Introduction

Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and around
eight per cent of the employment. Retail sector is one of India's fastest growing sectors with a 5
per cent compounded annual growth rate. India's huge middle class base and its untapped retail
industry are key attractions for global retail giants planning to enter newer markets. Driven by
changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is
expected to grow 25 per cent annually. It is expected that retail in India could be worth US$ 175-
200 billion by 2016.

The organized retail industry in India had not evolved till the early 1990s. Until then, the
industry was dominated by the un-organized sector. It was a sellers market, with a limited
number of brands, and little choice available to customers. Lack of trained manpower, tax laws
and government regulations all discouraged the growth of organized retailing in India during that
period. Lack of consumer awareness and restrictions over entry of foreign players into the sector
also contributed to the delay in the growth of organized retailing. Foundation for organized retail
in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). Following
Pantaloon's successful venture a host of Indian business giants such as Reliance, Bharti, Birla
and others are now entering into retail sector.

A number of factors are driving India's retail market. These include: increase in the young
working population, hefty pay-packets, nuclear families in urban areas, increasing working-
women population, increase in disposable income and customer aspiration, increase in
expenditure for luxury items, and low share of organized retailing. India's retail boom is
manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer
shopping, entertainment and food all under one roof. The Indian retail industry is the fifth largest
in the world. Comprising of organized and unorganized sectors, India retail industry is one of the
fastest growing industries in India, especially over the last few years. Though initially, the retail
industry in India was mostly unorganized, however with the change of tastes and preferences of
the consumers, the industry is getting more popular these days and getting organized as well.
With growing market demand, the industry is expected to grow at a pace of 25-30% annually.
The India retail industry is expected to grow from Rs. 800,000 crore in 2008-09 to Rs. 130,000
crore by the year 2015.

Growth of Indian Retail

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India
retail industry is the most promising emerging market for investment. In 2007, the retail trade in
India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose
to 12%. It is also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is expected to grow to US$
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700 billion by 2010. By the same time, the organized sector will be 20% of the total market
share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of the total
retail market.

Some Major Retailers in India

Pantaloon
Pantaloon is one of the biggest retailers in India with more than 450 stores across the country.
Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the
country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year
2010. In 2001, Pantaloon launched country's first hypermarket ‘Big Bazaar’. It has the following
retail segments:

• Food & Grocery: Big Bazaar, Food Bazaar

• Home Solutions: Hometown, Furniture Bazaar, Collection-i
• Consumer Electronics: e-zone
• Shoes: Shoe Factory
• Books, Music & Gifts: Depot
• Health & Beauty Care: Star, Sitara
• E-tailing: Futurebazaar.com
• Entertainment: Bowling Co.

Tata Group

Tata group is another major player in Indian retail industry with its subsidiary Trent, which
operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book
and music retailer in India ‘Landmark’ in 2005. Trent owns over 4 lakh sq. ft retail space across
the country.

RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it came into food &
grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and
beauty care outlets ‘Health & Glow’.

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh
stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to
reach Rs. 90,000 crores by 2010.

AV Birla Group

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AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe,
Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments
of retail. It will invest Rs. 8000-9000 crores by 2010.

Retail formats in India

• Hypermarts/supermarkets: large self-servicing outlets offering products from a variety

of categories
• Mom-and-pop stores: they are family owned business catering to small sections; they
are individually handled retail outlets and have a personal touch.
• Departmental stores: are general retail merchandisers offering quality products and
services.
• Convenience stores: are located in residential areas with slightly higher prices goods due
to the convenience offered.
• Shopping malls: the biggest form of retail in India, malls offers customers a mix of all
types of products and services including entertainment and food under a single roof.
• E-trailers: are retailers providing online buying and selling of products and services.
• Discount stores: these are factory outlets that give discount on the MRP.
• Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and
other small items can be bought via vending machine.
• Category killers: small specialty stores that offer a variety of categories. They are known
as category killers as they focus on specific categories, such as electronics and sporting
goods. This is also known as Multi Brand Outlets or MBO's.
• Specialty stores: are retail chains dealing in specific categories and provide deep
assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of
examples.

Challenges facing Indian retail industry

• The tax structure in India favors small retail business
• Lack of adequate infrastructure facilities
• High cost of real estate
• Dissimilarity in consumer groups
• Restrictions in Foreign Direct Investment
• Shortage of retail study options
• Shortage of trained manpower
• Low retail management skill

The Future

The retail industry in India is currently growing at a great pace and is expected to go up to US$
833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a
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CAGR of 10%. As the country has got a high growth rates, the consumer spending has also gone
up and is also expected to go up further in the future. In the last four year, the consumer spending
in India climbed up to 75%. As a result, the India retail industry is expected to grow further in
the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of
40%.

Definition of Private Label

PLs-are defined as the “products owned and branded by the organizations whose primary
objective is distribution rather than production” PLs, also called own labels, can also be defined
as “any products over which a retailer has exercised total sourcing and market control”.

In other words Brand owned not by a manufacturer or producer but by a retailer or supplier who
gets its goods made by a contract manufacturer under its own label

According to the Private Label Manufacturers’ Association (PLMA), “Private label products
encompass all merchandise sold under a retailer’s brand. That brand can be the retailer’s own
name or a name created exclusively by that retailer.

Types of Private Label

 Store brands - The retailer's name is very evident on the packaging.

 Store sub-brands - Products where the retailer's name is low-key on the

packaging.

 Umbrella branding - A generic brand, independent from the name of the retailer.

Why Private Labels Matter

Private labels matter for several reasons, the most important of which is their higher
margins. For retailers, gross margins on private labels are, on average, 25% to 30%
higher than on those of manufacturer brands. In consumer products especially, retailers'
margins on national brands are in the 12% to 17% range, which is not enough to offset
the cost of modern trade overhead. With a house brand, the margin can be upward of
40%. From the retailers' point of view, the urgency is obviously because of margin play."

Some private labels of easy day

Great Value brand which offers tea, local snacks, ketchup, dish-washing bars, and toilet and
glass cleaners.
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 George is a brand of more formal clothing for men, women and children. It also consists of
dress shoes, wallets, belts, and neckties.

White Stag is a brand for women's clothing, footwear, and basic jewelry.

Parent's Choice is the Walmart store brand for baby products, including food, diapers, formula,
and accessories.

Equate is a brand used for consumable pharmacy and health and beauty items, such as shaving
cream, skin lotion, over-the-counter medications, and pregnancy tests.

Sam's Choice, originally introduced as Sam's American Choice in 1991, is premium retail
brand in food and selected hard goods

Ol' Roy is Walmart's store brand of dog food. Its namesake comes from Sam Walton's bird dog,
and has become the number-one selling brand of dog food in the United States

Faded Glory is a brand for basic men's, women's, and children's clothing and footwear. It is
Walmart's primary clothing brand.

Jesse James Industrial Workwear is a brand of men's work clothing, named for the motorcycle
builder Jesse James.

No Boundaries, usually abbreviated as NOBO, is a line of apparel targeted at teenagers and

young college students.

Simply Basic was previously a brand used for health and beauty items, but is now used primarily
for women's sleepwear.

Some private labels of Big Bazar

Tasty Treat consist noodles, pasta, vermicelli, soups, namkeens, chips, toast, khari,
papads, jams, pickles, carbonated drinks, ketchup and fruit beverages under the brand. It has
now added breakfast cereals to the range.

Premium Harvest in commodities

Fresh & Pure in dairy

John Miller in men's grooming category with deodorants

Clean Mate in home-care

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Caremate in personal hygiene

Ektaa in community foods

Sach in oral care

Need
To study the factors which affect the changing behavior of customer in retail stores in
Jallandhar. And also to study the factors that attract the customers towards private labels.

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Scope
• If the suggestions are taken care of and are followed in a proper manner, the in-store
brand retailers are going to get benefit in attaining and maximizing its organizational
objectives.

• In this report I will restrict myself to factors that affect consumer behavior in respect to
Big Bazar & Easy Day.

Objective
• To understand the factor on which consumer evaluate private label brands in respect to
Big bazar & Easy day.

• To understand the attitude of consumer toward private label in Jalandhar.

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Review of literature
Katrina Ellis, Mark D. Uncles (1991) studied and observed that the role of private labels in
consumer choice can be studied by considering two issues: do private labels affect the way
people buy within a store, and do they affect the way people choose between stores? Some
examples are presented which show that within a store, the way consumers buy private labels is
similar to the way they buy brands, and that for the buying of a product at different stores,
consumers patronize stores with private labels in much the same way as stores without them.

Diane Halstead(1995) stated that Private label brands may be in danger as a result of recent
changes in the marketing strategies used by private label firms. The primary competitive
advantage of private label brands, good quality at low prices, may be lost if private label firms
continue to modify and expand how their brands are marketed. Specifically, changes in private
label brands' advertising, packaging, sales promotion, and product improvement strategies
indicate that private label brands are moving closer than ever to manufacturer brand status. To
the extent that these changes result in higher average retail prices and/or lower gross margins for
retailers, the advantages of private brands to both consumers and distributors will diminish,
illustrating that the historical “wheel of retailing” hypothesis may be applicable to private label
brands. Investigates the aforementioned trends and provides suggestions for manufacturers and
retailers for future brand management strategies.

Richard R. Brand & Joseph (1997) In this study the relationship between consumer-specific
constructs and the size of consumer retail choice sets for four different types of retailers:
convenience/quick-stop stores, fast-food outlets, health clubs and medical services. Includes in
the analysis consumer experience, product class importance, brand-decision importance,
perceived risk, brand loyalty and demographics as predictors of the size of awareness,
consideration/evoked and reconsideration set sizes. Find that when comparing physical goods as
opposed to service providers, the size of retail choice sets differs significantly and that consumer
experience and reseller loyalty are important predictors of choice set size.

Jonathan Schneide(2002) his study suggested that Because private label products are less
expensive, one might be tempted to think of them as a lower quality alternative. Indeed early
ventures in private labeling yielded inconsistent quality and tarnished the overall image of a
private label concept. Retailers found that consumers, faced with uncertainty, weren’t going to
experiment with a non-brand name item. A large part of growing the private label market
involved improving the product’s quality.

ACNielsen’s (2005) this study show that private-label products were “meant for people on tight
budgets who can’t afford the best brands,” a global average of 34% agreed. Asian consumers
(46%) were mostly likely to agree while North American consumers (20%) were least likely. As
competition intensifies for shelf space in stores, the perceived quality gap is narrowing between
private label and national brands. ACNielsen noted that retailers are improving the quality of
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their store-brand packaging, and there’s also evidence that some retailers are requesting more
attractive packaging from consumer goods companies to help increase sales.

Jorge Tarzijan(2007) studied and stated that national brand manufacturer' gains from producing
private labels are increasing with the concentration of the retail market. Another implication
derived that national brand manufacturers should be more enthusiastic about producing private
labels when independent manufacturers may produce a good whose perceived quality is closer to
that of the national brand.

Julian Ming-Sung Cheng(2007) stated that t on the whole national brands were perceived as
significantly superior to international private labels, while international private labels were
perceived as being superior to local private labels in terms of all perceptions except price
perception. The findings also revealed that product categories moderated price and brand
personality perceptions across the three brand types, while product categories failed to moderate
the effect of the three brands types on quality and brand leadership perceptions.

Ailawadi(2008). This study show that One way of ensuring better margins on merchandise sold
is by offering store brands also known as private labels (PLs). In addition to better margins, PLs
also give retailers greater control over the supply chain; negotiating leverage with national brand
(NB) manufacturers; opportunities for niche marketing; opportunities for launching new
innovative products; and a platform for building store loyalty. However managing PLs is a very
complicated & strategically very critical function. PLs need to be managed very professionally.

Uday khanna (2008).This article tell us about the forign & Indian context of private label brands
& also highlighting advantages & disadvantages of private label brands. And some of the factors
that attract coustomer toward retail store.

Jenni romanuk(2008) In his article stated that Companies are interested in consumer
behaviour because they can develop marketing strategies to influence consumers to
purchase their products based on consumer analysis. The success of a company’s
marketing strategy will depend on how buyers react to it. To find out what satisfied
customers, marketers must examine the main influences on what, where, when and
how customers buy goods and services. By understanding these factors better,
marketers are better able to predict how consumers will respond to marketing
strategies. Ultimately, this information helps companies compete more effectively in the
marketplace and leads to more satisfied customers.

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Dr. Pankaj Madan(2009) study show that the changes, trends & future prospects occurring in
the retail industry. Retailing is becoming a buzzword in the current market scenario. It is
undergoing a sea change with the emergence of new topologies like hypermarkets, supermarkets,
superstores, malls, e-retailing & others. The gradual shift in the demographics of the Indian
customers gives an opportunity to the retailers to showcase their energy and charisma. The ever
increasing per capita income & the growing purchasing power give a wider room to the
consumers in terms of availability, convenience, experience & choice.

Amelia Yuen Shan Au-Yeung & Jessica Lu(2009) The purpose of this paper is to establish an
understanding of the development of retailers views on own label in Taiwan. In particular the
study aims to investigate the extent to which the development of retailers own label in the region
resembles or differs from the historical development of that in the west as documented in
literature.

Magda Nenycz-Thiel(2009) studied and suggested that the perceptual categorization into private
label brands and national brands differs once private labels have been purchased. Users of
private label brands did not see them as being any less trustworthy than national brands.
However, non-users of private labels did use trust to discriminate between the two types of
brands, and tended to use negative attribute information to categorize the brands into groups.
Regardless of experience, however, private labels form a subgroup in consumers' memory, with
low price and low quality as the main drivers of this categorization.

Dr Amit Mittal (2009) His study show that benefits of the private label and the salient attributes
on which consumers evaluate both private labels (PLs) and national brands (NBs). It also tell the
attitudes of consumers towards PLs and NBs.

Hillary (2010) The purpose of this paper is to profile the private label apparel consumer using
demographic & behavioral predictors. The paper also aims to examine cross-shopping behaviors
among purchasers of private label apparel across the five top us private label apparel retailers.

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Research Methodology
Population of study
All those persons who visit these stores.

Scope of study
It is limited to Easy day and big bazaar, Jallandhar.
Sample size
Sample Size 100
Research type-:
Descriptive research

Sampling Design-:
Convenience Sampling
Data collection tools-:
Standardized Questionnaire
A particular format of questions is made and is being filled by the customer’s visiting the store.

Source of data collection

Primary data: - questionnaires & by talking to their respective store managers.

Secondary data:- journals, internet database. Data is collected from websites of both the retail
stores.

Data analyses tools

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The collected data will be analyzed keeping in view the objective of the study. Various statistical
tools that I had used depend on the data available with me.

The software that I had used to interpret the data is statistical package for social science (spss).

Factor analysis is done to find out the factors that are important which affect the consumer
perception to choose private label brands.

Finding & Analyses

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.573

Bartlett's Test of Sphericity Approx. Chi-Square

17.309

df 15

Sig. .301

Fig 1.

From this table we can see that our research is accurate & data collected by me is highly
independent . is more then .500 which shows data is independent and we can apply factor
analyses on the data.

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 Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Comp % of Cumulative % of Cumulative % of

onent Total Variance % Total Variance % Total Variance Cumulative %

1
1.437 23.953 23.953 1.437 23.953 23.953 1.299 21.652 21.652

2
1.143 19.043 42.997 1.143 19.043 42.997 1.174 19.560 41.212

3
1.032 17.196 60.193 1.032 17.196 60.193 1.139 18.981 60.193

4
.911 15.181 75.373

5
.814 13.560 88.934

6
.664 11.066 100.000

Extraction Method: Principal Component

Analysis.

Fig 2.
Fig 2 shows that the 1st factor is contributing 23.95 to the total & factor 2 is contributing 19.04 &
factor 3 is contributing 17.20. This shows that first 2 factors are contributing around 43 & first 3
factors are contributing around 60% So I think that first three factors are enough for considering
because our three factors are targeting 60% of consumer decision making.
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 Fig 3.

Eigen value show us that how much variability is there. Eigen value more than 1 consider
important. This screen plot shows there are three factors that are most important & should be
consider.

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 Rotated Component Matrixa

Component

1 2 3

stores_own_labeled_produccts_include_least_variety
.123 .672 .291

quality_of_stores_own_brands_is_better_than_others
-.053 -.050 .909

stores_own_brands_are_relatively_inexpensive_than_na
tinal_brands .764 -.192 -.042

i_like_to_purchase_a_product_if_its_store_own_brand
.525 .194 .389

more_discontoffers_found_on_store_own_brand
.649 .182 -.052

Does_price_affect_your_buying_decision
-.027 .783 -.267

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 5 iterations.

Fig 4.
Interpretation

Table 4 show that there are basically two factors that affect consumers towards private label.
Factor 1
This includes factors like
1. More discounts found on store own brand
2. Stores own brands are relatively inexpensive than natinal brands
This shows us that the customers think that the retail stores offer more discounts on there private
label brands or the store owned brands i.e. store owned brands are much cheaper than the
national brands.
Factor 2
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 1. Quality of stores own brands is better than others
2. I like to purchase a product if its store own brand

This shows us that the sales of the private label brands totally depend on there quality hence the
retailers should focus on the quality of there private label brands to increase the sales.

Factor 3
1.price affect ur decision
2. stores own labeled products include least variety

The customer perception about the private label brands is that these brands are much cheaper
than the national brands . customer buy private label because of low prices.

After analyzing this we can say that there are different factors that affect the behavior of different
consumers at different times. Through factor analysis, it has been found out that there are mainly
three factors that affect the behavior viz. quality, discounts and price.

FINDINGS:

• Quality of the product. If the quality is good the consumer will definitely buy the
product ignoring the point of price and label.

• Discounts given along with the product also determine the chances of choosing
the private label brands because the offers attract the consumers to buy the
products.

• Price is the most important factor that is given preference by most of the
consumers to buy any product.

Suggestions:
 Retailers should focus on quality of their private labels to attract more customers. Private
label manufactures must not compromise with the product quality in order to find the cost
cutting saving.

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  Retailers should promote their private label brands with the help of attractive
advertisements and offers. This will increase the awareness in customers and hence will
increase the demand of their products.

 Retailers should focus on visibility of their own private labels inside the stores.

 Retailers should provide information of their private labels to the employees so that they
can guide the customer to buy the products.

References
Journals

Aliwadi,& K.L.(2008), “private label use & store loyality,”vol.13,pp19-30

Amelia yuen shan Au-Yuang & Jessica Lu(2009)development of retailers own labels products
Vol.21 issue :4page540-554

Batra & R.sinha(2000), consumer-level factors moderating the success of private label brnds.
Jornal of retailing Vol.76,no.2,pp175-191
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Dr. amit mittal(2009)benefits of private labela Vol.3,no.34,pp145-178

Diane halsteat,cherylb.Ward(1995)accesing the vulnerability of private label brand,Vol.4 issue

3pp38-48

Halstead Diane (1995), Journal of Product & Brand Management Volume: 4 Issue: 3
J.thomas Gomez-arias & Laurentino Bello-Acebron(2008)why do leading brand manufacturers
supply private labels? Vol.23,issue-4 pp273-278

Jorge Tarzijan(1999)Should national brand manufacturers produce private labels?,emrald group

publishing limited, vol.16,no 6,page 368-376

Julian ming-sung(2007)journal of product & brand managent, Emrald group publishing limited
Vol.16,no 6, page 368-376

Katrina Ellis & Mark d uncles(1991) British food journal, mcb up ltd, Vol 93, no. 9, page 41-49

Magdnenycz-thiel & jenni Romaniuk(2009) journal of product & brand management , emrald
group publishing ltd., vol 18,no4 page 251-261

Marguerite moore & Jason M.Carpenter(2010) a decision tree approach to modeling the private
label apparel consumer Vol 28 issue1 page 59-69

Website

http://www.brandchannel.com/features_effect.asp?pf_id.=94

http://www.findarticles.com/p/articles/mi_34092/is_n20_v29/ai _9053516/

http://www.knowledge.whaton.up.edu/india/article.cfm?articleid=44432

http://www.shelfimpact.com/archives/2010/01/chase_your_customer_not ur_c.php

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