Effects of Demonetization on Customer Buying

Behavior in FMCG Sector

DISSERTATION SUBMITTED TO COLLEGE OF MANAGEMENT & ECONOMIC

STUDIES FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF

MBA (LOGISTICS AND SUPPLY CHAIN MANAGEMENT)

Guided by:

MR. SAURABH TIWARI

Lecturer

College of Management and Economics Studies

University of Petroleum & Energy Studies
Dehradun 248 006
Submitted by:
SIDHARTH
Enrollment No:

SAP ID:

College of Management and Economic Studies

University of Petroleum and Energy Studies,
Dehradun, Uttarakhand, India
April, 2011
 CERTIFICATE

TO WHOMSOEVER IT MAY CONCERN

This is to certify that the dissertation report on Effect of Demonetization in

Customer Buying Behvaiour in FMCG Sector completed and submitted to
University of Petroleum and Energy Studies, Dehradun by (student name) in partial
fulfillment of the provisions and requirements for the award of degree of MASTER OF
BUSINESS ADMINISTRATION (LOGISTICS AND SUPPLY CHAIN MANAGEMENT), 2009-
2011 is a bonafide work carried by the scholar under my supervision and guidance.

To the best of my knowledge and belief the work has been based on
investigation made, data collected and analyzed by the scholar, and this work has
not been submitted anywhere else for any other university or institution for the
award of any degree/diploma.

Mr. Saurabh Tiwari Dated.

(Lecturer CMES)

(UPES, Dehradun)
 ACKNOWLEDGEMENT

First and foremost, I would like to thanks my respective mentor Mr. Saurabh Tiwari
(Lecturer - CMES) for his valuable guidance and encouragement throughout my
research project on Effect of Demonetization in Customer Buying Behavior in
FMCG Secotr . His expertise, enthusiasm, and dedication for work have been
constant source of motivation for me.

I would like to express my deep gratitude to University of Petroleum and

Energy Studies for extending the opportunity of undergoing the project and
providing with all necessary resources and expertise needed for completion of the
project.

I also convey special thanks to Mr. Neeraj Anand Head of Department (MBA-
Logistics and Supply Chain Management) for his extended support throughout the
project.

SIDHARTH

Enroll no.

MBA-(Logistics and Supply Chain Management)

 INTRODUCTION

On 8 November 2016, the Government of India announced the demonetization .The government
claimed that the action would curtail the shadow economy and crack down on the use of illicit
and counterfeit cash to fund illegal activity and terrorism. The sudden nature of the
announcementand the prolonged cash shortages in the weeks that followedcreated
significant disruption throughout the economy, threatening economic output. The move was
heavily criticised as poorly planned and unfair, and was met with protests, litigation, and strikes.

Prime Minister of India Narendra Modi announced the demonetization in an unscheduled live
televised address at 20:00 Indian Standard Time (IST) on 8 November. In the announcement,
Modi declared that use of all 500 and 1000 banknotes of the Mahatma Gandhi Series would
be invalid past midnight, and announced the issuance of new 500 and 2000 banknotes of
the Mahatma Gandhi New Series in exchange for the old banknotes.

The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day after the
announcement. In the days following the demonetisation, the country faced severe cash
shortages with severe detrimental effects across the economy. People seeking to exchange their
bank notes had to stand in lengthy queues, and several deaths were linked to the inconveniences
caused due to the rush to exchange cash.

Initially, the move received support from several bankers as well as from some international
commentators. It was heavily criticised by members of the opposition parties, leading to debates
in both houses of parliament and triggering organised protests against the government in several
places across India. The move is considered to have reduced the country's GDP and industrial
production. As the cash shortages grew in the weeks following the move, the demonetisation was
heavily criticised by prominent economists and by world media.
The Indian government had demonetised bank notes on two prior occasionsonce in 1946 and
then again in 1978and in both cases, the goal was to combat tax evasion by "black money"
held outside the formal economic system In 1946, the pre-independence government hoped
demonetisation would penalise Indian businesses that were concealing the fortunes amassed
supplying the Allies in World War II. In 1978, the Janata Party coalition government demonetised
banknotes of 1000, 5000 and 10,000 rupees, again in the hopes of curbing counterfeit money and
black money.

In 2012, the Central Board of Direct Taxes had recommended against demonetisation, saying in a
report that "demonetisation may not be a solution for tackling black money or economy, which is
largely held in the form of benami properties, bullion and jewellery." According to data from
income tax probes, black money holders kept only 6% or less of their wealth as cash, suggesting
that targeting this cash would not be a successful strategy.

On 28 October 2016 the total banknotes in circulation in India was 17.77

trillion (US$260 billion). In terms of value, the annual report of Reserve Bank of India (RBI) of
31 March 2016 stated that total bank notes in circulation valued to 16.42
trillion (US$240 billion) of which nearly 86% (around 14.18 trillion (US$210 billion)) were
500 and 1,000 banknotes. In terms of volume, the report stated that 24% (around 22.03
billion) of the total 90266 million (9026.6 crore) banknotes were in circulation.

In the past, the Bharatiya Janata Party (BJP) had opposed demonetisation. BJP
spokesperson Meenakshi Lekhi had said in 2014 that "The aam aurats and the aadmis (general
population), those who are illiterate and have no access to banking facilities, will be the ones to
be hit by such diversionary measures."

In June, the Government of India had devised the Income Declaration Scheme, that lasted till 30
September 2016, providing an opportunity to citizens holding black money and undeclared assets
to avoid litigation and come clean by declaring their assets, paying the tax on them and a penalty
of 45% thereafter

The plan to demonetise the 500 and 1000 bank notes began six to ten months prior, and was
kept highly confidential with only about ten people aware of it completely. The logistical
processes and preparations for printing the new 500 and 2000 bank notes began in early-May.
The cabinet was informed about the demonetisation on 8 November 2016 in a meeting called by
the Prime Minister of India Narendra Modi which was followed by Modi's public announcement
about the demonetisation in a televised address

Televised address

On 8 November 2016, Prime Minister of India Narendra Modi announced the demonetisation in
an unscheduled live televised address to the nation at 20:15 IST. In the announcement, Modi
declared circulation of all 500 and 1,000 banknotes of the Mahatma Gandhi Series as invalid
effective from the midnight of the same day, and announced the issuance of new 500
and 2,000 banknotes of the Mahatma Gandhi New Series in exchange for the old banknotes.

After Modi's announcement, the Governor of the Reserve Bank of India, Urjit Patel, and
Economic Affairs secretary, Shaktikanta Das explained in a press conference that one purpose of
the action was to fight terrorism funded by counterfeit notes. While the supply of notes of all
denominations had increased by 40 percent between 2011 and 2016, the 500 and 1,000
banknotes increased by 76 percent and 109 percent, respectively, owing to forgery. They said that
forged cash was used to fund terrorist activities against India and that the demonetisation had a
counter-terrorism purpose.

Patel also informed that the decision had been made about six months ago, and the printing of
new banknotes of denomination 500 and 2,000 had already started. However, only the top
members of the government, security agencies and the central bank were aware of the move. But
media had reported in October 2016 about the introduction of 2,000 denomination well before
the official announcement by RBI. This statement has led to much debate, because the Reserve
Bank governor six months before the announcement was Raghuram Rajan, while the new
banknotes have the signature of the newly appointed governor,

The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 was issued by the
Government of India on 28 December 2016 ceasing the liability of the government for the
banned bank notes, and also imposing a fine upto 10,000 or five times the amount of the face
value of the bank notes, whichever is higher, for people transacting with them after 8 November
2016; or holding more than ten of them after 30 December 2016. The ordinance also provided for
the exchange of the bank notes after December 30 for non-resident citizens and others on a case
by case basis.

However, Petrol, CNG and gas stations, government hospitals, railway and airline booking
counters, state-government recognised dairies and ration stores, and crematoriums were allowed
to accept the banned 500 and 1,000 bank notes until December 2, 2016.

Exchange of old notes

People gathered at ATM of Axis Bank in Mehsana, Gujarat to withdraw cash following deposit
of demonetised currency notes in bank on 15 November 2016.

The Reserve Bank of India stipulated a window of fifty days until 30 December 2016 to deposit
the demonetised banknotes as credit in bank accounts. The banknotes could also be exchanged
over the counter of bank branches upto a limit that varied over the days:

Initially, the limit was fixed at 2,000 per person from 8 to 13 November.

This limit was increased to 4,500 per person from 14 to 17 November.

The limit was reduced to 2,000 per person from 18 November.

All exchange of banknotes was abruptly stopped from 25 November 2016.

International airports were also instructed to facilitate an exchange of notes amounting to a total
value of 5,000 for foreign tourists and out-bound passengers.

Facts and figures

Up to 97% of the demonetised bank notes have been deposited into banks which have received a
total of 14.97 trillion ($220 billion) as of December 30 out of the 15.4 trillion that was
demonetised. This is against the government's initial estimate that 3 trillion would not return to
the banking system.[44]

Of the 15.4 trillion demonetised in the form of 500 and 1000 bank notes of the Mahatma
Gandhi Series, 9.2 trillion in the form of 500 and 2000 bank notes of the Mahatma Gandhi
New Series has been recirculated as of 10 January 2017, two months after the demonetisation

Cash withdrawals from bank accounts were restricted to 10,000 per day and 20,000 per week
per account from 10 to 13 November. This limit was increased to 24,000 per week from 14
November 2016.

A daily limit on withdrawals from ATMs was also imposed varying from 2,000 per day till 14
November, and 2,500 per day till 31 December. This limit was increased to 4,500 per day
from January 1, and again to 10,000 from January 16, 2017. Limits placed vide the circulars
cited above on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft
accounts stand withdrawn with immediate effect. The limits on Savings Bank accounts will
continue for the present and are under consideration for withdrawal in the near future. Limits
vide the circulars cited above placed on cash withdrawals from ATMs stand withdrawn from
February 1, 2017. However, banks may, at their discretion, have their own operating limits as
was the case before November 8, 2016, subject to 2 (ii) above.

Exceptions

Under the revised guidelines issued on 17 November 2016, families were allowed to withdraw
250,000 (2.5 lakh) for wedding expenses from one account provided it was KYC compliant.
The rules were also changed for farmers who are permitted to withdraw 25,000 per week from
their accounts against crop loans

A fortnight before the official announcement, a news report in the Hindi daily Dainik
Jagran quoting RBI sources mentioned about the coming release of new 2000 rupee note
alongside withdrawal of 500 and 1000 rupee notes. Similar news came in The Hindu Business
Line on 21 October 2016 which also mentions about coming 2000 rupee note and about possible
withdrawal of 500 and 1000 rupee notes.

A businessman reportedly admitted in an interview that he had received prior warning of the
impending demonetisation from a source in the government, and that he had sufficient time to
convert most of his money into smaller denominations.

The chairman of the State Bank of India had also openly spoken in April 2016 about the
possibility of demonetisation of 500 and 1000 notes.

A BJP MLA from Rajasthan, Bhawani Singh Rajawat, claimed in a video that
'Ambani and Adani' were informed about the demonetisation, and made arrangements. However,
he later said that it was an off-the-record conversation, and officially denied the comments

The Indian Supreme Court while hearing one among a slew of cases filed against the sudden
demonetisation decision in various courts, observed that it "appears to be carpet bombing and
not surgical strike" which government repeatedly claims it to be.

Nobel laureate Indian economist Amartya Sen, severely criticised the demonetisation move
calling it a "despotic action" among other things.

Former Senior Vice-President and Chief Economist of the World Bank, Kaushik Basu, called it a
'major mistake' and said that the 'damage' is likely to be much greater than any possible benefits.

Pronab Sen, former Chief Statistician and Planning Commission of India member, called it a
"hollow move" since it did not really address any of the purported goals of tackling black money
or fake currency.
Prabhat Patnaik, a former professor of economics at the Jawaharlal Nehru University,
Delhi called the move 'witless' and 'anti-people'. He criticised the simple way in which black
money was assumed as "a hoard of cash", saying that it would have little effect in eliminating
"black activities" while "causing much hardship to common people."

Noted economist and journalist, T. N. Ninan wrote in the Business Standard that demonetisation
'looks like a bad idea, badly executed on the basis of some half-baked notions'. Deepak
Parekh (Chairman of HDFC) had initially appreciated the decision to ban the Rs. 500 and Rs.
1000 notes, but later said that the move had derailed the economy, and expressed skepticism
about its outcome. Industrialist Rajiv Bajaj criticised the demonetisation, saying that not just the
execution, but the concept of demonetisation was wrong in itself.

Chief Ministers of several Indian states like Mamata Banerjee, Arvind Kejriwal and Pinarayi
Vijayan[ have criticised and led major protests against the decision in their states and in
parliament. Initially, the move to demonetise and try to hinder black money was appreciated, but
the manner in which it was carried out by causing hardships to common people was criticised.
A Public Interest Litigation (PIL) was filed in Madras High Court by M Seeni Ahamed, General
Secretary of the Indian National League, to scrap the decision. The High Court dismissed the PIL
stating that it could not interfere in monetary policies of the government. Similar PILs were also
filed in the Supreme Court of India.[Supreme Court of India is yet to decide on the matter. It is
listed for hearing on 2 December 2016.

Several government ministers had declared before the demonetisation that they were holding
large amounts of cash, including Arun Jaitley, who had more than 65 lakh rupees in cash. This
led to speculation about whether and when the ministers had deposited the cash they held.

Steve Forbes described the move as 'Sickening And Immoral'. He stated that "What India has
done is commit a massive theft of people's property without even the pretense of due process--a
shocking move for a democratically elected government." Nobel laureate Paul Krugman said
that it is difficult to see gains from demonetisation, while there may be significant costs to it.

The demonetisation also came in for sharp criticism from media outside India, with the New
York Times saying that the demonetisation was "atrociously planned" and that it did not appear to
have combatted black money, while an article in The Guardian stated that "Modi has brought
havoc to India". The Harvard Business Review called it "a case study in poor policy and even
poorer execution" The frequent change in the narrative on objectives of the demonetization to its
visible impact on the poorest of the poor made other critiques calling government's narrative as
spins in view of the "pointless suffering on India's poorest

Banking

A State Bank of India branch remained open at night, and a long queue of people waited outside
the ATM to withdraw money

In the first four days after the announcement of the step, about 3 trillion (US$45 billion) in the
form of old 500 and 1,000 banknotes had been deposited in the banking system and
about 500 billion (US$7.4 billion) had been dispensed via withdrawals from bank accounts,
ATMs as well as exchanges over the bank counters. Within these four days, the banking system
has handled about 180 million (18 crore) transactions. The State Bank of India reported to have
received more than 300 billion (US$4.5 billion) in bank deposit in first two days after
demonetisation. A spike in the usage of debit card and credit card post demonetisation was also
reported.

Between November 10 and November 27, banks reported exchange and deposits of demonetised
banknotes worth 8.45 trillion (US$130 billion) (exchange of 339.48 billion (US$5.0 billion)
and deposits of 8.11 trillion (US$120 billion)). During this period, an amount
of 2.16 lakh crore (US$32 billion) had been withdrawn by people from their accounts.

In Malda, a district believed to be a transit-point for fake Indian currencies, a large sum of cash
deposits in dormant accounts were also reported. According to The Economic Times, more than
80 percent of fake currency in India originates from Malda district in West Bengal

Human trafficking

Nobel laureate Kailash Satyarthi and others working to fight human trafficking said that the note
ban had led to a huge fall in sex trafficking. Satyarthi said the demonetisation would be effective
in combating exploitation of children as well as corruption and would be a great obstacle to
traffickers. However, 2 months later he expressed his disappointment on Rs 2000 notes being
pushed into human trafficking in absence of other concrete steps.

Radical groups

The Demonetisation has badly hit Maoist and Naxalites as well. The surrender rate has reached
its highest since the demonetisation is announced. It is said that the money these organisations
have collected over the years have left with no value and it has caused them to reach to this
decision.

The move also reportedly crippled Communist guerrilla groups (Naxalites) financing through
money laundering. On 10 November the police arrested a petrol pump owner at Ranchi when he
reportedly tried to deposit 2.5 billion, belonging to a person affiliated with the
banned Communist Party of India (Maoist). According to Chhattisgarh Police demonetisation
has affected the Naxalite activities. It is reported that insurgents have stashed more than
70 billion in the Bastar region.

While Manohar Parrikar claimed that the move has also helped in reducing the incidents of
stone-pelting in the Kashmir valley, his claim has been disputed.

Hawala

Mumbai Police reported a setback to Hawala operations. Hawala dealers in Kerala were also
affected. The Jammu and Kashmir Police reported the effect of demonetisation on hawala
transactions of separatists.

Railways

As of November 2016, Indian Railways did not have the option to make payment with cards at
the counters. After the demonetisation move, the government announced to make card payment
options available at railway counters in the country. The railways placed an order for 10,000
card reader machines in January 2017
Cash shortage

Queue at an ATM for 100 banknotes in Howrah, on 8 November 2016, 22:23 (IST)

The scarcity of cash due to demonetisation led to chaos, and most people holding old banknotes
faced difficulties exchanging them due to endless lines outside banks and ATMs across India,
which became a daily routine for millions of people waiting to deposit or exchange the 500
and 1000 banknotes since 9 November. ATMs were running out of cash after a few hours of
being functional, and around half the ATMs in the country were non-functional. ]Sporadic
violence was reported in New Delhi, but there were no reports of any grievous injury, people
attacked bank premises and ATMs, and a ration shop was looted in Madhya Pradesh after the
shop owner refused to accept 500 banknotes

DEMONITIZATION AN INDIA BUDGET 2017

The BJP government in India has unveiled annual budget on February 01, trying for recovery
after deadly cash crunch, unleashed by PM Modi by his shock therapy, making people feel badly
stranded at a crossroads without cash and not really knowing where exactly to go for getting their
own money deposited in banks.

While demonetization forces the people to deposit all their money to banks, especially in rural
areas where economy is hidden, Jaitley claimed his budget is focused on increasing rural
incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial
sector.

Prime Minister Narendra Modi's surprise decision last November on a night as the results of US
presidency poll were pouring in, to scrap high-value banknotes worth 86 percent of India's cash
in circulation has hit consumer demand, disrupted supply chains and hurt capital investments.
PM Modi did find some space in international news but he could not equal or outsmart Trumps
grand victory defeating the official candidate Hillary. Clinton
As Gujarat CM, Modi had promised a vibrant economy during his 2014 maiden elections to
parliament from Varanasi in UP, but India economy has only survived now- let alone becoming a
strong one. That is below the target rate of 8 percent or more that Modi needs to create enough
jobs for the 1 million young Indians who enter the workforce in India - a nation of 1.3 billion
where half the population is below the age of 25.

Indian Finance Minister Arun Jaitley presented his budget as five states are going to assembly
polls later this month the outcomes of which could decide the future politics of India as well as
political alliances and equation. Arun Jaitley said that the impact on growth from the
government's cash crackdown would wear off soon. "We are seen as an engine of global growth,"
Jaitley said as he delivered the opening remarks of his fourth budget.

Budgets are essentially statements on the status of national economy and they are meant to
allocate resources for every sector of the nation and specify the sources of resources including
taxes needed for developmental projects, etc. Generally the budgets remain as unfulfilled
promises and project proposals as a lot of resources are being diverted and siphoned off by many
important persons for their personal and private purposes, thereby making corruption
inevitable at the source.

The budget talked about concessional tax rates being provided to those moving toward non-cash
payment mechanisms, and making it mandatory for many Government transactions to move to
digital, which again are important steps in this direction. The reduction of personal income tax at
the lowest slab to 5 percent is more a gesture of goodwill for those who bore the pain of
demonetization, rather than a big reward.

The budget makes clear the intention of the Government to fight black money and digitize the
economy. Limiting the amount of cash per transaction to Rs. 3 lakh, reducing the limit of cash
donations to trusts/political parties to Rs. 2,000 per person, and coming up with an innovative
way of funding political parties (electoral bonds) are all excellent initiatives. The
implementation, though, needs to be watched.

Jaitley's chief economic adviser advocated slashing personal income tax and accelerating cuts in
corporate tax rates. He cautioned, however, against pursuing debt-fuelled fiscal expansion. Still,
economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would
be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has
budgeted for the year soon to end.

The BJP budget has been in consistent with the governments focus over the last two years on
fundamental growth, rather than subsidies and loan waivers. It focused on increasing rural
incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial
sector.

The rollout of a nationwide Goods and Services tax (GST), expected in July after years of delays,
and could also weigh on economic growth. Countries that have introduced GST in the past have
often faced a relative economic slowdown before the benefits of a unified tax regime feed
through.

The budge, as well as the government, has not taken into account the suicides of farmers in rural
areas, although the budget also provided for an additional Rs.20, 000 crores for the long-term
irrigation fund under NABARD. The total allocations to rural, farm, and allied sectors saw a
whopping 24 percent hike in outlay at over Rs 1, 87,000 crore.

The impetus given to affordable housing by according it the status of an Infrastructure Industry
and increasing the area eligible for affordable housing are steps in the right direction, which
would ensure that more people in the country can afford to buy their own homes.

Reportedly, assets worth $7.6 trillion are stashed in tax havens across the globe. Jurisdictions
known as tax havens across the world offer powerful MNCs and rich individuals banking
secrecy and the ability to sidestep financial regulations that apply to ordinary people. However,
this secrecy sure hurts the public, as profits and wealth go untaxed, countries lose revenue and
allocations in budgets shrink. Reportedly, assets worth $7.6 trillion are stashed in tax havens
across the globe.

Not only the rich lords hoard black cash in the country, but the cross-border movement of money
that is illegally earned, transferred or utilized (through trade manipulation, organized crime and
corruption) or tax avoidance by multinational companies also cause over $1 trillion every year to
illicit financial flows in developing countries, including India.

Double Taxation Avoidance Agreements (DTAAs) have been misused and exploited in the past,
to avoid paying any taxes resulting in double non-taxation and re-routing black money
through tax havens for investment in India. The General Anti-Avoidance Rules (GAAR) have
also been adopted by the government, extends to deny double taxation avoidance benefits if
deals in tax havens are found to be avoiding taxes.

The Union Budget has announced a few new laws to address financial crime one for
confiscation of property of economic offenders and another to deal with illicit deposit schemes.
India will start exchanging information with other countries, and receive information regarding
Indian citizens' assets abroad starting September 2017, on an automatic and periodic basis.

Still, economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That
would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the
government has budgeted for the year soon to end.

While opinions vary on how long the disruptions caused by Modi's crackdown on untaxed and
illicit wealth will last, there is near unanimity among economists that Asia's third-largest
economy needs a helping hand.

The issue of combating blackmoney was not given proper thoughts. The budget speech did not
draw attention to a number of initiatives taken by the government in the past few months to curb
the menace of tax avoidance.

Government of India should seek to address these loopholes in the norms of international
taxation at the national level, while simultaneously support the establishment of a representative
and well-resourced global tax body under the auspices of the UN.

Observations

Demonetization has only further complicated the life of common people and has not succeeded
in India because basically every politician and official dealing with economic affairs are corrupt
and make wealth illegally that the state defends. Black money also has not many headway in real
terms because there is no visible evidence that black money is disappearing from Indian scene.
Without sincere intention by officals and politicians nothing can be set right in the country- the
rulers since 1947 has only added rot to Indian system which is now defunct. Importantly, no
politician party seems to be sincere about abolishing corruption and black money as that could
negatively affect the funding of politics and polls by the rich and corporate lords that shamelessly
thrive thanks to state protection and policies in their favor.

Budget statements are just the usual gimmick to fool the poor voters.

India acclaimed to be a "bright spot" in the world economy, and Finance Minister Arun Jaitley
repeated the same as he unveiled his annual budget, adding that the impact on growth from the
government's cash crackdown would wear off soon.

The BJP governments budget has kept in pace with the economic policy of India for the last
many years since the large scale privatization cum divestment program during the Congress reign
with Manmohan Singh as finance minister to promote WB and IMF polices, to release the money
of the state sectors for use by the private compote lords and global multinational magnets to
increase their own wealth instead of taking care of welfare programs of common men.

The BJP budget this year was a usual one and as former finance minister Chidambaram said
there are no real high lights. Those who had expected relief for those who suffered as Modi
imposed demonetization without adequate preparation too launch his pet financial dream of
ending black and other dirty money in the country. Now it is clear that the black money is here to
stay no matter what measures the government adopt mainly because they only corporate lords
who control the government want all these dirty cash circulation so that they could make more
profits- after the objective of all governments both elected and electionless serve the cause of
the rich and corporate lords and for which, unfortunately, common people vote a party to power.

The worst of the cash crunch is now almost over, leaving behind a shaky nation, and the
government expects it to be fully cleared by the end of April. A private manufacturing survey
showed business is slowly returning to normal. Still, the finance ministry forecasts that growth
could dip to as low as 6.5 percent in the current fiscal year to March, before picking up slightly
in the coming fiscal year to between 6.75 and 7.5 percent. That is below the target rate of 8
percent or more that PM Modi needs to create enough jobs for the 1 million young Indians who
enter the workforce in India - a nation of 1.3 billion where half the population is below the age of
25.

The BJP which, like the Congress party, promotes the rich and corporate lords to sponsor cricket
and IPL type joint sport exercise to keep the people under illusions, pursues the congress policies
by keeping in view the goals of World Bank and IMF, denying subsides and freebies to poor and
under privileged- thereby they want to remove the poor classes altogether and increase the illegal
wealth of the rich. That is basic of capitalism that fuels wars of imperialism for acquiring more
resources- now energy resources of West Asia.

The merging of the Railway Budget with the general budget was done seamlessly and was touted
as a historic move, ridding us of the colonial era practice of separate budgets. However, the
rationale for merging the railway budget with general budget this year as a new experiment has
caused confusion as a separate budget for rail steadily raised the facilities and working of the
sector, increasing rails and spending more resources year by year. Unlike other transport sectors,
railways have achieved great strides over years and rail system today is not what it was say 10
years back. As the largest employment sector railways is also the cheapest mode of transport in
India.

The nation expected the finance minister and PM Modi to give details of demonetization efforts
of the fo government giving a brief about the amount of blackmoney it should get and what are
the new techniques being employed to tackle this grave anti-national mischief by liquor-cricket
bosses like Mallya- a BJP MP with links everywhere especially with cricket bosses and other
corporate lords. The Modi government refuses to take the people into confidence on
demonetization.

Perhaps, the intentions of the government to guide the country onto the path of inclusive growth
are clear. While there will always be some misses and hits in the budget, the Modi Government,
unlike the Congress and even Vajpayee governments that religiously promoted corruption and
black money as their key policy, has shown the political will to fight corruption and black
money, which have become strong appendages of our economy.

Taxes the major revenues for the governments but the Modi government is eager to be
sympathetic to big business houses with tax rebates. The ministers roadmap in the FY-2015
budget promised to reduce the corporate tax rate to 25% within four years, even after three years.

In a difficult year, represented by growing global uncertainties, lower economic growth at home
and increasing oil and commodity prices, the finance minister has done to sticking to the
fundamentals and doing what is good for the economy, rather than for the vote bank.

While avoiding populist measures and focusing on investment activities that have a multiplier
effect, Arun has also tried to garner additional resources through higher tax compliance, rather
than higher tax rates. In fact, contrary to popular expectation, the definition of long term capital
gains for property transactions was brought down to two years from three years.

REAL RESAON BEHIND DEMONITIZATION

Burning schools stopped in J&K

Education gives the ability to think, question and analyse to a person, which helps them
differentiate between the right and wrong. The separatists and religious hard-liners would never
want this to happen- people were hired to do violent acts, burn schools and spread fear amongst
the people of Kashmir. With their hoarded, ill-gotten wealth turning into trash they have been left
motionless. School burning incidents have stopped and just a day before, approx. 54,000 students
appeared for their exams.

Corrupts burning cash

Honest citizens are ready to do their bit for the country (to face hassles of currency exchange)
and face this move with patience, as they know this bold move will make India- a world power.
The corrupt people, who had stashed un-accounted cash in huge amounts, are spending their
nights, burning their cash.

Arhar dal crashes to Rs.80/kg in UP

With demonetization fear has gripped the black-marketers hoarding grains and pulses in their
granaries. As government has promised more action in the coming days, stocks of arhar dal has
increased in the market, and prices have crashed. According to a report, Arhar dal is being sold at
Rs.80 per kilo, (down from Rs.120-Rs.130) in U.P.

Kirana shops/Panwalas installing debit card machines

Demonetization has only instilled better sense in people. Going cashless, is one such example.
People have started installing debit card machines and Paytm for cashless transactions, thus
improving transparency in market- Kirana shops, Panwalas, Sherbet sellers, auto rickshaws etc.
are examples where such cashless transactions are being done.

People have realised the benefits of having a cashless economy and like the government, the
citizens too, are working towards the betterment of the country.

Municipalities making record recoveries of house tax

For years, the municipalities were running behind people to pay their arrears on house tax, but in
vain. Post demonetization, defaulters are paying their pending taxes, increasing cash coffers of
the municipal corporations. The municipalities have made record recoveries of house tax this
year, all thanks to the bold move of demonetizing larger bills.
Electricity companies making huge record recoveries of past arrears

Like Municipalities, electricity providers are making huge recoveries of past arrears. The
government has allowed acceptance

People can deposit old currency notes at many (public service providers) places, as electricity
provider offices fall in that list, people are paying off their arrears with the demonetized currency
notes.

Medicine shops making big sales

As medicines and drugs fall under essential commodities list, one can use demonetized currency
notes at medicine shops. People are flocking medicine shops and stocking up on medicines, in a
bid to get rid of their old currency notes.

Delhi Metro smart cards sales increase

One could expect less traffic in Delhi for a few months, as people have bought season tickets
with their old currency. The air quality in Delhi has worsened, breaking the record of poor air
quality in years; with lessened traffic one can expect some respite.

Many businessmen recovering past dues as old as 4 years and getting advance for new
orders

Many business men deliberately dont make early payments, and continue doing business on
credit. By doing so, they infuse the profits in their production cycle to double their profits- and
most of it is in cash. The demonetization move has forced them to get rid of their hoarded black
money. Now, they are not only paying their dues with interest, but are also making advance
payments.

Huge opportunities for mobile wallets

Digitization is the way to future. Post demonetization steep rise in the use of mobile wallets have
been reported. The private sector online payments have reported a significant rise in the usage
patterns by their users. Oxigen Wallet witnessed increase in the load money transactions by up to
40-45 per cent by the first half on Wednesday, and Indias largest mobile payments platform
Paytm also recorded 435 per cent increase in traffic on its platform, with add money transactions
increasing by 1000 per cent.

In India most of the transactions are done through cash. According to various data released: less
than 5% of all payments happen electronically. The ratio of cash to gross domestic product is one
of the highest in the world12.42% in 2014, compared with 9.47% in China or 4% in Brazil.
The number of currency notes in circulation is also far higher than in other large economies;
India had 76.47 billion currency notes in circulation in 2012-13 compared with 34.5 billion in the
US

If we manage to tap even half of the cash transactions, then Indias GDP will reach to new highs.

Banks plush with funds.Rs.3 lakh crore banked in 4 days!!! Cost of funds reduced for bank

As people are depositing their old currency notes, banks have reported huge surge in their cash
coffers. According to a report, banks have cumulatively collected more than Rs.3 Lakh Crore in
just 4 days. In the coming days the amount is only going to increase. This will bring down the
interest rates for loans. Many have already slashed their interest rates.

Labourers paid Dihadi for standing in queues

If you have visited any bank, or been in a queue to exchange your old currency notes, one could
only see either the middle class or the poor. The rich have found their way to the new currency,
sans standing in queues. Businessmen are using their labourers to get their money exchanged and
for that they are being lured with fat commissions.

All property deals involving black money in jeopardy. Bayana in jeopardy

Bayana- An Indian term used to denote the token money given to the landlord to informally
freeze negotiations on a particular property, after the initial terms and conditions have been
formalised. Such payments are done in cash, and not documented. Property deals involving black
money have been hit hard; the builders (construction) lobby are one of the largest hoarders of
black money. One may witness a slowdown in the realty market, but in future they wouldnt get
involved in such activities.

Property prices come down by 25%

With the black money being driven out from the market, the prices of unsold units will witness a
slump in prices, the property prices are expected to come down by 25%.

Democracy deepened. All castes/creeds standing in same queue.

Demonetization has brought all of us in one big frame. People are standing in queues and helping
each other irrespective of ones caste or creed. The real essence of democracy is being witnessed.

Fake currency rackets hit

A recent study commissioned by the NIA showed that 250 in every 10 lakh notes in circulation in
India are fake, with FICN (Fake Indian Currency Notes) bearing a face value of Rs 400 crore in
circulation at any given point in time. (Reported by TOI) The study stated that FICN worth Rs 70
crore was being infused into the Indian market every year. The fake currency racketeers have
been left with trash, and with high security features in the new Indian currency notes; making a
counterfeit is impossible.

Political parties spends in Punjab/UP hit

Come elections, and you could witness money being showered on voters. With demonetization,
political parties with black money wouldnt be able to woo voters.

We can hope, there will be fair voting in the upcoming state election of Punjab and UP

Drug peddlers in Punjab hit

The only state to have suffered the drugs menace is Punjab. The drug peddlers have run back into
their rat holes post demonetization. The drugs business is the most important, in a shadow
economy. The drugs business has completely stopped in the state, as transactions were done only
in cash.
 LONG TERM GOAL OF DEMONITIZATION

Surgical Strike on the parallel black economy: This is the most obvious one. India has a huge
parallel black economy which the government cant tax and which forms an island away from
the main economy.

Nobody knows the exact figure but it has been estimated to be in the range tens of thousands of
crores of Rupees in the past to lakhs of crores today. You can be sure that a good chunk of this
will come into the main economy. It is a Herculean task to merge the two streams of white and
black money and a great beginning has already taken place.

Make the corrupt lose their money: You may have heard of so many scams in the past ranging
from Bofors to the one lakh crore plus 2G and Coalgate. A simple question. How much of bribe
money has been recovered? Miniscule one must say. Well this is for the first time that the corrupt
are losing their money in large numbers. Huge sacks of money are being burnt, thrown or caught.
Some of it is also percolating down as commission for the poor who are converting the old
money into new, so its an unexpected benefit for them too. You may remember that earlier also
the recent tax amnesty scheme yielded tens of thousands of crore Rupees. The hoarders of black
money will always be wary in the future.

Get every citizen in India to be monitored online: A cashless economy is not just convenient for
citizens, but also for the government to monitor. The government wants each and every
transaction in India to be online so it can be easily tracked and taxed. Credit card and netbanking
usage is up; debit card transactions have soared while PayTM has struck a virtual goldmine. This
is a huge step forward in India becoming a cashless economy. Some may complain that Big
Brother is watching, but like it or not, this is the future. Expect many more Modi schemes which
will push ordinary citizens online. Of course all this will be rendered ineffective if we dont
become a Broadband Nation soon. 5. Checking of counterfeit notes: The Rs 500 note came out in
1997 and the Rs 1000 one in 2000.
After 9/11 Pakistan entered into a new partnership with America and they looked the other way
as our arch nemesis set up a grand counterfeiting operation. However now fake notes have been
removed from the system and new counterfeits will be difficult. Pakistan is facing collapse.
Incoming US President Donald Trump is not that favourable towards Pakistan and they wont be
able to operate with impunity. Moreover the new notes are much more difficult to counterfeit. It
was none other than Babasaheb Ambedkar, the father of the Indias economy after Independence,
who said that notes should be changed every 10 years.

Crackdown on terrorism and Naxalism: It is an open secret that both terrorism and Naxalism run
on counterfeit notes coupled with black money. They have been severely hit as their funds have
dried up. They are currently down and now is the chance to land a decisive blow and finish off
these menaces once and for all.

Change the mindset of everyone: Since Independence, we have led a fatalistic chalta hai
policy. Corruption cant go. The black money economy cant be hit. And so on. That changed
overnight. Now the citizens of India know that Modi is serious and any other governments too
can crack down if they really want to. More and more people will choose to come onto the white
money stream to play it safe.

Keep everyone on their toes: Modi has been coming out with a slew of schemes after he became
Prime Minister and this one was a #SurgicalStrike. What next? Already there is a buzz that the
real estate industry will be targeted. People are also guessing that the Rs 2000 note itself may be
#Demonetized in the future. Then there was the rumour of the high value note having GPS
tracking. Thats not possible because the bank note doesnt have a power source. However
technology is there for notes to be RFIDed. RFID technology can be embedded into a currency
note. That means that if you have a stack of high value notes, they can be detected with an RFID
reader. The long range ones can do so at a distance of 100 metres. So the tax man can stand
outside your home and detect your notes! However all this is very expensive and may lead to
privacy issues and misuse and hence seems unlikely, but you never can predict the future! 9.
Boost the economy: For one a good amount of black money will make its way into the white
economy and that will only boost the latter. Then with people burning their notes and counterfeit
ones 0being taken out of the system, the value of the Rupee will become stronger. The more the
notes there are in the market, the higher the inflation. If bad notes are taken out of the market,
prices will fall and the Rupees buying power will marginally increase. The online industry has
also received a huge boost. 10. Crack down on black political campaigning: It is an open secret
that most of the political parties use black money for election campaigning all over India. It has
been very difficult to crack down. In fact in some areas, political parties openly distribute Rs 500
and Rs 1000 notes. Well the timing of the current #Demonetization couldnt be more perfect.
There are upcoming elections in Uttar Pradesh, Punjab, Goa and many other States go to the
polls in 2017. Black money election funding will be severely hit in these States and parties will
be forced to raise white money and use their white money reserves. This will be a good
beginning and all Modi has to do is introduce a Bill to regulate campaign spending after that.

ADVANTAGE OF DEMONITIZATION

Advantages of Demonetization
1. The biggest advantage of demonetization is that it helps the government to track people
who are having large sums of unaccounted cash or cash on which no income tax has been
paid because many people who earn black money keep that money as cash in their houses
or in some secret place which is very difficult to find and when demonetization happens all
that cash is of no value and such people have two options one is to deposit the money in
bank accounts and pay taxes on such amount and second option is to let the value of that
cash reduced to zero.

2. Since black money is used for illegal activities like terrorism funding, gambling, money
laundering and also inflating the price of major assets classes like real estate, gold and due
to demonetization all such activities will get reduced for some time and also it will take
years for people to generate that amount of black money again and hence in a way it helps
in putting an end this circle of people doing illegal activities to earn black money and using
that black money to do more illegal activities.

3. Another benefit is that due to people disclosing their income by depositing money in their
bank accounts government gets a good amount of tax revenue which can be used by the
 government towards the betterment of society by providing good infrastructure, hospitals,
educational institutions, roads and many facilities for poor and needy sections of society.

Disadvantages of Demonetization

1. he biggest disadvantage of demonetization is that once people in the country gets to know
about it than initially for few days there is chaos and frenzy among public as everybody
wants to get rid of demonetized notes which in turn sometimes can lead to law and order
problem and chaotic situation especially in banks and ATMs which are the only medium to
change the old currency units to new currency units.

2. Another disadvantage is that destruction of old currency units and printing of new
currency new units involve costs which has to be borne by the government and if the costs
are higher than benefits then there is no use of demonetization.

3. Another problem is that majority of times this move is targeted towards black money but
if people have not kept cash as their black money and rotated or used that money in other
asset classes like real estate, gold and so on then there is no guarantee that demonetization
will help in catching corrupt people.

How successful is the government in achieving these goals via demonetization?

While the currency ban has gained popular support among most of the netizens of India who hail
it as a masterstroke against fake currency and black money, the people in support mainly fall into
the category upper middle class and the rich. This move has caused huge negative disruptions in
the market and the economy because of poor implementation. The two main poor
implementational aspects are not mobilizing enough Rs 100 notes in the market and not
introducing enough new Rs 2000 and Rs 500 notes in banks and ATMs.
The worst affected are the urban poor and the people in rural areas who form the majority of the
daily wage labourers and earn their income via cash in the range Rs 100-300. As a case in
example, in Delhis Azadpur mandi, one of Asias largest agricultural supply chain, the
demonetization move has reduced daily business volumes by 50% to 70% ( by Rs 20-30 crore).
It is the farmers, the daily wage labourers and small-scale traders and businessmen who bear the
brunt of this loss and not the criminal elite.

As for curbing conflict funding, the government seems to have effected a change on this front.
According to data from the Jammu and Kashmir home department, the number of stone-pelting
incidents faced a sharp decline, by more than 50% in the month of November just after the
announcement of the currency ban.

CONSUMER BEHAVIOUR

One thing that we have in common is that we all are consumers. In fact
everybody in this world is a consumer. Every day of our life we are buying and
consuming an incredible variety of goods and services. However, we all have
different tastes, likes, dislikes, and adopt different behavior patterns while making
purchase decisions.
 The term consumer behavior refers to the behavior that consumers display in
searching for purchasing using evaluation and disposing in searching for
purchasing using evaluating and disposing of products and services that they exact
will satisfy o how individuals make decisions to send their available resources
(time, money and effort) on consumption related items. It includes the study of
What they buy, Why they buy, When they buy it, Where they buy it, how
often they buy it and how often they use.

DEFINITIONS:

Consumer Behavior is broadly defined by various scholars & researchers

as:

1. Its the behavior displayed by the consumers during the acquisition,

consumption and disposition of products, services, time and ideas by
decision making units.
2. It is the body of knowledge which studies various aspects of purchase and
consumption of products and services by individuals with various social and
psychological variables at play.
3. The behavior that the consumers display in searching for, purchasing, using,
evaluating and disposing of products and services that they expect will
satisfy their needs.
4. The process and activities people engage in when searching for, selecting,
purchasing, using, evaluating, and disposing of products and services so as
to satisfy their needs and desires.
5. The activities directly involved in obtaining, consuming, and disposing of
products and services, including the decision processes that precede and
follow these actions.
 6. The American Marketing Association (AMA) defines consumer behavior as
The dynamic interaction of cognition, behavior & environmental events by
which human beings conduct the exchange aspect of their lives.

Consumer behavior is helpful in understanding the purchase Behavior and

preferences of different consumers. As consumers, we differ in terms of sex age,
education, occupation, income, Family setup, religion, nationality and social
status. Because of this different background factors, have different needs and we
have only buy those products and services, which we think, will satisfy our needs.

A MODEL OF CONSUMER BEHAVIOUR:

A consumer decisions to purchase a particular product of service is the result

of complex interplay of a number of variables. The starting point of the decision
process is provided by the companies marketing stimuli in the shape of product,
promotion, price and distribution strategy. Consumer often purchase new products
that are associated with a favorable viewed brand name.

The term consumer behavior refers to the behavior that consumer display in
searching for purchasing, using, evaluating and disposing of products and services
that they expect will satisfy these needs. The study of consumer behavior in the
study of how individuals make decisions to spend their available resources (time,
money, effort) on consumption related items. It includes the study of what they
buy, why they buy, when they buy, where they buy, how often they buy
and how they use.

MODEL OF CONSUMER BEHAVIOUR

Marketing Other Consumer
stimuli stimuli Decisions

Product
Product Economic
Consumer Consumer Choice
Price Technological
Characteristic Decision Brand
Place Political
s Process Choice
Cultural
Promotion cultural Problem Dealer
recognition choice
Social Information Purchasing
Personal Search Timing
Psychological
DETAILED Evaluation
MODEL OF Purchasing
Decision Amount
FACTORS INFLUENCING CONSUMER BEHAVIOR
post
Cultural Factors Purchase
Social FactorsBehavior.

Cultur Refere Personal Factors

e nce
groups Age and Psychological
Life
Factors
Sub Cycle
Cultur Family Occupati Motivati
e on on
Economi
Percept
c Buyer
ion
Social Circumst s
Roles & ances Learnin
Class Status Lifestyle g
Personalit
Beliefs
y and Self
and
Concept
Attitudes

CULTURAL FACTORS:

Culture: Culture is the most fundamental determinant of a persons wants and

behavior like set of values, perceptions, preferences and behaviors through his or
her family member.

Subculture: social classes are relatively homogeneous and enduring divisions in a

society which are hierarchically ordered and whose members shares similar Values,
interest and behavior and social classes includes upper class, middle class and
lower class.

SOCIAL FACTORS:

References Groups: A persons reference groups consist of all the groups that have
a direct (face to face) are indirect influence on the persons altitude or behavior.
This group to which the person, belongs and interacts.

Personal Factors: A consumer decision also influenced by personal characteristics

notably the buyers age & life cycle stage, occupation, economic circumstances,
life style and personality and self concept.

PSYCHOLOGICAL FACTORS:
Motivation: A person has many needs at any given time. Some needs are biogenic.
They arise from psychological states of tension such as hunger, tryst and
discomfort.

Perception: Perception is defined ass the process by which an individual selects,

organizes, intercepts, information, inputs to create a meaningful picture of the
world.

NEED FOR THE STUDY:

Consumer behavior plays a major role for the growth of the company in the
modern market scenario. The basic idea of this study is to find the consumer
behavior towards Big Bazaar. The needs have to be recognized and necessary steps
have to be taken to make the changes.

India is growing rapidly and changes are dynamic. People are changing, the
preference and the demand is changing. The market also has to change accordingly.

The purpose of consumer behavior is not only for retaining the customers
but also attracting new customers and increasing the sales also creating and
maintenance of brand awareness.

In this competitive market the level of consumer satisfaction decides the

success of any product and any company. The night consumers have to be targeted
and the right strategy should be implemented at the right time. This will give the
desired results.

OBJECTIVES OF THE STUDY:

The main objective is to determine the current consumer behavior levels of the
customers with regards to Big Bazaar.

To study and analyze consumer shopping behavior towards Big Bazaar and
effect on Demonetization.

To assess the behavior level of different type of customers shopping at Big

Bazaar in demonization.

To identify what type of strategies are suitable for the company to reach the
targeted customers.

To find out the factors which influence the consumption of the products in
Big Bazaar at the demonization.
 To identify effective a advertising sources which are influencing customer
purchasing behavior at Big Bazaar.

To find out how the consumers spent their incomes, time on the purchasing
of the products.

RESEARCH METHODOLOGY

The survey technique is intended to secure one or more items of information

from a sample of respondents who are representatives of a larger group. The
information is recorded on a form known as questionnaire. As data are gathered by
asking questions from persons who are believed to have desired information, the
method is known as questionnaire technique.

REASONS FOR WIDE USE OF THIS METHOD:

It can secure both quantitative and qualitative information directly from the
respondents.
It is the only method of directly measuring attitudes and motivations.
It is quite flexible in terms of the types of data to be saaembled, the method
of collection or the timing of research.

Meaning of Research

According to D. Slessinger and M. Stephenson in the Encyclopedia of social

sciences define research as the manipulation of things, concepts or symbols for
the purpose of generalizing to extend, correct or verify knowledge, whether that
knowledge aids in construction of theory or in the practice of an art.
TYPES OF RESEARCH

1. Exploratory Research,
2. Descriptive Research.

Exploratory Research:

Exploratory research studies are also termed as formulate research studies.

The main purpose of such studies in that of formulating a problem for more precise
investigation or of developing the working hypothesis forms an operational point
of view.

Descriptive Research:

Diagnostic Research studies determine the frequency with something occurs

or its association with something else.

In this project, information pertaining to customer needs satisfaction and

their demographic profile was collected; hence it is a descriptive research.

1) Primary data:

Meaning: Primary sources of data are the data which

needs the personal efforts of collect it and which are not readily available.
Primary source of data are the other type of source through which the data was
collected.

Following are few ways in the data was collected:

1. Questionnaires: It is the set of questions on a sheet of paper was being given

to the of fill it, bases on which the data was interpreted.

2. Direct interviewing: Direct interviewing involved the process where I asked

the questions directly to the customers and I got the feedback.

2) Secondary data:

Secondary sources are the other important sources through which the data
was collected.

These are the readily available sources of the data where one had need not
put much effort to collected, because it is already been collected and part in an
elderly manner by some researcher, experts and special.

The secondary sources helpful for the study were

1) Text books like marketing management research methodology

Advertisement and sales promotion etc.
2) Internet was made use for the collection of the data.
3) News papers were also referred.
4) Business magazines were referred.

3) Sample size:
By using judgment random sampling technique 100 respondents are
selected for the purpose of the study.
 4) Period of study:
The study is undertaken in the duration of 34 days.

5) Research approach:
The survey method was adopted for collected the primary data. Survey
research is systematic gathering of data from respondent through
questionnaire.

6) Research instrument:
The data for this research study was collected by survey technic using
interview method guided by questionnaire.

7) Collection of Data:
Questionnaire and personal interviews are the methods that I have used
for collecting the data.

SCOPE OF THE STUDY

Big Bazaar scope is limitation to one Branch (DEHRADUN). The scope of
the study is to identify the consumer behavior towards Big Bazaar. It is aimed at
enlightening the company about different steps to be taken up to increase the share
of Big Bazaar with regard other competitors and also to make the company to
provide better customer services.
The scope of the study is only confined to the area covered under Deheadun
and only confined in studying about the consumer behavior towards Big Bazaar.

LIMITATIONS:

Time has been a major constraint throughout the study as it has been only for
duration of 2 months.
 As this survey was restricted to Deheadun this cannot be stated as an in
depth research on this subject.

Enough care is taken in formulating the questionnaire, still some errors may
creep in.
The consumer behavior varies according to different products.

Quality verses price was not taken into the consideration.

The project is based on the interview methodology by a structured

questionnaire and the personal skills of the person undertaking the project
affect the results.

REVIEW OF LITARATURE

Annamalai, S. and Muthu R. Iiakkuvan (2008) in their article Retail transaction: Future
bright for plastic money projected the growth of debit and credit cards in thc retail
transactions. They also mentioned the growth factors, which leads to its popularity, important
constraints faced by banks and summarized with bright future and scope of plastic money.
 Alvares, Cliford (2009) in their reports The problem regarding fake currency in India. It
is said that the country's battle against fake currency is not getting easier and many fakes go
undetected. It is also stated that counterfeiters hitherto had restricted printing facilities which
made it easier to discover fakes.
Ashish Das, and Rakhi Agarwal, (2010) in their article Cashless Payment System in India-
A Roadmap Cash as a mode of payment is an expensive proposition for the Government.
The country needs to move away from cash-based towards a cashless (electronic) payment
system. This will help reduce currency management cost, track transactions, check tax
avoidance / fraud etc., enhance financial inclusion and integrate the parallel economy with
main stream.
Jain, P.M (2006) in the article E-payments and e-banking opined that e- payments will be
able to check black An Analysis of Growth Pattern of Cashless Transaction System.
Taking fullest advantage of technology, quick payments and remittances will ensure optimal
use of available funds for banks, financial institutions, business houses and common citizen
of India. He also pointed out the need for e-payments and modes of e- payments and
communication networks.

What is consumer behavior?

Activities people involved in when selecting, purchasing, and using products

so as to satisfy needs and desires. Consumer behavior involves the psychological
process that consumers go through in recognizing needs, finding ways to solve
these needs, making purchase decision (e.g., whether or not to purchase a product
and, if so, which brand and where), interpret information, make plans, and
implement these plans (e.g., by engaging in comparison shopping or actually
purchasing a products).

SOURCES OF INFLUENNCE OF THE CONSUMER:

The consumer faces numerous of influence. Often, we take cultural

influences for granted, but they are significant. An American will usually not
bargain with a storeowner. This, however, is common practice in much of the
world. Physical factors also influence our behavior. We are more likely to buy a
soft drink when we are thirsty. For example, and food manufacturers have found
that it is more effective to advertise their products on radio in the late afternoon
when people are getting hungry. A persons self image will also tend to influence.
what he/she will buy. An upwardly mobile manager may buy a flashy car to project
an image of success. Social factors also influence what the consumers buy-often,
consumers seek to imitate others whom they Admire, and may buy the same
brands, the social environment can include both the mainstream culture (e.g.,
Americans are more likely to have corn flakes/ham and eggs for brake past than to
have rice, which is preferred in many Asian countries) and a sub culture (e.g., rap
music often Appeals to a segment within the population that seeks to distinguish
itself from the main stream population). Thus sneaker manufacturers are eager to
have there products worn by admired athletes. Finally, consumer behavior is
influences by learning you try a hamburger and learn that it satisfies your hunger
and tastes good, and the next time you are hungry, you may consider another
hamburger.

DECISION-MAKING INVOLVE SEVERAL STEPS

 1.Need recognition

5.Purchase evaluation
2. Information search

4.Purchase decision 3. Evaluation of alternatives

Problem recognition you realize that something is not as it should be. Perhaps,
for example, your car is getting more difficult to start and is not accelerating well.
Information search- what are some alternative ways of solving the problem? You
might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a
taxi, or ride a skateboard to work.

A customer can obtain information from several sources:

Personal sources: family, friends, neighbors etc.

Commercial sources: advertising, sales forces retailers, dealers,

Packaging, point-of sale displays.

Public sources: news papers, radio, television, consumer organizations,

special magazines.

Experimental sources: handling, examining, using the product

Internal and external search for information to make a decision

Internal search: Scan memory.

External search: shopping, personal sources, public media,

Advertisements

Evaluation of alternatives: A skateboard is inexpensive, but may be ill-suited for

long distances and for rainy days.

Purchase stage, and sometimes a post-purchase stage (e.g., you return a

product to the store because you did not find it satisfactory), in reality, people may
go back and fourth between the stages. For example, a person may resume
alternative identification during while evaluating already known alternatives.

The decision maker(s) have the power to determine issues such as:

Whether to buy?

Which product to buy?

Which brand to buy?

Where to buy it? And

When to buy?

Note, however, that the role of the decision maker is separate from that of
the purchaser. From the point of view of the marketer, this introduces some
problems since the purchaser. can be targeted by point-of-purchase (POP)
marketing a effort that cannot be aimed at the decision maker. Also note that the
distinction between the, purchaser and decision maker be somewhat blurred the
decision maker may have to make a substitution if the desired brand is not in stock,
the purchaser may disregard institutions (by error or deliberately).

BUYER BEHAVIOUR CULTURAL FACTORS

Cultural factors have a significant impact on customer behavior. Cultural is

the most basic cause of a persons wants and behavior. Growing up, children learn
basic values, perception and wants from the family and other important group.
Marketing are always trying to spot cultural shift which might point to new
products that might be wanted by customer or to increased demand. For example,
the cultural shift towards greater concern about health and fitness has created
opportunities (and now industries) servicing customers who wish to buy:

Low calorie foods

Health club memberships

Exercise equipment

Activity or health- related holidays etc.

Similarly the increased desire for leisure time has resulted in increased demand
for convenience product and service such as microwave ovens, ready meals and
direct marketing service businesses such as telephone banking and insurance.

Each culture contains sub-cultures groups of people with shared values. Sub-
cultures can include nationalities, religions, racial groups, or group of people
sharing the same geographical location. Sometimes a sub-culture will create a
substantial and distinctive market segment of its own.

BUYER BEHAVIOUR SOCIAL FACTORS:

Introduction: A customers buying behavior is also influenced by social factor,
such as the group to which the customer belongs and social status. In a group,
several individuals may interact to influence the purchase decision. The typical
roles in such a group decision can be summarized as follows:

Initiator: the people who first suggest or think the idea of buying a particular
product or service.

Influence: a person whose view or advice influences the buying decision. Decider:
the individual with the power and/or financial authority to make the ultimate
choice regarding which product to buy.

Buyer: The person who concludes the transaction.

User: The person (persons) who actually uses the product or service.

INDIVIDUAL FACTORS THAT SHAPE BUYER BEHAVIOUR PROCESS

HIGH INVOLVEMENT Extensive problem-solving (EPS)

LOW INVOLVEMENT Limited problem solving (LPS)

Reutilized response behavior (RRB)

The various purchase influence factors are as follows:

 Personal
Social Age and life cycle stagePsychological
Cultural
Reference Motivation
Culture Buyers
groups Occupation Perception
Sub culture
Family Learning
Social culture
Roles and status
Economic situation Beliefs and attitudes

Life style

Personality & self concept

CULTURAL FACTORS

Cultural factors exert a broad and deep influence on consumer behavior. The
marketer needs to understand the role played by the buyers culture, subculture,
and social class.

Culture

The set of basic values, perceptions, wants, and behaviours learned by a

member of society from family and other important institutions,

Subculture

A group of people with shared value systems based on common life

experiences and situations.

Social classes

Relatively permanent and ordered divisions in society whose members

share similar values, interests, and behaviors.
SOCIAL FACTORS

A consumers behavior also is influenced by social factors, such as the

consumers small groups, family, and social roles and status.

Groups

Two or more people who interact or accomplish individual or mutual goals.

Family

A family is a domestic group of people, or a number of domestic groups

linked through descent (demonstrated or stipulated) from blood relation, marriage
or adoption.

Roles and status

A person belongs to many groups- family, clubs, organisations. The persons

position in each group can be defined in terms of both role and status.

PERSONAL FACTORS

A buyers decisions also are influenced by personal characteristics such as

the buyers age and life cycle stage, Occupation, economic situation, lifestyle, and
personality and self-concept.

Age and life-cycle stage

People change the goods and services they buy over their lifetimes. Tastes
and preferences changes as lift-cycle goes.

Personality and self concept

 A persons distinguishing psychological characteristics that lead to relatively
consisting and lasting responses to his or her own environment.

PSYCHOLOGICAL FACTORS

A persons buying choices are further influenced by four major

psychological factors: motivation, perception, learning, and attitudes.

Motivation

A need that is sufficiently pressing to direct the person to seek satisfaction of

the need.

Perception

The process by which people select, organize, and interpret information to

form a meaningful picture of the world.

Learning

Changes in an individuals behavior arise from experience.

Beliefs and attitudes

A descriptive thought that a person holds about something is his/her belief. A

persons consistently favorable or in favourable evaluations, feeling, and
tendencies toward and object or idea is attitude.

The common tools used to conduct data analysis range from simple cross
tabulations and segmentation analysis to more sophisticated statistical methods
such as multivariate and logistic regression discriminates analysis and cluster
analysis. In the last few years, optimization tools and machine learning algorithms
such as neural networks and genetic algorithms have also been used to perform
advanced data analysis.

The study of consumers helps firms and organizations imjprove their marketing
strategies by understanding issues such as

The psychology of how consumers think, feel, rason, and select between
different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other marketing
decisions;

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;

How consumer motivation and decision strategies differ between products

that differ in their level of importance or interest that they entail for th consumer;
and How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.

Understanding these issues helps us adapt our strategies by taking the

consumer into consideration. For example, by understanding that a number of
different messages compete for our potential customers attention, we learn that to
be effective, advertisements must usually be repeated extensively. We also learn
that consumers will sometimes be persuaded more by logical arguments, but at
other times will be persuaded more by emotional or symbolic appeals. By
understanding the consumer, we will be able to make a more informed decision as
to which strategy to employ.
 Behavior occurs either for the individual, or in the context of a group(e.g.,
friends influence what kinds of cloothes a person wears) or an organization
(people on the job make decisions as to which products the firm should use).
Consumer behavior involves the use and disposal of products as well as the
study of how they are purchased. Product use is often of great interest to the
marketer, because this may influence how a product is best positioned or
how we can encourage increased consumption. Since many environmental
problems result from product disposal (e.g., motor oil being sent into sewage
systems to save the recycling fee, or garbage piling up at landfills) this is
also an area of interest.
Consumer behavior involves services and ideas as well as tangible products.
The impact of consumer behavior on society is also of relevance.
 RESEARCH METHODOLOGY
Research Objectives:

1. To study affect of demonetization on consumer behavior

2. To examine tradeoffs, relative importance of different attributes while

responding to a FMCG sector

3. To study the effect of sales promotions in FMCG sector esp. in soaps and
detergent industry.

Product categories under study

DETERGENTS: Washing Powder for Clothes

TOILETERIES Soaps

Research Design

Research design selected for this project is Descriptive.

Data collection Method:

(a)Primary Data Collection Method:
Survey method was used for primary data collection.
We used questionnaire as an instrument for survey method.
Structured questionnaire.
Type of questionnaire: Open ended and closed ended.

(b)Secondary Data Collection method:

Reference books.
Internet.
 Sampling Detail

1. Target population: The population for this

research study consists of the residence of
Dehradun.

2. Sampling unit: In this study the sampling unit is individual

consumer.

3. Sample size: 100 consumers 100 retailers.

4. Sampling method: The sample is selected by

using convenience-sampling method.
 DATA ANALYSIS AND INTERPRETATION

1. Do you support Demonetization?

a) Yes
b) No

Chart Title
YES NO

22%

78%
2. How Frequently do you visit the store after Demonetization?
a) Once a week
b) Twice a week
c) With in Fortnight
d) With in a month

Chart Title
once a week twice a week
with in fortnight with in month

20%
32%

30%
18%
3. Does Demonetization shifted your purchasing preferences from
unorganised stores to organised stores?
a) Yes
b) No

Chart Title
yes no

35%

65%

4. Is there any change in the buying pattern of FMCG goods after

demonetization?
a) Yes
 b) No

Chart Title
yes no

22%

78%

5. Is there any Price change of FMCG goods after Demonetization?

a) Yes
 b) No

Chart Title
yes no

45%
55%

6. What is your previous mode of transaction before Demonetization?

a) Cash
 b) Card
c) Paytm
d) Banking Applications
e) Others

Chart Title

others ; 10%
cash ; 25%
banking application ; 10%

paytm; 25%
card; 30%

7. What is your present mode of transaction after Demonetization?

 a) Cash
b) Cards
c) Paytm
d) Banking Applications
e) Others

Chart Title
cash card paytm
banking application others

10%
10% 25%

25%
30%

8. Did Demonetization affected your purchasing behaviour?

a) Yes
b) No
 Chart Title
yes no

32%

68%

9. If Yes then how?

10. Does Demonetization shifted your purchasing preferences from

unorganised stores to organised stores?
a) Yes
b) No
 Chart Title
yes no

44%
56%

11. According to you will Demonetization help in the economic

growth?
a) Yes
b) No
 Chart Title
yes no

33%

67%

(Retailers)

1. Do you support Demonetization?

a) Yes
b) No
 Chart Title
yes no

35%

65%

2. Did Demonetization Effect your business transactions?

a) Least Affected
b) Partially Affected
c) Fully Affected

Chart Title
least affected partially affected fully affected

35% 35%

30%

3. Which segment has Affected the most due to Demonetization?

a) FMCG
 b) Beauty
c) Home Decor
d) Others

Chart Title
fmcg beauty home dcor other

25%
35%

20%
20%

4. Is there any change in Customers buying behaviour?

a) More Change
b) Less Change
c) No Change
 Chart Title
more change less change no change

20%

56%
24%

5. Are you providing credit facility to the customers after Demonetization?

a) Yes
b) No
 Chart Title
yes no

33%

67%

6. Did you face any constraints due to Demonetization?

a) Fully Affected
b) Partially Affected
c) Least Affected
 Chart Title
fully affected partially affected least affected

30%
45%

25%

7. Does sales pattern of FMCG goods was affected due to

Demonetization?
a) Yes
b) No
 Chart Title
yes no

41%

59%

8. What is your average sales after Demonetization?

a) Below 40,000
b) Between 40,000 80,000
c) Between 80,000 1,20,000
d) 1,20,000 Above
e) Below 40000
 Chart Title
below 40000 between 40000-80000
between 80000-1,20000 1,20000 above
below 40000

15% 20%

15%

30%
20%

9. Reason behind the constraints caused?

10. Which mode of payment is most used after Demonetization?

a) Cash
b) Cards
c) Banking Application
d) Paytm
e) Others

Chart Title
cash card banking application
paytm others

10%
20%
20%

30%
20%
 11. According to you will Demonetization help in overall growth?
a) Yes
b) No

Chart Title
yes no

35%

65%

RECOMMENDATIONS
An attempt has been made to suggest to the Big Bazaar a few measures. These
suggestions have been made within the preview of the data available.
 1) The company must go for some more promotional activities rather than TV,
advertisement, hoarding and news papers and less price of the things

2) The company has to conduct the periodical meetings with customers and
take their valuable suggestions.

3) The company may adopt policy of discounts cards and gifts to customers
while purchasing the products.

4) Innovative efforts must be launched to improve the position through better

marketing strategies.

5) Innovative packaging can give a company an advantage over competitors.

6) The store staff should be trained adequately so as to convince the Potential

buyers, because his performance on jobs has great impact on sale of a
product.

7) Most of the customers belongs to age group of 17-27 years. So, company
has to concentrate more on those people to enhance the sales.

Moreover, the company has to concentrate more on the customers of age group of
28-37 years to enhance the sales

Conclusion of the Survey

 The study reflects that the use of sales promotion undeniably has increased
over the years in India. Future holds lot of promise for such schemes across wider
range of product-markets.

Sales Promotion has ceased to be major differentiator at least in the metros,

with almost all companies offering similar freebies and gifts. As a result now
marketers have to find out some innovative ways of sales promotion to differentiate
from competitors. Currently Price off and Bye one get one free offers are very
effective to attract the consumers towards the products.

We have noted that these kind of promotional tools are useful for short term
increase in sales and to induce first trial. These types of promotional schemes
should be consistent and changed from time to time depending upon season and
competitors schemes.

With the Increasing number of supermarket, the branded packaged goods

work as silent sales person. So in such stores, sales promotion plays a more
effective role in stimulating consumers demands.

One of the very important facts we came to know from this project is that
sale of goods which contain large quantity and having big packaging e.g. detergent
are stagnating because consumer prefer to buy small pack goods, the reasons are:
small pack goods reduce risk of bad quality, It had low cost or say price, and last but
important factor i.e. mentality to purchase just to try first. Sales of small pack goods
are quite high, but from the companys point of view small pack goods is less
profitable compare to large pack goods.
 So here marketer tries to increase sales of large pack goods by using sales
promotion tactics like price off and percentage extra.

BIBLIOGRAPHY

Text Books

Consumer Behavior: Albert J. Dells Bittas

Consumer Behavior: David L. Loudon

Principles of Marketing: Philip Kotler

Marketing Management: Philip Kotler

Websites:

www.consumerbehavior.com

www.bigbazaar.com

www.panthalone.com

www.futuregroup.com
Questionnaire (Customers)
Name-

Age-

Occupation-

Contact No-

Mail Id-

12. Do you support Demonetization?

c) Yes
d) No

13. How Frequently do you visit the store after Demonetization?

e) Once a week
f) Twice a week
g) With in Fortnight
h) With in a month

14. Does Demonetization shifted your purchasing preferences from

unorganised stores to organised stores?
c) Yes
d) No

15. Is there any change in the buying pattern of FMCG goods after
demonetization?
c) Yes
d) No

16. Is there any Price change of FMCG goods after Demonetization?

c) Yes
d) No

17. What is your previous mode of transaction before

Demonetization?
 f) Cash
g) Card
h) Paytm
i) Banking Applications
j) Others

18. What is your present mode of transaction after Demonetization?

f) Cash
g) Cards
h) Paytm
i) Banking Applications
j) Others

19. Did Demonetization affected your purchasing behaviour?

c) Yes
d) No

20. If Yes then how?

21. Does Demonetization shifted your purchasing preferences from

unorganised stores to organised stores?
c) Yes
d) No

22. According to you will Demonetization help in the economic

growth?
c) Yes
d) No
Questionnaire (Retailers)
Name-

Age-

Occupation-

Contact No-

Mail Id-

12. Do you support Demonetization?

c) Yes
d) No

13. Did Demonetization Effect your business transactions?

d) Least Affected
e) Partially Affected
f) Fully Affected

14. Which segment has Affected the most due to Demonetization?

e) FMCG
f) Beauty
g) Home Decor
h) Others

15. Is there any change in Customers buying behaviour?

d) More Change
e) Less Change
f) No Change

16. Are you providing credit facility to the customers after

Demonetization?
c) Yes
d) No

17. Did you face any constraints due to Demonetization?

d) Fully Affected
e) Partially Affected
f) Least Affected
18. Does sales pattern of FMCG goods was affected due to
Demonetization?
c) Yes
d) No

19. What is your average sales after Demonetization?

f) Below 40,000
g) Between 40,000 80,000
h) Between 80,000 1,20,000
i) 1,20,000 Above
j) Below 40000

20. Reason behind the constraints caused?

21. Which mode of payment is most used after Demonetization?

f) Cash
g) Cards
h) Banking Application
i) Paytm
j) Others

22. According to you will Demonetization help in overall growth?

c) Yes
d) No

23. What measure your company have undertaken to overcome the

situation?