Retail scenario in India


The retail scenario in India has been evolving rapidly for the last few years. The Indian retail market is now moving rapidly towards organized retail with close to 6% of the sales being in this format. The retail market is set to change rapidly with several major business houses attempting to establish a presence in the sector. Today mega Indian business houses and corporates like the Reliance Group of Mukesh Ambani (Reliance Fresh & Reliance Hyper), Future Group of Kishore Biyani (Food Bazaar), RPG Group (Spencer's Retail), the Aditya Birla Group (More), ITC Ltd (Choupal Fresh & Choupal Saagar), Wadhawan Holdings (Spinach), the Godrej group (Nature's Basket & Godrej Aadhar), Subhiksha, J Raheja group (Hypercity) alongwith with, Shoppers Stop etc are entering this space. With such a large variety of shopping options being available the shopper now has much more freedom in terms of his purchases and is influenced by several factors. Going forward this can only seek to increase and this in turn will bring a variety of challenges for brands. Importantly consumers will now be influenced not only by the media but also by the last mile of advertising that they will come across while shopping, that is POINT OF PURCHASE material. In the retail world, "POP" is used to refer to point-of-purchase advertising displays.

POP displayscan take various forms, including shelf-mounted signs, hanging posters, and more. Since an estimated 70% of purchase decisions are made within the retail store itself, effective POP displays can have a dramatic impact on sales for a particular product category or brand. Recently, static signs have begun to give way to electronic, dynamically updated point-of-purchase displays that present targeted product information, instant coupons, and more. The software used to control these dynamic POP displays typically allows for near-real time content updates, allowing brand managers to run instant marketing experiments, geographically targeted promotions campaigns, and more.

This study seeks to understand the impact of such material on the purchasing behavior and the sales of FMCG products to the end consumer. Further this is to be calculated in terms of the impact of this material in conjunction with other forms of media. Complicating the issue is the fact that retailers themselves are now launching their own brands in order to increase their revenues which otherwise are limited. The presence of in - store brands also suggests a desire on the part of the retailer to help the consumer.

Retailers are branching out into private brands as they are looking to increase their revenues which they can only do in one of the following three ways while not getting into their own brands these being:

1. Sell more per customer visit

2. Increase the number of visits per customer while maintain the size of the shopping basket

3. Get more people to the store.

Literature review

The modern retail store is the place where the brands which are being advertised and the consumer finally meet. This is finally the place at which the consumer makes his end purchasing decision and spends his money on buying the product. As a result of this the communication that is received by the consumer at this final point becomes key. The communication received must complement the information received by the consumer from other communication vehicles. POP material satisfies the need for information of the product that exists in the mind of the consumer. The emergence of private labels has also increased the importance of such material as POP is the only exposure that consumers get to private labels which often compete on pricing, usually attempting to provide an extremely similar product at a lower price point.

The POP information is growing in importance with the consumer for the following reasons:

1. A wide variety of products are available at the store and their advertising is done only in terms of POP and awareness is created only at this point.

2. POP material can often prove to be more productive than other forms of advertising and promotions

3. Changes in consumers shopping patterns have resulted in higher levels of impulse purchase behaviour which is greatly influenced by POP material

4. Lower presence levels of salespersons leads the consumer to make decisions independently based on the information available at that point of time.

5. POP is far more precise in terms of target marketing with it positioning being in the exact spot of the availability of the consumer.

6. They attract consumer attention and compel people to inspect the product and hence facilitate sales.

POP material can be in various forms in terms of Print as well as digital mediums. It is important to evaluate the effectiveness of this medium of advertising.

Purchasing behaviour

Purchasing in itself can be of two types mainly planned and impulse. Here we look at planned and impulse purchase behaviour and how a consumer reacts to its various factors.

Impulse purchasing

With the growth of modern retail formats impulse purchasing is on the rise. This is because of the greater visibility of products in the case of this format of retailing. Research has shown that all shoppers have at some point of time indulged in impulse purchasing. With shopping becoming a leisure and lifestyle activity impulse purchasing is set to rise further.

Characteristics of impulse purchasing

1. An intense feeling to obtain the product

2. Not accounting for negative consequences of the product

3. Feelings of excitement

4. Conflict between control and indulgence.

There are four different types of impulse purchasing

1. Accelerator impulse - purchasing in advance so as to create a security net in anticipation of the future

2. Compensatory impulse - buying in order to reward oneself or for compensating for some form of failure

3. Breakthrough impulse - sudden reaction to long standing discontent towards a particular object which the buyer feels can be resolved with the purchase

4. Blinding impulse - when the desire to obtain the product overwhelms the shooper which leads to the purchase

Shoppers believe impulse purchasing to be quite different from simple unplanned purchase which may occur simply due to earlier oversight and is different from differed purchasing and from unplanned demand.

Greater understanding of this phenomenon is need to understand the level of readiness of the consumer towards a particular brand or a category which can be changed at the point of sale .This would enable marketers to focus their energies on more effective channels of communication. The increased tendency to not plan for shopping in advance works in their favour as they will be able to increase the levels of impulse purchasing and the overall size of the shopping basket.

Planned purchasing

Planned purchasing occurs when a shopper enters a store with any one of the following in mind

* Product category and brand decided

* Product category decided

* Product class decided

* General need recognized

At the point of purchase the consumer is exposed to a variety of brands which may be national, local or private labels. The growth of in - store brands present a major threat to established brands. They attempt to make their product uniquely identifiable in order to ensure that they do not lose any of their sales to private labels. Competitive clutter is great at the POP due to a variety of copy cat, me too and private label brands. As a result of this locating the brand that the consumer had originally decided to purchase becomes a tough ask and the opportunity for a brand - switch exists. In this scenario the consumer may end up picking up a wrong brand (copycat) or a different brand. Thus manufacturers attempt to ensure that their products and SKU'S cannot be confused with any other an attempt to create an identity for their brand which is unique from all of their competitors. At the point of purchase the salience of a brand is measured by its perceptual features such as colour luminance, edges and how it influences the goals of the consumer. The perceptual features of brands have a significant effect on search performance. In - store factors are those factors which cannot influence the consumer without his presence at the store. In - store factors include number of facings of the brand, the positions of its vertical and horizontal displays and its price. Brands are clamouring for increased visibility inside stores as studies have shown that the impact of POP is directly related to the area occupied by the POP as it maximizes the amount of time spent by the eye on it, this is valid in a area of three to fifteen square inches. Placement of the material also makes a significant difference with material which is placed at the centre of a shelf receiving maximum attention. The immense value of eyeballs at the point of purchase has lead to some retailers going on to create their own in - store media and marketing programs, in turn affording the retailers an additional source of revenue and creating brand building opportunities.

A study has revealed that up to two - thirds of a brand's perceptual features depend on in - store marketing with only one - third being dependent on out of store marketing. This reiterates the importance of integration between the in - store and out - store marketing effort. In spite of the strong effect that the perceptual features of the brand on its search performance it appears that consumers only evaluate one or two features of a brand at a time when they are attempting to locate a brand rapidly and accurately. This is important from the point of view of designing the packaging of the product and for advertising which seeks to highlight the visibility of the brand on the shelves. Advertising is necessitated in order to establish strong associations for the brand with its unique features. Major brands do not require substantial in - store branding as they have high recall value from the advertising that consumers are exposed to out of the store, thus the smaller the brand the greater the need for in - store branding. There is growing evidence which supports the effectiveness of in - store marketing for these brands.

This helps us understand the interplay between the in - store and out of store marketing techniques, how they affect consumer attention and choice of brand purchase and the differing impact of POP material inside the store. This shows that while both in and out sore factors influence attention, consideration and choice there is a difference in terms of the level of impact. In - store factors primarily influence attention whereas out of store factors influence the consideration of the product in the first place and help make a choice.

The final purchase of the product is a complex interplay of a large variety of factors which include out of store material which drives recall and in - store factors such as the POP material and shelf placement of a product.

The importance of garnering the attention of the consumer cannot be over emphasised. Companies look carefully at attention drivers and then try to appeal to the senses of the consumers. This holds a large number of implications for managers as even though the decision making is done inside the store only partial information can be processed by the consumer at this point. This is where out of store factors play a major role. The greater the usage of a brand the greater the level of loyalty is developed for it. Thus in store marketing works best for little known products which do not have any major differentiating factors.

The placement of a product on a certain position of a shelf can play a major role in the amount of attention that it receives from the consumer. The placement of a product in a particular place affects the consumers brand choice decisions, a manufacturer's distribution decision and a retailer's discount and shelf space decision. The consumer has certain pre defined notions of a product based on its placement in a store and on a particular shelf. Consumers believe that products are placed from top to bottom in descending order of price and similarly from right to left. Thus the centre position of the shelf is the place which is most valuable from the point of view of the brand and maximises its visibility and the impression that the consumer develops of it. The consumers also have a linear association between price and quality believing that a product with a higher price offers superior quality. Thus when a consumer is looking for a specific price/quality he is more likely to look at the extreme ends of a shelf whereas in other circumstances he will be looking at the centre of the shelf.

The level of intensity is changing specially with the launch of brands by retailers which command a certain degree of brand loyalty and thus sell at a premium. Essentially private brands earlier competed solely on the basis of price discrimination. Now however the POP material put up in store gains more importance with these brands developing a loyal base of customers. In cases such as GAP and BENETTON it is difficult to distinguish between the brand and the retailer making the decision making process more complex for the consumer.

The advantage that retailers possess over manufacturers is that apart from the use of regular advertising they are also able to leverage the presence of their staff at the point of purchase. Thus brands who are not retailers themselves are finding it extremely difficult to retain their customers. Ensuring that a brand has a unique identity is of tantamount importance to manufacturers.

In the case of consumers with low levels of literacy the scenario changes and their decision making process is different from that of customers with high levels of education. The presence of visual aids in the form of POP material can play a greater role in their decision making process.

“Literacy is a key ability factor that should influence whether a consumer is persuaded by peripheral cues rather than message claims (Viswanathan, Rosa, and Harris 2003). The lack of reading fluency that characterizes low-literacy consumers leads their cognitive resources to be devoted to low-level reading processes (word level), leaving little room for comprehension of the overall message (Perfetti 1985).”

Thus POP plays a more important role in gaining their attention and communication to them effectively specially in terms of video displays.

In conclusion

Brand switching occurs at higher levels in the case of those products which are for everyday use and require a low level of involvement. They are more readily accepted by the consumers as there is very little differentiation between them and the perceived risk in these products is low. POP plays a great role in this case acting as reminders as well as influencing the last minute decision making process.

A differentiation occurs on the impact of POP material depending on the level for the purchase. The greater the level of involvement in the purchase the greater is the level of knowledge, the greater the directly associated attributes will be evaluated and the level of differentiation that will exist in the mind of the consumer when purchasing the product will be higher.

Greater levels of knowledge for the category lead to differences existing in the favour of the brand that has out of store branding i.e. National brands. The inverse is true in the case of lower levels of involvement.

This however is not the case when the level of involvement is extremely high and the consumer is able to objectively evaluate the product purely on the basis of its qualities. In such a scenario informed consumers will choose to buy store brands over the national brands whereas the inverse is true for those who do not have the ability to evaluate as they will place their trust in a national brand as the perceived risk will be lower. An important goal for any lesser known brand is to desensitise the consumer towards nation brands; this can be achieved by minimising the perceived differences between the brands as opposed to the national brand. This is what FMCG brands will have to focus on in the future, that is to maintain the differences that exist in the minds of the consumer. Retailers on the other hand will be making every effort to promote their brand through in - store advertising and even attempting to exceed national brands in terms of quality to develop customer loyalty and command a price at par with a national brand.

It is important to note that if the trust placed by the customer in the store brand is high then not only does it work against a national brand but also against other retail outlets and can turn into a competitive advantage for the brand owner/retailer.

Knowledge gaps

* The Return on Investment on the money spent on Point of Purchase advertising in the industry

* Brand Switching in the case of Modern Retail in India

* The differing impact of Point of purchase material in the case of

o High involvement purchasing

o Impulse purchasing

Research problem

To understand the role of Point of Purchase material in influencing brand switching by the consumer and the impact this has on the sales of FMCG companies looking separately at high involvement and impulse purchase categories.

Research objective

* To understand the drivers for brand switching in modern retail stores in India

* The role played by Point of Purchase material in the decision making process of the consumer

* The level of influence exerted by Point of purchase material in the case of :

o Impulse purchasing

o High involvement categories

Research methodology

In order to evaluate the impact of POP the research shall be split into two separate categories being High involvement and Impulse

The products to be evaluated in each category are:

High involvement:

1. Face Wash

2. Health Food Drink

3. Anti - dandruff Shampoo


1. Chocolate

2. Chips

3. Beverages

Phase 1

Secondary research

* Availability of product and brand at general/modern trade locations

* Sales of brands from general trade stores in percentage terms

* Sales of brands from modern trade

* Number of competing brands/private labels at Point of Purchase

Phase 2

Primary research

Type of research: Qualitative

Primary research will be conducted at modern trade outlets in the following three ways

1. Interviews

a. Entry interviews - this would involve interviewing customers at the point of entry to the store to understand the needs which they are looking to fulfil at the point of entry.

b. Exit interviews - evaluating the shopping basket of the same consumer on his exit and comparing it with his desires at the point of entry.

2. Observational studies - silent observation of customers in order to determine the product from a particular chosen from a category after taking into account the POP material at the point.

3. Blind purchasing - providing shoppers with characteristics of a product category, providing them with the necessary resources and asking them to purchase any brand once inside the store and evaluating their purchase decision taking into account their exposure to POP material.

Expected contribution

The study is designed to help understand the impact of POP material on sales of FMCG companies in modern trade in order to interpret the effectiveness of this medium of communication when used in modern retail outlets. It is designed to understand how this method of communication can be used more effectively when competing with Private labels and other brands which do not use other mediums and capture sales solely at the point of purchase.


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The current scenario of POINT OF PURCHASE globally

The level of interest in POINT OF PURCHASE communications has been rising globally there are several reasons behind this and it is important to understand that going forward the level of interest in this form of communication is only likely to increase. Consumer shopping habits are changing rapidly and more and more consumers are looking to modern trade in order to purchase their commodities. This has lead to increased focus on the POINT OF PURCHASE material in store as it plays an important role in what sort of spends companies should be making on this material. This study also seeks to understand what decision variables are involved in purchase behavior of a potential customer. Thus keeping this in mind the study seeks to understand the drivers behind consumer behavior at the modern trade outlet and the role that is played by POINT OF PURCHASE in making these decisions.

The level of interest has increased because of a variety of factors but a key one here is the fact that the present day consumer has a narrow attention span. As a result of this the medium of communication used to reach out to him becomes crucial. The advertising audience has become fragmented and companies need to find new and innovative ways to reach out to the consumer. This can be done through a variety of sales promotion activities and through POINT OF PURCHASE material. These POINT OF PURCHASE materials include Posters, danglers, flyers, at store promotions etc. a successfully integrated marketing campaign would include all of these working alongside direct marketing, media advertising and other forms of promotion.

POINT OF PURCHASE communication materials can be said to be anything that is a promotional material at the point of purchase. It includes window displays, video demonstrations, interactive kiosks etc. both retailers and manufacturers use in store advertising as a form of promoting their sales.

At the store product presentation plays a key role in the decision making process of the buyer. A tactic that is typically used by store owners in to stock products in accordance with the margins provided giving better store space to those providing higher margins. The product's packaging is an important part of the POINT OF PURCHASE communication as this is what draws the buyer to the product.

The objectives of POP communications are as follows:-

* Attract the consumer's attention: the primary goal of all POP is to attract the attention of the consumer in order to bring the product into his consideration set.

* Remind :- in order to aid product recall or to remind the consumer of some existing promotion that may be going on

* Inform :- provide information about the product and of its characteristics

* Persuasion : - to persuade the consumer to look at the product and consider purchasing it

* Building the brand image: - POP assists in building the image of the brand by reinforcing the message of the brand that the consumer comes across otherwise.

The major advantages of POP communication can be said to be the following: -

* Displays - which can be of a wide variety and of several different design types in order to attract consumer attention

* Signs :- these would inform the consumer of any special promotions or schemes that may be going on at present

* Shelf media : - this informs the consumer about the products on the shelf without taking up on important store space

* New media: - which can be of the form of television sets in the store which are running promotional campaigns for products.

The end result of all of this is the fact that as a push technique the retailer may carry a certain line of products or push a particular set of products. This will have a significant impact on sales taking into consideration the fact that it has been widely tested that up to seventy percent of the final decision making of the product only occurs at the point of purchase. POP is good methods to create pull based sales as they can help trigger impulse sales which would otherwise have been lost. With a lack of proper trained sales personnel POP becomes even more important as it becomes a valuable information source to the consumer and helps him understand the decision variables and arrive at a choice. (146)

In India today POP has started to play an important role with the growth of modern trade outlets. This has lead to companies looking increasingly carefully at spending on POP communication where the decision may be influenced. Modern trade is set to reach close to 10% of the total retail market space in the year 2012.

The study seeks to understand the validity of the spends occurring in the modern trade environment, how these are beneficial, what changes are required and also what companies should be looking towards in the future.

The study is divided into two distinct categories being:-

High involvement


The products which have been taken into the consideration set are:

For high involvement:-

* Face wash

* Anti - dandruff shampoos

* Health Food Drinks

For the Impulse category:-

* Chips

* Chocolates

* Beverages

The categories have been selected on the basis of them involving different decision making processes. Impulse buys are driven far more by the sudden desire for consumption and an overwhelming urge to consume the product and also its availability and the sort of impact its POP has. Contrary to this High involvement purchases are usually well thought out decisions with some or most of the decision variables keyed in and the role of the POP played in this scenario is of far lesser importance.

Thus both categories are to be studied independently of each other and an attempt made to define the level of impact that POP has on the consumers of each of the categories.

Hypothesis to be tested

Hypothesis 1

The consumer makes complete purchase decisions only at the point of purchase.

The underlying idea behind this hypothesis is that the consumer has not made a complete purchase decision at the point of entering the store and that he makes certain decisions while he is at the store. He may be undecided on the following grounds:-

* Only general need recognized

* Product category decided

* Product class decided

* Product category and brand decided

In the case of impulse purchasing he may not have any decision variables in mind and all decision making may occur at the store itself. The hypothesis seeks to test whether these assumptions are correct and if so what are the key influencers.

Hypothesis 2

The decision making process can be influenced by material at the point of sale

The assumption in this case follows from the previous hypothesis that the complete purchase decision has not been made at the point of entering the store. With this in mind companies will be able to influence the purchase decision by providing the potential customer with additional information so as to help him arrive at the complete purchase decision and buy their product.

The purchase decision before being made has to satisfy a number of different variables in the mind of the consumer before the product is finally purchased. Only after all the criteria are satisfied does the customer purchase the product. These criteria are:-

1. Category to which the product belongs

2. Brands of the product available

3. Features of the product

4. Advertising claims of various brands

5. Quantity of the product available

6. Price of the product

7. Promotional scheme running at a given point of time

8. Influencers to the product

9. In store advertising of the product

10. Variants of the product available

Only after the criteria have been matched with what the customer is looking for does the customer choose to purchase the product. At the point of entering the store the customer has yet to lock in all possible decision variables. This creates an opportunity for the marketers as they are now in a position to influence the customer and help him decide on the decision variables and purchase the product that they want him to purchase.

All decision variables are not of the same level of importance and it is vital for the marketer to understand the level of importance that the customer puts to each decision variable so that he can understand the places where the marketing effort has to be maximum.

In order to understand this there are a number of key questions that the marketer wants answered so as to optimize his spending at the point of purchase.

The marketer seeks to understand the level of decision making that the consumer enters the store with in order to determine the level of influence that can be exerted on him. The marketer then needs to ask a few key questions in order to effectively tap into the key behaviors that are displayed by the consumer when he is in the store. In order to understand this following questions are what the marketer seeks to have answered by the consumer.

1. Whether or not the customer had planned to come to the store or if he has simply walked into the store at the time of his purchase.

2. Whether the shopper had planned his purchases at the time of entering the store

3. At which point in the purchase cycle of the month does the shopper seek to fulfill his need for the particular category

4. Which categories of products did the customer enter in mind with, how they were related to the marketers product category

5. Whether the purchase was a planned purchase or an impulse buy

6. Whether the user is a first time user of the product or a repeat user in order to understand the level of influence exerted by brands on him

7. Is the product category treated as an impulse purchase and if so how often does the buyer decided to consume the product on the spur of the moment

8. Whether the product is a complex buy and involves a decision making process where the customer seeks information about the product consciously before making the final purchase decision.

9. What are the features that the customer is looking at while purchasing the product and which features do most customers look for these will include:-

a. Features

b. Advertising claims

c. Ingredients

d. Brand name

e. Discounts and promotional schemes

f. Pack size

g. Price

h. Variants available

i. In store activity

10. Which are the sources that the buyer seeks information from in the case of purchasing the product

11. In the case of the buyer and the consumer being different whether the level of influence exercised by the consumer on the buyer is significant

12. The level of awareness displayed by the buyer at the point of entry

13. Whether or not he choose to look at different products and make them a part of his consideration set when he comes across them in the store

14. How often can the consumer be persuaded to change to a new brand upon coming across new information at the point of purchase

15. What are the elements in the store that exert maximum influence on the buying decision

16. Whether the buyer purchases the same brand from different store formats

17. The store format from which the buying decision usually occurs

18. From which pint in the store the buyer purchases the product

19. The quantity in which the product is purchased

20. The number of times that the buyer purchases the product on visiting the store

21. The reason behind consuming the product in the case of it being an impulse purchase decision

Based on the above the company needs to decide on some actions which it wants followed in the modern retail space:-

Whether or not point of sale material should be used - the company needs to evaluate the effectiveness of the point of sale material used by it and make an attempt to understand the additional sales which are generated by the material at the point of sale and whether they justify the investment made by the company

Level of influence - the level of influence that the point of sale material exerts on the buyer and how his shopping behavior is affected when he comes in contact with material at the point of sale.

Amount of expenditure incurred - the level of expense incurred and the additional sales revenue generated. Also the company needs to understand how whether further investments will lead to a proportionate increase in the sales of the product

Efficiency of spends - the company needs to understand which are the point of sale materials that have maximum impact on the purchase behavior of the customer and which have the least impact. With this in mind the company can effectively allocate its spends on the materials that show the highest levels of returns.

The sort of point of sale material required for each of the six products will be different as the buyer behavior is different for each product. Some similarities may be displayed in the same categories and the study seeks to understand the manner in which POP material can be used for optimum returns.

Interpretation of data collected

The data has been collected in questionnaire format

The respondents have been

* Walking out of a modern trade outlet

* Have had a minimum family income of Rs 20000 per month

* Should have purchased at least one of the products in the basket

* Should be willing to answer all questions

Respondents were initially shown a show card with the products listed and asked if they had purchased any of the products. A positive response then involved them answering the questionnaire of their product.

Observational research included silent observation of the shopper when he was in the purchase process and the decision variables that he considered while undertaking the purchase.

An attempt was made to understand the process by which the buyer makes his final purchase decision.

Anti - Dandruff shampoo

Level of purchase intention

The level of purchase intention for a product is to be determined at the point of entry to the store. In the case of anti - dandruff shampoos it is apparent through the data set that the majority of the purchase occurs when the respondent has made a planned entry into the store. A more telling fact revealed is the idea that over 60% of the respondents stated that this was a part of their monthly sopping trip which shows that anti- dandruff shampoos are a considered monthly purchase. Also 76% of the respondents stated that they had intended to buy an anti dandruff shampoo at the point of entry. This reveals that shampoo is usually a high- involvement purchase for the buyer and is planned well in advance in most cases and also the fact that over 90% of the respondents conducted research before purchasing the product. Importantly 88% of the respondents said that at some point of time they had purchased anti - dandruff shampoos without having intended to do so at the time of entering the store. This is the category of consumers who have a much greater chance of being influenced by the, material at the point of purchase

Information seeking behaviors

The graph above shows the level of impact and the factors which the customer considers when making a purchase of an anti - dandruff shampoo. The most significant impact on the customer is that of the claims made by the advertiser and shows that the customer is willing to take these claims at face value.

Product features comes a close second. This is important from the point of view of POP as in a category such as anti - dandruff shampoo most advertisers have similar claims and have imitable product features. Thus the crucial factor at the point of purchase becomes the information that the consumer gets at the last point. This information is sought by 32% of the buyers and shows that they can thus be easily influenced in a modern trade outlet. Also important at the point of purchase are various other factors which are valuated only inside the store such as the size of the pack available and the promotional scheme on at present.

External influencers

Word of mouth plays a crucial role in the purchasing of an anti - dandruff shampoo with the large majority of the respondents stating that they seek information from their friends and colleagues which shows the role played by them in the purchase of the product. The consumer does not actively choose to seek information from advertising, however it is evident from the previous questions that the consumer does process the information that he does receive from the advertiser. Thus while unwanted this information does play an important role in the final purchase of the product.

Switching behaviors

Brand switching at the point of purchase is of supreme importance to the company as it influences the level of spends that the company will incur at this level. While in India only about 10% of the retail trade is of the modern trade format companies spend more than this on attempting to influence customers at the store.

36% of the respondents stated that they were unaware of all brands when they entered the store. This shows the ability of the marketer to influence the decision at the point of purchase by creating awareness. An even higher percentage of respondents stated that when they come into contact with this information they have chosen to change the brand that they had originally intended to purchase. While at the store they also actively seek information from posters and flyers if they come across them in order to make an attempt of making a more informed purchase decision.

Influence of different POP material

The graph below shows the POP material which as noticed by the consumer while at the store:-

The POP that has the most impact on the consumer is evident from the graph. During the month of February ITC was doing extensive promotions at Reliance mart and what is evident from the data above is the fact that their promotions were noticeable and had an impact on the buying behavior of the consumer. Also separate stocking as adopted by Head & Shoulders and Clinic Plus catches the eye of the consumer while at the store and has the ability to influence the purchase decision of a large number of people. However POP material such as banners and posters do not have any significance as they do not capture a large number of eyeballs.

Face Wash

Level of purchase intention

The level of purchase intention is decided by the number of people who entered the store with the intention of purchasing the product. The sample of respondents at the given stores displayed a high level of purchase intention. A purchase of a face wash is a largely planned purchase with over 80% of the respondents stating that at the point of entering the store they had already decided to come and purchase certain items with over 70% knowing that they had intended to purchase a face wash. Importantly the purchase of a face wash is not a big ticket item like that of a health food drink and so the purchase is not part of the monthly shopping trip but figures far more importantly on a top up purchase list. Most people had used a face wash before and thus the purchase was repeat purchase for them with a category awareness already existing in their minds. To some extent the purchase of a face wash is unplanned with 82% of the respondents stating that they had at some point of time bought a face wash without it having been on their shopping list. An important finding from the point of view of POP is that only 62% of the buyers actively sought information about the product before purchasing it and thus the level of influence that is exerted by POP can be significant.

Information seeking behavior

The graph above shows the level of impact and the factors which the customer considers when making a purchase of a face wash. Once again it is evident that the role played by advertising that the consumer views is significant. Product features also play an important role in determining the purchase that is undertaken by the consumer. From the point of view of POP it is seen that a large number of respondents look at in store advertising, promotions and pack size at the time of purchasing the product. This shows that the consumer does not have all decision variables locked in when he decides to purchase a product of this category and thus marketers can influence him by playing on the variables that are not locked in. Also evident is the low level of brand loyalty in the case of this category which is why people are influenced by the in store variables. The price and the variant of the face wash available also have an impact on the final decision made by the customer.

External Influencers

The role of friends and that of family when influencing the purchase of the face wash is significant. 68% of the respondents stated that they sought information primarily from these two sources. Also important to be noted is the fact that an equal number of respondents stated that they sought information equally from out of store and from in store advertising. This is in spite of the spends on in store advertising being very different from the spends on out of store advertising and shows that in this category in store advertising is a prominent source of information search for the buyer.

Switching behaviors

As seen from the data above the purchase of a face wash while still being part of the high involvement category is a slightly less pre decided purchase as compared to the purchase of a anti - dandruff shampoo. In the case of a face wash 70% of the buyers said that they were not aware of all the brands of face wash's that were available in the store at the time of making their purchase. A further 74% stated that they actively sought information from the POP material that was inside the store which could then play a big role in influencing their purchase. Also respondents admitted to buying a new brand when at the store which was different from the brand which they had originally intended to purchase. 64% of the respondents stated that they reevaluate their decision when coming across new brands in the store.

Influence of different POP material

Most effective POP promotions in this case are also the fact that there are individuals inside the store who are promoting the products. Whereas HIMALYA products were recalled by the consumer's as they were stocked separately the highest recall value was that of Clean & Clear by Johnson & Johnson which had an individual who was promoting the trial of their products. Shelf strips and posters were not very high on recall value and thus did not play a significant role in influencing the buying decision of the consumer.

Health Food Drinks

Level of purchase intention

In the case of health food drinks the number of people who had intended to purchase was extremely high at 94%. The survey also showed that most of the respondents were on a bulk shopping trip which shows this particular item has a big ticket item in terms of the purchase of FMCG goods which is why the purchase is planned and conducted in a bulk set up. A large bulk of the respondents had entered the store with a list in mind with a health food drink featuring on the list. New purchasers are few with most of the respondents already having used the drink at some point of time earlier. As compared to the other two products a drink is far more important a purchase and so information is consciously sought by the purchaser before making the purchase. 76% of the respondents stated that they had at some point of time bought a health food drink when they had not intended to do so. On the whole the category is one of planned purchasing where information is sought actively before apurchase decision is made.

Information seeking behavior

Health food drinks are a complex category from the point of view of the marketer as they have a large number of variables all of which act as influencers in the buying process. Advertised features take the top spot with nearly all the respondents stating that they are affected by the advertisements of the features of the brand. Offers and discounts also play a key role and thus promotional activities and advertisements which give freebies with the product are important. In store advertising along with the size of the pack available combine to influence the final purchase with the variant of the drink available also playing a role in its purchase. The brand name of the drink is also important though it is evident that it does not play a crucial role in the final purchase of the product.

External influencers

In the case of the category of health food rinks there is a large influence exerted by non -purchasers. This is shown by the respondents of which 84% said that they were influenced by their family members as to which health food drink they should be purchasing. This is because of the fact the purchaser is in fact not the end consumer of the product and the influence of the consumer is significant. In most cases the consumer is in fact the child of the purchaser and thus his opinion is considered when making the purchase decision. This is also the reason behind offers/promotions playing an important role in the purchase as consumers are easier to influence with schemes.

Switching behavior

Switching behavior is important to the context as the buyer and the consumer are not the same. Thus while the buyer is seen to not be aware of the brands of health food drinks upon the point of entry and also displays information seeking behavior from POP he does not display high levels of switching behavior. This is because the purchase decision with regards to the brand to be purchased has already been made before the buyer has actually entered the store. Thus buyers do not look to reevaluate their decision even when they do come across new data in the store.

Influence of different POP Material

The highest impact is shown by promotions. During the months of January and February Bournvita had introduced a special trial pack of 80Gm and this clearly had a high recall value with the buyers. What the buyers also noticed was the separate stocking of the products and this attracted their attention. While shelf strips had some value they were noticed by less than half the people who purchased the product in spite of both Bournvita and Horlicks having shelf strips at both the stores under consideration. This shows their low efficacy and ways should be found to improve this.

Impulse purchases


Level of purchase intention

In the case of impulse purchasing the level of purchase intention may not be very high at the time that the customer entering the store. This is because the customer may not have intended to purchase the product but being an impulse purchase the customer may purchase it purely out of a sudden desire for consumption of the product and the access to it.

In the case of chips it is seen that 84% of the time the customer has entered the store having already planned to go shopping. Over 80% of the prospective customers enter with a list, however interesting for marketers is the fact that only 64% of the time do chips feature on the list of things that they had planned to purchase while at the store. This shows that only after coming across the chips at the store does the customer consider purchasing them.

Impact of place of purchase

Most respondents stated that they usually purchased their chips from the local kirana store. This goes to show that even a category such as chips is usually purchased after the customer has realized in advance that he does have a desire for consumption and it is not an on the spot purchase. 22% of the respondents stated that they buy different chips from the kirana store and from a modern trade outlet. This is where POP material and things such as separate stocking schemes and other promotions become important. This shows the importance of these factors and how they affect the purchase made by the customer. At the kirana store the customer has already decided the variant the wishes to purchase whereas in the case of modern trade he has access to a wider variety of products all of which he can see and examine. He is also exposed to promotions which were absent earlier and this affects his purchase decision.

Purchase behaviors

The purchase behavior for chips is such that even though it is largely an impulse purchase it is not bought solely for self consumption. In this case 42% of the respondents stated that they bought more than two packets of chips at any given point of time. The reasons for this are the facts that Lay's has been running a promotional scheme which offers discounts if 3 or more packets of chips are bought together. With this scheme running respondents bought the pack where the discount was being offered.

Frequency of purchase

The efficacy of POP material is brought to the fore by the fact that 24% of the respondents stated that they bought at least one packet of chips each time they visited a modern trade outlet. This shows the impact that the display and the POP had on the consumer whose purchasing went up significantly when compared to kirana stores. The remaining respondents bought occasionally on visiting the store. All respondents stated that they had at some pint of time in their shopping bought chips without having intended to buy them while at the store.

Reasons for purchase

Thus it is seen that maximum purchases occur when the consumer has a sudden desire for consumption of the chips. Planned purchases also play a role in the purchase, however visibility of POP material such as posters and flyers in store is low in the mind of the consumer. Offers and promotions are more noticeable and have a greater impact on their purchasing behavior.

POP material noticed

Over 90% of the consumers noticed that chips had been stocked at the checkout counter. This however did not convert into a proportionate number of sales with only 18% of the total buyers buying chips from the checkout counter. The remaining went to the stacks in the store and purchased chips. Separate stocking and promotions were also heavily noticed and it appears that companies would do well to use these as influencers in order to promote impulse purchasing.


Level of purchase intention

In the case of chocolates it is seen that the majority of the people treat their entry into the store as a planned visit. 86% of the respondents stated that they had planned to enter the store a large number stated that they had entered with a shopping list and over 75% said that at the time of entering the store they had already decided to purchase some chocolates. Thus actually seeing the chocolates was a driver for about one fourth of the sales that occurred at the store.

Impact of place of purchase

Over 80% of the respondents stated that they usually purchased their chocolates from the local kirana store. Thus modern trade has only a small pie of the total share of chocolate trade. Importantly a large number of the respondents stated that they bought different chocolates from the kirana store and from the modern trade outlet. This is because of the wider variety of products available and also the types of chocolates available being different. Modern trade sold different chocolates in terms of selling gift packs which respondents stated that they did not purchase from kirana stores. At the kirana store the customer has already decided the variant the wishes to purchase whereas in the case of modern trade he has access to a wider variety of products all of which he can see and examine. He is also exposed to a wider range of chocolates which were absent earlier and this affects his purchase decision.

Purchase behaviors

While purchasing chocolates from a modern trade outlet it is seen that only one quarter of all purchases are that of a single bar which may be regarded solely for the purpose of personal consumption. Over half the sample bought several packs of chocolates which may be regarded for take home purposes. This is the segment which can be impacted by the presence of POP material as they are making the purchase decision for others without having full awareness in a large number of cases as to their choice. Thus POP material has an effective opportunity to influence them.

Frequency of purchase

18% of the respondents stated that they purchased chocolates on every visit to the store. Thus they were aware of most of the brands of chocolates available at the store and knew what they were looking for. The remainder were occasional purchasers and so looked around to fond exactly what they wanted and were influenced more by the presence of the POP material at the store. All respondents stated that they had at some pint of time in their shopping bought chips without having intended to buy them while at the store.

Reasons for purchase

As can be seen from the above graph the majority of the buyers had a sudden desire for consumption of chocolate before the point of entry or while at the store. A few had planned to purchase these chocolates well in advance and so for them it was a planned shopping experience. The impact of offers and promotions and that of visibility tactics such as posters in the store was low with most respondents not remembering seeing these

POP material noticed

Most people saw the chocolates at the checkout counter but as with the previous case of chips this did not have a very high rate of conversion. This is because a wider variety of chocolates are available at the stacks in the store and people prefer to look at the entire range before purchasing. Separate stocking was noticed next and finally shelf strips and discounts which were given about equal weight age in terms of the number of people who noticed them.


Level of purchase intention

The majority of the respondents stated that they had entered the store after having planned to do so in advance. Most of them entered with a list and over 75% stated that they had beverages on their list at the time of entering the store.

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