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International Journal of Business Management & Research (IJBMR) ISSN(P): 2249-6920; ISSN(E): 2249-8036 Vol. 4, Issue 2, Apr 2014, 93-108 © TJPRC Pvt. Ltd.

CUSTOMER SERVICES MANAGEMENT IN SMALL SCALE RETAILING - AN EMPIRICAL STUDY K. RATNA MANIKYAM Lecturer, Department of Commerce, Sri A. S. N. M. Government College, Palakol, Andhra Pradesh, India

ABSTRACT The retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services. The retail industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. The Indian retail industry is the largest among all the industries, accounting for over 10 percent of the country’s GDP and around 8 percent of the employment. Though the organized sector occupied only 5 percent share in the total retailing, the main challenge facing the organized sector is the competition from unorganized sector. Small scale retailing is one of the key sectors of Indian economy. This service is providing employment and livelihood to millions of people since ages. The emergence of organized retailing in a big way in recent years brought in revolutionary changes in the business environment. The small scale retailers are challenged on many fronts. Indian Retail sector is dominated by small scale retails. The presence of millions of small scale retails in different product categories makes to realize that the large number of people is depending on this activity. In the light of severe competition threats from the fast growing and more challenging big retailers in the fast changing scenario, the survival and growth of small scale retailing depends upon their customer services management. This paper examines the customer services provided by the small scale retailers. The findings of the empirical study are tabulated and analyzed to draw conclusions.

KEYWORDS: Retailing, Customer Service, Customer Retention, Business Philosophy, Service Experience INTRODUCTION The Indian Retail Industry is the largest among all the industries, accounting for over 10 percent of the country’s GDP and around 8 percent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market (Dhanabhakyam, M. and Shanthi A.). According to AT Kearney’s annual Global Retail Development Index (GRDI), in 2011, India is the fourth largest retail destination globally. As the most attractive emerging market destination for investment, India slipped from the top position it held in the last three years to finish second this year, after Vietnam (Karen Fifer and Gauri Padmanabhan). India has also been ranked as the third most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm, A T Kearney in its 9th annual Global Retail Development Index (GRDI) 2010. Retailing plays a significant role in economic system of any country. It involves selling goods and services to the ultimate consumers. “Retailing is a part of the continuous process going in between the farm and the factory and household in which goods are changed in form, packed, transported and subdivided” (Taimini K.K). Retailing is one of the oldest of all business institutions. It has developed along with various stages of civilization, altering its form or varying its offerings to meet the changing demands of the people it has served (Rathor B.S). The roots of retailing are embedded deeply in www.tjprc.org

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antiquity. In the earliest cultures, trading and bartering took place. These activities were conducted for the purposes of satisfying basic needs and accumulating luxuries (James R. Lowry). The importance of retail trade runs through the entire story of human race. From the very beginning of human history, it is found that people traded with one another for necessities of their lives. And throughout, the objective has the same – the struggle of mankind to satisfy his wants (Clare Wright Barker and Ira Dennis Anderson). The earliest traders were soldiers of fortune who travelled from place to place engaging in barter with whoever had something desirable to trade (Herbert Heaton). In the earliest nations of antiquity of which there are historical records as well as those which came later, trading was widely carried on. Every city and village had its market places; most of them seem to have had retail shops of one kind or another. In ancient Greece and Rome, for example, retailers of many kinds abounded. In the larger cities the shops were apparently grouped together by kinds of business in certain locations. Over a period of time the retailing business passed through various stages of development (Paul H. Nystrom). Service experience is a service process that creates the customer’s cognitive, emotional, and behavioral responses, resulting in a mental mark, a memory. The role of the prepurchase service experience is to help customers assess the quality and value of the service in context, thus facilitating assessment and decision making by the customer (Johnston and Clark 2001, Bo Edvardsson, Bo Enquist and Robert Johnston 2003). Service experiences are the outcomes of interactions between organizations, related systems/processes, service employees and customers. Considerable research in marketing and management has examined customer satisfaction with service experiences (Arnold and Price, 1993; Bitner, Booms and Mohr, 1994; Bitner, Booms and Tetreault, 1990; Keaveney, 1995; Ostrom and Iacobucci, 1995; Surprenant and Solomon, 1987; Zeithaml, Parasuraman and Berry, 1990). Voss (2003) argues that organizations are “focusing more and more on experiences in order to engage customers . . . to differentiate themselves.” It is also recognized that functional qualities are not enough: an emotional reaction forms part of a quality and favorable experience (Cronin 2003; Sherry 1998). What distinguishes the excellent from the average service organisation often has to do with these experiences and not just a logical value for money outcome and cognitive assessment of the service (Johnston and Clark 2001). Predominantly, the research has focused on the roles of service processes, employees and tangibles in creating quality service experiences for customers (Mary Jo Bitner, William T. Faranda, Amy R. Hubbert and Valarie A. Zeithaml 1997). Quality service experiences result not only in customer satisfaction but also in building customer loyalty. Bearden and Teel (1983) have shown a relationship between satisfaction and loyalty. Szymanski and Henard (2001), in their meta-analysis, indicate 15 positive and significant correlations between the two constructs. The ability to satisfy customers is vital for a number of reasons. It has been found that dissatisfied customers tend to complain to the establishment or seek redress from them more often to relieve cognitive dissonance and failed consumption experiences (Oliver, 1987; Nyer, 1999). Customer satisfaction is the consumer’s fulfillment response (Oliver, 1997). It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption related fulfillment (Syed Saad Andaleeb and Carolyn Conway, 2006). Companies are searching for new and better ways to create value and differentiate their market offerings to attract and keep customers and make a profit (Bendapudi and Leone 2003; Shaw and Ivens 2002).

REVIEW OF LITERATURE Research on retailing particularly small scale retailing is not carried out to the level it deserves. The following are the studies selected for review which are related closely to the concept under study. Mohan Guruswamy and Others (2005) have made a study on ‘FDI in India’s Retail Sector’. In their study they examined the various causes for failure to get Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


Customer Services Management in Small Scale Retailing – An Empirical Study

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Foreign Direct Investment by small retailers such as low productivity, less employability, substantial quality, foreign competition, limited revenue generation through less number of operations. . In the study they suggested that the small retailers must be given the opportunity to provide more personalized services in order to take advantage of high cost of human resources. Laxmi Prabha and Amatual Baseer (2007) in their research study titled “Emerging retail trends in India” examined the types of the retailers in India and their pricing strategies. According to them, most retailers in India are using cost-plus pricing. They opined that in India strong regional and national players are emerging across formats and products categories and the shopping mall formats are fast evolving. Partnering among Brands, retailers, franchisees, investors and malls is taking place with a rapid pace. Sasikumar and Regina Sibi Cleetus (2008) in their study on “Impact of Corporate Retailing on Small Retail Outlets” examined the impact of corporate retailing on small scale retail outlets. The study revealed that there is serious impact of corporate retailing on small scale retailers. Many small sale retailers were displaced due to corporate entry in retail as per the study. Subba Rao. N (2008) studied retail industry challenges and opportunities in India. In his opinion the retail strategies may differ depending upon the product assortment, brands available and store location and retail business has been changing from commercial retail outlets to superstores, specialty stores, franchise stores direct marketing and even tele marketing. These changes have been made business of retailing more challenging than ever. Prasanta Paul, Debasish Mukherjee and Chiranjib Das (2009) have identified Indian retailing challenges. They classified Indian-specific challenges of retail sector into two categories i.e. internal and external. The internal challenges identified are prevention of shortages, shop lifting, keeping pace with the technology, streamlining of logistic and supply chain, and training of personnel, management of the profitability of the store etc., and the external challenges identified are vastness of the market, required laws relating to this trade, infrastructure, rising aspirations of the consumer etc. Keval Sheth, Rohit Divekar, R. Srinivasan and R. K. Srivastava (2009) in their research work titled “Unorganized Retailing – Competition to Co-existence “studied the market orientation in unorganized retailing. They stated that unorganized retailers cannot compete with big retailers on head-to-head basis. Since the major retailers aim at the mass – consumption middle class, small retailers can successfully target lower income group. The study found that market orientation and small sale retailers’ performance are positively related. The customer service focus of small retailers is the key determinant of success compared to other components of market orientation. J. Joseph Cronin, Jr.,(1985) in his work on “Determinants of Retail Profit Performance: A Consideration of Retail Marketing Strategies” ascertained whether a parsimonious set of marketing strategies which are associated with profit performance could be identified to serve as criteria for evaluating and selecting the marketing tactics of retailers. The research reveals that such a set does exist, as four of the predictors have a significant association with profitability which is readily interpretable and combine to explain nearly 22 percent of the variation in profit performance. Specifically, sales growth, market share, and the ratio of capital-to-labour were found to have a significant and positive influence on profit performance, while average inventory per store exhibited the hypothesized negative relationship. The case study of Peter Jones and Colin Clarke-Hill, Peter Shears, David Hillier(2001) titled “Retailing Organic Food” identified the growth of market of Organic Food that has evolved from niche to mainstream market. Pricing, supply and marketing are the issues identified as challenges in organic food retail market. Jun Li and Yunyi Wang and Nancy L. Cassill (2004) in their research work on “A comparative study on new retailing outlets in the Shanghai apparel market” presented a comparison on four influential retailing outlets in the www.tjprc.org

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Shanghai apparel retail market: upscale shopping centers, modern shopping malls, joint discount superstores (joint ventures with foreign retail giants), and manufacturers’ wholly-owned flagship stores (factory outlets). The empirical research of Gaby Odekerken-Schroder, Kristof De Wulf and Kristy E. Reynolds (2005) titled “A Cross-Cultural Investigation of Relationship Marketing Effectiveness in Retail Services: A Contingency Approach” investigated the impact of factors such as: demographic characteristics of the consumer (age and gender), personal values of the consumer (social affiliation), and shopping related consumer characteristics (product category involvement, consumer relationship proneness, and shopping enjoyment) on the effectiveness of relationship marketing efforts in a retail services context. The study focused on two different service industries, food and apparel. Andrew Paddison and Eric Calderwood (2007) in their research work titled “Rural retailing: a sector in decline?” analyzed the key issues and challenges that face the rural retailing sector. The study explored various issues such as link between extending the retailer’s spatial scope, the constraints of remoteness and finite population catchments were analyzed in detail. Louise van Scheers and M C Cant (2007) in their work on “The effect of consumer price knowledge and gender on retail marketing strategy” studied the effect of consumer price knowledge and gender on retail management strategy. Consumers who are branded as cherry pickers are price sensitive shoppers with no brand loyalty but this market segment has been found to be sizable, heterogeneous, and potentially attractive for retailers, contrary to the myth that they are a retailers’ nemesis. Nicholas Alexander, Anne Marie Doherty, Jason M. Carpenter, Marguerite Moore’s (2009) conceptual paper titled "Consumer receptiveness to international retail market entry" provided a framework for improving the understanding of consumer receptiveness to incoming international retailers. The paper proposed a method to explore how consumers in the host market respond to incoming international retail firms. The exploratory research study of Jason M. Carpenter, Vikranth Balija (2009) titled "Retail format choice in the US consumer electronics market” used demographics and retail attributes to profile consumer electronics shoppers of each major retail format in the USA. The research study provides consumer electronics retailers with specific knowledge of the attributes that consumers consider to be important when making format choices and identifies the demographic characteristics of shoppers who frequent each retail format. Anjala S. Krishen, My Bui, Paula C. Peter (2009) in their experimental research work titled “Retail kiosks: how regret and variety influence consumption” made an attempt to gain insight regarding the impact of consumer regret on shopping in mall kiosks and its relationship with consumer variety-seeking tendencies. It is evident from the study that that variety and regret play an important role in mall kiosk shopping. The review of literature drives to the conclusion that a few studies are conducted in small scale retailing with a limited scope. A comprehensive study on retail operations in different categories and consumer behavior were not attempted by the researchers. There is very limited research studies were made either on organized retailing or small scale retailing in India. Mainly the researchers focused on the issues related to organized retailing. The studies on small scale retailing were very few. According to the above review of research and development, the selected theme of the research problem was not concentrated.

OBJECTIVE OF THE STUDY The objective of this study is to analyse the Customer Services provided by the small scale retailers of five selected categories including food & grocery, textile & apparel, electrical & electronics, jewellery, and footwear.

Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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Customer Services Management in Small Scale Retailing – An Empirical Study

RESEARCH METHODOLOGY Scope of Coverage The study covers small scale retail units in different retail categories. For the purpose of the study, five retail categories were selected based on the number of retailing units established in Andhra Pradesh. The five categories selected for the study are food and grocery, textile and apparel, electrical and electronics, jewellery, and footwear. Geographically the state is identified with three regions named as Coastal Andhra, Telangana and Rayalaseema. The Coastal Andhra region covers nine districts, the Telangana region covers 10 districts and the Rayalaseema region covers four districts. Sample Selection For the purpose of the study one district from each of the region has been selected based on the largest number of units established. Accordingly, the districts East Godavari, Hyderabad, and Kurnool were selected for the study. Since the universe of the small scale retailing units is large, to decide the sample size quota sampling technique is used. Accordingly, the sample units are selected by using simple random sampling technique. The sampling frame used from the purpose was retailers list provided by the department of Commercial Taxes. The sample units of retailers are shown in the following table. Category Food and grocery Textile and apparel Electrical and electronics Jewellery Footwear Total

East Godavari 15

Hyderabad 15

Kurnool 15

Total 45

15

15

15

45

15

15

15

45

15 15 75

15 15 75

15 15 75

45 45 225

Research Instrument: Questionnaire is used to collect data, information and opinion of the retailers. Ranking scale is used wherever found suitable. Personal interviews are conducted to collect data and information from retailers. Data Analysis, Interpretation and Presentation: After completing the field edit, tabulation of the data was done by using SPSS. The ranking scale is used for issues presented in Tables 2,4,5,7 and 8 to collect information. Top three ranks (five ranks in case of Table 8) are collected and the data on ranks were converted into scores as shown below. Rank

Weight

1

3

2

2

3

1

Score: n x rank x weightage Wherever scores are calculated weighed mean, and percentage to Maximum possible score (MPS) are calculated for data analysis. Ranking Scale: MPS of any variable = 3 n of variable x 3 = MPS of that variable.

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(The score obtained by each variable/MPS) x 100 = % to MPS (Total number of respondents x Maximum weight = MPS) For Example Particulars Score Maximum Score % to MPS

Product Range 373 n x max. weight = 225 x 3 = 675 (373/675) x 100 = 55.26

CUSTOMER SERVICES The importance of customer relationships has been identified world over by all businesses irrespective of their size and nature of business. The fast changing business scenario reaffirms the greater need to build a strong loyal customer base to succeed in business. Towards this end, there is a need for transformation of the entire organization to make every employee customer oriented in every act of performance. Customer service therefore occupies a significant place in retail operations as an essential measure towards building customer relationships. Customer service is a set of activities and programs undertaken by the retailer to make the shopping experience more rewarding for their customers. These activities increase the value customers receive from the merchandise and service they purchase. All elements of the retailing mix provide customer service that increases the value of the merchandise. Some of the services offered by the retailers include acceptance of credit cards, alteration of merchandise, free home delivery, demonstration of merchandise, extended store hours, signage to locate and identify merchandise, gift wrapping, salespersons in assisting the customers, etc. There are many more innovative services a retailer offers. But the most important indicator of quality service is not the service offered but how it is offered by the retailer and the employees of the store. Customer services help in differentiating retail offerings. One can build customer loyalty and develop sustainable competitive advantage by providing excellent customer service. Good service keeps customers returning to a retailer and generates positive word-of-mouth publicity which attracts new customers. Customization and standardization are the two approaches retailers use to develop a sustainable customer service advantage. Customization approach relies on the quality of interaction between a sales associate and the customer. This approach encourages service providers to tailor the service to meet each customer’s personal needs. The customized approach typically results in most customers receiving superior service. The standardization approach is based on standardizing key touch points of service delivery and ensuring that the set guidelines are followed strictly by every person of the store. Rules and procedures are set for customer contact and the customers receive the same service in the store time after time. When customers evaluate retail service, they compare their perceptions of the service they receive with their expectations. Customers are satisfied when the perceived service meets or exceeds their expectations. They are dissatisfied when they feel the service falls below their expectation. Customer’s expectations are generally based on customer’s knowledge and experiences. Expectations vary depending on the type of store. Since expectations aren’t the same for all retailers, a customer may be satisfied with low levels of actual service in one store and dissatisfied with high service levels in another store. Retailers, therefore, need to understand specific expectations of the customers on retail services.

BUSINESS PHILOSOPHY TOWARDS CUSTOMERS Retail services are having high customer contact and therefore, a business philosophy towards customers will play a pivotal role in shaping up the business prospects. Keeping this in view an attempt is made in the study to know the Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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Customer Services Management in Small Scale Retailing – An Empirical Study

business philosophies of responding units in relation to customer service. The data presented in Table 1 reveals that the responding units follow five different philosophies guiding the relationship with customers. The philosophies are: 1. Customer satisfaction is the foundation for business success, 2. The satisfied customer would bring more customers, 3. A satisfied customer exhibits high degree of store loyalty, 4. A dissatisfied customer is capable of destroying the reputation of the shop, and 5. A dissatisfied customer creates problems to the business. It can be seen from the table that 40 percent of the responding units have the philosophy that states the ‘customer satisfaction is the foundation for business success’. As many as 32 percent of the respondents revealed that their philosophy has been the satisfied customer would bring more customers. Out of the total, 18.22 percent of the respondents believe that a satisfied customer exhibits high degree of store loyalty. There are 5.33 percent of the respondents who revealed that their guiding philosophy was ‘a dissatisfied customer is capable of destroying the reputation of the shop’ whereas ‘a dissatisfied customer creates problems to the business’ has been the philosophy of 4.44 percent of the respondents. Table 1: Business Philosophy in Relation to Customers Particulars Customer satisfaction is the foundation for business success The satisfied customer would bring more customers A satisfied customer exhibits high degree of store loyalty A dissatisfied customer is capable of destroying the reputation of the shop A dissatisfied customer creates problems to the business Total

Food & Grocery

Textile & Apparel

Electrical & Electronics

Jewellery

Footwear

Total

16(7.11)

20(8.89)

19(8.44)

18(8.00)

17(7.56)

90(40.00)

15(6.67)

14(6.22)

13(5.78)

14(6.22)

16(7.11)

72(32.00)

9(4.00)

8(3.56)

7(3.11)

8(3.56)

9(4.00)

41(18.22)

3(1.33)

2(0.89)

4(1.78)

2(0.89)

1(0.44)

12(5.33)

2(0.89)

1(0.44)

2(0.89)

3(1.33)

2(0.89)

10(4.44)

45(20.00)

45(20.00)

45(20.00)

45(20.00)

45(20.00)

225(100.00)

Figures in parentheses indicate percentage to the total. Source: Primary Data Having considered customer satisfaction as the driving force in providing customer services the respondents focused on the number of activities to create a feel of satisfaction among customers. The factors considered for the purpose include good reception, courteous and prompt response, providing adequate information, giving right advice, helping in product choice, offering wide range of products, providing comforts to customers in the store and after sales service. The data presented in Table 2 reveals giving right advice to the customers, good reception and courteous and prompt response are the three most considered factors to create a feel of satisfaction among the customers. The factor ‘giving right advice’ got the highest score of 255 representing 37.78 percent to MPS. The factor ‘good reception’ got the second highest score of 249 representing 36.89 percent to MPS. The factor ‘courteous and prompt response’ got the third highest score of 210 representing 31.11 percent to MPS. The sector wise analysis of the factors considered for the purpose reveals that the respondents of respective categories differ in their approach in creating a feel of satisfaction. The category wise top three factors considered are as following.

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Table 2: Factors Considered for Creating a Feel of Satisfaction among Customers Particulars Score Good reception 249 Courteous and prompt response 210 Providing adequate information 160 Giving right advice 255 Helping in product choice 186 Offering wide range of products 187 Providing comforts to customers in the store 45 After sales service 61 WM= Weighed Mean, MPS = Maximum Possible Score Source: Primary Data

WM 1.11 0.93 0.71 1.13 0.83 0.83 0.20 0.27

% to MPS 36.89 31.11 23.70 37.78 27.56 27.70 06.67 09.04

The respondents were asked to reveal whether they discriminate customers in extending services or not. The data shown in Figure 1 reveals that the majority of the respondents representing 70.67 percent do not discriminate customers in terms of economic status, order size, regularity, gender, age, physical appearance and so on. However, 29.33 percent of the respondents revealed that they do discriminate customers in extending services believing such discrimination will help in building up the desired group of customers as the loyal customer base.

Descrimination 29%

No descrimination 71%

Source: Primary Data Figure 1: Discrimination among Customers in Extending Services

CUSTOMER RETENTION An attempt is made in the study to know the loyal customer base of the respondents as a percentage to total customers. The data presented in Table 3 reveals that the loyal customer base of the respondents varied between 20 percent and 80 percent of the total customers. Out of the total, 1/3 of respondents are having 30 percent loyal customer base. About 19 percent of the respondents are having 20 percent loyal customer base and about 18 percent of the respondents are having 40 percent loyal customer base. The average size of the loyal customer base of the retail units has been 32.44 percent to the total customers. The loyal customer base is highest in the case of food and grocery retailers (37.11 percent) followed by jewellery retailers (36.22 percent). The lowest loyal customer base is in footwear retailing which reported the average loyal customer base as 25 percent of the total. In textile and apparel category, the loyal customer base constitutes about 35 percent whereas in electrical and electronics it is 29 percent.

Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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Customer Services Management in Small Scale Retailing – An Empirical Study

Table 3: Size of Loyal Customer Base Loyal Food & Textile & Electrical & Customers Grocery Apparel Electronics (in %) 20 4(1.78) 7(3.11) 11(4.89) 25 4(1.78) 4(1.78) 7(3.11) 30 11(4.89) 15(6.67) 18(8.00) 35 4(1.78) --40 12(5.33) 12(5.33) 8(3.56) 50 7(3.11) 5(2.22) 1(0.44) 60 2(0.89) --70 1(0.44) 1(0.44) -80 -1(0.44) -Total 45(20.00) 45(20.00) 45(20.00) Figures in parentheses indicate percentage to the total. Source: Primary Data

Jewellery

Footwear

Total

4(1.78) 2(0.89) 18(8.00) 2(0.89) 7(3.11) 11(4.89) 1(0.44) --45(20.00)

16(7.11) 15(6.67) 13(5.78) -1(0.44) ----45(20.00)

42(18.67) 32(14.22) 75(33.33) 6(2.67) 40(17.78) 24(10.67) 3(1.33) 2(0.89) 1(0.44) 225(100.00)

Customer retention is the major challenge for small scale retailers. Retailers adopt several measures to attract retail customers. The data presented in Table 4 reveals that the respondents are adopting measures such as building relationships, stable pricing, assured supply, maintaining quality, providing efficient after sales service and recognition and preferential treatment to retain the existing customers. It can be seen from the table that building relationships with customers,

maintaining quality and

stable

pricing

are

the

key

measures

adopted

by the

respondents.

‘Building relationships’ as a measure got the highest score of 368 representing 54.52 percent to MPS (mean value 1.64). ‘Maintaining quality’ got the second highest score of 359 representing 53.19 percent to MPS. ‘Stability in pricing’ as a measure got a score of 252 representing 37.33 percent to MPS. The top three measures in all the retail categories are the same with differing priorities except in the case of jewellery category. The top three measures adopted by jewellery retailers are maintaining quality, building relationships and providing efficient after sales service in the order. Table 4: Measures Adopted to Retain Existing Customers Particulars Score WM Building relationships 368 1.64 Stable pricing 252 1.12 Assured supply 140 0.62 Maintaining quality 359 1.60 Providing efficient after sales service 136 0.60 Recognition and Preferential treatment 95 0.42 WM= Weighed Mean, MPS = Maximum Possible Score Source: Primary Data

% to MPS 54.52 37.33 20.74 53.19 20.15 14.07

PROBLEMS FROM CUSTOMERS The respondents were asked to reveal the problems faced by them with customers. As per the study the problems from customers include spending more time in the shop, not allowing the salesman to attend other customers, quarreling with salesman, insisting to accept returns, excessive bargaining, disturbing the order of chairs and other facilities and wrong handling of the products. The data presented in Table 5 reveals that the responding units perceive that the buyers spending more time in the shop as one of the major problems. This factor got a score of 257 representing 38.07 percent to MPS. The second major problem reported was the buyer not allowing the salesman to attend other customers. This factor got a score of 220 representing 32.59 percent to MPS. Excessive bargaining was the third problem which got a score of 190

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representing 28.15 percent to MPS. The problems with customers are not similar across the retail categories under the study. The three major problems with customers for food and grocery retail units in the order are quarreling with salesman, excessive bargaining and insisting to accept returns. In the case of textile and apparel, the major problems with customers are not allowing the salesman to attend other customers, spending more time in the shop and excessive bargaining. The retailers from electrical and electronics category face spending more time in the shop, quarreling with salesman and excessive bargaining problems from customers while jewellery category retailers face ‘not allowing the salesman to attend other customers’, ‘excessive bargaining’ and ‘wrong handling of the products’ as problems from buyers. In the case of footwear category the major problems with customers are spending more time in the shop, not allowing the salesman to attend other customers and excessive bargaining. Table 5: Problems Faced with Customers Particulars Score WM % to MPS Spending more time in the 257 1.14 38.07 shop Not allowing the salesman to 220 0.98 32.59 attend other customers Quarreling with salesmen 176 0.78 26.07 Insisting to accept returns 143 0.64 21.19 Excessive bargaining 190 0.84 28.15 Disturbing the order of chairs 58 0.26 08.59 and other facilities Wrong handling of the 108 0.48 16.00 products WM= Weighed Mean, MPS = Maximum Possible Score Source: Primary Data The study reveals that about 81 percent of the responding units have troubling customers who test the patience of retailers and their employees and who provoke unwanted reactions from the retailers’ side. The share of such customers varies between two percent and more than 10 percent. The data presented in Table 6 reveals the share of troubled customers was 5-6 percent in the case of about 55 percent of the respondents. The overall average share of troubling customers of the small scale retail units has been 4.64 percent. The average share of troubling customers is highest in the case of footwear category (5.27 percent) followed by textile and apparel retail category (4.98 percent). The lowest share troubling customers is in the case of jewellery retail units (3.71 percent). In food and grocery category the average share of troubling customers is 4.56 percent whereas in electrical and electronics category it is 4.67 percent. Table 6: The Share of Troubling Customers Percentage of Troubling Customers 2 3 4 5 6 7 8 9

Food & Grocery

Textile & Apparel

Electrical & Electronics

Jewellery

Footwear

Total

-4(1.78) 2(0.89) 5(2.22) 4(1.78) 14(6.22) -2(0.89)

2(0.89) -1(0.44) 19(8.44) 12(5.33) 7(3.11) ---

2(0.89) --19(8.44) 15(6.67) 3(1.33) ---

2(0.89) --11(4.89) 7(3.11) 8(3.56) ---

---18(8.00) 13(5.78) 7(3.11) 1 (0.44) --

6(2.67) 4(1.78) 3(1.33) 72(32.00) 51(22.67) 39(17.33) 1(0.44) 2(0.89)

Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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Customer Services Management in Small Scale Retailing – An Empirical Study

Table 6: Contd., 10 2(0.89) --1(0.44) > 10 ----Total 33(14.67) 41(18.22) 39(17.33) 29(12.89) Figures in parentheses indicate percentage to the total 225 respondents. Source: Primary Data

-1 (0.44) 40(17.78)

3(1.33) 1 (0.44) 182(80.89)

The data presented in Figure 2 reveals the respondents who receive complaints from customers on service failures. Out of the total 60 percent of the respondents revealed that they have not received complaints from customers during the last two years whereas 40 percent of the respondents receive complaints from the customers on service failures. More number of retailers in electrical and electronics and footwear categories receive complaints from customers. A few units from food and grocery category receive complaints from consumers.

Receive complaints 40% Do not receive complaints 60%

Source: Primary Data Figure 2: Complaints from Customers on Service Failures All the retailers who received complaints from customers responded in different ways as a measure of service recovery. The responses of the retailers on customer complaints include apologize the customer, accept the customers demand, take action to arrest reoccurrence, respond positively only when the demand is reasonable and do not entertain unreasonable demands. The data presented in Table 7 reveals apologize the customer, accept the customers demand and respond positively only when the demand is reasonable are the top three considered measures when there are customer complaints on service deficiency. The measure ‘apologize the customers’ got the highest score of 169 representing 62.59 percent to MPS. Accept the customers demand as a measure got the second highest score of 118 representing

43.70

percent to MPS. ‘Respond positively only when the demand is reasonable’ got the third place with a score of 112 representing 41.48 percent to MPS. Table 7: Response to Customer Complaints on Service Deficiency Particulars

Score

WM

% to MPS 62.59 43.70 32.96

Apologize the customer 169 1.88 Accept the customers demand 118 1.31 Take action to arrest reoccurrence 89 0.99 Respond positively only when the 112 1.24 41.48 demand is reasonable Do not entertain unreasonable 52 0.58 19.26 demands The ratings of 90 respondents (40 percent) who received complaints are taken as base to calculate scores and mean values. WM= Weighed Mean, MPS = Maximum Possible Score Source: primary data www.tjprc.org

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K. Ratna Manikyam

MAJOR CHALLENGES OF RETAILING IN INDIA One of the major changes in the Indian retailing in the recent past is the entry of corporate retailing. This change influenced the consumers as well as the small scale retailers significantly in the country. An attempt is made to know the perceptions of the small scale retailers on the impact of corporate retailing on their business. The data presented in Table 8 reveals that the small scale retail units perceive that the growth of corporate retailing affected the business of small scale retailers. The statement ‘the growth of corporate retailing affected the business of small scale retailers’ got a score of 958 representing 85.16 percent to MPS. The statement ‘due to big retail houses the preference of small scale retailers decline’ got a score of 869 representing 77.24 percent to MPS. A few respondents agree to the statement some small scale retailers closed their businesses due to competition from big retailers’ got a score of 546 representing 48.53 percent to MPS. The statement ‘small scale retailers improved their businesses practices to face competition from corporate retailers got a score of 802 representing 71.29 percent to MPS. The statement ‘small scale retailers are forced to offer more services to customers to withstand competition from big stores’ got a score of 803 representing 71.38 percent to MPS. The statement ‘there is a bright future for small scale retailers in spite of the growth of big retailers’ got a score of 805 representing 71.56 percent to MPS. It can be inferred from the data that the small scale retailers realized the threat from corporate retailing but did not loose heart. They have improved their business practices and services to customers to face the new challenge. They believe that there is a bright future for small scale retailing in spite of the high growth rate of corporate retailing. Table 8: Opinion on the Impact of Corporate Retailing on Small Scale Retailing Particulars The growth of corporate retailing affected the business of small scale retailers Due to big retail houses the preference of small scale retailers decline Some small scale retailers closed their businesses due to competition from big retailers Small scale retailers improved business practice to face competition from corporate retailers Small scale retailers are forced to offer more services to customers to withstand competition from big stores There is a bright future for small scale retailers inspite of the growth of big retailers Weighed Mean, MPS = Maximum Possible Score Source: primary data

Score

WM

% to MPS

958

4.26

85.16

869

3.86

77.24

546

2.43

48.53

802

3.56

71.29

803

3.57

71.38

805

3.58

71.56

CONCLUSIONS The changing scenario of business environment in retailing creates new challenges and threats to small scale retailers. The growth of organized retailing in India during the last decade changed the face of retailing in all formats. The small scale retailers who adapted themselves to the changes could able to withstand in the business. These retailers could retain their customer base by making improvements in store ambience, communications, customer interaction and relationships and offering a wide range of product mix. This indicates that the small scale retailers, who are proactive and open for change, enjoy credibility in the market. The study revealed that the majority of the small scale retailers are successful in retaining their customers and also achieving growth in their business. However, the road ahead is not going to be smooth for ride unless the small scale retailers become strategically market oriented. They should adopt professional

Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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Customer Services Management in Small Scale Retailing – An Empirical Study

management techniques in re-engineering their business processes. The study revealed that the small scale retailers are following conventional methods in managing their operations. However, they are adapting to the changes slowly than demanded. It is necessary therefore orient themselves to adopt marketing philosophy in their business to give focused customer satisfaction and retention.

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Impact Factor (JCC): 4.9926

Index Copernicus Value (ICV): 3.0


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7 business mgmt customer services k ratna manikyam  

The retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services. The retail in...