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Chapter 1: Introduction

During the last few years organized retail has gained significant importance in India. After the

infotech phenomena, India is witnessing retailing revolution. (N.Rao 2002).Retail business in

India is rapidly evolving with the spending capacity of Indian consumers growing at

unprecedented rates. Modern retail has seen the emergence of sprawling shopping centers

offering exclusive shopping, entertainment and food all under one roof. Families across

different socio economic classes in India are lured by global and local retailers to buy

products and services. The new rules of marketing are redefining business strategies in

connecting with consumers. Cut throat competition forcing retailers to come up with most

marketable product innovations which are acceptable at consumer level. With growing

number of retailers selling similar products, customers expect unmatchable shopping

experience and unique product from each retailer. Customer service environment forms the

heart of any retail operations. For retailers customer service elements are those associated

with store environment and delivery systems, including role of employees. It starts with every

step of retailing, how consumers buy, where they buy, what they buy, when they buy and why

they buy. A retailer has to be proactive in serving the consumer before consumer arrive at the

store. Thus planning for setting customer service standards and elements starts well before

consumer comes for shopping. How effectively the product is offered to the consumer is very

important in retailing. The efficiency of entire service environment not only deals with service

provided at the time of shopping but it starts before consumer enters the retail outlet and it

continues even after final purchases made.Serving with accountability has become critical

success factor in consumer driven markets.Business of retailing is greatly affected by the

patronage behavioral orientations of shoppers. Understanding these orientations can help

retailers to implement service environment catering to needs and wants of customers.

Customer focused retail servicescape is a critical touch point driving positive shopping

experience. If a consumer wants to buy cosmetics he /she has the option to purchase it from

specialty store, department store, supermarket, hypermarket, beauty service providers and

traditional retailers engaged in selling cosmetics. Considering all these retailers they differ in

terms of offering shopping experience and product specifications.

The purpose of this research is to determine the influence of store servicescape or customer

service environment on buying behavior of women cosmetics consumers in organized retail

stores. More specifically, an attempt has been made to understand impact of various

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servicescape dimensions towards overall shopping experience and resulting buying behavior

outcomes at select department stores, and specialty stores selling cosmetics in Pune city.

1.1 Significance of the study: A study of consumer buying behavior is important for several reasons as different mindsets

and distinct consumer behavioral pattern in Pune city of India will be significantly helpful in

understanding of business scenario. Research on the above topic will give in-depth analysis

into urban female consumers’ decision making process towards cosmetics. The relative

influence of service environment on shopping experience of urban females would be

interesting to know for the researcher to understand consumer behavior. In the effort to attract

more consumers and create excitement, giving total retail experience by elevating service

standards Pune retailers are bringing world class products into the market. This throws the

great opportunity for the researcher to study women consumer behavior towards cosmetics.

The study is also helpful for the retailers from the point of view as it can be applied in

formulating sales and customer service strategy and informing individuals about cosmetics

consumption. This research will contribute for better understanding of service environment,

and provide basis for further study.Thus this study would be helpful from academic as well as

industry point of view.

This research will examine how women consumers respond to different servicescape

attributes, whether servicescape affects their shopping experience or not. The study will

explore impact of servicescape variants on buying behavior. Furthermore, the research results

might guide marketers in designing effective and balanced retail servicescape to encourage

desirable shopping experience.

1.2 Scope of the study: A .Geographical Scope – Geographically, this study covers women cosmetics consumers of Pune city. The scope of this

study is limited to in-store buying behavior of women consumer at select organized retail

outlets of the city. Identified sites to conduct this study are specialty stores, department

stores, hypermarkets,supermarkets located in different parts of the city.

B. Functional Scope- The study is restricted to the analysis of only buying behavior outcomes or responseswith

respect to servicescape dimensions (service environment) of a store .The study focuses only

on women cosmetics usersand not men. Also, since the beauty and personal care industry is

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the aggregation of a wide range of product categories of cosmetics, for this project only make

up cosmetics, skin care cosmetics and hair care cosmetics and fragrances categories are taken

into consideration. Hygiene cosmetics like dental care, bath soaps and salts and baby care and

beauty services are not included in this study.

1.3 Rationales of the study: Changing consumer needs, changes in social and economic factors, advancement in

technology and intensifying market competition are factors forcing retailers to improve

service standards while selling products and services. The successful store service

environment focuses on understanding the needs and desires of the customers. Launching

point for each retail process is service delivery, so streamlining retail operations for attracting,

interacting and engaging consumers has become very important.

The focus of this project is to study the cosmetics purchase behavior of women consumers

and the shopping experience influencers. Advent of modern retail formats in Pune has

changed the way people shop. Major retail hubs such as Nucleus mall, Kumar pacific,

Amanora shopping center, Inorbit mall, and Phoenix market city and many more are housing

different department stores, hypermarkets, supermarkets and specialty stores selling

cosmetics. Women in IT city Pune are shopping for cosmetics in these stores are an

explanation of increasing number of retailers popping up everywhere. The shift from

transaction marketing to experiential marketing has been the effect of changing consumer

behavior.

1.4 Key research issues: The researcher attempts to understand “what are the key servicescape factors involved in

influencing women consumers’ buying behavior of cosmetics?”

The focus of the study will remain on-

• Understanding servicescape dimensions such as store ambience, design, sales consultants,

merchandise, and in store sales promotion and convenience, of retail outlets.

• The buying behavior of women consumers while shopping cosmetics.

1.5Research objectives: To determine the relative influence of service environment cues on shopping experience and

resulting purchasing intent following objectives were designed.

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1. To know the influence of total store servicescape on buying behavior.

2. To know whether demographic characteristics have significant difference for

perceived servicescape dimensions.

1.6Assumptions: Attempt has been made in this study to include stores selling cosmetics (department stores

and specialty stores, supermarkets and hypermarkets) located in malls which offer different

services. For example in department stores cosmetics company specific counters are handled

by specially trained beauty consultants. Whereas in specialty stores trained beauty consultants

handle different product categories of same brand. The servicescape variables identified for

this study are common across different store formats. But in reality it is not possible that all

the stores are alike in terms of selling products and offering associated services.

1.7 Pune City In the past 4-5 years Pune city has undergone complete makeover of its retail sector. Medium

to large format malls have forayed in the Pune market. The traditional shopping destinations

such as Laxmi road, M.G.road, J.M.road, F.C.road, Boat Club road are house to many

unorganized retailers as well as new organized retail formats. However with Pune’s growth in

a real estate sector in all directions of the city, newer residential pockets like Baner,

Hinjewadi, Kalyani Nagar, Yerwada,Nagar road, Bavdhan, Magarpatta city, Kharadi are the

hub for new shopping malls.

Suburban locations of Pune city like Yerwada –Kalyani Nagar in the northeast ,Warje in the

southwest, Aundh in northwest, SenapatiBapatMarg and Bund Garden road –central locations

have witnessed considerable organized retail developments. Pune’s software and BPO

industry have propelled investment in retail infrastructure including the development of

shopping malls.World class quality products offered with elevated service standards are in

high demand in Pune market. Economic growth of population and infrastructure

improvements in Pune is reflecting the current and future attractiveness of the target market

for sellers.

Previously, Puneites were considered as very traditional, conservative and price-conscious

buyers who would shop at convenient locations like Laxmi Road. However with changing

lifestyles, higher disposable incomes coupled with greater affordability have been

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instrumental in bringing about a drastic change in Pune’s consumer behavior pattern. Today’s

Puneites are more cosmopolitan, progressive and willing to experiment, showing appetite for

big brands. (Malla R.2012).

1.8 Organization of the thesis: First chapter begins with introduction of research study, relevant and specific introductions of

retail industry and cosmetics industry.

A conceptual framework of store servicescape developed by Mary Jo Bitner was adapted for

this research. To that additional element of service environment such as convenience

attributes, merchandise attributes and promotional attributes were added to study consumers

buying responses. In Chapter 2 the review of retail industry and cosmetics industry give

insights about importance and need to study these sectors. Chapter 3, the review of literature

includes an overview of existent literature on servicescape, shopping experience and

consumer buying behavior. Chapter 4 discusses research methodology followed for this study.

Chapter 5 presents in analyses and detail findings from the study. The summary of results and

conclusions that can be drawn from this research is presented in chapter 6, and finally,

limitations and future scope for research is discussed in chapter 7.