a function of aggressive intellect in promotion … · 1. to assess the level of emotional maturity...

Volume 1, Number 2, October-December’ 2012 ISSN (P):2279-0934, (O):2279-0942

International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 110 | P a g e

A FUNCTION OF AGGRESSIVE INTELLECT IN PROMOTION TACTICS FORMULATION

WITH SPECIAL REFERENCE TO FMCG DILIGENCE

S. Prakash1

ABSTRACT

Competitive intelligence is the art of defining, gathering, analyzing, and distributing intelligence about products, customers,

competitors, individuals, concepts, information, ideas or data needed to support executives and managers in making strategic

decisions for an organization. It includes a broad array from government intelligence to market intelligence to business

intelligence. This competitive intelligence would be of immense use in the industry where the durability of the goods is little.

Since, the durability is low; the consumers tend to buy the goods quite often. It is essential that the manufacturers of such

goods should concentrate on competitive intelligence in order to retain the existing consumers and to augment new consumers.

Hence, the fast moving consumer goods industry is deemed to be an industry where competitive intelligence is to be applied in

a broad manner.

KEYWORDS

Promotion, FMCG, Diligence, Competitive, Intelligence, Consumer etc.

INTRODUCTION

Fast Moving Consumer Goods also known as Consumer Packaged Goods (CPG), are products that have a quick turnover and

relatively low cost. Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers

and so the cumulative profit on such products can be large. Examples of FMCG generally include a wide range of frequently

purchased consumer products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well

as other non-durables such as glassware, bulbs, batteries, paper products and plastic goods. FMCG may also include

pharmaceuticals, consumer electronics, packaged food products and drinks, although these are often categorized separately. Fast

moving consumer goods are the goods which are consumed widely and have short term durability. It includes tooth paste, brush,

talcum powder, toilet soap, detergent soap, shampoo, etc. These goods are bought and consumed repeatedly. Consumer behavior

tends to change according to taste and fashion. In this context, retaining the existing consumer base is a challenging assignment

for marketing personnel. Everyday more new manufacturers enter into market with more attractive promotional offers.

RATIONALE OF STUDY

The marketing of fast moving consumer goods has become a biggest challenge and requires more dynamic and vibrant personnel.

These personnel need to work constantly to formulate innovative strategies every now and then. It is more prudent and

economical to retain the existing consumers than to augment new consumers. The entire marketing department should keep on

monitoring every change / move in the market - entrance of new brands, entrance of substitute products, price variations, changes

in tastes and preferences of the consumers, their requirements and expectations, change in the internal as well as external

environment, etc. In this context, it is deemed necessary that a comprehensive study on the competitive intelligence and marketing

strategy formulation with special reference to FMCG industry is to be undertaken.

OBJECTIVES OF STUDY

The present study is undertaken with the main objective of analyzing the role of competitive intelligence in marketing strategy

formulation with special reference to FMCG industry. However, this comprehensive objective has been divided into sub

objectives as stated below:

1. To assess the level of emotional maturity of the marketing executives in the FMCG industry.

2. To compare the perception of emotionally matured and immature marketing executives in the FMCG industry

3. To analyze the impact of soft skills training and yoga training on the sample respondents and

4. To offer suggestions to make the marketing executives emotionally matured.

RESEARCH METHODOLOGY

The research methodology provides a clear picture of the research processes and enables the researcher to carry out the research

smoothly. It includes the data source, sampling technique, tools used for data collection, tools used for data analysis, etc.

Data Sources

The data required for a research can be classified as primary data and secondary data. The primary data are the first hand

information obtained from the sample respondents. It serves the sole purpose of research. The secondary data are the data

1Professor, Department of MBA, S.N.S. College of Technology, Tamilnadu, India, [email protected]

mailto:[email protected]



obtained by previous researchers with different objectives. It may or may not be published. The present study is mainly based on

the primary data.

Sampling Technique

The sampling technique refers to procedure adopted for the selection of samples. In present study, convenient random sampling

technique has been adopted for the selection of sample respondents. A sample of 200 respondents have been selected among the

marketing executives of stockists / super stockists of leading FMCG manufacturers including Hindustan Unilever Limited, Procter

& Gamble Hygiene & Health Care Limited, Colgate Palmolive (India) Limited, Dabur India Limited, Nestle India Limited and

Glaxo SmithKline Consumer Health Care Limited.

Tools Used for Data Collection

A structured questionnaire was administered among the sample respondents for data collection. The questionnaire was designed

with utmost care to include all the questions, the answers of which are relevant for the present study. The questions are arranged

in the same sequence in order to obtain the correct and complete data required for the present study.

Tools Used for Data Analysis

The data obtained from the sample respondents through questionnaire have been grouped and tabulated wherever necessary. The

percentage analysis has been used for understanding the demographic profile of the sample respondents. The Emotional Maturity

Index (EMI) has been constructed and used for assessing the level of emotional maturity of the sample respondents. The

coefficient of correlation and analysis of variance have been applied to compare the performance of emotionally matured and

immature respondents.

LIMITATIONS OF STUDY

The present study is subject to the following limitations:

1. Due to the time constraint the sample size of the present study has been confined to 200 only.

2. Due to the economic constraint of researcher, scope of the study has been confined to Erode District of Tamil Nadu only.

RESULTS AND DISCUSSION

In the present study, an attempt has been made to measure the emotionally maturity of the sales executives by constructing an

Emotional Maturity Index. In this index, the level of fear, angry, happy and sorrow of the respondents have been obtained by 5

point scale. These levels are Very High, High, Neutral, Low and Very Low. Of these emotions, happy is considered as a positive

indicator and the other three emotions are considered as negative indicators. Hence, descending scores have been given for the

various level of happiness like 5 for Very High, 4 for High, 3 for Neutral, 2 for Low and 1 for Very Low. In regard to the negative

indicators, the scores have been assigned in ascending order, i.e., 1 for Very High, 2 for High, 3 for Neutral, 4 for Low and 5 for

Very Low. For each of the selected emotions, five situations have been given to the respondents which could probably cause the

emotions. For example, Fear of failure to achieve the target, Fear of being demoted, Fear of losing the job, Fear of cut in

increment and Fear of ill health. Thus, the sample respondents are given 20 statements to respond. Hence, the minimum score that

a respondent could obtain in this EMI is 20 and the maximum score that could be obtained by a respondent is 100. The average

EMI score is taken as 60 and those who have obtained scores 60 and above have been considered as matured and the respondents

whose scores were less than 60 have been regarded as immature.

It is observed that out of 200 respondents, 68.5 per cent of them have scored less than 60 EMI score and the remaining 31.5 per

cent of them have scored 60 or above. These 31.5 per cent of the respondents were taken as matured and the majority of 68.5 per

cent of them were taken as immature.

The level of performance of the sample respondents have been assessed as low level, medium level and high level. Those who

have achieved up to 50 per cent of the targets during the last three years were considered as low level performed, the level of

performance between 50 per cent and 100 per cent was taken as medium performance and the level of performance greater than or

equal to 100 per cent was considered as high level performance.

It is understood from the analysis that 41 per cent of the respondents had high level of performance during the last three years

30.5 per cent of the respondents had medium level of performance and the remaining 28.5 per cent of the respondents had low

level of performance.

In order to examine the significance of relationship between the performance of matured respondents and immature respondents,

analysis of variance has been performed by framing and testing the null hypothesis, there is no significant difference between the

performance of emotionally matured and immature respondents. The results showed that the null hypothesis was rejected and

there was a significant difference between the performance of emotionally matured and immature respondents. Thus it is

concluded that the performance of emotionally matured respondents has been better than that of emotionally immature

respondents.



The impact of emotional immaturity of the respondents on the consumer base been examined by comparing the loss of consumer

base in respect of emotionally matured and immature respondents. The results evinced that the marketing executives who were

immature emotionally have lost their existing consumer base more than the emotionally matured executives. With a view to make

the marketing executives, the companies have been offering soft skill and yoga training to them. An attempt has been made in this

study to test the effectiveness or otherwise of such training programmes. In this regard, the level of performance of the

respondents before attending the training and after attending the training has been compared with the help of paired t test. It is

observed that after attending the soft skill and yoga training, the respondents have become emotionally matured and their

performances have also been improved to a considerable extent. Thus it can be stated that the soft skill and yoga training have

significant impact on the emotional maturity of the marketing executives.

SUGGESTIONS

It is suggested that the employers should make the marketing executives realize the impact of emotional maturity. The marketing

executives should be given adequate training to manage their emotions. They should be trained in such a way that they have to

express their emotions in the right quantum and at the right time, be it a positive emotion or negative emotion. The soft skill and

yoga training shall be offered to the marketing executives frequently.

EXPECTED CONTRIBUTION

It is expected that the suggestions put forth as above would enhance the contribution of competitive intelligence of the marketing

personnel in order to formulate marketing strategies in the FMCG industry.

REFERENCES

1. Sharma, Radha, (2002). 360 Degree Feedback, Competency Mapping & Assessment Centers for Personal and Business

Development, Tata McGraw-Hill, pp. 239.

2. Business Case Study: “Acquiring E-Competency: A Success Story”.

3. (2010). Accounting Education: An International Journal, June, Volume: 19, Number: 3, pp. 279–300.

4. Moorthi, Y.L.R., “Creative Marketing for IT Firms: Academic Perspective”, IIM Bangalore.

5. Sing, M. Specer, and Tharuma, Rajah, “The Indian CEOs, Competencies for Success, Key To Outstanding Indian

Corporate Leadership”.

6. Alderman, John Starred, “New Business Court will Cement Cities Global Reputations”, Lord Mayor of City of London.

7. Willam, Rothwell, “Mapping Your Putting New Compete”.

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LOCATION INTELLIGENCE: A NEW STRATEGIC TOOL TO INDIAN RETAILING

Binkey Srivastava2 Ashish Srivastava3

ABSTRACT

To gain competitive advantage and stay ahead in today’s highly competitive retail environment, retailers need to know their

customers with respect to their outlets, monitor the performance, assess the impact of competition, drill down into a trade area

to identify customers and choose new store locations strategically. Location Intelligence with its ability to manage, display,

and analyze business information spatially, is emerging as a powerful tool to help retailers achieve all the above. Location

Intelligence is the ability to take organizational data and apply location to allow effective decision-making. The organizational

data comes from the Business Intelligent system (BI) and the location Business Intelligent (BI), (spatial) support is derived

from the Geographic Information System (GIS). BI systems Decision Making, handle the ‘who’, ‘what’ and ‘when’. GIS is a

powerful location tool, which enables the Geographic Information System (GIS), analysis of the Retail location analysis deals

with the collection, analysis and Location Intelligence, dissemination of spatially referenced information, which is ideally

handled by location Retail Location, intelligent systems. Location Intelligence allows easy visualization of the geographically

Spatial, influenced behaviors, activities, trends and processes, communicate the same for improved Strategic tool analysis and

decision making. The focus of this paper is to understand the use of location intelligence system on retail location decisions.

KEYWORDS

Business Intelligence, Geographic Information System, Location Intelligence, Retail, Indian Retailing, Location

Planning etc.

INTRODUCTION

“Location, location, location and location” is the most crucial decision for the retailer to stay ahead of the competition, to enter in

to a new market, for the simple reason that location cannot be duplicated but all the other components such as merchandise,

service, people, visuals, atmospherics can be duplicated. In this competitive edge to gain competitive advantage, location decision

is the most significant and crucial component in retailing.

The plethora of problems which a retail owners use to face are demographic, sales and competitive analysis, finding the best

locations for new retail stores, creating effective marketing campaigns, scheduling and route deliveries, and providing better

customer care and information. Earlier business data for these problems were presented as pie charts or simple histograms or as

columnar reports of spreadsheets. But does this accessible data could significantly improve their companies’ efficiency,

effectiveness, and profitability. The answer is obviously “no”! More than 80% of all data maintained by organizations around the

world has a location component. (Source: Business Week Research Services, 2007). This component can include customer

address, traffic patterns, warehouse location, delivery routes, administration boundary, sales region, competitor locations and store

locations. Thus the traditional graphical methods of business data presentation cannot handle the location component.

The misconception for Location intelligence is that invaluable organizational intelligence, drawn from both the organization’s and

customers’ locations that can improve the understanding of the organization’s operating environment, and so be used to increase

revenues, reduce costs, and improve profits. Rather Location Intelligence is a new technology tool that can address various

information needs of the decision maker. It not only allow companies to observe and collect data describing even the hidden,

business-relevant features of their location, but also to probe and deploy this data in a way that greatly enhances understanding of

the impact of location and, ultimately, enables organizations to dramatically reduce costs, increase revenues, and boost profits.

Such tools thus help to translate the notational “location inference” into a much more powerful form of location-based knowledge

called “location intelligence.”

It takes the organizational data and applies location to allow effective decision-making. The organizational data comes from the

Business Intelligent system (BI) and the location (spatial) support is derived from the Geographic Information System (GIS). The

retail analysts with the help of GIS quantify the spatial attributes and add into the analytical mix. It allows decision makers to

update their spatial data more efficiently through visual connection among customers, suppliers, and competitors. GIS are a

powerful tool for data storage, analysis and visualization, with the ability to combine information and mapping systems as

analytical and modeling tools. GIS takes care of the location aspect of the data as up to eighty percent of organizational data is

spatial component. Therefore to get maximum value from the ever-increasing volumes of data, firms need to make use of the

location element of the data to gain deeper business insight in order to improve competitiveness and business performance leading

to competitive advantage over the competitors.

India is the hottest Retail destination. It was ranked as the fourth most attractive retail destination among 30 emerging markets by

the Annual Global Retail Development Index (GRDI) for two years consecutively (AT Kearney report, 2011, figure 1). India

retail industry of organized and unorganized sectors is one of the fastest growing industries in India. According to a report by

global consultancy and research firm with the increase in disposable incomes, expansion of stores and favorable economic factors,

2Professor, Krishna Institute of Engineering & Technology, Uttar Pradesh, India, [email protected] 3Regional Sales Manager in Paharpur Cooling Towers Ltd, New Delhi, India, [email protected]





India's retail sector is expected to grow about US$ 900 billion by 2014, It is further expected to reach US$ 1.3 trillion by the year

2018 at a CAGR (Compounded Annual Growth Rate) of 10 percent.

Table-1: The 2011 Global Retail Development IndexTM

Sources: Authors Compilation.

Though over the universe GIS is a budding powerful location intelligence tool but retailers in India are still not using GIS much.

Although, the usage of GIS-based technologies is currently emerging in India at a fast pace as more and more users realize its

benefits. For today’s competitive markets, GIS-based applications can be tremendously used in sectors as retail (Financial Express

Report, 2004). In the US and Europe, retailers started using GIS in the late ‘90s. Robins (1993) revealed that early retail users of

GIS have focused on marketing applications and on-site selection. There are several instances of global use of GIS. Miracle Food

Mart of Canada implemented a system to replace hand-drawn maps that were used to assess customer distribution and to look at

market share on a store-by-store basis. Dayton Hudson's Target stores have used GIS as a strategic tool enabling it to determine

which areas are not being properly served (Robins, 1993). Major national chains such as Best Buy used GIS technology to assist

their advertising, merchandising, human resources, distribution and other departments. In the US, Starbucks, Blockbuster, Sears,

and many other businesses used census data and GIS software to help them understand what types of people buy their products

and services, and how to better market to these consumers ( Madigan, 1997, Duffy, 1999, Taneja, 1999). McDonald’s uses a GIS

system to overlay demographic information on maps to help identify promising new store sites (Alan, 2004).

WHAT IS LOCATION INTELLIGENCE (LI)?

Location Intelligence is the capacity to organize and understand complex events through the use of geographic relationships

inherent in all business data. The organizations can gain critical insights, make better decisions and optimize important processes

and applications by combining geographic and location related data with other business data (like employees, customers,

inventory, vendors, and facilities). Location Intelligence offers organizations opportunities to streamline their business processes



and customer relationships to improve performance and results. In short it is the ability to take organizational data and apply

location to empower effective decision making. It draws on a variety of data source as geographic information systems (GIS),

aerial maps, and demographic information along with the organization’s own databases. For major business decisions Location

Intelligence offers additional perspective, based on geographic relationships.

THE BI COMPONENT OF LOCATION INTELLIGENCE

Business Intelligence (Gartner, 2006) as the use of information that enables organizations to best decide, measure, manage and

optimize performance to achieve efficiency and financial benefits. Business Intelligence (BI) is defined as the processes,

technologies and tools needed to turn data into information, information into knowledge, knowledge into plans that drive

profitable business action – Data Warehouse Institute. Business graphics, typically charts, which are common components in any

reports, are used in BI systems to handle and present attribute data. However BI systems fall short of handling data which have

location component inherent in them like customer, competitor location, sales territories etc., since eighty percent of an

organization’s data can be associated with a geographic location (spatial component) (Franklin 1992). BI tools excel at extracting

the “Who”, “What” and “When” aspect of the data but are lost when it comes to the “Where” of the data. BI systems are lost and

cannot handle business queries as:

Where things are as customer, outlets, stores etc.?

Where is the nearby competitor, resource point, maintenance crew?

What quantities of market size, sales by area, outlets?

How to reach thereby shortest route and what are the alternatives routes?

How many stores can this market support?

Where should I open new outlet?

Can I consolidate outlet without hurting customer service?

The above questions illustrate how spatial considerations are part of many business problems. Thus adding maps to BI brings a

new kind of competitive advantage not only by allowing decisions to be based on more data and more kinds of data but also by

communicating the resulting information in a way that is easily understood, since people are visually oriented.

THE GIS COMPONENT OF LOCATION INTELLIGENCE

A GIS is a computer system for managing spatial data. The term geographic implies that location of the data items are known in

terms of geographic co-ordinates (Latitude and Longitude). The term information of GIS implies that the data in a GIS are

organized to yield useful knowledge, often as colored maps and images, statistical graphics, tables and various onscreen responses

to interactive queries. The term system implies that a GIS is made up from several interrelated and linked components with

different functions. Thus GIS has functional capabilities for data capture, input, manipulation, transformation, visualization,

combination, query, analysis, modeling and output. However from a decision makers perspective “GIS is a managerial decision

making tool for decision making, involving a spatial dimension as one of the variable among a set of variables considered for

decision making”. GIS technology brings together common database operations such as query and statistical analysis with the

unique visualization and geographic analysis benefits offered by maps. These abilities distinguish GIS from other information

systems and make it valuable for use in a wide range of applications to solve problems and plan ahead by looking at data in a way

that is quickly understood and easily shared.

LOCATION INTELLIGENCE FOR RETAIL LOCATION PLANNING

Retailers make few decisions that are as permanent and potentially unforgiving as selecting store location (Arthur Blank: Former

president Home Depot). Selecting the right location for the store is the most important decision a retailer has to make simply

because location cannot be duplicated by competitors. Operating a store is a long term commitment, hence it has to be in the right

place or else the retailer has to risk reducing profitability over a period of many years. In today’s competitive marketplace there

are several location issues that the retailers must consider such as:

How many stores can the market support?

Which are the best locations for their products?

Should the stores be on the high street, in a shopping centre or part of an out-of-town complex?

Is current and future demand in the area enough to support the store?

Knowing all the risks, retailers continually need to open stores, manage their existing locations, adapt to new market conditions

and react to new consumer demand. A poorly located store can impact dramatically on the retailer’s bottom-line profitability. So

how do retailers decide where to locate stores?

Location Intelligence is the tool that provides retailer the answer to several issues and problems. Location Intelligence exploits the

location based information hidden in the business data to identify relationships between different data and use this to drive new

decisions. Retail location analysis activity within the retail business deals with the collection, analysis and dissemination of

spatially referenced information. LI helps in the catchments area analysis to identify the trade area and helps the retailers

understand the trading area of their stores i.e. area from where the customers come, types of customers in terms of age, gender,

occupation, family size, religion, caste etc., number of house holds in different income group like high income group (HIG)

middle income group (MIG) and low income group (LIG). Thus when location data is combined with available real estate data,



demographic data, data on existing customers, and information on prospective customers, the result- Location Intelligence can

help identify a site location with maximum revenue potential. In retail, where a store is located tends to affect sales performance

more than any other factor. Great managers, great marketing programs, and even great products often have far less effect on sales

than does a premium location. As a result, sophisticated location intelligence tools can help retail owners to:

Determine optimal store locations to open a new store.

Performing drive-time analysis over street network.

Analyzing customer movement and whether customers moving from a particular location.

Identifying and reaching potential customers.

Quantify and avoid cannibalization among stores.

Optimizing transit routes for fastest transportation between stores and warehouses.

How many potential customers live within 10 miles or 10 minutes drive from the store? (Refer Figure 2)

Precisely match media and marketing messages to targeted households.

Identify under-performing stores and determine which to close and which to renovate?

Where a new store should be located in order to minimize the impact it has on the current location of stores?

Finding new markets.

What is the market share and penetration?

How many competitors are located within the market area of the store?

Investigate that whether the stores should be on the high street, in a shopping mall or part of an out-of town complex.

Examining where exactly the high-income consumer group is located, which retail outlet has maximum customers traffic,

which locality has maximum no of double income families.

Change analysis by finding new trends created by changes in the city like new shopping malls, café strips or major roads.

Matching distribution network match with consumer location.

Measure the impact of new store openings, relocations, remodels, closures, and competitive acquisitions.

LI provides answers to all the above questions in the form of market mapping, catchments area identification, consumer profiling

and identification, mapping of key performance variables, and the complex modeling of an entire retail network.

Figure-2: Market Area Analysis by Location Intelligent,

Identifying Customer within 2, 6 and 10 Mins Drive from the Store


ADVANTAGES OF LOCATIONS INTELLIGENCE

A recent research report defines the benefit of LI in the following way:

“Integration of Location (GIS) and standard BI platforms brings LI to greater usefulness by making it available as an option to

anyone who is familiar with the more readily-available BI solutions, and without the need to master new concepts or a new user

interface. Spatial relationships also greatly enhance many of the details commonly reported by BI systems, providing an added

level of analysis that is useful in viewing and assessing trends (and existing data types).”

Location Intelligence provides the ability to visualize spatial or geographic data on maps. This style of visualization differs from

standard table or grid reports and charts in that it associates business data with a particular location and allows to easily observing

patterns, which are otherwise hidden within a dataset.

Used Where Traditional Tables/Grids, Graphs and Other Analysis Tools are Not Descriptive (Refer Figure3).

Tables / grids and charts only tell a part of the story. Map visualizations are the only way to quickly relate BI data with locations

that are meaningful to business and to detect geographic trends such as customer clusters.



Figure-3: Location Intelligence for Better Understanding


Indicate Where Data Is Not Located In Addition To Where It Is Located

Geographic visualizations are complete. This means that when looking at a map decision maker sees it in its entirety. For

example, when looking at a map of Uttar Pradesh state in India the entire Uttar Pradesh state is laid out before the user. Thus

when overlaying data onto a map not only do one see where they are on the map but where they are not located. This provides an

instant insight into the potential markets that the business may be missing out on.

Faster Answers to Queries

To gain competitive advantage over competitors decision makers should have the right kind of information. Information is of

value in the business environment if it reaches the right decision maker, at the right time and in an easily understood format. LI

has the ability to locate more data and information faster by tying many internal and external data sets together through location.

Improving Data Quality and Credibility

Due to the voluminous data stored by companies on almost every conceivable aspect of their business operations, it may be

inevitable that errors sometimes occur which degrades the usefulness and credibility of information. With various data types being

used, some of these errors may be difficult or even impossible to detect in tabular database formats. Often it is only when this data

is pulled into a GIS through a process like geo-coding and mapped or spatially analyzed that some of these errors can be detected

and corrected.

CONCLUSIONS

Retailers location decision are said to be the most fundamental decisions because it facilitates getting the merchandise to the

ultimate consumer at the right place, at the right time, in the right quantities, and at the right price. Further, location decisions are

capital intensive and strategically important for the retailer because they help in developing sustainable competitive advantage

over the competitors simply because location cannot be duplicated by competitors. With eighty percent of the business of data

containing location element a simple pie chart or a bar graph and other typical graphics simply fall short of handling and

supporting spatial data and fail to support better decision making. Innovative visualization technologies of Location Intelligence

are required to effectively synthesize data into information and present the content in an understanding manner to the end user.

Thus people are visually oriented, when decision maker sees something on a map as opposed to a spread sheet or a pie chart, they

understand the relationship between different pieces of business data better, resulting in effective decision making. Data

visualization evolves into a means of transforming data quickly into information, information into knowledge, knowledge into

strategies for profitable business activities (see fig.4).

Figure-4: LI for Competitive Advantage




LI thus integrates demographic information and other spatial data to an organization’s existing business data, making maps truly

interactive, allowing the users to drill down to data associated with any given location. What is the average income in areas where

the highest performing stores are located? Where are the competitors stores located in relation to the one that is being planned?

Where will my customers come from? Such information is valuable when planning new store locations and making other strategic

decisions about the store, customers, merchandise and warehouse. For instance McDonald’s uses LI to overlay demographic

information on maps to help identify promising new store sites (Alan, 2004). Indian retailers will be surely benefited from

Location intelligence tool for making strategic decision. Indian retailers would not prefer to be left behind in using technology as

LI, as Indian retail business sector is expected to reach US$ 1.3 trillion by the year 2018.

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*****


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http://www.esri.com/

http://www.esri.com/library/bestpractices/retail-business.pdf

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CUSTOMER PATRONAGE BEHAVIOUR IN SHOPPING MALL: A REVIEW ANALYSIS

Suman Yadav4 Sadaf Siraj5 Richa Arora6

ABSTRACT

The retailing sector in India has undergone significant transformation in the past 10 years. Retailing is gradually inching its

way towards becoming the next boom industry. Organized retailing is changing the whole concept of shopping in terms of

consumer buying behavior. Shopping today is much more than just buying – it is an experience itself. The retailing business in

India has witnessed huge growth due to emergence of supermarkets as well as centrally air-conditioned malls. Consumers are

the major beneficiaries of the retail boom. The Indian consumer is changing rapidly. They now have a choice of wide range of

products, quality, variety and prices. Consumer are now showing preference for shopping malls, which enable them to shop

variety of products’ under one roof and offer shopping experience in term of ambience and entertainment.

This research reviews the existing literature, which is discussed with respect to costumer patronage behavior towards a mall,

mall attributes that attract customers to a mall and the impact of demographic, psychographics profile of shopper segment,

shopper motives towards mall visit. This paper highlights the research done in last two decades on customer patronage

behavior in shopping mall and identifies areas for future research with India as focus.

KEYWORDS

Shopping, Mall, Patronage, Behavior, Motives, Shopper, Entertainment etc.

INTRODUCTION

An understanding of patronage behavior is a critical issue for retail managers because it enables them to identify and target those

consumers who are most likely to purchase. Reflecting this managerial need, one research stream has focused on explaining retail

patronage with respect to various elements (e.g., store, frequency of visit, store choice). The practical and conceptual importance

of this topic has been underscored by the substantial volume of studies published in leading journals. Decades of research efforts

have produced a rich body of empirical data associated with a variety of research designs and study contexts. However, a review

of the literature reveals marked differences in both the direction and the magnitude of the effects for the same predictor variables

across studies.

In fact, malls play a significant role in the life of the consumers’ thereby influencing their lifestyles (Terblanche, 1999). Malls are

not only a centre for shopping but have also become a centre for social and recreational activities (Ng, 2003). Stores, food courts,

restaurants, cinemas, children’s play areas, interactive entertainment, social use areas, relaxation spaces and promotional areas

form major components of any mall (Terblanche, 1999). With the growth of the large number of malls, shoppers tend to be more

selective in making choices. They like to patronize malls that are more attractive and have a wide variety of stores and

merchandise matching their preferences. Thus, it is essential for mall managers to know which attributes in the malls attract the

shoppers and to what extent (Wong et al., 2001).

Mall attributes that are attractive for one shopper may not necessarily be attractive for others. With the growth of various malls

and millions of square feet of retail space, patronage motives were among the most heavily examined topics in retailing (Yavas,

2003). However, just a few empirical studies have analyzed the motivational aspects of consumers that explain their attraction to

shopping malls (e.g. Bodkin and Lord, 1997; Ruiz, 1999; Dennis et al., 2001; Nicholls, et al., 2000, 2002). The starting point was

that some shoppers were attracted to malls due to purely economic motives. And the most important reasons for selecting malls

were convenience of a specific store in the mall, services and prices. Nicholls et al. (2000) found that Chilean consumers’ mall

visits were driven, primarily, by purchasing factors while consumers in the USA visited their mall for more diverse reasons,

largely revolving around entertainment.

Bloch et al. (1994) examined the effect of mall physical environment on consumers’ emotional states and found that malls were

viewed by consumers as a place not only for shopping, but also for other activities, such as entertainment. Other studies have

pointed out the importance of the shopping centre image as a critical determinant of consumer patronage decisions (Finn and

Louviere, 1996; Sit et al., 2003). Terblanche (1999) studied the impact of four dimensions on shopping centre patronage, namely,

functional, recreational, socializing, and convenience. These were based on the perceived benefits that consumers enjoy when

visiting a super regional shopping centre. He found that recreation appears to be the major benefit pursued by shoppers that

patronize a super regional shopping centre. Demographic and psychographic characteristics of mall patrons were also described

(Bellenger et al., 1977; Bloch et al., 1994; Roy, 1994). Martin and Turley (2004) studied the attitudes of the young segment (19-

25 years old) towards malls, and factors motivating consumption. They found that they were motivated to patronage more likely

objectively rather than socially.

4Ph.D Research scholar, Department of Management, Jamia Hamdard University, New Delhi India, [email protected] 5Assistant Professor, Department of Management, Jamia Hamdard University New Delhi, India, [email protected] 6Ph.D Research scholar, Department of Management, Jamia Hamdard University, New Delhi, India, [email protected]






Previously mentioned research identified attractiveness factors of shopping malls assuming that consumers are homogenous in

their choice of malls. This assumption contradicts the fact that consumers are different, and therefore, it is necessary to segment

the market (Suarez et al., 2004). In this concern, Suarez et al. (2004) revealed the existence of different segments of consumers in

their shopping centre choice. The importance of adopting a segmentation strategy in shopping mall management was highlighted

by Frasquet et al. (2001). They demonstrated that the determinant factors of preference for a mall differ by consumer segment and

concluded that modeling shopping centre choice produces better results when it is preceded by a segmentation of the sample than

when it is applied to the non-segmented market. Over the last three decades, there has been a substantial amount of research on

market segmentation for consumer goods and services. However, segmentation research in retailing was very rare and

concentrated on individual stores, not on the mall itself.

In India literature on customer patronage behavior in shopping mall is scant and researchers have partially investigated the

customer patronage role in the shopping mall. Although Indian have always preserved its cultural values but still Indian culture

has undergone metamorphosis resulting in to change in family structure, increase in number of working couples, delegation of

authority etc. Hence the main objective of current study is to strengthen the understanding the impact of mall attributes, mall

management attributes and individual attributes on customer patronage behavior in shopping mall.

OBJECTIVES OF STUDY

Identify the different Mall models & their impact on customer patronage behavior.

Study the different mall management strategies & their effect on customer patronage behavior.

Establish a relationship between the demographic and psychographic profile of shoppers & its impact on customer

patronage.

GRAVITY PULL MODEL AND CUSTOMER PATRONAGE BEHAVIOR

The first malls were built in the late 1940,s. During the innovation phase of shopping centre a few developers were aware of the

success of the new centre trade. They began constructing malls on similar lines. During the innovation phase customer patronage

behavior was influenced by gravity pull model. This model variable is still working. Gravity pull model consisted of the factors

that influenced the consumer patronage towards mall based on accessibility, parking, retail tenant mix, product range,

merchandise value, sales personnel, orientation, infrastructure facilities, trading hour and size of the retail centre.

Accessibility

This factor concerns with the convenience of the customers to visit the place evaluating the distance between their point of origin

and point of destination. It also concerns with how easily and conveniently the destination can be reached taking into

consideration all the obstacles on the way. The customer patronage behavior is influenced by the easy accessibility of the malls.

(Baker, 2002, Van der waerden et al.,1998, Arentze and Timmermans, 2001, Teller, 2008, El-Adly et al., 2007).

Retail Tenant Mix

A good tenant mix is the one which encourages the interchange of the customer’s activities and retail activities. Composition and

compatibility are the two factors that give shape to the tenant mix making it more attractive and this attraction influences the

customer patronage behavior to a greater extent.(Bloch et al.1994, Brown,1991, Arentze and timmermans,2001, Teller,2008,

Abghari et. al., 2011 ).

Product Range, Merchandise Value and Sales Personnel

The kind of products and the services offered the price and value of the products and services and the type of the sales personnel

in a retail centre have great effect and influence of the tenant mix on them. The quality of the product, its low prices, variety of

discounts and special offers makes a mall an attractive place for the customers to visit and this in turn affects the customer

patronage behavior.( Baker et al., 2002; Bearden, 1977; Anselmson, 2006; Ruiz et al., 2004).

Orientation and Infrastructure Facilities

Orientation helps to search, locate and access different stores within the mall with an ease. The infrastructure facilities accounts

for the proper seating arrangement, baby sitting and diaper changing stations, changing rooms, cleanliness in the malls that are

designed to reduce the shopping efforts of the customers. There exists a significant relationship between the service quality and

repurchase and customer patronage behavior (Belleger, 1977; Baker et al., 2002; Teller, 2008). A Recent study by (Abghari et. al.,

2011) showed that orientation and infrastructure facilities did not influences satisfaction, patronage and retention proneness.

Parking

People visiting malls come by their own conveyance, thus they should be provided with the proper parking facilities. Sufficient

space should be provided to reduce the parking time. The type of parking facilities provided to the customers at the type of

shopping at the mall silently influences the customer patronage behavior.( Baker et al. 2002; Van der waerden et al., 1998).



However study by Voster.C and Borgers.A,(2011) parking fee decrease the attractiveness of the mall. Parking impacts on

satisfaction rather than retention proneness and patronage intention (Abghari et. al., 2011).

Atmospheric

Atmospheric clues including external (e.g. architectural style, layout, design and image) internal clues (e.g. flooring, lighting,

color, music) are very essential part of patronage behavior. Researcher have largely explored how atmospheric attribute such as

music (Milliman, 1982; Morin et al., 2007; Yalch and Spangenberg, 2000), color (Bellizzi and hite, 1992), odour/scent (Hirsch,

1995; Michon et. al. 2005; Spangenberg et al, 1996), lighting (Areni and Kim, 1994) crowding (Machleit et al.,2000) effect

consumer behavior in store environment.

Malls with strong images have higher sales turnover, catchment area and rental income than those with poorer images (Dennis et

al., 2002; Finn and Louviere, 1996; Severin et al., 2001). General layout’ is one of the attributes most associated with spending

(Dennis et al., 2002).

Recent researches showed that atmospheric attribute influenced only desire to stay but not patronage intension (Abghari, 2011;

Teller et al., 2008). Various researches noted atmospheric clues highly correlated with the consumer buying behavior and spend

more money in store (Wakefield and Baker, 1998; Baker, 2002; Severin et al., 2001).

OUT OF TOWN SHOPPING MODEL AND PATRONAGE BEHAVIOR

Retailing has changed dramatically along with other pattern of life in the 20th century and the demands of consumer for more and

different styles of shopping can be shown by experience throughout the world. Particularly in the United States there was an

increasing demand for a clean, attractive, pleasant environment in which to shop and one which can be reached by the easiest

possible journey. People are unlikely to go to places where there is poor access and little car parking. People would not shop in

the centers that are dull and uninteresting. Changing consumer need and taste have lead to the development of out of town

shopping malls and complex which incorporate leisure and recreational activities. The out-of-town shopping retail patronage is

motivated by “who” (demographic and lifestyle), “what” (specific products), “when” (situational specific), “why” (store variety,

entertainment and merchandise assortments).

Demographic and Lifestyle

A study of out-of-town shopping patterns in 422 households residing in a small Pennsylvania city was conducted by Herrmann

and Beik (1968) who note that out shoppers tended to have higher incomes, out-of-town charge accounts and did not have

younger children in the household. They also found that occupation and presence of local charge accounts did not have an impact

on out shopping. A survey of 234 consumers conducted in ten rural communities by Lumpkin et al. (1986) and Smith (1999)

found that out shoppers tended not to shop at several stores in search of lower prices, had slightly lower levels of loyalty to local

merchants with favorable attitudes towards large city out shopping and were more likely to be single, better educated and have

higher incomes. Individual with higher need for uniqueness prefer shopping in regional shopping mall than nearest shopping mall

(Warren et al. 1995).

Specific Products

These researches showed significant because it demonstrated the importance of the product or “what” in Determining retail

patronage behavior (Darden and Perreault, 1976) interviewed 278 suburban housewives from 16 suburban areas of Athens, and

found that product-specific out shoppers are typically younger; out shoppers for big-ticket home products. Out-of-town purchases

in semi durable goods (books, records, tapes, bedding, linens, clothes, shoes, women’s coats, curtains and drapes, rugs and

carpets, men’s suits and women’s fancy dresses) that are less bulky, easy to carry and did not involve major monetary outlays.

Products that were more likely to be purchased in-town included major appliances, automobiles, furniture and jewellery; each of

these categories has a significant service element attached to either the sale or post-sale maintenance (Papadopoulos (1980),

Thompson (1971), Hermann et al.(1968), Marjanen(1995). Lee and Yong (1998) conducted a study in Singapore which showed

that Housing and development Board was established and it provided retail facilities related to the daily and essential needs of its

residents. The findings confirmed that the residents mainly purchased food and grocery items from neighborhood centers but the

highly ordered goods were purchased from the central shopping area.

Situational Specific

Very little amount of work is done taking into consideration the when aspect of the purchase behavior. Papadopoulos (1980)

Referring to a news stated that a certain number of consumers make use of the special trains for shoppers to visit to the

neighboring places for shopping during Christmas period. Smith (1999) carried out a study city vs. over a three year period of

time to identify the out shopping pattern and result showed that city household did shopping in suburban in winter holidays.

Store Variety and Entertainment

Maronick, T. J. (2007) carried out a longitudinal study at Baltimore residential area in 1982, 1992 and 2005 and depicted the

reduction in the non food shopping items at a harbor place and inner harbor place after the initial excitement followed by the



opening of harbor place in 1980 but a substantial and stable percentage of residents visited the harbor and inner harbor place for

dining and entertainment purpose.

Sim et al. (2007) studied 1283 shoppers at suburban shopping centre in Singapore and determined that the physical size and

having Cineplex’s, variety of stores attract shoppers to visit malls and stay longer. Eckman and Yan (2009) showed life centre are

different from traditional shopping mall and central district centre because life centre provide consumers safer and clean

environment, more convenient store hour, sufficient parking, attractive price, fashionable merchandise and better entertainment

option.

ENTERTAINMENT MODEL AND PATRONAGE BEHAVIOR

Now a day we find large number of malls and because of this the market has become highly competitive, thus recreational aspect

of retailing is increasingly becoming a powerful competitive tool. Pleasurable and entertaining shopping experiences introduced

by (Jones, 1999).Cinemas, restaurants, live performances, art exhibitions, themed areas, and fitness spaces offer visitors the

opportunity to spend free time, take a walk, meet friends, and relax with their families in a safe and weatherproof environment.

shopping motives suggest that a person may also go shopping when he needs attention, wants to be with peers, desires to meet

people with similar interests, feels a need to exercise, or has leisure time’ (Tauber, 1972). People usually visit malls keeping two

things in mind: hedonic motive and utility motive. Hedonic motive includes leisure activities, games, hobbies, creativity, aesthetic

appreciation, cinemas, etc. All these things involve the expenditure of the time of the consumers on the activities through which

they gain pleasurable experience and hence influence the customer patronage behavior. Hedonic reason people go shopping:

Researchers like Arnold and Reynolds (2003), have focused on the hedonic motivations of shopping. In their research they have

recognized six dimensions of hedonic shopping motivations: adventure, gratification, role, value, social, and idea shopping.

People usually visit malls keeping two things in mind: hedonic motive and utility motive. Hedonic motive includes leisure

activities, games, hobbies, creativity, aesthetic appreciation, cinemas, etc. All these things involve the expenditure of the time of

the consumers on the activities through which they gain pleasurable experience and hence influence the customer patronage

behavior.

Shim et al. (2010) supporting flow theory for entertainment shopping. Study suggested that mall patronage intension directly

related to the motive, freedom of choice, perception of challenge and skills need for entertainment activity. These four effect

mood state which put impact on entertainment activity, shopping and patronage intension. Howard (2007) and Bloch et al.(1991)

noted that leisure shopping influenced by individual shopping motive, characteristics and social setting and nature of destination.

Muhammad F. Ibrahim et al. (2002) showed transport also plays an important role for entertainment shopping and future intension

patronage. Sit et al (2003) introduced food, special events are the factor which attract shopper to visit mall also developed two

shopper segment- pro entertainment and anti entertainment. Wakefield et al. (1998) noted patronage intention and desire to stay in

mall influenced by excitement, environment, variety of store and involvement with shopping. Arpita Khare (2011) identifies

entertainment attribute influenced Indian consumers towards mall and their positive impact on mall foot fall.

Adventure

The adventure refers to the sheer excitement and adventure in the shopping by experiencing the feeling of being in the other world

of exciting sights, smells and sounds. Quality of the shopping experience positively correlated with the customer patronage

behavior (Tabuer, 1972; Dawson et al., 1990; Babin et al., 1994). Babin et al. (2009) study showed mall differentiation from

competitor positively affects hedonic motives and customer attachment to the mall.

Gratification

This category shows that one visits malls in order to relieve stress, to alleviate the negative mood and to feel special and to forget

about their problems (Tabuer, 1972; Bloch et al., 1994; Lee, Moschis, & Mathur, 2001).

Social

Mall acts as a gathering site for people and allows them to celebrate reunion with friends and family (Tabuer, 1972; Westbrook

and Black, 1985; Reynolds and Beatty 1999).

Idea

People visit mall to keep up with the latest trends and changing fashion and enjoy browsing, collecting information about different

things. They are not much interested in the purchase of the product but enjoy exploring new things by window shopping (Tabuer,

1972; Bloch, Ridgway, and Sherrell, 1989; Bloch, Sherrell and Ridgway, 1986).

Value

Researches also suggested that utilitarian need have great impact on mall visit. Wide selection of product, different price range,

promotions, discounts minimize perceived cost (Bearden, 1977; Severin et al., 2001). Malls are so spacious and provided product

under one roof which enhance their value oriented visit.(Miceli et al., 1998, McDonald, 1999; Berry et al., 2002).



IMPACT ON MALL MANAGEMENT STRATEGIES ON PATRONAGE

Shopping mall management has long struggled to identify factors affecting mall patronage (e.g., Burns, 1992; Kenney, 2000;

Kirkup and Rafiq, 1994). From the perspective of shopping mall management, a mall that can generate more traffic is one that can

demand higher lease price from its store tenants because more mall traffic usually translates into more store traffic and sales. Mall

management built a image of the mall which influence the mall patronage. (Chebat, C.J. et al, 2010). Mall management built mall

image and generate footfall by recommending many strategies such as:

Price based promotional events include group wide sales, gift with purchase, discounts (e.g., Kim, et al., 2004; Parsons,

2003; Talpade and Haynes, 1997). This priced based promotional activity encouraging visits (Folkes and Wheat, 1995;

Smith and Sinha, 2000) and also increased spending behavior of the customer in mall. (Kendrick, 1998; Parson, 2003).

Entertainment based promotional events include general entertainment like stage show, art exhibition, fashion show,

musicians. This type of promotion held in a very pleading environment or festival season because they created a degree

of excitement and excellence of shopping experience (Wakefield and Baker, 1998). Entertainment based activity

positively related with the visit (Wakefield and Baker, 1998; Parson, 2003).

Public Relation oriented promotional events include School and community display, painting competition and social

campaigns (Alexander and Muhlebach, 1992). This type of promotion used to build mall image in the society rather

than sale and visit drivers.

Store based promotional events include discounts, fashion show, school holiday and other temporary activity within the

store that create memorable experience for the participating customers(Parson,2003; Sit et al., 2003). This type of

events provides additional value to the customer shopping experience and positive image towards the store (Close et al.,

2009).

Mall Group promotional events (Multiple malls managed by a single organization) these promotional activities include shopping

carnivals. Malls within a location participate in these events especially for limited period, such as school holiday, festival season.

Mall group promotional events motive is increased sale in the malls and also create pleasure able shopping experience for

customers. Mall group promotional activities generating sales for the malls (Parson, 2004 and Ballantine, 2004).

DEMOGRAPHIC AND PSYCHOGRAPHIC FACTORS IMPACTS ON CUSTOMER PATRONAGE BEHAVIOR

Generation Factor

Mall developers are ensuring that they have proper portfolio for their target customer. Retailers and shopping centre developers

know that mall patronage is determined by consumer satisfaction with the mall shopping experience (Machleit et. al., 2005).

Generation segment refers to a consumer segment that uses an individual’s coming-of-age year as a proxy to postulate the value

priorities developed through life experiences during the formative years, which may persist throughout that person’s lifetime

(Ingelhart, 1997; Strauss and Howe, 1991; Thau and Heflin, 1997; Morgan and Levy, 2002; Mitchell, 2003).

Generation y (20-30 years)

Consumers who were born between 1981 and 1995 Generation Y consumer attending college either employed full or part time

jobs. Generation Y consumers are free spending and enjoying recreational activities. Their patronage influenced by recreational

activity and social activity. They visit mall for watching movie, eating out, getting with friends, browsing, thrill seeking, escapism

and keep touch with new trends.(Khare.A,2011, Martin et al.,2004, Sit et al., 2003, Ravichandran et al.,2009) and positive attitude

towards mall factors hygienic and entertainment(Jackson et al.2011).

Generation x (30-40 years)

Shopper who were born between 1965 and 1980.Gentation X consumer are employed, self employed, professionals, house wives

and serious buyer. They are serious shopper, fulfilling duties towards family and enjoy weekend with their family so convenient

location, entertainment, variety of services and utility factors influenced their patronage. (Kim et al., 1995, Jackson et al., 2011,

Khare, 2011).

Baby Boomers (40-50 years)

Shopper who were born between 1946 and 1964.Convenient location, eating area, safe environments influenced their patronage

behavior (Khare. A,, 2011 and Kim et al., 1995).

Late Baby Boomers (50 and Above)

Shopper who were born between 1920 and 1945.They have less energy, much time and much disposal. Convenient location,

eating area, safe environment and services influenced their patronage (Khare. A., 2011, Kim et al. 1995, Strugnell et al. 2009).



Gender Factors

Previous research shows that males and females exhibit different shopping attitudes and behaviors (Darley and Smith, 1995;

Fischer and Arnold, 1994; Qualls, 1987). Males and females differ in many aspects of consumption, product choice and response

to advertising and product positioning (Zeithaml, 1988). Females are also more involved in the purchasing sequence, seek

information more actively before making purchases, and spend more time in stores than males do (Fischer and V. Arnold, 1994).

Married men’s involvement in shopping may be dependent on the wife’s work status, with husbands of working women being

more involved in shopping (Dolakia et al., 1994).

Research has shown that gender is a predictor of shopping activities while on vacation, with females more likely than males to

engage in shopping and browsing (Oh et al., 2004, Khare.A 2011), and females more likely than males to spend more and to

prefer different items as souvenirs than males (Lehto et al., 2004). Cleveland et al. (2003) show that when shopping for holiday

gifts, females make greater use than males of product-specific and environmental sources of information, whereas males make

greater use of salesperson assistance.

Income

Shopper income has a great influenced on their patronage and their shopping activity. Various research noted that lower income

shopper visited mall for recreational activity and higher income for (purchaser) utility (Bellenger et al., 1977, Dowson et al.,1990,

Sit et al., 2003 Babin et al.,(2009). Higher income shopper visit mall more, spend on food and non food items, have positive

attitude towards mall than lower income shopper (Joshi et al., 2010).

Psychographic Factors

Psychographic variables analyzed include shopping orientation, values and lifestyle. Lifestyle activities that form part of the AIO

(activities, interests, opinions) analysis may be defined as pattern on which consumers spend their time and money (Engel et al.,

1995). Shopping orientation assist us in understanding the consumers’ priorities and motives for shopping (Taubur, 1972). The

consensus of previous studies indicates that personal value, attitude, interest, opinion, and shopping orientation of a individual is

a valuable tool for understanding unique characteristics of the target market in formulating strategies (Hawkins et al., 2002;

Darden and Ashton, 1974). Researchers have also found a link between shopping orientation and patronage behavior and suggest

that the various shopping orientation groups have different expectations from the mall attributes (Homer and Khale, 1988, Shim

and Eastlick, 1998, Joshi et al., 2010).

Situational Factors

Situational factor which is very important (customer attribute) for customer patronage behavior and most ignored factor in the

literature review. Belk (1975) introduced situational factor in buying decision. Buying decision depends on situational factor like

Physical surrounding of store (Simonson and Winer, 1992; Babin and Babin, 2001; Stassen et al. 1999) Shopper mood (Babin and

Babin 2001; Curren and Harich, 1994). Nicholls et al., (2005) carried out a study and showed that nine situational factors out of

13 factor impact on buying decision.

Shopper Segment

Previously mentioned research identified different motivation, store attribute, choice to choose mall, store type and shopping

behavior based for shopper segment. Shopper segment according centre type (Reynolds et. al., 2002) mall attribute (El-adly, 2007,

Sit et al., 2003) motivation (Dawson et al., 1990, Reynolds et al., 2003, Nishank joshi, 2010) motivation and behavior ( Bloch,

1994, Howard et al., 2007). Activity (Ruiz, et al., 2004) shopping orientation .Two segmentation approaches have been introduced

in the marketing literature, a priori and cluster-based segmentation (also called post-hoc).

Priory segmentation has been subject to criticism in that it focuses on the external characteristics of consumers (e.g. sex, age and

social class) in describing the differences between segments’ behavior. These external characteristics are not necessary

determinants of buying behavior (Harrison, 1995).

A few researchers have used this approach in shopping centre segmentation. For example, Lee et al. (2005) studied shopping

centre factors that have an influence on shopping enjoyment of male segment. They found that “shopping-centre features”,

“ancillary facilities”, “value-added features” and “special events” are significant in affecting male shoppers’ enjoyment. Also,

Dennis et al. (2001) in a part of their study used different subsets of a priori segmentation pairs: male / female, higher / lower

socio-economic groups, higher / lower household income, older / younger and auto/public transport. However, the final pair was

based on post-hoc segmentation. They identified two groups, “service” and “shops” importance motivation, which were more

effective than conventional a priori segmentation bases in modeling spending behavior. Compared with a priori segmentation, the

post-hoc or cluster-based approach has obtained much attention in shopping mall segmentation. Using this approach, a

heterogeneous population is segmented on the basis of homogeneous responses from within the population. In this concern, Finn

and Louviere (1990) identified shopper segments based on differences in shopping mall consideration sets and investigated the

differences in mall choice parameters for these segments.

At the same line, (Nishank joshi, 2010) segmented shoppers in India on the basis of cluster analysis, into seven groups the “Mall

enthusiast” “Price conscious” “Traditionalist” “Disinterested shopper” “Aspiration” “Student shopper”. In India



(Singha.K.P,2003) also segmented shopper into two groups on the basis of shopping orientation “ fun shopper” and “work

shopper”. Mall attributes have been used by Reynolds et al. (2002) to segment malls into five segments namely enthusiasts, basic,

apathetic, destination and serious. Sit et al. (2003) used the mall image attributes to segment shoppers into six market segments

labeled as the “serious” shopper, the “entertainment” shopper, the “demanding” shopper, the “convenience” shopper, the

“apathetic” shopper, and the “service” shopper.

Regarding shoppers behavior in the mall, Bloch et al. (1994) concluded that consumers vary in the way they behave in the mall

and in perceived benefits bringing them to the shopping mall. Specifically, they recognized four mall inhabitant groups –mall

enthusiasts, traditionalists, grazers, and minimalists. Each group interacted with or consumed the mall habitat in a distinctive

manner. Similarly, Ruiz et al. (2004) used the activities that shoppers perform in the mall as a basis of segmentation. They

identified four segments, namely, recreational shoppers, full experience shoppers, traditional shoppers and mission shoppers.

CONCLUSIONS

Customer patronage behavior- Mall attributes, Shoppers motives, Individual factors (demographic & psychographic profile of

the shopper). The review of the customer patronage behavior shows The analysis of the extant literature throws light on three

categories of variables that affect the that customer patronage is affected by accessibility, tenant mix, services capes (architect, &

design of facility) & entertainment quotient of the mall. Although shopping motives may be a function of retail format, the impact

of cultural & social environment cannot be undermined, Most of the prior studies related to the cultural & social influence on

patronage behavior are US centric, not much work in this field has been done in India which provides an ample scope for research

considering the unique & complex characteristics of Indian culture.

Furthermore, although prior studies have dealt with mall attributes and entertainment as attractive variables for the choice of

mall but fewer studies have tried to establish a direct relationship between the entertainment factor & mall revenue

enhancement. Past researches have dealt with the impact of individuals’ social and economic condition on the patronage

behavior but not much emphasis has been given to situational variables affecting the same.

In addition to this not much work has been done in the area of mall management strategies and comparative analysis of the

different mall management strategies with respect to mall patronage. Very limited studies have been conducted in India taking

in to consideration all the factors mentioned above and till now no relationship have been established among all the above factors

in Indian market environment with customer patronage behavior.

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CHANGING DYNAMICS OF FAMILY DECISION MAKING IN HINTERLAND WITH

SPECIAL REFERENCE TO MEMBERS’ LIFE STAGE

Sadaf Siraj7

ABSTRACT

With about 69% of population living in the villages (Census, 2011) and generating nearly half of the national income, the rural

market is increasingly playing a very important and decisive role in the Indian marketing environment. These rural markets

exhibit linguistic, regional and cultural diversities and economic disparities, and hence, are considered to be more complex to

deal with than the urban markets.

From the survey of extant literature on family purchase behaviour it is clear that the researchers in India have focused more on

urban consumer, where as studies exploring the dimensions of purchase behaviour of rural consumer are few and far between.

To bridge the gap, this paper attempts to explore the dynamics of family purchase behaviour in the rural context by means of a

survey of 152 families from eight villages of Aligarh district (Uttar Pradesh, India).

The study empirically investigates the relative involvement of family members’ vis-à-vis life stage. The individual’s life stage

has been divided into pre-teens (12 years & below), teenage (13-19 years), early adulthood (20-30 years), middle adulthood

(31-40 years), late adulthood (41-60 years) and old age (61 years & onwards. (Erikson 1950, Levinson, 1978, Sheehy, 1995).

Its impact has been tested on in the purchase decision stages (idea initiation, information collection and final decision) for

specific products and as also product related sub-decisions (amount to be spent, when to purchase, what brand, type, size,

colour and quantity to purchase and from which dealer). Statistical tools like Kruskal-Wallis-H test have been employed to

analyse the data collected.

The findings of the study point towards a gradual shift from unilateral decision making to joint decision making process

marked by increased participation of youth & children. Also significant differences were observed in the involvement of

family members in purchase decision process depending upon the nature of the product, stages of the purchase decision

process, and the sub-decisions related to purchase. The findings of the study have an applied bias as they can be utilized by

marketers in deciding on strategies to be adopted in market segmentation based on lifestage and product positioning.

KEYWORDS

Family, Decision Making, Life Stages, Rural Consumer, Individualized Joint Families, Rural Buying Pattern,

Unilateral Decision-Making, Children, Decision Makers etc.

INTRODUCTION

The family is a complex and ever evolving core institution in many of the world's societies or nations. It exerts a major influence

on the consumption behaviour of its members. For a family to function as a cohesive unit, one or more family members must

carry out roles or tasks. The role of family members varies widely between countries and social classes (Kotler, 2003). The

purchase of a consumer durable product is an important occasion in Indian families (Kapoor, 2003). A large number of family and

social factors influence consumer purchase decision process (Gupta & Chundawat, 2002). They evolve from a consumer’s formal

and informal relationships with other people Understanding the distribution of consumer and decision maker roles within a family

is crucial to developing a family marketing plan. To develop this understanding, it is useful to put purchasers and consumers into

three categories, based on the number of people who share the role: one, some, and all.

Traditionally, unequal status relationship between males and females in the family was considered one of the key features of the

Indian society. The social norms prevalent in India emphasized seniority among family members and the dominant role of the

male (Khan, 2000). Such masculine cultures typically emphasize strongly differentiated sex roles (Hofstede, 1980; Brislin, 1993)

with husbands making more unilateral decisions than their counterparts in the developed nations.

In India, gradual changes are taking place in the cultural and sociological ethos, which have triggered changes in the purchase

process and consumption patterns of Indians (Gupta & Chundavat, 2002). Similar changes to a lesser extent have taken place in

the rural setup due to a shift from agriculture to non-agriculture activities (Bijapurkar, 2002) and emergence of ‘individualised

joint families’ (Kashyap, 2005b), increased literacy and media exposure. Earlier women and children as such had no role to play

in the decision making process, however, now due to the aforementioned reasons their level of participation has gone up (Pareek

,1999;, 2000; Khairoowala & Siddiqui, 2001; Lokhande, 2004; Nagaraja, 2004). Mishra & Dubey (2011) tried to examine the

extent to which the rural women of Koylanchal (Jharkhand, India) participated in decision making process. Women of Koylanchal

of low economic category were found to participate in more practices related to vegetable cultivation. women perform a variety of

tasks both in cultivation as well as marketing.

Thus, it is evident that gradual shift is taking place in the roles being played and the level of involvement of various family

members during the purchase of products and services. But, there is dearth of literature in the context of mechanics at work when

7Assistant Professor, Department of Management, Jamia Hamdard University New Delhi, India, [email protected]




these individuals are involved in the purchase process in their capacity as family members. The information concerning

involvement of family members during different stages of the decision making process and the various related sub-decisions in

the Indian context is in its nascent stage with even lesser work been done in the rural context.

Thus, we need to empirically verify their respective roles and levels of involvement during purchase decisions before conclusions

are drawn and the findings are used as inputs for formulating marketing strategies for the rural consumer considering the fact that

almost 68%% of Indian population lives in rural areas offers a cornucopia of opportunities to companies who venture to brave it.

This kind of study assumes a greater significance due to the simple fact that rural consumer is different from his urban counterpart

(Kashyap, 2000)

REVIEW OF LITERATURE

Since 1970 the interest of consumer researchers increased in examining the extent and nature of husband-wife influence in

purchase decisions after the pioneering work of Davis (1970, 1971, 1974, and 1976).Researchers have categorised household

decision making as husband dominated, wife dominated, syncratic (joint decision) and autonomic (individualised decisions)

(Herbst, 1952; Davis & Rigaux, 1974 and Lavin, 1985). According to Aronoff & Crano (1975) and Davis (1976) the marital role

influence was found to vary among families while Cunningham and Green (1974) found that relative roles of husband and wife in

purchase decisions change with the passage of time.

Historically, Indian society has long been male dominated, with women deferring to men and serving in subordinated positions

both in the home and in the work place but as the literacy rate is picking up, income level rising, and their being gradual but

steady transition from an agrarian to an industrial economy from traditional family to democratic family setup, the role of women

is changing and is further expected to change greatly.

The male (breadwinner) is no longer the sole authority in purchase decision making (Dobhal, 1999). In the context of role of

females in the urban settings, a gradual shift is discernable with more and more women taking up jobs and consequently

influencing the decision process (Khan, 2000), While Pareek (1999), Khairoowala & Siddiqui (2001), Lokhande (2004),

Nagaraja (2004) indicate the increasing influence of women in the buying process even in the rural context.

Increased attention is being given to children and their role in family decision making (Foxman et al., 1989; and McNeal 1998).

Lackman & Lanasa (1993) note that the influence of children in consumer decision making appear to be growing. Five studies

(Mehrotra & Torges, 1976; Jenkins, 1979; Nelson 1979; Roberts, Wortzel & Berkeley, 1981; and Darley & Lim, 1986) examined

the influence of all children living at home, not focusing on a specific age group while Kidsense—a study conducted by Walt

Disney Company with media investment management company GroupM (Mishra, 2006) classified three age bands as toothagers

(1- 4 yrs), toonagers (6-9 yrs.) and teenagers (10-12 yrs.). It pointed out that a four year old kid does not see the world like an

eight year old, hence the decision-making also differs. Vincent (2006) in his study found high level of brand awareness among the

children, their influence in the decision making process and independent decision making in case of FMCG’s. Another study by

Mishra (2006) found brand preference among children in the high involvement category including cars, computers and cell

phones etc. Kashyap (2005b) also indicated the influence of children in the urban settings. Suri & Singh (2003) found brand

awareness among the rural children.

Children have not been observed to have a large impact on instrumental decisions such as how much to spend (Kaur, 2003; Singh

and Kaur, 2004; Verma, 1982), but rather play a role while making expressive decisions such as color, model, brand, shape, and

time of purchase (Sen Gupta and Verma, 2000; Singh, 1992; Synovate, 2004) as validated in the West as well According to Kaur

& Singh (2006) while younger children clearly affect parental behavior and purchases, adolescents have full cognitive

development and an understanding of the economic concepts required for processing information and selection.Women's

autonomy in decision making is positively associated with their age, employment and number of living children. (Acharya et. al.

2010) Women from rural area and Terai region have less autonomy in decision making in all four types of outcome measure.

Western women are more likely to make decision in own health care, while they are less likely to purchase daily household needs.

Women's increased education is positively associated with autonomy in own health care decision making.

Veni & Vishwanath (2011) tried to find the role of children in family purchase decision in Hyderabad, in case of selected

products such as Household furniture , automobiles, personal computer, Household appliances, Breakfast cereals and in vacation

decisions. It was found children though not much but exhibits a considerable amount of influence in the house hold purchases and

with the increase in their age so does their influence increases.

According to Singhla & Kumar (2011) in personal care products where the brand is not visible at the time of consumption

(Spaghetti), and where the product is transformed considerably by the time it is consumed, the female spouse partner is an

autonomous buyer for the joint consumption. However, a large number of purchase decisions are likely to joint if their

consumption is also joined. It was also observed that there are some determinants which also make an impact of spousal decision

making process are social class of the family to which the spouse belongs, role orientation, life cycle, importance of purchase,

perceived risk and time pressure imposing upon a buying decision will be joint or autonomous.

According to Ali, A. et al (2012) , children especially boys in the age group of 14-16 years have more influence than the girls in

the same age group. Moreover this influence increases when parents are professionally more involved than otherwise.

http://findarticles.com/p/search/?qa=Singh,%20Raghbir



RESEARCH GAP

The survey of the existing literature highlighted the fact that most of the studies on family purchase behaviour and decision-

making process are US centric (Brehl & Callahan Research, 1967; Bernardt, 1974; Cunningham & Green, 1974; Davis & Rigaux,

1974; Burns & Devere, 1981; Belch et al., 1985 ) and only a few studies have been conducted in Indian context (Dhobal, 1999;

Khan, 2000; Gupta & Chundavat, 2002; Kapoor, 2003) and that too focusing on the urban families.

Despite the fact that the rural market is vibrant and holds tremendous potential for growth vis-à-vis various categories of product

and services, yet, surprisingly most of the studies conducted till date have focused on the individual buyer behaviour (Kumar &

Suri,1996, Kashyap, 2000; Khairoowala & Siddique, 2001; Sayulu & Reddy, 2002, , Lokhande, 2004; Venkateshwarlu, 2004;

Lokhande, 2003; Nagaraja, 2004; Mathur, 2005,Veni & Vishwanath, 2011 & Ali, A. et al , 2012) , and rarely an attempt has been

made to delve into the realm of family decision making and purchase process.

As the influence of the family members in product purchase decisions is likely to vary across cultures and regions, the findings of

US centric studies as well as those related to urban context in India cannot directly be applied to family decision making in rural

India, without verification. Thus, through this study, an attempt has been made to explore the dynamics of family purchase

behaviour for selected products in the rural context.

OBJECTIVES OF STUDY

The study broadly attempts to empirically investigate the patterns of family purchase behaviour for selected products in the rural

context. Keeping the same in mind, the following objectives were set:

1. To investigate the relative involvement of husband, wife, children and grandparents in the purchase of specific products (i.e.

product specific influences).

2. To investigate the effect of individual’s life stage on the involvement in the purchase decision stages, i.e. the relationship

between the independent variable- individual’s life stage (i.e. - pre-teens, teenage, early adulthood, middle adulthood, late

adulthood and old age) the dependent variables- stages in the decision process (i.e. idea initiation, information collection and

final decision making).

3. To investigate the effect of individual’s life stage on the involvement in the product related sub-decision, i.e. the relationship

between the independent variable—individual’s life stage (i.e. - pre-teens, teenage, early adulthood, middle adulthood, late

adulthood and old age) and the dependent variables—and the various product related sub-decisions (i.e. amount to be spent,

when to purchase, what brand, type, size, colour and quantity to purchase and from which dealer) for four consumer

durables—two-wheeler, television, radio, edible oil and tooth paste.

HYPOTHESIS OF STUDY

The study is primarily based on the premise that the individual’s position in the family & life stage — independent variable —

and stages and sub-decisions in the purchase of specific products — dependent variable — are independent of each other as far

as the relative involvement of different family members is concerned. The hypotheses considered are reflective of this premise.

H01: There is no relationship between the life stage of the family members and involvement during the idea initiation

stage during the purchase of selected products;

H02: There is no relationship between the life stage of family members and involvement during the information collection

stage during the purchase of selected products;

H03: There is no relationship between the life stage of family members and involvement during the final decision stage

during the purchase of selected products;

H04: There is no relationship between the life stage of family members and involvement in the sub decision –‘amount to

be spent for’ selected products;

H05: There is no relationship between the life stage of family members and involvement in the sub decision ‘time of the

purchase’ of selected products;

H06: There is no relationship between the life stage of family members and involvement in the sub decision ‘brand’ of

selected products;

H07: There is no relationship between the life stage of family members and involvement in the sub decision ‘type’ of

selected products;

H08: There is no relationship between the life stage of family members and involvement in the sub decision ‘quantity’ for

selected products;

H09: There is no relationship between the life stage of family members and involvement in the sub decision ‘dealer’ for

selected products.

RATIONALE FOR PRODUCT SELECTION

The rationale behind the selection of the aforementioned products for the present study was that these products represent buying

situations ranging from complex buying decisions (e.g. Television, Insurance) to relatively less complex ones (e.g. tooth paste)

and also the number and type of role played by the various family members in different life stages is expected to vary in each



case. Further, since the products were of use to all members of the family their participation in decision making for the same was

assumed.


The research instrument designed for the study consisted of structured questionnaire and the respondents were required to indicate

their level of involvement with the help of three-point rating scale viz. HI (highly involved), MI (moderately involved) and NI

(not involved). The simple scale format allowed the researcher to easily collect data even from children who possess varying

cognitive levels.

Data was collected from a sample of rural families consisting of husband, wife, children and grandparents. These families were

residing in eight different villages of four blocks that were randomly selected from Aligarh district (Uttar Pradesh, India). Of the

241 families (randomly picked up from an exhaustive list prepared by the researcher) that were initially approached, those

households were identified that had purchased at least two of the durables during the last two years to minimize forgetting effect

(Khan, 2000), or had not received the same as dowry (see Note 1) during marriage in the household or as gifts from a relative

living in a city. This resulted in a sample of 176 households; questionnaires were administered to these households. After

collecting the data from 176 households, it was found that questionnaires from 152 families (499 individuals) were suitable for

further analysis.

While administering the questionnaire, the members of the family were instructed not to confer or consult one another and the

researcher made it a point to be present so as to respond to doubts and queries regarding the questions in the research instrument.

The researcher personally assisted the children in filling up the questionnaire after explaining to them the contents of the

questionnaire and eliciting their views. So, as to maintain data integrity, at the very outset, the database was maintained using

SPSS 17 Software Package. This was essential because for each family member about 75 data entries (7 for the demographic

section of the questionnaire and 68 for the decision stages and the sub-decisions for the eight products under study) had to be

performed.

The nature of the data necessitated the use of non-parametric tests .For the purpose of ascertaining whether there were significant

differences in the responses vis-à-vis respondent’s position in the family & life stage, for the various decision stages and the

related sub-decisions for each product, the Kruskal-Wallis-H Test was employed. The hypotheses were tested on the basis of

significance of results. In quite a number of cases, the null hypothesis was rejected.

ANALYSIS AND INTERPRETATION

For a bird’s eye view, the summarized tables of results [Table 1a & 1b] in terms of statistical significance for the various stages of

decision process and related sub-decisions are given at the end. Further, detailed tables representing the Involvement of Family

Members in Different Life Stages in the Purchase of each selected products is provided (see Table 2a, 2b,2c,2d,2e); wherein the

mean ranks represent the degree of involvement of the family members during the different decision stages as well as sub-

decisions vis-à-vis their life stage.

Table-1a: Summary of Results for Kruskal-Wallis-H Test - Individual’s Life Stage and Involvement

during Stages of Decision Making

Stage Product p, df Hypothesis HI; LI

Idea

Initiation

Television p<0.01, df=6 Rejected (H01a) PT → OA

Radio p<0.05, df=5 Rejected (H01b) EA → PT

Insurance p<0.01, df=6 Rejected (H01c) MA → PT

Tooth Paste p<0.01, df=6 Rejected (H01d) TA → OA

Washing Powder p<0.01, df=6 Rejected (H01e) MA → OA

Information

Collection

Television p<0.01, df=6 Rejected (H02a) MA → PT

Radio p<0.01, df=5 Rejected (H02b) OA → PT

Insurance p<0.01, df=6 Rejected (H02c) OA → PT

Tooth Paste p<0.01, df=6 Rejected (H02d) TA → OA

Washing Powder p<0.01, df=6 Rejected (H02e) MA → PT

Final

Decision

Television p<0.01, df=6 Rejected (H013b) MA → PT

Radio p<0.01, df=5 Rejected (H013c) MA → PT

Insurance p<0.01, df=6 Rejected (H013e) LA → PT

Tooth Paste p<0.01, df=6 Rejected (H013g) TA → OA

Washing Powder p<0.01, df=6 Rejected (H013h) MA → PT p<0.01, df=6 Rejected (H013h) MA → PT Rejected (H013h) MA → PT

Sources: Data Analysis.

Note: HI – Highest Involvement, LI – Lowest Involvement;

PT - Pre-Teens (12 Years & Below), TA - Teenage (13-19 Years), EA - Early Adulthood (20-

30 Years), MA - Middle Adulthood (31-40 Years), LA - Late Adulthood (41-60 Years) and OA

- Old Age (61 Years & Onwards).



Table-1b: Summary of Results for Kruskal-Wallis-H Test - Individual’s

Life Stage and Involvement during Sub-Decisions

Sub Decision Product p, df Hypothesis HI → LI

Amount To

Be Spent

Television p<0.01, df=6 Rejected (H014b) LA → PT

Radio p<0.05, df=5 Rejected (H014c) LA → PT

Insurance p<0.01, df=6 Rejected (H014e) OA → PT

Tooth Paste p<0.01, df=6 Rejected (H014g) MA → PT

Washing Powder p<0.01, df=6 Rejected (H014h) MA → PT

When To

Purchase?

Television p<0.01, df=6 Rejected (H015b) TA → OA

Radio p>0.05, df=5 Accepted (H015c)

Insurance p<0.01, df=6 Rejected (H015e) OA → PT

Tooth Paste p<0.01, df=6 Rejected (H015g) TA → OA

Washing Powder p<0.01, df=6 Rejected (H015h) MA → OA

Which Brand

To Purchase?

Television p<0.01, df=6 Rejected (H16b) EA → PT

Radio p<0.05, df=5 Rejected (H16c) OA → PT


Tooth Paste p<0.01, df=6 Rejected (H16g) PT → OA

Washing Powder p<0.01, df=6 Rejected (H16h) MA → OA

What Type /

Model To Purchase?

Television p<0.01, df=6 Rejected (H017b) TA → OA



Washing Powder p<0.01, df=6 Rejected (H017g) MA→ OA

What Quantity /

Pack Size To Purchase?

Tooth Paste p<0.01, df=6 Rejected (H019a) PT → OA

Washing Powder p<0.01, df=6 Rejected (H019a) MA → OA

Which Dealer?

Television p<0.01, df=6 Rejected (H020b) MA → PT



Tooth Paste p<0.01, df=6 Rejected (H020g) TA → LA

Washing Powder p>0.05, df=6 Accepted (H020h) -


Note: HI–Highest Involvement, LI–Lowest Involvement;

PT-Pre-Teens (12 Years & Below), TA-Teenage (13-19 Years), EA-Early Adulthood (20-30 Years),

MA-Middle Adulthood (31-40 Years), LA-Late Adulthood (41-60 Years) and OA-Old Age (61 Years &

Onwards).

Detailed tables representing the Involvement of Family Members in Different Life Stages in the Purchase of Television, Radio,

Insurance, toothpaste & Washing powder are provided as follows; wherein the mean ranks represent the degree of involvement of

the family members during the different decision stages as well as sub- decisions vis-à-vis their life stage.

Table-2a: Involvement of Family Members in Different Life Stages in the Purchase of Television

TE

LE

VIS

ION

Stages &

SubDecisions

Pre-teen

Teen

Age

Early

Adulthood

Middle

Adulthood

Late

Adulthood

Old

Age

Kruskal-

Wallis H

df Inter

Idea Initiation 308.17 305.66 262.52 208.77 191.99 86.50 96.271 6 S

Information

Collection 141.11 216.28 257.21 241.37 246.73 166.56 21.889 6 S

Final Decision 129.39 194.70 250.44 260.69 246.97 177.06 35.749 6 S

Amount Decision 107.00 140.66 236.99 271.88 291.83 201.19 111.736 6 S

Time Decision 256.67 281.62 233.57 247.24 193.48 95.69 52.117 6 S

Brand Decision 108.36 222.49 274.57 246.66 232.68 147.47 37.102 6 S

Type Decision 185.83 273.01 265.70 248.38 188.35 90.50 61.468 6 S

Dealer Decision 147.50 187.31 248.79 257.10 255.15 197.09 38.868 6 S



Note: Inter= Interpretation; S=Significant differences; NS= Not significant.

Table-2b: Involvement of Family Members in Different Life Stages in Purchase of Radio

RA

DIO

Stages & Sub

Decisions

Pre-teen

Teen

Age

Early

Adulthood

Middle

Adulthood

Late

Adulthood

Old

Age

Kruskal-

Wallis H

df Inter


Information

Collection 95.50 116.27 156.6 144.71 139.38 170.08 14.986 5

S



Final Decision 88.85 106.28 150.51 157.00 143.20 144.08 23.698 5 S


Time Decision 100.10 125.65 146.65 147.73 137.80 149.81 6.559 5 NS

Brand Decision 83.50 122.14 142.03 149.02 144.51 153.88 12.386 5 S

Type Decision 87.50 123.09 144.83 151.63 138.62 148.35 12.114 5 S





Table-2c: Involvement of Family Members in Different Life Stages in Purchase of Insurance Scheme

INS

UR

AN

CE

Stages & Sub

Decisions

Pre-teen

Teen

Age

Early

Adulthood

Middle

Adulthood

Late

Adulthood

Old

Age

Kruskal-

Wallis H

df Inter

Idea Initiation 89 93.03 174.35 222.48 213.56 208.88 114.009 6 S

Information

Collection 101 104.1 171.81 208.52 217.75 218.25 92.557 6 S

Final Decision 103 106.93 173.97 203.62 221.23 200.25 88.259 6 S

Amount Decision 86 93.2 172.28 221.77 215.39 229.5 113.753 6 S

Time Decision 90 95.8 185.83 214.73 211.85 226.75 101.038 6 S

Brand Decision 104.5 108.52 178.72 204.36 216.53 212.63 81.842 6 S

Type Decision 103 110.91 174.08 205.18 216.63 213.92 78.555 6 S


Idea Initiation 89 93.03 174.35 222.48 213.56 208.88 114.009 6 S



Table-2d: Involvement of Family Members in Different Life Stages in the Purchase of Tooth Paste

TO

TH

PA

ST

E

Stages & Sub

Decisions

Pre-teen

Teen

Age

Early

Adulthood

Middle

Adulthood

Late

Adulthood

Old

Age

Kruskal-

Wallis H

df Inter


Information

Collection

297.35 300.05 259.87 233.63 217.93 179.09 32.864 6 S

Final Decision 259.25 303.74 258.53 245.9 207.23 179.25 35.852 6 S


Time Decision 274.75 283.07 274.7 250.46 206.99 159.06 31.52 6 S

Brand Decision 323.9 303.11 277.49 232.78 201.46 155.34 58.446 6 S



Table-2e: Involvement of Family Members in Different Life Stages in the Purchase of Washing Powder

WA

SH

ING

PO

WD

ER

Stages & Sub

Decisions

Pre-teen

Teen

Age

Early

Adulthood

Middle

Adulthood

Late

Adulthood

Old

Age

Kruskal-

Wallis H

df Inter


Information

Collection

187.47 216.59 268.18 275.65 251.63 190.71 22.086 6 S

Final Decision 180.15 202.98 268.75 286.39 251.63 201.41 33.515 6 S


Time Decision 214.38 208.86 266.85 284.02 248.99 174.24 28.239 6 S

Brand Decision 213.52 203.79 282.39 289.79 232.93 186.44 38.122 6 S

Type Decision 214.05 206.72 276.36 289.41 238.18 166.65 36.261 6 S


Idea Initiation 212.82 241.77 255.46 268.52 241.42 223.82 7.106 6 NS



At the aggregate level as can be seen from the above tables, p<0.01 in most cases is indicative of highly significant differences

between the family members vis-à-vis their life stages and involvement during the different stages in the decision- making process

as well as the sub-decisions, implying thereby that there is a relationship between the life stage of the member and his

involvement in decision-making process.

A shift from unilateral to a more participative decision- making can be traced, wherein the members in the in late adulthood (41-

60 yrs.) & old age (61 onwards) parents (husband& wife) or grandparents do not always dominate the decision-making process



while children falling in the pre-teens, teenage and early adulthood (21-30 yrs.) bracket show high involvement in the idea

initiation stage & sub decisions like timing of purchase, choice of brands & model of not only FMCGs but also higher end

durables, etc. Members belonging to the middle adulthood stage seem to show active involvement in most of the decisions & sub

stages across the different product categories.

Involvement of the members is quite product specific, Preteens & teenagers dominate the scene in the purchase related decisions

of toothpaste, while the pattern that emerges in case of radio is indicative of active participation of the older age group

(grandparents). The product is basically of their interest and is a frequent source of entertainment and information. The younger

generation was not much interested in the product as they are more interested in TV and VCD. So is the case with insurance.

The general trend that is quite apparent is that in issues involving allocation of family’s money, it is the elder members of the

family (husband & grandfather) who matter the most. Results also indicate some kind of dyadic relationship involving

consultation between the younger generation and the older one regarding the brand choice.

DISCUSSIONS

In contrast to the developing nations, where a number of studies related to family purchase decision process have been conducted,

In India, only a few studies have been conducted in this area and that too mostly in the urban setup. This study has been carried

out in the rural set up and while the findings of this study corroborate many of the observations of earlier researchers in this area,

there are deviations in some aspects.

In conformity with the observations of earlier researchers the study also indicates that husband/wife influence in purchase

decision process depends to a great extent on three factors:

Firstly, this influence is product specific (Converse et al. 1958; Wolff, 1958; Beckman & Davidson, 1962, Ferber &

Lee, 1974; Wilkes, 1975; Davis, 1976; Woodside & Motes, 1979; and Belch et al., 1985; Sayulu, & Reddy, 1998;

Ramaswamy & Namakumari, 2002; Kapoor, 2003; Nagaraja, 2004).

Secondly, within a specific product category the husband-wife influence is also the function of stages in purchase

decision process (Davis & Rigaux, 1974; Wilkes, 1975; Park & Lutz, 1982; and Belch et al., 1985; Nagaraja, 2004).

Thirdly, it also depends on the specific purchase factors i.e. the sub-decisions related to purchase (Belch et al., 1985).

Owing to large number of instances of involvement of grandfather, wife and children that have been reported in this study it can

be inferred that contrary to the observation of Imperia et al. (1985) pertaining to less developed nations, significantly more joint

decisions are being taken in the Indian rural families.

As concerning the significant role played by the elders (grandparents) in the family the study corroborates the observations of

Kashyap (2005a) as the grandfather is seen playing a dominant role especially in case of resource allocation and vendor selection

in the purchase of all the durables under study.

Further, the reported instances of involvement of the children vis-à-vis brand selection in case of products like television, VCD

and tooth paste are indicative of brand consciousness in children and these findings are in agreement with the observations of

Shannon (1997), Suri & Singh (2003), Mishra (2006) and Vincent (2006). Contrary to the findings of Spiro (1983) the study

indicates that the children exert considerable influence, during different stages of the decision process as also the sub-decisions.

The findings also confirm the assertions of Szybillo & Sosanie (1977) that the role of the teenage child is quite prominent at the

initiation stage as is seen in the case of television and toothpaste where pre-teens and teens dominate the scene in the above stated

stage in the present study.

As far as the life stage is concerned, as also observed by Kashyap (2005a), growing influence of youth in the purchase decision

process in the rural context was seen across product category especially television and washing powder where the family

members in their early adulthood were found showing considerable involvement in different stages as well as sub decisions

concerning brand, type and model.

The findings of the study suggest that it is not only the wife/husband who is involved but all members of the rural family (nuclear

and joint) seem to be playing their respective roles in the purchase decision today. In particular, the findings of this study indicate

that the children exert considerable influence during the idea initiation stage in case of television, and tooth paste. It is interesting

to note that children were found to be wielding some influence in case of even big-ticket item like television.

CONCLUSIONS

There’s a gradual shift from unilateral decision making to joint decision making process marked by increased younger members

of the family. But, the involvement of family members in purchase decision process depends to a great extent on the nature of

the product, stages of the purchase decision process, and the sub-decisions related to purchase.

Children are increasingly playing an active role not only in the purchase decision of FMCGs but also in the purchase of higher

end items like television and they display significant level of brand awareness.



The involvement of rural youth is growing in stages as well as sub decisions concerning color, brand, type and model.

One of the most interesting and noticeable development vis-à-vis the rural set up in India is the emergence of ‘individualized

joint families’ where individuals branch off to form nuclear families (with separate cooking arrangements), live separately on a

daily basis and make independent purchase decisions for FMCGs. But unlike their urban counterparts, they bond with the ‘parent’

family for social occasions and seek the advice of family elders in important decisions involving heavy investments as is seen in

the present study where grandfather (old age) is seen playing a dominant role especially in case of resource allocation in the

purchase of nearly all the durables under study.

MARKETING IMPLICATIONS

The areas of marketing in which the findings of this study may help the practitioners are identified in the following:

i) Development of promotional campaigns — this may include the decision regarding the use of basic advertising theme /

appeal for specific advertisement, decision regarding the execution style of the advertisement, the selection of media and

media vehicles, decision regarding media scheduling etc.

ii) Segmenting the Market — another area in which the findings of this study may prove to be of help to marketers is in

segmenting the product market, particularly when the role of family members is found to vary in the sub-decisions of

purchase. Segmentation may not be based entirely on the involvement of family members but it may be used in

conjunction with demographic and psychographic studies of the consumers in the product area.

iii) Product Design and Development — in case the research findings vis-à-vis family decision making point towards the

dominant role of a particular family member during the stages of the decision process, then, further studies focusing on

this/these family member/s should be undertaken to find out their preferences which may be taken as a basis for product

re-design and improvement. Thus, family decision making studies, as the current one, can be used as a prelude for

undertaking consumer preference studies.

In the light of the findings of the present study it is suggested that in order to increase the effectiveness of promotional campaigns,

marketers must examine the relative involvement of family members at each stage of the decision making process, for each of the

product category under consideration.

For example, in the case of television where husbands (older age group) are expected to play a dominant role, more so in the rural

setting, children were found to be holding sway as far as the idea initiation and timing of purchase was considered. Further,

husband was again aided by son in all the stages as well as the brand, type and dealer decision.

These observations pertaining to Television, radio & toothpaste have important implications for the marketers because while

designing their promotional messages and other elements of the marketing mix, they need to perform a delicate balancing act.

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*****



RURAL MARKETING IN INDIA: OPPORTUNITIES, CHALLENGES AND STRATEGIES

Shabana Siddique8 R. A. Siddique9

ABSTRACT

Rural marketing is much talked about subject for the business establishments especially the FMCG and the consumer durable

industry. In present scenario every marketing player is keen to invest in rural markets. This is because of the fact that rural

markets have high growth rate and preferences of people living in rural areas are also getting changed. They are also willing to

have an improvement in their standard living. Now days many of business firms are planning to have a significant investment

in rural markets in order to increase their growth rate. Though there is vast potential and substantial growth opportunities in

the rural markets, yet there are some challenges too, which caused hurdles in tapping rural markets. But the question arises

whether they would get desired results by investing in the rural markets. This study is a step ahead in exploring various

strategies to be adopted in the rural market in toto as well as the hidden opportunities along with the present scenario of rural

marketing, highlighting key challenges related to rural marketing.

KEYWORDS

Rural Marketing, Opportunities, Challenges, and Strategies, Rural, Consumer etc.

INTRODUCTION

In recent year, rural markets have acquired significant, as the overall growth of the economy has resulted into substantial increase

in the purchasing power of the rural communities. On the account of green revolution, the rural areas are consuming a large

quantity of industrial and urban manufactured products. In this context, a special marketing strategy namely “Rural marketing”

has emerged. A survey by National Council For Applied Economic Research, India’s premier economic research entity, recently

confirmed that rise in rural income keeps in pace with urban income. Marketing executives are fanning out and discovering the

strength of the large rural markets as they try to enlarge their markets. This is because of the fact that urban markets is fast

shrinking due to saturation caused by competition and the growth rate over the past year has consistently showing declining

trend.

Opportunities in Rural Markets

The Indian rural market with its vast size and demand base offers huge opportunities that companies can not afford to ignore. A

country with approximately 1.20 billion people of which 70% live in rural areas which means more than 700 million people

spread around 6,27,000 villages. India’s rural population comprises of 12% of the world’s population present huge, untapped

market. The importance of the rural markets for some FMCG and durable marketers is underlined but the fact that rural market

accounts for 55 % of LIC policies, 70% of toilet soaps, 50% of TV, fans, bicycles, tea, wrist watches, washing soaps, blades, salt

tooth powder and 38% of all two wheelers purchased. The figures reveal that consumer is upgrading from loose to packaged

products even in rural markets. The telecommunication sector has also witnessed a tremendous growth from the village and small

town. The telecommunication subscriber base for India grew from 70.83 million in the first quarter of 2008 to 90.98 million in the

second quarter. Rural India contributed to 79% rise in this sector, while the remaining 21% rise in growth from urban India. This

segment is currently growing by 8-10% every month. A recent forecast revealed that Indian cellular services revenues will grow

at a rate of 18.4% with most of the growth coming from rural markets.

The Rural Marketing Association of India (RMAI) in association with MARI has conducted a study to understand impact of

economic slowdown on rural markets in India. It was found that there has been no impact of economic slowdown on the rural

economy. In fact, rural markets offer greater opportunities to marketers trying to find a way out of economic crises. The study

revealed that more than 60% of India’s income comes from rural segment and small town. The rural markets consisting of 56

million market household with annual income of $ 200 every year represents a significant market can not be ignored. About 66 %

of the rural population makes a living out of agriculture and the economic meltdown has no negative impact on this sector.

Villages seem to be getting a head of urban cities where expenditure is concerned .In rural areas, 46% of household’s income is

spent on food, while 10% is spent on ceremonies and leisure travel. Spending on health accounts for 9% of the total household

earning while 8% of the income is spent on transportation, wedding and celebrations account for 58% of non routine expenditure.

Wedding celebrations are seen as status symbols in rural India. Textile and clothing retailers that focused on small towns grew

faster than those that focused on urban areas and sale of consumer goods grew by 20% in rural market, compared with urban

growth of 175 according to Techno Park, a research firm that tracks consumption pattern.

There has been increase in the demand and consumption of loans in rural India. There are about 72 million Kisan credit users in

rural India which is almost equal to number of credit card users in urban India. A recent report titled “ Kisan is king” ( farmer is

King) by financial service from Indian Infoline found that number of rural middle – class has grown by 135% since 2001 and

accounts for 45% of total national demand for many consumer products.

8Associate Professor, Guru Nanak Khalsa Group of Institutions, Haryana, India, [email protected] 9Assistant Professor, Navsari Agricultural University, Gujarat, India, [email protected]





In the past four years, the India government has invested heavily in programs aimed at boosting rural income, which grew at 4%

annually, according to government reports. Government price for rice and wheat have jumped nearly 65% over the period, about $

38 billion has been pumped in to rural development programs and more than $9 billion into building rural roads. The total central

expenditure on rural has increased from 2.89% in 2002-2003 to 4.55% in 2008-2009. Rural development expenditure now

constitutes a significant portion of expenditure incurred by government of India (GOI).

Graph-1: Massive Increases in Funds for Rural Development

Sources: Union Expenditure Budget, Volume: 12, 2000-10.

The government has increased spending in rural areas, from US$9 billion for financial year ending March 2007 to an anticipated

US$16 billion for the financial year ending March 2010 (Graph 1.2).

Graph-2: Government Budgeted Expenditure on Rural Development

Sources: Ministry of Rural Development.

During the year of 2008-2009, the rural market has grown at an impressive rate of 25% compared to 7-10% growth rate of the

urban consumer retail market. According to Mc Kinsey survey conducted recently, Rural India, with a population of 700 million,

would become bigger than the total consumer market in countries such as Korea or Canada and it would grow almost 4 times

from it existing size in the next few year.

There are Major reasons for greater business confidence in rural India (a) Rural spending is now less dependent on farm income,

which now constitutes less than 50 percent of the total rural income. Income remittances from migrant rural populations and

increases in nonfarm activities such as trading and agro-processing are boosting nonfarm income. (b) The increase in procurement

prices (the minimum price that farmers earn on produce sold to the government) is putting more money into the hands of the rural

population. A series of good harvests, on the back of several good monsoons from 2005 to 2008, has accelerated rural

employment in agricultural and allied activities. (c) Improved access to finance and institutional credit has brought greater cash

inflows to rural households. Institutional credit to the agriculture and allied sectors increased from INR695.6 billion (US$14.5

billion) in 2002-03 to INR2.6 trillion (US$55 billion) in 2008-09.4 (d) Policy measures such as the US$13.9-billion waiver of

agricultural loans and the National Rural Employment Guarantee Scheme (NREGS), which guarantees 100 days of employment

to one member of every rural household, have helped to reduce rural under-employment and raised wages. The official minimum

average per-day wage paid under NREGS has increased from INR65 (US$1.4) in 2006-07 to INR84 (US$1.8) in 2008-09.

The overarching trend that emerged from the survey conducting by Accenture, findings is that businesses are confident about the

opportunities that rural India has to offer. Further, they plan to strengthen their presence in semiurban and rural areas over the



medium to long term. More than half of our survey respondents foresee 20 to 50 percent of their revenues coming from the rural

market over the next three years; and, more than 65 percent of the organizations surveyed have already invested in rural India, in

some cases more than five years ago (Graph3).

Graph-3: Businesses are Investing in Rural Markets (Percent of Survey Respondents)

Sources: Accenture Research Report.

Accenture’s survey findings indicate that corporate leaders believe a rural presence can help strengthen their overall

competitiveness. Graph-4 illustrates, the investment decision depends on factors that range from access to cheap labor pools and

sources of raw materials to market expansion and an improved public image. Rural markets are home to resources and talent rural

markets encompass eager consumers who want to share the fruits of India’s industrial growth. More than half of the senior

executives surveyed were keen to tap rural areas’ new segments of consumers (Graph-4). From a supply-side perspective, more

than 40 percent wanted to access raw materials. Unsurprisingly, more than a third of respondents agreed that rural markets offer

labor pools at much lower cost than in urban markets.

Rural markets are crucibles for business model innovation. Many consumers in rural areas lack the prejudices that make their

urban counterparts resistant to change. They are keen to experiment with new products, new services and new processes. “Ready

to be trained rural talent is far more hard-working, experimental, ready to adjust and learn,” was the opinion of an executive in a

telecom company.

Graph-4: Rural Markets Offer Opportunities across the Value Chain (% Survey Respondents)


CHALLENGES IN RURAL MARKETS

The rural markets may be alluring but it has got its own problem like; low per capita disposable income, large number of daily

wage earners, season consumption linked to harvest and festivals, poor roads, and power problems. The rural consumer is

different from urban market in many ways .The biggest challenge for any marketers are meeting the four aspects in rural

marketing: Availability, acceptability, affordability and awareness.

1. Availability

The first challenge is to ensure availability of the product or service. India’s 6, 27,000 villages are spread over 3.2 million sq km,

700 million Indian lives in rural areas, finding them is not easy. However, given the poor state of roads, it an even greater

challenge to regularly reach products to the village.



2. Acceptability

The second challenge is to again the acceptability for the product or service. Therefore, there is need to offer products that suit the

rural market. Because of the lack of the electricity and refrigerator in rural areas, coca-cola provides low cost ice boxes i.e, a tin

box and new outlets. The insurance companies that have tailor made products for the rural market have performed well.

3. Affordability

The third challenge is to ensure affordability of the producer or service with low disposable incomes. Products need to be

affordable to the rural consumer because most are daily wages earner. With an average income of less than Rs 2000/, rural Indians

have a very low disposable income. Most rural have minimal storage space and no refrigerator. Very few people own or have

access to cars. As a result, rural Indian purchasing habits tend to be of an earn today spend today mentality.

4. Awareness

Since large part of rural India is inaccessible to conventional advertising media, building awareness is another challenge.

Hindustan unilever relies heavily on its own company organized media. Coca Cola uses a combination of TV, Cinema and radio

to reach rural households. No doubt rural markets, as part of an economy, have untapped potential but there are several difficulties

confronting the efforts to fully explore rural markets. This is because most firms try to extend marketing plans that they use in

urban areas to rural markets.

Apart from the above challenges, there are some more specific hurdles in tapping the rural markets such as poor infrastructure,

inability of small retailer to carry stock without credit facility, wholesaler and dealer network problems, high distribution cost,

mass communication and promotion problems, cultural gap between urban based marketers and rural consumer, low level of

exposure to different product categories and product brands, management and sale managing problems and generating effective

demand for manufacturing. The concept of rural market in India is till in evolving shape as many brand like Colgate, Palmolive,

HUL, Godrej, etc. have already made foray into rural markets but still capturing the market is distant dream.

With all the above facts and figures the question is, can marketer afford to ignore rural India and move a head? Well the answer

is, marketer is not able to survive without rural India in future. It is estimated that rural Indian will consume 60% of the goods

produced in the country. Rural India is an unknown entity even today and it calls for a lot investment. The ratios between

investment and returns will not be able the same as seen in urban India. The rural consumers are value conscious. They may move

forward and they can make differences to products and brands. Therefore, marketers need to understand the social dynamic and

attitude variations with each village.

Hence, the rural markets suffer from persistent structural handicaps. Issues such as inadequate infrastructure, low literacy, and

high levels of poverty raise serious question marks about the sustainability of the rural opportunity. Accenture’s survey findings

indicate how concerned businesses are about these issues. Around 74 percent of respondents agreed that poor linkages for roads,

railways and telecom infrastructure are big hindrances. Another 40 percent cited the lack of skilled talent and 34 percent

highlighted fragmented demand patterns as key challenges.

Other barriers to profitability and scalability include the lack of granular information on rural markets and consumers, and limited

access to financing options. Timely data collection on demographics and consumption patterns is difficult; data analysis is no

easier. One retailer related how difficult it was to switch suppliers from one season to another because rural customers, hit by a

season of poor crops, could no longer afford a particular commodity at the price they had paid a year earlier (Graph-5)

Graph-5: Key Barriers to Setting p Efficient Rural Supply Chains (Percent of Survey Respondents)




STRATEGIES FOR RURAL MARKETING

The past practice of treating rural markets as appendages of the urban market is not correct, since rural markets have their own

independent existence and if cultivated well could turn to a generator of profit pf marketers. The rural markets can be exploited by

realizing them, rather than treating them as convenient extension of the urban markets:

Understanding Rural Market

Understanding the characteristics that make people and the markets in rural India unique, can help the companies to enter the

market with success. Before entering a company considers the rural markets, understanding the types of products and packages

that rural Indian typically use is crucial. By taking into account the low disposable incomes and the unique product and package

needs of this market, consumer products that are designed and packaged for this market have great potential.

The success of Cavin Kare has become a very notable case study. It is company that began in a small way. It started the Chic

shampoos Sachet for 50 paisa when shampoo was available at one rupee and it revolutionized the market.

Communicating to Rural Audience

Right communication is the key to any successful marketing campaign. In rural market it is especially important to get right tome

and approach communication strategy. It is basic principle that one has to understand the audience before communicating the

brand message.

The large parts of rural India can be accessed through conventional media for building awareness. Electronics uses Vans and

roads shows to reach rural customers.

Table-1: Rural channel of communication

Static Interactive Events

Hoarding Sampling Cinema festivals

Side Boarding Demonstrations Created events

Jharoka Audio visuals Folk shows

Shop Front Cinema Projections Melas

Modes of transport selling

Wall paintings Direct to consumer


Developing Rural Specific Products

Many companies are developing rural specific products .Therefore; there is a need to offer the products that suit the rural market.

One company has reaped rich dividends by doing so is LG electronics. It developed a customized TV for the rural market and was a

runway hit selling 100,000 sets in every first year.

HDFC standard life topped private insurer have performed well in rural market by offering tailor made product for them .Motorola’

have launched seven model of cellular phones of high technology but none took off. On other hand, ‘Nokia’ has launched a simple

product which has captured the market.

Adapting Localized Way of Distribution

Proper distribution channels must be recognized by companies. They must adapt local distribution channels. Many MNC giants like

Adidas, Nike, and Reebok started with exclusive stores and they realized that they do not enjoy much brand equity in India

especially rural market and to capture the market share in India, they have to go the local market shoe sellers. They have to reach to

local cities with low priced products.

Understanding Cultural and Social Value of Rural Market

Social and cultural values have very strong hold on the people. Cultural and social values play major role in deciding what to buy.

Moreover rural people are emotional and sensitive. So these things should be taken in account while making the strategies and

promoting their brands, companies must give regards to their social and cultural values.

Using Indian Words for Promotion

Companies use Indian word for brand like LG used Indian brand name “ Sampoorna “ for it newly launched TV and in the past one

year, LG has sold 1 lakh 20’ inch sampoorna TV in villages. The days have gone when a rural consumer had to go to nearby town or

city to buy branded product. The growing consumption power of the rural consumer is having tremendous opportunity for

companies to enter in to rural market. At the same time, they also threw up major challenges. The marketers who understand the

rural consumer and tune their strategy are sure to reap benefits in the coming years.



CONCLUSIONS

Looking at the challenges and opportunities which rural marketers offer to the marketers, it can be said the future is very promising

for those who understand the dynamics of rural markets and exploit them to their best advantage. Even Gandhiji believed that

India’s “future lay in her villages” and it goes without saying among us who can bring innovation in marketing mix with rural

markets in mind will take away “the future at the bottom of the pyramid”.

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7. Shrama, R., (2009). “Unique Issue in Rural Marketing and their Implication”, Gyanpratha Accaman Journal of

Management Science, Volume: 1 :( 2), pp. 75-79.

8. Singh, J., (2005). “Business Challenges in Rural India”, Marketing Mastermind, pp. 23-26.

9. Sudhanshu, S., and Sarat, S. K., (2010). “Non Conventional MARCOM Strategy for Rural India”, Indian Journal

of Marketing, Volume: 40: (2), pp. 56-61.

10. Vaswai, L. K.; Aithal, R.; Pradhan, D., and Sridhar, G., (2005). “Rural Marketing in Development Paradigm”,

International Journal of Rural Management, Volume: 1: (2), pp. 245-262.

11. (2009). Masters of Rural Markets: The Hallmarks of High Performance, Accenture Research Report ASSOCHAM,

“The Rise of Rural India”, Published in April.

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PERFORMANCE APPRAISAL OF NREG SCHEME: A COMPARATIVE STUDY

P. Saritha Srinivas10

ABSTRACT

The National Rural Employment Guarantee Act (NREGA) also known as National Rural Employment Guarantee Scheme

(NREGS) is Indian legislation enacted on August 25, 2005. The NREGA provides a legal guarantee for one hundred days of

employment in every financial year to adult members of any rural household willing to do public work-related unskilled

manual work at the statutory minimum wage. The Ministry of Rural Development (MRD), Government of India is monitoring

the entire implementation of this scheme in association with state governments. This act was introduced with an aim of

improving the purchasing power of the rural people, primarily semi or un-skilled work to people living below poverty line in

rural India. It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated work

force must be women. Adult members of rural households submit their name, age and address with photo to the Gram

Panchayat. The Gram Panchayat registers households after making enquiry and issues a job card. The job card contains the

details of adult member enrolled and his / her photo. Registered person can submit an application for work in writing (for at

least fourteen days of continuous work) either to Panchayat or to Programme Officer. The Panchayat / Programme officer will

accept the valid application and issue dated receipt of application, letter providing work will be sent to the applicant and also

displayed at Panchayat office.

KEYWORDS

National Rural Employment Guarantee Act (NREGA), Ministry of Rural Development (MRD), Rural, Gram

Panchayat, Employmet, Perforamce Appraisal etc.

INTRODUCTION

The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid. National Rural

Employment Guarantee Act gives legal guarantee of providing at least 100 days of wage employment to rural households whose

adult members are willing to do unskilled manual labour. The scheme was introduced in 200 districts during financial year 2006-

07 and 130 districts during the financial year 2007-08. In April 2008 NREGA expanded to entire rural area of the country

covering 34 States and Union Territories, 614 Districts, 6,096 Blocks and 2.65 lakhs Gram Panchayats. Equal wage shall be paid

to both men and women. The payment of wages shall be made atleast once in a fortnight. The Programme Officer, the District

Programme Coordinator and the State Programme Coordinator shall keep a watch on the average wages earned. The district-wise

average wage earned by the workers shall also be brought to the notice of the State Council every year.

Objectives of Scheme

The National Rural Employment Guarantee Act (NREGA) was notified on September, 2005. The Act provides a legal Guarantee

of 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled

manual work at the minimum wage rate notified for agricultural labour prescribed in the State or else an unemployment

allowance. The objective of the Act is to supplement wage employment opportunities in rural areas and in the process also build

up durable assets.

Activities Covered Under NREGS

Permissible activities as stipulated in para 1 of Schedule-I of Mahatma Gandhi NREGA are as under:

Water conservation and water harvesting;

Drought proofing ;

Irrigation canals including micro and minor irrigation works;

Provision of irrigation facility, horticulture plantation and land development facilities to land owned by households

belonging to the Schedule Castes and Schedule Tribes or Below Poverty Line families or to beneficiaries of land

reforms or to the beneficiaries under the Indira Awas Yojna of the Government of India or that of small farmers or

marginal farmers as defined in the Agriculture Debt Waiver and Debt Relief Scheme, 2008;

Renovation of traditional water bodies including desilting of tanks;

Land development;

Flood control and protection works including drainage in water logged areas;

Rural connectivity to provide all-weather access;

Construction of Bharat Nirman, Rajiv Gandhi Sewa Kendra as Village Knowledge Resource Centre and Gram

Panchayat Bhawan at Gram Panchayat level;

Any other work which may be notified by the Central Government in consultation with the State Government.

10Assistant Professor, Department of Business Administration, Yogi Vemana University, India, [email protected]




Funding Pattern

The Government of India funds shall be utilized for the following:

Cost of wages.

Three fourths of material cost.

Administrative cost.

The cost of capacity building.

Establishment of Programme Officer with the supporting staff.

The State Employment Guarantee Fund shall be spent for the following:

25 per cent of the material and wages of skilled and semi-skilled workers.

Unemployment allowance.

Administrative expenses of the State Employment Guarantee Council.

Other expenses related to implementation of the scheme but not permitted by Government of India guidelines.

Execution of Works

At least 50% of the works in terms of cost will be allotted to Gram Panchayats for execution. Based on the demand for

employment from the wage seekers the Panchayat Secretary shall request Programme Officer to issue work

commencement letter for opening of works. The Programme Officer shall issue work commencement letter to the Gram

Panchayat or other line departments, strictly following the order of priority indicated in the administrative sanction

proceedings issued by the District Programme Coordinator. Every Gram Panchayat shall maintain a Register of Works

for which work-commencement letters are received, for the financial year. The copies of the work-commencement letter

issued to the Gram Panchayat should also be sent to the Village Organization or Village Organizations concerned.

On receiving the work-commencement letter, the executing agencies shall start the work immediately.

While executing the works, the norms under the Scheme shall be followed.

The Muster Rolls shall be supplied from District Employment Guarantee Scheme Cell to Programme Officer. Each

Muster Roll shall be uniquely numbered. The Programme Officer will issue the duly numbered Muster Rolls to

executing agencies, which shall maintain such Muster Rolls for every work. The executing departments shall maintain a

stock register of the Muster Rolls. The Muster Rolls shall be closed once a week.

MONITORING AND EVALUATION

At least 10 per cent of the Employment Guarantee Scheme works shall be inspected by District level officers and at

least 2% of the works by State level officers. The State Government shall designate Area Officers for each District for

effective monitoring.

The Panchayat Secretary shall fill the Management Information System format and send to Mandal Parishad

Development Officer and Programme Officer. Programme Officer shall compile, analyse this data and take appropriate

remedial actions. He/She shall forward the reports to District Programme Coordinator with specific remarks. The

District Programme Coordinator shall send the reports to State Programme Coordinator at quarterly intervals. State

Programme Coordinator shall also submit quarterly reports to the Government of Andhra Pradesh and Government of

India. State Employment Guarantee Council shall submit an annual report to the State Legislature.

State Programme Coordinator shall empanel reputed agencies to carry out impact assessment. The District Programme

Coordinator shall engage agencies to carry out studies specific to district, which are not covered by the agencies

employed by State Programme Coordinator. The Impact Assessment Reports shall be put before the State Employment

Guarantee Council and also be submitted to Government of Andhra Pradesh and Government of India. State Programme

Coordinator shall take appropriate remedial measures based on the reports of the above studies.

NEED FOR STUDY

Most of the jobs created under the NREGS are in the area of water conservation, land development and drought proofing. Though

the government has launched this programme with the object of eradicating poverty by providing minimum employment

opportunities for the rural poor, in the implementation of the programme, number of short comings are found in providing

technical and professional support, delays in payment of wages to workers, use of machineries instead of labour, duplication of

job cards etc., The planning commission also highlights the same dearth in its report. Hence, there is a direct need to study on

draw backs in the implementation process NREGS and how far this programme could succeed in reducing the poverty in the rural

areas.

OBJECTIVES OF STUDY

To study the disparities in implementation of NREGS in Kadapa and Chittoor districts of Andhra Pradesh.

To study the role of NREGS in providing employment to rural men and women.



MODEL AND METHODOLOGY

The present study is based on secondary data collected from NREG reports. The study is confined to two districts of Andhra

Pradesh such as YSR (Kadapa) district and Chittoor district. Parameters like Job cards issued to number of households,

Employment provided to number of households, Number of households working under NREGS and Number of households

employed for 100 days, Total funds granted to two districts, Total works taken up by the different districts, Works completed by

the different districts and Works in progress, Total person days provided under NREGS and the share of men and women were

taken for the study. Statistical tools of Simple Percentages and Correlation Coefficient are used to study the objectives. The period

of the present study is 2007-2008 to 2011-12.

COMPARATIVE STUDY

The Kadapa and Chittoor districts in Andhra Pradesh have been selected for the study. In Kadapa district, there are 50 Mandals,

818 Grampanchayats, 4241 Habitations, 527889 jobcards issued and 312632 labour groups registered. Under the scheme whereas

in Chittoor district, there are 66 Mandals, 1380 Grampanchayats, 11572 Habitations, 617114 job cards issued and 322093 labour

groups registered under the scheme.

Table-1: Indicates the Performance of Works and Labour in both Kadapa and Chittoor Districts for Year 2007-08.

Performance Report on NREG Scheme for Year 2007-08

Particulars Financial Year of 2007-08

Kadapa Chittoor

Works-In-

Progress

Number 118 7,523

Value (Rs in Lakhs) 131.32 6,076.61

Total Number

of Works

Completed

Number 6,584 16,770

Value (Rs in Lakhs) 7,079.99 5,544.03

Total

Expenditure

Wages (Rs in Lakhs) 9,847.80 12,243.12

Material and Skilled Wages (Rs in Lakhs) 3,187.56 1,727.90

Contingent Expenditure (Rs in Lakhs) 302.28 353.65

Total (Rs in Lakhs) 13,337.64 14,324.67

Admin Expenditure % 2.32 2.53

Wage

Employment

Provided

Household (Nos) 2,29,492 2,71,248

Individual (Nos) 3,39,436 4,28,916

Men (Nos) 1,44,379 1,88,264

Women (Nos) 1,95,057 2,40,652

SC Individual (Nos) 1,00,432 1,39,409

ST Individual (Nos) 11,024 23,071

Persons with Disability (PWDs Nos) 1,888 3,723

Total Number of Person Days Generated 1,24,42,028 15401125

Average Wage Rate Per Day Per Person (Rs.) 79.15 79.49

Average Number of Days Employment Provided per Household 54.22 56.78


From the above table, it is observed that 131.32 lakhs of Work-in-progress in Kadapa district and 6076.61 lakhs in Chittoor

district. Total number of works completed was more with less expenditure spent in Chittoor district (16,770) when compared with

Kadapa district (6,584) because of performance and skilled persons. Work participation of men, women, SC and ST were more in

Chittoor district when compared with the Kadapa district in 2007-08 as of more Mandals and Grampanchayats in the district.



Table-2: Performance of NREG Scheme in Both Kadapa and Chittoor districts for Year 2008-09

Performance Report on NREG Scheme for the Year 2008-09


Kadapa Chittoor

Works-In-

Progress

Number 299 23,513

Value (Rs in Lakhs) 407.85 31,863.57

Total Number

of Works

Completed

Number 12,925 20,769

Value (Rs in Lakhs) 16,843.57 8,721.29

Total

Expenditure

Wages (Rs in Lakhs) 9,176.29 11,453.52



Total (Rs in Lakhs) 14,214.77 15,510.13


Wage

Employment

Provided

Household (Nos) 2,34,942 2,36,808

Individual (Nos) 3,90,112 3,94,444

Men (Nos) 1,71,799 1,79,088

Women (Nos) 2,18,313 2,15,356




Total Number of Person Days Generated 1,15,47,216 1,45,83,228




From the above table, it is cleared that, The Kadapa district was provided with less employment of men (7289) and with more

employment of women (2957) when compared with the Chittoor district. The total number works completed was Rs. 16843.57

lakhs in Kadapa district and Rs. 8721.29 lakhs in Chittoor district. There are 8122.28 more works were completed in Kadapa

district with less expenditure spent and with less man power compared with Chittoor district in 2008-09 as of more skilled women

employees.

Table-3: Performance of NREG Scheme in Both Kadapa and Chittoor Districts for Year 2009-10.



Kadapa Chittoor

Works-In-

Progress

Number 2,871 27,822

Value (Rs in Lakhs) 6,371.35 46,024.01

Total Number

of Works

Completed

Number 23,734 64,071

Value (Rs in Lakhs) 22,931.31 52,178.13

Total Wages (Rs in Lakhs) 16,052.67 17,977.31



Expenditure Material and Skilled Wages (Rs in Lakhs) 3,323.71 3,159.60


Total (Rs in Lakhs) 20,165.43 22,031.32


Wage

Employment

Provided

Household (Nos) 2,31,902 2,52,122

Individual (Nos) 4,22,696 4,47,960

Men (Nos) 1,87,469 2,09,193

Women (Nos) 2,35,227 2,38,767








It is observed that very less number of works i.e., 22931.31 lakhs completed in Kadapa district when compared with Chittoor

district. The expenditure incurred towards materials and skilled wages is 3323.71 lakhs is more compared with the Chittoor

district even though less number of works in Kadapa district because of less skilled employees. More employment (447960) of

men and women was provided in Chittoor district compared with the Kadapa because of more interest and willingness of the

unemployees in Chittoor district.

Table-4: Performance of NREG Scheme in both Kadapa and Chittoor Districts for Year 2010-11.



Kadapa Chittoor

Works-In-

Progress

Number 28,232 55,135

Value (Rs in Lakhs) 34,730.72 74,275.69

Total Number

of Works

Completed

Number 46,724 32,017

Value (Rs in Lakhs) 71,577.65 61,704.42

Total

Expenditure

Wages (Rs in Lakhs) 14,028.85 13,348.09


Contingent Expenditure (Rs in Lakhs) 2,098.18 2,919.08

Total (Rs in Lakhs) 23,260.41 25,371.47

Admin Expenditure % 9.91 13

Wage

Employment

Provided

Household (Nos) 2,24,485 2,18,821

Individual (Nos) 3,98,485 3,77,147

Men (Nos) 1,72,480 1,74,506

Women (Nos) 2,26,005 2,02,641










Table 4.0 shows that the total expenditure incurred for material and skilled wages and contingent expenditure (9231.56 lakhs) is

less when compared with the Chittoor district but total number of works completed 46724 lakhs in Kadapa district is more when

compared with the Chittoor district as of more skilled man power. More women employees provided employment in 2010-11 in

Kadapa district but more employment was provided to backward classes in Chittoor district because of more people exists in the

district.

Table-5: Performance of NREG Scheme in both Kadapa and Chittoor Districts for Year 2011-12.



Kadapa Chittoor

Works-In-

Progress

Number 40,990 96,469

Value (Rs in Lakhs) 49,024.83 1,15,131.43

Total Number

of Works

Completed

Number 17,013 32,548

Value (Rs in Lakhs) 19,975.56 28,927.95

Total

Expenditure

Wages (Rs in Lakhs) 10,671.80 12,459.09


Contingent Expenditure (Rs in Lakhs) 2,349.76 2,941.06

Total (Rs in Lakhs) 16,199.79 22,048.70


Wage

Employment

Provided

Household (Nos) 1,71,684 1,68,853

Individual (Nos) 2,92,703 2,84,266

Men (Nos) 1,22,126 1,29,906

Women (Nos) 1,70,577 1,54,360

SC Individual (Nos) 84,165 1,04,369







From the table, it is observed that the total works completed and work-in-progress in Chittoor district is more when compared

with the Kadapa district and also spent less administrative expenses. More works completed in Chittoor district with less man

power 284266 members compared with the Kadapa district (292703 members). More employment also provided to the backward



classes and paid high wage rate to the members in Chittoor district compared with the Kadapa district. The Chittoor district also

provided more number of days work to the members in the district in 100 days.

OBSERVATIONS AND FINDINGS OF STUDY

National Rural Employment Guarantee Act gives legal guarantee of providing at least 100 days of wage

employment to rural households whose adult members are willing to do unskilled manual labour.

The objective of the NREG Act is to supplement wage employment opportunities in rural areas and in the process also

build up durable assets.

Total number of works completed was more with less expenditure spent in Chittoor district (16,770) when compared

with Kadapa district (6,584) because of performance and skilled persons in 2007-08.

Work participation of men, women, SC and ST were more in Chittoor district when compared with the Kadapa district

in 2007-08 as of more Mandals and Grampanchayats in the district.

There are 8122.28 more works were completed in Kadapa district with less expenditure spent and less man power

compared with Chittoor district in 2008-09 as of more skilled women employees.

Very less number of works i.e., 29246.82 lakhs completed in Kadapa district when compared with Chittoor district in

2009-10.

In 2009-10, the expenditure incurred towards materials and skilled wages is 3323.71 lakhs is more compared with the

Chittoor district even though less number of works in Kadapa district because of less skilled employees.

More women employees provided employment in 2010-11 in Kadapa district.

In 2010-11 more employment was provided to backward classes in Chittoor district because of more people exists in the

district.

In 2011-12, more employment also provided to the backward classes and paid high wage rate to the members in

Chittoor district compared with the Kadapa district.

The Chittoor district was provided more number of days work to the members in the district in 100 days in 2011-12.

The overall performance of the NREG scheme is good in Chittoor district in the study period because more works were

completed work-in-progress and more people are registered with high wage rate for more number of days in the study

period.

RECOMMENDATIONS

From the above findings, following suggestions and recommendations are made for better implementation of NREG scheme in

both Kadapa and Chittoor districts in particular and Andhra Pradesh in general:

The Government shall improve awareness regarding NREG scheme among the rural and urban area people.

The Government shall take actions to complete the works within stipulated time by NREG members by sanctioning

required funds in time.

The Government shall motivate the women to participate in NREG scheme by providing child care benefits at work

place.

The Government officials shall take necessary actions and look after in the payment of high wages for maximum

number of days in all districts.

The training (at least 7 days) need to be provided to the members of the scheme to improve their skill and complete the

works perfectly.

REFERENCES

1. (2007-2012). Annual Reports of NREG Scheme, Kadapa Ddistrict.

2. (2007-2012). Annual Reports of NREG Scheme, Chittoor District.

3. www.nregs.gov.in

4. www.andhrapradesh.in

*****

FOR ANY CLARIFICATION OR SUGGESTION, WRITE US:

Editor-In-Chief




(Mobile): +91-09419216270 – 71


http://www.nregs.gov.in/

http://www.andhrapradesh.in/





COMMERCIALISATION OF CITRUS FRUITS IN RURAL AREAS: MANDARIN ORANGES

OF ARUNACHAL PRADESH

Otem Moyong11

ABSTRACT

Arunachal Pradesh, with its undulating topography and varied agro-climatic conditions provides immense potentiality for

growing temperate, tropical and sub-tropical fruits and vegetables. Out of the total land (51236 hectare) under horticultural

crops like orange, pineapple, apple, banana, kiwi etc., in the state, land under orange cultivation (21740 hectare) alone account

for more than 42 percent. In spite of annual production of oranges of around 26716 metric tons produced in rural areas,

commercial production of oranges has yet to touch the cultivators in massive way due to lack of awareness, poor

infrastructure, transportation and communication bottleneck etc.

Nevertheless, people of the state especially those of East Siang District have started commercial production of Mandarin

Oranges satisfactorily. It is estimated that a cultivator can earn a handsome income of more than Rupees 1 lakh annually from

orange orchard having 1 hectare land. In this backdrop, an attempt has been made in this paper to raise issues and discourses

with regard to commercial cultivation of oranges in rural areas based on primary and secondary data.

KEYWORDS

Arunachal Pradesh, Citrus Fruits, Commercialisation, Mandarin Oranges, Rural Area etc.

INTRODUCTION

In a country like India where rural population outnumbered the urban population, the growth and development of rural economy

is immense for the interest of Nation’s economic growth. In fact, rural economy is regulated by the rural masses and

unequivocally, its growth and development often relies on various economic activities they perform. Nevertheless, people from

rural areas are mostly agriculturist and are inter-dependent. Most of them engaged firmly on agriculture for their sustenance.

Similarly, Arunachal Pradesh , the largest hilly state in the northern hilly region of India located between 26 35’ North latitude

and 91 35’ to 97 27’ East longitude with elevation range 250 to 7090 meters above sea level, is outnumbered by the rural

population. Agriculture is the main occupation and maximum number of rural population directly engaged themselves in

agriculture for their livelihood. Despite of their hard labour, the production is very marginal and non-remunerative which caused

malnutrition among the people. In fact, illiteracy and age-old traditional practices of cultivation are the eminent causes of their

hardship. The plague of poverty not only hampered their living but also it restraint the growth of the rural economy. Hence, the

state’s overall economy has been adversely affected since past few decades.

Topographically and agro-climatically, the state is having potential in horticultural development unless of minimal production and

poor economic condition. There also exist wide ranges of geographical cum cultural variation which are apparently suitable for

growing large number of horticultural crops. Yet potential has remained unexploited although the Government of India is putting

endless endeavour for the upliftment of the state. Moreover, many researchers had also proclaimed and drawn significant

inferences in context to the versatility of the state. Horticultural farming is yet one of the major source of generating adequate

income among those other allied economic activities.

Now-a-day, it is occupying a prominent status in the field of rural development. People of different quarters have become well

aware about the consequences of this respective activity. It has been noted that the income earned from horticultural crops are

quite different from other allied activities. It moreover provides as a perfect supplement to agriculture in the form of income

generation. The income earned from horticulture is used to meet the daily expenses and other miscellaneous expenditure that

indirectly save the agricultural output or income for consumption purposes. As a matter of fact, horticultural farming is the easiest

mode of earning adequate amount of income for the rural households. Moreover, people of the study area commonly undertake

citrus farming, banana, pineapple, large cardamom, ginger and black pepper as the leading horticultural crops. It has a great

influence on rural economy by regulating the money flow in peak season.

STATUS OF ORANGE PRODUCTION

Apart from the allied activity, Orange cultivation is now occupying prominent status in comparison with other horticultural

products being cultivated in the state. It has become the main commercial crop in the region as it generates high income level for

the farmers with low investment cost. In Arunachal Pradesh, Orange plantation is mostly practiced and produced abundantly in

East Siang district which is located in the heart of the state bounded by Upper Siang on the north, Assam in the south, Lower

Dibang Valley in the east and West Siang on the west. It is however widely practiced in Pangin, Boleng, Bilat and some parts of

the Pasighat circle which is the Head Quarter itself. Generally, Mandarin Orange (Citrus Reticulata) possessing huge commercial

value is commonly grown in the region.

11Sr.Assistant Professor, Department of Commerce, Rajiv Gandhi University, Arunachal Pradesh, India, [email protected]




It can be seen from the Table1 that in the state of Arunachal Pradesh the area under fruits has gone up from 49102 hectares in

2001-03 to 51203 hectares in 2003-04 and production rose from 96438 MT in 2002-03 to 99561 MT in 2003-04. The Table 1

shows area and production of horticultural crops during last few years;

Table-1: Area and Production of Horticultural Crops in Arunachal Pradesh during the year 2000-01, 2001-02, 2002-03

and 2003-04 (Area in Hectare/Production in MT)

Sl. No. Name of

Crops

2000-01 2001-02 2002-03 2003-04

Area Production Area Production Area Production Area Production

1 2 3 4 5 6 7 8 9 10

1. Orange 19147 24000 19626 24232 21295 25444 21740 26716

2. Apple 6733 8513 6852 8588 7352 8846 7752 8900

3. Pineapple 7329 31980 7459 32289 7749 33903 7849 34135

4. Banana 3538 13200 3958 13302 4358 13834 4658 14525

5. Walnut 2285 51 2374 51 2654 53 2904 60

6. Kiwi - - - - - - 360 150

7. Others 6354 15357 5406 16815 5694 14358 6100 15075

TOTAL 45386 93101 45765 95277 49102 96438 51263 99561

Sources: Directorate of Horticulture, Itanagar, Government of Arunachal Pradesh.

It is observe that among the fruit crops, Citrus i.e. Orange constitutes about 42 per cent of the total area under fruit crops followed

by Pine-apple which accounts for about 15 per cent. However, Pine-apple is dominating fruit constituting 34 per cent of the total

production followed by Citrus which shares about 26 per cent of the total fruit production in the state.

The area and production of all the crops have slightly increased over the previous year. Other fruit crops grown in the state are

pears, Plum, Walnut, Pitch, Guava, Jack fruit, Mango, Papaya, Litchi, etc. In recent years, plantation of a new fruit “KIWI”

(Chinese Gooseberry) has been taken up in the West Kameng, Lower Subansiri and Dibang Valley districts of the state.

So, far as the status of horticultural crops in East Siang district is concern, citrus fruits occupy the lions share in terms of area as

well as production (Table2).

Table-2: Major Horticultural Fruits Crop in East Siang District (Area in Hectare / Production in Metric Ton)

Sl. No. Name of

Fruit Crops

2007-08 2008-09 2009-10 2010-11

Area Production Area Production Area Production Area Production

1 2 3 4 5 6 7 8 9 10

1. Citrus 2125 14757 2558 16300 3070 19500 3400 21450

2. Pineapple 330 4840 347 5082 381 5590 436 6149

3. Banana 394 6044 414 6346 426 6473 436 6796.6

4. Litchi 162.6 103 164 104 165 105 168 107.1

5. Ginger 145 1452 152 1525 160 1677 210 2180.1

6. Arecanut 182 270 184 273 186 276 190 284.2

7. Jack Fruit 70 900 72 927 74 954 77.5 1001.7

TOTAL 3408.6 28366 3891 30557 4462 34575 4917.5 37968.7

Sources: District Horticulture Officer, East Siang District, Pasighat.

The above table signifies that the Citrus fruits i.e. Orange crops production potentiality is very high in the East Siang District and

it leads the rows which include other major horticultural fruits crops. Among the major horticultural fruits crops being shown in

the table, citrus fruits embraces maximum cultivated area and thus contributes optimum shares across the years. It is shown in the

table that the annual production of citrus in 2007-08 was 14,757 MT against an area of 2125 hectares which is 52 per cent of the

total horticultural fruit crops production during the year. The production increased to 16,300 MT in the subsequent year along

with the increase in cultivated area and so on. It further increased up to 21,450 MT (56 per cent) during the year 2010-11.

Thus, considering the productivity of Mandarin oranges in East Siang district in particular and the state in general; oranges offer

huge commercial scope for the cultivators. It may be noted that cultivation and production of oranges in the state are practiced

only in rural areas.

OBJECTIVES OF STUDY

In the light of above discussion, the objective of the present study is sought to disseminate the commercial perspective of orange

cultivation in the study area in particular and rural areas of the state in general with a view that maximum benefits are obtained by

the orange cultivators if it is practice in commercial way.




In order to achieve the stated objective as well as to arrive at logical conclusion, a field survey was conducted during the month of

November and December 2011 covering five villages in East Siang district where maximum oranges are produce. The sample

villages are viz, Komsing, Yeksi, Pangin, Renging and Tekang.

During the field survey 40 sample respondents were selected and interviewed using pre-designed interview schedule (both close

and open ended). The selection of sample villages and respondents was based on non-probability sampling technique.

The primary data obtained through field survey as well as secondary data have been elicited through discussion, tabulation,

interpretation, diagrammatic representation. This are supplemented by the statistical records and collected from the concerned

departments or offices for evaluation.

DISCUSSIONS

The information collected during the course of the study has been tabulated and discussed under the following sub-headings:

Table-3: Profile of Respondents in Terms of Orange Orchard Owned, Period of

Cultivation and Procurement of Orange Sampling of Sample Village

Particulars No. of Respondents

Number of Orange

Orchard Owned

One 16 (40)

Two 19 (48)

Three 2(5)

More than Three 3 (7)

Total 40 (100)

Cultivation of Orange

Last 5 years 3 (7)

Last 10 years 2 (5)

Last 15 years 16 (40)

Last 20 years 19 (48)

Total 40 (100)

Procurement of

Orange Sapling

Self-grown 36 (90)

Borrowed from others 2 (5)

Provided by Government Nil

Self-grown as well as provided

by the Government

2 (5)

Total 40 (100)

Sources: Field Survey.

Note: Number In Brackets Indicates The Percentages.

Orange Orchard Owned: Table3 shows different features of the sample respondents of sample villages in the study district. It

can be seen from the table that, 16 (Sixteen) number of respondents owned one orchard, 19 (Nineteen) of them owned two, 2

(two) persons owned three orchards and 3 (three) persons owned four or more than four orchards in the region. Hence, maximum

number of persons or respondents owned two orchards which proportionately increase the level of income in comparison to those

having lesser orchards.

Period of Orange Cultivation: The given Table 3 also reflects the period of cultivation of Oranges. Here, it is observed that only

3 (Three) respondent out of 40 are cultivating Orange since last 5 years, 2 (Two) person is cultivating since last 10 years out of the

total. Further, it can be seen from the table that 16 (Sixteen) persons i.e. 40 per cent are growing Oranges since last 15 years and

as many as 19 (Nineteen) number of persons i.e. 48 in percentage are cultivating since last 20 years or more. This indicates that

the cultivation of Orange fruit is not new in the region. People are undertaking the said activity since last few decades. This is the

reason Orange is considered as most popular horticultural crop in the study district.

Procurement of Orange Sapling: On the other hand, 36 persons i.e. 90 per cent of the respondents are bringing up their orchard

through self-grown saplings. It has been well depicted in the Table 3 that 2 (Two) cultivators each has borrowed saplings from

others and procured the same from Government i.e. from Horticulture Department. This indicates the minimum dependency on

Government by the people at this context as maximum of the respondents had brought up their orchards by themselves. Since, the

advent of scientific technology in the region is still under infant stage.

It is clear from the Table 3 that maximum number of cultivators owned more than one orchard. However, it is not necessary that

those holding maximum orchards would generate greater income. The range or volume of production depends on the size or area

of the orchards.

More the area is; more will be the production. It is because the orchard covering large area would hold more Orange trees than the

smaller one; and more trees would yield more numbers of fruits and hence, enabling greater inflow of income. The rate of



productivity is calculated in terms of Metric ton per hector. Since, one hectare comprises of 10000mtrsq. The area of land holding,

maintenance cost involve in Orange farming, income earned from selling of Oranges by the sample respondents are given in the

Table 4.

Table-4: Profile of Respondents in terms of Pattern of Land Holding, Maintenance Cost and

Annual Income in the Sample Villages

Particulars Number of Respondents

Pattern of Land Holding for:

i) Agriculture

ii) Horticulture i.e. Orange

>1 hec. 22

Up to 1 hec. 10

Upto 2 hec. 3

< 2 hec. 5

Total 40

>1 hec. 8

Up to 1 hec. 21

Up to 2 hec. 8

Up to 4 hec. Nil

< 4 hec. 3

Total 40

Maintenance Cost (in Rupees)

Up to Rs. 5,000/- 8

Up to Rs. 10,000/- 14

<.10,000/- 18

Total 40

Annual Income from

Oranges (in Rupees)

Rs. 50,000 to Rs. 1,00,000 20

Rs. 1,00,000 to Rs. 1,50,000 12

Rs. 1,50,000 to Rs. 2,00,000 6

< Rs. 2,00,000 2

Total 40


In Table 4 the pattern of land holding by respondent i.e. area under agriculture and horticulture have been clearly distinguished.

Apart from it, the various maintenance cost and level of income are also given in the table. Maintenance cost includes the

collective expenditure meted annually in procuring manure, fertilizer, insecticide, pesticide, weedicide, labour etc.

Pattern of Land Holding: It can be seen from the Table 4 that people are holding more land under Orange when compare to the

land under agricultural crops. The number of respondent holding less than 1 hectare of agricultural land is 22 whereas that of

Orange cultivation is only 8. Meanwhile, the person holding up to 1 hectare of land under Orange cultivation is as many as 21

while it is only 10 under agriculture i.e. double than the latter. Further, person having up to 2 hectares are 3 and more than 2

hectares are again 5 under agriculture cultivation.

In contrary, it is 8 and 3 under Orange cultivation. The gross cultivable land is more under Orange farming than that of

agriculture. This signifies that people are giving more interest in Horticulture farming than agriculture. The reason may be due to

geographical constraints of the study area i.e. due to hilly terrain; agricultural practice is found quite difficult in compare to

Orange farming. The income generated from agricultural produce are also non-remunerative i.e. subsistent for hand to mouth

only. In context to afore mentioned phenomena, it has been found during the course of study that more than 90 per cent of the

people of the sample villages undertake Orange cultivation. They firmly consider this activity as their sole source of income and it

has proven it. Agriculture on the other hand is performed as secondary activity in the village.

Maintenance Costs: The ceilings of expenditure on maintenance of orchard(s) have also been depicted in the Table 4. It is seen

from the Table that 8 (Eight) respondents spent within Rs. 5000/- in maintaining their orchards, 14(Fourteen) of them bear up to

Rs. 10, 000/- as maintenance cost and as many as 18 (Eighteen) number of respondents spent above Rs. 10, 000/- as maintenance

expenditure. The expenditure on maintenance includes cost of fertilizers, pesticides, labour charges etc. It is however observed

from the present study that the manure and fertilizer costs are basically less in comparison to other aspects of maintenance cost.

In other words, the import or buying of manure and fertilizer is very less in the sample villages as the cultivators conglomerate

dung or excreta of domestic animals like Mithun (Bos Frontalis), cow, ox, pig etc. and apply when or where needed. In spite, a

considerable amount of capital is spent in the labour cost. It is said that the wage rate tends to vary seasonally depending upon the

availability of works to be done. In the sample villages, the labour wages are payable under piece rate system of wage payment.

They charge according to size or area of land covered by them. For example, the wage rate chargeable across the sample villages

is Rs. 2,000/- per acre or 0.5 hectare in weeding and pruning the orchard(s).It is however noted that the rate pretend to be vary

annually or seasonally. It is wholly depends on the availability works and corresponding number of workers or labours.

Sometimes, the rate of wage increases and sometimes it decreases and vice-versa. As per the information derived from the

respondents, it is found that the rate of maintenance cost of Orange orchard is decreasing year after year. The rate of decreased

value is not consistent and tends to vary yearly. It depends on the size of the orchard. They further informed that the use of



manure and medicine such as bio-fertilizer, pesticides, insecticides etc. are very minimal. More money is required in hiring of

man power for the pruning of orchard(s). Maximum amount out of maintenance cost is spent on labour.

It may be noted that, maintenance of Orange orchard(s) is a necessary task in order to increase the production. It is therefore

found that the Orange tree that are carefully nurtured and maintained yield more and better quality fruits. It thus increases the

productivity as well as rate of production.

Annual Income from Oranges: It further shown in the Table 4 that 20 (Twenty) person earned annual income of Rs. 50,000/- to

Rs. 1,00,000/-. Besides those, 12 (Twelve) person are under income level of Rs. 1,00,000/- to Rs. 1,50,000/- and 6 (Six) of them

earned Rs. 1,50,000/- to Rs. 2,00,000/- respectively. It is given that only 2 (Two) person among the 40 (thirty) respondents is

earning gross income of Rs. 2,00,000/- and above. The reason for variation of income among the respondents is the different in

size of orchard/s. Orchard/s having large area coverage will yield higher quantity of Orange than the lesser one in terms of

production.

As the trend of production goes on at same pace in the subsequent years but the district has witness a decline in productivity

during the financial year 2010-11. The reason for decreased productivity rate is signified by the above chart that the production

was not proportionate with bearing area during the year. That is why it was very marginal which caused productivity rate in

declining form. This sometimes happens when the Orange tree yield lesser fruits irrespective of areas and the number of trees in

the orchard. In other instances, the productions of fruits are also affected by several diseases and heavy downpour of rain at the

time of blooming.

Therefore, special attention is extensively needed so as to bring out the orchard in more fruitful manner. These feet can be

achieved by taking preventive measures such as proper maintenance of the orchard, proper pruning of ill-fated branches, timely

spraying of pesticides, proper manuring etc.

Village-wise Production of Orange

Village-wise Production of Orange of the sample village is given in the table5

Table-5: Production of Oranges in the Sample Villages (Figure in Metric Ton)

Year

Village

Production in Quantity

Komsing Yeksi Pangin Renging Tekang Total East Siang

2006-07 325 102 85 296 98 906 13416

2007-08 338 118 106 320 126 1008 14757

2008-09 356 139 124 339 142 1100 16300

2009-10 375 154 140 356 157 1182 19500

2010-11 384 174 152 375 175 1260 21450


It is to be mention that production of Oranges in the region is usually optimum in quantity. There is however no standard rate of

production as most of the cultivators is unaware of competency. In addition, they are confronting several hardships due to the

remoteness and infrastructure backwardness. New technology and HYV seedlings are yet to be launched in the region. It is rightly

said that there is need of technical intervention in any sort of activity in order to upgrade and develop. Since, the cultivators itself

spend their energy in producing Oranges and they indeed succeed to produce more as per their capability. In this respect, below is

the table showing village wise production of Orange for the last five years.

The data shown in the above given table5 is further shown in the following graph:

Graph-1

Sources: Primary Data.

0

5000

10000

15000

20000

25000

Komsing Yeksi Pangin Renging Tekang Total East SiangPro

du

ctio

n (

in M

T)

Sample Villages

Production of Oranges in the Sample Villages

2006-07

2007-08

2008-09

2009-10

2010-11



The above plotted chart indicates the village wise production of Oranges in Metric Ton. It is however observed from the above

chart that gross production of Orange is optimum in the particular region. The figure shows that trend of production is in

increasing direction in almost all the villages. Among the Orange producing villages, Komsing village emerged to be the highest

followed by Renging village. In terms of quantity, it produced 325 MT in the year 2006-07 i.e. 36 per cent of the total production

i.e. 906 MT. Renging occupied the second spot by contributing 33 per cent i.e. 296 MT. Irrespective of the quantity, both the

villages have same trend of production i.e. both are heading in similar direction. But if we carefully gaze on the above laid chart,

Komsing has gradual as well as steady increased rate of productivity.

On the other hand, Renging had the same but slight differences are there. It has lesser rate of productivity than Komsing. Apart

from the two giant producing villages, others include Yeksi 102 MT, Tekang 98MT which are 11 per cent each and Pangin 85 MT

i.e. 9 per cent respectively during the same year or season. In the next two subsequent years, the rate of production of almost

every quarter seems to be in increasing trend. The total productions in these periods were 1008 MT in 2007-08,1100 MT in 2008-

09, 1182 in 2009-10 and finally, 1260 MT in 2010-11.This indicates that the farming of Orange crop in the region is favourable.

In economic terminology, it is consider that the increased production manifests corresponding increase of revenue generation.

On the other hand, it can be observed from the above chart that the gross contribution of the selected sample villages towards the

district is very marginal. It was only 6.75 per cent during the year 2006-07. However, it seems that the percentage has been

improved a lot during the year 2007-08 as it goes up to 6.8 per cent. It has been further observed that the percentage rate of

contribution have a considerable variations as it again decreased to 6.7 during the subsequent year. Ultimately, it has been

observed that the contribution rate take a negative slope in the two subsequent periods i.e. 6.2 per cent in 2009-10 and 5.8 per cent

in 2010-11 respectively.

Perhaps the annual productions as well as the productivity rate of the sample villages are increasing yearly irrespective of

decreased rate of contribution towards the district’s annual output. The reason for decreasing trend of contribution is due to

extension of Orange farming across the district. It may be mention that the district comprised of 144 villages and almost 60 per

cent of the total population undertakes Orange cultivation. They also contribute respective quantity towards the district which also

has proportionate impact on the annual production.

COMMERCIAL PERSPECTIVE OF ORANGES: AN ILLUSTRATION

As per the standard norms set by the Horticulture Department, Government of Arunachal Pradesh, the number of Orange trees in

one hector is 270 allowing 6 metres distances between the trees across the orchard as a gap. The reason for providing such gaps is

so as to prevent congestion among the trees. It is believed that insufficient gap in an orchard hamper the growth, yield rate and

taste of Orange due to the congestion between the trees.

Furthermore, the standard quantity of a tree is assumed to be 62 kg per tree or 8 fruits as 1 kg. In order to make the production

analysis more accurate, the standard price (market price) of Orange have been considered uniform during the whole 5 (five) years

as Rs. 80/- per 100 fruits. The rate of self-consumption by the cultivators had also been taken uniformly at 20 per cent from the

annual production.

The standard method set by Government in evaluating the annual production and productivity of Orange fruits in the following

manner which has been explained below:

Numerically,

1 acre = 4000 sqmtr i.e. 110 plants can grow,

1 hectare = 10000 sqmtr i.e. 270 plants can grow,

Total number of trees in 1 Hectare = 10000 ÷ 36 = 277.77 i.e. 270 trees,

Whereas: 36 sqmtr is the total gaping area provided in 1 hectare.

Average bearing capacity of a tree = 500 fruits per tree,

Standard Quantity per tree = 62 Kg,

Total Production per hectare = 62 × 270 = 16740 Kg,

or, 16740 ÷ 1000 = 16.74 MT per hectare.

The above standard values are executed by the Horticulture Department and they considered this standard as the official yardstick

in calculating and maintaining records of the annual production and productivity of Orange fruits of the concerned region. This

standard yardstick is applicable in every Horticultural unit across the state so that production and sell of Orange fruits can be

easily measure.

On the other hand, there is slight altercation between the Horticultural Department and the prospective cultivators regarding the

fruit bearing capacity of Orange tree. The cultivators affirm that an Orange tree bears 1000 to 4000 fruits during peak season

whereas it is 500 fruits according to the provision laid by Horticultural department. The claims of cultivators are, more often,

found true as the Orange tree after reaching its maturity period i.e. 10 to 12 years, began to produce more fruits which may vary

up to 3000 to 4000. In such kind of situation, the standard norms levied by the Horticultural Department are very minimal. It

therefore conceals the real value of production as well as contribution of the Orange towards the economy of the state in general

and the region in particular.



As a matter of fact, quantitative approach has been applied for the evaluation of annual income derived from selling of Oranges.

Earlier, it was sought that Horticultural Department embraces a specific standard to calculate or measure the volume of production

and quantity being disbursed. Here, the above given data have been evaluated by using this standard. It was so calculated by

considering the annual production. Like that of other essential commodity, the market price of Orange also varies seasonally.

During the peak season where production is surplus, there is little decrease in the price level.

In contrary, the price used to go up when the production is less or minimum. This is called off-season in the economic

terminology. As per the information derived from cultivators, the price sometimes reached Rs. 135/-per 100 fruits. It is mentioned

here that although the product is quantify in terms of MT (Metric Ton) but selling is done in terms of number of fruits. Usually,

the prospective cultivators used to sale their product i.e. Oranges by way of fixing the rate or price on every 100 fruits.

The following illustration may prove noteworthy in preventing the intricacies regarding the analysis and evaluation of gross profit

on sale of Oranges. For example, Mr A is a cultivator and holding an Orange orchard of an area of 1 hectare. He spends Rs.

8000/- as maintenance cost every season i.e. annually and also pays an amount of Rs. 300/- as sales tax. He also consumed 3% of

the total production for self-consumption. According to the standard set by Horticultural Department Government of Arunachal

Pradesh, the total production and income derived from orchard would be calculated as follow:

Here, we are given:

Total area of the orchard = 1 hectare i.e. 10000sqmtr,

Total number of Orange trees = 270,

Average bearing capacity of a tree = 500 fruits,

Standard quantity of a tree = 62 kg,

(Since normal size 8 Oranges equal to 1 kg, therefore 500 fruits÷ 8 = 62 kg),

Therefore, total production of the orchard = 270 × 62 = 16740 kg,

Since, 3% of the total production is used as self-consumption.

We get, 16740 × 3 % = 494 kg.

Therefore, the total production ready for sale would be, 16740 –494 = 16246 kg,

And, if we converted it into MT, we get, 16246 ÷ 1000 = 16.246 MT.

Let us take the average of market price i.e. Rs. 80/- per 100 fruits.

We must then convert MT into fruits, we get, 16.246 × 1000 = 16246 kg

Or, 16246 kg × 8 = 1, 29,968 fruits

Or, 1, 29,968 fruits ÷ 100 fruits = 1299.68

Or, 1299.68 × Rs. 80 = Rs. 1, 03,974 /-

Hence, it is clear from the above illustration that Mr A get Rs. 1, 03,974/- (Rupees One Lakh Three Thousand Nine Hundred

Seventy Four) as a Gross income. If suppose, he spent Rs. 8,000/- as a maintenance cost and Rs. 300/- i.e. Amount charged by

Arunachal Pradesh Marketing Committee (APMC) to every indigenous Grower of the state, he is getting Rs. 95,674/- (Rupees

Ninety Five Thousand Six Hundred Seventy Four) i.e. Rs. 1,03,974 minus Rs. 8,300.

Here, in the case of above illustration, the market price of Orange have been considered fixed i.e. Rs. 80/- per 100 fruits. The price

in fact depends upon the situation of the market. If there is more demand for the fruit crops then obviously the market price will

be increased or higher and vice-versa. It is therefore noted that there is no any fix or consistent rate of the fruit crops. It tends to

vary according to the market situation. Earlier, the region has witnessed a price rise up to Rs. 135/- per 100 fruits. In contrast, they

also came across a situation where the price of Orange fallen down to Rs. 55/- per 100 fruits. Thus, price variation has an eminent

effect on the revenue generation. It is noted that the present day marketing become more convenient in comparison to that of past.

It is because the demand for Orange has become very high in the neighbouring states specially Assam and West Bengal. The

traders from these states purchased the whole fruits of the orchard during peak season. Moreover, the transportation costs which

are considered most problematic hurdles for the Growers are also bore by these traders.

On the other side of the story, the APMC department which are activating recently have been another setback for the trading

communities. The said committee charges both the growers and the traders or buyers at a specified rate. They charge Rs. 1500 to

each and every trader who deals with the producer. It is a mandatory amount that is to be payable by every trader irrespective of

quantity or quality of goods and services deals thereof.

On the other hand, they offer trading (export/import) license to the indigenous producer or grower at their disposal. Along with

that they charge Rs. 300/- to those cultivators who deals by himself or herself the trading activities. Marketing license/permit is

quite mandatory for every cultivator in spite of which he or she can claim compensation for the losses (accidental) from those

authorities under which he or she channelized the product.

CONCLUSIONS

Arunachal Pradesh is being considered one of the most important regions among other north-eastern state of India for growing

horticultural crops abundantly. However, in spite of abundant production of Mandarin Oranges, the cultivators are yet to taste the

real commercial values and practices of Orange cultivation though they take challenges by emphasizing and adopting horticultural



practices than agriculture. This is mainly due to lots of bottlenecks ranging from lack of marketing, poor transportation &

communication, poor education and knowledge, inadequate finance, unscientific cultivation practices, to inadequate support from

government etc.

Therefore, promising role is very much sought from state government to carve the confronting problems to the lowest possible.

More importantly, information relating to costs and benefits of commercial production as discussed is urgently required to be

disseminated to ultimate cultivators. This will not only bring awareness but also encourage the Orange growers to be more

challenging and enterprising.

To conclude, scientific cultivation of Mandarin Oranges offers huge scope for orange production and marketing in the state of

Arunachal Pradesh if see from commercial perspective and it expected that commercialisation of Orange production would

definitely increase the income, living standard and economic self sustenance of the rural poor people of the state in near future.

REFERENCES

1. Azad, K. C.; R., Swarup, and B., K. Sikka, (1998). Horticulture Development in Hill Areas, New-Delhi: K. M. Mittal

Publications.

2. GOAP, (2004). Economic Review of Arunachal Pradesh, Directorate of Economics & Statistics, Government of

Arunachal Pradesh, Itanagar.

3. GOAP, (2005). Primary Census Abstract, Directorate of Census Operations, Arunachal Pradesh.

4. GOAP, (2007). Statistical Hand Book of East Siang District, Department of Economics and Statistics, Pasighat.

5. Krishnaswami, O. R., and M., Ranganathan, (2005). Methodology of Research in Social Sciences, Mumbai: Himalayan

Publishing House.

6. Rao, G. U. K., (2001). “Employment Opportunity in Horticultural Enterprises”, Journal in SEDME.

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THE EXTENDED SERVICES MARKETING MIX USED BY

RESTAURANT AND BANKING INDUSTRY

Akash B. Shah12

ABSTRACT

In the field of marketing, the concept of marketing mix has great importance. There are basic 4 P’s of marketing mix namely -

product, price, promotion, and place. Various combinations of this marketing mix are employed by organization to pursued

customers. However, while dealing with services 3 more P’s namely people, process, and physical evidence plays an

important role. By utilizing these 7 P’s a service organization can be benefited. Just because of the different nature of service,

it should be treated differently than products which are tangible. This difference between product and service makes it more

difficult for marketer to pursued service seeking customers. This paper shows how this service marketing mix is used by

restaurant and banking industry.

This paper has two parts: The first part explain - concept of service, difference between services and goods. And second part

includes - The extended service marketing mix used by restaurant and banking industry.

KEYWORDS

Resturant, Banking, Marketing Mix, Service Marketing, 7P’s, Service Seeking Customer, GDP etc.

INTRODUCTION

Goods and services are the major marketable entities in most commercial activity, though the traditional definition of marketing

has now expanded its scope to include idea, people and so on. Earlier, goods have occupied a lot of space in academic writing, as

there was a growing demand for them in the western, developed countries. As the growth in the market for goods in the developed

world got saturated, their attention has turned toward services. (Source: Nargundkar).

The concept of service marketing was emerging in the early 1970 and had a different field with concept, models and also had a

different characteristic of services.

Source: http://www.iei.liu.se/fek/frist/fek1hel/mafo/forelasningar_2009/1.308975/grnroos1994from4ptorm.pdf

Various reasons for developing the field of service marketing and service management are as follows:

Service marketing concept and service marketing strategies have developed in response to the tremendous growth of

service industry.

Second indicator of the economic importance of services is that trade in services is growing worldwide.

There is increasing dominance of services in economies worldwide. In the year 2007, 60.7 % of gross domestic product

(GDP) is attributed to services.

Sources: Zeithaml, Gremlar, Bitner and Pandit.


Mohammed Rafiq and Pervaiz K. Ahmed (1995) presented a paper on “Using the 7 P’s as a generic marketing mix”, the results

presented here suggest that there is a high degree of dissatisfaction with the 4 P’s framework among European academics. The 4

P’s framework is thought to be most relevant for introductory marketing and consumer marketing. The result also suggests that

the 7 P’s framework has already achieved a high degree of acceptance as a generic marketing mix among our sample of

respondents. However, although there is general support for 7 P’s mix, there is not uniform support for the three new variables.

Seyed Mohammad Hassan Hosseini (2011) surveyed on, “Marketing mix from view point of Zanjan grand restaurant customers”,

and concluded that, the lowest score in ZGH marketing mix is contributed to promotion, which need significant and more

attention. On the other hand people and process dimensions receive the highest score and other factors are rated in between.

CONCEPT OF SERVICE

In market there are two types of products available, i.e. first tangible goods and second intangible services. A person can buy,

consume and also can feel service but a consumer neither watch nor own services. Restaurant, Banking, Insurance, Tourism,

Telecom are the best example of service industry.

A service can be defined as - “Service is a type of economic activity that is intangible, is not stored and does not result in

ownership. It also consumed at point of sale” Source: http://www.investorwords.com/6664/service.html

12Assistant Professor, Anand Institute of Management, Gujarat, India, [email protected]

http://www.iei.liu.se/fek/frist/fek1hel/mafo/forelasningar_2009/1.308975/grnroos1994from4ptorm.pdf

http://www.investorwords.com/6664/service.html




“Service means any activity or benefit which is offered for sale by one person to another, in which ownership is not transferred,

and intangible in nature.”

DIFFERENCE BETWEEN SERVICES AND GOODS

To differentiate service and goods we can say that services are perishable while products are non-perishable, i.e. services cannot

be stored while products can be stored for future use; Second difference is that services are intangible while products are tangible,

i.e. we cannot see services, but we can see goods.

Another difference between service and goods is that services are heterogeneous while products are homogeneous in many

respects, i.e. production and delivery of service varies among different person which is not in the case of goods. Production of

goods can be separated from consumption, while in services, production and consumption are simultaneous i.e. production and

consumption of services are done at the same time; and service cannot be owned while product can be owned, i.e. a person cannot

own a service.

Source: Lovelock, Wirtz and Chatterjee.

THE MARKETING MIX CONCEPT

“A mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called

marketing mix”. Before the concept of service developed, marketing mix includes 4 P’s (product, pricing, promotions and

placement), but now with growing importance of service marketing mix includes 7 P’s (product, pricing, promotions, placement,

people, process and physical evidence).

Elements of the Extended Services Marketing Mix Used by Restaurant and Banking Industry: (The “7 P’s”)

The service marketing mix is also known as the extended service marketing mix and is an integral part of a service blueprint

design. As said above it consists of 7 P’s as compared to the 4 P’s (product, pricing, promotions and placement) of a product

marketing mix. It adds 3 more P’s (people, process & physical evidence) which are required for optimum service delivery.

Figure-1

Sources: http://www.marketing91.com/service-marketing-mix/

Following part of this paper shows how these factors are necessary for delivering services at optimum level with respect to

restaurant and banking industry.

1) Product

Goods produced by manufacturers for the end-users are called products. Products can be of two types - tangible product

and intangible product (services). The product in service marketing mix is intangible in nature. Education industry,

transportation, banking industry, and restaurant can be a best example of service product.

For restaurant, food which they serve is a product. And for banking industry, various deposits and loan schemes which

they offer with different scheme is known as product.

2) Pricing

The money which a buyer has to pay for purchasing a product or service is called as price. Generally service pricing

involves taking into consideration fixed cost (overhead cost) & variable cost (includes both labor and material cost). By

adding a profit markup you get your final service pricing. Pricing also includes discount, commission for channel

partner and credit terms for selling products and services.

http://www.marketing91.com/service-marketing-mix/



For restaurant, raw material cost, labor cost, depreciation cost should consider while calculating cost. On the other hand,

in banking industry they have to consider labor cost, depreciation cost, interest, etc.

3) Promotion

Promotion refers to the various strategies and ideas implemented by the marketers to make the end - users aware of their

brand. Promotion of services is not easy due to intangible nature of services.

There are two ways of promotion

Advertising,

Word of mouth.

Services are easy to be copied and hence it is generally the brand which sets a service apart from its rival. There are

number of educational institutes, travelling agency, and banks promoting themselves rigorously. What is the reason for

that? It is because competition in this service sector is generally high and promotions are necessary to beat competition.

For restaurant word of mouth promotion plays an important role at local level. But for banking industry, they should

advertise their service through mass media advertising.

4) Placement

Placement refers to the location where the products and services are available and can be sold or purchased. Buyers can

purchase products and services either from physical markets or from virtual markets. Placement also includes physical

channel and channel partners.

Place is more important to restaurant than banking industry, the reason is that now banks provides online banking

facility, which is not possible in case of restaurant. The simple reason is that - if a person wants to eat, he/she must have

to visit restaurant.

From now onward paper explains the extended service marketing mix:

5) People

There is high level of importance of people in service industry. The simple reason for this is, if they want to purchase

any service they have to encounter service people. People define a service. In service marketing, people can make or

break an organization, because people create first impression in service industry.

For a restaurant, their cook and service people staff defines restaurant. While in banking industry, their employees in

branch and their behavior with respect to customers define bank.

6) Process

Service process is the way in which a service is delivered to the end customer. Service process includes design of

activity flows. It also clarifies about role of technology, i.e. Degree of automation. Process is a vital element in the

service blueprint, in which company defines exactly what should be the process of delivering the service product to the

end customer, before establishing the service.

In restaurant, the service process will be – greet customer, sitting, order taking, order delivery, bill payment. But in

banking the service process will be – enter the bank, meet with receptionist, discuss issue, meet concern person, solve

problem.

7) Physical Evidence

The last element in the service marketing mix is a very vital element. Physical evidence includes interior design,

equipment, staff grooming, sounds and smells. As said above, services are intangible in nature. Yet, to create a better

customer experience tangible elements are also delivered with the service.

Take an example of a restaurant which has only furniture, or a restaurant which has ambient lighting, well groomed staff

along with good seating arrangement and this also serves good food & service. Which one will you prefer? Obviously,

second one which has nice physical layout. That’s physical evidence. Many times, physical evidence is used as a

differentiator in service marketing.



All 7 P’s can be summarized as following:


CONCLUSIONS

By this paper, it can be concluded that, as there is growing importance of service, the concept of service marketing mix has come

into existence. The service marketing mix is also known as the extended marketing mix. The extended marketing mix includes 7

P’s (Product, Pricing, Promotion, Placement, People, Process, Physical Evidence) instead of original 4 P’s (Product, Pricing,

Promotion, And Placement) of marketing mix.

All 7 P’s are important to restaurant and banking industry. Basic marketing mix (4 P’s) have more importance i.e. basic product,

price, place and promotion are the main factor that influence consumer, though new additional marketing mix adds value to basic

product or service i.e. people, process and physical evidence adds value to basic product or service.

REFERENCES

1. Nargundkar, (2011), Services Marketing, Tata McGraw Hill Education Private Limited, 3rd Edition.

2. Zeithaml; Gremlar; Bitner and Pandit, (2008). Services Marketing - Integrating Customer Focus across the Firm”, Tata

McGraw Hill Publishing Company Limited, 4th Edition.

3. Lovelock; Wirtz and Chatterjee, Service Marketing, Pearson Education, 5th Edition.

4. http://www.iei.liu.se/fek/frist/fek1hel/mafo/forelasningar_2009/1.308975/grnroos1994from4ptorm.pdf

5. http://www.marketing91.com/service-marketing-mix/

6. http://www.achmadyaun.com/marketing/25.pdf

7. http://www.managementstudyguide.com/marketing-mix.htm

8. http://www.sajth.com/vol4issue1/B%20Seyed%20Mohd.pdf

*****

FOR ANY CLARIFICATION OR SUGGESTION, WRITE US:

Editor-In-Chief




(Mobile): +91-09419216270 – 71

[email protected]

[email protected]

http://www.iei.liu.se/fek/frist/fek1hel/mafo/forelasningar_2009/1.308975/grnroos1994from4ptorm.pdf

http://www.marketing91.com/service-marketing-mix/

http://www.achmadyaun.com/marketing/25.pdf

http://www.managementstudyguide.com/marketing-mix.htm

http://www.sajth.com/vol4issue1/B%20Seyed%20Mohd.pdf





GREEN MARKETING: AN CONCEPTUAL VIEW

D. Anand13 R. Vasudevan14

ABSTRACT

In today's business world environmental issues plays an important role in marketing. All most all the governments around the

world have concerned about green marketing activities that they have attempted to regulate them. For example, in the United

States (US) the Federal Trade Commission and the National Association of Attorneys-General have developed extensive

documents examining green marketing. There has been little attempt to academically examine environmental or green

marketing.

This article introduces the terms and concepts of green marketing, briefly discuss why going green is important and also

examine some of the reason that organizations are adopting a green marketing philosophy. It also focuses some of the

problems with green marketing.

KEYWORDS

Green Marketing, Organization, Environment, Policies, Competitive Advantage etc.

INTRODUCTION

Many people believe that green marketing refers solely to the promotion or advertising of products with environmental

characteristics. Generally terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are

some of the things consumers most often associate with green marketing. In general green marketing is a much broader concept,

one that can be applied to consumer goods, industrial goods and even services. For example, around the world there are resorts

that are beginning to promote themselves as "ecotourism" facilities, i.e., facilities that specialize in experiencing nature or

operating in a fashion that minimizes their environmental impact .

Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process,

packaging changes, as well as modifying advertising. But to define green marketing is not a simple task. The terminology used in

this area has varied, it includes: Green Marketing, Environmental Marketing and Ecological Marketing. While green marketing

came into prominence in the late 1980s and early 1990s, it was first discussed much earlier.

The American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975. The proceedings of this

workshop resulted in one of the first books on green marketing entitled "Ecological Marketing". Green marketing is defined as

"Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to

satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on

the natural environment."

This definition incorporates much of the traditional components of the marketing definition, that is "All activities designed to

generate and facilitate any exchanges intended to satisfy human needs or wants" Therefore it ensures that the interests of the

organization and all its consumers are protected, as voluntary exchange will not take place unless both the buyer and seller

mutually benefit. The above definition also includes the protection of the natural environment, by attempting to minimize the

detrimental impact this exchange has on the environment. This second point is important, for human consumption by its very

nature is destructive to the natural environment. So green marketing should look at minimizing environmental harm, not

necessarily eliminating it.

IMPORTANCE OF GREEN MARKETING

Man has limited resources on the earth, with which she/he must attempt to provide for the worlds' unlimited wants. There is

extensive debate as to whether the earth is a resource at man's disposal. In market societies where there is "freedom of choice", it

has generally been accepted that individuals and organizations have the right to attempt to have their wants satisfied. As firms

face limited natural resources, they must develop new or alternative ways of satisfying these unlimited wants. Ultimately green

marketing looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals

and industry, as well as achieving the selling organization's objectives.

When looking through the literature there are several suggested reasons for firms increased use of Green Marketing. Five possible

reasons are as follows:

1. Organizations perceive environmental marketing to be an opportunity that can be used to achieve its objectives.

2. Organizations believe they have a moral obligation to be more socially responsible. Governmental bodies are

forcing firms to become more responsible.

13Professor & Head, Management Studies, Easwari Engineering College, Tamil Nadu, India, [email protected] 14Assistant Professor, Management Studies, Easwari Engineering College, Tamil Nadu, India, [email protected]





3. Competitors' environmental activities pressure firms to change their environmental marketing activities.

4. Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior.

OPPORTUNITIES

All types of consumers, both individual and industrial are becoming more concerned and aware about the natural environment. In

a 1992 study of 16 countries, more than 50% of consumers in each country, other than Singapore, indicated they were concerned

about the environment. A 1994 study in Australia found that 84.6% of the sample believed all individuals had a responsibility to

care for the environment. A further 80% of this sample indicated that they had modified their behavior, including their purchasing

behavior, due to environmental reasons. As demands change, many firms see these changes as an opportunity to be exploited. It

can be assumed that firms marketing goods with environmental characteristics will have a competitive advantage over firms

marketing non-environmentally responsible alternatives.

There are numerous examples of firms who have strived to become more environmentally responsible, in an attempt to better

satisfy their consumer need. McDonald's replaced its clam shell packaging with waxed paper because of increased consumer

concern relating to polystyrene production and Ozone depletion. Xerox introduced a "high quality" recycled photocopier paper in

an attempt to satisfy the demands of firms for less environmentally harmful products.

This is not to imply that all firms who have undertaken environmental marketing activities actually improve their behavior. In

some cases firms have misled consumers in an attempt to gain market share. In other cases firms have jumped on the green

bandwagon without considering the accuracy of their behavior, their claims, or the effectiveness of their products. This lack of

consideration of the true "greenness" of activities may result in firms making false or misleading green marketing claims.

SOCIAL RESPONSIBILITY & GREEN MARKETING

Many firms are beginning to realize that they are members of the wider community and therefore must behave in an

environmentally responsible fashion. This translates into firms that believe they must achieve environmental objectives as well as

profit related objectives. This results in environmental issues being integrated into the firm's corporate culture. Firms in this

situation can take two perspectives; (1) they can use the fact that they are environmentally responsible as a marketing tool; or (2)

they can become responsible without promoting this fact. There are examples of firms adopting both strategies.

Organizations like the Body Shop heavily promote the fact that they are environmentally responsible. While this behavior is a

competitive advantage, the firm was established specifically to offer consumers environmentally responsible alternatives to

conventional cosmetic products. This philosophy is directly tied to the overall corporate culture, rather than simply being a

competitive tool. An example of a firm that does not promote its environmental initiatives is Coca-Cola. They have invested large

sums of money in various recycling activities, as well as having modified their packaging to minimize its environmental impact.

While being concerned about the environment, Coke has not used this concern as a marketing tool. Thus many consumers may

not realize that Coke is a very environmentally committed organization. Another firm who is very environmentally responsible

but does not promote this fact, at least outside the organization, is Walt Disney World (WDW). WDW has an extensive waste

management program and infrastructure in place, yet these facilities are not highlighted in their general tourist promotional

activities.

GOVERNMENTAL PRESSURE

As with all marketing related activities, governments want to "protect" consumers and society; this protection has significant

green marketing implications. Governmental regulations relating to environmental marketing are designed to protect consumers in

several ways, 1) reduce production of harmful goods or by-products; 2) modify consumer and industry's use and/or consumption

of harmful goods; or 3) ensure that all types of consumers have the ability to evaluate the environmental composition of goods.

Governments establish regulations designed to control the amount of hazardous wastes produced by firms. Many by-products of

production are controlled through the issuing of various environmental licenses, thus modifying organizational behavior. In some

cases governments try to "induce" final consumers to become more responsible. For example, some governments have introduced

voluntary curb-side recycling programs, making it easier for consumers to act responsibly. In other cases governments tax

individuals who act in an irresponsible fashion. For example in Australia there is a higher gas tax associated with leaded petrol.

COMPETITIVE PRESSURE

Another major force in the environmental marketing area has been firms' desire to maintain their competitive position. In many

cases firms observe competitors promoting their environmental behaviors and attempt to emulate this behavior. In some instances

this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behavior. For

example, it could be argued that Xerox's "Revive 100% Recycled paper" was introduced a few years ago in an attempt to address

the introduction of recycled photocopier paper by other manufacturers. In another example when one tuna manufacture stopped

using driftnets the others followed suit.



COST OR PROFIT ISSUES

Firms may also use green marketing in an attempt to address cost or profit related issues. Disposing of environmentally harmful

by-products, such as polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases

difficult. Therefore firms that can reduce harmful wastes may incur substantial cost savings. When attempting to minimize waste,

firms are often forced to re-examine their production processes. In these cases they often develop more effective production

processes that not only reduce waste, but reduce the need for some raw materials. This serves as a double cost savings, since both

waste and raw material are reduced. In other cases firms attempt to find end-of-pipe solutions, instead of minimizing waste. In

these situations firms try to find markets or uses for their waste materials, where one firm's waste becomes another firm's input of

production. One Australian example of this is a firm who produces acidic waste water as a by-product of production and sells it to

a firm involved in neutralizing base materials. The last way in which cost or profit issues may affect firms' environmental

marketing activities is that new industries may be developed. This can occur in two ways: 1) a firm develops a technology for

reducing waste and sells it to other firms; or 2) a waste recycling or removal industry develops. For example, firms that clean the

oil in large industrial condensers increase the life of those condensers, removing the need for replacing the oil, as well as the need

to dispose of the waste oil. This reduces operating costs for those owning the condensers and generates revenue for those firms

cleaning the oil.

SOME PROBLEMS WITH GREEN MARKETING

There are a number of potential problems that must overcome. One of the main problems is that firms using green marketing must

ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing

with environmental marketing. Green marketing claims must clearly state environmental benefits. A problem of the firms face is

that thos who modify their products due to increased consumer concern must contend with the fact that consumers' perceptions are

sometimes not correct. For example the McDonald's case where it has replaced its clam shells with plastic coated paper.

There is ongoing scientific debate which is more environmentally friendly. Some scientific evidence suggests that when taking a

cradle to grave approach, polystyrene is less environmentally harmful if this is the case McDonald's bowed to consumer pressure,

yet has chosen the more environmentally harmful option. When firms attempt to become socially responsible, they may face the

risk that the environmentally responsible action of today will be found to be harmful in the future. Take for example the aerosol

industry which has switched from CFCs (chlorofluorocarbons) to HFCs (hydro fluorocarbons) only to be told HFCs are also a

greenhouse gas. Some firms now use DME (di-methyl ether) as an aerosol propellant, which may also harm the ozone layer.

Given the limited scientific knowledge at any point, it may be impossible for a firm to have made the correct environmental

decision. This may explain why some firms, like Coca-Cola and Walt Disney World, are becoming socially responsible without

publicizing the point.

They may be protecting themselves from potential future negative backlash; if it is determined they made the wrong decision in

the past. While governmental regulation is designed to give consumers the opportunity to make better decisions or to motivate

them to be more environmentally responsible, there is difficulty in establishing policies that will address all environmental issues.

For example, guidelines developed to control environmental marketing address only a very narrow set of issues, i.e., the

truthfulness of environmental marketing claims. If governments want to modify consumer behavior they need to establish a

different set of regulations.

Thus governmental attempts to protect the environment may result in a proliferation of regulations and guidelines, with no one

central controlling body. Reacting to competitive pressures can cause all "followers" to make the same mistake as the "leader."

Mobil Corporation who has followed the competition and introduced "biodegradable" plastic garbage bags, as because technically

these bags were biodegradable, the conditions under which they were disposed did not allow biodegradation to occur. Mobil was

sued by several US states for using misleading advertising claims. Thus blindly following the competition can have costly

ramifications.

The push to reduce costs or increase profits may not force firms to address the important issue of environmental degradation. End-

of-pipe solutions may not actually reduce the waste but rather shift it around. While this may be beneficial, it does not necessarily

address the larger environmental problem, though it may minimize its short term affects. Ultimately most waste produced will

enter the waste stream, therefore to be environmentally responsible organizations should attempt to minimize their waste, rather

than find "appropriate" uses for it.

CONCLUSIONS

Green marketing covers more than a firm's marketing claims. While firms must bear much of the responsibility for environmental

degradation, ultimately it is consumers who demand goods, and thus create environmental problems. One example of this is where

McDonald's is often blamed for polluting the environment because much of their packaging finishes up as roadside waste. It must

be remembered that it is the uncaring consumer who chooses to disposes of their waste in an inappropriate fashion. While firms

can have a great impact on the natural environment, the responsibility should not be theirs alone. It appears that consumers are not

overly committed to improving their environment and may be looking to lay too much responsibility on industry and government.

Ultimately green marketing requires that consumers want a cleaner environment and are willing to "pay" for it, possibly through

higher priced goods, modified individual lifestyles, or even governmental intervention. Until this occurs it will be difficult for



firms alone to lead the green marketing revolution. It must not be forgotten that the industrial buyer also has the ability to pressure

suppliers to modify their activities.

Thus an environmental committed organization may not only produce goods that have reduced their detrimental impact on the

environment, they may also be able to pressure their suppliers to behave in a more environmentally "responsible" fashion. Final

consumers and industrial buyers also have the ability to pressure organizations to integrate the environment into their corporate

culture and thus ensure all organizations minimize the detrimental environmental impact of their activities.

REFERENCES

1. Crane, A., (2000). “Facing the Backlash: Green Marketing and Strategic Re-Orientation in the 1990s”, Journal of

Strategic Marketing, Volume: 8, Number: 3, pp. 277-96.

2. Elkington, J., (1994). “Towards the Sustainable Corporation: Win Win Business Strategies for Sustainable

Development”, California Management Review, Volume: 36, Number: 2, pp. 90-100.

3. Mintel, (1991). “The Green Consumer Report”, London.

4. Ottman, J. A., (1993). Green Marketing: Challenges and Opportunities, Chicago, IL: NTC Business Books.

5. Porter, M. E., and Van, der Linde, (1995). “Green and Competitive: Ending the Stalemate”, Harvard Business Review,

Volume: 73, Number: 5, pp. 120-33.

6. Shelton, R. D., (1994). “Hitting the Green Wall: Why Corporate Programs Get Stalled”, Corporate Environmental

Strategy, Volume: 2, Number: 2, pp. 5-11.

7. Smithe, T., (1998). The Green Marketing Myth: Tending out Goats at the Edge of Apocalypse, Toronto: University of

Toronto Press.

8. Wong, V.; Turner, W., and Stoneman, P., (1996). “Marketing Strategies and Market Prospects for Environmentally-

Friendly Consumer Products”, British Journal of Management, Volume: 7, Number: 3, pp. 263-81.

*****

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CUSTOMER RELATIONSHIP MANAGEMENT: AN CONCEPTUAL OVERVIEW

G. Arockia Raj15

ABSTRACT

CRM helps track and manage customer relationships. In the past, CRM was a term used only to describe a software

application used by customer service representatives to manage customer interactions. However, in recent years, CRM has

come to describe the software system, the documented customer service processes, and a customer-centric philosophy and

methodology.

Enterprise Resource Management (ERP) and Customer Relationship Management (CRM) are two business management

systems that often integrate policies, processes, procedures and computerized documentation and tracking to improve business

flows and productivity. By integrating the two, an organization can manage all aspects of its operation by monitoring and

modifying repeatable processes with documentable metrics.

KEYWORDS

Management, Information, Systems, Technology, Customer Relationship Management (CRM), Data Warehousing,

Enterprise Resource Planning (ERP) etc.

INTRODUCTION

Customer Relationship Management (CRM) is the customer-focused business strategy which is not a new concept. Although

CRM is more about the customer, it cannot be successful by this definition alone. CRM should be performed in organizations as

the combination of three main concepts: people, processes, and technology. Customer relationship management (CRM) is a

combination of people, processes, and technology that seeks to provide understanding of customer needs, to support a business

strategy, and to build long-term relationships with customers.

To increase relationships with all customers the integration of these three is essential. Applying CRM’s system in one

organization means a change in different areas of the business and seeks a proper balance of people, processes, and technology.

One of the main reasons of CRM failures is considering technology as the main part of the system. CRM project success will

happen if the CRM users investigate people, process, and technology either one by one or together.

The Goals of CRM Are:

Building long-term and profitable relationships with chosen customers,

Getting closer to those customers at every point of contact with them.

TOP MANAGEMENT

Top management commitment is more essential than CEO attention to the CRM project. This view was reinforced that singled out

top management support and involvement as a key success factor for CRM implementations. Customer-centric management

requires top management support and commitment to CRM throughout the entire CRM implementation.

Moreover, top management should provide the stage in CRM initiatives for leadership, strategic direction, and alignment of vision

and business goals. Also warns against starting a CRM project if senior management does not fundamentally believe in re-

engineering a customer-centric business model. Top management must show its commitment to development of company

education and training programs, and also enhancing employee skills and knowledge.

Furthermore, it should be noted that education increases motivation and commitment of employee and reduces employee

disagreements. In addition to these, different reward programs such as compensation programs and reward systems for employees

should be considered by management.

CRM projects require absolute attention of all members of the organizational departments such as sales, marketing,

manufacturing, customer services, information technology, etc. Top management and marketing and sales management are

generally the initiators of a corporate CRM project. In addition, project teams require not only sponsorship by top management

but also a project champion that can persuade top management for continuous efforts to change.

PHASES OF CRM

The whole idea of studying, analyzing and creating new customers while trying to keep the current customers happy and satisfied

is known as CRM, or customer relationship management. The very core of CRM is nothing more than collecting customer data

and analyzing it to make decisions that bring in new customers apart from satisfying the existing ones.

15P.G. Assistant in Commerce, LFHSS, Tamil Nadu, India, [email protected]




People

The people component is the most difficult one in order to adjust employees/staffs to the changes. Those users, who do not have

an understanding of the reasons for the changes, usually oppose that change. CRM initiatives require vision and each and every

employee must understand the purpose and changes that CRM will bring. CRM success will be in danger by negative feedback.

Implementation of enterprise technology, such as CRM and ERP, requires changes to organizational culture. While both

technology and business processes are crucial to successful CRM initiatives, the attention is back on individual employees who

are the basis of the customer relationship. Along several important elements regarding to management and employee team that

successful CRM system requires, top management commitment plays the main role.

Process

The process component of CRM is the most delicate one because inappropriate process is the same as continuing your work

aimlessly. When the company aims to create an effective process change, first of all it seeks to know the function of existing

customer-facing business processes. Then the company needs to redesign or replace the process with ones that have been created

and / or agreed upon internally. As an example, the replacement or updating of the business processes happens for most

companies that have the process of direct contact with the customers during the purchase, payment, and usage of the company's

products and services.

CRM is a combination of business processes and technology that seeks to understand a company’s customer from the perspective

of who they are, what they do, and what they are like. It should be considered that companies have been repeatedly warned that

failure is eminent if they believe that CRM is only a technology solution.

The shortage of customer- facing process will not compensate by purchasing CRM software, the solution is agreeing internally on

how users would like a process to be done. In fact, CRM is an integrated approach to managing customer relationships with re-

engineering of customer value through better service recovery and competitive positioning of the offer.

The goals of a customer-centric model are to increase revenue, promote customer loyalty, reduce the cost of sales and service, and

improve operations. Emphasized that optimizing customer relationships requires a complete understanding of all customers;

profitable as well as non-profitable, and then to organize business processes to treat customers individually based on their needs

and their values, Identify, customize, interact, and differenciate.

Planning

The meaning of the very word "planning" makes this stage of customer relationship management very explicit. It begins with the

business organization planning to primarily approach its customers or prospective customers. The second part of the planning

phase is in the design of campaigns to get more customers for it to flourish. This entire phase includes relevant software-

marketing tools as well as the personal marketing of goods and sales without which the first phase is incomplete.

Assessment

It is imperative to understand that a customer base needs to be selected for the relevant analysis, but without assessment the whole

idea of customer relationship management doesn’t work. Immediately after that the customer’s various requirements are studied

explicitly to know what they are looking for.

The assessment phase also includes software much like data warehousing, data mining and online analytical processing. Certified

personnel make the CRM function while the analyst is responsible for analyzing the data collected from various customer sources.

The data is used to help the company better prepare its marketing material for consumers.

Execution

Execution is the most important phase because the customer feedback and interaction are a major part of this stage. Therefore, it is

this phase in which direct contact with the customer is how the flagship is able to find out whether the customer is actually

satisfied with its product. All of the feedback coming from the customers is treated as crucial to the company’s reputation.

The execution stage includes the use of Internet, call centers and surveys in a systematic way to keep track of what the customers

actually are getting from the company and what they may or may not want in the future.

BENEFITS OF CRM

For any business, excellent customer service involves awareness of customer needs and effective response to those needs.

Customer relationship management, or CRM, combines elements of different processes, principles, software and strategies to help

businesses understand, anticipate, and respond to customer needs consistently.



Knowledge of Customer Needs

CRM allows an organization to develop a knowledge base that all employees can accessible easily. This allows the company to

analyze available data and provides employees with accurate information about customers. It also empowers the organization to

arrive at correct and well-informed decisions.

In addition, it helps the company be as close to the client base as possible so it can effectively anticipate their changing needs and

cater to such needs. With the knowledge base, employees can easily share and update any piece of information to any department

with ease.

Higher Revenues

CRM can boost customer revenue through efficient computerized bookkeeping. This allows the organization to increase its

revenue through higher volumes of purchases.

With improved customer satisfaction, businesses can be assured that their clients will veer away from competitors. CRM assists

an organization with its advertising campaigns, direct mail, and e-commerce. It will also help manage customer profile analyses to

enhance marketing strategies. With CRM, coordination of various processes such as customer sales, customer care, orders,

warehousing, payment processing, packing, returns processing, and inventory management becomes easier.

For example, you can make sure to offer the lower cost opportunities to clients who are more conscious of price while offering the

higher-end products to those clients in the luxury market.

Improved Communication and Customer Satisfaction

Employing efficient CRM processes will help achieve goals that target successful communication and fulfillment of customer

needs. Therefore, CRM helps improve communication between the company and its customers. Employing CRM methods

enhance customer satisfaction with the company and all its products. If customers are happy and satisfied, the company can easily

retain customers for long periods of time without exerting much effort. This will also contribute to the company's good reputation

in the market and in the eyes of the customers.

In other words, CRM will help create and retain customers, and help keep them loyal. It ensures customers will have fulfilling

relationships with the company, which will always do its part in delivering excellent customer service.

TECHNOLOGY

The technology component is the toughest one, because there are a lot of technology offerings and alternatives. There are two

issues related to technology: dealing with CRM software vendors and staying on top of CRM technology trends. CRM is a

strategy that puts together a combination of Information Technology (IT) with business processes and services such as Data

Warehouse Technology and Enterprise Resource Planning (ERP) Technology.

Information Technology

Whereas CRM collect and analyze data on customer patterns and also deliver customer data by accumulating, storing,

maintaining, and distributing customer knowledge throughout the organization, CRM takes so much advantage of different

dimensions of technology.

Technology innovations have the ability of interpreting customer behavior, developing predictive models, responding with timely

and effective customized communications, and delivering product and service value to individual customers. Using technology to

“optimize interactions” with customers, companies can create a 360 degree view of customers to learn from past interactions to

optimize future ones.

Information Technology (IT) has long been recognized as an enabler to radically redesign business processes in order to achieve

dramatic improvements in organizational performance. IT assists with the re-design of a business process by facilitating changes

to work practices and establishing innovative methods to link a company with customers, suppliers and internal stakeholders.

Innovations in network infrastructure, client/server computing, and business intelligence applications are the main elements in

CRM development. In CRM, an effective management of information has an efficient role. Information is critical for product

tailoring, service innovation, consolidated views of customers, and calculating customer lifetime value. Among others, data

warehouses, and enterprise resource planning (ERP) systems are main infrastructures to CRM implementations

Simple CRM

A number of small business CRM applications exist at low or no cost. Microsoft's Office Suite comes with a basic CRM

application provided as a sample of the Access database. Several open source CRM package,s like openCRX and SugarCRM,

provide free CRM applications.



Full-Featured CRM

Larger businesses need full-featured CRM applications. For example, Frontrange's Goldmine, permits businesses to not only keep

information about their customers at hand, it provides work flows and incident tracking for billing purposes.

CRM in the Cloud

One method for rapid adoption of a CRM without increasing IT staff is to host it with a service provider. Salesforce.com and

Microsoft Dynamics store customer data in secure data warehouses and the data is accessed via the Internet. The advantage of

having the CRM hosted is universal access. Field sales staff gains instant access to customer information from anywhere they

have Internet access.

Data Warehouse Technology

Data warehouse is the most popular and most needed of systems for providing CRM operating systems such as HR, sales and

transaction processing, financial, inventory, purchasing and marketing. Specifically, data warehouses extract, clean, transform,

and manage large volumes of data from multiple, heterogeneous systems, creating a historical record of all customer interactions.

Constantly extracting knowledge about customers reduces the need for traditional marketing research tools such as customer

surveys and focus groups.

Thus, it is possible to identify and report by product or service, geographic region, distribution channel, customer group, and

individual customer. Data warehouse causes instant access to information throughout the organization and also makes CRM

possible because it consolidates, correlates, and transforms customer data into customer intelligence that can used to form a better

understanding of customer behavior. Customer data includes all sales, promotions, and customer service activities.

In addition to transaction details, information related to billing and account status, customer service interactions, back orders,

product shipment, product returns, claims history, and internal operating costs can improve understanding of customers and their

purchasing patterns too.

A brief outline of organizational benefits with a data warehouse is:

Accurate and faster access to information to facilitate responses to customer questions,

Data quality and filtering to eliminate bad and duplicate data,

Extract, manipulate and drill-down data quickly for profitability analysis,

customer profiling, and retention modeling,

Advanced data consolidation and data analysis tools for higher level summary as well as detailed reports,

Calculate total present value and estimate future value of each and every customer.

Enterprise Resource Planning (ERP) Technology

The implementation of Enterprise Resource Planning (ERP) produces an improvement in the quality and efficiency of business

processes. However, when the majority of companies in a sector have optimised their internal processes, this improvement

becomes a condition that is necessary to remain in the market, but ceases to be a competitive advantage.

Successful ERP links all areas of a company. The management, manufacturing, human resources, financial systems and

distribution will connect to external suppliers and customers into a tightly integrated system with shared data and visibility.

Organizations with successful ERP marketing, are preparing themselves for creating a good relationship with CRM or taking over

other software companies that have been operating in the CRM market. ERP technology and CRM applications have significant

differences.

CRM applications are web-enabled and designed to extend the data mining capabilities of ERP throughout the supply chain to

customers, distributors, and manufacturers. Organizations can use CRM analytical capabilities to predict and answer key business

questions on customer intelligence and share the results across channels. Although ERP is not required for CRM, providing

customers, suppliers, and employees with web-based access to systems through CRM will only be beneficial if the underlying

infrastructure, such as data warehouses and/or ERP, exists. Companies with an ERP system, however, need to understand where

they are in the implementation process, as well as assess where other technologies, such as data warehouses, fit in before plunging

into CRM applications.

Integrating ERP with CRM is an ideal solution for companies that perform both manufacturing tasks and deal heavily with

customer service issues. By integrating CRM with ERP, customer orders can be automatically integrated into a manufacturing

flow and supplier chain management system. For companies engaging in custom builds, the time to deliver can be lower and

problems with component delivery can be solved by initiating supplier orders as customer orders come in.

ERP is often directly integrated into CRM because of their similarities with regard to data collection and analysis. Broad software

applications can cover both programs' needs. ERP uses data for improved operational efficiencies, while CRM works to increase

revenue.



SECRETS TO CRM SUCCESS

In 70 percent of Customer Relationship Management (CRM) implementations failed, and many more didn't live up to customer

expectations. Today, CRM is being adopted far more successfully than in the past. The secret to the success is a combination of

factors, including making slow iterative changes, involving users, and only implementing software that meets present needs. CRM

is about changing people and process first. CRM software itself is nothing more than a means to enable this.

Involve Users Early

When implementing CRM, successful organizations bring users to the table early, meaning before software has been licensed.

This helps validate process, and engage users in the changes needed for an organization to become customer-centric. Unmitigated

organization change in adopting CRM processes is a leading reason for a project to be considered a failure. Users can validate

how tasks are actually completed and ensure the processes support those practices.

Develop a Comprehensive Training Plan

Another success factor when adopting CRM is to have a comprehensive training plan that covers both the initial implementation

and ongoing training. Some user groups of a CRM system typically have high turnover rates, so ongoing training must have the

same rigor as the initial training to keep data quality high in the CRM system and maintain user confidence. Oorganizations that

devote an equal amount of training to CRM processes as they do the CRM software typically have more success.

Implement Piecemeal

Another tactic to increase CRM success is to implement with smaller projects. In early organizations were encouraged by CRM

vendors to buy big packages that would encompass all their future CRM needs, which were often never fully implemented.

Today's projects are targeted, and functionality is only purchased as needed. This doesn't mean that an organization shouldn't have

a future vision to guide greater CRM adoption it just should be realized in bite-sized chunks to gain credibility and momentum.

Share CRM Data

Golden customer data is one CRM success factor that will drive a real competitive advantage, but only if the right people in the

organization can access it. CRM data should be integrated into key enterprise systems, including customer portal sites, accounting

systems or any system that needs customer information. Data is integrated to support a multi-department process, such as order

fulfillment, which makes it less likely that an order will get lost when sales hands off the order to the warehouse staff.

CONCLUSIONS

CRM requires a customer-centric business environment to support effective marketing, sales, and service processes. Many firms

have switched from a product-centric to a customer-centric culture, which emphasizes the whole customer experience.

Investigating CRM elements (people, process, and technology) one by one and together shows their high value in managing a

proper customer relationship. The main business drives of CRM are increasing customer lifetimes, reducing costs, and improving

efficiency.

The main obstacles to becoming customer-centric are poor performances in some areas. In addition to these, the method used here

is personal opinion; the article believes that re-engineering a customer-focus business model in organizations needs the integrating

of the main parts of each element, mixing of the related activities, and eliminating of those which do not add any value to

organization and customers. Moreover, successful implementation of CRM means significant changes in some jobs, so it seeks

the instant adjustment of employees with those cultural changes which create by CRM implementation.

REFERENCES

1. G., Shainesh, and Jagdish, N. Sheth, (2006). Customer Relationship Management: A Strategic Perspective, Macmillan

India Ltd.

2. “Knowledge Management”, Bharathidasan University, Centre for Distance Education Materials.

3. “Revitalising Global Business”, Conference, Annamalai University, Chidambaram.

4. Jill, Dyche, “Customer Relationship Management”, New Delhi: Pearson Education.

5. http://www.ehow.com/about_6706231_role-technology-crm.html

*****

http://www.ehow.com/about_6706231_role-technology-crm.html



LIFESTYLE CHANGE AFFECTING THE CONSUMPTION PATTERN OF

INDIAN MIDDLE CLASS WOMEN

Rizwana Atiq16 Zeeshan Amir17 Asma Farooque18

ABSTRACT

The Asian Development Bank (ADB) advocates middle-class centric policies as a policy option to sustain economic growth in

its report. The middle class consumes more consumer durables which provide great business opportunity. Majority of poor

people are moving to the middle class, thus increasing the size of the middle class in India.

The contribution of women in decision making is increasing with growing number of nuclear families, educated women and

working women. The number of middle class working women is also rising sharply, thus leading to introduction of women

oriented products.

Lifestyle is considered important because in marketing, lifestyle variables have been utilized as bases for market segmentation

and market positioning because of the commonalities across individuals in their whole pattern of acting and interacting in the

world. Thus it becomes imperative for marketers to understand how lifestyle changes are affecting the consumption pattern of

middle class women in India.

KEYWORDS

Lifestyle, Consumption, Social Change, Purchasing Power, Value, Sensitive etc.

DEFINITION OF MIDDLE CLASS

There is no official definition of the middle class in India. In Weberian socio-economic terms, the middle class is the broad group

of people in contemporary society who fall socio-economically between the working class and upper class. The common

measures of what constitutes middle class vary significantly between cultures.

There are various ways of defining the middle class, but one of the simplest ways is to term it as "the consumer class". It is the

middle class which actually causes growth. The middle class usually enjoys stable housing, healthcare and educational

opportunities for their children, reasonable retirement and job security, and discretionary income that can be spent on vacation and

leisure pursuits. Using income is one way of defining middle class is in terms of how much of income is left over for discretionary

expenditure, after paying for food and shelter. If more than one-third is left, that qualifies one for inclusion in the 'middle class'.

SIZE OF MIDDLE CLASS IN INDIA

A method employed by CNN-IBN in its middle class survey utilised a consumption-based criterion. The survey looked at whether

a household owned a car or scooter, colour television, or a telephone, and estimated that the middle class equaled approximately

20% of the population or slightly over 200 million people.

Globally, the size of the middle class could increase from 1.8 billion people to 3.2 billion by 2020 and to 4.9 billion by 2030.

Almost all of this growth (85 per cent) comes from Asia.

The Indian middle class, estimated to be 50 million people, by McKinsey & Company is fast becoming used to Western Culture.

It will reach 600 million by 2030. According to Deutsche Research the estimates are nearly 300 million people for all Middle

Class. According to NCAER, India's middle class population will touch 267 million in 5 yrs. Further ahead, by 2025-26 the

number of middle class households in India is likely to more than double from the 2015-16 levels to 113.8 million households or

547 million individuals.

Over the next two decades, the country’s middle class will grow from about 5 percent of the population to more than 40 percent

and create the world’s fifth-largest consumer market.

India’s rapid economic growth has set the stage for fundamental change among the country’s consumers. The same energy that

has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centered in the cities. A new

study by the McKinsey Global Institute (MGI) suggests that if India continues its recent growth, average household incomes will

triple over the next two decades and it will become the world’s 5th-largest consumer economy by 2025, up from 12th now.

The middle class is not yet the biggest segment of India’s overall population. Given all the attention focused on India’s middle

class in recent years, it is important to keep a proper perspective on its size and potential purchasing power. The middle class is a

growing consumer market.

16Assistant Professor, Integral University, Uttar Pradesh, India, [email protected] 17Dean, FMR, Integral University, Uttar Pradesh, India, [email protected] 18Sr. Assistant Professor, FMR, Integral University Uttar Pradesh, India, [email protected]






THE GROWING MIDDLE CLASS IN INDIA

The importance of the middle class comes from the fact that it is growing at a faster pace than the overall population, so it will

represent an increasingly larger market for companies and new challenges for policy makers. McKinsey data estimates that while

the total population will increase almost 30% between 2005 and 2025, the middle class population will increase approximately 10

times or almost 1000% during this period.

Going by one of the few estimates available, India's middle class consumption is forecast to triple as a share of India's total

consumption over the next 15 years. Evidence shows that as income increases, the amount of discretionary spending and variety

of this discretionary spending also increases. For corporations, the middle class in India thus presents significant business

opportunities. The sales growth of consumer goods such as televisions and mobile phones to the middle class has already been

established, but a new range of products such as financial services is increasingly being geared towards this group as well.

Regardless of which estimate is used, it is important to keep a proper perspective on the potential of the middle class. The middle

class in India has generated tremendous interest from the media and multinational corporations looking for a new market

demographic. However, despite its anticipated growth, the middle class is still a minority segment of the overall population. Using

India”s planning commission estimates that 27.5% of the population in 2004-2005 was under the poverty line, then even the most

generous estimates of India‟s middle class puts it on par with or likely smaller than the size of the poor population .

When India opened up in the early 1990s, the middle class was often cited to sell the attractiveness of India’s domestic market.

There is good reason to be optimistic about a new Asian consumerism emerging at a scale and timing sufficient to replace the

forecast shortfalls in US consumer demand growth. Indeed several Asian countries, in particular China and India, have reached a

tipping point where large numbers of people will enter the middle class and drive consumption.

India could witness a dramatic expansion of its middle class, from 5-10 per cent of its population today to 90 per cent in 30 years.

With a population of 1.6 billion forecasts for 2039, India could add well over 1 billion people to its middle class ranks by 2039.

India has leaded a global recovery. This scenario, importantly, does not depend on a rebound in US consumer demand. Instead, it

depends on a sharp upsurge in demand from a new Asian middle class. This New Asian middle class is large and growing rapidly,

and that it is of sufficient size to provide the impetus for demand growth that the world needs.

As India has the potential to grow rapidly for some years to come, its emerging middle class will strengthen and reinforce its growth.

Indian consumers will be more logical in their thinking and foreign brands will not only be considered as the standard of quality.

Each brand, be it Indian or foreign, will be judged on its merit.

IMPORTANCE OF STUDY OF MIDDLE CLASS IN INDIA

The middle class has played a special role in economic thought for centuries. It emerged out of the bourgeoisie in the late

fourteenth century, a group that while derided by some for their economic materialism provided the impetus for an expansion of a

capitalist market economy and trade between nation states. Ever since, the middle class has been thought of as the source of

entrepreneurship and innovation—the small businesses that make a modern economy thrive. Middle class values also emphasize

education, hard work and thrift. Thus, the middle class is the source of all the needed inputs for growth in a economy.

All eyes are now turning to Asia, and specifically to the emerging middle class in China and other countries, to become the next

global consumers. Within Asia there is significant talk of rebalancing towards domestic demand (more specifically domestic

consumption) as a way of sustaining growth in the face of potentially sluggish exports. But the policy prescriptions to achieve

such a rebalancing are not easy. They involve creation of a social safety net, medical insurance schemes, and better public

education services. In short, Asian consumption is tied in the minds of many analysts to long-term changes. Most analysts think

about the middle class in terms of values as well as incomes. The World Values Survey provides some information on how Indian

society is changing.

Inventing the "New" Middle Class in India

The policies of economic liberalization initiated in the 1990s have produced a significant debate on the role of the urban middle

classes in contemporary India. This debate has centered on the role of the urban middle classes in a culture of consumption that

has expanded with new commodities available in the context of liberalization.

Advertising and media images have contributed to the creation of an image of a "new" Indian middle class, one that has left

behind its dependence on austerity and state protection and has embraced an open India that is at ease with broader processes of

globalization. In this image, the newness of the middle class rests on its embrace of social practices of taste and commodity

consumption that mark a new cultural standard that is specifically associated with liberalization and the opening of the Indian

market to the global economy.

Images of mobility associated with newly available commodities such as cellphones and automobiles, for instance, serve to

create a standard which the urban middle classes can and should aspire to. In this process, the new (urban) Indian middle class

becomes a central agent for the re- visioning of the Indian nation in the context of globalization. The significance of the

production of this hegemonic cultural standard is marked by the public.



A debate has sparked in relation to the social role and responsibility of the Indian middle class. At a popular level, for instance,

satirical stories regarding proliferation and disturbances caused by new commodities such as cellphones abound in the media. At

another level, intellectual critics of India's new culture of consumption have produced a more substantive censure of the Indian

middle class.

IMPORTANCE OF STUDY OF LIFESTYLE

Lifestyles are group specific forms of how individuals live and interpret their lives in a social context. The Marketing Dictionary

of Rona Ostrow and Sweetman R. Smith describes lifestyle as "a distinctive mode of behavior, centred around activities, interests,

opinions, attitudes and demographic characteristics distinguishing one segment of a population from another. A consumer's

lifestyle is seen as the sum of his interactions with his environment. Lifestyle studies are a component of the broader behavioural

concept called psychographics."

Lifestyle research needs a double perspective / methodology: observer and participant. We live our lives, and others observe it but

we need to make sense of our actions and frame them in a more or less personally interpreted (sub) cultural framework. Lifestyles

link social structure to attitudes and behavior. The lifestyle perspective (mainly derived from market research and sociology)

reveals the socio-cultural plurality of societies. To disaggregate consumers into lifestyle groups with different attitudes and

behavior would be a sufficient reason to use the concept in consumption research.

Lifestyles are closely intertwined with consumption. Lifestyle changes are drivers of social change. Lifestyle marketing is a

process of establishing relationships between products offered in the market and targeted lifestyle groups. It involves segmenting

the market on the basis of lifestyle dimensions, positioning the product in a way that appeals to the activities, interests and

opinions of the targeted market and undertaking specific promotional campaigns which exploit lifestyle appeals to enhance the

market value of the offered product.

Lifestyle pattern are important in determining purchase decisions. When goods and services available in the market are in tune

with lifestyle patterns and values, consumer market reactions are favorable. And purchases that reinforce these patterns further

illuminate these lifestyles.

LIFESTYLE OF WOMEN IN INDIA

Market observers put the growth down to changing demographics, international exposure and shift to lifestyle spending. They add

that the extra jingle in the pockets of the Indian urban middle class women, the target segment, has added fizz to the market. India

is attractive in terms of purchasing power, time spent on media, and product consumption.

Harold W. Berkman and Christopher Gilson define lifestyle as "unified" patterns of behaviour that both determine and are

determined by consumption. The term "unified patterns of behaviour" refers to behaviour in its broadest sense. Attitude formation

and such internal subjective activities may not be observable, but they are behaviour nonetheless. Lifestyle is an integrated system

of a person's attitudes, values, interests, opinions and his over behaviour.

Tomorrow’s women consumers will focus more on technology and credit purchase. Number of nuclear families will increase. Health

care will become very important in the coming years. According to Kotler and Armstrong, 1989, people's interest in various goods

is affected by their lifestyles and when they purchase goods they normally select the ones that are consistent with their lifestyles.

Fitzerald (1994) has described the role of life style in deciding the consumer behaviour factor. Lifestyles link social structure to

attitudes and behavior. The city-based Weekender, for example, played its cost-effective and fashion card well so that its women’s

wear segment now accounts for 50 per cent of the total brand sales at Rs 12 crore. The women’s wear segment has grown at 30

per cent consistently, outshining the more stoic menswear’s average growth rate of 5 per cent.

CONSUMPTION PATTERN OF MIDDLE CLASS WOMEN IN INDIA

Research shows today's women buy more than men. Historically, men purchased the big-ticket items. Cars, computers and hi-fi

components have always seemed to hold more fascination for men than women. Earlier women did not talk about these categories

much but now women are the majority buyers in many unexpected areas including new cars and computers. Even if women don't

make a hobby of these products still they do hold their discretion in buying them.

Consumer behaviour is affected by a lot of variables, ranging from personal motivations, needs, attitudes and values, personality

characteristics, socio-economic and cultural background, age, gender, professional status to social influences of various kinds

exerted by family, friends, colleagues and society as a whole today’s consumers strictly follow their culture, tradition and values, as a

result of which foreign companies were forced to give an Indian touch to them in order to succeed in India. The relevant consumer

base is large and growing, as are affluence levels. On growth potential they do even better. Physical reach has increased to less-

developed sections of the key urban towns.

Indian women consumers have become value sensitive and are not much price sensitive as was the case earlier. If they feel that a

particular product offers them more value and its price is high, even then they are willing to buy the product.



The Indian women consumers strictly follow their culture, tradition and values, as a result of which foreign companies were

forced to give an Indian touch to them in order to succeed in India. McDonalds, MTV, Pepsi, Star TV, Coca Cola India and many

more had to indianise themselves to flourish in India.

The Indian women consumer of today gives preference to features of a product along with its brand name. Even after

liberalization Indian companies and brands are doing very well. It is clearly evident from the fact that despite many foreign brands

being sold in India, Raymond is still India’s largest textile company and Haldiram is doing well despite the presence of McDonalds and

Pizza Hut.

The women consumers today are not confined to a single brand. They prefer change rather than sticking to the same brand. Not

often do we see any home with cars of the same brand or household products of the same brand. The use of credit card for shopping

is a new emerging trend in India. Also a large number of women are availing credit or loan from banks and other financial

institutions to fulfill their needs and wants.

There is a stiff competition in the Indian market today and it has become a buyer’s market from seller’s market. Customers are the

ultimate beneficiary of the fierce competition in the market. Competition has reduced prices to a great extent and has forced the

manufacturer to maintain product quality to sustain in the highly competitive market.

A slew of industries that had almost no presence in the country till some time back are dishing out jobs in plenty. Call centers,

retail chains, mobile phone companies, data processing firms have all contributed to the job explosion. But that's not the whole

story. High-tech gadgets have invaded the Indian consumer market with the liberalization of the economy. Economists are trying

to better understand modern consumption processes (Duchin 1998). David M Potter (1954) presented the situation of consumers

with diverse nature and ambitions. Cyndee Miller (1995) has described the 80 different natures of women as purchaser in different

capacities.

In recent years research on consumption and environment has found more attention and the results are stimulating (Stern et al.

1997, Princen et al. 2002). There is no doubt that consumption as a social process and consumerism as a social reality or ideology,

as some scholars prefer to put it, cf. Lodziak 2002) contribute to a substantial degree to local and global environmental problems

and pose some serious constraints—if not clear obstacles—to a sustainable development of the planet.

In a research paper by Swanee Hunt titled “Women are The Emerging Power Of The 21st Century” March 09, 2009, i.e.

increasing affluence has led to increased consumption growth in key urban towns and rural markets for which women are

dominantly responsible. A separate study of 100 cities' consumption spending by research agency Indicus Analytics shows that

metros constitute about 30% of the total consumption market. This implies that the key urban towns, the rest of urban India and

rural India together garner almost 70%. Given the larger women consumer base of these markets, an increase in share of relevant

consumers would imply larger numbers being added in these markets than in the metros.

Juliet Schor (1999) has argued that it is a "new consumerism" that defines the middle-class: a constant, "upscaling of lifestyle

norms; the pervasiveness of conspicuous, status goods and of competition for acquiring them; and the growing disconnect

between consumer desires and incomes."Murphy, Shleifer and Vishny (1989) emphasize the willingness of the middle class

consumer to pay a little extra for quality as a force that encourages product differentiation and thereby feeds investment in

production and marketing of new goods.

Howard and Sheth (1969) explained how consumer’s buying behaviour influenced by internal and external factors. They explained that

human mind is a Black Box which receive stimuli. This stimulus creates perception in the mind of consumer which implied the kind

of learning - favourable or unfavourable. This will give the output in the form of acceptance or rejection. Basically this model is

based on Stimulus -Response theory.

The Western style women’s apparel brands market is estimated at an annual Rs 740 crore by KSA Technopak, as compared to the

Rs 3,000 crore men’s branded apparel segment SharmilaSenthil Raja, a senior consultant at KSA-Technopak, terms the growth as

highly catalysed. The women’s wear density in stores has risen at least three times in the last couple of years, says

ArunSirdeshmukh, head (marketing) at Indus League, the makers of Scullers women’s wear. He adds that large format stores in

specific regions are beginning to see 25 to 30 per cent of total sales coming from western women’s wear.

According to AniruddhaDeshmukh, executive director, projects its western women’s wear to bringe in over 40 per cent of its total

revenues in the next couple of years from less than 30 per cent now. But, having tasted success, the apparel companies are

focussing on adding a western tinge to the smaller cities as well. They reckon that with the service industry stepping into the

smaller centres too, they too will take a liking to the western women’s wear.

In a thesis presented to the faculty of the Graduate School of Western Carolina University in partial fulfillment of the requirements

for the degree of Master of Arts in History from saris to skirts: a study of changing lifestyles of Indian women immigrants to the united

states by Ruby Mitra Banerjee & director: Dr. Elizabeth G. McRae Associate Professor of History History Department November 2009,

the market is currently limited to the tier I service industry-oriented cities. While acceptance at the workplace is the key, the

market is said to be driven by the concentration of shopping malls and large format stores in these cities. Thus, Marketers must

study the buying behavior of Women with the view to analyze their buying behavior with respect to the age, marital status,

occupation, professional status factors, etc. to identify the decision maker and the influencer for the purchase made.



CONCLUSIONS

The basic premise of studying lifestyle and its effect on consumption pattern is that the more marketers know and understand

about their customers, the more effectively they can communicate with and serve them. When goods and services available in the

market are in tune with lifestyle patterns and values, consumer market reactions are favourable. This will help the marketers, the

consumers and the economy as a whole.

REFERENCES

1. Aziz, J., and L., Cui, (2007). “Explaining China's Low Consumption: The Neglected Role of Household Income”,

Working Paper 07/181, International Monetary Fund, Washington, DC.

2. Banerjee, A., and E., Duflo, (2007). “What is Middle Class about the Middle Classes around the World?”, MIT

Department of Economics Working Paper 07-29, Cambridge, MA.

3. Banister, J., (2005). “Manufacturing Earnings and Compensation in China”, Monthly Labor Review, Volume: 128(8),

pp. 22-40.

4. Barro, R., (1996). “Determinants of Economic Growth: A Cross-Country Empirical Study”, NBER Working Paper

5698, National Bureau of Economic Research Inc., Cambridge, MA.

5. Bhalla, S., (2008). “Indian Economic Growth 1950-2008”, Oxus Investments, New Delhi, India.

6. Bhalla, S., (2009). “The Middle Class Kingdoms of India and China”, Peterson Institute for International Economics,

Washington, DC, (forthcoming).

7. Blanchard, O., (2009). “Sustaining a Global Recovery”, Finance and Development, Volume: 46(3), pp. 8-12.

8. Caselli, F., and J., Feyrer, (2007). “The Marginal Product of Capital”, The Quarterly Journal of Economics, Volume:

122(2), pp. 535-568.

9. Chan, W. C., and A., Tse, (2007). “The Consumer Trap: Retailers Need to Adapt to Entice Fickle Chinese Shoppers into

Their Stores”, McKinsey and Company.

10. Collier, P., (2007). The Bottom Billion, New York: Oxford University Press.

11. Datt, G., (1998). “Computational Tools for Poverty Measurement and Analysis”, FCND Discussion Paper 50,

International Food Policy Research Institute, Washington, DC.

12. Duchin, F., (1998). Structural Economics.Measuring Change in Technology, Lifestyles, and the Environment.

13. Lodziak, C., (2002). “The Myth of Consumerism”, Island Press, Pluto Press. London, Sterling, VA.

14. Lutzenhiser, L., (1997). “Social Structure, Culture, and Technology: Modeling the Driving Forces of Household Energy

Consumption”, In: Stern et al., pp. 77-91.

15. Myers, N., and Kent, J., (2003). “New Consumers: The influence of Affluence on the Environment”. Proc. Natl. Acad.

Sciences USA, Volume: 100(8), pp. 4963-4968.

16. Princen, T.; Maniates, M., and Conca, K., (2002). “Confronting Consumption”, (Eds.), The MIT Press.

17. Reusswig, F., (1994). “Lifestyles and Ecology.The Differentiated Ecology of Modern Societies—With Special Regard

to the Energy Sector”, IKO. Frankfurt/M. (in German).

18. Reusswig, F.; Gerlinger, K., and Edenhofer, O., (2003). “Lifestyles and Global Energy Use”, Analysis and Strategic

Approaches for a Sustainable Energy Structure”, In Preparation (An extended version in German is available as PIK-

Paper).

19. Schipper, L. J., (1997). “Carbon Emissions from Travel in the OECD Countries”, In: Stern et al., pp. 50-62.

20. Stern, P. C.; Dietz, T.; Ruttan, V. W.; Socolow, R. H., and Sweeney, J. L., (1997). “Environmentally Significant”,

(Eds.).

21. Consumption, Research Directions, Washington, D.C.: National Academy Press.

*****



MEASURING POST-MERGER OPERATING PERFORMANCE OF ACQUIRING FIRMS

OF FOOD AND BEVERAGES INDUSTRIES IN INDIA

Pravin Narayan Mahamuni19 Anand Ganpatrao Jumle20

ABSTRACT

Corporate Restructuring has become a major component in the financial and economic environment all over the world.

Industrial restructuring has raised important issues for business decisions as well as for public policy formulation. Since 1991,

Indian industries have been increasingly exposed to both domestic and international competition and competitiveness.

Hence, in present globalised economy, mergers and acquisitions (M&A) are being increasingly used the world over, for

improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business

risk, for entering new markets and geographies, and capitalizing on economies of scale etc.

This research is focus on measuring impact of mergers on the operating performance of acquiring firms in food & beverage

industries in India, by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as all

merger firms in India during 2005 to 2008.

The present study is mainly based on secondary data, which have collected from using CMIE Prowees Database.

KEYWORDS

Corporate, Restructuring, Industrial, Mergers, Acquistions etc.

INTRODUCTION

Mergers, acquisitions and corporate control have emerged as major forces in the modern financial and economic environment.

Mergers, a source of corporate growth, have been the subject of careful examination by scholars. The mergers and acquisitions in

India have changed dramatically after the liberalization of Indian economy.

The policy of liberalization, decontrol and globalization of the economy has exposed the corporate sector to domestic and global

competition. Low cost products, with good quality have become essential for a company to survive in the competitive market.

Factors like low interest rates, cheap labor, and liberal government policy, have helped the Indian corporate sector to reduce their

cost. It is in this context that corporate sectors view mergers for further cost reduction through technology advancement or to

make their presence felt in the market. The liberalization policy of Government of India has witnessed an unprecedented number

of mergers and acquisitions in the country. In terms of the growth rate in mergers and acquisitions deals, India occupies the

second position in the world.

MERGERS AND ACQUISITIONS IN INDIAN INDUSTRY

In Indian industry, the pace for mergers and acquisitions activity picked up in response to various economic reforms introduced

by the Government of India since 1991, in its move towards liberalization and globalization. The Indian economy has undergone a

major transformation and structural change following the economic reforms, and “size and competence” have become the focus of

business enterprises in India.

Indian companies realised the need to grow and expand in businesses that they understood well, to face growing competition;

several leading corporates have undertaken restructuring exercises to sell off non-core businesses, and to create stronger presence

in their core areas of business interest.

Mergers and acquisitions emerged as one of the most effective methods of such corporate restructuring, and became an integral

part of the long-term business strategy of corporates in India. Over the last decade, mergers and acquisitions in the Indian industry

have continuously increased in terms of number of deals and deal value. A survey among Indian corporate managers in 2006 by

Grant Thornton found that Mergers & Acquisitions are a significant form of business strategy today for Indian Corporates. The

three main objectives behind any M&A transaction, for corporates today were found to be:

Improving Revenues and Profitability,

Faster growth in scale and quicker time to market,

Acquisition of new technology or competence.

19 Assistant Professor, ZES’s Dnyanganga Institute of Career Empowerment & Research, Maharashtra, India,

[email protected] 20Professor, ZES’s Dnyanganga Institute of Career Empowerment & Research, Maharashtra, India, [email protected]





Table-1: Objectives of Indian Corporates for M&As

Objective Behind M&A Transactions Responses (in %)

To improve revenues & Profitability. 33%

Faster growth in scale and quicker time to market. 28%

Acquisition of new technology or competence. 22%

To eliminate competition & increase market share. 11%

Tax shields & Investment savings. 3%

Sources: Grant Thornton (India), The M&A and Private Equity Scenario, 2006.

Given this context, the present study has attempted to examine the performance of companies that have gone through mergers in

India, in the post-reforms period, and see if mergers had a significant impact on operating financial performance of merging

companies. More specifically, the study has aimed to study mergers of firms in different industry sectors in India, to see if there

are variations in the impact, for different industries.

SIGNIFICANCE OF STUDY

In real terms, the rationale behind mergers and acquisitions is that the two companies are more valuable, profitable than individual

companies and that the shareholder value is also over and above that of the sum of the two companies. Despite negative studies

and resistance from the economists, M&A’s continue to be an important tool behind growth of a company. In simple terminology,

mergers are considered as an important tool by companies for purpose of expanding their operation and increasing their profits,

which in facade depends on the kind of companies being merged.

Indian markets have witnessed burgeoning trend in mergers which may be due to business consolidation by large industrial

houses, consolidation of business by multinationals operating in India, increasing competition against imports and acquisition

activities. Therefore, in this research, researchers aimed at measuring acquiring firms operating performance after the post reform

period.


The following are the few existing studies reviewed which were conducted by researchers in the view of analyzing the financial

performance during merger activity in different time periods.

Beena analysed the pre and post-merger performance of a sample of 115 acquiring firms in the manufacturing sector in India,

between 1995-2000, using a set of financial ratios 4 and t-test. The study could not find any evidence of improvement in the

financial ratios during the post-merger period, as compared to the pre-Merger period, for the acquiring firms. Pawaskar (10)

analysed the pre-merger and post-merger operating performance of 36 acquiring firms during 1992-95, using ratios 5 of

profitability, growth, leverage, and liquidity, and found that the acquiring firms performed better than industry average in terms of

profitability. Regression Analysis however, showed that there was no increase in the post-merger profits compared to main

competitors of the acquiring firms.

Dr. Neena Sinha, Dr. K.P.Kaushik & Ms. Timcy Chaudhary (2010) Measuring Post Merger and Acquisition Performance:

An Investigation of Select Financial Sector Organizations in India – The present paper examines the impact of mergers and

acquisitions on the financial efficiency of the selected financial institutions in India. The analysis consists of two stages. Firstly,

by using the ratio analysis approach, we calculate the change in the position of the companies during the period 2000-2008.

Secondly, we examine changes in the efficiency of the companies during the pre and post merger periods by using nonparametric

Wilcoxon signed rank test. While we found a significant change in the earnings of the shareholders, there is no significant change

in liquidity position of the firms. The result of the study indicate that M&A cases in India show a significant correlation between

financial performance and the M&A deal, in the long run, and the acquiring firms were able to generate value.

Dube and Glascock (2006) examined the post-acquisition differences in share and operating performance, and in risk

characteristics, for acquirers who pay cash versus those who employ stock, as well as for acquirers who merge with targets as

opposed to those who directly approach target shareholders to tender their shares.

Healy, Palepu, and Ruback examined post-acquisition performance for 50 largest U.S. mergers between 1979 and 1984 by

measuring cash flow performance, and concluded that operating performance of merging firms improved significantly following

acquisitions, when compared to their respective industries.

Kruse, Park and Suzuki examined the long-term operating performance of Japanese companies using a sample of 56 mergers

of manufacturing firms in the period 1969 to 1997. By examining the cash-flow performance in the five-year period following

mergers, the study found evidence of improvements in operating performance, and also that the pre- and post-merger performance

was highly correlated. The study concluded that control firm adjusted long-term operating performance following mergers in case

of Japanese firms was positive but insignificant and there was a high correlation between pre- and post-merger performance.

Pramod Mantravadi & A Vidyadhar Reddy (2008) in paper titled “Post-Merger Performance of Acquiring Firms from

Different Industries in India” studied the impact of mergers on the operating performance of acquiring corporates in different



industries, by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as all mergers

involving public limited and traded companies in India between 1991 and 2003. The results suggest that there are minor variations

in terms of impact on operating performance following mergers, in different industries in India. In particular, mergers seem to

have had a slightly positive impact on profitability of firms in the banking and finance industry, the pharmaceuticals, textiles and

electrical equipment sectors saw a marginal negative impact on operating performance (in terms of profitability and returns on

investment). For the Chemicals and Agri-products sectors, mergers had caused a significant decline, both in terms of profitability

margins and returns on investment and assets.

Pramod Mantravadi and Vidyadhar Reddy (2007) in their research study Mergers and operating performance: Indian

experience, attempted to study the impact of mergers on the operating performance of acquiring corporate in different periods in

India, after the announcement of industrial reforms, by examining some pre- and post-merger financial ratios, with chosen sample

firms, and all mergers involving public limited and traded companies of nation between 1991 and 2003. The study results

suggested that there are minor variations in terms of impact on operating performance following mergers in different intervals of

time in India. It also indicated that for mergers between the same groups of companies in India, there has been deterioration in

performance and returns on investment.

Siriopoulos et. al. (2006) in their study of Mergers and Acquisitions in Greece also find that acquired firms are highly

productive operations. These results support McGuckin & Nguyen (1995) and Harris & Robinson (2002) studies who have

found that acquisition activity in the UK is generally associated with the transfer of firms with above average productivity. Since

large firm size and high productivity are common characteristics of relatively mature targets, which have accumulated past

experiences as a result of dynamic learning procedures, age of firm also emerges as a significant determinant variable of target

firms in the study of Siriopoulos et.al. (2006). Overall, these studies favour rejection of the market for corporate control

hypothesis. Surjit Kaur compared the pre and post-takeover performance for a sample of 20 acquiring companies during 1997-

2000, using a set of eight financial ratios 3, during a 3-year period before and after merger, using t-test. The study concluded that

both profitability and efficiency of targeted companies declined in post- takeover period, but the change in post-takeover

performance was statistically not significant.

To sum up the review of literature, many contributions have offered different perspectives of merger in different industries

worldwide and explained the valuation techniques followed by merging companies, and shareholders wealth effect due to

merger. From the review of many excellent research papers analyzing the pre and post merger performance of merged

companies, it is inferred that majority of the studies strongly support the concept of enhanced post merger performance due to

merger and it is beneficial to the acquirer companies.

OBJECTIVES OF STUDY

Based on Review of literature & available data, researcher stated following objectives:

(1) To overview the operating performance of Food & Beverage Industries in India.

(2) To investigate and test if there are any significant deviations in the results achieved by mergers in Food & Beverage

industry sectors in India, by analyzing sub-samples representing industry sectors.

HYPOTHESIS OF STUDY

H1: There is improvement in operating performance of merged firms.

H2: Post-merger operating performance of acquiring companies is not affected by industry type (Food & Beverage)


Period of Study

To study the objectives 3 years pre & 3 years post merger period is considered. Merger year considered as a base year.

Sampling Method

While selecting sample the researcher is used non-probability convenient sampling method. With reference Food & Beverage

Industries are to be taken into consideration to formulate the total population.

Data Collection

The present study is mainly based on secondary data. The availability of secondary data to be collected from Prowess Database of

CMIE, Annual Reports, published Research, Reports and Research Organization, Books, periodicals and Website etc.

Data Analysis

Pre-merger and post-merger operating performance ratios were estimated and the averages (mean) computed for the entire set of

sample firms, which have gone through mergers during the period 2005 to 2008. The average ratios for each of the industry sub-

samples were also computed. Average pre merger and post merger financial performance ratios were compared to see if there was



any statistically significant change in operating performance due to mergers, using “paired two sample t-test” at confidence level

of 0.05.

Tools used for Data Analysis

In order to analysis & evaluation of the collected data, tools like Ratio Analysis, also Mean & paired‘t’-test is used.

DATA ANALYSIS AND INTERPRETATION

Mean Pre-Merger & Post-Merger Ratios for Merging All of the Food & Beverage Firms

Table-2

Ratios Pre-Merger

(3 years Before)

Post-Merger

(3 years after) t (0.05 sig) p Value

Operating Profit Margin -6.2894 -3.5953 -0.6240 0.545

Gross Profit Margin -8.0764 6.8878 -1.0700 0.308

Net Profit Margin -174.5567 -0.1306 -0.9910 0.343

Return on Net Worth 12.1875 -0.0128 1.1720 0.104

Return on Capital Employed 3.9858 2.3044 0.5990 0.561

Debt-Equity Ratio -17.8014 2.9388 0.2620 0.798


From the above Table No.02 of the comparison of the pre-merger & post-merger operating performance ratios for the entire

sample set of acquiring firms from Food & Beverage Industry showed that there is slightly decline in all ratios. In operating profit

margin there is marginal improvement in mean i.e. -6.2894 to -3.5953 but the improvement is not statistically significance (t-

statistic value of -0.6240 & p<0.545).

However in gross profit margin (i.e. -8.0764 to 6.8878) and net profit margin (i.e. -174.5567 to -0.1306) ratios improving in post-

merger period but statistically cannot conclude that there is a significant difference between the means for the two variables due to

p<0.308 & p<0.348 respectively.

Mean of return on net worth (i.e.12.1875 to -0.1306) and return on capital employed (i.e. 3.9858 to 2.3044) showed that

significant decline in post-merger but statistically cannot conclude that there is a significant difference between the means for the

two variables due to t-statistic value of 1.1720 (p<0.104) & 0.5990 (p<0.561) respectively. There is insignificant increase in

leverage showed on post-merger period (i.e. -17.8014 to 2.9388) and confirmed by low t-statistic value of 0.2620.

Mean Pre-Merger & Post-Merger Ratios for Merging Food Firms

Table-3

Ratios Pre-Merger

(3 years Before)

Post-Merger


Operating Profit Margin -2.7243 2.2670 -1.0230 0.333

Gross Profit Margin -11.2860 6.7827 -1.0790 0.302

Net Profit Margin -174.5567 -0.1306 -0.9900 0.348

Return on Net Worth 10.6397 -2.3170 1.5590 0.153

Return on Capital Employed 3.7210 1.6643 0.6120 0.556

Debt-Equity Ratio 1.3410 1.8697 -0.6960 0.504


Result of the Table No. 03 inferred that, the mean of operating profit margin is significantly improving after the merger period

(i.e. -2.7243 to 2.2670), but the t-statistic value of -1.0230 (p<0.333) suggest that the difference is not statistically significant. On

the other hand, same case with gross profit margin (i.e.-11.2860 to 6.7827) & net profit margin (i.e.-174.5567 to -0.1306) were

also significantly increased, but is not statistically significant which indicated by t-statistic value of f -1.0790 (p<0.302) & -0.99

(p<0.348) respectively.

The mean of returns on net worth is significantly declined in post-merger period (i.e.10.6397 to -2.3170), but the decline is not

statistically significant, as indicated by t-statistic value of 1.5590 (p<0.153). Likewise, return on capital employed (i.e.3.7210 to

1.6643) marginally decline in post-merger period, but the decline is again not statistically significant as indicated by t-statistic

value of 0.6120 (p<0.556).

The mean of debt equity ratio shown a significant rise after the merger (i.e.1.3410 to 1.8697), but cannot conclude that there is

statistically significant difference between means of pre & post merger period as indicated by low t-value of -0.6960 (p<0.504).



Mean Pre-Merger & Post-Merger Ratios for Merging Beverage Firms

Table-4

Ratios Pre-Merger

(3 years Before)

Post-Merger


Operating Profit Margin -24.1150 -32.9067 10.0480 0.063

Gross Profit Margin 7.9717 7.4133 0.0416 0.749

Net Profit Margin 2.8483 3.2917 -0.4730 0.719

Return on Net Worth 19.9267 11.5083 3.6730 0.169

Return on Capital Employed 5.3100 5.5050 -0.0710 0.955

Debt-Equity Ratio 5.1017 1.0433 1.2950 0.419


After inferring the above Table No. 04 of the result indicates that, the mean of operating profit margin is declined during the post-

merger period (i.e.-24.1150 to -32.9067) likewise, with gross profit margin (i.e.7.9717 to 7.4133) is marginally decline,

statistically cannot conclude that there is a significant difference between the means for the two variables because of p<0.068 &

p<0.749 respectively. In case of net profit margin (i.e.2.4883 to 3.2917) is also significantly increased, but is not statistically

significant which shown by t-value of -0.4730 (p<0.719).

The mean of returns on net worth is showing significantly decline in post-merger period (i.e.19.9267 to 11.5083), but the decline

is not statistically significant, as indicated by t-value of 3.6730 (p<0.169). On the other side, return on capital employed

significantly increase in post-merger period (i.e.5.3100 to 5.5050), but the decline is not statistically significant, as indicated by t-

statistic value of -0.0710 (p<0.955). The mean of debt equity ratio shown a significant declined after the merger (i.e. 5.1017 to

1.0433), but cannot conclude that there is a significant difference between the means for the two variables as indicated by t-value

of 1.2950 (p<0.419).

Hypothesis Testing

H1: There Is Improvement In Operating Performance of Merged Firms.

Based on the results shown in the above analysis, this hypothesis (H1) is rejected, due to post-merger period the performance in

terms of profitability as well as returns on investment is negatively impacted.

H2: Post-Merger Operating Performance of Acquiring Companies is not affected by Industry Type (Food & Beverage)

Based on the above results, the hypothesis (H2) is also accepted, since same result are obtained for merger firms in both sector i.e.

Food & Beverage Industry sector, in terms of impact on operating performance is not marginally declined, though it is not

statistically significant in both cases.

FINDINGS

From the above analysis of the result inferred that, operating performance of the all sample firms from Food &

Beverage Industry, in post-merger period is declined. As there are decline in profitability ratios as well in return on net

worth & invested capital.

The results from analyzing the above data indicates that, there is marginally improvement in profitability ratios, but not

statistically significant in Food industry. Where on the other hand, return on net worth & capital invested is declined.

There is insignificant increase in leverage show in post-merger period in Food as well in Beverage Firms.

The result of Beverage sector suggest that (refer Table No.04) in post-merger period the significant decline in terms of

both profitability and returns on net worth & capital employed in the business.

In case of Food firms’ performance, there is marginally improvement shown in mean of ratios after the merger period.

On the other hand performance of Beverage firms after the merger is significantly decline. In case of the performance of

Food & Beverage firms’ combine after the merger is significantly increased but statistically cannot conclude that there

is significant difference between mean of two variables.

CONCLUSIONS

This study is undertaken to test whether the industry type has an impact on the outcome of merger for the merging firm in Food &

Beverage Industry, in terms of impact on operating performance. The results from the analysis of pre- and post-merger operating

performance ratios for the acquiring firms in the sample showed that, there is negatively impact on operating performance in post-

merger period. On the other side, there is a same impact of mergers on Food & Beverage industry sectors in India. Type of

industry does seem to make a difference to the post-merger operating performance of acquiring firms.

Future research in this area could be an extension of the present study, by estimating and comparing with industry/sector averages,

and the differences, if any, could be explored further to derive further insights. Researchers could also analyze the post-merger

returns to shareholders of acquiring firms involved in mergers in India, to correlate with findings of studies indicating poor post-

merger performance.



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*****



AN EMPIRICAL STUDY OF OCTAPACE CULTURE AND

ORGANIZATIONAL COMMITMENT

Mohammad Hassan Jafri21

ABSTRACT

Various cultural frameworks have been studied in relation to organizational commitment and its different types but

OCTAPACE culture. The present research is an exploratory research designed to investigate the influence of OCTAPACE

culture on organizational commitment and also on the three dimensions (types) of organizational commitment (affective,

normative and continuance commitment).

Data were gathered on a structured questionnaire covering all variables of interest from a total of 210 employees, taken

randomly, working in public sector organizations in Bhutan. The result revealed that OCTAPACE Culture influences

organizational commitment significantly. Results also showed that different dimensions of OCTAPACE Culture have varying

effects on different types of organizational commitment. Implication of the research is that in order to develop employee

engagement and commitment towards their organization, management can use OCTAPACE Culture as a strategy. Further the

research has also implication in the sense that management can focus more on those aspects / dimensions of OCTAPACE

Culture which results into the types of commitment management wants to emphasize upon.

KEYWORDS

OCTAPACE Culture, Organizational Commitment, Affective Commitment, Normative Commitment, Continuance

Commitment etc.

INTRODUCTION

Role of organizational culture in organizational performance is gaining wide recognition across the globe especially in present

volatile, uncertain, unpredictable and highly competitive business environment. Academicians and practitioners have realized that

organizational culture influences employee performance (Lee & Yu, 2004) and organizational performance (Saeed & Hassan,

2000, Hsu et al., 2009) significantly including financial performance of the company (Sanders & Cooke, 2005). Starbucks,

Continental Airlines, Kentucky Fried Chicken (KFC), Ernst and Young (E & Y), Hyundai Car (UK) etc. have become high

leading organisations because of changes in their corporate culture and these changes have led to a massive positive impact on the

organisational performance (Zain, Ishak & Ghani, 2009). Organizational culture influences and shapes employee attitude and

behaviour which in turn influences employee and organizational performance.

Employees are the currency of successful business especially in service industry. Employee mindsets- their fundamental attitudes

and behaviors matter to achieve and maintain high performance (Thomas, Harburg & Dutra, 2007). One of the attitudes that could

lead to high performance is employee’s organizational commitment. That is why probably, organizational commitment has

emerged as a promising area of research in recent time (Adebayo, 2006; Nehmeh, 2009).

Organizational culture has been the subject of exploration for academics and practitioners since long time. Various dimensions of

organizational culture such as communication, training and development, rewards and recognition, risk taking, creativity and

innovation, team and people oriented, result oriented etc. have been explored in relation to several relevant organizational

outcomes including commitment. But probably no empirical studies have been undertaken to explore influence of OCTAPACE

culture on organizational commitment. OCTAPACE culture is relevant and critical for business performance and success in the

present business scenario (Academy of Human Resources Development, 2009). The present study is a modest attempt to fill this

void. Thus the present study is exploratory in nature and aimed at finding the influence of OCTAPACE Culture on organizational

commitment. Also the study intends to find out that how different dimensions of the OCTAPACE culture influences different

types of organizational commitment.

CONCEPTS AND LITERATURE REVIEW

Organizational Commitment

Building employee commitment is fundamental to sustained business success. Organisations that can successfully harness the

commitment of their employees enjoy several distinct competitive advantages. Committed employees execute business strategies

more successfully and are more flexible and adaptive to changing business conditions, can produce superior shareholder value

through lower operating costs and higher revenues and profits. Committed employees demonstrate higher levels of integrity,

support customers and colleagues more effectively and are more prepared to ‘go the extra mile’, beyond the call of duty, and all

this can help in creating a winning organization.

Organizational commitment is a psychological state that binds an employee to an organization. Two approaches have been used to

define the commitment by researchers –One-dimensional and Multidimensional approach. Multidimensional approach also called

21Lecturer, Gaeddu College of Business Studies, Royal University of Bhutan, Bhutan, [email protected]




as Three-component model of organizational commitment, has gained substantial popularity since its inception (Wasti, 2005). In

this study, we operationalized organizational commitment as a multi-dimensional construct. Multidimensional approaches view

organizational commitment as a psychological state that consists of three components – Affective, Continuance and Normative

Commitment (Meyer & Allen, 1997).

Affective commitment refers to the emotional attachment with the organization based on the match with the organizational values

and goals to that of the employee’s personal values and goals. It is the most desired form of commitment sought by organizations.

Employees with high level of affective commitment possess a strong belief in and acceptance of organizational goal, objectives

and values (Mowdey, Steers & Porter 1979). Normative commitment refers to the sense of obligation and responsibility to remain

with the organization. Employees with high normative commitment believe that they ought to continue working for their

organization because it the “right and moral” thing to do (Meyer & Allen 1991; Meyer, Stanley, Herscovitch & Topolnystsky,

2002). Continuance commitment is a form of psychological attachment to an employing organization that reflects the employee’s

perception of the loss he/ she would suffer if employees were to leave the organization (Allen & Meyer, 1990).

Allen & Meyer (1990) proposed that continuance commitment develops on the basis of two factors: (1) number of investments

(side-bets) individuals make in their current organization and (2) perceived lack of alternatives. These investments can be

anything that the individual considers valuable that would be lost by leaving the organization. These various types of commitment

will have varying effects on the organization’s performance and a person can display aspects of all of them. Meyer & Allen

(1991) argued that these components are not mutually exclusive. This implied that employees could be simultaneously committed

to an organization in an affective, continuance and normative commitments at varying levels of intensity. Employees could at any

point of time have a commitment profile that reflected high or low levels of all components (Meyer et al. 2002). These different

profiles would lead to different effects on workplace behaviour.

Organizational Culture

Despite the great attention received by Organizational Culture (OC), there has no universal agreed upon definition for the

construct (Lewis, 2002). Most of the definitions provided for the construct indicated that it is the shared system of values, beliefs,

and attitudes that are common among the organizational individuals and influence their judgments (O’Reilly & Chatman, 1996;

Mckinnon et al., 2003). Different organisations have their own distinctive cultures. Through tradition, history and structure,

organisations build up their own culture. Culture shapes employee’s attitudes, values, motivation, and performance (Lather,

Puskas, Singh & Gupta, 2010). Culture works as lens through which employees see organizational expectations and obligations.

Organizational culture affects company’s financial performance (Kotter & Heskett, 1992) and also is critical in attracting and

retaining talent, change management, creating energy and momentum, engaging employees, creating synergy between work

behaviour and organizational goal (Eikenberry, 2010).

OCTAPACE Culture

OCTAPACE culture is relevant and critical for business performance and success and brings higher efficiency and organizational

effectiveness (Academy of Human Resources Development, 2009). Organizations such as Infosys, Wipro, Tata Steel etc. are

successful and growing which can also be attributed to the tremendous impact of OCTAPACE culture (Academy of Human

Resources Development, 2009). Empirical studies indicated that the culture of OCTAPACE values is imbibed in the culture of the

many organizations to a good or moderate degree (Alphonsa, 2000; Kumar & Patnaik, 2002; Bhardwaj & Mishra, 2002).

OCTAPACE culture is represented by occurrence of values / ethos of Openness, Confrontation, Trust, Authenticity, Pro-action,

Autonomy, Collaboration and Experimentation. It deals with the extent to which these values / ethos are promoted in organisation.

Openness & Risk Taking

The value deals with the extent employees in the organization feel free to express their ideas, willing to take risks and

experiment with new ideas and new ways of doing things.

Confrontation

The value deals with the extent employees in the organization takes challenges face and not shy away from the

problems and work jointly with others concerned to find its solution.

Trust

The value deals with the extent employees have mutual faith and between employee and management with respects to

work, information sharing, helping etc. and can be relied upon what other person says and do.

Authenticity

Authenticity is the value underlying trust. The value deals with the extent employees are willingness to acknowledge the

feelings he/she has, and accept him / her as well as others who relate to him/her as persons.



Pro-activity

The value deals with the extent employees are action – oriented, willing to take initiative and show a high degree of

proactively. They anticipate issues and act or respond to the needs of the future.

Autonomy

The value deals with the extent employees are willingness to use power without fear, and helping others to do the same.

Employees have some freedom to act independently within the boundaries imposed by their role/job.

Collaboration

The value deals with the extent employees work together and use one another’s strength for a common cause. Involves

strategies, workout plans of action and implement them together.

Experimenting

Experimenting as a value emphasizes the importance given to innovation and trying out new ways of dealing with

problems in the organization.

Organizational Culture and Organizational Commitment: A Link

Organizational culture and organizational commitment is related to each other (Purang & Sharma, 2007). Pollitt’s (2005) research

findings indicated that organizational culture is the strongest strategic lever in creating an engaged and committed workforce.

Organizational culture works as a catalyst for employee’s commitment towards their organization. There are studies that have

examined the link between different aspects of corporate culture and organizational commitment (Karia & Ahmad, 2000; Saeed &

Hassan, 2000; Boon & Arumugam, 2006). But the researcher has not found any research establishing a link between OCTAPACE

culture and organizational commitment. Although there are some researches which explored different dimensions of OCTAPACE

as an individual construct and not as OCTAPACE culture perspective. Authenticity is found to be related to organizational

commitment. Findings of a study by Kliuchnikov (2011) indicate that a positive and significant relationship exists between

authentic leadership and affective organizational commitment. A meta-analysis conducted by Humphrey, Nahrgang & Morgeson

(2007) showed that perceived job autonomy is positively related to important work outcomes, including organizational

commitment. Job autonomy is capable of stimulating high levels of commitment to organization (Parker, Wall & Cordery, 2001),

specifically affective commitment (Mowday, Steers & Porter, 1979; Meyer & Allen, 1991; Karim, 2010). Teamwork

(collaboration) facilitates the meeting of affiliate needs within the workplace and has been directly connected to organizational

commitment (Karia & Ahmad, 2000; Karia & Asaari, 2006). Trust is also related to organizational commitment ( Ferres, Connell

& Travaglione, 2004; Chughtai & Zafar, 2006). Employees who have trust in the words and actions of management of

organization will most likely enjoy working in the organization and develops attachment with the organization. When trust level is

high, employees are supportive of, or committed to authorities and the institutions. Similarly experimentation also produces

commitment. A study conducted by Lok & Crawford (1999) on hospital found that a supportive and innovative culture is

positively correlated with commitment.

Above findings indicate some link between different dimensions of OCTAPACE culture (investigated as an individual construct)

with commitment. Based on the above findings it is difficult to establish conclusive relationship between OCTAPACE culture and

organizational commitment and also between different dimensions of OCTAPACE Culture and different types of organizational

commitment. So keeping in mind this constraint, the present research is designed to explore above relationships. Thus following

research questions are raised for the present study.

RESEARCH QUESTIONS

1. Does OCTAPACE Culture influences organizational commitment?

2. Do different dimensions of OCTAPACE culture are significantly related to three dimensions of organizational

commitment (affective, normative and continuance commitment)?


The present study is an exploratory research based on primary data using cross-sectional design.

Sample and Procedures

The target population of this study was employees working in the different public sector organizations in Bhutan. Data were

collected randomly using a standard questionnaire covering variables of interests from a total of 210 employees working at

different levels in their organization. Four public sector organizations were chosen for the study. Data were collected during

working hours with permission from the competent authority of organizations. Demographic data were also taken from

respondents. Approximately 32 years are the average age of respondents which consists of male and female in the ratio of 61 and

39 percent (approximately) respectively. All the necessary information regarding the study and ways to respond on questionnaire



were shared with all respondents. Respondents were assured of confidentiality of their responses and were told that their

responses shall be used for the research purpose only.

Measures

In the present study following scales were used. These scales were not adopted rather used in its original form.

Organizational Commitment was measured through using Organizational Commitment Questionnaire (OCQ), developed by

Allen & Meyer (1996). This scale measures commitment in three areas namely affective, normative and continuance commitment.

There are six items each of the three areas, making 18 items scale in all. Reliability of the scale was found to be .87 for affective,

.75 for continuance, and .79 for normative commitment (alphas).

Organizational Culture (OCTAPACE Culture) was measured using scale developed by Pareek (2003). The scale is a 40 items

instrument that gives the profile of the organization’s ethos in eight values. These values are openness, confrontation, trust,

authenticity, pro-action, autonomy, collaboration and experimentation. The questionnaire is divided into two parts. In the first

part, there are twenty four statements comprising three statements of each of the eight values. The respondents are required to

check on a four point scale how much each item is valued in the organization. The second part contains sixteen statements on

beliefs and contains two statements on each of the eight values. The respondents check on a four point scale how widely each of

the value is shared in the organization. Cronbach alpha coefficient reliability of the scale was 0.83.

ANALYSIS AND RESULTS

As the study aims to explore the influence of OCTAPACE culture on organizational commitment and also different dimensions of

the culture on three dimensions of organizational commitment; correlation and regression analysis were carried out. Correlation

was used to see how all the variables of interest were related to each other. Regression analysis was applied to ascertain how

explanatory variables influence outcome variables. The data were analyzed with the help of Statistical Package for Social

Sciences (SPSS, Version 12). The result in the table below (table -1) shows relationship among variables used in the study. The

table reveals that OCTAPCE Culture is positively and significantly related to organizational commitment. The table indicates that

some of the dimensions of the OCTAPACE culture generate commitment among the employees in the organization of the study.

Table-1: Mean, SD and Correlation Coefficient among Variables (N= 210)

Mea

n

SD

Op

ennes

s

Con

fron

tati

on

Au

then

tica

tion

Tru

st

Pro

-act

ion

Au

tono

my

Coll

abo

rati

on

Exp

erim

enta

tion

Org

aniz

atio

n

Cult

ure

CC AC NC

Org

aniz

atio

n

Co

mm

itm

ent

Gender 1.40 .49

Age 32.50 3.81

Qualification 1.52 .50

Openness 2.93 0.32 1

Confrontation 2.84 0.37 .366** 1

Authentication 2.79 0.36 .567** .365** 1

Trust 2.61 0.29 .241* .171 .137 1

Pro-action 2.90 0.42 .236* .170 .303** .379** 1

Autonomy 2.46 0.37 -.029 .263* -.355** -.076 -.218 1

Collaboration 2.71 0.30 .146 .376** -.136 .370** .113 .223 1

Experimentation 2.73 0.28 .356** .159 .415** .130 .210 .197 .067 1

OCTAPACE

(Org.) Culture 2.74 0.18 .681** .704** .556** .539** .559** .163 .493** .476** 1

CC 2.00 0.87 .059 .189 .212 .300** .346** -.153 .080 .228 .307** 1

AC 2.03 0.76 .062 .142 .212 .115 .093 .191 .299** .272* .224 .437** 1

NC 2.71 0.82 .196 .001 .166 .398** .472** .036 .125 .089 .345** .501** .122 1

Org.

Commitment 2.25 0.62 .135 .152 .302** .313** .396** .171 .220 .263* .383** .869** .666** .726** 1


Note: *Correlation is significant at the 0.05 level (2-tailed).

**Correlation is significant at the 0.01 level (2-tailed).

CC = Continuance Commitment.

AC = Affective Commitment.

NC = Normative Commitment.



OCTAPACE Culture and Organizational Commitment

Following table reveals the relationship of OCTAPACE Culture and Organizational Commitment.

Table-2: Organizational Commitment as Functions of OCTAPACE Culture

Independent

Variables

Beta t-value Significance R2 Adjusted R2 F Level of

Significance

OCTAPACE

Culture .383 3.523 .001 .147 .135 12.143 .001


OCTAPACE culture was found to be significantly influencing (β = .383, t = 3.523; p = .001) organizational commitment. R2 is

.147 which indicates that approximately 15 percent variation is explained in organizational commitment by OCTAPACE values.

F value found in this model is significant (F = 12.143, p = .001).

In order to know that how much different dimensions of the OCTAPACE culture influences different dimensions organizational

commitment, we need to focus on regression analysis presented in tables below:

Table-3: Dimensions of OCTAPACE Culture as Function of Affective Commitment (Stepwise Method)

Independent

Variables Entered

Beta t-value Significance R2 R2

Change

Adjusted

R2

F F

Change

Level of

Significance

Model 1

Collaboration .299 2.655 .010 .089 .089 .077 7.048 7.048 .010

Model 2

Collaboration

Autonomy

.359

.271

3.214

2.424

.002

.018 .159 .070 .135 6.701 5.877 .002


Above table (table - 3) shows that two values of OCTAPACE (Collaboration and Autonomy) are explaining the variance in

affective commitment in significant manner. In model 1, collaboration was regressed on affective commitment and was found to

be significantly influencing (β = .299, t = 2.655; p = .01). R2 is .089 which indicates that approximately 9 percent variation can be

explained in the affective commitment by the values of collaboration. F value found in this model is significant (F = 7.048, p =

.010). In model 2, Autonomy dimension of the OCTAPACE Culture, got added with the Collaboration (β = .271, t = 2.424; p =

.018). This explains approximately 16 percent variation in the formation of affective commitment (R2 = .159). F value in this

model is also found significant (F = 6.701, p = .002).

Table-4: Dimensions of OCTAPACE Culture as Function of Continuance Commitment (Stepwise Method)

Independent

Variables Entered

Beta t-value Significance R2 Adjusted

R2

F Level of

Significance

Model 1

Proaction .346 3.126 .003 .119 .107 9.769 .003


In predicting continuance commitment, only Proaction of OCTAPACE culture was found to be significantly influencing (β =

.346, t = 3.126; p = .003). R2 is .119 which indicates that approximately 12 percent variation can be explained in the continuance

commitment by the value of proaction. F value found in this model is significant (F = 9.769, p = .003).

Table-5: Dimensions of OCTAPACE Culture as Function of Normative Commitment (Stepwise Method)

Independent

Variables

Entered

Beta t-value Significance R2 R2

Change

Adjusted

R2

F F

Change

Level of

Significance

Model 1

Proaction .472 4.545 000 .223 .223 .212 20.659 20.659 .000

Model 2

Proaction

Trust

375

.256

.444

2.350

.001

.022

.279 .056 .259 13.740 5.522 .000


Above table (table - 4) shows that two values of OCTAPACE (Proaction and Trust) are explaining the variance in normative

commitment in significant manner. In model 1, proaction was regressed on normative commitment and was found to be

significantly influencing (β = .472, t = 4.545; p = .000). R2 is .223 which indicates that approximately 22 percent variation can be

explained in the normative commitment by the value of proaction. F value found in this model is significant (F = 20.659, p =



.000). In model 2, Trust dimension of the OCTAPACE Culture, got added with the Proaction (β = .256, t = 2.350; p = .022). This

explains approximately 28 percent variation in formation of normative commitment (R2 = .279). F value in this model also found

significant (F = 13.740, p = .000).

DISCUSSIONS

The present study is an exploratory study aimed at achieving two objectives. Firstly to explore influence of OCTAPACE culture

on organizational commitment and secondly, to explore influence of different dimensions of OCTAPACE Culture on three

dimensions of organizational commitment. Findings of the study support the assertion that OCTAPACE Culture influences

organizational commitment significantly. It may be possibly that OCTAPACE Culture works as a psychological force that helps

in generating employee’s commitment towards their organization. Culture refers to values and belief systems of the organization

and if the same is in sync with the employee’s values and belief systems, then probably it results in employee’s engagement and

commitment. Thus culture not only affects employee’s job behaviour but also their mindset. It appears as if organizational culture

tends to influence employees’ commitment directly through cultural values (Black, 1999).

Regarding the second assertion, the study partially supports that different dimension of OCTAPACE culture influences different

dimensions of organizational commitment. Data indicates that culture with Collaboration and Autonomy values influences

employee’s Affective commitment. This may be probably working together and in team (collaboration) helps in addressing

business problems more effectively and may be enjoyable also and this may probably develops emotional attachment with their

colleagues and organization. Similarly people, who work independently (autonomy), feel valued and consider it as a reward

(intrinsic satisfaction) and this may increase employee’s affective commitment. Autonomy was found to be the positively related

to affective commitment (Karim, 2010). Self-Determination theory asserts that autonomy is one of the individual’s basic

psychological needs which are able to activate self-determined behavior. Thus having the opportunity of responsibility and

freedom to develop own work activities, can encourage the sense of identification and attachment to work that in turn increases

employee’s affective commitment.

Proaction dimension of OCTAPACE Culture was found to be the predictor of continuance commitment in the study. Proaction

culture is characterized as taking the initiative, preplanning and taking preventive action and calculating the payoffs of an

alternative course before taking action. Continuance organizational commitment is rests on the Side-Bet theory which states that

employees who feel that they are favorably and properly rewarded for their investment in the organization, want to continue in the

organization. In Proactive culture, employees invest their knowledge, skills; abilities etc. for taking initiatives, preplanning etc.

and this investment make them probably to continue with the organization.

Normative commitment is being predicted by Proaction and Trust dimensions of the OCTAPACE Culture. It means proactive and

trusting organization creates a sense of moral obligation to continue with the organization. In proactive culture employees are

encouraged to take initiative which comes through some degree of faith in the ability of employees and sense of ownership and

this probably results into normative commitment. An organization characterized by climate of trust with respect to behaving,

thinking and feeling, among colleagues and between employee and employer, people probably feel that it is morally binding on

them to honestly work with the organization.

Similarly when employee feels that they are treated fairly, their knowledge, skills and opinions are valued by organization,

information are shared openly, people are honest etc., employees also develop a sense of respect towards the people and the

organizations, and think that for them it is morally binding to show commitment towards the organization. Trust and faith from

their colleagues and management is likely to simulate employees to reciprocate by increasing their loyalty to the organization.

When trust levels are high, employees are supportive of, or committed to, authorities and institutions that the authorities represent.

CONCLUSIONS

It can be argued that not only other cultural framework but also culture marked with OCTAPACE ethos and values generates

employee’s commitment towards their organization. The study also revealed that if not all but half of dimensions of OCTAPACE

Culture namely Collaboration, Autonomy, Proaction and Trust significantly influence different forms of employee’s commitment.

It reveals that organization should focus more on these aspects of OCTAPACE Culture to have effects on different types of

commitment by their employees.

IMPLICATIONS

The findings obtained from this research seem to suggest that organizations that require their employees to develop commitment

should demonstrate their commitment towards OCTAPCE values. Employers concerned with developing different types of

employee commitment need to focus their attention on teamwork and group efforts (collaboration), autonomy, proaction and

mutual trust in their work environment that can foster positive perceptions of organizations. Fostering these cultural elements can

act as a catalyst in enabling the employee to show commitment towards their job and organization which in turn can positively

influence their performance.

Thus the implications of this study are particularly significant when considering organizational development interventions

designed to increase employee commitment.



LIMITATIONS AND FUTURE RESEARCH

The findings of the study should be viewed with a few limitations in mind. Self-report measures were used to measure the

constructs. It is well known that this might cause common methods variance challenges. Another limitation can be the use of

employees alone to measure variables could have affected the validity of the responses. Employees might not have been fully

aware of some or all of the OCTAPACE Cultural values within their organizations and might have given inaccurate responses.

Small sample size is another limitation.

Research design is cross-sectional which reflect the picture of specific point of time. Probably longitudinal design will be better to

get better picture of the issue. The author recommends undertaking future research factoring above limitations to have better

understanding of the relationship and influences of issues taken in the study. Nonetheless, the study shall be treated as valuable

because of its empirical assessment of the issues which is relevant in present time and are unexplored.

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*****



SHOPPER MARKETING: REDEFINING THE CUSTOMER INTIMACY

Vasanth Kiran R.22 Deepak Jose23

ABSTRACT

Shopper marketing refers to the planning and execution of all marketing activities that influence a shopper along, and beyond,

the entire path-to-purchase, from the point at which the motivation to shop first emerges through to purchase, consumption,

repurchase, and recommendation. To stimulate sales of sustainable products, retailers need to know whether their in-store

instruments effectively influence their market shares. The goal of shopper marketing is to enable a win–win–win solution for

the shopper–retailer–manufacturer. Shopper marketing has emerged as a key managerial practice among manufacturers and

retailers, who are eagerly embracing innovations in the different aspects of shopper marketing. We review current and

potential innovations in shopper marketing. As expected, a price premium compared with the leading brand in a category

decreases market share for sustainable brands, but the location on the shelf and the arrangement of the entire product category

also influence market shares considerably. This paper identifies managerial challenges to achieving win–win situations among

shoppers, manufacturers, and retailers in shopper marketing and outlines future scenarios while it also touches upon purchase

path, 5 point model and 10 strategies to best usage of shopper Marketing.

KEYWORDS

Shopper Behaviour, Digital Shopper Marketing, Strategy, In-Store Marketing, Retailer, Models etc.

INTRODUCTION

Retailers and manufacturers realize the store’s potential as a strong marketing medium, and are now targeting shoppers in an

effort called shopper marketing. Shopper’s Marketing offers a great potential for retailers and manufacturers to engage their most

valuable shoppers more completely and more profitably. It offers new ways to reach shoppers in ways that can make a dramatic

difference in their experience and their spending (Nitzberg, 2009).While in-store merchandising has a long history in consumer-

packaged goods (CPG) marketing, for many years it was considered an afterthought, at best. The game, however, has changed.

Shoppers today have far more retail destinations to choose from, and less loyalty to any one of them. Shopping trips are shorter in

duration, and yet many shoppers require more information to complete them. With the fragmentation of all media, it’s increasing.

The store is compelling and an ideal marketing canvas. With 70 percent of purchase decisions being made in-store and 68 percent

of in-store purchases being impulse (POPAI, 1995), marketers have a tremendous opportunity to reach consumers, build brand

equity and stimulate consumption through effective shopper marketing.

One would think defining shopper marketing would be fairly straightforward. There is a shopper, you market to the shopper and

therefore, marketing to a shopper is shopper marketing – if only things were so logical and simple. Wide ranging debate exists

across the industry on what comprises shopper marketing. Most industry participants agree that the dimensions of shopper

marketing – reach, activities/tactics and program initiator – should include the following components:

• Reach: In-store marketing (e.g., point-of-sale marketing materials). • Activities / Tactics: Brand-building promotions (e.g., promotions advertising product brand for manufacturers). • Program Initiator: Both manufacturer and retailer (i.e., programs developed through manufacturer / retailer

collaboration).

However, many argue whether the scope of shopper marketing also includes the following marketing activities:

• Reach: Out-of-store marketing (e.g., direct mail, radio campaigns, and Internet campaigns).

• Activities/Tactics:

- Trade promotions (e.g., a ‘buy 2 get 1 free’ on-shelf promotion)

- Product modifications (e.g., modification of a product or packaging to satisfy shopper needs).

• Program Initiator:

- Retailer (e.g., private label marketing, store banner promotions).

- Manufacturer (e.g., product packaging innovation).

Companies, industry thought leaders and associations calibrate within these dimensions to create their own definitions of shopper

marketing. Upon examination, we found six prevalent definitions of shopper marketing. We use the term “shopper marketing” to

refer to all the marketing that happens within the retail space. More often than not, this form of location specific marketing is

directed toward exactly the same person whom brands target outside of stores with TV and other forms of activity. While that may

seem to be a statement of the obvious, it is not readily apparent from many observations of marketing in action. Too often we

observe a complete lack of integration between in-store and out-of-store activity. A factor that contributes to this problem is that

the structure of many organizations separates in-store and out-of-store marketing practitioners. (Pincott, 2007).

22Senior Faculty, Vanguard B School, Karnataka, India, [email protected] 23Research Scholar, V. M. University, Tamil Nadu, India, [email protected]





Figure-1

Sources: GMS / Deloitte consulting LLP 2007, Shopper Marketing Study Results.

Shoppers do not care whether the marketing stimulus they are receiving is an advertisement, consumer promotion, trade

promotion, product package, or store placement. They do not categorize these stimuli, they do not care what the industry calls

them and they certainly do not care who funds them. They just want relevant information, a pleasant store experience and an easy

purchase. Shoppers may be pre-disposed to make a purchase not just within a store environment, but on the way to the store and

from the store – at any point they are thinking about the purchase.

Figure-2

Sources: Hoyt & Company, LLC

Therefore, they are receptive to messages about the product outside the store. After positioning the shopper at the center of the

universe and identifying what marketers need to target the shopper holistically, we significantly broaden the aperture of the lens

through which we think the industry needs to view shopper marketing.

LITERATURE REVIEW

Consumer behaviour researchers have been interested in 'unplanned' and 'impulse' buying for some time (Clover, 1950; West,

1951; Stern, 1962; KoUat and Willet, 1967). The older literature tends to consider unplanned and impulse buying as more or less

equivalent (eg West, 1951). Stern (1962) differentiated 'reminder impulse buying' (in-store recollection of needed items) from

'planned impulse buying' (shopping for price discounts). 'Pure impulse buying' was a 'novelty or escape purchase which breaks a

normal buying pattern' and 'suggestion impulse buying' was the purchase of an item seen for the first time but recognised by a

consumer as relevant or needed. 1996). A recent research paper, for example, recounts these themes and weaves them together:

'Impulse buying behaviour is a sudden, compelling, hedonically complex purchasing behaviour in which the rapidity of the

impulse purchase decision process precludes thoughtful, deliberate consideration of all information and choice alternatives'

(Kacen and Lee, 2002:163). The store is a critical and highly attractive touch point to reach and influence consumers. The store as

a venue to convert consumers into buyers is not a new concept. The 'science of shopping' evolved in part due to the fact, as

demonstrated early on in consumer research, that shoppers visiting a retail place do not buy only those items that are on a

shopping list, or that they have identified a prior need for (West, 1951; KoUat and Willet, 1967). Sales organizations have been

utilizing the store for quite some time through rather substantial trade promotion programs and investments. Brand marketers have



only been targeting consumers outside of the store, leading them to the store but leaving them at the front door. They have been

neglecting an important moment in the consumer’s decision making process, “The First Moment of Truth”.

"Shopper marketing is a new medium as important as the internet, mobile or gaming," declared Starcom Media Vest Group North

America CEO Renetta McCann at the announcement of pilot results using Nielsen In-Store's Prism initiative, essentially a ratings

system for in-store media and marketing that measures reach and frequency similar to TV. "It's a brand-new ballgame, and we're

all in."In order to execute holistic 360-degree marketing, marketers can no longer overlook the store or the consumer-turned-

shopper (Hoyt, 2007).

THE SHOPPER MARKETING PROCESS: PATH TO PURCHASE

Figure-2

Sources: Model Developed by Authors.

The above model starts with a trigger, prompting the demand for a certain product. The path to purchase ends with the trigger

itself being fulfilled. From demand to satisfaction, the shopper will go through a series of interconnected actions, each with an

outcome that prompts another action. The path to purchase is no longer linear. In fact, most actions are happening at the end of the

funnel, and this is where Shopper Marketing is most effective…a late funnel media buy.

If we look at the path to purchase this way, we get a better sense as marketers of the new drivers within the decision-making

process, or journey. Understanding a shopper’s journey can help marketers develop communication strategies that are more

effective and ultimately, lead to a purchase. Marketers need to observe the actions that a consumer makes while understanding on

the back-end the cause of these actions

4P OF SHOPPER MARKETING

Figure-3

Sources: GMS/Deloitte consulting LLP 2007, Shopper Marketing Study Results



SHOPPER MARKETING STRATEGY AND ANALYSIS

A few strategies in which shopper Marketing can help to improve sales in these challenging times.

Sell to Shopper, not the Consumer

Utilizing insight into shopper behaviors is a key principle of Shopper Marketing and the main differentiator over traditional ‘brand

push’ strategies. During events of economic crisis, when shoppers will be thinking harder about every item they put in their

basket, such understanding is more critical than ever.

‘Consumers Use, Shoppers Buy’. Shopper marketing complements the ‘passive’ awareness and preference building role of

consumer marketing by focusing on the ‘active’ purchase decision making process of the shopper.

Asking few questions, like the following to yourself will provide you with greater insights. Do you understand the barriers to

purchase for your brand and category and how they may have changed as a result of economic pressures? Has the consumption

occasion changed, what role does price now play versus other factors such as convenience, wellness or sustainability?

Are shoppers’ trips and missions changing in a way that will affect your brand? Are your shoppers making fewer, bigger and more

planned trips? Are they shopping different channels in different ways?

Know your Brand

Understanding what the customers take on a particular Brand is is very essential. Every brand marketer commits significant

resource to understanding how their brands are perceived by consumers, but they miss the influence of assets and equities on

shopper choices?

In a recession, non-essentials get the first blow – the important question arises, how can you make yourself essential? Price is

undoubtedly a major driver of choice but it is not the only one. How important are trust, quality and familiarity?

What opportunities are created by changes in usage or consumption occasion? How can you re-frame value? Consider how you

can ‘Up’ the benefit and ‘Down’ the price to remove or minimize the inevitable trade-offs shoppers will have to make.

For e.g. Kraft is promoting the taste, value and nutritional benefits of its cheese slices when used to make a toasted cheese

sandwich. Trading up to a premium laundry detergent to prolong the life of expensive clothes may be a wise financial decision.

Remaining loyal to a bottled premium beer may be important if nights on the town are substituted by nights in. Hallmark is

stressing the variety of powerful emotions that can be unleashed – by sending a 99c card. Emotional imagery at the point of

purchase may dissuade pet owners from compromising on quality or treats for their beloved pets.

Offer Solutions

The final purchase decision is always made in favour of the product or selection of products that provides the shopper with the

most convenient response to her or his shopping motivation.

What is the purpose of that particular trip and how is it impacted by financial considerations?

Think about themes, co-locations and adjacencies that address shoppers’ needs for value – healthy meal options for the whole

family, fun nights in that won’t break the bank, pamper yourself and be kind to your purse, save money and save the planet.

Collaborate

Recessionary pressures will affect shopper segments in different ways, presenting different challenges and opportunities to each

retailer.

Understanding how your retail partners are reacting to these changing times and working with them to meet their own shoppers’

evolved needs will deliver incremental returns for both parties.

What programs will they be developing? How do they relate to your shoppers? How can you bring your knowledge of

consumption and usage occasions to the retailer’s knowledge of buying behavior?

All Shoppers Are Not the Same

Considering that all shoppers behave alike is a grave mistake. Just like the general population, shoppers are not one homogenous

mass. Exciting demographic changes present segmentation opportunities for focusing tailored offerings and messages whether

that be based on ethnicity, age, families or singles. All have distinct needs that will be affected by an economic downturn.



Think About the Path to Purchase

Whilst the ‘first moment of truth’ is undoubtedly when a shopper selects one brand over another, the decision making process

does not take place entirely at the shelf.

If shoppers are planning or combining their trips more or looking for deals, what role do coupons (and coupon websites) play, is

on-line a channel for raising awareness, do retailers loyalty programs influence planning decisions, can radio talk to your shoppers

while they drive to the store?

Align Your Brand and Sales Teams

Those organizations that see winning with shoppers as the sole remit of the sales and customer teams will not be as successful as

those that realize shoppers’ changing habits need to be addressed by the whole organization.

Recession beating solutions may present NPD opportunities, require new pack formats or equity communication that focuses on

relevant attributes. This will require an integrated planning process with brand and sales teams working in unison.

Keep it Simple

In times of change and uncertainty, clarity is the key. Value messages, especially in-store should be simple and to the point. If

things get too complex, shoppers will resort to the cheapest price.

Shoppers will also look for familiar cues of trust and re-assurance. Combine relevant value messages with these valuable equities.

Be proud and confident and not apologetic. Shoppers are looking for re-assurance that they are making the right choices. Be

transparent and don’t sell people what they don’t need – you will lose their trust and loyalty.

Innovate Wisely

While marketing in a recession is undoubtedly about marketing to the core (brands, consumers and retailers) times of change

create new opportunities as consumers and shoppers re-evaluate their needs.

New segments will emerge from changes in consumption and shopping behaviors while digital technologies in and out of store

present new engagement opportunities. Whilst all expenditure should be carefully considered, an insight led and integrated

planning approach can reveal opportunities for competitive advantage that can last well beyond the current recession.

Evaluate Constantly

This recession is far from over and none of us knows how things will play out. More change is certain however. It’s important that

we stay close to the consumer and our retail partners ensuring our products and messages are relevant to their needs and

remaining flexible as these needs change.

The Role of Packaging

Marketers who are willing to take a fresh look at packaging issues may identify some new opportunities for shopper marketing.

Often, the development and evaluation of packaging are focused on its ability to communicate messages about the brand. But that

is not where the power of packaging lies.

The familiar visual cues of brands such as Coca-Cola, Duracell, and McDonald’s are powerful not because they communicate

specific messages but because they are distinctive and instantly recognizable.

Understanding a brand’s core iconography and making it visible across all marketing material is a powerful and underleveraged

way of connecting in-store and out-of-store marketing

DIGITAL SHOPPER MARKETING

Digital Shopper Marketing is “shopper marketing making use of all forms of communication that are delivered using a binary

electronic format, utilizing technology such as computers, mobile devices and screens” (Katz, 2010).

Five to do’s when activating digital shopper marketing programs:

Leverage the proven winners.

Beware of the bright and shiny.

Understand the balance of PR driver’s vs those with utility.

Early-on vs. add-on.

Leverage the full spectrum of shopper “Need States”.



STEP MODEL

Figure-4

Sources: Model developed by Authors.

Display: Retailers are looking for shopper solutions that will set their stores apart. Brands must bring shopper-centric

merchandising ideas and vehicles if they want a seat at the table.

Messaging: Finding messages that will disrupt, attract and focus the shopper’s attention requires testing, tweaking and

re-testing by in-store professionals.

Location: Technology is changing the game on both the macro (targeting the most optimal stores) and the micro (end

cap or aisle placement) levels.

Timing: If a call comes late on a Friday saying a slot may be opening at a 2,000-store-chain, does your brand possess

the quick-reaction timing to answer the bell?

Pricing: A complete cost-containment strategy can be built around modular design, process efficiencies and the use of

templated components.

THE HUB RESEARCH RESULT

To determine the elements that comprise best practice, The Hub (2009) research compared the responses of those who rate their

success with shopper marketing as “excellent” against the averages for all respondents and against those who rate their success as

“not so good” (see chart below). The differences between the “excellents” and “not so goods” are significant in that they depict a

very clear picture of what constitutes best practice. Because many of these elements are self explanatory, we’ll confine the balance

of this discussion to those that normally require clarification. Seventy-two percent of “excellents” have 20-plus people in their

shopper-marketing departments. While this is partly a function of experience, it is primarily the result of commitment. These

companies understand the multi-faceted scope and responsibilities associated with running a bestpractice shopper-marketing

program.

Figure-5

Sources: The Hub Magazine, Shopper Marketing 2011 Survey.



GAPS IN SHOPPER MARKETING

There are few major gaps that one can identify below with some of retailers:

“Lack of understanding of what shopper marketing can do.”

“Lack of cohesive joined-up planning process.”

“The two greatest impediments are quality data availability (trade data) and an integrated approach to planning across

category, channel and customer.”

“Lack of clear understanding of what shopper marketing is and lack of case studies to prove it works.”

“Lack of broad understanding within the consumer marketing group; they don’t see the value; they believe that we

still go to market with brands; and because consumers buy brands they don’t need to focus so much on the customer.”

CONCLUSIONS

Shopper marketing clearly has enormous potential and continues to gain momentum among brands looking to test larger budgets.

Shopper marketing must continue to deliver comprehensive returns on investments, and must be multi-channel and no longer a

single SILO. Shopper marketing must be developed into a strategic marketing capability and it must intersect with every other

action and step along the path to purchase.

Finally agencies and brands need to institute an effective measurement strategy that assists in understanding the efficiency of

campaigns. As Shopper Marketing continues to grow and gain favourability among brands, its time for marketers to stop thinking

about the platforms as separate pieces to the puzzle, but rather one ad-hoc program that fluidly works together. Shopper marketing

should be a seamless part of the marketing discipline, considered and developed in conjunction with all the other marketing

elements. There is a huge opportunity for those who reach out to achieve.

REFERENCES

1. Clover, V. T., (1950). “'Relative Importance of Impulse Buying In Retail Stores”, Journal of Marketing, Volume: 15(1),

pp. 66-70.

2. Hoyt, C., (2007). “Minding the Store”, the Hub, May / June.

3. Hoyt, C., (2009). “Ready at Retail”, the Hub, July / August.

4. Kacen, J. J, and Lee, J. A., (2002). “The Influence of Culture on Consumer Impulsive Buying Behaviour”, Journal of

Consumer Psychology, Volume: 12(2), pp. 163-176.

5. Kollat, D. T., and Willet, R. P., (1967). “Consumer Impulse Purchasing Behaviour”, Journal of Marketing Research,

Volume: 4, February, pp. 21-31.

6. Katz, J., (2010). “Digital Shopper Marketing”, The Hub, March / Aprail.

7. Nitzberg, M., (2009). “Putting the Shopper in Your Shopper Marketing Strategy”, POP Times, retrieved from

http://www.dunnhumby.com/admin/files/6-09_ShopperMktg_Nitzberg.pdf, accessed on 11/10/2012.

8. Pincott, G., (2007). “Putting the Shopper Back into Marketing”, available at

http://www.wamda.com/web/uploads/resources/MillwardBrown_PointOfPurchase_Dec07.pdf accessed on 11/10/2012.

9. POPAI, (1995). “Consumer Buying Habits Study”, Point-of-Purchase Advertising Institute & Meyers Research Center.

10. POPAI, (1995). “Measuring the In-Store Decision Making of Supermarket and Mass Merchandise Store Shoppers:

Summary and Analysis”, Point-of-Purchase Advertising Institute, Englewood, NJ.

11. Stern, H., (1962), “The Significance of Impulse Buying Today”, Journal of Marketing, April, Volume: 26, pp. 59–63.

12. West, C. J., (1951). “Results of Two Years of Study into Impulse Buying”, Journal of Marketing, Volume: 15(3), pp.

362-363.

*****

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UNDERSTANDING THE CONSUMER BEHAVIOUR TOWARDS

SHOPPING MALLS IN RAIPUR CITY

Rupesh Kumar Tiwari24

ABSTRACT

Many developed and developing countries (like USA, Japan, Brazil, China etc) have already witnessed the noteworthy mall

culture which has redefined “Retail”. The emergence of malls, as an important and significant destination for shopping,

recreation and socialization has turned the face of the retail industry in India. Cities of India like Delhi, Mumbai, and

Bangalore etc have received colossal economic and social contributions from these malls making them one of the most

prominent cities not only in India but around the globe as well. Even, small cities like Raipur is now eye witnessing the same

phenomenon, described earlier as the “mall culture” (with two malls already functioning and many more in the pipeline).

Therefore, the main aim of this paper is to investigate the consumer behavior towards these shopping malls, with special

reference to Raipur city. The paper also tries to facilitate the Mall developers, managers, marketers and operators with the

perfect blend of necessary acumen in terms of various shopping dimensions required to offer the targeted customers so as to

operationalize the mall with utmost productivity and performance.

KEYWORDS

Mall, Consumer, Behaviour, Customers. Productivity, Performance etc.

INTRODUCTION

Shopping, buying and utilizing are three activities which constitutes the consumer behavior in a holistic manner (Tauber, 1972).

Myriad number of literatures is available which have identified various dimensions and concepts of customers’ buying and

consumption behavior. However, very few literatures are available which have described about the various constructs of shopping

behavior and even fewer numbers of researchers have focused on Indian Consumers.

According to Assael (1987), shopping behavior is the most unique for behavior which the consumers exhibit. Gifts, clothing,

groceries, gifts and household items are some of the most common type of shopping which consumers indulge in a highly

frequent manner. But according to Dholakia (1999), occasion and motives are also some crucial points which influence the

consumers shopping behavior. For example, for some consumers, shopping is all about getting the best deal out of bargaining, for

some (especially teenagers or the young crowd) shopping is a means of getting acquainted and interact more with others in a

social context and for some it is a way of breaking out from the regular monotonous professional and personal routine (Reid and

Brown, 1996).

It is also possible, that the motives behind two consumers shopping at the same store could be same or different. Same motives

may arise as when the customers look for convenience, shopping experience etc, whereas motives mat vary as a result of

compulsion or by free choice. Compulsion shopping happens when the customer is forced to indulge in shopping and for him/her

it could be a great deal of burden, in this case he/she will try to finish of the work in minimum time that too with minimum effort.

While for the other customer who see shopping as a mean of enjoyment, may consider shopping as a form of sport, in this case

he/she will not mind sparing extra time and effort while searching and evaluating various alternatives available to him.

The study done by Underhill (1999) revealed that, shopping is very distinctive in nature, its more to just purchasing what one

wants but it also includes the customer’s acceptance of the product, brand or stores as well, using multiple senses like- seeing,

smelling, tasting, hearing and even tasting (at times).

Solomon (1994), proposed five types of shoppers which he identified from his study on customers of western countries. The

following are the five types:

The Economic Shopper: A balanced and more coherent kind of customer who tries to get the best deal so as to utilize

his/her money efficiently and effectively.

The Personalized Shopper: Customer who will only shop at a store with which he/ she has formed a strong attachment.

The Ethical Shopper: Customer is very conscious and concerned about the local stores and will prefer them over the big

retail giants.

The Apathetic Store: Customer who doesn’t like to do shopping but does it because he/she consider as a necessary evil.

The Recreational Shopper: For this customer, shopping is a means of socializing, spending leisure time and for him/her

shopping is fun.

Reid and Brown(1996), proposes that the customer’s orientation towards shopping may shed light into the way he/she indulge in

shopping and it may also tell the reason why he/she chooses a particular retail store (including shopping malls). This would be of

24 Assistant Professor, Faculty of Management, Disha School of Management Education, Chhattisgarh, India,

[email protected]




great help to marketers to design the malls in a way so as to increase the shopping experiences of the customers and cooping up

with the expectations and needs of the mall customers; as Underhill (1999), observed that nowadays, upon entering a mall the

environment is so vibrant.

Available literatures focus mostly on Western customers or some of the selected Asian counties only. An appealing question is

whether the theories and concepts postulated by the available literatures also hold true for the Indian Customers (particularly of

Raipur region). Therefore the current study in hand, has the primary focus in understanding the Indian customers’ shopping

behavior.


There are seven dimensions identified which elucidate the consumers’ motives for visiting and shopping at malls (Bloch et al.,

1994). Following are the seven dimensions:

1. Aesthetics,

2. Convenience,

3. Escape,

4. Exploration,

5. Flow,

6. Role enactment,

7. Social.

Aesthetics Dimensions

Wakefield and Baker (1998) found out that the architectural design of the mall was the dimension which contributed the most to

the mall excitement, while a mall’s interior design had the strong influence on customers’ desire to stay longer in the mall.

Wakerfield and Baker (1998) also found a positive and strong relationship between the mall’s layout and desire to stay/mall

excitement. This tells us that customers not only evaluate the product assortments inside the mall but they also do look for the

intangibles that the mall offers like colors, ambience, fragrance, lighting and music.

According to a study conducted by Loudon and Britta (1993), a better Interior design actually helps to elevate the image of the

mall over a period of time. Complementing the discussed findings is the study conducted by Lui (1997) which revealed that

today’s Malls have seen a paradigm shift in the kind of interior which the designers choose for their malls; from a very relaxed

environment to architecturally lavish, affluent and sophisticated design. Prior researches suggest that use of light colors exhibits a

sense of spaciousness and calmness whereas bright colors impart a sense of excitement among the minds of the consumers;

moreover, even the use of serene music along with warm colors helped the mall by increasing the customers’ desire to stay

(Solomon, 1994; Peter and Olson, 1994). All in all, atmospheric characteristics are basically an extension to the product

assortments and could be manipulated positively to enhance buyers’ mood and comprehension, hence affecting behavior, and to

elevate the mall image. On the basis of the above discussed literatures, our research postulates the first proposition:

H1: Shopper’s motivation to go to a shopping mall will be higher when there is a higher preference towards aesthetics.

Convenience Dimension

Operating hours and time taken to reach the outlet are one of the main criteria which the consumers look for while selecting a

shopping outlet (Kaufman, 1996). As evident from the theory of retail location, Consumers give higher preference to shopping

outlet which is nearby their homes. Loudon and Bitta (1993) also discovered that consumers seek high convenience; they despise

spending time and effort finding parking space, department or a particular product; they also found that convenience is also an

important criterion for customers who are either visiting or making purchase in a mall very infrequently. Also, according to

Kaufmann (1996), consumers are getting more and more inclined towards a “one stop destination” for their complete shopping

desire, thereby complementing the theory of emergence of the mall culture. This steers us to our second hypothesis:

H2: Shopper’s motivation to go to a shopping mall will be higher when there is a higher preference towards consumers’

convenience.

Escape Dimension

Malls, because of their exciting, lavish and sophisticated environments proffer a sense of relief and break to the customers from

the same monotonous and routine rituals of job and personal works. Underhill (1999 and 2005) explained that many modern malls

have started to offer a myriad level of sensory stimulus. A trip to shopping malls can provide an individual/family a very

economic means of entertainment, leisure and recreation with a great deal of effortless planning. This leads us to our third

hypothesis:

H3: Shopper’s motivation to go to a shopping mall will be higher when there is a higher preference towards escape activity

of the customers.



Exploration Dimension

According to Tauber (1972), Malls attract shoppers by offering an opportunity to learn new trends i.e. Exploration. Infact,

customers perceive the process of accumulating information by exploring various products or stores (both new and old) as a sense

of benefit (Wakefield and Baker, 1998). Consumers always look for new and upgraded product and their desire for variety can

only be met through the process of exploration. So, it is of utmost importance to the mall management to offer a variety of

products and alternatives for an improved mall performance (Kaufmann, 1996). Thus we propose our fourth Hypothesis:

H4: Shopper’s motivation to go to a shopping mall will be higher when there is a higher desire for exploration

Flow Dimension

Bloch et al (1994) and Lui (1997) have explained the meaning of “Flow” as a blissful state of absorption which is associated with

the forgetting about the sense of time. For example if the mall experience is good the customers will not mind the time which they

have spent inside the mall while shopping or enjoying and may even have a high desire to spend more time inside the mall thus

resulting in better performance of the mall. Moreover, visiting a mall alone is also not perceived as a sense of negativity which

however, is present in case of watching movies alone or dining out alone. Thus, we propose:

H5: Shopper’s motivation to go to a shopping mall will be higher when there is a higher preference for flow.

Role Enactment Dimension

People behave in manner which is socially accepted or expected depending on the cohort they belong to. For example, shopping

of household items in Raipur is done by housewives and shopping for clothes and other related accessories are done by

individuals. Wakefield and Baker (1998) observed that hedonic shoppers (those who seek pleasure in shopping) were noticed to

visit malls more than utilitarian shoppers (those fulfill the duty of shopping). Solomon (1994) also elicited that some shoppers

enjoy bargaining and that they see shopping as a sport. Thus, in a nutshell we may say that consumers enact their social roles by

shopping or visiting a mall. Therefore, we have our sixth hypothesis:

H6: Shopper’s motivation to go to a shopping mall will be higher when there is a higher drive to enact to a social role.

Social Dimensions

Shopping offers an individual an opportunity to socialize, it often result in meeting up with old friends or new acquaintances.

Researches done by Tauber (1972); Wakefield and Baker (1998) have posit that the opportunity of socialization is an important

factor related shopping experience. In addition to this, Loudon and Bitta (1993) have highlighted that most of the people prefer to

shop at location where employees’ behavior towards them are cordial and courteous. Teens (even families) in particular have

shown a great tendency of visiting and recreating at shopping malls because of the economic cost of entry. Thus we, propose our

seventh and last hypothesis:

H7: Shopper’s motivation to go to a shopping mall will be higher when there is a higher desire for socialization.

The researchers are attempting to understand the influence of all the seven dimensions related to shopping experience with

regards to motivation towards visiting a mall. Thus, we postulate the above proposed hypotheses in the form of a graphical

representation as in Figure-1.

Figure-1: Graphical representation of Influence of Shopping Dimensions on motivation for shopping at Malls




RESEARCH MEHTODOLOGY

A self administered questionnaire was employed inorder to measure the responses of the consumers towards the selected

dimensions. A total of 156 respondents were selected purely on a judgmental basis (making it a non-probability sampling

technique) at the two malls situated at Raipur city namely, 36 City Mall and Magneto Shopping Mall, who visited the two malls

between 6:00 pm – 8:30 pm; as we believe that this the prime time when the most genuine bunch of customers visit the malls.

The questionnaire divided into four parts. Part I employed questions to measure necessary and relevant demographic details of the

respondents. Part II of the questionnaire used questions to capture the shopping behavior of the respondents (e.g. frequency of

shopping, time taken while shopping in the mall, etc.). Part III aimed at measuring the respondents’ reactions towards the various

dimensions of shopping as elicited by Bloch et al (1994). This part employed a total of 27 questions adapted from Tauber (1972)

and Bloch et al. (1994) to cater to the seven selected dimensions for the purpose of the study as depicted in our conceptual model.

Each question was measured using a five point Likert scale, which ranged 1 to 5, where 1 resembled the response as “strongly

disagree” while 5 resembled “strongly agree”.

ANALYSIS AND FINDINGS

Demographic Details (Part I)

From a total of 156 respondents, about 136 questionnaires were found completely usable for the purpose of the study. The

frequency and percentage of the respondents were constructed depicting the complete demographic characteristics of the sample;

as shown in Table1.

Table-1: Demographic Profile of Respondents

Frequency Percentage Frequency Percentage

Gender Marital Status

Male 57 43.2 Married 54 39.7

Female 79 59.8 Unmarried 82 60.3

Total 132 100 Total 136 100

Age Monthly

Income (in INR)

16-21 15 11.0 below 10,000 19 14.0

22-25 46 33.8 10,000-20,000 31 22.8

26-30 33 24.3 20,001-30,000 45 33.1

31-35 24 17.6 30,001-40,000 18 13.2

36 and above 18 13.2 above 40,000 23 16.9

Total 136 100 Total 136 100

Academic

Qualification Occupation

Undergraduate 29 21.3 Student 40 29.4

Graduate 63 46.3

Business/ self

Employed 35 25.7

Post-Graduate 42 30.9 Service 42 30.9

Doctorate 2 1.5 Others 19 14.0

Total 136 100 Total 136 100


There were 43.2 percent of male respondents and 59.8 percent of female respondents in the sample. The largest set of respondents

was found to be of the age group 22-25 years (33.8 %), following were the respondents of age groups 26-30 years (24.3%) and

16-21 years (17.6 %) respectively. Unmarried and single respondents were found to be more as in the sample accounting for

nearly 60 % and married respondents were about 40% of the total sample. No case of divorced/widowed was found. With respect

to the educational level, graduates were the most recurring with 46.3% followed by Post-Graduation level respondents. Percentage

of undergraduates included in the sample was 21.3% whereas only two respondents were holding Doctorate award.

According to the statistics in terms of monthly income illustrated that major proportion of respondents were earning a monthly

income ranging from 20,001-30,000 INR (33.1%) followed by respondents who specified that had a monthly income of 10,001-

20,000 INR accounting for 22.8 % of the total sample, others who followed had 30,001-40,000 INR (16.9%), below 10,000 INR

(14%) and above 40,000 INR (13.2 %). About the occupation of the respondents, the statistics revealed that 30.9% of respondents

were service professionals, 29.4% were students, 25.7% were self-employed and a considerably low percent of respondents with

14%, fell under the category of “Others” (for example, Retired, Housewives etc).

Shopping Behavior (Part II)

Table-2 indicates the shopping behavior of the respondents included in the sample. The given table tells that majority of the

respondents (30.1 %) spend about one and a half hours to two hours for shopping purpose while 23.5% of respondents spend two



and a half hours to three hours for shopping purpose. There were even a good percentage of respondents who shop for more than

4 hours accounting for 20.6% of the total sample a very less percent of respondents (8.8%) was observed, who spend half an hour

to one hour for shopping.

In terms of number of stores visited, 29.4% of respondents were found to be visiting 5-6 stores while shopping, followed by 27.9

% visiting 3-4 stores, a good set of respondents were also found (22.8 %), who visit more than 9 stores for their shopping purpose.

A considerably low percent of respondents accounting for 10.3 % and 9.6 % of the total sample were found to visit 7-8 stores and

1-2 stores respectively. In terms of number of times visiting the shopping mall, the result indicates that only 8.1 % of respondents

visited the malls on a daily basis whereas about 40 % of respondents visited the malls atleast once in a week (see Table II). 17.6 %

of respondents were found to be visiting the malls atleast once in a month whereas only a handful of respondents (5.1 %) were

observed to visit the malls once in 45 months or higher.

With regards to the percentage of monthly income spent in the malls; Table II Indicates that 31.6% of respondents spend about 6-

10 % of their monthly income, while shopping in the malls. Table II also indicates that 19.9% spent more than 20 %, 18.4 % of

respondents spent 11-15%, 15.4 % of respondents were found to spend 16-20 %, and remaining 14.7 % of respondents spend less

than 5% of their monthly expenditure in the shopping malls.

Table-2: Shopping Habits of Sample Respondents

Frequency Percentage Frequency Percentage

Average Time spent

for shopping (in Hours) Frequency of Visit

0.5- 1 12 8.8 Daily 11 8.1

1.5- 2 41 30.1 once in every 7 days 54 39.7



above 4 28 20.6 once in 45 days or higher 7 5.1

Total 136 100 Total 136 100

Stores Visited Monthly spendings

in mall

1-2 stores 13 9.6 less than 5 % 20 14.7

3-4 stores 38 27.9 6-10 % 43 31.6

5-6 stores 40 29.4 11-15 % 25 18.4

7-8 stores 14 10.3 16-20 % 21 15.4

more than 9 31 22.8 More than 20 % 27 19.9

Total 136 100 Total 136 100


Reactions towards Shopping Dimensions (Part III)

As we have already discussed, there are a number of reasons (dimensions like aesthetics, Convenience, flow etc) why consumers

shop or visit malls (Bloch et al. 1994). The response of each respondent was measured and compared among the various age

groups using a one-way ANOVA. The obtained result has been presented in Table III. The figures in the Table III are mean scores

based on a 5 point Likert scale as discussed in earlier section. The higher the mean score, the more respondents agree to the

various items of the selected dimensions.

With this thing in mind, we see that the shopping dimensions of aesthetic and exploration obtained higher preference ratings as

compared to the remaining dimensions. Notably, shopping dimensions of Escape and Flow received lower preference scores in

contrast to other dimensions. However, in general, most of the respondents accept the fact that they did not shop/visit malls just to

escape from boredom, stress, bad traffic or loneliness. It could be elicited from the study that the respondents visit the mall

seeking positive experiences rather than to avoid negative situations. The results revealed that Raipur customers prefer to visit

malls mainly because of the vibrant and attractive interior design of the mall (4.17); mall is a place where they get everything

(3.98); good place to hangout with friends as means of socializing (3.98); as they sell products of their interest and relevance

(3.96).

Theoretically, when we talk about the customers of different age groups, it is of common belief that for different age group there

different reasons for shopping at malls. To investigate this belief we studied customers belonging to five different age groups

namely 16 to 21, 22 to 25 yrs, 26 to 30 yrs, 31 to 35 yrs and those belong to 36 years or above. Table III shows one way ANOVA

scores for 27 items given by the respondents of various above mentioned age groups. The result from the given table shows that

out of 27 items of shopping dimensions, 11 items were found to vary significantly between the different age groups (as “p” value

< 0.05).

Of these, 5 items belonged to escape dimensions which suggest that younger respondents visit the malls for the main purpose of

escapism from boredom, stress, bad weather, bad traffic and loneliness while this wasn’t true with the case of older respondents.

Likewise, younger respondents gave higher preferences to the two items in the Exploration dimensions namely discovering and

examining new products. In social dimension the item which varied significantly was “I enjoy visiting the mall with my friends”



as younger respondents agreed more to this than the older respondents. This indicates that younger respondents prefer to visit the

mall as means of socialization and to hang out with their friends.

Table-3: ANOVA Scores of Shopping Dimensions by Age Group

16-21 22-25 26-30 31-35 > 36 Total p*

a) Aesthetics

1. the interior design of the mall attracts me 4.35 4.37 3.99 4.16 3.98 4.17 0.013

2. I notice the interior color usage of the mall 3.31 3.69 3.44 3.71 3.84 3.60 0.174

3. I notice the texture of the mall's interior 4.60 4.25 4.20 3.89 3.66 4.12 0.018

4. The Lightning and decoration of the mall attracts me 4.54 4.44 4.10 3.80 3.36 4.05 0.02

5. I am feel good whenever I am in the mall 4.64 4.48 4.14 3.89 3.14 4.06 0.015

b) Convenience

6. I visit the mall because its very near to my residence

or place of work 3.69 3.75 3.74 3.37 3.28 3.57 0.239

7. I Visit the mall because the parking space of the mall

is good 2.55 2.58 3.5 3.53 2.9 3.01 0.308

8. the mall has convenient store hours 3.54 3.3 3.84 3.64 3.37 3.54 0.254

9. Mall is a place where I can get everything(dining,

movies, shopping etc) 3.94 3.95 3.94 4.15 3.94 3.98 0.634

c) Escape

10. whenever I feel bored I visit the mall 4.39 4.34 3.13 2.70 2.50 3.41 0.067

11. whenever I feel lonely I visit the mall 4.12 4.10 2.50 2.40 2.40 3.01 0.631

12. Whenever I am stressed, I visit the mall 4.03 3.98 2.60 2.30 2.12 3.00 0.025

13. I get the feeling of relaxation when I visit the mall 4.05 4.00 3.24 3.15 2.9 3.47 0.014

14. I visit the mall to escape from bad weather 3.92 3.78 2.7 2.42 2.35 3.03 0.339

15. I visit the mall to avoid traffic congestion 3.69 3.42 2.92 2.87 2.36 3.05 0.124

16. to escape from the monotonous job routine, I visit

the mall 3.65 3.63 3.54 3.02 2.27 3.22 0.245

d) Exploration

17. Mall is a good place to find out what is new 4.5 4.44 4.28 4.10 4.10 4.28 0.030

18. it’s a good learning experience for me whenever I

visit the mall 4.05 4.01 3.74 3.72 3.44 3.79 0.023

19. Certain stores are fun to visit because they sell

products of my interest 3.78 4.07 4.02 4 3.93 3.96 0.012

20. I enjoy handling and trying various merchandise 4.03 3.96 3.34 3.29 3.08 3.54 0.000

e) Flow

21. I feel like in another world whenever I am in the mall 3.18 2.9 2.98 2.68 2.51 2.85 0.284

22. I lose track of time, whenevr I am inside the mall 3.68 3.65 3.72 3.43 3.26 3.55 0.414

23. when I leave the mall I feel it is very late at night 2.94 3.26 3.75 3.57 3.17 3.34 0.162

f) Role Enactment

24. Grocery shopping is a routine exercise of the

housewife. 4.16 4.04 3.73 3.93 3.66 3.90 0.076

25. I consider myself as a wise shopper, because of the

way I bargain and get the best deal 2.94 2.64 3.67 3.14 3.17 3.11 0.002

g) Social

26. I enjoy going to malls when I am with friends 4.43 4.18 4.14 3.9 3.27 3.98 0.000

27. The sales persons are friendly and courteous 3.48 3.52 4.10 4.23 4.22 3.91 0.013

*Level of significance using one-way ANOVA test. Significance values <0.05 are highlighted and underscored


Managerial Implications

As more and more malls are coming up in the Raipur city, competition in this domain will soon intensify and become fierce. It is

of utmost importance to mall management to understand the needs/desires of the targeted customers and deliver their offerings

accordingly so that they can get not only the maximum wallet shares of the customers but also their mind shares. The results of

the current study have many implications to the managers and marketers for an efficient, effective and productive mall

performance.

Malls are fast becoming a place for socializing and recreation (apart from shopping), and customers have set high expectations

from the malls. They see malls as a one stop destination for various purposes like dining, watching movies, hanging out, meeting

new/ old friends and shopping. Hence, mall managers should understand that malls have become something more than a place to

buy products and they should transform the malls that would offer energetic and vibrant stores with attractive product



merchandises, scores of entertainment bundled with modern, more sophisticated atmospherics and facilities, necessary to lure the

target customers.

Aesthetics were valued high by the Raipur customers, items related to the aesthetics like interior design, décor and lightning of the

malls were observed to have received high acceptance from the respondents. Managing atmospherics is of great strategic

importance, resulting in an appropriate differentiation and positioning. The results of the study could help marketers in framing

the atmospherics in a very strategic manner.

Customers of Raipur also gave high acceptance to dimensions like Exploration, Convenience and Social. The customers preferred

one stop shopping, wide product assortment and a place for recreation with friends and acquaintances. Mall managers and

marketers should bundle all the mentioned items while designing criteria which the mall has to offer to the customers, inorder to

lure them, make them to stay longer and spend more.

The current study also revealed that young customers of the Raipur city were found to have favorably inclined towards the mall

than their older counterparts. Mall managers and marketers should develop new strategies inorder to attract more and more youth

crowd by employing new technologies, vibrant color schemes and futuristic whereas they should also devise ways of attracting

older crowd by offering complete family entertainment along with a great shopping experience.

LIMITATIONS AND SCOPE FOR FUTURE WORKS

Resource and Time constraints led the researchers to select a limited sampling frame for the purpose of the current research.

Although the study offers exciting results and some great managerial implication yet they are not suitable for generalizing to the

whole of Chhattisgarh or the nation. The use of convenience sampling method by the researchers may have included a sense of

biasness while selecting the respondents. So, the researchers suggest the employment of probabilistic sampling and a large sample

frame, for all future works towards this direction in order to maximize the reliability and generalizability of the results.

Since only two malls were available at the time of study when undertaken, demographic profile of the customers may not be

broader. The researchers also recommend to gather data from customers at more number of malls (as they open) in order to

broaden the demographic profile. Future work examining the shopping behavior of the entire nation so as to compare and

benchmark across various cultures within the nation is also of highest need and desire.

REFERNCES

1. Assael, H., (1987). Consumer Behavior and Marketing Action, 3rd Edition, Boston, MA: Kent Publishing Company.

2. Bloch, P. H.; Ridgway, N. M., and Dawson, S. A., (1994). ‘‘The Consumer Mall as Shopping Habitat”, Journal of

Retailing, pp. 23-42.

3. Dholakia, R. R., (1999). “Going Shopping: Key Determinants of Shopping Behaviors and Motivations”, International

Journal of Retail and Distribution Management, Volume: 27, Number: 4, pp. 154-165.

4. Kaufman, C. F., (1996). “A New Look at One-Stop Shopping: A TIMES Model Approach To Matching Store Hours

And Shopper Schedules”, Journal of Consumer Marketing, Volume: 13, Number: 1, pp. 4-52.

5. Loudon, D. L., and Bitta, A. J. D., (1993). Consumer Behavior: Concepts and Applications, 4th Edition, New York, NY:

McGraw-Hill.

6. Lui, K. F., (1997). “Shopping Behavior in Kuala Lumpur Shopping Malls”, Universiti Putra, Malaysia.

7. Peter, J. P., and Olson, J. C., (1994). “Understanding Consumer Behavior”, Irwin Inc, Homewood, IL.

8. Reid, R., and Brown, S., (1996). “I Hate Shopping! An Introspective Perspective”, International Journal of Retail and

Distribution Management, Volume: 24, Number: 4, pp 4-16.

9. Solomon, M. R., (1994). “Consumer Behavior”, 2nd Edition, Allyn Bacon.

10. Tauber, E. M., (1972). “Why Do People Shop?”, Journal of Marketing Management, Fall, pp. 58-70.

11. Underhill, P., (1999), “Why We Buy? The Science of Shopping”, Simon Schuster, New York, NY.

12. Underhill, P., (2005), “Call of the Mall”, Simon Schuster, New York, NY.

13. Wakefield, K. L., and Baker, J., (1998). “Excitement at the Mall: Determinants and Effects on Shopping”, Journal of

Retailing, Fall, pp. 515-50.

*****



ANALYSIS OF VISUAL MERCHANDISING:

AFFECT ON CONSUMER BUYING BEHAVIOUR

Sonali Banerjee25 Parul Yadav26

ABSTRACT

Visual Merchandising is the art of displaying the merchandise in such a manner that it is appealing to the eyes of the customer.

It sets the context of the merchandise in an aesthetically pleasing fashion, presenting them in a way that would convert the

window shoppers into prospects and ultimately buyers of products. A creative and talented retailer can use this upcoming art

to breathe in new life into the products available at his store. Visual merchandising includes window displays, signs, interior

displays, cosmetic promotions and any other special sales promotions that take place in the store.

The scope of the study is limited to two main aspect of visual merchandising, i.e. the impact of atmospherics and the in store

product display. From this research it has been found that majority of the people have started shopping on a regular basis

(weekly/bi-weekly/monthly basis). The trend has changed the unmarried people show a mixed trend in shopping. Those who

are married, shop either weekly or in a longer time span. People now look for a shopping experience and therefore have

started visiting the departmental stores instead of going to the nearby Kirana Stores. Apart from that the people do not enter

the departmental store with a specific list in hand, they purchase as and when they find something that is needed and therefore

the impact of visual merchandising also increases.

The in store display of the product in specific shelves, makes shopping easier and helps to compare products. The different

shades of lighting catch the attention of the people and induce them to purchase the products. The music and fragrance always

catches the attention of the people. The mood of the people, stimulate their purchase decision. While the billing is being done,

the customers tend to look at the products displayed at the billing counter.

KEYWORDS

Display, Merchandising, Atmospherics, Visual, Shopping, Consumer, Store etc.

INTRODUCTION

Visual Merchandising is an art of presentation which places the merchandise in focus. This in turn helps in educating the

customers create a desire and in addition, it enhances the selling process. According to the New Oxford Dictionary of English,

1999, Oxford University Press, “Visual merchandising is an activity of promoting the sale of goods, especially by their

presentation in the retail outlets”. It includes combining the product, environment and space into a stimulating and engaging

display to encourage the sale of a product or service (Point-Of Purchase Display). It involves everything the customers see both

exterior as well as interior, that creates positive image of a business and results in attention, interest, desire and action (AIDA) on

the part of the customer. It is the art of implementing successful design ideas to increase store traffic and sales volume. It is often

referred to as a silent salesperson.

Store atmospherics include the exteriors and interiors of the store and the manner in which they are designed to create the

ambience of the store. The exterior design, functions as a silent salesperson. They give information to the customers about the

store. The walk and entry is a form of both the exterior as well as the interiors of the store. It should be so designed in such a

fashion that there is sufficient space for customers to have a hassle free movement yet maintaining its influence. These are visible

even when the people pass by the showroom, without even entering it. It gives the people a glimpse of the showroom and

therefore encourages people to enter the show room.

Landscaping basically implies the beautification of the exterior part of any organized retail format. It assumes supreme

significance when it comes to malls. The key to good landscaping is simplicity. Aesthetically designed garbage bins, well

designed benches, and creatively illuminated fountain are some examples of good landscaping. Window display is another form

of visual merchandising which is exterior to the store. It should be simple yet attractive with appropriate color and lighting.

Window displays have been found to promote sales, highlight seasonal changes, and announce the arrival of new products apart

from showcasing the best selling merchandise.

Interior presentations takes care of the first 30 seconds of a person’s visit to the store, that he decides to stay or leave the store.

Therefore it has a big role to play. Signages are also a form of visual merchandising which is interior to the stores. It provides

basic and significant information to customers. Key words like Prices, Discounts, & Free are often found on a signage. Theme

adds to the aesthetics of product displays within a store with changing season, festivals to make shopping fun-filled. Props are

found inside a store to highlight the merchandise and add to the visual impact of a store on customer.

25 Assistant Professor, Department of Marketing and Sales, Amity Business School, Amity University, Uttar Pradesh,

[email protected] 26Assistant Professor, Department of Marketing and Sales, Amity Business School, Amity University, Uttar Pradesh, India,

[email protected]





Store design & Layout tells a customer what the store is all about. It creates an image of the store and the brand that it offers in the

minds of the customers. It is the first impression that a customer has of the store. It is a function of the location of the store site,

which is a combination of various factors like the site itself, facilities like parking and the ease of access.

Modern Trade Market

Modern Trade Market are those market in which the customers have the freedom in selecting the products of their own choice as

there is no interference of the shopkeepers. They are free to choose, look, analyze the products available and make an informed

decision. Customers in Modern Market have large number of choices while selecting their products. Every single thing is

available to the customers under a single roof. In these kinds of markets, the customer doesn’t restrict himself or herself on a

single brand or product. Customers usually pick up those products, which are at their eye level. Customers visit these stores

because they offer more variety of schemes, promotions, etc. Modern Trade has a great prospective for the future. Another reason

for the success of modern trade is changing consumer with respect to its Income, lifestyle and demographics.

Modern Trade Market v/s Traditional Market

Table-1

Modern Trade Market Traditional Market

Outgoing and Inconsistent. Conservative and Consistent.

Short Term but Huge Profits. Long Term Gains.

Short term buyers. Long term buyers.

Products do not ask for in depth knowledge. In depth knowledge of the products.

No loyalty of buyer or seller. Sellers, supply chains are well oiled therefore more benefits.

Cut throat competition



Atmospherics as an important part of retail marketing strategy (Kotler, P., 1974) the retail store atmospherics includes tangible

and intangible dispositions interwoven into a web of meanings that touches the social, psychological, economic, cultural, and

religious life style of consumers, due to concordance with current fad, fashion, and trends. Atmospherics consists of

environmental elements such as bright or dim lighting, classical or familiar music, attractive window dressing and layouts,

magnificent architectural design, freshness and fragrance, appropriate temperature to make it cozy and comfortable, soothing and

trendy color, attractive logo, and gentle crowding are ideal conditions that can affect the current and future behavior of consumers

(Kumar, I., Garg, R., Rahman, Z., 2010).

The interior design within store can help in maintaining customer interest, encourage customers to lower their psychological

defenses and easy to make purchasing decisions. Most retail interior designers use atmospheric influencers to engineer shopper

moods and emotions. Designers create in-store micro-climates that can excite the five senses and that can influence shopper

behavior. (Kotler, P., 1974) the has an influence on the number of items bought in the store, spending more money than

originally anticipated, and spent time more than intended, (Sherman, E., and Smith, R. B., 1987), this shows a significant

interaction between the construction of consumer mood and the store image (Marsh, H., 1999).

According to (Kotler, P., 1974), when deciding to purchase, shoppers may respond to more than just the product and services

being offered. In-store music can be an important component of store atmosphere and can play a key role in the purchase

decision-making process. Consumers purchase a total product or experience, consisting of not only the physical item but also the

packaging, after sales services, promotions, image and the atmosphere of the place where the transaction took place.

Retail store elements such as colour, lighting and visual merchandising have always been considered as having immediate effects

on the buying decision making process. The emphasis has moved away from in-store product displays, towards elements that

excite the senses of shoppers such as music, smells, lighting and flooring that tend to capture the brand image or personality and

help to create an unique environment and shopping experience (McGoldrick, P.,1990).

The role of ambience in store choice has also been found significant. The shopping experience, as created by the store

environment, has been found to play an important role in building store patronage. Shopping is a recreational activity and

selecting a store is perceived to be high on “entertainment” value (Woodside, A.G., Trappery, R. J., and Randolph, J., 1992).

RESEARCH METHODS AND PROCEDURES

Research Objectives

To examine the influence of visual merchandising on the buying behavior of the consumers.

To evaluate the influence of atmospherics on consumers purchase decision.



Research Design

It is a descriptive research the data has been collected from people across age groups. It is the best form for statistical calculations.

There has been a formulation of the hypothesis based on the descriptive research. The following were the hypothesis set for the

research:

Ho: The frequency of shopping and the gender of the shopper are independent.

H1: The frequency of shopping and the gender of the shopper are not independent.

Ho: The kind of stores mostly visited and the frequency of shopping are independent.

H1: The kind of stores mostly visited and the frequency of shopping are not independent.

The report is based on primary as well as secondary data. However, a major emphasis is made on collecting the data via primary

data collection tools in order to avoid the overhearing factor in the attitude study. The primary data is further divided into two

parts: a) Qualitative, and b) Quantitative.

The Qualitative research has been conducted via in depth interviews of the store managers to get a brief about how the

merchandising is actually done. In addition, quantitative research was conducted through the use of a well drafted questionnaire.

The secondary data was also relied upon, so as to get an insight of the work already done in this field of visual merchandising.

Sampling Technique

Target Population: Individuals across all age groups those visits the modern retail formats for shopping. Main focus had been

laid on people who frequently visit these large retail stores.

Sampling Procedure: The sampling procedure followed is Convenience Sampling; Sample size: 272 people.

68 Shoppers * 4 Stores = 272 Respondents (N = 272).

Sample Elements: hand picked elements. Sample elements were chosen who frequently visited the large retail outlets and shops.

Data Collection: The data collection had been done using the survey method. Survey has been done on the sample elements using

a well drafted questionnaire. This was done into two parts: direct one to one survey as well as online survey had been conducted.

Much of the data cleaning was required for the online surveys though the samples were judgemental. The responses outside the

target sample elements that crept in were filtered. There was not much data cleaning needed for the direct surveys.

Data Analysis: The data has been analyzed using statistical software: SPSS 17.0 and Microsoft Excel 2007. The data was

cleaned and coded to give as input to the SPSS. The analysis done using SPSS was used to arrive at a meaningful conclusion of

the research. A code book was prepared for the entire questionnaire.

Sample Design: The data presented is with the help of bar graph, pie charts, line graphs and other presentation formats.

Tests: The following two tests have bee used in the research:

Cross tabulations – cross tabs give the relation between the two variables in a tabular form. It is a very effective tool

for data analysis as we can simultaneously study two or three variables are draw conclusions based on it.

Chi square test – It is done to understand if there is any significant relation between the variables which have been

used in the cross tabs or not and on the basis of that we reject or accept the null hypothesis to draw conclusions about

the population into consideration.

DATA ANALYSIS AND FINDINGS

Ho: The frequency of shopping and the gender of the shopper are independent.

H1: The frequency of shopping and the gender of the shopper are not independent.

Table-2: Chi-Square Tests

Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 3.589a 3 .309

Likelihood Ratio 3.588 3 .309

N of Valid Cases 272

Sources: Primary Data Analysis.

a. 0 cells (.0%) have expected count less than 5.

The minimum expected count is 13.88.



Here the p value which is 0.309 is greater than the value of α which is 0.05. Therefore we accept the null hypothesis. In this

example, we can conclude on this basis that the frequency of shopping and the gender of the shopper are independent. There is no

relation between the two. Womans are stereotypes as shopaholic, however this perception does not hold good as proved above.

The men as well as the woman shop. The frequency has nothing to do with the gender of the shopper.

Table-3: Cross Tab

What is your frequency of shopping for grocery?

Total Daily Fortnightly Monthly Weekly

Marital Status: Married Count 8 0 2 10 20

% within Marital Status: 40.0% .0% 10.0% 50.0% 100.0%

Others Count 0 0 2 0 2

% within Marital Status: .0% .0% 100.0% .0% 100.0%

Single Count 24 56 58 112 250

% within Marital Status: 9.6% 22.4% 23.2% 44.8% 100.0%

Total Count 32 56 62 122 272

% within Marital Status: 11.8% 20.6% 22.8% 44.9% 100.0%


It has been observed that the married people generally shop either weekly or go on increasing the time span to shop. However for

the unmarried people, they have no set pattern for shopping for products.

Chi Square Test

Ho: The kind of stores mostly visited and the frequency of shopping are independent.

H1: The kind of stores mostly visited and the frequency of shopping are not independent.

Table-4: Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 52.198a 6 .000

Likelihood Ratio 52.203 6 .000

N of Valid Cases 272


a. 1cells (8.3%) have expected count less than 5. The minimum

expected count is 4.24.


Here the p value which is 0.000 is lesser than the value of α which is 0.05. Therefore we reject the null hypothesis in the favour of

alternate hypothesis. In this example, we can conclude on this basis that the kind of stores which the customers visit and their

frequency of shopping is dependent on one another. There is a relationship which exists between the two. The people majorly are

visiting departmental stores and they are going on a weekly basis wherein they purchase in bulk. This leads to the success of the

retail giants and thereby a faster moving inventory for them. Various ranks were given to an assortment of items which people

purchase. These were given weights and the weighted average has been calculated. These are graphically represented in the chart.

It is clearly evident that majorly people visit these departmental stores to purchase gift items for others. However while they enter

these departmental stores to purchase gift items, they land up purchasing many other items which are necessities even though the

intention to purchase was the gift item. Major credit for this goes to the visual merchandising which results in impulse purchase

decision.

Graph-1


550832 730

954 900

What do you shop for mostly

Necessities Luxuries Comforts Gift Items Others



Many people visit the departmental store to compare the prices with the kirana stores and purchase similar products and thereby

calculate the savings. Apart from that the people visit these departmental stores without a specific product in mind and purchase

as and when they find something that they need or like. It has been found that a very less proportion of the population enter the

departmental store to purchase a specific thing. They purchase products as and when they find something appealing.

Therefore there is no set reason as to why people enter into a departmental store. It has also been found that many people visit the

departmental store because they find the visual merchandising quiet attractive and enter the store to explore the products available

and land up purchasing in bulks.

Table-5: Have You Indulged in any Impulse Purchase (Is An Unplanned or Otherwise Spontaneous Purchase)?

Frequency Percent Valid Percent Cumulative Percent

Valid No 35 12.9 12.9 12.9

Yes 237 87.1 87.1 100.0

Total 272 100.0 100.0


It was found that 87.13% of the people have indulged in impulse buying behavior. This means attractive visual merchandising can

help in making the people indulge in impulse purchase. Majorly, people indulge in the impulse purchase to buy Food and

Beverages available at the departmental stores. The other products wherein people indulge in impulse buying include apparels.

This is mainly during the sale season that people indulge in buying clothes without having any intention to purchase it.

Table-6: Have You Indulged in any Impulse Purchase?

*Gender Cross Tabulation

Gender

Total Female Male

Have you indulged in any impulse purchase

(is an unplanned or otherwise spontaneous

purchase)?

No 16 19 35

Yes 138 99 237

Total 154 118 272


Cross tabulation has been done between the gender of an individual and the indulgence in impulse buying. The above diagram

clearly shows that majorly irrespective of the gender of the individual, the indulgence into impulse buying is same. More than

83% of male population indulges into impulse buying. The old held norm that its only the woman population gets involved into

impulse buying does not hold good in the above case. Even though the percentage of females involved in impulse buying is 89%.

Table-7: Where Are the Products Being Generally Placed When You Have Indulged In Impulse Purchases?

Frequency Percent Valid Percent Cumulative Percent

Valid At the checkout counters 56 20.6 20.6 20.6

In a rack at eye level 86 31.6 31.6 52.2

Special Standees and other promotional material 28 10.3 10.3 62.5

Usual placement 2 .7 .7 63.2

Window Displays 100 36.8 36.8 100.0

Total 272 100.0 100.0


It becomes clear that the people, who indulge in impulse purchase, generally find the products at the window displays which are

outside the stores, thereby encouraging the customers to visit the stores and purchase the products. The products at the eye level in

the rack are another source wherein people find products which they tend to purchase out of impulse. Even at the check out

counters, the products like chewing gums, chocolates, toffees are available, which generally people pick out of impulse while the

billing is being done. Little role is also played by the standees, the promotional materials and the unsual placement of the

products.



Table-8: Cross Tab

Where Are The Products Being Generally Placed When You Have Indulged In Impulse Purchases?

Total

At

checkout

counters

In a rack at

eye level

Special Standees

and other

promotional material

Usual

Placement

Window

Displays

Age

Group

(in years)

20-40 Count 56 76 28 2 90 252

% within Age

group (in years):

22.2% 30.2% 11.1% .8% 35.7% 100.0%

40-60 Count 0 0 0 0 4 4

% within Age

group (in years):

.0% .0% .0% .0% 100.0% 100.0%

Below

20

Count 0 10 0 0 6 16

% within Age

group (in years):

.0% 62.5% .0% .0% 37.5% 100.0%

Total Count 56 86 28 2 100 272

% within Age

group (in years):

20.6% 31.6% 10.3% .7% 36.8% 100.0%


From the above table, it is evident that the people between the age group of 20-40 and 40-60 prefer to check products at the

window display and the people below the age of 20 prefer to find it at the eye level.

You Always Pay Attention To Different Window Displays No Matter What Is Being Displayed.

Table-9

1 2 3 4 5

Fi 27 65 68 78 34

Wi -2 -1 0 1 2

FiWi -54 -65 0 78 68 27


This comes out to be a positive i.e. 27, this means that, people, do pay some attention to the different window display no matter

what is being displayed. Therefore if the window display is eye catchy, people tend to move inside the store and seek for the

products available thereby inducing him to purchase the products available. Therefore, a check must be kept to keep the updated

merchandise in the window displays so that the people are aware about the latest within the store.

Standees, Mannequins and Other Promotional Material Motivates You to Purchase the Product

Table-10

1 2 3 4 5

Fi 16 50 94 86 26

Wi -2 -1 0 1 2

FiWi -32 -50 0 86 52 56


The figure comes out to be 56. This means that the standees, Mannequins and other promotional material within and outside the

store, motivates the consumers to purchase the product but not to a large extent. So, relying only on these promotional materials

will not help the marketers to increase their sales; as, it does have an impact on the consumers but not to a great extent.

The In Store Display of Product in Specific Shelves, Makes Shopping Easier and Helps You to Compare Products

Table-11

1 2 3 4 5

Fi 10 22 38 124 78

Wi -2 -1 0 1 2

FiWi -20 -22 0 124 156 238




The figure here is the maximum ie 238. This shows that the people very strongly believe that the in store display of products in

specific shelves makes shopping easier and helps them to compare the products with one another. It has been observed that when

similar products are kept in a particular shelf, people often compare the prices with respect to the quantities being sold in various

product brands. They make informed decision and purchase only that product which offers them the maximum benefit. The

customers believe that open display of products make them well informed about the offerings of the marketers.

Atmospherics:

You Always Pay Attention to Things Covered with Strong Lighting.

Table-12

1 2 3 4 5

Fi 18 54 80 96 24

Wi -2 -1 0 1 2

FiWi -36 -54 0 96 48 54


The positive figure above shows that the people do pay attention to the strong lighting. Even though it catches attention but it isn’t

true in all the cases. Since the figure is smaller, this shows that the impact is not on a large percentage of the population. Thereby

showing, that. it grabs attention of few, not all. Yet it does have a little influence on the consumers.

The Use of Lights in Different Brightness to Decorate the Store Would Increase Your Possibility of Making Purchase.

Table-13

1 2 3 4 5

Fi 16 51 91 87 21

Wi -2 -1 0 1 2

FiWi -32 -51 0 87 42 46


The above tabular presentation shows that the use of lights in different brightness (often used to decorate the store) has very little

influence on increasing the possibility of making purchase by the customers. These light effects attract the customers towards the

product and some of the customers are even encouraged to purchase the products under the lighting effect as well.

Mood Can Stimulate Your Buying Intention

Table-14

1 2 3 4 5

Fi 7 20 53 116 66

Wi -2 -1 0 1 2

FiWi -14 -20 0 116 132 214


The customers have a great impact on the intention of buying decision. If a customer is in a good mood then the probability to

purchase the product is more. This implies that the marketers should make every possible effort to improve the moods of the

customers. This can be done by offering them a happy buying experience. This maybe done in terms of services offered within the

stores, use of music, fragrance to improve the mood of the customers.

When You Are Waiting For Payment, You Would Pay Attention To Product Items Placed Nearly.

Table-15

1 2 3 4 5

Fi 10 46 64 106 46

Wi -2 -1 0 1 2

FiWi -20 -46 0 106 92 132


The above figure ie 132 is very high, showing that majority of the people do pay attention to the products laid near the cash

counter. This in turn encourages purchasing products out of impulse while the billing is being done.



Shop with Music Whispering Makes You Feel Relaxed and Comfortable

Table-16

1 2 3 4 5

Fi 10 22 84 98 58

Wi -2 -1 0 1 2

FiWi -20 -22 0 98 116 172


The table above shows that the people strongly believe that the whispering music makes people feel relaxed and comfortable.

Shopping becomes easier when the customers are relaxed. This improves their mood and therefore it stimulates the buying

intention of the people. In addition, the soft music the background, suppresses the obnoxious sound of people chit chatting with

one another. This in turn improves the overall shopping experience.

Loud Music Encourages You To Make Impulse Purchase.

Table-17

1 2 3 4 5

Fi 70 100 58 36 8

Wi -2 -1 0 1 2

FiWi -140 -100 0 36 16 -188


The above figure turns out to be minus 188. This shows that people highly disagree with the statement above. Loud music does

not at all encourage in making impulse purchase. The loud music in stores has no relation with impulse purchase. Some people are

of the view that loud music, makes it difficult for them to shop and spoils the entire shopping experience for them. They reduce

the time they spend in such stores.

Scents Always Catch Your Attention

Table-18

1 2 3 4 5

Fi 18 38 80 76 60

Wi -2 -1 0 1 2

FiWi -36 -38 0 76 120 -122


The high positive result above shows that the scent and fragrance has a great role to play. It always catches the attention of the

customers. Therefore it is wise to keep the store fresh and clean. In addition to this, the perfumes counter can be made in the

immediate beginning of the store so that it motivates the customers to enter the store.

CONCLUSIONS

Today's successful retailers make the most profitable use of each and every square foot of the space in the store and in the

warehouse. Since this space is costly, one must take a strategic approach to its use. Floor patterns, location of merchandise, levels

of inventory and appropriate displays are all key factors in the proper use of the space. Misuse of the space can be as detrimental

to ones success as poor buying or careless hiring. It is very important for every store to create a suitable atmosphere and appealing

arrangements in order to trigger the consumer's buying decision. In a world where one can find identical merchandise in more

than one store, layout and presentation become key differentiating factors.

Visual merchandising is basically seeing attractive displays and a well merchandised store, hearing music that is appealing and

having the ability to converse with knowledgeable salespeople, feeling and touching displays and offering customers something

to taste and smell.

RECOMMENDATIONS

On the basis of the analysis conducted, here are some of the recommendations for the successful use of the visual merchandising:

Make the most of the windows. The window displays must be arranged in the most fashionable and updated manner as

it is mostly viewed by the passing by customers. Window display creates an impression about the store in the minds of

the customers. The window display should be in such a way, that it should attract both males and well as females.



The products which are bought on impulse (mainly chocolates, chewing gums, perfumes) must be kept at the window

display, at the check out counter or at the eye level in the racks so that it is deliberately visible to the customers.

The mood of the customer impacts their shopping experience. Therefore it should be made sure that the customers are

kept in high spirits. This would in turn lead to their happy shopping experience and in turn a repeat purchase from the

outlet.

REFERENCES

1. Kotler, P., (1974). “Atmospherics as a Marketing Tool”, Journal of Retailing, Volume: 49.

2. Kumar, I.; Garg, R., and Rahman, Z., (2010). “Influence of Retail Atmospherics on Customer Value in an emerging

market condition”, Great Lakes Herald, Volume: 4, Number: 1.

3. Marsh, H., (1999). ‘Pop Stars of the Retail World”. Marketing.

4. McGoldrick, P., (1990). Retail Marketing, Maidenhead: McGraw-Hill.

5. Sherman, E., and Smith, R. B., (1987). “Mood States of Shoppers and Store Image: Promising Interactions and Possible

Behavioral Effects”, Advances in Consumer Research, Volume: 14, Number: 251-254.

6. Woodside, A. G.; Trappery, R. J., and Randolph, J., (1992). “Finding Out Why Customers Shop Your Store and Buy

Your Brand: Automatic Cognitive Processing Models Of Primary Choice”, Journal of Advertising Research.

*****

Editor-In-Chief




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RETAILING AND FDI: A CASE STUDY OF INDIAN RETAIL MARKET

Manoj E. Prabhakar27

ABSTRACT

Retailing is a tail activity in the business chain that links the end user and last middlemen in the business process.

Globalization has paved the way for many industries to accelerate its growth trajectory and retailing is said to be one such

industry which has shown highest potential with sustained growth. The emergence of global market (like emerging

economies) coupled with IT revolution has fuelled the growth of retailing across the world.

Retail picturesque in the world can be categorized into two extreme different markets, the developed countries which are

shown more mature progress due to emergence of modern retailing and depicted as most prominent industry. The second

category in which the emerging world economies like third world countries, which are showing huge potential for modern

retailing since the concept of modern retailing is still in nascent stage. India which falls under the second category due to

heavy domination of unorganized retailing and it can be named as world’s largest unexplored retail market. Indian market is

also the least competitive as well as least saturated of all major global markets and in terms of competitive landscape, it has

low entry barriers for foreign retail players than the other countries.(A.T.Kearney 2010).

KEYWORDS

Retail, FDI, Market, Unorganized, Government, Policy, India, Players etc.

BACKGROUND AND HISTORY

Retailing is a global industry which has emerged as unorganized from of retailing in the world. Basically retailing has close

affinity with the technology, which has acted as a catalyst to retail industry which has paved the way for tremendous growth of the

industry. Developed countries are able to catch the technology and its utility, which has laid the foundation of organized form of

retailing in the world, which is also called as modern retailing. On the other hand unorganized form of retailing is quite common

especially in the case of developing countries.

Unorganized retailing or neighborhood retailing or convenience store is a traditional feature of the Indian retail scene. Traditional

retailing is typically small family business (D’Adrea et. al., 2006, Bianchi 2004) linked with local culture (Goldman et. al., 1999)

and a non-organized distribution. These stores are performing various functions like social meeting place, points of exchanging

of information and serve as socially integrated units beyond buying – selling activity.

RETAIL INDUSTRY STRUCTURE IN INDIA

Traditionally Indian Retail can be traced back from Weekly Markets, sandhai’s, mandis, Melas, Village Fairs in Small towns and

villages to Kirana stores, PDS outlets, Khadi Bhandaar, and co-operative stores in urban cities. The retail industry in India is

highly fragmented, unorganized and can be grouped as unorganized retilers. Earlier, retailing in India was mostly done through

family-owned small stores with limited merchandise, popularly known as kirana or mom-and-pop stores.

The emergence of modern form of organized retailing has come up with textile vertical of retailing then followed by other

segments stared entering in organized form.Organised modern store retailing refers to trading activities undertaken by licensed

retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and

retail chains, and also the privately owned large retail businesses.

There are some retail chains like Nilgiri, Spencers, Pantaloon, Reliance were set up on the lines of western retail concepts of

supermarkets. The penetration of modern retailing store formats like Shopping malls, Super-marts, Hyper-marts, Departmental

Stores, Apparel Stores etc in the beginning of this century. Majority of these modern stores operate with the concept of 3Vs –

Value, Variety and Volume and called as ‘Corporate Backed Modern Stores’.

REASONS FOR RETAIL SHINE IN INDIA

There is handful of reasons which makes India as a retail hub in world of retailing. To say few:

a. The young Indian population constitutes more than 31 per cent is said to be a big asset due to their spending pattern

and earning potential.

b. The proportionate growth of middle income class that is expected to grow more than 25 per cent of total

households accounting for 44 per cent of the total disposable income.

c. Increased per capita income of Indians comparatively higher than the other developing countries.

27 Assistant Professor, Department of Rural Management, School for Management Studies, Babasaheb Bhimrao Ambedkar

University, [A Central University], Uttar Pradesh, India, [email protected]




d. After leading the IT bandwagon, India is poised to grow as a retail hub due to fast, positive sustained progress

made by the vibrant economy.

e. The spread of visual media and impact of technology are contributing much towards informing prospective

consumers about various goods, thereby creating demand for modern day shopping.

f. Consumer response time (CRT) i.e., time taken for the consumer to respond to the environment is relatively high

for Indian consumers.

g. The change in lifestyle pattern exhibited by modern consumers make the modern retailer to progress their target

soon.

Other set of factors like growing urbanization, increasing literacy rate, varied assortment availability and some demographic

factors like growing nuclear family and dual income families are making the modern retailers to have a level playing field.

GOVERNMENT POLICY ON FDI IN RETAILING

Retail is one such area which generally attracts the investments from all over the world and it is intent on the part of the

government to promote FDI in different areas for accelerated economic growth. Due to the commitment on the part of the

government to have more business prospects by attracting FDI, it has permitted single brand retail trade with the ceiling of 51 per

cent (now increased to 100%), with prior government approval for retail trade in ‘single brand’ with the aim of getting more

investment, technology, expertise in supply chain management, logistics and the best practices in the world and recently

government has announced 51 per cent for multi brand retailing, which has evoked some restless with the stakeholders since retail

trade is largely in the hands of the unorganized traditional retailers. It provides with self-employment for the youth who are not

having any formal education and also lead the youth to have a dignified employment in the society. So, rather than saying retail

employment by chance or choice, it is correct to say that, ‘it is forced employer’ in the country for many people. Though the

modern organized retailer may be able to generate well-articulated inventory practices, procuring efficient merchandise policy and

well integrated supply chain management, it may generate lot of weakness in the existing structure like disturbance in the

employment structure, economic growth so on. To say ill-conceived decision on FDI will lead to labor unrest in the country and

also it will create a big impact on the economy as whole.

PROBLEMS

The retail industry is not an exemption like any other industry without flaws. The retail sector is not recognized as an industry by

the Indian government, though it occupies second to agriculture in terms of contribution to GDP as well as provides employment

for masses. Since it is not recognized as an industry, the small scale retailers are facing problem like expansion of their business,

availing loan from the banks etc. The modern retailers too come across different challenges like rigid regulations from the

government, high real estate costs, high personal costs, lack of basic infrastructure and above all competition among themselves.

The traditional retailers are surrounded by different set of problems, and modern retailing has added one, among the different

problem, which traditional retailers have to tackle differently. Nevertheless, though this problem is a universal one, there is no any

tailor made solution available. These corporate backed modern store retailers are not only posing a big threat to the traditional

retailers, but also are offering possibility of foreign firms entering into retail environment which will boost and propel them in a

bigger way. Consequently, these traditional retailers are unable to run their business, which tend to be very important for Indian

economic and business environment. Hence it is felt necessary that the survival of traditional retail stores should be examined in

the changed retail business environments with the following questions.

REFERENCES

1. A. T. Kearney’s Report on GRDI 2010.

2. Bianchi, C., and Arnold, S. J., (2004). “An Institutional Perspective in Retail Internationalization Success: Home Depot

in Chile”, International Review of Retail, Distribution and Consumer Research, 14/2, pp. 149–169.

3. D’Andrea, G.; Ring, L. J.; Aleman, B. L., and Stengel, A., (2006). “Breaking the Myths on Emerging Consumers in

Retailing”, International Journal of Retail and Distribution Management, 34/9, pp. 111–129.

4. Goldman, A.; R., Krider, and S., Ramaswami, (1999). “The Persistent Competitive Advantage of Traditional Food

Retailers in Asia: Wet markets’ Continued Dominance in Hong Kong”, Journal of Macromarketing, 19(2), pp. 126-139.

DISCUSSION QUESTIONS

1. Expansion of the modern retailing in India - Will it create positive impact on the economy as compared to traditional

unorganized retailing?

2. Will the modern retail formats can create employment potential in big way as compared to traditional retailing?

3. Will FDI make a big impact on Indian retail market environment?

4. Explain the survival and competing strategies of small retailers as against the big bang corporate backed modern store

retailers?

*****



WORKLIFE BALANCE ISSUES IN HEALTH SECTOR:

A CASE STUDY OF VATSALYA HOSPITAL, BIJAPUR

Mamata Bannur28 Savitri Boral29

ABSTRACT

Work life balance (WLB) is the current distinct issue of health care industry. The employees always want to succeed and

progress at work place, at the same time spare some time for family and recreation. Balancing these two extremes is the cause

of burn out of employees and hence the employers recognized this as a need of hour and want to introduce the work life

balance strategies, plans and formulate polices to improve the employee morale, motivation and productivity. Work life

balance does not mean working less to fulfill personal responsibilities at the cost of organizational productivity. In fact it is to

work productively and improve the personal life simultaneously. The work life balance practices achieve retention of the

employees. This paper enlightens the wide options for employers and employees to link work life balance practices for

organizational and personal performance.This study tries to identify the work life balance issues in health sector with

Vatsalaya Hospital case study and the initiative the organization has taken up for the maintaing the worklife balance of their

employees.

KEYWORDS

Work Life Balance, Employees, Organization, Vatsalaya Hospital, Prodcutivity etc.

INTRODUCTION

Work/life balance is about people having measure of control over when, where and how they work. There is a view that work-life

balance only in the frame work of what the company does for the individual. However, work/life balance is a two-pronged

approach. The other prong of work-life balance, which many individuals overlook, relates to what individuals do for themselves.

The core of work-life balance could also be summed as achievement with enjoyment. If an individual goes on working but not

really enjoying then happiness and satisfaction can never be achieved. Achievement can be viewed as motive of life while while

enjoyment is the fuel that drives that motive. While we strike work/life balance, we are not merely balancing our profession and

family, we are also balancing our mental and status quo and there by balancing our emotional intelligence, which is the worldly

ability to manage us and to handle others. Organization can help facilitate work-life balance for their employees through work/life

programmes and training.

“A balanced lifestyle boosts their sense of responsibility and ownership. These programs also help the employees build better

relations with the management. It builds their confidence, thereupon creating a positive impact upon their productivity”.

Work/life balance, in its broadest sense, is defined as a satisfactory level of involvement or ‘fit’ between the multiple roles in a

person’s life. Although definitions and explanations vary, the work / life balance is generally associated with equilibrium or

maintaining an overall sense of harmony in life. The study of work / life balance involves the examinations of people’s ability to

manage simultaneously the multi-faceted demands of life. Although work / life balance has traditionally been assumed to involve

the devotion of equal amounts of time to paid work and non-work roles, more recently the concept has been recognized as more

complex and has been developed to incorporate additional components. A study explored and measured three aspects of work/life

balance:

Time balance, which concerns the amount of time given to work and non-work roles.

Involvement balance, meaning the level of psychological involvement in or commitment to, work and non-work roles.

Satisfaction balance or the level of satisfaction with work and non-work roles.

This model of work/life balance, with time, involvement and satisfaction components, enables a broader and more inclusive

picture to emerge.

Example: Someone who works two days a week and spends the rest of the week with his/her family may be unbalanced interms

of time [I.e. equal measures of work and life], but may be equally committed to the work and non-work roles [balanced

involvement] and may also be highly satisfied with the level of involvement in both work and family [balanced satisfaction].

Someone who works 60 hours a week might be perceived as not having work/life balance in terms of time. However, like the

person who works only a few hours a week, this individual would also be unbalanced interms of time, but may be quite content

with this greater involvement in paid work [balanced satisfaction].

Alternatively, someone who works 36 hours a week doesn’t enjoy his or her job and spends the rest of the time pursuing preferred

outside activities may be time-balanced but unbalanced in terms of involvement and satisfaction. Thus, achieving balance needs to

be considered from multiple perspectives.

28Assistant Professor, B.L.D.E.A’s A.S.P. College of Commerce, Karnataka, India, [email protected] 29HR Executive, Creative Eye Network, Karnataka, India, [email protected]





The problem in analyzing work / life balance only begins with the concept of balance. We also need to consider work and life.

Work can be initially defined as paid employment. But this soon breaks down when we begin to take into account extra unpaid

hours, the time taken to travel to and from work and the more intractable problems of farmers, hoteliers and others who work

from home and where the broader home and work is very porous. Part of the interest in the subject arises from the view that the

scope for increased work from home, facilitated by new technology, has helped to blur the border between home and work. At the

very least, the definition of work in the analysis of work/life balance is problematic. The same can be said for life or non-work,

the term work/life balance is in itself a misnomer and serves simply as a convenient short hand for work and the rest of life. If we

look at the sphere outside work, then psychologists need to recognize the complexities that could the analysis.

Much of the research has been concerned with the spillover analysts draw a distinction between free time and leisure time. Others

have explored committed time and free time. There are many ways in which we can study and conceptualize life outside work and

many studies of work/life balance are conveniently and partly inevitably imprecise in specifying what they mean. In simple terms,

“Work” is normally conceived of in this context as including paid employment while “Life” includes activites outside work. Life

outside work also includes free time. This is normally conceived as time when there are no commitments determined by others. It

can be distinguished from leisure, which is normally considered to be the pursuit of specific activity.

However, at the core of an effective work/life balance definition are two key everyday concepts that are relevant. They are daily

achievement and enjoyment, ideas almost deceptive in their simplicity. Achievement and enjoyment are the front and back of the

value in life. Work / Life Balance policies are often referred to in practice as ‘flexible working’, and include the following

different ways of working:

Part-time working.

Job sharing.

Flexi time.

Term-time working.

Shift working.

Annualized hours.

Compressed hours.

Teleworking/e-working.

Home-working.

Career breaks.

Study leave

IS WORK LIFE BALANCE - A NEW CONCEPT?

Although not necessarily a new concept, Work/Life Balance has evolved over a period of time. Throughout history, work and life

were basically integrated. Life activities like community involvement, childcare, and elder care happened right alongside work.

With the onset of the industrial revolution in the second half of the 18th century, the separation between work and life became

more clearly defined. The work place has continued to change dramatically since those days, and as a result, balancing work and

life has changed as well. One major change is that many families no longer have an adult who doesn’t work outside the home.

Without someone in the household attending to life issues full-time, morkers now have to find time to take care of tasks childcare

or caring for an elder parent in addition to their professional workload.

The wider significance of the Work/Life Balance Debate:

The so-called “Balance” that is presumed to exist between the paid work we perform and the lives we lead outside our job has

become the focus for an important public policy debate. The flow of research monographs, seminars and conferences over this

issue to have grown endless in a remarkably brief period of time. Private companies both large and small are preoccupied with

where the equilibrium of that “balance” should lie and how the supposed requirements of firms for better business performance

and higher productivity, can be reconciled with the demands and needs of their employees who are facing burden some

responsibilities beyond the workplace as parents and citizens.

A Balance of Family, Life and work

In recent years, the term ‘Work/Life Balance’ has replaced what used to be know an ‘Work/Family Balance’, Although the

concept of family has broadened to encompass extended families, shared parenting, sam-sex relationships and a wide range of

social and support networks and communities, the semantic shift from work/Family to work/Life arises from a recognition that

care of dependent children is by no means the only important non-work function. Other life activities that need to be balanced

with employment may include study, sport and exercise, volunteer work, hobbies or care of the elderly. ‘Eldercare’ in particular is

becoming a growing issue for employers. The Universal adoption of the term ‘work-Life’ as distinct from ‘Work/Family’ has

positive consequences such as legitimizing non-standard work arrangements for a diverse range of employees.

Work/Life Conflict

Work/Life Balance is out of kilter when the pressures from one role make it difficult to comply with the demands of the other.

This is known as Work/Life Conflict. This means that if individuals do not feel they have a ‘Good’ mix and integration of work



and non-work roles, they may experience negative or conflicting outcomes. This implies a bi-directional relationship where work

can interfere with non-work responsibilities [Work/life Conflict] and Vice Versa [Life/Work Conflict].

Employees who experience increased stress due to work/Life conflict and drcreased perceptions of control over their work and

non-work demands are less productive, less committed to, and satisfied with, their organization and more likely to be absent or

leave the organization. Individuals experiencing interference between work and personal lives are also significantly more likely to

suffer from reduced psychological well-being and physical health. In one study, people who experienced Life/Work conflict were

nearly 30 times more likely to suffer from a mood disorder [Ex: Depression], 10 times more likely to have an anxiety disorder and

11 times more likely to have an substance dependence disorder. On the other hand, employees with lower levels of Work/Life

Conflict report higher job satisfaction overall.

Importance of Work/Life Balance

Global economic change, new technology and the shift to the employee based economy are major problems faced by India today,

the nature of work, the organization of work, and employment relationships are all changing. There are a large number of social

and institutional changes taking place in India affecting families.

Figure-1





There is an extensive literature on the nature and consequences of leisure and the implications for mental health and well-being of

filling free time with leisure activities rather than passive behavior.

In the face of these challenges, we need to find way of operationalising and measuring work/life balance. An initial definition

might take the form of “Sufficient time to meet commitments at both home and work”.

The importance of managing an employee’s work/life balance has increased markedly over the past 20 years [De Bruin

and Dupuis, 2004]. There have been changes in several areas that directly impact on this issue. Firstly, jobs have

become more complex and employees have been put under pressure to produce quality results in shorter timeframes and

with fewer resources [Hosier, Forster and servatos, 2004] that has resulted in a redefinition of normal working hours.

Secondly, the demographic make-up of the labour force [ I.e. gender, ethnicity, dual career couples, religion, multi-

generational workplaces etc], and

Thirdly, the very nature of the employment has necessitated that organizations effectively manage their employee’s

wellbeing, stress and job satisfaction [Greenhaus and Powell 2006].

Organizational interest in the management of work/life balance derives from evidence that “there is little doubt any

more that there is a clear connection between the way people are managed and organizational performance” [Purcell,

2002:1], and that with the outset of predicted skill-shortages, the ability to offer effective work/life balance employment

opportunities may become a source of competitive advantage.

Ideally, the Work/Life Balance concept requires organizations to effectively integrate employees work and non-work

roles such that levels of multiple-role conflict, and the associated stress and job-dissatisfaction, are minimized or

avoided [ De bruin and Dupuis, 2004; Greenblatt, 2002].

In attempts to achieve a work/life balance, however, western organization have tended to adopt a limited set of policies

such as on-site child-care facilities, on-site gymnasiums, telecommunicating opportunities, and even on-site sleeping

quarters for the employee and their family [ hacker and doolen, 2003; Hyman and summers, 2004]. Each has attempted

to increase the flexibility by which employees can enact their work-roles whilst simultaneously them to enact their

family based roles to the minimum extent necessary;

Guest[1987,1997 and 2002] suggest for the work/Life Balance literature to incorporate an holistic approach to Human

Resource management and better inform organizational Human Resource development, its design and implementation

should adopt the following four criteria;

Work/Life Balance literature maintains a focus on the integration of HR policies with the organizations vision, goals

and strategy, central to this point is the consistency between the organizations exposed culture and the context of its

work/life balance approach;

The implementation of work/Life Balance policies create a set if internally consistent employment policies intended to

produce employee commitment, flexibility and quality-mutual flexibility and commitment being a cornerstone of the

concept of a Work/Life Balance programme;

There is recognition of the importance of human resources and of the need to engage in practices which reflect this

understanding. Therefore, managers internalizing [ and demonstrating by their behavior] the importance of human

resources is fundamental to the link between Work/Life Balance goals and their achievement; and

That there is a response by employees to the Work/Life Balance policies [ I.e. an ‘up-take’ of Work/Life Balance

opportunities by employees] and to the behavior of the line managers [ I,e a recognition by employees that their

superiors are committed to the achievement of a meaningful Work/Life Balance.

Therefore, the degree to which employers can support the achievement [ and benefits associated with] effective

Work/Life Balance/HR policy depends on two main considerations: the manner in which the Work/Life Balance is

defined and formalized within HR policy, and or how managers respond to employee requests for Work/Life Balance

relief. Interms of its formalization need to be aware of the extent Work/Life Balance is operationalised- that is, whether

it is to be regarded as a ‘right’, a ‘right to request’, or as a matter of managerial discretion. In terms of managerial

responses, organizations need to decide whether to apply an authorization approach [i.e. ‘hard HR’], a paternal approach

employee requests for Work/Life Balance relief. It is this intersection between corporate culture, as enacted, in rituals

and practice modeled by organizational leaders that set the tone for employee’s responses to Work/Life Balance

initiatives. Where leaders work very long hours, tend to take little annual leave and then in small amounts, demands

travel at short notice [ Sinclair, 2005] and require employee availability at the leaders when and wears these sacrifices as

‘badges on honour’, it follows that employees are, at best, cautious in utilizing Work/Life Balance.

The term Work/Life Balance is commonly used a more comprehensive expression to describe policies that have been

previously termed ‘family-friendly’, but are now extended beyond the scope of the family. Work/Life Balance refers to



the flexible working arrangements that allow both parents and non-parents to avail of working arrangements that

provide a balance between work responsibilities and personal responsibilities.

The term Work/Life Balance preferred due to the fact that it encompasses the experiences and needs of parents and non-

parents alike, and is a more progressive theoretical framework in which to think about new ways of living and working

that are satisfactory to all. In practice, it involves ‘adjusting work patterns so that everyone, regardless of age, race or

gender can find rhythm that enables them more easily to combine work and their other responsibility and aspirations

[pillinger 2001:1]. Personal fulfillment is important inside work and that satisfaction outside work may enhance

employee’s contribution to work.

Clark (2000) defines balance as “Satisfaction and good functioning at work and at home with a minimum of role

conflict”. In practice therefore, definitions have focused on time and role enactment.

European legislation defines 48 working hours a week as an appropriate maximum and reviews of the literature on

working hours and health provide some indication that when people work much beyond these hours, their health and

performance begins to deteriorate. The objective definition implied by this is that those who regularly work more than

48 hours a week will have an imbalance between work and rest of life.

Various time studies explored the amount of “Uncommitted” time after work and family obligations have been dealt

with.


Research Design: This study carried out in Bijapur branch and it is descriptive in nature. Descriptive research is concerned with

describing the characteristics of a particular individual or a group. Descriptive studies aims at portraying the characteristics of a

particular group or situation.

Collection of Data: In this study both primary and secondary data are used.

Sample Size: The sample size of 50 is considered.

Sampling Method: The survey is done by using Random sampling method.

Data Collection Method: There are mainly two types of sources for data collection. They are:

Primary Data

Secondary Data

Primary Data: The primary data was collected by interviewing the employees/doctors, of the hospital. Structured questionnaire

is prepared to collect information about the chosen topic. For the study survey a sample size of 50 respondents was randomly

selected and collected the date was tabulated and classified. It was analyzed by the help of sample statistical formula and the use

of average. The data was collected through interactions with the employees and administering a structured questionnaire.

Secondary Data: Any data which have been gathered for some other purpose are secondary data in hands of the market

researcher.The secondary data was obtained from;Company reports,documents ,websites for the developing theoretical

background for the study.

OBJECTIVES OF STUDY

The objectives of the study are:

To study the Impact of Work/Life balance initiatives on productivity of doctors.

To analyse the factors which affect work/life balance adversely and their level of influence on individuals.

What are the perceptions of the organization employees towards work/life initiatives being offered by the hospital?

How does organization manage the employee’s benefits and service programmes?

To analyse the outcomes of work/life imbalance.

LIMITATIONS OF STUDY

Limitation of the study mainly depends upon:

Area – The study was limited in Bijapur branch.

Selection – Selection of the samples was done as all the respondents did not give relevant information.

Time – Time was one of the major limitations.

All respondents are not giving proper response.

The findings of the study are solely based on the information provided by the respondents.



CONCEPTUAL FRAMEWORK

Impact of Work/Life Balance Initiatives on Productivity

Figure-2


DATA ANALYSIS AND FINDINGS

64% respondents working since 1 year, and 24% are working since from 2 years and 8% say they are working from 2-4

years and 4% they said they are working since from more than 4 years.

88% satisfied with working hours of the organization, 4% strongly agree, 4% disagree, and 4% say they strongly

disagree that they are not satisfied with working hours of the organization.

48% work 7-8 hours in a day, 36% said they work 8-9 hours in a day and 8% said 9-10 hours and 4% said 10-12 hours,

4% said they work more than 12 hours in a day.

48% respondents said that they have more work pressure, 8% they strongly agree that they say they have more pressure,

and 40% disagree and 4% are disagrre for the statement.

76% are satisfied with flexible working hours, 8% are highly satisfied and 12% say they feel average. 4% feel highly

dissatisfied.

56% feel satisfactory towards work, 24% feel highly satisfied, 12% say average, 4% are not satisfied. 4% are highly

dissatisfied.

48% said they work for 7 days, 40% they said they work for 6 days, 8% say that they work for less than 5 days, and 4%

say they work for 6 days.

56% satisfied with the leave policy of the organization, 8% are not satisfied, and 36% feel average.

44% said that they get enough time for their family after working hours, and 36% respondents said they won’t get

enough time, 16% disagree the statement and 4% strongly disagree.

52% agree that they are able to balance work/life with their personnel life. 24% disagrre, 16% strongly agree.

80% of respondents say that the organization takes initiatives to help you to manage work/life and personnel life. And

20% say no. 52% said they provide flexible work timings, 32% said they provide leaves to manage work/life, and 16%

say that job share option is provided by the organization.

76% respondents agree that they think if employees have good work/life balance the organization will be more

effective, productive and successful.

32% said they sometimes miss out family/friends because of work pressure, and 24% say always they miss out, and

16% they say rare and 28% say they never missout.

76% respondents said they work for long hours, and 12% said they work in shifts and 12% work for compulsory

overtime.

72% feel agree for work/life balance policy in the organization should be customizes to individual needs, and 12%

strongly agree, where, 8% feel indifferent and 4% feel disagree.



60% of the employees said they work in general/day shift, 36% of the employees said they work in alternative and 4%

said they work in night shift. 60% of the employees said they work in general/day shift, 36% of the employees said they

work in alternative and 4% said they work in night shift.

36% respondents agree that they say work/life balance initiatives helps to increase productivity of the organization. 44%

respondents disagree.

36% respondents agreed that the company organize holiday camps and picnics to manage work/life and personal life.

52% say yes as organization encourages the involvement of family in reward functions.

72 employees agree that work life balance initiative enables in retention of employees.

SUGGESTIONS

Flexible timings should be accordingly introduced for suitable designation.

Effective work-life benefits encourage employees to work harder.

To keep employees and keep satisfaction high, management need to implement recognition reward and motivation

programs.

Role clarity of each position should be defined and based on that individual can plan their work accordingly.

CONCLUSIONS

Work-life balance can bring a huge transformation at the organizational and individual levels. It helps an organization to

inherently build a strong value system, which is attributed to the work-life balance enjoyed at the employee level. Consequently,

the organization does not have to impose a formulated framework of organizational values because they now become intrinsic to

it.Evidence suggests that improvements in people management practices, especially work time and work location flexibility, and

the development of supportive managers, contribute to increased work-life balance. Work-life balance programs have been

demonstrated to have an impact on employees in terms of productivity, commitment, work/life balance and satisfaction.

Organizations that have implemented work-life balance programs recognize that employee welfare affects the “bottom line” of the

organization. Parameters are required to ensure that programs are having the desired effect on both employees and the

organization. Six parameters that can be used to evaluate work life balance programs are: extent of management buy-in and

training, how programs are communicated to employees, corporate culture, management controls, human resources policies and

employee control. Finally, self-management is important; people need to control their own behavior and expectations regarding

work-life balance.

REFERENCES

1. Bolino, M., Turnley, W., (2005). “The Personal Costs of Citizenship Behaviour: The Relationship between Individual

Initiative and Role Overload, Job Stress, and Work-family Conflict”, Journal of Applied Psychology, Volume: 90,

Number: 4, pp. 740–748.

2. Burke, R., Matthiesen, S., (2004). Correlates of Flow at Work among Norwegian Journalists’, Journal of Transnational

Management”, Volume: 10(2), pp. 49–58.

3. Carlson, D.; Kacmar, K.; Wayne, J., and Grzywacz, J., (2006). “Measuring the Positive Side of the Work Family

Interface: Development and Validation of a Work-Family Enrichment Scale”, Journal of Vocational Behavior, Volume:

68, pp. 131–164.

4. Den, Dulk, L., (2001). “Work-Family Arrangements in Organisations. A Cross-National Study in the Netherlands, Italy,

the United Kingdom and Sweden”, Amsterdam: Rozenberg Publishers.

5. Dikkers, J. S. E.; Den Dulk, L.; Geurts, S. A. E., and Peper, B., “Work – Nonwork Culture, Utilization of Work –

Nonwork Arrangements, and Employee-Related Outcomes In Two Dutch Organizations”, In: S. Poelmans (ed.), Work

and Family: An International Research Perspective, pp. 147–172.

6. Frone, M., (2003). “Work-family Balance”, In: Quick, J. and Tetrick, L., (eds.), Handbook of Occupational Health

Psychology, Washington, American Psychological Association, pp. 143–162.

7. Gallie, D., (2003). “The Quality of Working Life: Is Scandinavia Different?”, European Sociological Review, Volume:

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