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This study aims to examine the importance of credit and low price guarantee (LPG) on consumer purchase intention across types of retail store formats in an emerging market context.

A 2 (kirana/modern retail)×2 (high/low LPG)×2 (credit/no credit) experimental design was used for this study. A sample of 200 respondents was asked about their purchase intention for a newly introduced hypothetical toothpaste brand and six hypotheses were tested.

Findings show that credit and level of LPG determine consumer's purchase intention across store formats. The presence of credit and high LPG increases the purchase intention; however, relatively importance of these two varies by type of store. The absence of credit at kirana store definitely reduces the buying intention, while same is not true for modern retail store, where level of LPG is more important than the credit. Interestingly, buyer is likely to discount high LPG for a month's credit offered by a kirana store.

The study can help practitioners and scholars to understand consumer responses to credit and LPG in buying decisions, and subsequently in designing a better product offer at a particular store format in emerging markets.

Important insights are provided about the consumer behavior resulting from the presence or absence of credit and high or low levels of LPG in an emerging market context. The study also has public policy implications in a country where FDI in retail is a hotly debated topic.

This article seeks to understand whether Indian consumers are likely to move from traditional kirana stores to large organized retailers while shopping for groceries.

Two hypotheses were proposed: H1: customer patronage differs for different grocery store attributes and H2: customer perceptions of grocery store attributes differ for kirana stores and organized retailers. The study was carried out across four Indian cities‐ two major and two smaller cities with around 100 respondents from each city. Stratified systematic sampling design with a sample size of 409 was used for the study. Multivariate statistical techniques were used to analyze the data collected with the help of a structured questionnaire.

Customer patronage to grocery stores was found to be positively related to location, helpful, trustworthy salespeople, home shopping, cleanliness, offers, quality and negatively related to travel convenience. Kiranas do well on location but poorly on cleanliness, offers, quality, and helpful trustworthy salespeople. The converse is true for organized retailers.

Kiranas have major disadvantages on all customer perception scores except location. These scores being less important determinants of patronage compared with location, in the short run kiranas may not be ousted out of customers’ favour. However, in the long run if they do not work on these other factors, they would face oblivion.

Kiranas need to upgrade their facilities to be able to compete with the organized retailers, who are expected to improve their location scores rapidly in the near future.

The paper predicts whether the foray of large organized grocery retailing would close down millions of kirana shops and result in loss of livelihood, suggesting measures to counter the onslaught.

Marketing.

The courses in which this case can be used include e-business, e-commerce, digital marketing, retailing and marketing strategy. This case can be used to teach MBA students. This case is also having the equal relevance for the executive programmes.

AaramShop is digitizing the Grocery General Trade ecosystem. There are of millions of neighbourhood kirana stores spread across all the cities of India. AaramShop is bringing these neighbourhood kirana stores online, and making them not only e-commerce-ready but also capable of using technology to take their stores to the next level in terms of service and delivery. The case lists out the issues and challenges faced by AaramShop.

This case challenges the participants to understand the new business model in the e-commerce space. The participants can look at the different angles of the business model proposition, namely, how AaramShop approach delivers on the retailer proposition, consumer proposition and the brands proposition. The participants can also be sensitized about the obstacles in making the business model more successful. These obstacles can be posed by the retailers, consumers or brands. The case will lead to a discussion about the logistics model opportunity available to Aaramshop.com.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 8: Marketing

Retailing in India is an unchartered territory. Food and grocery is the most promising area for setting up retail business in India. An understanding of shopper retail format choice behaviour will enable retailers to segment their market and target specific consumer groups with strategies premeditated to meet their retail needs. The purpose of this paper is to make a detailed study on the effect of shoppers' demographic, geographic and psychographic dimensions in terms of format choice behaviour in the fast growing Indian food and grocery retailing.

Descriptive research design is adopted applying mall intercept survey method using structured questionnaire for data collection. Both descriptive (mean and standard deviation) and inferential statistical tools like χ², factor analysis and multivariate analysis are used to analyse the data collected from 1,040 food and grocery retail customers from upgraded neighbourhood kirana stores, convenience stores, supermarkets and hypermarkets in conjoint cities of Secunderabad and Hyderabad in Andhra Pradesh in India.

The findings suggest that shoppers' age, gender, occupation, education, monthly household income, family size and distance travelled to store have significant association with retail format choice decisions. The choice decisions are also varied among shoppers' demographic attributes. The findings from shoppers' psychographic dimensions like values, lifestyle factors and shopping orientations resulted in segmentation of food and grocery retail consumers into hedonic, utilitarian, autonomous, conventional and socialization type.

The study has practical implications for food and grocery retailers for better understanding the shopper behaviour in the context of changing consumer demographic and psychographic characteristics in an emerging Indian retail market. The findings may help the retailers to segment and target the food and grocery retail consumers and, as a consequence, to undertake more effective retail marketing strategies for competitive advantage.

Given the absence of published academic literature and empirical findings relating to store format choice behaviour in food and grocery retailing in India, this study may serve as a departure point for future studies in this area of concern. The research is also relevant to retail marketers in terms of format development and reorientation of marketing strategies in the fastest growing Indian retail market.

Strategic management.

Entry-level post-graduate management students at an MBA program; middle-level professionals in an executive management program.

Royal India Food Retail (RIFR) is an organized food retailer, head-quartered in Delhi, India. The firm has established 180 outlets across the three Indian states of Delhi, Chandigarh and Punjab, selling fruits and vegetables, full-range of staples, grocery items and essential non-food items and fast-moving consumer good products. Since its inception, RIFR has been making losses, owing to both unfavourable external conditions and poor strategic management. In 2014-2015, RIFR reported earnings before interest, tax, depreciation and amortization (EBITDA) loss of Rs 46m as against Rs 276m in 2013-2014 and Rs 346m in 2012-2013. This case examines the problems of RIFR, against the backdrop of an unfavourable industry structure and the need for astute decision making, and poses the question of what the next step for RIFR should be.

Developing a clear understanding of the business environment; understanding the challenges faced by businesses in emerging markets; highlighting the dynamics of a volume-driven vis-à-vis a margin-driven approach to business strategy; and the importance of resources as critical elements of strategy development.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy.

The purpose of the study was to understand influence of assortment, store facility, service and relationship on Indian consumers’ small retailer patronage behaviour. The determinant of small retailer–consumer relationships was studied.

Indian consumers were contacted through retail stores intercept method and requested to participate in the survey (n = 321). The questionnaire was adapted from the research conducted by Lee et al. (2008) and modified (some items on relationship were added). ANOVA and multiple regression tests were used to analyze the data.

The Indian consumers’ prefer small retailers due to assortment, service, store facility and relationship. The older and younger populations differ in their reasons for preferring small retail stores. The results show that service and assortment influence consumer-small retailer relationships.

The small retailers’ can harness the relationship and social interaction attribute of their service package for defending their turf against organized retail. The fast-moving consumer goods companies can use the competitive strength of small retailers for increasing their distribution in the interiors of the country and understanding market demand.

There is limited research in India to understand competitive advantage of small retailers over organized retailing.

The case study is based on field research and also on secondary data. A primary survey is included in the case study. Simple frequency and factor analysis as statistical tools have been used.

Family businesses, like that of Kiran Rai’s, owning a local Mom and Pop store in an emerging city were faced with a serious problem of sustaining their businesses. These family businesses countered immense competition from: their own types, i.e. from other local Mom and Pop stores within the same cities; online stores; and the organised stores.The choice of the customers to buy goods from the neighbourhood shops has remained largely as an age-old tradition in the households. With the millennials and the Generation Z (Gen Z) exposed to an array of brands, can they become the first choice of young customers for shopping for all kinds of products and varieties? Can the local Mom and Pop stores spread their wings across the young generations, particularly the Millennials and Gen Z through inexpensive social media channels? What are their growth options? How can the social media serve this purpose? The case uses the social cognition theory and the use gratification theory to throw light on the new concept of Social Shopping.

The case is meant to be discussed in courses like Fundamentals of Marketing, Digital Marketing and Retail Marketing in a 90-min session in the Post Graduate as well as in the Working Executives’ Management programmes. The case analysis will expose the students to the use of social media and its benefits to the small businesses. The students will also be able to analyse and understand the different types of Online Consumers’ Shopping Personalities. This would enable them to strategize for different stages in the decision-making processes.

By analyzing and discussing the case, students should be able to identify macro environmental factors that impact business decision-making; apply Michael Porter’s five forces framework; evaluate sources of synergy; understand the concept of disruptive innovation; choose sources of competitive advantage; apply the value proposition canvas; and apply tenets of Blue Ocean strategy.

The grocery retail market in India accounts for nearly 70% ($608bn) of the total retail market ($883bn). The brick-and-mortar multi-tiered distribution network for groceries encompasses a million wholesalers and distributors and 12 million retail outlets. These retail outlets serve as customer touch points where bulk of grocery shopping is done. The online grocery industry is a miniscule $5.5bn. High incomes, change in purchase behaviour, inclination towards speed and convenience on the demand side and alacrity on the supply side have paved the way for new format, quick commerce. Trends and forecasts suggest that quick commerce, a high cash burn business, will grow exponentially. Zomato has jumped onto the quick commerce bandwagon with the acquisition of loss-making Blinkit. The case analyses the quick commerce industry through the lens of Michael Porter’s five forces framework and the Blue Ocean strategy. It elaborates the profitability drivers of the industry and also examines the sources of synergy from the acquisition.

This case is suitable for a class on strategy in postgraduate-level courses. It can be used in a session on entrepreneurship and innovation.

Teaching notes are available for educators only.

CSS 11: Strategy.

Emerging economies are dominated by an unorganized retail landscape, with complex sociocultural norms dictating the behavior of retailers and customers. The purpose of this paper is to explore the phenomenon of consumer embarrassment in an emerging marketing, India.

This research adopts a grounded theory approach and undertakes 31 in-depth interviews with consumers in India. The data is analyzed inductively and iteratively simultaneously with data collection.

The study uncovers that sociocultural normative influences, the retail environment’s structural constraints, interaction-based buying processes and customers’ perceptions play a role in eliciting embarrassment in traditional stores. The traditional format retailers play a significant role in evoking embarrassment and, surprisingly, also in facilitating coping. Contrary to the extant findings, purchasing embarrassing products online may not ensure anonymity and elicit embarrassment. The findings contribute to understanding the phenomenon of embarrassment in emerging markets.

There is a dearth of research examining consumer embarrassment in emerging markets, with extant studies investigating the phenomenon in the modern retail setup of developed economies. The retail landscape of India is predominantly unorganized, with distinct transactional processes and physical characteristics that are starkly different from modern retail stores. Moreover, sociocultural normative forces have distinct influences on the informal setup of unorganized retail.

The purpose of this paper is to examine the relationship between customer loyalty and customer dependence in the context of modern format and traditional format stores. In the process, the role of switching cost and trust in this relationship has been explored.

Building on the literature, the authors have postulated a conceptual model and formulated relevant hypotheses. Quantitative methodology is applied with previously established. The data were collected through convenient sampling. Methods like Factor analysis, cross-tab and regression analysis have been used.

The findings indicate a significant relationship between customer loyalty and customer dependence. Switching cost and trust have been found to have a moderating effect over the relationship in both modern and traditional environments.

The limitation is the restriction to the Jammu context. The studies have brought about the difference in attitudinal and behavioural loyalty. Future research can be carried out on the role of dependence in explaining and strengthening this relationship.

The present study provides an insight into for the customer loyalty and customer dependence in the context of modern and traditional retail formats.