“Consumer Perception Towards Online Grocery Stores”

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Marketing Project Report Mumbai University


<ul><li>1.A PROJECT REPORT ONConsumer Perception Towards Online Grocery Stores SUBMITTED BY ABHIJIT P JAITAPKAR(MARKETING) ROLL NO B-01 Batch 2011 - 2013UNDER THE GUIDANCE OF DR. SANDEEP SAWANTCORE FACULTY - MARKETING UNIVERSITY OF MUMBAI KOHINOOR BUSINESS SCHOOL,KURLA, MUMBAI. 1</li></ul><p>2. DECLARATIONI hereby declare that the project report entitled Consumer Perception Towards OnlineGrocery Stores carried out at IMRB International is my work submitted in partialfulfillment of the requirement for Degree of MASTER OF MANAGEMENT STUDIES (MMS),UNIVERSITY OF MUMBAI from KOHINOOR BUSINESS SCHOOL, KURLA, MUMBAIand not submitted for the award of any degree, diploma, fellowship or any similar titles or prizes.Date:Signature: _______________Place: MumbaiStudent Name: ___________ 2 3. CERTIFICATEThis is to certify that the project entitled Consumer Perception Towards Online GroceryStores is successfully completed by Abhijit P Jaitapkar during the second year of hercourse, in partial fulfillment of the Masters Degree in Management Studies, under the Universityof Mumbai, through KOHINOOR BUSINESS SCHOOL, Kurla, Mumbai-400070.Date:Place: Mumbai Dr. Sandeep Sawant 3 4. ACKNOWLEDGEMENTIt is my privilege to express my gratitude and respect to those who guided and inspiredme in the completion of this project.I am deeply indebted to my project guide of the Kohinoor Business School Dr. SandeepSawant for giving me this opportunity to undergo my project in his esteemed organizationand for his timely suggestions and valuable guidance.On the occasion of complete and submission of project,I would like to express my deepSense of gratitude to college HOD .Dr. Ms.Bharati Deshpande for providing me thePlatform of management studiesI also want to give thanks to Mr. Subhash Gawade .He constantly encouraged me andshowed me the right path from day one till the completion of my project.I am also thankful to Mr. Dhananjay M. for helping me to proceed in conducting thesurvey and complete it on time.I am grateful to the Director, Faculties, administrative staff and the librarian of KohinoorBusiness School for providing me all the support required for successful completion of myproject.Abhijit P Jaitapkar 4 5. INDEXCHAPTER PAGE CHAPTER NAMENO NO 1INTRODUCTION EXECUTIVE SUMMERY 1 RESEARCH OBJECTIVES 3 RESEARCH DESIGN AND METHODOLOGY 4 SCOPE OF THE RESEARCH 5 2BACKGROUND OF TOPIC INDUSTRY INTRODUCTION 6 MODELS OF E-COMMERCE7 ONLINE SHOPPING IN INDIA10 ONLINE GROCERY SHOPPING 12 INDIAN PLAYERS IN ONLINE GROCERY15 SHOPPING 3PROFILE OF THE ORGANISATION IMRB INTERNATIONAL19 4ANALYSIS OF DATA 21 5CONCLUSION AND OBSERVATION 36 OBSERVATION 37 CONCLUSION 6APPENDICES QUEST IONNAIRE38 BIBLIOGRAPHY425 6. Executive SummaryInternet and Information technology have made tremendous contributions for businesstransformation witnessed nowadays all over the world. This has given birth to E commercewhich encompasses several pre purchase and post purchase activities leading to exchange ofproducts or service or information over electronic systems such as the internet and the otherTelecommunication networks.Analysing the competitive advantage of E-Commerce it is observed that E-Commerce enablessimpler, faster and efficient business transactions. For developing country like India, E-Commerce offer considerable opportunity for growth.E-commerce leads to a boon for the current economic downturn. As Indias e-commercemarket is worth about Rs 50,000 crores in 2012. About 80% of this is travel related (airlinetickets, railway tickets, hotel bookings, online mobile recharge etc.).Online retailing comprises about 15%. India has close to 10 million online shoppers and isgrowing at an estimated 40-45% per annum.The rapid growth of e-commerce in India is being driven by greater customer choice andimproved convenience.The project was undertaken under the supervision of Nirala Imex Inc who currently has theirbusiness operation in Taiwanese market in selling of Indian grocery items to the local retailers&amp; wholesaler in the Taiwanese market.The company has proposed a plan to launch an online grocery store in the Indian market forwhich the project was undertaken was to determine whether online grocery shopping will bebeneficial to the user with respect to questionnaire which will be analysed in three parts.6 7. The project will first study the attitude of customers towards online shopping, alsodetermining the factors which influence the consumer to purchase goods and service.The second half of the project will depict the attributes of online shopping influencing thepurchase decision by the respondent. It will also determine the issues regarding the onlineshopping.The third part of the project determines the purchase decision with respect to grocery. It willdetermine the place preference of grocery shopping with respect to price, quality, variety,proximity and offers/ discounts.The project will also recommend the business operational plan which works with contractingdealership with the local kirana stores.7 8. Research Objectives To study attitude of customers towards online shopping. To find out the preferences of the consumer regarding the attributes of online shopping website. To identify the issues faced by the user while online shopping. To determine the parameters for choosing the particular shopping centre for purchase of grocery items. To determine whether online grocery shopping will be beneficial and on what factors.8 9. Research Design And MethodologyThe sources of data used in this project report are both primary and secondary data. 1. Primary data Primary data consists of original information gathered from sample size of 200 respondents residing in Mumbai, India. 2. Secondary data Secondary data consists of information that already exists and that was collected in the past for some other purposes.Sample Design: Size of Sample: The sample size selected for the research is 200 in the area of Mumbai Parameters of Interests: The major parameter of interest is the subgroup of people who are working professional and web savvy having an experience in online shopping. The two other subsidiary parameters of interest are: o The respondent should also have an experience grocery shopping. o And the female respondent who have an online shopping experience.Sampling Technique: Quota Sampling: Quota sampling is a method for selecting survey participants. In quota sampling, a population is first segmented into mutually exclusive sub-groups, just as in stratified sampling. Then judgment is used to select the subjects or units from each segment based on a specified proportion9 10. Scope Of The Research To determine which factor influences the consumer to go for online shopping. To find out which feature of the website attracts the user to purchase the product from the online shopping website. To find out the whether grocery online shopping is beneficial for the user. To analyse which factors influence the user to buy online grocery.Limitations: The first limitation caused during the market research was to find out the respondent who shop online and are web savvy. The second limitation caused during the research was searching the women respondents who shop grocery products along with the experience of online shopping. Other limitation caused in the market research was that the research will only study the consumer perception towards online grocery shopping and not the dealers, wholesalers or retailers perception towards online shopping which acts as an agentto the online retail industry to support its business operations.10 11. Industry IntroductionInternet is changing the way consumers shop and buy goods and services, and has rapidlyevolved into a global phenomenon. Many companies have started using the Internet with theaim of cutting marketing costs, thereby reducing the price of their products and services inorder to stay ahead in highly competitive markets.Companies also use the Internet to convey communicates and disseminate information, tosell the product, to take feedback and also to conduct satisfaction surveys with customers.Customers use the Internet not only to buy the product online, but also to compare prices,product features and after sale service facilities the will receive if they purchase the productfrom a particular store. Many experts are optimistic about the prospect of online business.In addition to the tremendous potential of the E-commerce market, the Internet provides aunique opportunity for companies to more efficiently reach existing and potential customers.Although most of the revenue of online transactions comes from business-to-businesscommerce, the practitioners of business-to-consumer commerce should not lose confidence.It has been more than a decade since business-to-consumer E-commerce first evolved.Scholars and practitioners of electronic commerce constantly strive to gain an improvedinsight into consumer behaviour in cyberspace.Along with the development of E-retailing, researchers continue to explain E-consumersbehaviour from different perspectives. Many of their studies have posited new emergentfactors or assumptions which are based on the traditional models of consumer behaviour,and then examine their validity in the Internet context.11 12. Models of E-commerceBusiness-to-Business (B2B):B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type, and most experts predict that B2B ecommerce will continue togrow faster than the B2C segment. Eg: indiamart.com, eindiabusiness.com, tradeindia.cometc.Business-to-consumer (B2C):Business-to-consumer e-commerce, or commerce between companies and consumers,involves customers gathering information; purchasing physical goods (i.e., tangibles such asbooks or consumer products) or information goods (or goods of electronic material ordigitized content, such as software, or e-books); and, for information goods, receivingproducts over an electronic network.It is the second largest and the earliest form of e-commerce. Its origins can be traced toonline retailing (or e-tailing). Thus, the more common B2C business models are the onlineretailing companies such as flipkart.com Amazon.com, snapdeal.com etcBusiness-to-Government (B2G):Business-to-government e-commerce or B2G is generally defined as commerce betweencompanies and the public sector. It refers to the use of the Internet for public procurement,licensing procedures, and other government-related operations. This kind of e-commerce hastwo features: first, the public sector assumes a pilot/leading role in establishing e-commerce;and second, it is assumed that the public sector has the greatest need for making itsprocurement system more effective.12 13. Web-based purchasing policies increase the transparency of the procurement process (andreduce the risk of irregularities). To date, however, the size of the B2G ecommerce marketas a component of total e-commerce is insignificant, as government e-procurement systemsremain undeveloped.Consumer-to-Consumer (C2C):Consumer-to-consumer e-commerce or C2C is simply commerce between privateindividuals or consumers. This type of e-commerce is characterized by the growth ofelectronic marketplaces and online auctions, particularly in vertical industries wherefirms/businesses can bid for what they want from among multiple suppliers. It perhaps hasthe greatest potential for developing new markets.Online auction site eBay, Yahoo! Auctions are a couple of examples of C2C websites.Mobile Commerce in IndiaMobile is growing in India with more than 800 million subscribers across the country. Theadvancement in terms of adoption of smart phones with 3G enabled services is happening ata rapid pace. This of course has opened up the gates to mobile advertising, mobileapplication development and mobile commerce in India. According to BuzzCitys latestreport, India is top performing mobile advertising region in the whole of Asia. The growth inmobile advertising globally is tremendous with ads served on a year-on-year growth of139%. With respect to some number crunching, more than 126 billion ads were served in2011, compared with 52 billion in 2010.In India, Mobile Commerce is still in the development phase as the use of mobile phones forcarrying out transactions is very limited. However, the development is taking place at a nicespeed and in the coming years, Mobile Commerce is most likely to make its presence feel ascompanies and businesses have started understanding the benefits of Mobile Commerce.Some of the companies have even incorporated this technology. Airtel, ICICI, Reliance aresome of the companies/businesses that are using this technology as their users are allowed tomake limited purchases from their phones. For now, the users are mainly allowed to pay 13 14. phone bills, utility bills, book movie tickets, book travel tickets with their cell phones.However, more services will be introduced in coming years. Security is one of the mainconcerns of Mobile Commerce as its very important to offer secure transactions and this isthe reason why Mobile Commerce is still in the development phase in India.For now, users are mainly allowed to do Mobile Banking i.e. to access the bank accountwith a cell phone in order to pay the utility bills. With the current rate of development, userswill be soon allowed to purchase products, advertise, to take part in auctions and pay billswith the help of a cell phone, while they are on the move. 14 15. Online Shopping In IndiaThe Indian economy is slated to grow by upward of 6 % annually in the next few yearswhich is among the highest rates of any big emerging economy. And quite a lot of thisgrowth would be on the back of domestic consumption of goods and services.E-commerce is emerging as a great level given that organized retail is still not ubiquitousacross the length and breadth of the country with large retail chains making up less than 10%of the market.E-commerce is helping people in smaller towns in India access quality products and servicessimilar to what people in the larger cities have access to. Its being forecast that close to 60%of online shoppers would come from beyond the top eight large cities by end of this year.Increasing internet penetration has helped to expand the potential customer pool. Internetpenetration is only about 10% (or about 121 million users) as against about 81% in the USand 36% in China. However this number continues to rise at a consistent pace because offalling prices for broadband connections.Indians are also increasingly taking to mobile devices for not only search but shopping aswell. The number of smartphone users is rapidly increasing in India and with 4G servicesabout to take off its expected to get even more people going online. There are currentlyabout 900 million mobile subscribers and this number is expected to touch 1.2 billion by2015. Of these about...</p>