A study of the perception of mall shoppers in the city of Kolkata, India

1. A study of the perception of mall shoppers in the
city of Kolkata, India
Present affiliation of Authors
Dr. Atish Chattopadhyay
Professor of Marketing, SPJIMR, India
atishc@spjimr.org
And
Dr. Kalyan Sengupta
Professor of IT and Systems, IISW&BM, Kolkata, India
kalyansen2002@yahoo.co.uk
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2. 1. Introduction
The retailing industry in India, estimated at INR 930,000 crores (2003-04) is expected to
grow at 5 percent per annum. The size of the organized retail market in 2004 stood at
INR 28,000 crores, there by making up a mere 3 percent of the total market. The retail
revolution in India has provided a much wider range and depth of products for the Indian
consumers along with a choice of retail destination that reflect global formats. The late
1990s witnessed the proliferation of well endowed modern malls which caused the older
shopping destinations to move down the scale. Shopping malls have now become the
visible face of Indian retail. There are over two hundred malls in planning or under
construction stage throughout India. Over 35-40 million square ft. of new retail space
may come to the market in the next 12-24 months (including re-developments) in over 50
cities across the country. Further, by 2010, 500-600 malls occupying approx 120 million
square ft. are at various stages of planning at this point in time. Indian retailing have
witnessed fundamental shifts in the shopping behavior of customers (India Retail Report,
2005).
United States which has been a fore runner in the evolution of the organized retailing
witnessed the emergence of malls in the 1950s. In 1960s, Express highways took
organized retail to smaller town in US like the Wal-Mart (1962) and Gap (1969). In
1970s value retail chains gained prominence and competition dictated the course in the
US. This was the period when growth of retail gained at the expense of competition and
volumes became the name of the game. The 1980s saw retail developments in the US in
two distinct fronts – Off-price retailing as compared to Mega Malls with unique shopping
experience. It may be noted that the evolution of organized retail may hold certain
lessons for retailers in developing economies like India.
With the imminent opening of the retail sector by the Government of India and easing of
FDI norms, global retailers like Wal-Mart, Carrefour, Tesco and Home Depot will in all
probability enter India. “The battle with Wal-Mart is not about money, or low prices, but
for the mind space of customers” says Kishore Biyani of Pantaloons, India (Dasgupta,
2005). Experts opine that right positioning will be the key to success of shopping malls
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3. in India in the face of increased competition. The paper aims to study the existing
customer perception of the shopping centers of in the city of Kolkata, India.
2. Background Literature
Consumers today have a growing choice of shopping destination which includes
freestanding stores, retail parks, malls, specialty and festival centers, and ancillary
retailing (Guy, 1994), as well as an increasing variety of home shopping by mail,
computer, television and telephone. Shopping centers can no longer rely on a captive
market, and there is an increasing need for centers to compete and to market themselves
effectively.
Since the early – 1990s the need for effective marketing of shopping centers has been
brought into sharp focus. In extreme cases, some shopping mall schemes have required
repositioning or conversion to other land uses (Houlder, 1992). Some American mall
operators have been accused of marketing myopia (Turchiano, 1990) and centers have
been urged to strive for market dominance as never before (Gruen, 1993). Shopping
centers need to plan for the newly competitive environment.
Definition of “shopping centers” focus on their fundamental differences compared to
traditional high street retail locations – i.e. planned developments that are managed and
marketed as a unified whole (Guy, 1994). Often implicit is the suggestion that shopping
centers are coherently and proactively marketed, and that centers typically have a strong
marketing profile (Guy, 1994). However, many studies have pointed out the noticeable
lack of marketing orientation among shopping centers (e.g. Cooke, 1993). Howard
(1995) blames the property management emphasis in the industry and there is also
confusion as to what marketing actually means in the context of shopping centers.
The marketing task for managed shopping centers may be viewed as offering of a service
for targeted consumers to gain convenient access to a desirable mix of retailers within the
managed environment that provides a satisfying and safe shopping and leisure experience
(Kirkup and Rafiq, 1999). This definition differentiates “managed shopping centers”
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4. from other forms of shopping destinations like High Streets, Department Stores, home
Shopping etc. The marketing task for shopping centers includes major decisions to be
made prior to the opening of the center – relating to design of the center, location and
market positioning.
There exist a range of studies on the design and development process (e.g. Dawson,
1983; Beddington, 1991), center success and failure factors (e.g. Ordway et al., 1988),
occupancy dynamics (Kirkup and Rafiq, 1994a), and discussions on particular aspects of
shopping center management such as tenant relationships and their implications for
management. However, little research has been undertaken on the marketing issues with
respect to shopping centers.
The current research addresses the issue of understanding the shopper’s needs and
perceptions, so that shopping center managers can meet today’s market challenges
effectively.
3. Methodology
The research was carried out empirically by using a number of shopping centers of
similar nature. Our approach was comparative in nature. The steps adopted in our study
were (1) identification of the shopping centers under study and their profile (2) customer
survey to measure perception of the shopping centers (3) interpretation of marketing
strategies of shopping centers in the light of the perception of shoppers.
In step 1, we looked for a group of shopping centers in the city of Kolkata, which were
important in terms of growth and opportunity. In step 2 we were concerned about the
shopper’s perception with respect to the shopping centers. For this purpose, a customer
survey was conducted. A questionnaire was designed for the purpose of extracting
information on the following – (1) customer characteristics of respondents (2) General
characteristics of the shopping centers (3) Ratings of a number of selected parameters to
evaluate customer’s perception on a five point scale. Also, level of importance for such
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5. individual parameter was collected on a five point scale. The overall quality factors in our
case were derived through factor analysis technique.
As mentioned earlier, with the imminent opening of the retail sector by the Government
of India and easing of FDI norms, shoppers’ perception may be critical for success.
Thus, it was important to study present perception of shoppers of the shopping centers in
India. A set of prominent shopping centers in the city of Kolkata were chosen, namely 22
Camac Street, Forum, Vardaan, New Market, Metro Plaza, City Center and Metropolitan
(abbreviated names CS, Frm, Vdn, NM, MP, CC, Mpol).
Typical marketing strategies of the shopping centers were studied through case study
method. The case studies were developed based on business reports and direct interviews
with top level managers/owners of the firms based on their perception of the target
segment and competition. Also, the shopping centers were studied by way of visits,
collection of catalogs, promotional materials like advertisements etc.
The consumer survey was based on simple random sampling. Target population was
those who visited the shopping centers in the city of Kolkata. The study was based on
data collected in 2005 through a sample survey which included respondents’
demographic attributes, shopping motivations, situational factors and purchase behaviors.
The sample frame consisted of existing large shopping malls where customers were
interviewed as they left the centers. Randomized selection procedure was used whereby
interviewers walked from exit door to exit door consecutively, approaching the shopper
as he or she exited the mall (Sudman, 1980). These respondents were approached and
from which 408 agreed to be interviewed. Finally, 389 respondents filled in the
questionnaire, which was the sample size. Through the questionnaire, an attempt was
made to gather facts about the most recent visit and perception of the shopping centers
the respondents were aware of. As far as the scale for measuring the perception of the
shopping centers was concerned, a pilot survey was conducted to identify the parameters.
In the pilot survey, a set of 16 parameters was given to respondents and only 10
parameters were found to be suitable for the purpose.
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6. 4. Result and Discussions
4.1 Profile of the Shopping Centers
Kolkata was flooded by numerous mall projects recently. Forum was promoted by
Sunsam Properties on Elgin Road, City Center in Salt Lake by Bengal Ambuja and
Metropolitan by Calcutta Metropolitan Group on the E M Bypass. The other popular
shopping centers of the city are Vardaan Market, Metro Plaza, 22 Camac Street and New
Market. New Market is the oldest and located in the heart of the city since the British Raj.
Vardaan and Metro Plaza are more of shopping complexes rather than organized malls.
Vardaan Market is a combination of small retail stores with various types of merchandise.
Metro Plaza is also developed on the same format like that of Vardaan Market and
comprises of small retail stores with very few branded retail formats. 22 Camac Street is
a combination of office complexes, eating joints and retail stores. It houses offices of
Bengal Ambuja, Glaxo Consumer Division and Ernst & Young etc. It also houses large
branded retail formats like Westside, Pantaloons and Planet M. and also Food Joints like
Pizza Hut and Grain of Salt. Most importantly 22 Camac Street is located among the
other office complexes making it a very accessible shopping location for working
executives. Metro Politan is located on the EM By-pass and houses Big Bazar as its
anchor. City Centre at Salt Lake houses a host of national as well as international branded
stores such as Shopper’s Stop, Jockey, Reebok, Wills Life Style, Planet M, C 3, KFC,
Pizza Hut etc. It is located in the heart of Salt Lake City and thereby attracts shoppers
from all locations in and around Salt Lake.
4.2 Shopper Perceptions
The survey data provided a fair amount of information on shopper perceptions of the
shopping centers. The data set was tested for reliability and was found to be satisfactory.
The respondents were asked about the shopping center from which they made their last
visit. They were also asked about their favorite shopping destination. It was observed
that approximately 30 percent of the respondents considered Forum to be their favorite
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7. shopping destination followed by 22 Camac Street which was considered favorite by
around 21 percent of the respondents. New Market was considered favorite by around 19
percent of the respondents and City Center by around 13 percent of the respondents. This
clearly demonstrates that New Market has lost its leadership as the preferred shopping
destination of Kolkata (refer to table 1).
It was further observed that around 49 percent of customers visiting Forum considered it
to be their favorite shopping destination and the figure was around 51 percent for New
Market. This clearly demonstrates that the majority of the population purchasing from
New Market still considers it to be their favorite shopping destination though its
preference among the total shopping population of Kolkata has declined considerably. It
was also interesting to note that 22 Camac Street and City Center were considered to be
their favorite shopping destination by around 45 percent and 34 percent of the shoppers
respectively. It may also be noted that Vardaan Market, Metro Plaza and Metropolitan
enjoys very poor preference amongst the shoppers at less than 10 percent (refer to table
1).
Table 1: Favorite Shopping Destination Vs. Last Shopping Center Visited
Favorite Shopping Shopping Center Last Visited
Destination CS (%) Frm (%) NM (%) MP (%) CC (%) Mpol (%) Total (%)
CS 44.8 27.0 10.8 10.9 16.4 20.0 21.2
Frm 37.9 49.2 15.4 34.4 9.0 32.7 29.3
Vdn 1.7 3.2 3.1 10.9 7.5 4.6
NM 8.6 6.3 50.8 6.3 22.4 18.2 19.1
MP 5.2 4.8 3.1 18.8 6.0 6.5
CC 1.7 6.3 10.8 9.4 34.3 12.7 12.9
Mpol 1.6 1.5 12.7 2.4
Others 1.6 6.2 9.4 3.0 3.6 4.0
Total 100 100 100 100 100 100 100
Studies were carried out to investigate why some of the shopping centers preferred by
the shoppers while others were not. Also it would be of interest to investigate the
perception of shopping destination like New Market which is no longer preferred by a
vast majority of shoppers of Kolkata.
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8. Factor analysis was performed on all the quality attributes to investigate presence of
significant factors among the attributes under study. A number of indicative attributes
were considered for this purpose. The factors considered were:
i. Value for money
ii. Location
iii. Shop décor
iv. Customer service
v. Parking facility
vi. Eating joint/café
vii. Promotional activities
viii. Loyalty program
ix. Kids corner
x. Entertainment
The respondents were asked to assess the shopping centers for each of these factors on a
rating scale. It was also assumed that each of these factors is not considered by the
shoppers to be of equal importance and only a few might be of high importance and the
rest may be of less importance. In order to accommodate these subjective variations, the
respondents were asked to indicate the level of importance attached to each of the factors.
Using the attitude data for all the shopping malls, factor analysis was performed on all the
quality attributes in order to investigate dominant factors in the systems under study.
Results of the factor analysis are illustrated in the tables 2 & 3. It was interesting to note
that all the attributes converged into only two prominent factors. These may be
interpreted as 1) overall quality and 2) locational convenience. 92 percent of the
variance could be explained by these two factors. The rotated components of these
factors, after applying Varimax method became very distinct (table 3). Only one
component, viz. location patronized for the second factor while the rest of the variables
composed the first factor – overall quality.
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9. Table 2: Total Variance Explained
Component Initial Eigen Values Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Total % of Cumulative Total % of Cumulative Total % of Cumulative
Variance % Variance % Variance %
1 6.133 76.660 76.660 6.133 76.660 76.660 6.025 75.309 75.309
2 1.256 15.695 92.356 1.256 15.695 92.356 1.364 17.046 92.356
3 0.290 3.626 95.982
4 0.243 3.041 99.022
5 0.055 0.685 99.707
6 0.023 0.293 100.000
7 -1.5E-016 -1.84E-015 100.000
8 -9.1E-016 -1.14E-014 100.000
Table 3: Rotated Component Matrixa
Component
1 2
Location 0.100 0.966
Décor 0.970 0.187
Parking Facility 0.816 -0.369
Eating Joint 0.942 -0.072
Promotion 0.922 0.339
Loyalty 0.873 0.333
Kid Centre 0.982 0.162
Entertainment 0.971 0.046
Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization
a. Rotation converged in 3 iterations
Individual factor scores for each shopping center were estimated and two scatter
diagrams were constructed with value for money as the X-axis for both (figure 1a and
1b). It may be observed in figure 1a that City Centre, Forum and 22 Camac Street are
successful in creating a perception of quality amongst the shoppers. 22 Camac Street
also enjoys a good perception in terms of Value for Money. Erstwhile leader New
Market though enjoys good position in terms of Value for Money but has lost out on
account of quality perception, explaining its reduced patronage.
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10. Figure 1a: Positioning of the Shopping Centres (Overall Quality vs. Value for
Money)
1.50000
City Centre
1.00000 Forum
Camac Street
0.50000
Overall Quality
0.00000
Metro Plaza Metropolis
-0.50000
New Market
-1.00000
Vardhan Market
-1.50000
17.00 18.00 19.00 20.00
Value for Money
Figure 1b: Positioning of the Shopping Centres (Locational Convenience vs. Value
for Money)
1.50000
Camac Street
Forum
1.00000
Vardhan Market
0.50000
Convenience
0.00000
New Market
Metro Plaza
-0.50000
Metropolis
-1.00000
City Centre
-1.50000
17.00 18.00 19.00 20.00
Value for Money
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11. Locational convenience as observed from the factor analysis is an important factor in the
choice of shopping centres / destinations. City Center has significant disadvantage in
terms of locational convenience. It is evident that 22 Camac Street and Forum scores
highly with respect to locational convenience which has played an important role in their
success. It is interesting to observe from the two positioning maps that both Forum and
22 Camac Street could create a perception of higher quality and at the same time was
conveniently located – as such they enjoyed higher shopper preference. New Market
enjoyed shopper preference on account of the perception of good Value for Money.
5. Managerial Implications
There are various ways malls can build brand. This includes combining the consistency in
terms of perception people associate with a brand with something special that makes a
mall stand out. Mall owners try to position their properties in specific ways. For example,
Forum, the first mall in Kolkata has revolutionized the concept of mall experience in the
city. It is a 2, 00,000 sq. ft mall with Shopper’s Stop as its anchor occupying around
60,000sq.ft. space spread across three floors. Forum offers a product mix of shopping,
food and entertainment. Since, it targets the premium segment it houses top-notch
designer brands. Shopper’s Stop is the anchor which provides a unique shopping
experience to customers especially those having preference towards premium priced
brands.
A mall needs to operate in a manner similar to a retail store. For example, the tenant mix
at Forum was decided at the planning stage itself. The developer decided on who the
tenants would be along with the rentals and designed the mall accordingly. The product
mix was planned right down to how much of the retail space should stock accessories,
women’s apparels, men’s formal wear, kids wear etc (Agarwal 2004).
Once product mix is decided, and the relevant shops rented out, it is up to the stores to
figure out their pricing and brand strategies. Mall developer’s need to monitor the traffic
in each section of the mall to figure out which sections were doing well, and which were
not. This is the reason why mall space is generally rented out and not sold. Overall,
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12. renting helps in controlling the deliverables- performance, service and structure of
retailers in the mall. In case of unsatisfactory performance by any retailer, the same is
replaced. This is done to maintain continuity of products sold and provide a holistic
shopping solution to each customer.
Besides deciding on the tenant rentals and product mix, a mall developer needs to plan a
format for all stores within the mall. The question to be answered here is not just ‘how
much and what?’ but also ‘where?’ Shops must be located on the basis of customer
convenience and preference, following directly from the tenant mix. Forum, for example,
houses all sports brands like Nike, Planet Sports, Adidas, and Woodland Shoes etc on the
ground floor to provide a complete range of similar products to shoppers. All
comparisons can be made on the same floor before buying a product category. Similarly,
level 1 is the fashion level for up market women, both homemakers and working with
shops like Satya Paul, Be:, Bizarre, Swarovski etc, level 2 for trendy college going
students and Level 3 comprising mostly men’s apparels and accessories. Level 4 consists
of restaurants and Inox ticket counters while the actual multiplex is on Level 6. Level 5 is
dedicated entirely to food court. The strategy behind placing the food court on a floor
between the ticket counters and movie halls is to drive the crowd towards food before and
after movie watching. Shopping and entertainment activities complement each other and
are synonymous with lifestyle.
6. Conclusion
Our findings provide marketers with a current understanding of mall shoppers and their
perceptions. It addresses the issue of how malls can leverage their particular strength and
compete more effectively by adjusting their strategies in the face of competition. It is a
crucial learning period especially for real estate developers entering into mall
development, which is the case in India. Malls need to position themselves distinctively
and develop appropriate marketing strategies by aligning their marketing mix with their
desired positioning in the face of global competition.
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13. References:
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