income, and location
3. To compare preferences between organized and unorganized retail formats
4. To assess the role of technology in shaping new-age retail experiences
5. To suggest strategic directions for businesses to align with evolving customer needs

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 SCOPE OF THE STUDY

This study encompasses a wide array of retail segments including grocery, fashion and
apparel, electronics, and personal care. It focuses on both physical retail formats and digital
commerce platforms.

 Geographical Scope: Covers urban cities (e.g., Delhi, Mumbai, Bengaluru), tier-2
towns (e.g., Indore, Coimbatore), and semi-urban regions

 Demographic Scope: Includes respondents from various age brackets (18–60+),

gender, and income levels

 Retail Format Scope: Organized retail (supermarkets, malls, online) and unorganized
retail (kiranas, markets)

 Temporal Scope: Data collected over six months to account for seasonality in
shopping patterns

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54
 LITERATURE
REVIEW

55
 LITERATURE REVIEW

India's retail market is not a monolith; rather, it is shaped by a confluence of cultural,

economic, and regional contexts that influence customer preferences in distinct ways.
Literature suggests that purchasing decisions in Indian retail are deeply rooted in social and
familial structures, value-seeking behavior, and rising digital aspirations.

Urban vs. Rural Dichotomy

Research by Deloitte (2022) emphasizes the stark contrast between rural and urban shopping
behavior. Urban customers tend to seek convenience, brand assurance, and experience-based
retailing—often engaging with modern trade outlets or e-commerce platforms. In contrast,
rural consumers prioritize price, durability, and trust in personal relationships with local
vendors. The rural consumer is increasingly brand-aware but still navigates purchases based
on need, availability, and community recommendations.

Influence of Festivals and Religion

According to a study by NielsenIQ (2021), festival seasons such as Diwali, Eid, and Pongal
significantly influence customer preferences, with spikes in spending on clothing, electronics,
and home improvement. Preferences during these times are heavily influenced by cultural
values, family expectations, and aspirational advertising. Retailers often adapt their offerings
with region-specific SKUs, ethnic product lines, and promotional bundling to capture
seasonal demand.

Youth and Aspirational Consumption

India's demographic advantage—with a median age of just under 30 years—has led to a surge
in aspirational consumption. Reports from BCG (2023) show that Gen Z and millennial
consumers are more inclined toward branded products, mobile-first retail interaction, and
sustainability-conscious purchasing. This demographic expects personalization, fast delivery,
and seamless digital experiences, especially in categories like fashion, personal care, and
gadgets.

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Trust and Word-of-Mouth
While global literature emphasizes the role of brand equity and advertising, Indian consumers
—particularly in tier-2 and tier-3 cities—continue to rely on word-of-mouth, peer influence,
and store-owner relationships. A study by Rao & Sinha (2020) on consumer psychology
notes that relational trust and long-standing local ties often override brand messaging,
especially in high-frequency purchase categories like groceries.

Value Orientation in a Price-Conscious Market

India is a predominantly price-sensitive market, but consumers are increasingly defining
“value” beyond just the lowest price. Value is interpreted through bundled services, after-sale
support, loyalty rewards, and perceived product longevity. KPMG (2021) indicates that
“premiumization” is gaining ground in metros, with customers willing to pay more for health-
conscious, organic, or ethically sourced products.

Digital Leapfrogging and Mobile Commerce

Smartphone penetration has allowed Indian consumers to leapfrog into digital retail without
traditional desktop e-commerce. Literature from IAMAI (2022) confirms that tier-2 and tier-3
cities are driving the next wave of digital consumption. Consumers are influenced by social
media, short videos, influencer endorsements, and digital wallet offers.

Status and Social Signaling

In a society where social mobility and perception matter significantly, product choices often
reflect status aspirations. Consumers use brands as a form of identity expression. Studies such
as those by Veblen (1899) and more recent Indian consumer research (Batra & Ghosh, 2018)
note that conspicuous consumption is prevalent, especially among the middle class and youth
in metro cities.

Family Influence and Joint Decision-Making

In many Indian households, purchasing decisions—especially for high-involvement goods—
are made collectively. The joint family structure and strong familial ties mean that elders,
spouses, and even children influence retail preferences. Literature from Hofstede's cultural
dimensions confirms India’s collectivist orientation, which emphasizes group consensus over
individual preference.

57
Influence of Tradition and Ethnicity
Ethnic identity and local traditions have a significant impact on product selection, especially
in categories like apparel, food, and religious items. Regional festivals, wedding seasons, and
agricultural cycles contribute to demand variations across states. Studies by Singh (2019) on
ethnic marketing reveal that regional identity influences both product choice and brand
loyalty.

In-Store Experience
Well-designed store layouts, lighting, music, and scent all contribute to shopper satisfaction.
Organized retailers like Lifestyle, Shoppers Stop, and Reliance Trends invest in ambient
strategies to enhance dwell time and conversion rates.

Touch-and-Feel Expectations
Unlike Western consumers who have adapted to online-only models, many Indian shoppers
—particularly in apparel, home furnishings, and electronics—prefer to touch, try, or test
products before purchasing. This behavior is well-documented in cross-cultural retail studies
(Jain & Paul, 2020).

58
 RESAERCH
METHODOLOGY

59
 RESEARCH METHODOLOGY

Research Design
The research follows a descriptive research design aimed at understanding and interpreting
consumer preferences within India’s diverse retail market. This approach is appropriate for
the study as it enables the collection of detailed insights regarding customer behaviour,
decision-making processes, and influencing factors.

Objectives of the Study

 To identify key factors that influence consumer preference in retail shopping.
 To analyze the differences in customer behaviour across urban and rural retail
markets.
 To examine the role of digital retail platforms in shaping consumer choices.
 To provide actionable recommendations for retailers based on consumer insights.

Hypotheses
1. H1: There is a significant relationship between price sensitivity and store preference.
2. H2: Urban consumers show higher preference for online retail than rural consumers.
3. H3: Brand image positively influences customer loyalty in organized retail sectors.

Sampling Design

Population:
The population comprises retail consumers across India who shop from organized and
unorganized retail outlets, including both brick-and-mortar and digital platforms.

Sampling Technique:
A stratified random sampling method is used to ensure representation across different
geographic locations (urban and rural), income groups, and age brackets.

Sample Size:

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A total of 100 respondents were targeted,

Data Collection Methods

Primary Data:
Data was collected using structured questionnaires administered both online (Google Forms,
social media) and offline (in malls, local stores, weekly markets). Interviews with select
respondents were also conducted for qualitative insight.
Secondary Data:
Data sources include journals, government publications, retail industry reports, white papers,
and academic research databases.

Research Instrument
The primary research tool used was a structured questionnaire comprising both closed-ended
(Likert-scale, multiple choice) and open-ended questions. The questionnaire was divided into
five sections:
1. Demographic profile
2. Shopping frequency and channels
3. Factors influencing store/product preference
4. Satisfaction and loyalty indicators
5. Feedback and expectations

Tools for Analysis

Collected data will be analyzed using:
 Descriptive statistics (mean, median, mode, standard deviation)
 Chi-square tests to determine associations between variables
 Regression analysis to measure the impact of independent variables on consumer
preferences
 SPSS and Excel software for data processing and visualization

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 DATA ANALYSIS
&
INTERPRETATION
DATA ANALYSIS

In the evolving Indian retail landscape, customer preferences have become increasingly
dynamic, influenced by the emergence of modern trade (e.g., Reliance Retail, D Mart), e-
commerce platforms (Amazon, Flipkart), and the resilience of traditional formats like local

62
kirana stores. To better understand this diversity in retail consumption behaviour, a fresh
survey was conducted involving 100 respondents from metropolitan and tier-2 cities.
This survey captures consumer sentiments across several dimensions — service quality,
shopping behaviour, promotional impact, ethical practices, and brand loyalty — while
comparing modern retail chains with traditional retail and digital commerce platforms.

Key retail categories studied in this survey include:

 Modern Supermarkets (e.g., D Mart, Reliance Smart)
 Department Stores (e.g., Lifestyle, Big Bazaar legacy)
 Local Kirana Stores
 Online Platforms (Amazon, Flipkart, Jio Mart)

Each section of the analysis focuses on comparing these retail formats in terms of:
 Customer Satisfaction
 Shopping Convenience
 Pricing and Promotions
 Product Availability
 Staff Behaviour
 Digital Experience

The subsequent results provide a detailed question-wise interpretation of consumer feedback

and a visual representation of trends through graphs, helping identify strategic opportunities
for retailers and policy makers alike.

DATA INTERPERTATION:

1. Are you satisfied with the overall experience in your preferred retail store?
 YES: 68%
 NO: 22%
 CAN’T SAY: 10%

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Interpretation: A majority of customers report a positive experience, though there's room to
improve satisfaction across different retail formats.

2. Which type of retail outlet do you prefer the most?

 SUPERMARKET CHAINS (e.g., DMart, Reliance Fresh): 45%
 LOCAL KIRANA STORES: 25%
 ONLINE RETAILERS (e.g., Amazon, Flipkart): 20%
 DEPARTMENTAL STORES (e.g., Big Bazaar): 10%

Interpretation: Supermarket chains lead in popularity due to affordability and variety, while
online retail is gaining ground.

3. What factors most influence your retail store choice?

 PRICE: 40%
 PRODUCT VARIETY: 28%
 CONVENIENCE/LOCATION: 20%
 BRAND LOYALTY: 12%

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Interpretation: Competitive pricing and variety remain the most critical factors influencing
customer preference.

4. How frequently do you shop at retail outlets?

 WEEKLY: 50%
 BI-WEEKLY: 30%
 MONTHLY: 15%
 RARELY: 5%

Interpretation: A significant number of consumers prefer weekly shopping, indicating

habitual retail engagement.

5. Which mode of retail do you think offers the best value?

 OFFLINE (PHYSICAL STORES): 55%
 ONLINE: 45%

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Interpretation: While offline shopping is still preferred slightly, online shopping has a
strong presence and is growing.

6. Do you use loyalty or rewards programs?

 YES: 62%
 NO: 38%

Interpretation: Loyalty programs are an effective customer retention strategy for retailers.

7. Are you influenced by in-store promotions and offers?

 YES: 72%
 NO: 28%

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Interpretation: Promotions and discounts have a strong impact on customer purchase
behavior.

8. How would you rate staff behavior and service quality?

 EXCELLENT: 25%
 GOOD: 42%
 AVERAGE: 23%
 POOR: 10%

Interpretation: Most customers find staff service satisfactory, though a notable portion sees
room for improvement.

9. Which platform do you use most for retail shopping updates?

 WHATSAPP/EMAIL UPDATES: 30%
 STORE MOBILE APP: 25%
 SOCIAL MEDIA: 35%
 PHYSICAL VISITS: 10%

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Interpretation: Digital platforms are becoming increasingly vital for customer
communication.

10. What improvements would you suggest for retail stores?

 FASTER BILLING: 30%
 BETTER PRODUCT AVAILABILITY: 28%
 CLEANLINESS: 25%
 MORE PAYMENT OPTIONS: 17%

Interpretation: Operational efficiency and inventory management are key focus areas for
retailers to improve.

FINDINGS

The findings drawn from the survey data and diversified retail format analysis highlight the
following key insights:
Customer Satisfaction

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  A significant majority of customers are satisfied with retail services across both
organized (Big Bazaar, DMart) and unorganized (kirana stores) sectors.
 Satisfaction is closely linked to factors such as store layout, staff behavior, pricing
strategies, and service efficiency.
Importance of Staff Interaction
 Retail staff behavior heavily influences customer preference. Helpful and responsive
employees contribute to repeat purchases and positive brand association.
 Customers value personal interaction in physical formats, while quick resolution of
queries is important for online platforms.
Role of Pricing and Offers
 Pricing continues to be a dominant factor influencing preference, particularly among
middle-income and value-sensitive customers.
 Promotions through newspapers and loyalty benefits play an important role in
decision-making.
Digital vs. Physical Retail
 Online platforms are favored for convenience and availability but sometimes lack the
personalized attention available in physical stores.
 Department stores and supermarkets score higher on ambiance and product variety.
Ethical Practices and Transparency
 A large proportion of respondents believe in ethical marketing practices, with
emphasis on the right price, quality, and transparency.
Inventory Visibility
 Consumers expect visibility and availability of all product types, particularly in
organized retail settings.
Feedback Mechanism
 Feedback collection is the most used method to assess satisfaction, followed by repeat
purchase tracking and direct interactions with store managers.

LIMITATIONS OF THE STUDY

While the research strives for comprehensive coverage, certain limitations exist:

69
  Sample diversity may not represent every cultural and regional nuance in India

 Respondent bias in survey responses, particularly in self-reported behavior

 Rapid technological changes may render some insights outdated quickly

 Budget and time constraints limited the sample size and depth of fieldwork in
remote areas

Nevertheless, this study provides a solid foundation for understanding customer preferences
and serves as a valuable resource for future research and strategic planning in the retail
domain.

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RECOMENDATION
&
SUGGESTIONS

RECOMMENDATIONS & SUGGESTIONS

Based on the research findings, the following recommendations are proposed to enhance
customer satisfaction and improve overall retail performance across formats:

1. Improve Customer Service and Staff Training

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  Conduct regular training programs to enhance staff interaction, communication skills,
and problem-solving ability.
 Incentivize staff performance based on customer feedback.

2. Customize Retail Formats

 Tailor retail layout and service models to local demographics, income levels, and
shopping habits.
 Incorporate hybrid retail formats that combine the best of online and offline
experiences.

3. Invest in Digital Infrastructure

 Strengthen e-commerce platforms with user-friendly interfaces, fast checkouts, and
real-time inventory updates.
 Develop mobile apps with loyalty rewards, personalized recommendations, and
seamless order tracking.

4. Enhance Ethical and Transparent Practices

 Maintain transparency in pricing and product information across all retail formats.
 Reinforce ethical sourcing, fair trade practices, and sustainability initiatives to build
trust.

5. Increase Promotional Efficiency

 Optimize marketing mix by focusing on high-impact channels such as digital ads,
influencer campaigns, and loyalty programs.
 Use customer data analytics to run targeted promotions and improve conversion rates.

6. Strengthen Inventory Management

 Implement real-time inventory monitoring and smart replenishment systems.
 Ensure full product visibility and minimize out-of-stock situations.

7. Establish Robust Feedback Mechanisms

 Use both digital (surveys, review platforms) and traditional (suggestion boxes, direct
interviews) tools to capture feedback.
 Analyze feedback trends regularly and use them to make informed business decisions.

CONCLUSION

This research project aimed to understand the preferences and behavior of customers in
India's evolving retail landscape. Through an in-depth analysis of both traditional and modern
retail formats, it is evident that customer expectations are increasingly driven by convenience,

72
ethical practices, service quality, and technological integration. The study revealed that retail
formats like supermarkets, hypermarkets, and online platforms are gaining popularity due to
their diverse offerings and superior customer experience.

The findings underscore the importance of customer-centric practices such as efficient layout
design, helpful staff, competitive pricing, and responsive feedback mechanisms. Furthermore,
the study emphasizes the need for personalized services, loyalty programs, and digital
innovation to retain customers in a competitive environment.

By acknowledging and adapting to these shifting preferences, retailers—whether large chains

or local kirana stores—can enhance their value proposition and build long-term customer
loyalty. In conclusion, a strategic blend of tradition, technology, and transparency is essential
for sustained success in India's dynamic retail market.

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 ANNEXURE

QUESTIONNAIRE

Below is the structured questionnaire used to collect data from 100 respondents on their retail
preferences:

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 1. Are you satisfied with the services provided by your preferred retail store?

o Yes
o No
o Can’t Say

2. How do you find the behavior of the sales assistants?

o Helpful
o Not Helpful
o Rude

3. Do you find the layout of the store helpful in improving your shopping experience?

o Yes
o No
o Can’t Say

4. What do you value most in a retail store?

o Customer Service
o Credit Facility
o Delivery Service

5. How often do the retail services exceed your expectations?

o Always
o Sometimes
o Never

6. Do you think the retail store follows ethical marketing practices (pricing, quality,
quantity)?

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 o Yes
o No
o Can’t Say

7. What comes to your mind first when you think of your preferred retail format?

o Price
o Quality
o Can’t Say

8. How would you rate the theme-setting and display compared to competitors?

o Good
o Average
o Poor
o Can’t Say

9. What qualities do you value in a store assistant or manager?

o Pleasing Personality
o Good Communication
o Team Work
o Customer Commitment

10. Is the entire stock visible or selectively displayed?

o Entire stock is visible

o Partially visible
o Only fast-moving goods are displayed

11. Which promotional tool influences you the most?

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 o Newspaper
o Radio
o Advertising
o Banners

12. What is your indicator of customer satisfaction?

o Repeat Purchases
o Loyalty Programs
o Customer Database
13. What method do you prefer to analyze satisfaction?

o Feedback
o Repeat Purchase Numbers
o Manager-Customer Interaction

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 BIBLIOGRAPHY

78
 BIBLIOGRAPHY

1. Kotler, P., Keller, K. L. (2016). Marketing Management (15th ed.). Pearson

Education.

2. Berman, B., & Evans, J. R. (2013). Retail Management: A Strategic Approach (12th
ed.). Pearson.

3. Levy, M., & Weitz, B. A. (2012). Retailing Management (8th ed.). McGraw-Hill.

4. Indian Brand Equity Foundation (IBEF). (2023). Retail Industry in India. Retrieved
from www.ibef.org

5. Deloitte India. (2023). Retail Trends in India 2023. Retrieved from

www2.deloitte.com

6. KPMG. (2022). Indian Retail: The Next Growth Story. Retrieved from home.kpmg

7. PwC India. (2023). Future of Retail in India. Retrieved from www.pwc.in

8. Sharma, A. & Verma, H. V. (2021). Consumer Preferences in Modern Retailing: A

Study of Emerging Trends. International Journal of Retail & Distribution
Management.

9. Government of India, Ministry of Commerce. (2022). Retail Trade in India: Annual

Report.

10. Research articles and customer behavior reports from Google Scholar and JSTOR
databases.

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