A Comprehensive Study on Organized Retailing with Reference to Customer Preferences and Customer Loyalty in Indian Context

Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/ by/4.0) ABSTRACT The initiation of economic reforms made globalization an indispensible observable fact across all the countries irrespective of some protestations from a few parts of the globe. Globalization in quintessence means free trade of goods and services, capital, intellectual skill and knowledge among different countries. This in turn offers variety of products & services to the global market. Due to which the market has become highly heterogeneous and complex and also made the competition stiffer among the marketers. The needs, tastes and preferences of the customers are rapidly changing at a much faster rate. In order to sustain this highly ever changing customer’s needs, tastes, demands and preferences, the marketer need to be more organized to withstand & sustain the highly competitive market. Changing customer demand & lifestyle in turn has given rise to organized retailing in India. Retailing is one of the rapidly growing sectors in the service industry. It is one of the active & attractive sectors of the last decade and has become an intrinsic part of everyday lives. This emerging market is witnessing a significance change in its growth and investment plan. There is a stiff competition between the retail giants (organized sector) and unorganized kirana shops. The organized retail formats rapidly emerged in India because of the economic fundamentals, nuclear families, easy financing options, increase in the population of working women, rising disposable income, Dual Income No Kids. But its impact on unorganized sector is severe. It will take over the profitability and presence of unorganized sector in the years to come. Irrespective of that, organized retailers facing problems such as rigid tax structure, inadequate infrastructural facilities, high cost of real estate, stringent foreign direct investment (FDI) policies etc. Because of the support of government & the buying nature of the Indian consumer, unorganized retail sector is still predominating over organized sector in India, unorganized retail sector constituting 96% of total trade, while organized retailing accounts only for 4%. In the near days to come the entire gamut may get changed due to technological advancements and changing lifestyle of customers. Finally it develops a model for strategizing the marketing for retail industry.


Objectives of the research paper has mentioned below
To study the emergence of organized retailing in India To understand the potential and acceptance of retailing in Indian marketplace To study the consumer perception and loyalty towards organized retailers To understand the future growth of retailing in India

Introduction
Unorganized retailers have experienced a decline in their share of business and margin after the entry of large organized retailers, which is seen a threat. There is no decline in overall employment in the unorganized sector. There is competitive response from traditional retailers through improved business practices and technology up gradation. A majority of unorganized retailers are interested to stay in the business to meet the needs of competitive market in the future years and the next generation to continue the same. Unorganized retailing i.e.owning a small petty shop is a major source of employment, it requires less amount of capital & labour. In India large number of working class people work on the daily wage basis, so small retailers /shops (unorganized retailers) are the best place for them to buy smaller quantity of products. Apart from that most of the Indian consumers are seasonal workers, hence they will buy their livelihood through cash during their employment period & during the unemployment period they will obtain the same through credit system. This facility is available only with unorganized retailers, but there is an exception that credit facility is also available in organized retailing only for purchase of consumer durables. Customers give more preference to location utilities i.e., proximity and convenient shop timings. Unorganized retailers offer this benefit to Indian consumer. Operating cost of unorganized retailers is low because unlike organized retailers their retailing activities are not bound by legal norms. Because of the less emphasis is given to promotional activities, there is no promotion cost and labor cost will also be less as the majority of the labors will be their own family members. The organized retail sector in the country, which presently accounts for close to 4 percent of total market, will increase its share to 14 to 18% by 2020. As per estimates made by ASSOCHAM, the organized retail in urban market is expected to grow at the rate of 50 percent to reach a value of 30 percent of the total retail market in India. Currently, the rural retailing accounts for 88% and urban retailing accounts for 12%. India is popularly called as youth nation as the majority of the Indian population belongs to the age group of 20 -45 years, with working population. Because of the increasing number of working people in a family, household's income level is also raising at a rapid rate with enough purchasing power. Availability of credit facility with less interest rates increases the purchasing power of the Indian consumer, in turn increases rate of their shopping. Dhar and Hoch (1997) define private labels are as those products owned, controlled and sold exclusively by a retailer and for what the retailers must accept all responsibility from developing, sourcing, warehousing and merchandising to marketing such as branding, packaging, promoting and even advertising. Nielsen A.C. (2003) defines private label as follows: "any brand that is sold exclusively by a specific retailer or chain". These definitions bring out two main ideas. First, it is the retailer who owns and controls the brand whereas this was traditionally the role of the producer. Second, the retailer has exclusive rights to the product. This means that different retailers do not sell identical private labels, which is not the case when retailers sell manufacturers brands. Thus the development of private labels does not only change the relations between producers and retailers (because of the retailer has a new role), but also affects competition between retailers, as private labels are an additional way of differentiating between retailers. Positive growth rate in Private labels/brands start from 2000 onwards in India. Presently there is an overabundance of different names and definitions used to describe this concept. While some authors use the term private labels, others prefer words like own brands, retailer brands, wholesaler brands or distributor own brands. Consumer base for organized retailing -India's consumer market till now was broadly defined as a pyramid; a very small affluent class with an appetite for luxury and high-end goods and services at the top, a middlesclass at the center and a huge economically disadvantaged class at the bottom. This pyramid structure of the Indian market is slowly collapsing and being replaced by a new multifaceted consumer class with a relatively large affluent class at the top, a huge middle class at the center and a small economically disadvantaged class at the lower end. Despite having a large consumer base that is growing steadily, the market is complex and the propensity and capacity for Indian consumers to spend depends on a unique blend of price and value. Therefore, retailers whether domestic or foreign who can understand this complexity will be the most successful at selling to Indians, and stand to reap enormous benefits of scale. In fact, the income induced class movement happening across the rural and urban regions is forcing companies to relook at their customer segmentation and product positioning.  (Richardson 1997). If this is the case, it is difficult to understand how PL use would increase store loyalty.

Organized retailing -
Kunkel and Berry (1968) believed that an image is acquired through experience and thus learnt, and found retail store image to be the total conceptualized or expected reinforcement that a person associates with shopping at a particular store. Crosby et. al (1990); Sharma (1997); Williams (1998) have mentioned that companies should focus on customer satisfaction, trust and commitment through implementation of customer oriented selling, thus leading to a long term relationship. Consequently because salespeople are often communicating with customers, their behaviour and activities are crucial in maintaining relationships with customers and enhancing customer retention. Zimmer and Golden (1988), however, took a different approach, focusing on consumers' unprompted descriptions of image, without directing them towards affective dimensions or specific attributes. Thus these researchers argued that their results captured more deeply consumers' evoked retail store image. Donthu and Gilliland (1996) carried out a study to profile the Infomercial shoppers and found that those who purchased using infomercial advertisements were more convenience seekers, brand and price conscious, variety seeking, impulsive, and innovators. Moschis (1976) studied the cosmetic buyers and found that besides being store loyal, shoppers were also loyal to the brands that they bought. These shoppers showed a problem solving approach to shopping. Bettman (1979) highlighted that situational variables affect in store decision making in various ways. Store knowledge determines the extent to which product and brand search is guided by internal or external memory. Hutcheson and Mutinho (1998) found that shoppers used a combination of the quality of staff and "the occurrence of low prices and the frequency of promotions" in choosing a store. A study by Venugopal (2001) has investigated the retail business from the perspective of a retailer's expectations from the suppliers.
Dash et al. (1976) found that the level of pre-purchase information regarding the brand determined the type of store chosen. Shoppers who had higher levels of prepurchase information generally shopped at the specialty store, whereas shoppers with low pre-purchase information bought at departmental stores. This is mainly attributed to customers adopting a risk reduction policy with regard to their impending purchase. A store is chosen based on the self-confidence that the customer has regarding the store; about the nature and quality of product and service he will receive. Malhotra (1983) proposes a concept of preference threshold. It is suggested that shoppers tend to show a preference for a store depending on the threshold value allotted by the shopper. It is assumed that if the perceived value is less than the threshold, the shopper may not choose the store. Sinha (2003) brought out the shopping orientation of the Indian shoppers. The analysis indicates that the Indian shoppers seek emotional value more than the functional value of shopping. Although there is an indication of shopping being considered as a task and should be finished as soon as possible, this orientation is overshadowed by the entertainment value derived by the shoppers. The study also indicates that though there are some similarities in the orientation of Indian shoppers and shoppers from developed countries, there are some significant differences too. This study complements recent studies by Ailawadi, Pauwels, and Steenkamp (2008) and Hansen and Singh (2008), which also involve the possibility of PLs to differentiate from rival retailer-owned brands. Both these studies investigate the association between PL buying and store patronage. In the current study, the central issue is how PL experiences in one chain shape consumers' subsequent quality beliefs about the PL of a rival chain and its choice share vis-à-vis NBs. Thus, our study differs from those of APS and HS not only because we focus on crossretailer effects through learning dynamics but also because we use a different outcome metric-a PL's choice share relative to NBs within a specific category and store, when the consumer is in that store and has decided on a category purchase.

Conclusion
Academic research has provided useful insights to combat increasing retail sales, several gaps in our understanding have yet to be addressed. First, there is a dearth of research on whether and when consumers continue to be willing to pay a price premium for National Brands (NBs) over Private Label brands(PLs). This is remarkable because the ability of NBs to charge a price premium has a strong impact on profitability. Second, although there has been a lot of research into the consumer-side factors that drive PL success, supply-side factors, in particular marketing and manufacturing, have received far less attention. Third, almost all the existing research has been conducted in countries in which PLs are highly developed. In order to thrive in the hyper competitive climate of the future, Retail sector of all sizes and types must focus on the basic level of any business transaction -namely understanding how consumers needs, preferences, lifestyle changes and their product purchase decisions. Retailers must align their strategies in order to meet the highly competitive market and must tune to the structural transformation taking place at both the macro and micro levels through constant innovation and customer feedback for effective and efficient use of resultant knowledge. The role of technology in supporting the strategic planning and implementation process is indeed critical. Although it is reasonable that researchers first focus on these markets to understand how NBs can fight PLs, it is paramount that we conduct research in countries with a more recent PL history. Because the economic and marketing environments of these countries are different from those of more developed PL countries, the best ways to fight PLs may also differ.