Research Article: 2022 Vol: 26 Issue: 6
Daniel Pilli, Malla Reddy University
Soujanya Konka, KLEF Green Fields
Citation Information: Pilli, D. & Konka, S. (2022). Impact of organized retail marketing on customer satisfaction. Academy of Marketing Studies Journal, 26(6), 1-13.
In the current scenario of business, the retail industry at the Indian and global level is witnessing a lot of transition. Some economies excelled and some struggled. Technological advances transformed business practices. New emergent retailers have introduced innovate business models and new infrastructure. The novel practices of business had a wide spread effects on the retail industry. India today consists of dynamic consumers who are demanding and knowledgeable, increased levels of consumption and increasing population base. The retailer has to therefore, constantly innovate to satisfy the changing needs of the customers.
Customer Satisfaction, Organised Retailing, Customer Preferences and Buying Patterns
Indian retail industry was mostly unorganized, nascent and highly fragmented in nature. This may be true when it has been compared with the developed nations. Though it is in early stages of development many products are sold in this industry. The retailer is succeeding to reach every corner in the country with their products. Retail industry is still having a large market potential to target. In the coming days retailing will develop as one of the biggest and important industries in India. Organized and unorganized retailing in India is having their own merits and demerits but both run next to each other in a different way to satisfy the customers. With the increasing number of aspiring middle class, favourable demographics, increasing urbanization, increasing number of nuclear families, rising affluence amid consumers, growing preferences for branded products, new policy reforms had captured the attention of both national and global companies to show interest to make an entry into India retail market.
Customer satisfaction plays a major role in determining the success of any business organization. The whole business will be centered on the customer and the business firms will continuously strive in developing products and services that will meet the needs and wants of the customers and to improve their performance A satisfied customer will recommend the company and its products and services to his known contacts such as friends, relatives, colleagues and neighbours where as a dissatisfied customer will be very damaging to the organization as his bad talk about the company may affect the valuable customers. Hence keeping in view the significance of customer satisfaction and the need to understand customer preferences and buying patterns an effort was done to examine the influence of organised retail marketing on satisfaction of the customers of Spencer’s Retail Outlets in Guntur District, Andhra Pradesh.
Clark & Hwang (2000) attributes such as helpfulness, friendliness, politeness and number of salespeople, store layout, ease in finding things, cleanliness, goods assortment , quality and price levels, merchandise selection, fashionableness, willing to exchange, credit and charge account, value for money, special sales, advertising and location etc. affect customer satisfaction., Babakus et al. (2004) service quality and the merchandise had an impact on performance of the store. Martenson (2007) brand name of the store was important for customer satisfaction, Ivan-Damir and Sonja Radas (2006) satisfactory buying, size of the family and their age favourably influence loyalty of the customers. Females had comparatively greater loyalty than men, and ‘proximate customer’ showed greater loyalty relatively than the ‘distant shopper and income had not influenced conative loyalty behavior, Baseer & Prabha (2007) there were many opportunities for retailing in India, Anbalagan & Gunasekaran (2006) market liberalisation and increasingly assertive consumers were sowing the seeds for retail transformation , Lu and Seock (2008) there was a positive and significant relationship among the various dimensions of service quality with satisfaction and loyalty of the customers, Khare & Rakesh (2010) highlighted that there was an exponential development of organised retailing in India, Devgan & Kaur (2010) factors such as increasing per capita income, emergence of nuclear families and entry of multinational companies created immense opportunities for the growth of organized retail sector in India, Nisha Rathore (2010) customer behavior in retailing was more unexpected & volatile than ever before, Hansen et al. (2011), consumers who assign high value to quality and price were likely to be more satisfied, Ian Grace. B. Lukoma (2011) Location of the store, courtesy of the staff and Reliability of supermarkets were the key aspects that drive satisfaction of the customers, Thiruvenkadam & Panchanatham (2011) customers differ in selecting a store based on their patronage factors of a store, Neetu & Pawan (2012) organized and unorganized retail sectors in Indian can co-exist and flourish together, Singh & Pandey (2013) Urban people were enjoying “Shopptainment” because of transformation of traditional retailing to organized retailing, Dineshkumar & Vikkraman (2012) revealed that the customers preferred organized retailing as compared to unorganized retailing, due to which the organized retailing had become a biggest challenge to the unorganized outlets, Sanjay & Anoop (2012) modern retailing was not a threat to independent Mom and Pop stores, Lakshmi Narayana et al. (2013) Proximity, goodwill, credit sales, bargaining, loose items, convenient timings, and home delivery were found to be the factors making the customers to buy from the unorganized retail shops, Rana, et al. (2014) responsiveness and product quality were considered as most important to customers followed by pricing policies and physical design, Rashid & Rokade (2015) composite variables like environment, comfort, responsive, tangibles, empathy, convenience, assurance and efficiency influence customer's perception, Md Alauddin (2016) observed a gap between the expectations and perceptions of the customers towards organised retailing in Bangladesh, Kumar & Devi (2016) organised retail stores when compared with the conventional stores were effective in maintaining the POP (Point Of Purchase) and communication offers to the customers through advertisements, Brar et al. (2018) retail was growing rapidly and emerged as the most vibrant industry contributing to the GDP and employment of the country.
Though several studies had attempted to identify the attributes of organized retailing that influence customer satisfaction, the impact of those attributes on customer satisfaction was not extensively studied. Not many studies on organized retailing were conducted in the sun rising state of Andhra Pradesh in General and Guntur District in Particular, where there is lot of untapped market. Studies on various stores like Big Bazaar, Reliance mart, Metro mall were done. No studies were focused on Spencer’s which is one of the oldest retail formats in India and first of its kind in starting grocery chain in India. Very few studies were done on identifying the problems faced by the retail shoppers. Customer preferences and buying patterns, Customer satisfaction and problems of customers were studied individually. But studying all these things together is imperative to the marketers which help them in formulating their strategies. Therefore, the present study was an attempt to bridge this gap.
Objectives of The Study
The present research was undertaken with the following objectives.
1. To analyse the customer preferences and buying patterns towards organized retail marketing with reference
Spencer’s, Guntur District.
2. To explore the various attributes of organized retail marketing and their impact on satisfaction of the
3. To analyse the variance in customer preferences and buying patterns of varied demographic profiles of the
4. To identify the problems and shortcomings in service if any, with a view to improve the quality of
performance of Spencer’s.
The following hypotheses were formulated for conducting the present research.
H1: There is a significant impact of product attributes on customer satisfaction
H2: There is a significant impact of store attributes on satisfaction of the customers.
H3: There is a significant impact of promotional offers on satisfaction of the customers
H4: There is a significant impact of behaviour of sales personnel on customer satisfaction.
The customers who regularly and occasionally make purchases from Spencer’s retail outlets located in Guntur District were the population of the current research. The researcher has selected spencer’s retail outlet in Guntur district as sampling unit for the present research study. The mall culture in Guntur is in evolutionary stage. Spencer’s which is one of the oldest retail formats in India has introduced the joy of hyper store shopping experience to the customers of Guntur since 2010 and has been successfully running the store till today. So, the researcher had made an attempt to study the preferences and buying patterns, factors of organised retail marketing that influence customer satisfaction with reference to spencer’s in Guntur, Andhra Pradesh Times (2003).
Spencer’s retail outlet has been a part of the Indian retail landscape since 1863. Right from the time of launch Spencer’s has been a consumer-focused brand which has been continuously inventing, pioneering formats aimed at the satisfaction of the customers. In Indian grocery business Spencer’s since its inception has been a recognized and respected player with its quality goods and services catering the needs of upper middle class. It has continually helped reshape the retail landscape in India by making shopping more convenient and enjoyable activity for the consumer.
A total of 915 questionnaires were distributed out of which 664 questionnaires were returned filled up in all respects. From the information provided by the managements of the outlets it was estimated that approximately 3000 customers visit the stores in a day Therefore 22.13 % of the population has taken as the sample. The sample for the present study was drawn by using Convenience Sampling method as the researcher finds it easy and convenient to take exit interviews from the customers who are leaving the store.
The required data was obtained from both the primary and secondary sources of data. Primary data was collected with the help of observation method and survey method. Questionnaire consisted of structured questions (close ended). Questions used in the study were brief, comprehensive and the use of technical terms was avoided to increase understanding and interest of the respondents Anić & Radas (2006).
Questionnaire consists of four parts.
Part I- Provides Demographic information.
Part II- Obtains views and opinions on customer preferences and buying patterns towards organized
Part III- Explore various attributes that influence satisfaction of the customers.
Part IV- Analyse the problems encountered by the customers.
The secondary data was obtained from Books, Journals, Periodicals, Abstracts, Directories, and Research reports, Conference Papers, Web Sites, Newspapers and Magazines.
The researcher had conducted a preliminary survey with a sample of 50 respondents to narrow down the problem. The customers of Spencer’s retail outlets were selected randomly and were administered the questionnaire. The pilot study indicated some minor problems and certain additions and deletions were made. Language and wordings of some items in the questionnaire were modified to make it easier and more understandable to the respondents Lu & Lukoma (2011).
Reliability Analysis of The Data
Ideally, the Cronbach‘s alpha should be in between 0.5 and 1.Cornbachs α coefficient was 0.818, 0.867,0.785 respectively for the sales used in the study. Since the values were greater than 0.5 the data was more consistent Lu & Seoak (2018) Table 1.
|Table 1 Cronbachs Alphas for Scales Used in the Present Study|
|Attributes of oranised retailing||0.867|
Factor Analysis was used to identify the factors contributing for satisfaction of the customers. The impact of factors of product, store, promotional offers, and behavior of sales personnel on customer satisfaction was examined with the help of multiple regression analysis. MANOVA (Multiple Analysis of Variance) was computed to find whether there was any variance in the levels of customer satisfaction experienced by the respondents belonging to different demographic variables. The results of the analysis is as follows Table 2 and 3.
|Table 2 Demographic Profile of the Respondents|
|25 and below||275||41.4|
|Age above 45 years||35||5.3|
|Below Rs. 5,000||23||3.5|
|Between Rs. 5,000 - Rs 10,000||230||34.6|
|Between Rs. 10,000 - Rs. 15,000||137||20.6|
|Between Rs. 15,000 - Rs. 20,000||122||18.4|
|Above Rs. 20,000||152||22.9|
|Table 3 Analysis of Customer Preferences AND Buying Patterns Towards Organised Retailing|
|TYPE OF RETAIL FORMAT|
|Hyper/ Super Markets||35||5.3|
|MEANS TO KNOW ABOUT SPENCER’S|
|TV Commercials and News Papers||80||12|
|Word of mouth||318||47.9|
|TV Commercials and News Papers||80||12|
|REASONS TO SHOP FROM SPENCER’S|
|Status Related Satisfaction||141||21.2|
|PURPOSE OF VISITING RETAIL OUTLET|
|Shopping and Entertainment||147||22.1|
|Enjoying Food Courts||211||31.8|
|FREQUENCY OF SHOPPING|
|Once in six months||9||1.4|
|PREFERRED DAY OF SHOPPINGINCOME|
|Any week day||82||12.3|
|On any day||81||12.2|
|PREFERRED TIME OF SHOPPING|
|TIME SPENT FOR SHOPPING|
|Less than 1 hour||160||24.1|
|Between 1-2 hours||306||46.1|
|Between 2-3 hours||120||18.1|
|More than 3 hours||78||11.7|
|AVERAGE MONTHLY PURCHASE|
|Below Rs 1000||41||6.2|
|Between Rs 1000-2000||160||24.1|
|Between Rs 2000-3000||209||31.5|
|Between Rs 3000- 4000||198||29.9|
|Above Rs 5000||56||8.4|
|PREFERENCE TO SHOP WITH OTHERS|
|Provides financial support||61||9.2|
|Gives second opinion||38||5.7|
|Their choice suit to me best||56||8.4|
|Information and reviews||227||34.2|
|FACTORS INFLUENCING PURCHASE DECISION|
|Advertisements and offers||114||17.2|
|SPENDING ON ORGANISED RETAILING|
|KIND OF GOODS PREFERRED|
Factor analysis is used for defining the factors affecting customer satisfaction Table 4 -7.
|Table : 4 Factor 1 Product Attributes|
|Factors of Product||Factor Loadings||Mean Scores||Standard Deviation|
|Value of merchandise||0.544||3.63||0.76|
|Table 5 Factor II: Store Attributes|
|Factors of Store||Factor Loadings||Mean Scores||Standard Deviation|
|Stacking of the products||0.255||3.57||0.638|
|Convenient billing counters||0.293||3.50||0.626|
|Entrance and walk ways||0.455||3.58||0.696|
|Spacious shop floor||0.315||3.25||0.774|
|Good food court||0.572||3.12||0.861|
|Play station for kids||0.628||3.08||0.874|
|Sufficient dressing rooms||0.516||3.26||0.742|
|Table 6 Factor III: Sales Promotion|
|Awareness of offers||0.484||3.34||0.682|
|Frequency of promotional offers||0.349||3.19||0.624|
|Redemption of gift voucher/ Discount coupon||0.469||3.46||0.682|
|Customer membership/loyalty programmes||0.427||3.35||0.759|
|Table 7 Factor IV: Behaviour Of Sales Personnel|
|Behaviour of Sales Personnel||Factor
|Sales presentations/ Demonstrations||0.529||3.35||0.748|
|Solving customer problems||0.446||3.06||0.757|
|Willing to handle customer queries/ Requests||0.497||3.26||0.772|
|Knowledge of staff about store policies||0.425||3.12||0.737|
Impact of organized retail marketing on Customer Satisfaction Table 8 and 9.
|Table 8 Regression Analysis|
|Model||Variables Entered||Variables Removed||Method|
Behaviour of Sales Personnel b
|Table: 9 Model Summaryb|
|Model||R||R Square||Adjusted R Square||Std. Error of the Estimate||Durbin-Watson|
From the above table, it is evident that there is a multiple correlation value of 0.759, indicates a strong correlation with the model variables. Particularly, the model could explain about 57.6% variance in the dependent variable Table 10 - 14.
|Table 10 Anovaa|
|Model||Sum of Squares||Df||Mean Square||F||Sig.|
|Table 11 Coefficientsa|
|Model||Unstandardized Coefficients||Standardized Coefficients||t||Sig.||Collinearity Statistics|
|Behaviour of Sales Personnel||0.424||0.107||1.224||3.979||0.000||0.007||146.968|
|Table 12 Model Fitness|
|Unstandardized Coefficients||Standardized Coefficients||t||Sig.|
|Quality of products||-0.101||0.046||-0.086||-2.215||0.027|
|Variety of products||0.021||0.042||0.021||0.489||0.625|
|Unique and latest products||-0.049||0.039||-0.053||-1.281||0.201|
|Value of merchandise for the money||0.066||0.037||0.074||1.795||0.073|
|Location of the store||0.092||0.037||0.095||2.502||0.013|
|Stacking of the products||0.037||0.040||0.035||0.932||0.351|
|Sufficient and convenient billing counters||-0.013||0.043||-0.012||-0.303||0.762|
|Entrance and walk ways||-0.054||0.038||-0.056||-1.430||0.153|
|Spacious shop floor||0.018||0.033||0.021||0.537||0.591|
|Good food court||-0.066||0.033||-0.085||-1.989||0.047|
|Play station for kids||-0.033||0.033||-0.043||-1.002||0.317|
|Sufficient dressing rooms||-0.029||0.036||-0.032||-0.791||0.429|
|Awareness of offers||0.140||0.040||0.143||3.489||0.001|
|Frequency of promotional offers||-0.139||0.043||-0.129||-3.193||0.001|
|Redemption of gift voucher/ Discount coupon||0.014||0.040||0.015||0.363||0.716|
|Customer membership/loyalty programmes||0.045||0.036||0.051||1.251||0.211|
|Sales presentations/ Demonstrations||-0.002||0.037||-0.003||-0.062||0.950|
|Solving customer problems||0.153||0.037||0.173||4.120||0.000|
|Willing to handle customer queries / Requests||0.073||0.035||0.084||2.078||0.038|
|Knowledge of staff about store policies||0.042||0.031||0.047||1.824||0.167|
|Table 13 Comparison of Satisfaction of Customers with Respect to Various Attributes of Organized Retail Marketing Across Different Demographics Factors|
|Product attribute satisfaction||Store attribute satisfaction||Sales promotion satisfaction||Behaviour of sales personnel satisfaction|
|Table 14 Analysis of Customer Problems and Shortcomings|
|FREQUENCY OF PROBLEMS FACED BY CUSTOMERS|
|DIFFERENT TYPES OF PROBLEMS FACED AT SPENCER’S|
|Non – Availability of Products||137||20.63|
|Non- response from staff||135||20.33|
|More than reasonable price||98||14.75|
|Announced offers are not given||91||13.70|
|TIME TAKEN TO RESPOND TO CUSTOMERS’ PROBLEMS|
|Less than a day||59||14.2|
|More than one week||12||2.9|
|OPINION ON VISITING SPENCER’S AGAIN|
|Not so likely||31||4.7|
|OPINION ON RECOMMENDING SPENCER’S TO FRIENDS/ RELATIVES|
|OVERALL SATISFACTION WITH SPENCER’S|
The model is significant as p-value for the model fitness is 0.001 < 0.05.
Major Findings of The Study
➢ Most of the customers prefer shopping malls to buy the products and services and expressed that their spending on the organized retailing was increased and also expressed that they prefer convenience goods from these stores.
➢ Customers expressed that they come to know about the Spence’s retail outlets from the good word of mouth of the satisfied customers and opined that they prefer to shop from Spencer’s retail outlets as their friends and family members referred the store.
Majority of the customers visit the Spencer’s retail outlets to enjoy the food courts and said that they visit the shop once in a week and prefer to shop in the weekends.
➢ Most of the customers expressed that they prefer evening time for shopping and spend between 1-2 hours for shopping. It was clear that most of the customers spend between Rs 2,000 – Rs.3, 000 for the purpose of shopping.
➢ Majority of the customers were interested to shop with their family members as they give company during shopping and influence their purchase decision.
➢ From the factors analysis, results indicated that quality of products, variety of products, and value of merchandise for the money were the major product factors that contributed for the customer satisfaction. The store attributes that contributed for customer satisfaction were location of the store, stacking of the products, entrance and walk ways etc. The factors of sales promotion that impacted customer satisfaction includes promotional offers, redemption of gift voucher, customer membership/ loyalty programmes and etc. And the attributes related to the behavior of sales personnel that affected customer satisfaction were personal attention, sales demonstrations and willingness to handle queries.
➢ Multiple Regression Analysis showed that product, store, sales promotion, behaviour of sales Personnel found to have an impact on the overall customer satisfaction. Among all, the attributes of product are impacting customer satisfaction more followed by attributes of sales personnel, sales promotion and store attributes.
➢ Customer satisfaction was differed among the respondents belonging to different education qualifications. The respondents belonging to the qualification of post-graduation and schooling are getting impacted more towards product attributes and the respondents belonging to qualification of graduation and schooling are getting impacted towards store attributes.
➢ A significant variance was found in satisfaction levels of the respondents belonging to different occupations towards attributes of behaviour of the sales personnel. It was found that the students are getting more influenced toward the behaviour of sales personnel.
➢ Variance was found in the level of customer satisfaction among the customers belonging to different income levels. From the results it was found that there was a significant variance in the satisfaction levels of towards store attributes and attributes of sales personnel based on income. The respondents belonging to the income groups of Rs 5000 – 10000, Rs10,000-15000 are getting more affected with the attributes of store. The satisfaction of the respondents belonging to the income group of 15,000-20,000 are most likely to get influenced by the attributes of sales personnel.
➢ Non-availability of the products and non-response of the staff were the major problems that the customers faced while shopping at Spencer’s. The problems the customers faced at the time of their shopping were found to be rectified within 2-4 days. Majority (56.9%) of the customers were satisfied with the Spencer’s Retail outlets. Most of the Customers were very likely to visit Spencer’s Retail outlets again. Majority of the customers were interested to recommend the store to their friend and relatives.
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Received: 12-Jul-2022, Manuscript No. AMSJ-22-12321; Editor assigned: 14-Jul-2022, PreQC No. AMSJ-22-12321(PQ); Reviewed: 28- Aug-2022, QC No. AMSJ-22-12321; Revised: 30-Aug-2022, Manuscript No. AMSJ-22-12321(R); Published: 20-Sep-2022