Reasons for increasing trend of shopping from big supermarkets in Karachi.

SUBMITTED TO:

Sir Mumtaaz Khan

31-May-10 GROUP MEMBERS:
SHAH MUHAAMAD SAAD MALEEHA MOHIUDDIN AMBREEN NIZAR SHAZIA TAJ

PROBLEM:
The aim of the study is to find out the answer to the main problem Reasons for increasing trend of shopping from big supermarkets in Karachi.

LITERATURE REVIEW:

RETAILING IN PAKISTAN:
Retailing in Pakistan, and for that matter in most of the Third World Countries, has traditionally been a small scale business, meant mainly for small and less or not educated entrepreneurs. Till late sixties, large scale retailing institutions like Super Markets, Departmental Stores and Discount Houses were unheard of in Pakistan. However, utility Store and canteen stores Department, a type of mini super markets, are functioning since the time of independence; but these stores were mutual benefit stores for service of government servants and Defense Services personnel respectively. In late sixties, in Lahore, a super market chain with the name of COOP stores was introduced. The CSD still remains a mutual benefit store but utility stores have been opened to general public. The chain of COOP store of Lahore was later taken over by Utility Stores Corporation of Pakistan. In the rural areas of Pakistan, the retailing still follows the same traditional "HUTTI' system small shops which provide very necessary daily use items to the villagers from available stores. These days almost all grocery items, cosmetics, vegetable ghee, and other essential items including shelf medicines are available on HUTTIES, but back in fifties rather till late in sixties very few items could be procured from these HUTTIES.

In the urban areas of Pakistan, almost all types of related outlets exist. The introduction of sector wise planned markets in the newly planned modern city of Islamabad the capital, gave new dimensions to modern retailing in Pakistan. Thereafter almost in all other cities and new towns of Pakistan, where a new residential locality had to be developed, special emphasis was given to plan retail markets in a proper way.

THE MAIN RETAIL URBAN OUTLETS ARE:

Small retailers Large retailers/ wholesale retail stores Department stores Super markets Utility stores Cooperative stores Medical & general stores Specialty stores Friday, Tuesday or Sunday Bazaars

SMALL RETAILERS:
These are very similar to HUTTIES found in the rural areas of the country. Normally these types of stores are located in suburbs of the cities and towns and take care of the demands and requirements of the people living in that area.

SUPER MARKETS:
A supermarket is a departmentalized food store. Pakistan entered the super market era at a time when some western European countries were moving from super market to 'Hyper mart'. The first supermarket in Pakistan was opened at Karachi in 1968. During last 27 years quite a few of them have sprung up, but most of these are more like mini super markets rather than full fledged supermarkets with intensive and extensive product mix. Even food items like meat, fresh fruits, are not available with

most of them.

ROLE OF SUPERMARKETS:
Supermarkets simply meet the needs of consumers as cost effectively as possible, while acting within the bounds of ever-extending legislation, therefore in large part their behavior simply reflects the desires of consumers and government. Larger retailers do exert significant "buyer power" which can be destructive, more carefully thought out rules on Trade Justice and allowable ethics in international trade could well reduce this. Recent consumer interest in Fair Trade has lead to a "rush to Fair Trade" by many retailers and supermarkets which is welcomed, but there is no saying whether it will last or not, as supermarkets will always be ready to throw fair trade products out of the door to replace them with products that meet the needs of the next wave of consumer interest.

Despite the low purchasing power of the majority of Pakistani consumers, multinational companies dominate sales in the household care market. This is because those consumers who do buy household care products are affluent enough to afford the goods offered by foreign multinationals, which they buy through supermarkets and hypermarkets in urban areas. The multinationals also benefit from the perceived higher quality of their goods, and the lack of domestic competitors. This is underpinned by their capacity to invest more in advertising and promotional campaigns aimed at boosting consumer awareness of their products

GLOBAL RETAILERS EYE ON PAKISTANI MARKET:

Pakistan's economy is yet in its infancy when compared to the role, scope and impact of retailing giants of the developed world. Retailing is about the economies of scale. It is not the per unit profit on merchandize, but the profit on volume and the time span within which it is made; that is at the core of

the retailing. The reasons for retailers from the developed world to set up stores in developing countries are apparent. The home turf represents mature markets where scope for expansion is restricted. While immensity of scale, size, space and number of products offered for sale are the salient features of modern retailing, the key to success lies in economies of scale in purchasing and selling the goods. For developing countries like Pakistan, retailing in the afore-depicted sense is a matter of time. With world-wide progressive applicability of the regulations and procedures of WTO, rising incomes creating urban middle class in developing countries, emergence of mass marketing retailing outlets as entirely foreign-owned or as joint-ventures with local entrepreneurs appears to be inevitable. Benefits of such retailing are immense for the consumer, with generally assured quality of products and competitiveness of prices. Retailing has the potential to be a boon for the consumers, provided state institutions act as regulators with imbibed sense of integrity. Mass consumer marketing can generate massive economic benefits both for the operator, native manufacturers of the products as well as for the consumers and social benefits for the community and the economy at large. It can be a great impetus not only for commerce but also for the manufacturing sector to observe discipline, integrity and commitment as to the standards and norms of respective products to open up foreign markets via the retailer.

CONCEPTUAL FRAME WORK:

Variables:
CONVENIENCE PRICE/VALUE FOR MONEY VARIETY AND QUALITY VIBRANT ATMOSPHERE CUSTOMER SERVICE PLEASURE & JOY FULL SHOPPING SALES PROMOTION ACTIVITIES ALL THINGS UNDER ONE ROOF LEVEL OF INCOME TIME SAVING SERVICE(COURTESY) BUYERS BUYING BEHAVIOR PEOPLES PREFERENCE OF SUPER MARKET

HYPOTHESIS:
Ho .1) At least 60% people prefer to go to supermarket as compare to retail/departmental stores. Ho .2) Shopping at Super Markets saves time. Ho .3) There is variety of goods available under one roof. Ho .4) Discounted prices give an incentive to buy in bulk. Ho .5) People prefer to go to super Markets even if its not near their place.

RESULTS:

Ho: At least 60% people prefer to go to supermarket as compare to retail/departmental stores. Ha: At least 60% people dont prefer to go to supermarket as compare to retail/departmental stores.

12 Alpha=4%=0.04 P = 0.000
One-Sample Test

Test Value = 0.6 96% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference Lower Upper

you prefer to go to super stores r departmental stores

16.267

34

.000

1.17143

1.0251

1.3178

P < Alpha Reject HO Conclusion At 4% significance level, the data provide sufficient evidence to conclude that 60% people prefer to go to supermarkets.

Ho: Shopping at Super Markets saves time.

Ha: Shopping at Super Markets doesnt save time.

12 Alpha=5%=0.05 P = 0.000

One-Sample Test

Test Value = 0.5 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference Lower Upper

saving time increases customer attention

10.045

34

.000

2.41429

1.9258

2.9027

P < Alpha Reject HO

Conclusion At 5% significance level, the data provide sufficient evidence to conclude that shopping at super markets saves time.

Ho: There is variety of goods available under one roof. Ha: There isnt variety of goods available under one roof.

12 Alpha=5%=0.05 P = 0.000

One-Sample Test

Test Value = 0.5 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference Lower Upper

what sort of benefits u get from super markets

12.007

34

.000

2.10000

1.7446

2.4554

P < Alpha Reject HO Conclusion

At 5% significance level, the data provide sufficient evidence to conclude that super markets provides lots of benefits but 1 major benefit is that is provides variety of goods under one roof.

Ho: Discounted prices give an incentive to buy in bulk Ha: Discounted prices dont give an incentive to buy in bulk.

12 Alpha=5%=0.05 P = 0.000

One-Sample Test

Test Value = 0.5 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference Lower Upper

does discounted prices gives an incentive to buy in bulk?

9.564

34

.000

2.35714

1.8563

2.8580

P < Alpha Reject HO Conclusion At 5% significance level, the data provide sufficient evidence to conclude that discounted prices gives an incentive to buy in bulk.

Ho: People prefer to go to super Markets even if its not near their place Ha: People dont prefer to go to super Markets if its not near their place.

12 Alpha=5%=0.05 P = 0.000

One-Sample Test

Test Value = 0.5 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference Lower Upper

if super market is nt near ur place will u still prefer going?

8.577

34

.000

1.07143

.8176

1.3253

P < Alpha Reject HO Conclusion

At 5% significance level, the data provide sufficient evidence to conclude that people prefer to go to super markets if its not near their place.