Chapter 1: Introduction

During the last few years organized retail has gained significant importance in India. After the
infotech phenomena, India is witnessing retailing revolution. (N.Rao 2002).Retail business in
India is rapidly evolving with the spending capacity of Indian consumers growing at
unprecedented rates. Modern retail has seen the emergence of sprawling shopping centers
offering exclusive shopping, entertainment and food all under one roof. Families across
different socio economic classes in India are lured by global and local retailers to buy
products and services. The new rules of marketing are redefining business strategies in
connecting with consumers. Cut throat competition forcing retailers to come up with most
marketable product innovations which are acceptable at consumer level. With growing
number of retailers selling similar products, customers expect unmatchable shopping
experience and unique product from each retailer. Customer service environment forms the
heart of any retail operations. For retailers customer service elements are those associated
with store environment and delivery systems, including role of employees. It starts with every
step of retailing, how consumers buy, where they buy, what they buy, when they buy and why
they buy. A retailer has to be proactive in serving the consumer before consumer arrive at the
store. Thus planning for setting customer service standards and elements starts well before
consumer comes for shopping. How effectively the product is offered to the consumer is very
important in retailing. The efficiency of entire service environment not only deals with service
provided at the time of shopping but it starts before consumer enters the retail outlet and it
continues even after final purchases made.Serving with accountability has become critical
success factor in consumer driven markets.Business of retailing is greatly affected by the
patronage behavioral orientations of shoppers. Understanding these orientations can help
retailers to implement service environment catering to needs and wants of customers.
Customer focused retail servicescape is a critical touch point driving positive shopping
experience. If a consumer wants to buy cosmetics he /she has the option to purchase it from
specialty store, department store, supermarket, hypermarket, beauty service providers and
traditional retailers engaged in selling cosmetics. Considering all these retailers they differ in
terms of offering shopping experience and product specifications.

The purpose of this research is to determine the influence of store servicescape or customer
service environment on buying behavior of women cosmetics consumers in organized retail
stores. More specifically, an attempt has been made to understand impact of various

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servicescape dimensions towards overall shopping experience and resulting buying behavior
outcomes at select department stores, and specialty stores selling cosmetics in Pune city.

1.1 Significance of the study:

A study of consumer buying behavior is important for several reasons as different mindsets
and distinct consumer behavioral pattern in Pune city of India will be significantly helpful in
understanding of business scenario. Research on the above topic will give in-depth analysis
into urban female consumers decision making process towards cosmetics. The relative
influence of service environment on shopping experience of urban females would be
interesting to know for the researcher to understand consumer behavior. In the effort to attract
more consumers and create excitement, giving total retail experience by elevating service
standards Pune retailers are bringing world class products into the market. This throws the
great opportunity for the researcher to study women consumer behavior towards cosmetics.
The study is also helpful for the retailers from the point of view as it can be applied in
formulating sales and customer service strategy and informing individuals about cosmetics
consumption. This research will contribute for better understanding of service environment,
and provide basis for further study.Thus this study would be helpful from academic as well as
industry point of view.
This research will examine how women consumers respond to different servicescape
attributes, whether servicescape affects their shopping experience or not. The study will
explore impact of servicescape variants on buying behavior. Furthermore, the research results
might guide marketers in designing effective and balanced retail servicescape to encourage
desirable shopping experience.

1.2 Scope of the study:

A .Geographical Scope
Geographically, this study covers women cosmetics consumers of Pune city. The scope of this
study is limited to in-store buying behavior of women consumer at select organized retail
outlets of the city. Identified sites to conduct this study are specialty stores, department
stores, hypermarkets,supermarkets located in different parts of the city.

B. Functional ScopeThe study is restricted to the analysis of only buying behavior outcomes or responseswith
respect to servicescape dimensions (service environment) of a store .The study focuses only
on women cosmetics usersand not men. Also, since the beauty and personal care industry is
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the aggregation of a wide range of product categories of cosmetics, for this project only make
up cosmetics, skin care cosmetics and hair care cosmetics and fragrances categories are taken
into consideration. Hygiene cosmetics like dental care, bath soaps and salts and baby care and
beauty services are not included in this study.

1.3 Rationales of the study:

Changing consumer needs, changes in social and economic factors, advancement in
technology and intensifying market competition are factors forcing retailers to improve
service standards while selling products and services. The successful store service
environment focuses on understanding the needs and desires of the customers. Launching
point for each retail process is service delivery, so streamlining retail operations for attracting,
interacting and engaging consumers has become very important.

The focus of this project is to study the cosmetics purchase behavior of women consumers
and the shopping experience influencers. Advent of modern retail formats in Pune has
changed the way people shop. Major retail hubs such as Nucleus mall, Kumar pacific,
Amanora shopping center, Inorbit mall, and Phoenix market city and many more are housing
different department stores, hypermarkets, supermarkets and specialty stores selling
cosmetics. Women in IT city Pune are shopping for cosmetics in these stores are an
explanation of increasing number of retailers popping up everywhere. The shift from
transaction marketing to experiential marketing has been the effect of changing consumer
behavior.

1.4 Key research issues:

The researcher attempts to understand what are the key servicescape factors involved in
influencing women consumers buying behavior of cosmetics?
The focus of the study will remain on

Understanding servicescape dimensions such as store ambience, design, sales consultants,

merchandise, and in store sales promotion and convenience, of retail outlets.

The buying behavior of women consumers while shopping cosmetics.

1.5Research objectives:
To determine the relative influence of service environment cues on shopping experience and
resulting purchasing intent following objectives were designed.
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1. To know the influence of total store servicescape on buying behavior.

2. To know whether demographic characteristics have significant difference for
perceived servicescape dimensions.

1.6Assumptions:
Attempt has been made in this study to include stores selling cosmetics (department stores
and specialty stores, supermarkets and hypermarkets) located in malls which offer different
services. For example in department stores cosmetics company specific counters are handled
by specially trained beauty consultants. Whereas in specialty stores trained beauty consultants
handle different product categories of same brand. The servicescape variables identified for
this study are common across different store formats. But in reality it is not possible that all
the stores are alike in terms of selling products and offering associated services.

1.7 Pune City

In the past 4-5 years Pune city has undergone complete makeover of its retail sector. Medium
to large format malls have forayed in the Pune market. The traditional shopping destinations
such as Laxmi road, M.G.road, J.M.road, F.C.road, Boat Club road are house to many
unorganized retailers as well as new organized retail formats. However with Punes growth in
a real estate sector in all directions of the city, newer residential pockets like Baner,
Hinjewadi, Kalyani Nagar, Yerwada,Nagar road, Bavdhan, Magarpatta city, Kharadi are the
hub for new shopping malls.

Suburban locations of Pune city like Yerwada Kalyani Nagar in the northeast ,Warje in the
southwest, Aundh in northwest, SenapatiBapatMarg and Bund Garden road central locations
have witnessed considerable organized retail developments. Punes software and BPO
industry have propelled investment in retail infrastructure including the development of
shopping malls.World class quality products offered with elevated service standards are in
high demand in Pune market. Economic growth of population and infrastructure
improvements in Pune is reflecting the current and future attractiveness of the target market
for sellers.

Previously, Puneites were considered as very traditional, conservative and price-conscious

buyers who would shop at convenient locations like Laxmi Road. However with changing
lifestyles, higher disposable incomes coupled with greater affordability have been
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instrumental in bringing about a drastic change in Punes consumer behavior pattern. Todays
Puneites are more cosmopolitan, progressive and willing to experiment, showing appetite for
big brands. (Malla R.2012).

1.8 Organization of the thesis:

First chapter begins with introduction of research study, relevant and specific introductions of
retail industry and cosmetics industry.

A conceptual framework of store servicescape developed by Mary Jo Bitner was adapted for
this research. To that additional element of service environment such as convenience
attributes, merchandise attributes and promotional attributes were added to study consumers
buying responses. In Chapter 2 the review of retail industry and cosmetics industry give
insights about importance and need to study these sectors. Chapter 3, the review of literature
includes an overview of existent literature on servicescape, shopping experience and
consumer buying behavior. Chapter 4 discusses research methodology followed for this study.
Chapter 5 presents in analyses and detail findings from the study. The summary of results and
conclusions that can be drawn from this research is presented in chapter 6, and finally,
limitations and future scope for research is discussed in chapter 7.

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