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Retail Management
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carry 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The minimum value of Conversion ratio is:
a. 0
b. 0.5
c. 2
d. 1
2. The law of retail gravitation is also called:
a. Huff’s law.
b. Belly’s law.
c. Philip Kotler’s law.
d. Relly’s law.
3. In Huff’s probability model of retail store location, the exponential ‘alpha’ denotes:
a. The attractiveness of the store.
b. Power of the store in terms of potential customer located farthest.
c. It is simply a power over the attractiveness of the store.
d. None of the above
4. If the market has low level of retail saturation then the chances of success in the market is:
a. Higher.
b. Lower.
c. Unpredictable.
d. Extremely lower
5. If the original price be ‘a’ and the reduce price be ‘b’ then the mark down % in Pricing techniques
is given by:
a. (a - b)/a.
b. (a – b)/b.
c. (b – a)/a.
d. (b – a)/b.
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Part Two:
1. What do mean by ‘Super market’?
2. What do you understand by Upper and Lower threshold in pricing methodologies?
3. What does the term ‘silent market’ say?
4. Explain ‘Gap theory’ related with service quality.
5. Explain barometric technique used for sales forecasting.
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Branded Jewellery Market in India: An Overview
Brands are built over decades, more so in high-value markets like gold jewellery .The total jewellery
market in India is around Rs.60, 000 crore, out of which the estimated size of the diamond jewellery
market is Rs.8,000 crore, and that of branded diamond jewellery is about Rs.600 crore. For a brand to
become firmly established it must deal with several tangible and intangible factors. It requires focused
advertising, customer confidence, name-recognition, display and astute salesmanship to compete with
traditional jewellers. Success hinges upon how a particular brand can differentiate itself from the clutter.
Most important, affordability and quality are the elements in sustaining a brand. The growth of a
jewellery brand depends on the confidence it can instill in buyers about the purity of the gold, be it 14, 18,
or 22-carat. It also depends on the mark-up in price. The cost includes making (labour) charges on top of
value of the material, gold content and stones including diamonds and precious stones, if used. Besides, a
system of hallmarking for the purity of metal and identification of the manufacturer and jewellery items is
a need if not an imperative. At present the branded jewellery business is in its infancy in India,
constituting hardly 10% of the market. With the market growing annually at the rate of 20-25%, its share
will expand. While domestic jewellery makers have the advantage of skills which still form a sizeable
component of value, the confidence factor (in traditional craftsmen) is, however, on the decline. This
gives branded jewellery an edge over the traditional variety. One handicap branded jewelers face is the
differing tastes of consumers. Thus, inventories will be high as also the carrying cost. On the other hand,
the convenience of readymade jewellery is an ace in the brand marketer’s hand. The consumer has no
time to waste on the whims of craftsmen. Earlier, there was not much of a choice available.
Consumer Perception of Gold Jewellery
India is the world’s largest consumer of gold. The precious metal is traditionally purchased either as an
investment or to make intricate ornamental heirloom jewellery. The liberal economic dispensation
ushered in at beginning of the 1990s and the emergence of an affluent professional class led to the
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creation of a burgeoning designer wear/cosmetics/fashion accessory market in India. This encouraged
some domestic jewellery manufacturers to carve out a niche in this market. The abolition of the Gold
Control Order and the subsequent easing of restrictions on the import of the precious metal, including a
substantial reduction in import duties, have encouraged the development of this new market.In the mid-
1990s the Indian consumer’s attitude towards gold jewellery changed. Gold jewellery, from being just an
investment avenue, was now seen as a way to make a lifestyle and personality statement. Globally, 90%
of the jewellery is sold as dress-wear – a part of the wardrobe and not the vault. Branded jewellery as a
fashion accessory constitutes around one per cent of the Rs. 60,000 crore per annum jewellery market in
India. However, it is growing fast and has become a part of every girl’s treasure trove. One can easily spot
branded jewellery counters at Shoppers’ Stop and Lifestyle. With exclusive designs, standardized pricing
and superior finish, branded jewellery is aptly termed as fashion accessories, suitable for both western as
well as traditional wear. It must be mentioned that purchasing gold is not necessarily an urban
phenomenon and market share gains are likely to be more rapid in smaller towns. Though designer
jewellery arrived in India in the late nineties, it was only in this millennium that the scenario changed.
With aggressive advertising campaigns, the big brands – Tanishq, Carbon, Gili, Sarkles and Oyzterbay,
to name a few – arrived, teaching the customers at the paying end to shop like his or her counterpart in the
West. The message read loud and clear: “Your wardrobe includes jewels too!” Stiff competition from
traditional jewellers forced the newcomers to introduce a series of exchange offers and guarantee
certificates to woo the adventurous consumer. Nevertheless, this gold-loving nation has been very
cautions in its appreciation of branded jewellery. Much of the gold jewellery in India is 22-carat unlike in
western countries where it is basically 14 carats. Fine jewellery by international standards goes up to 18
carats. For stone setting alloys up to 18 carats are preferred. Educated middle-income women, particularly
working women, tend to wear less gold jewellery these days. However, growing incomes – especially
among NRIs - have increased demand. Most jewellery consumers are women between 25-45 years and
men in the 40-55 year bracket. Men largely buy lower-value items, such as rings, chains or tie-pins,
frequently as gifts. While women are seen more often in jewellery showrooms, it is the men who are still
the effective decision-markets as far as buying goes in a majority of cases. The phenomenon, however, is
changing. People are now looking beyond traditional 22-carat jewellery. Changing lifestyle has made
buyers more product and quality-conscious. And branded jewellery as an off-the-counter product is
gaining greater acceptance. In the past five years or so since branded jewellery entered the market, it has
threatened the very survival of traditional jewellers and craftmen in the same way as traditional tailors,
who are being replaced by makers of branded readymades. Inroads are being made by branded jewellery
both in the domestic and international markets. This indicates that Indian women are definitely showing
signs of accepting branded jewellery.
Country-wise Gold usage in Carat Jewellery (1990 to 1999)
Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Italy 381 415 461 441 435 446 439 500 535 511
India 238.6 227 293.8 259 346 400.6 427.8 594 682.6 644
USA 126.6 121.2 132.1 140 146.7 148.3 152.4 159 170.2 178.2
Japan 109.5 106.7 104 88 85 78 74 55 39 37
Turkey 130.9 102.6 116.3 126.6 80.7 110.4 140.7 168.1 159 115
Germany 49.8 51 45.4 44.5 41.8 38.9 37.2 35.9 34.3 32.6
Other
Countries 1070.8 1163.7 1377.1 1250.1 1253.8 1345.6 1366 1580.4 1331.4 1416.2
China 0 134.7 203 179 208 204 189 224 173 166
Soviet
Union/CIS 0 36.9 29.2 26 20.2 20.2 25.3 29 27 28
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The Forward Path
The future of the branded category of jewellery seems to be bright in India with the consumer becoming
more conscious of fashion trends and also ready to bring gold ‘from the vault to the wardrobe!’ Fashion
jewellery has come to stay. With people willing to spend lavishly on their clothes, it won’t be long before
they start looking for matching ornaments.
Source: The Gems Jewellers Export Promotion Council.
Major Jewellery Brands:
Carbon
Carbon, a pioneer in the branded jewellery segment, has a range of 18 carat fashion accessories that
includes rings, necklaces, pendants, ear tops and bracelets. Established in October 1996, carbon is a
distinctive lifestyle jewellery brand for the sophisticated and contemporary woman. The Carbon range is
currently available in 40 outlets (in a shop-in-shop format only) across 16 cities, and will be in 23 cities
by 2005.The Company is also planning to have its own outlets, the first of which is likely to open before
the end of 2003. it also plans to expand its market by going in for products for specific occasions such as
festivals, birthdays and anniversaries. In addition, it’s looking at cross-promoting Carbon jewellery with
other branded lifestyle products such as perfumes, clothing and cosmetics. The price range of Carbon
products is modest (Rs.3,750 to Rs.20,000 per piece), and unlike traditional jewellery whose prices can be
brought down through bargaining, its items have a nationally uniform MRP. Through its marketing and
advertising campaigns, Carbon aims at creating a contemporary feel with more value for the wearer. Six
years since its inception, Carbon’s annual sales have reached a considerable Rs.16 crore (approx) in the
domestic market, with an average piece value of Rs. 5,000.Carbon recently launched the Persona
collection for women to mark its fifth anniversary. This collection of five pendants depicts five different
facets of a woman. Besides woman’s earrings and pendants, Carbon has something for men too: cufflinks,
tie-pins and bracelets. Carbon’s product strength is in its collections like Venus and Sun sign. The
company brings out a new range almost every month based on consumer response. Carbon is one of the
organized and more successful ventures in branded jewellery retailing from the house of Peakok
Jewellery Private Limited. It was incorporated in Bangalore in early 1991 and spearheaded by Mahesh
Rao, a young entrepreneur with extensive experience in the fashion accessories market. Mr. Rao felt in
the mid-1990s that the Indian consumer’s attitude towards gold jewellery would change from being an
investment avenue to one that made a lifestyle and personality statement. Seizing the opportunity, he
initiated within the Peacock fold, besides their exports, a new brand of 18-carat gold jewellery called
Carbon for the domestic market. Peacock has a state-of-the-art manufacturing facility in Koramangala,
Bangalore.
Tanishq
Titan Industries Limited is a joint venture of the Tata Group and The Tamil Nadu Industrial Development
Corporation (TIDCO). Its product range includes watches, clocks and jewellery. In a short span of time,
the company has built an enviable reputation for its corporate practices, products and services. After
entering the watch segment in 1987, Titan ventured into the precious jewellery segment in 1995 under the
brand name Tanishq. It is India’s only fine jewellery brand with a national presence and is an
acknowledgement business leader in the country’s jewellery market. In early 2000, Titan organized
itself into two business units: watches and clocks, and jewellery. According to Jacob Kurien, chief
operating officer of Tanishq, this helped the company redefine its business purpose and focus. Tanishq
has invested Rs.60 crore in its manufacturing unit in Hosur, Tamil Nadu. Tanishq worked tirelessly on a
two-pronged brand-building strategy: (i) Cultivate trust by educating customers on the unethical practices
in the business, and (ii) use innovative methods to change the perception of jewellery as a high-priced
purchase. Tanishq has leveraged the design skills that are part of the Titan heritage to refine its products,
and has invested a lot in R&D and consumer research on what the Indian woman is looking for and how
she is evolving. Tanishq jewellery is sold exclusively through a company-controlled retail chain which
now has 55 outlets – five owned by the company and the rest run by franchisees – spread over 40 cities
Total 2107.2 2358.8 2761.9 2554.2 2618.9 2792 2815.4 3345.4 3151.5 3128
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and is still expanding. The locations are chosen on the basis of geographical spread and the shopping
dynamics of a particular metro. The primary promotional medium for Tanishq is its boutiques, which
explains the emphasis on store design and layout. Its stores demonstrate design leadership and
differentiation and provide excitement around the collections in the outlets. Tanishq made its foray into
18-carat jewellery in the early 1990s; switched to 22-carat and again turned to 18-carat jewellery. To meet
the increasing demand, it plans to nearly double the number of its outlets and offer a range of ‘wearable’
products. The brand caters to customers looking for items in between costume jewellery and real gold
ornaments.
Major collections of Tanishq include:
Aria: Tanishq Aria is a spectacular collection of diamond jewellery. With over 80 exquisite designs of
earrings, finger-rings, bangles and neckwear, the prices in this collection began at as Rs.3, 200.
The collection targets the contemporary woman, with designs representing a seamless blend of the
traditional and the modern. Aria has been crafted by experts with a thorough understanding of the Indian
woman’s jewellery needs. The Aria collection is available at all Tanishq showrooms. Collection G: the
World Gold Council recently launched a range of 22-carat lightweight gold jewellery called Collection G.
This range is promoted by Tanishq and is an exclusive concept/brand of WGC. It includes pendants,
earrings, finger-rings and bracelets, and targets urban woman in the age group of 18-30 years. In 22-carat
gold, the designs are stylish and modern and go with all forms attire – casual and formal. Indian and
Western. It has multiple finishes on a single piece to convey a modern look. The jewellery is priced from
Rs.4, 995.
Gili
Gili, a distinctive brand established by the Gitanjali Group, is one of India’s largest exporters of fine
diamonds and a De Beers sight holder. It came into existence soon after the abolition of the Gold Control
Order by the Indian government. Gili offers a wide range of 18-carat plain gold and diamond-studded
jewellery, designed to appeal to the contemporary Indian woman. Indian and western styles and motifs
combine to produce truly unique ornaments that are finely crafted and extremely attractive. Gili’s
products are available through a mail-order catalogue and show-in-shop counters in fine stores all over
the country. In addition, it has special promotional offers during special events like Valentine’s Day,
Raksha Bandhan and Diwali, and beauty contents and shows. Gili jewellery comes with a guarantee
on the quality and weight of the diamond and gold. Gili’s Millennium Series diamonds are triple certified
and come in a special box. Ideal to give as a gift or keep as a souvenir of a one-in-a-lifetime occasion. In
1997, Gili launched a collection of 18-carat gold ethnic Indian ornaments with traditional forms and
motifs, created with the most modern technology available today. These pieces are well finished,
beautifully polished and available at extremely affordable prices. The Gili Gold range caters to the
modern individual, with locally manufactured designs in 24-carat gold that are elegant, simple. Timeless
rings, pendants, earrings, necklaces and bangles. Gili have captured the 18-carat diamond-studded
jewellery segment in the price range of Rs. 2,500 to 15,000.
Intergold
Intergold is the biggest exporter of diamond-studded jewellery in India. It started off more than a decade
ago as a diamond exporting company in Mumbai and has achieved unprecedented success in the diamond
industry in a short span. The export division has a 6,000 sft factory, which churns out 3,000 high-quality
pieces for export daily. The integrated store has a strong identify of its own: the place looks inviting and
is aesthetically appealing. The décor and design of the stores have been conceptualized to harmonies with
the actual product design. Thematic window displays attract customers and see-through glass windows
virtually compel them to walk in without being overawed, as they usually are at diamond jewellery
showrooms. The products in the store are divided into categories like pendants, necklaces and earrings for
the convenience of buyers. They are further divided according to price so a customer doesn’t need to
worry about affordability for each product. Showrooms personnel are knowledgeable about the products
and sales techniques, apart from being trained to use audio-visual aids for the benefit of consumers.
Intergold specializes in diamond, platinum and Italian jewellery and white gold. There’s something here
for buyers from all age groups with varying tastes. In the women’s range, Intergold offers pendants, rings,
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earrings, small sets and necklaces, whereas men can go in for classy tie tacks, tie pins, button covers,
sherwani buttons, belt buckles, cuff links, pendants and rings. Intergold sells only through exclusive retail
outlets and has branches in Mumbai, Goa, Surat and Bangalore. It plans to open stores in Delhi,
Hyderabad, and Calcutta soon. All Integrated stores are equipped with ultrasonic cleaners for cleaning
jewellery and diamond testers to check whether the gems are genuine.
Oyzterbay
In July 2000, six professional from Tanishq left the organization to float a new start-up – Oyzterbay.com
– for branded jewellery. Oyzerbay wants to be in e-tailing as well as brick-and-mortar retailing. The
initial plan is to have 50 exclusive outlets (both its own and franchisees) across the country. Oyzerbay
signature stores showcase and display precious metals, gemstones and crafted jewellery designs.
Oyzterbay is a young company at the forefront of change in the jewellery industry. In February 2001, it
launched its first internationally styled store at Bangalore, with a stunning range of precious jewellery in
carat gold and silver at affordable prices. The Oyzterbay network now covers all major Indian cities and
an overwhelming response has induced the company to expand to 50 outlets soon. Oyzterbay positions
itself as well-styled, high-quality jewellery for young women. Delicate and bold, traditional and modern,
the designs reflect the change in the attitude towards jewellery: from heavy overdressing to elegant daily
wear, and from ostentations display to understated panache. Prices start at a mere Rs.500 for sterling
silver jewellery, and all products – including solid gold jewellery – are priced below Rs. 10,000, a move
that also positions Oyzterbay as the only chain catering to the burgeoning gift market. The range is
continually refreshed based on market feedback and emerging design trends. Oyzterbay stores lead the
market in attitude, ambience and service. They sport a contemporary and inviting glass-front store design
in soft colors of wood with accents of steel, in stark contrast to the forbidding opulence of traditional
jewellery stores. Complemented by modern in-store graphics and merchandising, the house colors –
tangerine pink and metallic mauve – pervade all elements of the corporate identity. The Oyzterbay web
store replicates the store experience with state-of-the-art features that make buying and gifting Oyzterbay
jewellery quick, easy and secure. A multi-media advertising campaign rolling out from April 2001 has
created waves with its fresh approach to the jewellery market. Jewellery for the Living has rapidly
become a byline for jewellery for the young woman of today - that is, jewellery for the joy of wearing, not
destined for the safe-deposit locker. Oyzterbay products are also available in large department store
chains in a shop-in-shop format.
Sparkles
Sparkles are carrying on a family tradition in producing 9-carat, 14-carat and 18-carat jewellery. The
objective is not only to provide off-the-shelf diamond jewellery in a wide array of designs, but also to
offer customers an affordable range of choices. A trend-setting initiative in the Indian market, Sparkles
became a revolutionary success and grew to become one of the market leaders in the branded jewellery
segment. Sparkles sells through 28 outlets in seven major Indian cities. With a wide range of designs and
more coming out every month, it is only a matter of time before it covers more cities and outlets. Besides
these regular outlets, its web-site sparklesindia.com has been a pioneering effort that has taken branded
jewellery to the newest communication medium – the Internet. During the past few years Sparkles has
been tracking what its customers want, and is striving with every new design and product to meet their
expectations. Total satisfaction and loyalty vindicates their commitment to constantly strive for quality.
Sparkles – from Poddar Jewels, Mumbai – is the only company to have added an ethnic touch to the usual
collection with nose studs.
Questions:
1. Do you think that an exclusive brand retail store would work in India? Or a mix of formats for a
brand? Discuss.
2. Will the franchisee route to a faster roll-out of retail outlets work for these jewellery brands?
What are the pros and cons?
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Caselet 2
Bobcat India Limited revolutionized footwear selling in India. The company hit upon the idea of reaching
customers through exclusive retail stores way back in 1932 and set up its own outlets, which numbered
around 1,200. It was no mean task setting up such a large network of retail outlets, especially when 90%
of them were owned and operated by the company, the rest being dealer-owned and operated. This chain
store format identify has been a strong differentiating factor in the Indian retail sector, being the first of its
kind. Combined with the high quality of the footwear, the brand soon had top-of-the-mind recall and
stayed there for many years. Unit a few years ago, the name ‘Bobcat’ was synonymous with organized
retailing in India, the only one of its kind.
The Chain Store Format
The Bobcat chain store format had its own credo – a signature store design with exclusive signage and
windows in order to facilitate easy association in the minds of the Indian consumers.
At present there are only two major categories of stores in the Bobcat Chain Store format:
(a) Bobcat Family Stores
(b) Bobcat Bazaar
(a) Bobcat Family Stores
These are sub-dividend into two formats again, based on the size of the stores. They are:
(1)Super Stores, generally more than 5,000 sq.ft. Catering to customers in the footwear category.Highstreet
stores that are anywhere between 500 and 1,500 sq.ft. Found in busy shopping areas.
(b)Bobcat Bazaar
Bobcat Bazaar stores sell the company’s planned economy product lines and marked-down merchandise
round the year. Known as R-pair stores, their performance depends heavily upon the availability of
marked-down merchandise. Such markdowns are done on products that have suffered quality accidents,
are shop-soiled, lines that are closed-out etc.
Recent Format Developments
New retail formats have begun to supersede conventional ones. Independent big-box multi-brand
department stores have started selling footwear as a category, especially in metros and cities. Malls are
another new shopping format that is growing rapidly in the metros. Many upcoming footwear retailers are
obtaining space inside the malls as mall partners to take advantage of the ready footfalls available. For the
existing independent Bobcat stores it is expensive now to run campaigns and promotions to attain the
required footfalls and expected conversions.
Merchandising in Bobcat Family Stores
The exclusively of the ‘Bobcat’ brand to the Bobcat retail stores was the differentiating factor for
customers until recently. However, a few years ago the company decided to sell Bobcat branded goods
through its channel sales wing called Bobcat Wholesale. Hitherto, the wholesale channel had a different
brand for itself called BSC. This wholesale channel supplies merchandise to footwear retailers across
India through its authorized distributors. The brand Bobcat has now been extended to this wholesale
channel too, which means that Bobcat branded goods is available in every other local footwear store. The
exclusivity of the brand to its own outlets has come to an end. And, even as the sales of the wholesale
division remain stagnant, what compelling reasons can a customer have to
visit a Bobcat Store now? A peculiar feature of the Bobcat store was its odd price points: Rs 149.95,
199.95, etc.
Merchandise presentation and Visual Merchandising
Bobcat pioneered the concept of show window displays in India with a style that was unique to the
company. It was professionally managed, with an exclusive team handling the motif and the design.
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Every month the direction to decorate the show windows were given by a mailer prepared by special
decorators. Sales personnel in each store were trained to be window decorators too. Recently, these
windows had to be done away with because the company thought that they should follow the
contemporary practice of free-access retailing, where all merchandise pairs are displayed in open shelves
to enable customers to help themselves. Remember, in India footwear is always tried on a footstool and
bought after considerable service extended by the salesperson personally. Free-access retailing may work
when there is adequate space inside a store to move around. The effect of such ‘pigeon-hole’ free access
is that they give an impression that they are Bobcat’s R-Pair outlets. What can now entice the customer
into entering a Bobcat store?
Customer Service
Though Bobcat faces tough manpower challenges (the store sales personnel and managers have separate
labor unions), the sales personnel who are on its permanent rolls are trained in selling footwear. However,
there are a large proportion of untrained and temporary hands. Further, salespersons do not wear any
uniform and hence customers can hardly identify them. There is as yet no loyalty program to create
customer stickiness to any store or the brand, and most of the stores are not connected by a central
information system or ERP (enterprise-wide resource planning) as the organization has its limitations
when it comes to investing in such initiatives. Organized retail companies need to have non-negotiable
standards of customer service or they will lose customers to its competitors. The company is now losing
its market share despite its strong position in categories like men’s footwear, children’s uniform shoes,
etc. However, the number of stores it has around the country is around the same, at 1,200. The company
now needs to put together a plan for both its survival and growth on a war footing. The top management
is revisiting its strategies in every functional area to turn the company around.
Questions:
1. What store format mix would you recommend for the company?
2. Did the company do the right thing by extending the in-store brand to the wholesale channel?
What should it do now?
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. “The Indian Retail sectors are witnessing a transition phase where organized retailing is taking a
lead over unorganized retailing”. In the light of above statement, explain the current states of
Indian Retailing.
2. “The customer is fully satisfied when the perceived services meets or exceeds their
expectations”. Explain.
END OF SECTION C
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IIBM Institute of Business Management
Examination Paper MM.100
Consumer Behaviour
Section A: Objective Type (30 marks)
· This section consists of Multiple choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carries 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The Yellow color is related with personality links like:
a. Caution, warmth
b. Power, informality
c. Passion, excitement
d. Purity, innocence
2. Consumers having high ethnocentric value in CETSCALE for foreign made products are likely to
feel that:
a. It is worthy to purchase the foreign products.
b. It is wrong to purchase foreign made products.
c. Only foreign made products should be purchased.
d. They should remain neutral.
3. If the OSL(optimum stimulation level) score of a person is greater than the lifestyle he/she is
living then he/she likely to:
a. Take rest
b. Appear quite satisfied
c. Seem bored
d. Cannot be predicted.
4. The psychologists who disagree with the Freud’s theory of personality are usually referred as:
a. Non Freudians
b. Freudians
c. Neo Freudians
d. C-Freudians
5. According to Sigmund Freud, the human personality consists of 3 interacting systems viz the id,
the superego and the ego. What actually ‘id’ refers to
a. Its role is to see the individual’s needs in a socially acceptable fashion.
b. Its role is to drive impulsions for the needs to be satisfied immediately.
c. Its function is to control and balance the impulsive demands.
d. None of the above
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Part Two:
1. What is a ‘common man approach’?
2. Differentiate between ‘Enculturation’ and ‘Acculturation’.
3. Write a short note on ‘Rokeach Value Survey’, a widely used value instrument, in consumer
behavior studies.
4. Explain the ‘Sociometric method’ of measurement in ‘Opinion Leadership’.
5. What do you understand by the term ‘Viral marketing’?
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Indian refrigeration industry had apparently reached maturity in the eighties. The introduction stage
could be seen in 1962-66; growth, 1967-80; and maturity 1981-88.Between 1989-90 and 1990-91, the
market grew by 12 to 12.35 lakhs units; in 1992-93 it is estimated to have come down from 12 to 10.39
lakhs pieces. Thus, the decline seems to have begun. Presently, there are six main competitors in the
refrigerator market in India. The industry seems to have structure prevailing in monopolistic competition.
The products at present available in the market are under the brand names of Godrej, Kelvinator, Voltas,
Videocon, BPL and Allwyn. The new entrants to the market like BPL and Videocon with latest ultra
modern refrigeration technology have thrown down the gauntlet to the existing leaders like Godrej and
Kelvinator. A study has been conducted to find out what change have occurred in consumers behavior
due to the emergence of these new challenges, because, for all one knows; a very tough competition has
recently emerged among the industrial giants due to which consumer behavior has undergone drastic
change. The main purpose of study is to see how defectors are affecting consumer behavior. The specific
objectives of this study are positioning of products and brands, rating of different parameters and their
ranking, consumers’ degree of satisfaction, estimating ideal capacity and ideal prices. Consumer’s
perception of price and brand, awareness of different brands and various sources of information to the
consumer. This survey leads to the conclusion, that most of the people are aware of 165-liter capacity
with awareness of nearly 95%, others are less known to consumers. The most important parameters for
customers while buying a refrigerator are technology, cooling efficiency, durability, price, capacity and
after-sales service in that order. According to the dealers, the customers consider brand name, technology,
cooling efficiency, durability and after-sales service as very important. Other parameters like special
gift/price, guarantee/warranty are just important parameters. According to the customers, BPL, Voltas and
Videocon are high – priced refrigerator; Godrej and Kelvinator, comparatively low-priced; and Allwyn,
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medium-priced. From the dealers’ survey it has been found out that the ideal capacity is 165 liter; and the
ideal price Rs. 7,000-8,000.
Questions:
1. Due to the emergence of new industrial giants like BPL and Videocon, consumer
behavior has undergone a sea-change. In what ways?
2. Discuss which will be the most effective strategy according to you that will make
Consumer brand loyal in the refrigerator industry.
Caselet 2
Walking down the streets of Delhi’s Connaught place, capital’s business heart, Mike Steve, 50 years old
CEO of Macnine shoes (India), was looking at the feet of the busy office goers. The CEO purposely
walked to his office near Super Bazaar from the Palika car parking to have a firsthand feeling of the
market response to the Macnine shoes, and in general the foot-wear habit of urban Indians. Macnine shoes
brought an image of simple no fuss yet elegant office-going shoes. The shoes, known for its comfort and
reasonable prices shared a good market share in face of competition from Windsor, Red Tape, Lee
Cooper, Woodland, etc. but as the days passed Mike’s trained eyes could see the changing scenario.
Office goers no longer seemed to prefer “no fuss” shoes, there was a distinct preference for heavy looking
chunky shoes. People’s perception about office-going shoes was changing from regular 6-hole laced
shoes to these heavy looking shoes. As a result, Macnine shoes’ market share decreased by 10 per cent
between 1998 and 1999. Disturbed by the fact, Mr. Steve called a meeting of the departmental heads and
after five-hour long meeting it was accepted, Indian consumers had undergone a sea change in their
attitudes and perceptions about the products. Office was no long seen as a boring work-place where a “no
nonsense” rather “stiff upper lip” attitude has to be maintained. Office was seen as more a part of regular
life and a relaxed “as you want to be” (of course within limits) attitude. Keeping pace with the time,
Macnine shoes also should shed its “traditional” image. More importantly, consumers are going more and
more for branded shoes, rather than mass production shoes that will be available at the retail shops. The
departmental heads agreed that there is a definite price-quality perception in the mind of the consumers.
Consumers perceive high price as a certificate of high quality that will be associated with the branded
products. Based on the price-quality perception, Macnine shoes were decided to be positioned in the
market. Dramatically changing from the basic principle of quality and affordability targeting the growing
middle class, the company saw a better prospect in developing a high priced brand image as shoe was no
longer, especially in big cities seen as necessity but it was a part of life style marketing where shoes were
seen as fashion accessories.
Macnine shoes which for over two decades was known for making popular affordable shoes, took a one
eighty degree turn and developed dedicated showroom with premium shoes and other accessories like Tshirts,
bags, socks etc. but, the result were quite contrary to what was expected, the decrease in market
share continued despite these efforts. The reason seems quite simple, or decade’s consumer has known
the shoe to be in the affordable range. With this sudden change the loyal buyers felt betrayed and turned
away towards other local brands. The main selling point of the company was missing the consumers no
longer felt the urge to come to buy macnine shoes. The fact was the brands who started as selling
premium shoes were perceived to be in a category of catering the upper category of consumers with
extremely focused range of shoes which borne a premium price. Talk of red Tape, talk of Lee Copper, the
image that comes to the consumer’s mind is of premium shoes with all its associated characteristics.
While past experience brings in the minds of the consumer an “affordability” image of Macnine shoes.
When the company drastically wanted to change the image, they could not fit into consumer perception of
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a premium shoe, while high price deterred people who wanted affordability foremost. Macnine lost on
both the grounds.
Questions:
1. Explain the “role and status” for Macnine shoes.
2. Suggest some ways of changing consumer perception of Macnine shoes.
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. A college student has just purchased a new personal computer. What factors might cause the
student to experience post purchase dissonance? How might the student try to overcome it?
How can the retailer who sold the computer help reduce the student’s dissonance? How can
the computer’s manufacturer help?
2. An Advertising on a known deodorant shows a young beautiful girl is upset to meet her
boyfriend, as friends point out at her “Bad body odour”. The advertisement is trying to arouse
which motive in the consumer? Discuss by giving one similar examples?
END OF SECTION C
S-2-210311
Retail Management
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carry 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The minimum value of Conversion ratio is:
a. 0
b. 0.5
c. 2
d. 1
2. The law of retail gravitation is also called:
a. Huff’s law.
b. Belly’s law.
c. Philip Kotler’s law.
d. Relly’s law.
3. In Huff’s probability model of retail store location, the exponential ‘alpha’ denotes:
a. The attractiveness of the store.
b. Power of the store in terms of potential customer located farthest.
c. It is simply a power over the attractiveness of the store.
d. None of the above
4. If the market has low level of retail saturation then the chances of success in the market is:
a. Higher.
b. Lower.
c. Unpredictable.
d. Extremely lower
5. If the original price be ‘a’ and the reduce price be ‘b’ then the mark down % in Pricing techniques
is given by:
a. (a - b)/a.
b. (a – b)/b.
c. (b – a)/a.
d. (b – a)/b.
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Part Two:
1. What do mean by ‘Super market’?
2. What do you understand by Upper and Lower threshold in pricing methodologies?
3. What does the term ‘silent market’ say?
4. Explain ‘Gap theory’ related with service quality.
5. Explain barometric technique used for sales forecasting.
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Branded Jewellery Market in India: An Overview
Brands are built over decades, more so in high-value markets like gold jewellery .The total jewellery
market in India is around Rs.60, 000 crore, out of which the estimated size of the diamond jewellery
market is Rs.8,000 crore, and that of branded diamond jewellery is about Rs.600 crore. For a brand to
become firmly established it must deal with several tangible and intangible factors. It requires focused
advertising, customer confidence, name-recognition, display and astute salesmanship to compete with
traditional jewellers. Success hinges upon how a particular brand can differentiate itself from the clutter.
Most important, affordability and quality are the elements in sustaining a brand. The growth of a
jewellery brand depends on the confidence it can instill in buyers about the purity of the gold, be it 14, 18,
or 22-carat. It also depends on the mark-up in price. The cost includes making (labour) charges on top of
value of the material, gold content and stones including diamonds and precious stones, if used. Besides, a
system of hallmarking for the purity of metal and identification of the manufacturer and jewellery items is
a need if not an imperative. At present the branded jewellery business is in its infancy in India,
constituting hardly 10% of the market. With the market growing annually at the rate of 20-25%, its share
will expand. While domestic jewellery makers have the advantage of skills which still form a sizeable
component of value, the confidence factor (in traditional craftsmen) is, however, on the decline. This
gives branded jewellery an edge over the traditional variety. One handicap branded jewelers face is the
differing tastes of consumers. Thus, inventories will be high as also the carrying cost. On the other hand,
the convenience of readymade jewellery is an ace in the brand marketer’s hand. The consumer has no
time to waste on the whims of craftsmen. Earlier, there was not much of a choice available.
Consumer Perception of Gold Jewellery
India is the world’s largest consumer of gold. The precious metal is traditionally purchased either as an
investment or to make intricate ornamental heirloom jewellery. The liberal economic dispensation
ushered in at beginning of the 1990s and the emergence of an affluent professional class led to the
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creation of a burgeoning designer wear/cosmetics/fashion accessory market in India. This encouraged
some domestic jewellery manufacturers to carve out a niche in this market. The abolition of the Gold
Control Order and the subsequent easing of restrictions on the import of the precious metal, including a
substantial reduction in import duties, have encouraged the development of this new market.In the mid-
1990s the Indian consumer’s attitude towards gold jewellery changed. Gold jewellery, from being just an
investment avenue, was now seen as a way to make a lifestyle and personality statement. Globally, 90%
of the jewellery is sold as dress-wear – a part of the wardrobe and not the vault. Branded jewellery as a
fashion accessory constitutes around one per cent of the Rs. 60,000 crore per annum jewellery market in
India. However, it is growing fast and has become a part of every girl’s treasure trove. One can easily spot
branded jewellery counters at Shoppers’ Stop and Lifestyle. With exclusive designs, standardized pricing
and superior finish, branded jewellery is aptly termed as fashion accessories, suitable for both western as
well as traditional wear. It must be mentioned that purchasing gold is not necessarily an urban
phenomenon and market share gains are likely to be more rapid in smaller towns. Though designer
jewellery arrived in India in the late nineties, it was only in this millennium that the scenario changed.
With aggressive advertising campaigns, the big brands – Tanishq, Carbon, Gili, Sarkles and Oyzterbay,
to name a few – arrived, teaching the customers at the paying end to shop like his or her counterpart in the
West. The message read loud and clear: “Your wardrobe includes jewels too!” Stiff competition from
traditional jewellers forced the newcomers to introduce a series of exchange offers and guarantee
certificates to woo the adventurous consumer. Nevertheless, this gold-loving nation has been very
cautions in its appreciation of branded jewellery. Much of the gold jewellery in India is 22-carat unlike in
western countries where it is basically 14 carats. Fine jewellery by international standards goes up to 18
carats. For stone setting alloys up to 18 carats are preferred. Educated middle-income women, particularly
working women, tend to wear less gold jewellery these days. However, growing incomes – especially
among NRIs - have increased demand. Most jewellery consumers are women between 25-45 years and
men in the 40-55 year bracket. Men largely buy lower-value items, such as rings, chains or tie-pins,
frequently as gifts. While women are seen more often in jewellery showrooms, it is the men who are still
the effective decision-markets as far as buying goes in a majority of cases. The phenomenon, however, is
changing. People are now looking beyond traditional 22-carat jewellery. Changing lifestyle has made
buyers more product and quality-conscious. And branded jewellery as an off-the-counter product is
gaining greater acceptance. In the past five years or so since branded jewellery entered the market, it has
threatened the very survival of traditional jewellers and craftmen in the same way as traditional tailors,
who are being replaced by makers of branded readymades. Inroads are being made by branded jewellery
both in the domestic and international markets. This indicates that Indian women are definitely showing
signs of accepting branded jewellery.
Country-wise Gold usage in Carat Jewellery (1990 to 1999)
Country 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Italy 381 415 461 441 435 446 439 500 535 511
India 238.6 227 293.8 259 346 400.6 427.8 594 682.6 644
USA 126.6 121.2 132.1 140 146.7 148.3 152.4 159 170.2 178.2
Japan 109.5 106.7 104 88 85 78 74 55 39 37
Turkey 130.9 102.6 116.3 126.6 80.7 110.4 140.7 168.1 159 115
Germany 49.8 51 45.4 44.5 41.8 38.9 37.2 35.9 34.3 32.6
Other
Countries 1070.8 1163.7 1377.1 1250.1 1253.8 1345.6 1366 1580.4 1331.4 1416.2
China 0 134.7 203 179 208 204 189 224 173 166
Soviet
Union/CIS 0 36.9 29.2 26 20.2 20.2 25.3 29 27 28
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The Forward Path
The future of the branded category of jewellery seems to be bright in India with the consumer becoming
more conscious of fashion trends and also ready to bring gold ‘from the vault to the wardrobe!’ Fashion
jewellery has come to stay. With people willing to spend lavishly on their clothes, it won’t be long before
they start looking for matching ornaments.
Source: The Gems Jewellers Export Promotion Council.
Major Jewellery Brands:
Carbon
Carbon, a pioneer in the branded jewellery segment, has a range of 18 carat fashion accessories that
includes rings, necklaces, pendants, ear tops and bracelets. Established in October 1996, carbon is a
distinctive lifestyle jewellery brand for the sophisticated and contemporary woman. The Carbon range is
currently available in 40 outlets (in a shop-in-shop format only) across 16 cities, and will be in 23 cities
by 2005.The Company is also planning to have its own outlets, the first of which is likely to open before
the end of 2003. it also plans to expand its market by going in for products for specific occasions such as
festivals, birthdays and anniversaries. In addition, it’s looking at cross-promoting Carbon jewellery with
other branded lifestyle products such as perfumes, clothing and cosmetics. The price range of Carbon
products is modest (Rs.3,750 to Rs.20,000 per piece), and unlike traditional jewellery whose prices can be
brought down through bargaining, its items have a nationally uniform MRP. Through its marketing and
advertising campaigns, Carbon aims at creating a contemporary feel with more value for the wearer. Six
years since its inception, Carbon’s annual sales have reached a considerable Rs.16 crore (approx) in the
domestic market, with an average piece value of Rs. 5,000.Carbon recently launched the Persona
collection for women to mark its fifth anniversary. This collection of five pendants depicts five different
facets of a woman. Besides woman’s earrings and pendants, Carbon has something for men too: cufflinks,
tie-pins and bracelets. Carbon’s product strength is in its collections like Venus and Sun sign. The
company brings out a new range almost every month based on consumer response. Carbon is one of the
organized and more successful ventures in branded jewellery retailing from the house of Peakok
Jewellery Private Limited. It was incorporated in Bangalore in early 1991 and spearheaded by Mahesh
Rao, a young entrepreneur with extensive experience in the fashion accessories market. Mr. Rao felt in
the mid-1990s that the Indian consumer’s attitude towards gold jewellery would change from being an
investment avenue to one that made a lifestyle and personality statement. Seizing the opportunity, he
initiated within the Peacock fold, besides their exports, a new brand of 18-carat gold jewellery called
Carbon for the domestic market. Peacock has a state-of-the-art manufacturing facility in Koramangala,
Bangalore.
Tanishq
Titan Industries Limited is a joint venture of the Tata Group and The Tamil Nadu Industrial Development
Corporation (TIDCO). Its product range includes watches, clocks and jewellery. In a short span of time,
the company has built an enviable reputation for its corporate practices, products and services. After
entering the watch segment in 1987, Titan ventured into the precious jewellery segment in 1995 under the
brand name Tanishq. It is India’s only fine jewellery brand with a national presence and is an
acknowledgement business leader in the country’s jewellery market. In early 2000, Titan organized
itself into two business units: watches and clocks, and jewellery. According to Jacob Kurien, chief
operating officer of Tanishq, this helped the company redefine its business purpose and focus. Tanishq
has invested Rs.60 crore in its manufacturing unit in Hosur, Tamil Nadu. Tanishq worked tirelessly on a
two-pronged brand-building strategy: (i) Cultivate trust by educating customers on the unethical practices
in the business, and (ii) use innovative methods to change the perception of jewellery as a high-priced
purchase. Tanishq has leveraged the design skills that are part of the Titan heritage to refine its products,
and has invested a lot in R&D and consumer research on what the Indian woman is looking for and how
she is evolving. Tanishq jewellery is sold exclusively through a company-controlled retail chain which
now has 55 outlets – five owned by the company and the rest run by franchisees – spread over 40 cities
Total 2107.2 2358.8 2761.9 2554.2 2618.9 2792 2815.4 3345.4 3151.5 3128
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and is still expanding. The locations are chosen on the basis of geographical spread and the shopping
dynamics of a particular metro. The primary promotional medium for Tanishq is its boutiques, which
explains the emphasis on store design and layout. Its stores demonstrate design leadership and
differentiation and provide excitement around the collections in the outlets. Tanishq made its foray into
18-carat jewellery in the early 1990s; switched to 22-carat and again turned to 18-carat jewellery. To meet
the increasing demand, it plans to nearly double the number of its outlets and offer a range of ‘wearable’
products. The brand caters to customers looking for items in between costume jewellery and real gold
ornaments.
Major collections of Tanishq include:
Aria: Tanishq Aria is a spectacular collection of diamond jewellery. With over 80 exquisite designs of
earrings, finger-rings, bangles and neckwear, the prices in this collection began at as Rs.3, 200.
The collection targets the contemporary woman, with designs representing a seamless blend of the
traditional and the modern. Aria has been crafted by experts with a thorough understanding of the Indian
woman’s jewellery needs. The Aria collection is available at all Tanishq showrooms. Collection G: the
World Gold Council recently launched a range of 22-carat lightweight gold jewellery called Collection G.
This range is promoted by Tanishq and is an exclusive concept/brand of WGC. It includes pendants,
earrings, finger-rings and bracelets, and targets urban woman in the age group of 18-30 years. In 22-carat
gold, the designs are stylish and modern and go with all forms attire – casual and formal. Indian and
Western. It has multiple finishes on a single piece to convey a modern look. The jewellery is priced from
Rs.4, 995.
Gili
Gili, a distinctive brand established by the Gitanjali Group, is one of India’s largest exporters of fine
diamonds and a De Beers sight holder. It came into existence soon after the abolition of the Gold Control
Order by the Indian government. Gili offers a wide range of 18-carat plain gold and diamond-studded
jewellery, designed to appeal to the contemporary Indian woman. Indian and western styles and motifs
combine to produce truly unique ornaments that are finely crafted and extremely attractive. Gili’s
products are available through a mail-order catalogue and show-in-shop counters in fine stores all over
the country. In addition, it has special promotional offers during special events like Valentine’s Day,
Raksha Bandhan and Diwali, and beauty contents and shows. Gili jewellery comes with a guarantee
on the quality and weight of the diamond and gold. Gili’s Millennium Series diamonds are triple certified
and come in a special box. Ideal to give as a gift or keep as a souvenir of a one-in-a-lifetime occasion. In
1997, Gili launched a collection of 18-carat gold ethnic Indian ornaments with traditional forms and
motifs, created with the most modern technology available today. These pieces are well finished,
beautifully polished and available at extremely affordable prices. The Gili Gold range caters to the
modern individual, with locally manufactured designs in 24-carat gold that are elegant, simple. Timeless
rings, pendants, earrings, necklaces and bangles. Gili have captured the 18-carat diamond-studded
jewellery segment in the price range of Rs. 2,500 to 15,000.
Intergold
Intergold is the biggest exporter of diamond-studded jewellery in India. It started off more than a decade
ago as a diamond exporting company in Mumbai and has achieved unprecedented success in the diamond
industry in a short span. The export division has a 6,000 sft factory, which churns out 3,000 high-quality
pieces for export daily. The integrated store has a strong identify of its own: the place looks inviting and
is aesthetically appealing. The décor and design of the stores have been conceptualized to harmonies with
the actual product design. Thematic window displays attract customers and see-through glass windows
virtually compel them to walk in without being overawed, as they usually are at diamond jewellery
showrooms. The products in the store are divided into categories like pendants, necklaces and earrings for
the convenience of buyers. They are further divided according to price so a customer doesn’t need to
worry about affordability for each product. Showrooms personnel are knowledgeable about the products
and sales techniques, apart from being trained to use audio-visual aids for the benefit of consumers.
Intergold specializes in diamond, platinum and Italian jewellery and white gold. There’s something here
for buyers from all age groups with varying tastes. In the women’s range, Intergold offers pendants, rings,
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earrings, small sets and necklaces, whereas men can go in for classy tie tacks, tie pins, button covers,
sherwani buttons, belt buckles, cuff links, pendants and rings. Intergold sells only through exclusive retail
outlets and has branches in Mumbai, Goa, Surat and Bangalore. It plans to open stores in Delhi,
Hyderabad, and Calcutta soon. All Integrated stores are equipped with ultrasonic cleaners for cleaning
jewellery and diamond testers to check whether the gems are genuine.
Oyzterbay
In July 2000, six professional from Tanishq left the organization to float a new start-up – Oyzterbay.com
– for branded jewellery. Oyzerbay wants to be in e-tailing as well as brick-and-mortar retailing. The
initial plan is to have 50 exclusive outlets (both its own and franchisees) across the country. Oyzerbay
signature stores showcase and display precious metals, gemstones and crafted jewellery designs.
Oyzterbay is a young company at the forefront of change in the jewellery industry. In February 2001, it
launched its first internationally styled store at Bangalore, with a stunning range of precious jewellery in
carat gold and silver at affordable prices. The Oyzterbay network now covers all major Indian cities and
an overwhelming response has induced the company to expand to 50 outlets soon. Oyzterbay positions
itself as well-styled, high-quality jewellery for young women. Delicate and bold, traditional and modern,
the designs reflect the change in the attitude towards jewellery: from heavy overdressing to elegant daily
wear, and from ostentations display to understated panache. Prices start at a mere Rs.500 for sterling
silver jewellery, and all products – including solid gold jewellery – are priced below Rs. 10,000, a move
that also positions Oyzterbay as the only chain catering to the burgeoning gift market. The range is
continually refreshed based on market feedback and emerging design trends. Oyzterbay stores lead the
market in attitude, ambience and service. They sport a contemporary and inviting glass-front store design
in soft colors of wood with accents of steel, in stark contrast to the forbidding opulence of traditional
jewellery stores. Complemented by modern in-store graphics and merchandising, the house colors –
tangerine pink and metallic mauve – pervade all elements of the corporate identity. The Oyzterbay web
store replicates the store experience with state-of-the-art features that make buying and gifting Oyzterbay
jewellery quick, easy and secure. A multi-media advertising campaign rolling out from April 2001 has
created waves with its fresh approach to the jewellery market. Jewellery for the Living has rapidly
become a byline for jewellery for the young woman of today - that is, jewellery for the joy of wearing, not
destined for the safe-deposit locker. Oyzterbay products are also available in large department store
chains in a shop-in-shop format.
Sparkles
Sparkles are carrying on a family tradition in producing 9-carat, 14-carat and 18-carat jewellery. The
objective is not only to provide off-the-shelf diamond jewellery in a wide array of designs, but also to
offer customers an affordable range of choices. A trend-setting initiative in the Indian market, Sparkles
became a revolutionary success and grew to become one of the market leaders in the branded jewellery
segment. Sparkles sells through 28 outlets in seven major Indian cities. With a wide range of designs and
more coming out every month, it is only a matter of time before it covers more cities and outlets. Besides
these regular outlets, its web-site sparklesindia.com has been a pioneering effort that has taken branded
jewellery to the newest communication medium – the Internet. During the past few years Sparkles has
been tracking what its customers want, and is striving with every new design and product to meet their
expectations. Total satisfaction and loyalty vindicates their commitment to constantly strive for quality.
Sparkles – from Poddar Jewels, Mumbai – is the only company to have added an ethnic touch to the usual
collection with nose studs.
Questions:
1. Do you think that an exclusive brand retail store would work in India? Or a mix of formats for a
brand? Discuss.
2. Will the franchisee route to a faster roll-out of retail outlets work for these jewellery brands?
What are the pros and cons?
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Caselet 2
Bobcat India Limited revolutionized footwear selling in India. The company hit upon the idea of reaching
customers through exclusive retail stores way back in 1932 and set up its own outlets, which numbered
around 1,200. It was no mean task setting up such a large network of retail outlets, especially when 90%
of them were owned and operated by the company, the rest being dealer-owned and operated. This chain
store format identify has been a strong differentiating factor in the Indian retail sector, being the first of its
kind. Combined with the high quality of the footwear, the brand soon had top-of-the-mind recall and
stayed there for many years. Unit a few years ago, the name ‘Bobcat’ was synonymous with organized
retailing in India, the only one of its kind.
The Chain Store Format
The Bobcat chain store format had its own credo – a signature store design with exclusive signage and
windows in order to facilitate easy association in the minds of the Indian consumers.
At present there are only two major categories of stores in the Bobcat Chain Store format:
(a) Bobcat Family Stores
(b) Bobcat Bazaar
(a) Bobcat Family Stores
These are sub-dividend into two formats again, based on the size of the stores. They are:
(1)Super Stores, generally more than 5,000 sq.ft. Catering to customers in the footwear category.Highstreet
stores that are anywhere between 500 and 1,500 sq.ft. Found in busy shopping areas.
(b)Bobcat Bazaar
Bobcat Bazaar stores sell the company’s planned economy product lines and marked-down merchandise
round the year. Known as R-pair stores, their performance depends heavily upon the availability of
marked-down merchandise. Such markdowns are done on products that have suffered quality accidents,
are shop-soiled, lines that are closed-out etc.
Recent Format Developments
New retail formats have begun to supersede conventional ones. Independent big-box multi-brand
department stores have started selling footwear as a category, especially in metros and cities. Malls are
another new shopping format that is growing rapidly in the metros. Many upcoming footwear retailers are
obtaining space inside the malls as mall partners to take advantage of the ready footfalls available. For the
existing independent Bobcat stores it is expensive now to run campaigns and promotions to attain the
required footfalls and expected conversions.
Merchandising in Bobcat Family Stores
The exclusively of the ‘Bobcat’ brand to the Bobcat retail stores was the differentiating factor for
customers until recently. However, a few years ago the company decided to sell Bobcat branded goods
through its channel sales wing called Bobcat Wholesale. Hitherto, the wholesale channel had a different
brand for itself called BSC. This wholesale channel supplies merchandise to footwear retailers across
India through its authorized distributors. The brand Bobcat has now been extended to this wholesale
channel too, which means that Bobcat branded goods is available in every other local footwear store. The
exclusivity of the brand to its own outlets has come to an end. And, even as the sales of the wholesale
division remain stagnant, what compelling reasons can a customer have to
visit a Bobcat Store now? A peculiar feature of the Bobcat store was its odd price points: Rs 149.95,
199.95, etc.
Merchandise presentation and Visual Merchandising
Bobcat pioneered the concept of show window displays in India with a style that was unique to the
company. It was professionally managed, with an exclusive team handling the motif and the design.
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Every month the direction to decorate the show windows were given by a mailer prepared by special
decorators. Sales personnel in each store were trained to be window decorators too. Recently, these
windows had to be done away with because the company thought that they should follow the
contemporary practice of free-access retailing, where all merchandise pairs are displayed in open shelves
to enable customers to help themselves. Remember, in India footwear is always tried on a footstool and
bought after considerable service extended by the salesperson personally. Free-access retailing may work
when there is adequate space inside a store to move around. The effect of such ‘pigeon-hole’ free access
is that they give an impression that they are Bobcat’s R-Pair outlets. What can now entice the customer
into entering a Bobcat store?
Customer Service
Though Bobcat faces tough manpower challenges (the store sales personnel and managers have separate
labor unions), the sales personnel who are on its permanent rolls are trained in selling footwear. However,
there are a large proportion of untrained and temporary hands. Further, salespersons do not wear any
uniform and hence customers can hardly identify them. There is as yet no loyalty program to create
customer stickiness to any store or the brand, and most of the stores are not connected by a central
information system or ERP (enterprise-wide resource planning) as the organization has its limitations
when it comes to investing in such initiatives. Organized retail companies need to have non-negotiable
standards of customer service or they will lose customers to its competitors. The company is now losing
its market share despite its strong position in categories like men’s footwear, children’s uniform shoes,
etc. However, the number of stores it has around the country is around the same, at 1,200. The company
now needs to put together a plan for both its survival and growth on a war footing. The top management
is revisiting its strategies in every functional area to turn the company around.
Questions:
1. What store format mix would you recommend for the company?
2. Did the company do the right thing by extending the in-store brand to the wholesale channel?
What should it do now?
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. “The Indian Retail sectors are witnessing a transition phase where organized retailing is taking a
lead over unorganized retailing”. In the light of above statement, explain the current states of
Indian Retailing.
2. “The customer is fully satisfied when the perceived services meets or exceeds their
expectations”. Explain.
END OF SECTION C
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IIBM Institute of Business Management
Examination Paper MM.100
Consumer Behaviour
Section A: Objective Type (30 marks)
· This section consists of Multiple choice questions & Short Answer type questions.
· Answer all the questions.
· Part One questions carries 2 marks each & Part Two questions carry 4 marks each.
Part One:
Multiple Choices:
1. The Yellow color is related with personality links like:
a. Caution, warmth
b. Power, informality
c. Passion, excitement
d. Purity, innocence
2. Consumers having high ethnocentric value in CETSCALE for foreign made products are likely to
feel that:
a. It is worthy to purchase the foreign products.
b. It is wrong to purchase foreign made products.
c. Only foreign made products should be purchased.
d. They should remain neutral.
3. If the OSL(optimum stimulation level) score of a person is greater than the lifestyle he/she is
living then he/she likely to:
a. Take rest
b. Appear quite satisfied
c. Seem bored
d. Cannot be predicted.
4. The psychologists who disagree with the Freud’s theory of personality are usually referred as:
a. Non Freudians
b. Freudians
c. Neo Freudians
d. C-Freudians
5. According to Sigmund Freud, the human personality consists of 3 interacting systems viz the id,
the superego and the ego. What actually ‘id’ refers to
a. Its role is to see the individual’s needs in a socially acceptable fashion.
b. Its role is to drive impulsions for the needs to be satisfied immediately.
c. Its function is to control and balance the impulsive demands.
d. None of the above
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Part Two:
1. What is a ‘common man approach’?
2. Differentiate between ‘Enculturation’ and ‘Acculturation’.
3. Write a short note on ‘Rokeach Value Survey’, a widely used value instrument, in consumer
behavior studies.
4. Explain the ‘Sociometric method’ of measurement in ‘Opinion Leadership’.
5. What do you understand by the term ‘Viral marketing’?
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
The Indian refrigeration industry had apparently reached maturity in the eighties. The introduction stage
could be seen in 1962-66; growth, 1967-80; and maturity 1981-88.Between 1989-90 and 1990-91, the
market grew by 12 to 12.35 lakhs units; in 1992-93 it is estimated to have come down from 12 to 10.39
lakhs pieces. Thus, the decline seems to have begun. Presently, there are six main competitors in the
refrigerator market in India. The industry seems to have structure prevailing in monopolistic competition.
The products at present available in the market are under the brand names of Godrej, Kelvinator, Voltas,
Videocon, BPL and Allwyn. The new entrants to the market like BPL and Videocon with latest ultra
modern refrigeration technology have thrown down the gauntlet to the existing leaders like Godrej and
Kelvinator. A study has been conducted to find out what change have occurred in consumers behavior
due to the emergence of these new challenges, because, for all one knows; a very tough competition has
recently emerged among the industrial giants due to which consumer behavior has undergone drastic
change. The main purpose of study is to see how defectors are affecting consumer behavior. The specific
objectives of this study are positioning of products and brands, rating of different parameters and their
ranking, consumers’ degree of satisfaction, estimating ideal capacity and ideal prices. Consumer’s
perception of price and brand, awareness of different brands and various sources of information to the
consumer. This survey leads to the conclusion, that most of the people are aware of 165-liter capacity
with awareness of nearly 95%, others are less known to consumers. The most important parameters for
customers while buying a refrigerator are technology, cooling efficiency, durability, price, capacity and
after-sales service in that order. According to the dealers, the customers consider brand name, technology,
cooling efficiency, durability and after-sales service as very important. Other parameters like special
gift/price, guarantee/warranty are just important parameters. According to the customers, BPL, Voltas and
Videocon are high – priced refrigerator; Godrej and Kelvinator, comparatively low-priced; and Allwyn,
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medium-priced. From the dealers’ survey it has been found out that the ideal capacity is 165 liter; and the
ideal price Rs. 7,000-8,000.
Questions:
1. Due to the emergence of new industrial giants like BPL and Videocon, consumer
behavior has undergone a sea-change. In what ways?
2. Discuss which will be the most effective strategy according to you that will make
Consumer brand loyal in the refrigerator industry.
Caselet 2
Walking down the streets of Delhi’s Connaught place, capital’s business heart, Mike Steve, 50 years old
CEO of Macnine shoes (India), was looking at the feet of the busy office goers. The CEO purposely
walked to his office near Super Bazaar from the Palika car parking to have a firsthand feeling of the
market response to the Macnine shoes, and in general the foot-wear habit of urban Indians. Macnine shoes
brought an image of simple no fuss yet elegant office-going shoes. The shoes, known for its comfort and
reasonable prices shared a good market share in face of competition from Windsor, Red Tape, Lee
Cooper, Woodland, etc. but as the days passed Mike’s trained eyes could see the changing scenario.
Office goers no longer seemed to prefer “no fuss” shoes, there was a distinct preference for heavy looking
chunky shoes. People’s perception about office-going shoes was changing from regular 6-hole laced
shoes to these heavy looking shoes. As a result, Macnine shoes’ market share decreased by 10 per cent
between 1998 and 1999. Disturbed by the fact, Mr. Steve called a meeting of the departmental heads and
after five-hour long meeting it was accepted, Indian consumers had undergone a sea change in their
attitudes and perceptions about the products. Office was no long seen as a boring work-place where a “no
nonsense” rather “stiff upper lip” attitude has to be maintained. Office was seen as more a part of regular
life and a relaxed “as you want to be” (of course within limits) attitude. Keeping pace with the time,
Macnine shoes also should shed its “traditional” image. More importantly, consumers are going more and
more for branded shoes, rather than mass production shoes that will be available at the retail shops. The
departmental heads agreed that there is a definite price-quality perception in the mind of the consumers.
Consumers perceive high price as a certificate of high quality that will be associated with the branded
products. Based on the price-quality perception, Macnine shoes were decided to be positioned in the
market. Dramatically changing from the basic principle of quality and affordability targeting the growing
middle class, the company saw a better prospect in developing a high priced brand image as shoe was no
longer, especially in big cities seen as necessity but it was a part of life style marketing where shoes were
seen as fashion accessories.
Macnine shoes which for over two decades was known for making popular affordable shoes, took a one
eighty degree turn and developed dedicated showroom with premium shoes and other accessories like Tshirts,
bags, socks etc. but, the result were quite contrary to what was expected, the decrease in market
share continued despite these efforts. The reason seems quite simple, or decade’s consumer has known
the shoe to be in the affordable range. With this sudden change the loyal buyers felt betrayed and turned
away towards other local brands. The main selling point of the company was missing the consumers no
longer felt the urge to come to buy macnine shoes. The fact was the brands who started as selling
premium shoes were perceived to be in a category of catering the upper category of consumers with
extremely focused range of shoes which borne a premium price. Talk of red Tape, talk of Lee Copper, the
image that comes to the consumer’s mind is of premium shoes with all its associated characteristics.
While past experience brings in the minds of the consumer an “affordability” image of Macnine shoes.
When the company drastically wanted to change the image, they could not fit into consumer perception of
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a premium shoe, while high price deterred people who wanted affordability foremost. Macnine lost on
both the grounds.
Questions:
1. Explain the “role and status” for Macnine shoes.
2. Suggest some ways of changing consumer perception of Macnine shoes.
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. A college student has just purchased a new personal computer. What factors might cause the
student to experience post purchase dissonance? How might the student try to overcome it?
How can the retailer who sold the computer help reduce the student’s dissonance? How can
the computer’s manufacturer help?
2. An Advertising on a known deodorant shows a young beautiful girl is upset to meet her
boyfriend, as friends point out at her “Bad body odour”. The advertisement is trying to arouse
which motive in the consumer? Discuss by giving one similar examples?
END OF SECTION C
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