“Consumer Perceptions of Global and Local Brands in the Indian ...

“Consumer Perceptions of Global and LocalBrands in the Indian Retail Industry”By Smriti Bajaj(2006-2007)“A dissertation submitted to the University of NottinghamIn part consideration for the degree of ‘MA in Marketing’Consumer perceptions of Global and Local Brands in the Indian retail Industry 1

5.3 Limitations .......................................................................................................... 63REFERENCES ................................................................................................................. 64APPENDIX....................................................................................................................... 68Consumer perceptions of Global and Local Brands in the Indian retail Industry 5

Chapter OneIntroduction1.1. IntroductionThis study aims in understanding consumer perception of global brands vs. local brandsin the Indian retail industry. The Indian retail industry is undertaken for the study for thesimple reason being the strong growth of the retail sector in India. Organized retailing isat its infancy in India and presents huge growth opportunity. Standing on the threshold ofa retail revolution and witnessing a fast changing retail landscape, India is all set toexperience the phenomenon of a global village. India presents a grand opportunity to theworld at large, to use it as a business hub. A vibrant economy, India tops A.T. Kearney’slist of emerging markets for global retailers and it has climbed up three notches to emergeas the second most attractive investment destination for global retailers (A.T Kearney,2005)India is very often called as the nation of the ‘dukandars’ (shop keepers) - around 12million retailers- consisting of more retail shops than those in the rest of the world puttogether. The retail trade is highly fragmented in nature and it is often remarked that retailin India is nascent and mostly unorganized. The local bania or kirana store, the paanwalaand the vegetable vendor who are very much a part of the Indian retail landscape aretermed together by many as the unorganized sector. While it is true that they do not usetechnology, they are well aware of the needs and wants of their customers, are aware oftheir likes and dislikes and they know what and how much to stock. Many of them alsoknow their customers by name and offer add-on services like free home delivery andcredit facilities. This is the traditional form of retail in India (Pradhan, 2007)However the business of retail in India has seen significant changes in the last few years.We have seen the emergence of new formats and the application of global concepts andConsumer perceptions of Global and Local Brands in the Indian retail Industry 6

compared to the high street brands. With brands like Gucci, Versace, Valentino, Chanelas well as the Indian designer wear brands such as Ritu Kumar, Rocky S, etc on theopposite end there are the unorganized local stores, selling their products in small familyrun retail outlets, hence leaving very few fashion brands operating in the middle end ofthe market. There are not many options left for young people who want speedy fashion atreasonable prices. In absence of strong brands in the women’s wear segment, for womenwho are looking for stylized garments, be it casual or formal at reasonable prices, thecurrent scenario is unbalanced with either the price element or the style element. Hencethere is a need for brands for which can balance both the price and the style element.1.2Objectives of the StudyThe primary objective of this study is to understand consumer perceptions of global andlocal brands in the Indian retail industry. The secondary objectives are mentioned asfollowsTo analyze the factors that effect consumer preference for global brands.Factors like Product and Service Quality, Country of Origin, Culture,Materialism affect consumer perceptions of global and local brands.To determine the main reasons as to why people consume brands as symbolicidentities.To identify the key discrepancies that exist between managerial and consumerexpectations of delivering brand satisfaction which have led to the gap forforeign low cost retailer brands.1.3 Dissertation Outline and StructureChapter Two-Literature ReviewThis chapter provides a wide-spread discussion on the existing literature on globalbranding and how consumers perceive global and local brands. The reasons for theirpreferences have also been explored. Factors like Quality of Products and Services,Impact of Culture, Materialism, and Country of Origin have been discussed in detailConsumer perceptions of Global and Local Brands in the Indian retail Industry 8

which lead consumers towards global brand purchases. In addition market segmentationhas also been discussed in order to relate to the class of people which help us achieve ourobjective of why people particularly from the upper middle classes construct symbolicmeanings of brands.A model explaining the various antecedents that lead consumers to purchase globalbrands has been developed based on the literature review. Based on the model relevanthypothesis has been proposed in this chapter. The validity of these hypotheses will betested and further examined in the following chapters.Chapter Three-MethodologyThis chapter clearly defines the basic purpose of this study. It then discusses in depth therelevant methodology that has been made use of to carry out this research. It also explainsin detail how data for this purpose has been collected by briefing on the method ofsampling and the technique used for collecting relevant information.Chapter Four -Analysis and DiscussionThis chapter discusses the findings from the data collected and concluding discussionsare presented. For the purposes of analysis and to achieve the objectives of this researchthe results from the interviews have been broken down to various themes so that thehypothesis proposed in chapter Two can be tested. The themes have been broken downsuch that they correlate to the literature review to facilitate discussion of each issue indepth.Chapter Five-ConclusionThis chapter presents a key summary of findings obtained from the above chapter. Thesefindings would be of interest to managers to understand consumer perceptions of globaland local brands in a developing country like India. It then provides various implicationsfor managers of various global retailers like Tesco, H&M etc before entering the Indianmarkets based on the responses of the Indian retailers and lastly it discusses thelimitations of this study.Consumer perceptions of Global and Local Brands in the Indian retail Industry 9

Chapter 2Literature ReviewIn light of the primary objective of this research to understand consumer perceptions ofglobal and local brands this chapter will examine and present a detailed review on thereasons as to why consumers in emerging in emerging markets prefer foreign brands overlocal brands. Several studies show that preference for imported, branded products overdomestic ones seems to prevail among consumers in developing countries (Batra et al,2000). Consumers in developing economies appear to perceive that products fromdeveloping countries are of lesser quality and will result in higher levels of dissatisfaction(Okechuku and Onyemah, 1999: cited in Batra et al)A conceptual model has been developed which explains what are the basic factors thatlead consumers in emerging markets to purchase global over local brands. This modelwill be applied and tested in our analysis to conclude and explore the main reasons forconsumer purchases of global over local brands and what are the further implications thatmanagers need to keep in mind while moving into emerging markets.This chapter has been divided into several sections. The first part throws light upon theconsumer preferences for global brands. It then moves on to explaining the antecedents ofglobal brand purchases that affect consumers like Service Quality and Product Quality,Culture, and Materialism . It also discusses Consumer segmentation in order to identifydifferent classes in different societies in order to study the consumption behaviour.Figure: The figure below depicts a conceptual model for understanding ConsumerPurchase Behavior .Consumer perceptions of Global and Local Brands in the Indian retail Industry 10

Antecedents Intermediaries ConsequencesService QualityCountry ofOriginProductQualityConsumerSatisfactionPurchase of GlobalBrandsCultureMaterialismBrandImageConsumer as InterpreterSelf IdentitySocialStatusValuePrestigeConsumer perceptions of Global and Local Brands in the Indian retail Industry 11

2.1 Global Brands‘People are pawns in the hands of giant companies with huge advertising budgets andglobal reach. Brands bring something that people think is better than what they feel’.- (The Economist)Today brands have come to represent a fascist state where we all salute the logo and havelittle opportunity for criticism because our newspapers, television stations, Internetservers, streets and retail spaces are all controlled by multinational corporate interests”(The Economist, 2004). With globalization touching the nooks and corners of everynation a global consumer segment has arisen whose needs and interests are becomingincreasingly homogeneous. The growing integration of international markets as well asthe growth of competition on a worldwide scale implies that adoption of a globalperspective has become increasingly imperative in planning marketing strategy (Douglas,1987)As the world is shrinking in to a global marketplace, it is increasingly significant tounderstand the consumer’s perception of global brands and local brands. Studyingconsumer perceptions towards global vs. local brands have substantial implications inmarketing and will also serve as a citation for future research. There would also beseveral reasons for consumer’s perceptions and attitudes towards these brands. Thus thereis a need to uncover the reasons for consumer’s preference for global brands over localbrands.2.1. (A) Consumer perceptions of global and local brands.A local brand can be defined as a brand that exists in one country or in a limitedgeographical area (Wolfe, 1991). Schuiling et al (2004) point out that local brands belongto a local, international, or a global firm, they also provide a link between nationaleconomy and individual well-being. Several researchers define global brands as “a brandthat is marketed under the same name in multiple countries with similar and centrallylocated coordinated marketing strategies”.Consumer perceptions of Global and Local Brands in the Indian retail Industry 12

etter product and service quality, they also tend to relate global brands as symbols ofsocial status. The COO of origin has also been found as a significant factor influencingglobal brand preferences in terms of status and quality. All these factors are discussed indetail below.2.2Antecedents of Global Brand Purchases‘Quality’ affects consumer behaviour to a great extent. The importance of quality is furtherenhanced by Aaker (1991), who categorized perceived quality as one of the key subdimensionsof brand equity. Quality can be defined as “the consumer’s judgement about aproduct’s overall excellence or superiority (Zeithmal, 1988). Similarly, the definition ofquality by Aaker (1991) is “the customer’s perception of the overall quality or superiorityof a product or service with respect to its intended purpose, relative to alternatives”.‘Satisfaction’ is the result of a post consumption or post usage evaluation, containing bothcognitive and affective elements (Olivier, 1997). According to the expectancydisconfirmation paradigm (Olivier, 1980), customers judge satisfaction by comparingpreviously held expectations with perceived quality or service performance. Managerially,it is extremely important to understand how to create and offer customer satisfaction.Therefore, both in practice and in academic research, ‘quality’ has emerged as a criticalissue for determining customer satisfaction.2.2 (A)The impact of Product Quality in Consumer Satisfaction Responses, Countryof Origin and Brand Image.Products constitute an array of intrinsic and extrinsic attributes that consumers use todetermine product quality. Intrinsic attributes are an integral part of and inseparable fromphysical product. Extrinsic attributes (e.g.-price, country of origin, or a brand name) are notphysical components of a product, and changes have no material effects on the actualproduct, yet they often serve as cues that may affect consumer’s quality perceptions(Ghauri and Cateora, 2006)Consumer perceptions of Global and Local Brands in the Indian retail Industry 16

Garvin (1984: 1987) cited in Tamni et Sebastianelli (2002) provides a well-knownframework for thinking about product quality that is often used by consumers to evaluateproducts that deliver satisfaction. These include: performance, features, reliability,conformance, durability, serviceability, aesthetics and perceived quality. The table belowprovides an explanation of the above.Table 1DimensionDefinitionPerformanceFeaturesReliabilityConformanceDurabilityServiceabilityAesthiticsPerceivedThe primary operating characteristics of a productThe secondary characteristics of a product that supplement itsbasic functioning.The product’s profitability of failure-free performance over aspecified period of time.The degree to which a product’s physical and performancecharacteristics meet design specifications.A measure of useful product life, i.e., the amount of use a customergets from a product before it deteriorates or must be replaced.The ease, speed, courtesy, and competence of repair.How the product looks, feels, sounds, tastes or smells, a matter ofpersonal preferencesQuality based on image, brand name, or advertising rather thanProduct attributes and, of course, is subjectively assessed.Source: Garvins Eight product quality dimensions cited in (Tamni et Sebastianelli)(International Journal of Quality and Reliability Management)Hooley et al (1998) found that consumers often tend to relate product quality to pricing aswell. High pricing is generally associated with higher quality, superior brand image andstrong reputations. German manufacturers such as Mercedes, BMW and Audi havesuccessfully positioned their offerings at the high quality end of spectrum through superiorConsumer perceptions of Global and Local Brands in the Indian retail Industry 17

design, technical engineering skill and attention to quality control. For quality positioningto be viable, customers must be prepared to pay for superior quality as there are usually,though not always higher costs associated with offering a higher quality product. In theautomotive industry, German manufacturers such as Mercedes, BMW and Audi havesuccessfully positioned their offerings at the high quality end of spectrum through superiordesign, technical engineering skill and attention to quality control through themanufacturing process.Zhang (1999) defines COO as “information pertaining to where a product is made”. It isoperationalised and communicated with the phrase “Made in” and the country name.Johansson et al (1985) define country of origin as the country where corporate headquartersof the company marketing the product or brand is located. Typically, this is the homecountry for a company. It can also be defined as any influence that the country ofmanufacture has on a consumer’s positive or negative perception of the product andservices (Cateora, 1996).Consumers in emerging countries consciously shop for quality goods but often areunfamiliar with product category attributes and benefits (Batra, 2000). Therefore, brandsand COO serve as surrogates to inform the consumer about product’s quality. A studyconducted by Schooler (1965) in Guatemala revealed that products made in lessdeveloped countries were not evaluated as quality products. Consumers were biased foror against products from a less developed country when they were evaluating productsmade in different, less developed countries.Consumers hold stereotyped images about countries and these images are used asinformation cues in judging products from different origins (Lotz and Hu, 2001). They alsotend to generalize their attitudes and opinions across products from a given country, basedon their familiarity and background with the country and their own personal experiences ofproduct attributes such as “technological superiority”, “product quality”, “design”, “valuefor money”, “status and esteem”, and “credibility of country of origin” of a brand.Favorable country perceptions are known to lead to favorable perceptions of associatedattributes such as product quality indicating thereby, that consumer evaluations areConsumer perceptions of Global and Local Brands in the Indian retail Industry 18

governed by influences other than the quality of the product (Peterson and Jolibert, 1995).In this context COO effect refers to the extent to which the place of manufacture influencesconsumer’s product evaluations.One might generalize that the more technical the product, the less positive is the perceptionof one manufactured in a less developed country. There is also the tendency to favorforeign-made products over domestic-made ones in less developed countries. Not allforeign products fare equally well because consumers in developing countries havestereotypes about the quality of foreign- made products even from industrialized countries.A survey of consumers in Czech Republic found that 72 percent of Japanese products wereconsidered to be of the highest quality, German goods followed with 51 percent, Swissgoods with 48%, Czech goods with 32% and last, the United States with 29% (Cateora,1996)2.2 (B) Service Quality Impact on Customer Satisfaction, Country of Origin andBrand ImageOver the past two decades the theory and practice of service quality has receivedconsiderable attention. Viewed as a means by which customers distinguish betweencompeting organisations (Marshall and Murdoch, 2001), service quality is known tocontribute to market share and customer satisfaction. Thus the pursuit of quality services inorganisations is driven by the need to survive and remain competitive (Agus et al, 2007).Perceived service quality can be defined as a global judgement or attitude related to thesuperiority of a service (Parsuraman et al, 1988). The term perception pertains to theconsumer’s beliefs concerning the received or experience. (Brown and Swartz, 1988).Service quality has been discussed in only a handful of writings (Gronroos 1982; Lehtinenand Lehtinen 1982; Lewis and Booms 1983; Sasser, Olsen and Wyckoff 1978). Accordingto them ‘Service quality is a measure of how well the service level delivered matchescustomer expectations. Delivering quality service means conforming to customerexpectations on a consistent basis’. In line with this thinking Parsuraman et al (1988)developed a global measurement for service quality, namely SERVQUAL. SERVQUALhas been applied to measure service quality in various service industries by manyConsumer perceptions of Global and Local Brands in the Indian retail Industry 19

esearchers. They highlighted five dimensions of service quality (tangibles, assurance,reliability, responsiveness and empathy) which are explained in the table below.Table 2TangiblesPhysical facilities, equipment, and appearance of personnel.ReliabilityAbility to perform the promised service dependably and accuratelyResponsivenessWillingness to help customers and provide prompt serviceAssuranceEmpathyKnowledge and courtesy of employees and their ability to inspireTrust and confidenceCaring, individualized attention the firm provides its customers.Source : Parsuraman et al, 1988 (Journal of Retailing)Most of the studies on country of origin have revealed that COO of a product does affectproduct evaluation. Studies also reveal that COO affects the consumption of services.Javalgi et al. (2002) examined three types of services that were affected by COO. Theseinclude core services e.g. (travel services), supplementary services, e.g. (warranties) andcross-national service comparison where services are produced (source) and consumed inindividual countries.When examining core services by COO, consumers tend to prefer their own, and fromeconomically progressed countries (Javelgi et al, 2002). Supplementary services, thoseoffered along with the sale of products, tend to be important in developing, competitiveadvantage (Lovelock, 1995, 1999) as cited in Javelgi et al. It appears that most consumershold negative images of products from economically less progressed countries (Javelgi etal, 2002).Consumer perceptions of Global and Local Brands in the Indian retail Industry 20

Finally when services are produced and consumed in individual countries, consumers tendto exhibit similar attitudes and preferences with regard to the criteria they deem importantwhen evaluating services (Javalgi et al, 2001). The challenge for service providers is thatthey must anticipate consumers concerns regarding a specific COO, especially servicesoriginating from less developed economies.On the basis of the above literature it is hence proposed:H1: Customer satisfaction is enhanced by product and service quality which areperceived higher in global brands.H2: There are country specific advantages for brands from countries which are seenas strong in that product category. Such a country of origin effect has a direct impacton product quality which provokes consumers to purchase global brands.H3: Service Quality is affected by the country of origin which affects purchase of localbrands.2.3 Impact of Culture and Acculturation on Brand ImageGlobalisation of markets and international competition are requiring firms to operate in amulticultural environment. In addition, migration patterns and transnationalcommunication media like satellite television are creating multicultural populations indomestic markets and exposing consumers to alternative behaviours and wants (Craigand Douglas, 1997). Hence it is very important to understand people and the backgroundfrom which they prevail. Understanding people means understanding their background,from which present and future behaviour can be predicted. Their background hasprovided them with a certain culture. The word ‘culture’ is used here in the sense of ‘thecollective programming of the mind which distinguishes the members of one category ofpeople from another’ (Hofstede, 1994).Culture is the main determinant for consumer behaviour. Since the literature on culture isvery broad, it is necessary to narrow down the focus of this research to meet the purpose ofConsumer perceptions of Global and Local Brands in the Indian retail Industry 21

findings of this study by describing certain points of culture influencing consumerbehaviour.Usuiner (2000) points out factors like individualism, collectivism, independence,interdependence, loyalty, consumer’s involvement, and cognitive styles and have culturalimplications on human behaviour which affect consumption of which only theindependent and Interdependent self is explained below as it realtes directly to ourresearch purpose.Independent and Interdependent self.As cited in Usuiner (2000), Markus and Kitayama (1991) have outlined two construal’sof the self: the independent and interdependent. The independent self corresponds to thewestern conception: it is based on assumption of individualism (people are seen asinherently separate and distinct). In the area of consumption personal preferences aresuppose to reflect a person’s tastes, values and convictions; expression of self isencouraged. On the other hand, the ‘inter dependant self’ of most Asians is based on theassumption of collectivism (people are seen as not fully separable that is they areconnected to each other by a multiple of overlaps and links: they share a commonsubstance). As a result in identity lies in familial and social relationships. People withinterdependent selves tend to value the criteria of appropriate social conduct in theirconsumption behaviour. Chiou (1995) notes that individuals in Asian societies have toconsider the wider implications of their actions and it causes consumers to identifycertain roles and behaviors and to have less personal freedom in adopting new products.Independent and Interdependent selves are reflected in the concept of belonging to acertain class.India represents a cultural society in which most people belong to a particular group or asociety which expects the people in behaviour of a special kind and certain obligations aswell. India’s collective culture has significant impact on individual’s consumptionbehaviour. Cultural variables influence the symbolic meanings individuals give to brandsand thereby leading them to purchase global brands due to a better brand image.Consumer perceptions of Global and Local Brands in the Indian retail Industry 22

AcculturationThe increase migration of people around the world creates complexity in most markets.As these people are exposed to their host culture they begin to acculturate and adopt itsnorms of behaviour. As Douglas and Craig (1997) suggest, increased migration is one ofthe forces that are causing “radical changes” in consumer behaviour. Immigrants not onlyadapt, or acculturate, to their host culture, but also they change the culture themselves.Because of the mutual influence between immigrants and their host culture, someresearchers refer to acculturation as one of the components of a more general construct,cultural interpenetration, which includes the bidirectional links between immigrants andtheir host culture (Andreasen, 1990).Acculturation has been found to moderate the effect of sub(culture) on consumerbehaviour by a number of researchers. Studies have found that acculturation has amoderating effect on affective variables such as attitudes towards advertising (Ueltschyand Krampf, 1997) and on the comparative persuasion of TV commercials in differentlanguages (Roslow and Nicholls, 1996). Acculturation also moderates sub culturalinfluences on behaviour, such as spousal or family roles in consumer decision making(Ganesh, 1997, Webster, 1994), general consumption patterns (Wallendorf and Reilly,1983), the weights given to certain attributes in the choice process (Kara and Kara, 1996),and brand loyalty and purchase of prestige products (Deshpande et al, 1986). Thus themoderating role of immigrant acculturation highlights the importance of understandinghow culture affects consumer behaviour at the domestic level (cited in Luna and Gupta,2001).On the basis of the above literature it is hence proposed:H4: In developing countries the increase influence of modernisation andwesternisation (impact of culture) affects consumer perceptions of brand image.2.4Social Identity and MaterialismSocial Identity theory defines self in terms of personal identity and social identity.Individuals shift their focus from personal to social identity, which influences theirConsumer perceptions of Global and Local Brands in the Indian retail Industry 23

perceptions, cognitions, evaluations and attributions about issues and events. Individualswant to make sense in the increasingly complicated world and one way of doing this isfrom the shift to social identity, the categorisation from which they belong to and to berecognised as part of (Burgess, 1999).As cited by (Burroughs & Rindfleisch, 2002)) Materialism is widely viewed as animportant life value. It can be defined as a “set of centrally held beliefs about theimportance of possessions in one’s life”. It can be viewed as the value a consumer placeson the acquisition and possession of material objects. For some possessions are essentialto their lives and identities. Materialism represents a mind set or constellation of attitudesregarding the relative importance of acquisition and possession of objects in one’s life. Adefining characteristic of highly materialistic individuals is a belief that well being can beenhanced through one’s relationships with objects.For materialists, possessions and their acquisitions are at the fore front of personal goalsthat dictate “ways of life”. They value possessions and their acquisitions more highlythan most other activities in life. Belk (1984) defines it as “the importance a When a largeportion of the society avidly desires to consume goods for reasons that economists havetraditionally defined as nonutilitarian (e.g. status seeking, novelty), a “consumer culture”is said to exist.According to Inglehart (1990, 1994) a person’s basic sense of economic insecurity isformed during childhood. If a person experienced affluence and economic stability as achild, later they will pay less attention to economic concerns and allocate more attention tohigher order needs, such as self-actualisation, freedom and quality of life. He alsoadvocated that if a person experiences economic difficulty in their early life, they will tendto carry the fear of poverty with them through their entire lifetime and may becomeobsessed with acquiring more wealth and possessions even though there is no real risk ofloosing their wealth. Hence it can be perceived that economic insecurity as a child can leadto materialism as an adult.Consumer perceptions of Global and Local Brands in the Indian retail Industry 24

Inglehert’s (1990, 1994) theory can be linked to the materialist culture among the Indians.According to his theory individuals may become obsessed with acquiring more wealth andpossessions even though there is no real risk of loosing their wealth. ‘Economic insecurityas a child may lead to materialism as an adult’. It is well accepted that India is a developingeconomy and has been continuously facing rapid economic growth in the last several years.There has been a sudden rise of a middle class with incredible spending power. Thisindicates that the middle class is increasingly becoming richer and entering into the upperclass categorisation. Hence, there is a large faction of the population who have experiencedeconomic instability and poverty in their childhood.Inglehert concludes that societies, which experience economic instability and perceivedpoverty, should develop materialistic cultures. As a result we can expect: 1 richer nationswould have fewer materialists than poorer ones; (2) societies that have experiencedeconomic growth should show intergenerational differences in which the young are lesslikely to be materialists than are the old and (3) the size of those intergenerationaldifferences should be greater in society that have experienced little or no growth.Ger and Belk (1993) point out that in collectivist cultures the wealth status and possessionsof the family maybe more important that that of the individual, therefore as compared topeople from the West tend to integrate their sense of self. Thus the self is once againemphasised, and is illustrated how it manifests through possessions, which in turnhighlights the development of materialistic behaviour. According to Richard and Dawson(1992) materialist tend to judge themselves and others success by the quality and quality ofpossessions attainted thus the value of the possessions stem not only from their ability toreflect status, but also their ability to project a sought after self-image.It is hence proposedH5: The materialist individualists are inclined more towards global brands as they providethem with higher status, identity and prestige.2.5 Consumer SegmentationConsumer perceptions of Global and Local Brands in the Indian retail Industry 25

In today’s increasingly competitive global market, market segmentation is essential to thesurvival of global companies. Market segmentation permits the market managers to reapthe advantages of both standardisation and customisation (Baalbaki and Malhotra, 1993). Asegmentation approach is essential in either domestic or international markets, is no longerquestioned, rather the bases for segmentation has become the focus (Day et al, 1998)Consumer segmentation is the selection of groups of people who are most applicable forthe product. Following are a few segmentation techniques that companies implement eitherin isolation or combination.Geographic segmentation: This calls for dividing the markets into geographical units. suchas nations, states, regions, counties, cities or neighbourhoods. A company may decide tooperate in a few geographical areas, or operate in all areas but pay attention to geographicaldifferences in needs and wants.Demographic segmentation- This consists of dividing the market groups based on variablessuch as age, gender, sexual orientation, family size, family life cycle, income, occupation,education, religion, ethnic community and nationality. Demographic factors are the mostpopular bases for segmenting customer groups. One reason is that consumer needs, wantsand usage rates often vary closely with demographic variables.Psychographic segmentation- This divides buyers into groups based on social class,lifestyles or personality characteristics. People in the same demographic group can havevery different psychographic make-ups. (Kotler et al, 2004)Social classes are society’s relatively permanent and ordered divisions whose membersshare similar values and interests and behaviours. All societies place people in particularstrata. In economic oriented societies they may divide people into haves and haves not, butother criteria are feasible based on birth, education, even in the absence of obvious wealthor income criteria (Usunier, 2000). Not only do class systems differ in various parts of theworld: the relative sizes of the classes vary with the relative prosperity of countries. Someclasses have a greater influence on buying behaviour than others. In most western countriesConsumer perceptions of Global and Local Brands in the Indian retail Industry 26

‘lower’ classes may exhibit upward mobility, showing buying behaviour similar to that of‘upward’ classes. But in other cultures where a caste system gives people a distinctive role,buying behaviour is more firmly linked to social class. Upper classes in almost all societiesare often similar to each other than the rest of their own society. While making purchasesthey make choices that are less culture bound than those of the lower classes. This tendencyaccounts for the strength of global luxury brands such as Burberry, Tag Heuer and MontBlanc. Generally the lower social classes are more culture bound, although young people ofall classes are less so and account for the global youth brands like Nike, Coca-cola andSwatch.Wong and Ahuvia (1995) argue that ‘Americans generally see ones social class asprimarily reflecting one’s personal income level which in turn is believed to reflect (atleastin part) one’s individual professional merit. But to the interdependent Chinese, class doesnot belong to oneself, but also to one’s group, usually one’s family. Relatives and kinshipclan’. Like many other elements of the self and others, social classes are important forconsumer behaviour, people expressing their class differences, real or fantasized, byconsumption (Usuiner, 2000).Marketers have also used personality variables to segment markets, giving their productspersonalities that correspond to consumer personalities. Honda used personalitysegmentation to power its way into the US market.Behavioural segmentation- divides buyers into groups based on their knowledge, attitudes,uses or responses to a product. Many marketers believe that behaviour variables are thebest starting point for building market segments. Here elements such as user status, usagerate, loyalty status are taken into consideration.Tam and Tai (1997) identified five distinct segments in China that can be extended to theIndian markets as well. The largest segment to emerge were identified as “traditionalists”and accounted for 41% of the population. According to the findings the “traditionalists”adhered closely to the old attitudes and beliefs. They were resistant to change and reluctantto try new and premium products. They also tended to remain strongly loyal to the brandsConsumer perceptions of Global and Local Brands in the Indian retail Industry 27

that they had frequently purchased. “Strivers and achievers” were defined mainly by theirspending habits and materialistic values. “Strivers” were very materialistic, immersed in anaggressive pursuit of achievement and made up about 20% of the population. Most of themwanted to change their roles in lives but it is probable that the majority would not achievethis. “Strivers” were impulse buyers and insisted on instant gratification. “Achievers alsovalued achievement and materialism, but they have been more successful than ‘strivers’.They could be described as ‘yuppies’ and were found to be more keen on luxuries that theyconstituted a special sub group: “super-achievers”. They were the first to latch onto newtrends, products and premium brands. Adapters were generally older people who werecomfortable with their accomplishments in life but were still open to new experiences.China and India have over a billion consumers, presenting tempting prospects forinternational companies. The experience of international companies suggests that despitethe attractiveness of these emerging markets, their consumers remain an elusive target. Acommon fallacy lies in the thinking that there are huge margins to be gained fromskimming the 3-5% affluent consumers in emerging markets who have global preferencesfor ‘luxury goods’ and purchasing power. In India Coca – cola came in at the top and triedto trickle down. It launched pricey 350 ml bottles instead of offering cheaper smaller ones.Rather than concentrating on the main towns, it went for the whole of India with a singlesize and price, using expensive and flawed distribution and advertising. Ford and othermotor manufacturers also misjudged the Indian market. They started with medium-sizedcars in a market dominated by small ones, and expected to compete with nearly 70%overcapacity in medium sized car manufacturing. Kellogg’s offered premium priced cerealssupported by expensive marketing. They soon learnt that, although market research showedthat India was the largest cereal-consuming nation on earth, consumers were choosing tobuy Champion’s products costing a fifth price of Kellogg’s. Analysts argue that it isimportant to define the Indian market not by income alone, but by consumption. (Kotler etal, 2004)2.6SummaryConsumer perceptions of Global and Local Brands in the Indian retail Industry 28

The table below summarises the key findings of the authors that are directly related to ourresearch objectives. From this table it also becomes clear how the conceptual model hasbeen developed.Section Author/ Article Key FindingsConsumer Perceptions ofGlobal and Local Brands.Holt et al (2003)“Managing theTransnational Brand: HowGlobal Perceptions DriveValue,” working paper,Harvard Business School.Local brands have strongbrand equity and higherconsumer awareness butglobal brands do have ahigher brand imageDouglas et al (2004) “HowGlobal Brands Compete”,Harvard Business Review(Alden et al, 1999),““Brand Positioningthrough advertising inAsia, North America andEurope: the role of globalconsumer culture”, Journalof Marketing, Vol. 63,pp.75-87.Peterson, R.A. andJolibert, A.J.P (1995), “Ameta-analysis pf countryof-origineffects”, Journalof International BusinessStudies, Vol. 26 (4), pp.883-900Global brands are associatedwith Quality Signal, GlobalMyth and SocialResponsibilityConsumers prefer brandsthat they perceive asoriginating from a nonlocalcountry, especiallyfrom Western countries,more than they do localbrands and that preference islinked not only to perceivedquality but also to socialstatus.Consumers in developingcountries seek to emulatewestern consumptionpractices and lifestyles andpurchase foreign brandsConsumer perceptions of Global and Local Brands in the Indian retail Industry 29

(Culture)Product QualitySteenkamp et al (2003) ),“How perceived brandglobalness creates brandvalue”, Journal ofInternational BusinessStudies, Vol. 34 (1), pp.53-65.Ghauri, P. and Cateora, P(2006), InternationalMarketing, 2 ND EDN,McGraw-Hill Companies,Berkshire.Cateora (2000)Studies revealed thatprestige was one of theimportant factors drivingglobal brand preferences.Foreign brands of mostconsumer durables and nondurable categories weresignificantly given highermean attribute ratings on“status and esteem”.Extrinsic cues (Price,Country of Origin, Brandname) and Intrinsic cueswere identified which affectquality of ProductsGarvin (1984: 1987), cited in Performance, Features,Sebastianelli et al, 2002)International Journal ofQuality and ReliabilityManagementHooley, G.J., Möller, K.and Broderick, A.J. (1998)“Competitive Positioningand the Resource BasedView of the Firm”, Journalof Strategic Marketing,6(2), 97-115.Reliability, Conformance,Durability, Serviceability,Aesthetics and perceivedQuality were identified ascues to judge productQualityProduct Quality is alsoassociated with high pricingleading to superior brandimage and strong reputationsthereby affecting customersatisfactionConsumer perceptions of Global and Local Brands in the Indian retail Industry 30

Service QualityBatra et al, (2000) “Effectsof Brand Local andNonlocal Origin onConsumer Attitudes inDeveloping Countries”,Journal of ConsumerPsychology, Vol. 9 (2), 83-95.Peterson, R.A. andJolibert, A.J.P (1995), “Ameta-analysis pf countryof-origineffects”, Journalof International BusinessStudies, Vol. 26 (4), pp.883-900Parsuraman et al (1998), “SERVQUAL: A Multiple-Item Scale for MeasuringConsumer Perceptions ofService Quality”, Journalof Retailing, Vol. 64(1)Consumers use COO as animportant cue to shop forquality products, COOinforms the consumersabout a products qualitywhen they are unfamiliarabout a products.Consumers generalise theirattitudes and opinionsacross products from agiven country, based ontheir familiarity andbackground with thecountry and their ownpersonal experiences ofproduct attributes such as“technologicalsuperiority”, “productquality”, “design”, “valuefor money”, “status andesteem”, and “credibilityof country of origin” of abrand.Five dimensions affectingservice quality wereidentified –tangibles,assurance, reliability,responsiveness andempathy that have anConsumer perceptions of Global and Local Brands in the Indian retail Industry 31

Javalgi, R., White. D.(2002), “ StrategicChallenges for themarketing of servicesinternationally”,International MarketingReview, VOL.19, no.6,pp.563-581impact on brand imageService quality is affectedby COO.Culture/ AccultuartionUsunier. J, (2000),“Marketing AcrossCultures”, Chapter 3 andChapter 4, Third Edition,Prentice Hall, PearsonEducation.Douglas S.P. and Craig,C.S. (1997), “Thechanging dynamic ofconsumer behaviour:implications for crossculturalresearch”,International Journal ofResearch in Marketing,Vol. 14, pp.379-95.Factors like Individualism,CollectivismIndependence,Interdependence, loyaltyand cognitive styles havecultural implications onhuman behaviour whichaffect consumptionthereby affecting brandimage.Increased migration is oneof the forces that arecausing “radical changes”in consumer behaviour.Immigrants not only adapt,or acculturate, to their hostculture, but also theychange the culturethemselves. Because of themutual influence betweenimmigrants and their hostculture, some researchersConsumer perceptions of Global and Local Brands in the Indian retail Industry 32

efer to acculturation asone of the components of amore general construct,cultural interpenetration,which includes thebidirectional links betweenimmigrants and their hostcultureSelf Identity Burgess, 1999 Individuals want to makeMaterialismInglehert, R. (1994)“Economic Security andValue Change”, TheAmerican Political ScienceReview,sense in the increasinglycomplicated world and oneway of doing this is fromthe shift to social identity,the categorisation fromwhich they belong to andto be recognised as part ofa person’s basic sense ofeconomic insecurity isformed during childhood.If a person experiencedaffluence and economicstability as a child, laterthey will pay less attentionto economic concerns andallocate more attention tohigher order needs, such asself-actualisation,freedom and quality ofConsumer perceptions of Global and Local Brands in the Indian retail Industry 33life.Richins. M, and Dawson.R, (1992), “A Consumer materialist tend to judge

Values Orientations forMaterialism and ItsMeasurement: ScaleDevelopment andValidation”, Journal ofConsumer Research,Vol.19, pp.303themselves and otherssuccess by the quality andquality of possessionsattainted thus the value ofthe possessions stem notonly from their ability toreflect status, but alsotheir ability to project asought after self-imageConsumer perceptions of Global and Local Brands in the Indian retail Industry 34

Chapter 3Methodology3.1IntroductionThis chapter discusses the methodology employed in carrying out the proceeding study.Initially the aims and purpose of the research are identified, as they provide thefoundation of selecting the appropriate methodology. It then discusses the data collectionand the method used for data analysis.3.2Research MethodResearch Methods are of basically two types, qualitative and quantitative. In both themethods the marketer is interested in gaining knowledge about the market. Since theliterature on consumer perception towards global and domestic brands is not yet richenough to provide a sound conceptual foundation for investigating consumer purchasebehaviour, an exploratory qualitative study was undertaken to investigate the reasons forconsumer preferences for global over local brands in emerging marketsQualitative research is open ended, in depth and seeks unstructured responses that reflectthe person’s thoughts and feelings on the subject. Qualitative research interprets what the‘….people in the sample are like, and their outlooks, their feelings, the dynamic interplayof their feelings and ideas, their attitudes and opinions, and their resulting actions’(Ghauri and Cateora, 2006). According to Patton (1980) the main objective of qualitativeresearch is to gain in-depth understanding of a situation which is based on the researchersimmersions in the phenomenon to be studied, this can mean collecting data to provide adetailed description of the events occurring and situations and interactions occurringbetween people.Consumer perceptions of Global and Local Brands in the Indian retail Industry 35

Semi structured interviews of executives in four nationally recognized retailorganizations and of Indian customers residing in the U.K. and India were conducted togain insights about the following questions:What are the main reasons for consumer preferences of global over localbrands?What do managers of retail organizations perceive to be the key attributes of abrand that delivers customer satisfaction? What problems and tasks areinvolved in delivering products that maintain customer satisfaction?What do consumers perceive to be the key attributes of a brand that deliverssatisfaction?Do discrepancies exist between the perceptions of consumers and brandowners/ retailers?3.3Why Qualitative Research...The main purpose of this research is to explore the impact of various factors like culture,country of origin, quality on the consumption patterns of consumers and also to explorethe materialistic attitudes among the Indians which makes them class and prestigeconscious that lead them to purchase foreign brands. The changes in the retail sector hasalso been looked into as a result of foreign brand entry which has affected theconsumption patterns of the consumers, thus making qualitative research the best methodfor exploring the outlooks, opinions, interplay of feelings and ideas of consumers. Withthis method the researcher could interact more freely with the retailers and consumersand gain an indepth insight on consumer purchase behaviour. By using qualitativeresearch, the experience can be described and the opinions of ‘how’ and ‘why’ questionscan also be answered.Consumer perceptions of Global and Local Brands in the Indian retail Industry 36

3.4Research Design (Sampling Method)In order to opt for the appropriate data collection approach, a researcher should plan outthe sampling method. Sampling involves selection of the research participants for aparticular study. Various types of sampling methods are used by researchers which canbroadly be divided into probability and non-probability sampling. Probability samplingrefers to sample designs where units are selected by some probability mechanism,allowing no scope for the influence of subjectivity (Greenfield, 1996). There are variousapproaches to probability sampling some of which are random, systematic, stratified andstage sampling (Coleman and Briggs, 2002). Non probability sampling allowsinterviewers to choose sample members ‘at random’ (meaning as ‘they wish or whereever they find them’) which is not random sampling.Due to the availability and accessibility of the sampling frame, a probability sample wasnot feasible for the present research. Non probability sampling which is non-random andsubjective (Cooper and Schindler, 1999) is applied in the study to carry out theinterviews. A combination of two non-probability subcategories were selected whichwere more feasible for the study. The ‘Convenience’ and ‘Judgement’ sampling weremade use of (Coleman and Briggs, 2002). Convenient sampling is one which iscomposed of members most easily available to the researcher. Convenient sampling waschosen by the researcher, mainly due to the selection of participants who weregeographically convenient. Judgement sampling occurs when a researcher selects samplemembers to conform to some criterion. The aim is to produce data representative of thepopulation to be sampled, but judgement is used in the sample selection procedure inorder to make data more useful to the decision maker (Crouch and Housden, 1996) Withthe application of Judgement sampling, people who belong to the upper middle class whonormally spend a major portion of their income on branded products were picked up asper the researcher’s choice from the general public for study.This study primarily focuses on India One (The upper middle and middle class). Thereare vast differences in consumption patterns of all the three classes. Also among IndiaConsumer perceptions of Global and Local Brands in the Indian retail Industry 37

One the desire to acquire wealth and products as symbols of success and wealth is greateras compared to India Two (lower middle class) and Three (service class). In order tounderstand the symbolic meanings of brands created by individuals this study focuses onthe consumption patterns and habits of India One.3.5Data CollectionSecondary data collection has been made use of in the first part of this research.Secondary data can be collected from internal and external sources. Internal datacollection source is collected from company documents like sales report or customer database while external information is collected from outside sources like governmentreports, books and periodicals etc. This research involved data collection from secondaryexternal sources. Various academic journals like ‘Journal of Consumer behaviour’,‘Harvard Business Review’, ‘Journal of Marketing Management’ etc and variousdatabases like EBSCO, Emerald and Mintel were used to gather information on therelevant topics. Various academic textbooks and industry reports have also been madeuse of that were useful in reviewing the existing literature on branding and inunderstanding consumer purchase behaviour.Primary research has been used for the second part of the research. Primary data can becollected through various methods which include interviewing, direct observation, theanalysis of artifacts, documents and cultural records; the use of visual materials and theuse of personal experiences (Denzin and Lincoln, 2005). Interviews were used as theprimary source of data collection. They are considered one of the most fundamentalmethods of qualitative inquiry and can reveal what guides and determines people’sactions, bringing to life their thoughts, perceptions and emotions (Darlington and Scott).Interviews can be used conducting various techniques such as telephone interviews, faceto-faceinterviews and focus group interviews. In qualitative research interviews may beclassified as semi-structured, unstructured and group based. Semi structured interview isnormally a mixture of pre-coded and open-ended questions combined in thequestionnaire. The interviewer is bound by the structure of the questionnaire but therespondent is free to answer the open ended questions in any way but more skill is neededConsumer perceptions of Global and Local Brands in the Indian retail Industry 38

in interpretating the responses. However danger exits that the interviewer will edit theresponses to those which seem to be most appropriate, or most required.In the current research face to face semi interviews were conducted to gather empiricalmaterial. According to Saunders et al (1997) face to face interviews consist of openended questions thus allowing the respondent to describe the perceptions in detail.Researchers have a list of themes and questions to be covered and can vary frominterview to inter looking at the appropriateness. This form of an interview provided theresearcher with the prospect of exploring answers where the researcher wantedinterviewees to explain and build up on the responses and obtain facts. The interviewswere conducted in the homes of the informants (all lived in apartments or with parents),lasted for 45 minutes to one hour. In each interview I sought to elicit numerousperceptions of consumers towards brands and what are the main cues of a brand that leadthem towards purchase of global brands. The conversations were loosely structured byquestions that introduced the importance of various factors like Country of Origin,Culture, Quality of Product and Services in evaluating consumer decision for brandpurchases. The interview structures for the executives were built around managerialperceptions about key attributes of a brand that deliver customer satisfaction. Theinterviews with managers and consumers enabled to uncover the discrepancies that existin perceptions between both the groups.3.6Conducting the InterviewsA pilot interview was conducted before interviewing the actual chosen respondents. Themain purpose of this pilot interview was to test the designed questions for flaws. Thepilot interview helped the researcher to examine the flaws in the questions that weredesigned and accordingly rectify the mistakes. The pilot interview was conducted with arespondent from Mumbai (India). During the pilot interview it was discovered that globalbrands were really popular with the upper middle and middle class that is basically IndiaOne. Brands were consumed as symbols of status and self-identity only among the uppermiddle classes. The lower classes that is India Two and Three did not give too muchimportance to global branding. The consumption patterns between all the three classesvary distinctively. Thus in order to make the study meaningful the researcher focused onConsumer perceptions of Global and Local Brands in the Indian retail Industry 39

only the upper middle classes who relate to brands as symbols of self identity andpersonality.Consumer InterviewsThe consumers who belonged to the upper middle and middle class and those whoconnected themselves with highly social people were selected. These consumers werefrom the age group of 20-30 and included teenagers and married people. In total 15consumers were interviewed out of which 7 were students currently studying in the UKsince a year and the rest 7 were of consumers residing in the city of Mumbai. They allbelonged to the age group of 20-25. The students belonged to different parts of Indiafrom metropolitan cities like Jaipur, Delhi, and Kolkatta. They were selected fromvarious cities in order to gain consumer opinions about global and local brands from allover India. These interviews were conducted in order to show a comparison in theperceptions of Indians living here and the ones who have always been purchasing highstreet/ global brands in India.Executives InterviewsNationally recognised companies from the retail sector of India participated in the study.Semi structured interviews with open ended questions were conducted with fourexecutives totally from the retail sector. The executives were selected from customerrelations, production, and senior management. The respondent held titles such asproduction head, senior manager of customer relations, and managing director. Fourexecutives were interviewed about a broad range of questions which mainly pertained toissues on factors affecting purchases of local brands and why do local brands face toughcompetition from global brands. These questions were manly asked to get a retailersperspective on foreign competition. Although this study required a large number ofinterviews of retailers, but due to time and availability of retailers interviews with onlyfour could be conducted. The executive interviews lasted for about 45 minutes.The research questions varied slightly according to the age group interviewed. Questionswere posed to obtain factual information: some attitudinal information and some targetedboth purposes. A sample of the questions asked and the rationale behind each questionConsumer perceptions of Global and Local Brands in the Indian retail Industry 40

is displayed in Appendix 2 as an Interview template. Due to the lack of time only one ofthe interviews is transcribed. As far as the retail interviews, out of 4 interviews onesample interview is transcribed and shown in the appendix3.7Data AnalysisThe interviews were analysed using the grounded theory approach recommended byStrauss and Corbin (1998). The grounded theory approach allows for the identification ofdifferent concepts that emerge and allows for a descriptive analysis of consumerpreferences of global over local brands. This was done by interpreting, segregating andcombining responses pertaining to consumer perceptions. Subsequently the anecdotaldata transcribed was able to follow “pattern coding”. Pattern codes are explanatory orinferential codes, ones that identify an emergent theme, configuration, or explanation.They pull together a lot of material into more meaningful and parsimonious units ofanalysis. They are a sort of meta- code (Miles and Huberman, 1994). They usually turnaround four, often interrelated, summarizers: themes, causes explanations, relationshipsamong people and more theoretical constructs.During fieldwork the researcher is looking for threads that tie together bits of data,pattern coding enables the researcher to bring common bits of data by breaking themdown into themes. Pattern coding was chosen by the researcher since the course of theinterview took place in terms of the literature review which was divided into varioussegments, it would be easier for the researcher to interpret the data from interviews whichwould be broken into themes that correlate to the literature review presented. During theinterview a number of themes were discussed with the consumers: the notion of brands,what it means to them, what are their perceptions about global and local brands, theimpact of culture, country of origin and materialism on their buying behaviour and alsohow the coming in of high street brands have affected their consumption patterns.The first step during the analysis, using pattern coding was listening to the audio-tapedinterviews several times and transcribing the same. The transcriptions was then brokendown into discrete part and examined closely. Lastly the transcriptions were comparedfor differences and similarities (Strauss and Corbin, 1988). Concepts that were similar inConsumer perceptions of Global and Local Brands in the Indian retail Industry 41

nature were then grouped together under more abstract concepts which can be termed ascategories (Strauss and Corbin, 1988).The final results of the categories were then conceptualised and compared to secondarydata which led to formulating key themes and ideas. This helped form a perception ofGlobal brands amongst the Indian consumers.After the key themes, ideas and concepts have been grouped under common categories aconcept map was used to illustrate the relationships between concepts. A concept map isa graphical illustration that is used to organise information by systematically linking therelationships between categories using connecting lines (Novak & Gowin, 1984). Thesubject is represented in a circular box and the related concepts are illustrated in squareboxes. These linking lines have clarifying words to clarify the specific relationshipsamong concepts (Nowak & Gowin, 1984). The concept map is used as a tool to easilyvisualis the main concepts and analyse the emerging themes (Strauss and Corbin, 1998).Consumer perceptions of Global and Local Brands in the Indian retail Industry 42

3.8Table: Concept Map of Factors leading Consumers to Purchase Global BrandsConsumers whobelieve in symbolicconsumptionareConsumers whobelieve inwesternisationareMaterialistCollectivistDue toSuchasBelieve in society,status and imageImpact of Culture/AcculturationLead toCountry of Origin,Price,Brand Image areextrinsic cuesGlobal BrandPurchasesareExtrinsiccuesLead toAssurance,reliability,ResponsivenessPerformance,features,reliabilityareProductQualityIntrinsiccuesServiceQualityAre cuesofConsumer perceptions of Global and Local Brands in the Indian retail Industry 43

3.9SummaryThis chapter clearly outlined the research method followed and the method of analysis forthe data gathered. It elucidated the purpose of this research, the research techniquesadopted and the reasons for adopting the respective techniques. The above is a summaryof pathway that was adopted in order to reach a desired result. The grounded theoryapproach, and concept mapping helped to generate themes and form a map that depictedreasons for global brand purchases (This map was developed based on the respondent’sreplies).IConsumer perceptions of Global and Local Brands in the Indian retail Industry 44

Chapter FourAnalysis and DiscussionThe results of the interviews produced various themes related to consumer preferences ofglobal brands. The themes were: Consumer perceptions of Global and Local Brands,Cues of Product and Service Quality that affect purchases, Consumer SegmentationImpact of Culture on Consumption and lastly Materialism and Social Identity.4.1Theme One: Consumer Perceptions of Global and Local Brands.The emergence of a global marketplace has fuelled the growth and awareness of fashionbrands across India. As India opened up its economy to the rest of the world a whole lotof foreign brands like Benetton, Tommy Hilfiger, Mango etc entered India thusinfluencing the minds of the consumers in decision making. Due to the immenseexposure of these global brands there have been major changes in perceptions of Indiansas far as local brands are concerned. It was observed that consumers tend to evaluateglobal brands in terms of better quality and perceived globalness. “International brandsappeal to me to a great extent. I think they are better quality than Indian brands andgive more customer satisfaction. They may be more expensive but then one has to payfor quality products.” said a respondent from Mumbai. A citizen from Jaipur studying inU.K agreed: “I like global brands because they usually offer more quality and betterguarantees than other products”.Consumers exhibited that global brands made them feel a part of the global consumerculture and gave them recognition. It was also revealed that consumers preferred payingfor brands which were recognised as they gave them a sense of ‘global identity’.“I can afford global brands and local designer brands …but everywhere you go it islike D&G OR Channel and Dior..Rocky S is also a good brand but not recognisedConsumer perceptions of Global and Local Brands in the Indian retail Industry 45

globally...so why pay for local designer brands that are not recognised” said arespondent from Mumbai. A respondent from Calcutta studying in the U.K echoed “Themain difference between a global and local brand is just the ‘name’ I guess…peoplerecognise the brand that I am wearing and this makes me feel a part of somethingbigger..Like for instance before coming to the U.K I purchased a pair of sunglasseswhich read ‘Ted Baker. I didn’t know what a “Ted Baker was! It was only until I got tothe U.K that people around me noticed and remarked ‘OH you’re wearingTed!’…which made me realise it was a big brand in the U.K. and it gave me a sense ofa global identity”Not only did the consumers associate global brands with quality but also trust.innovation and technological advancement. This is very evident with responses like:“My ideal brand would be Sony, as they have over several years maintained the highstandards set by them by offering great quality products and constantly innovating andstaying ahead of competition.”“If given a choice between global and a local brand I would go in for a global brandfor sure…I mean Indian (local) brands are good but not as good as the foreign ones inquality …technical expertise and designs..Global brands are always upgradingthemselves and keep coming out with new products all the time whereas local brandsare pretty predictable ya...”For certain product categories local brands exhibited a higher level of satisfaction andtrust. “In terms of household products it is only the Indian retailer who can understandthe mindset of the consumer. They know the tastes and preferences rather the prioritiesof the Indians when buying a product. When I want to buy butter or yogurt I wouldonly go in for Amul …because of its quality and trust and not for any foreign brandfor sure”.“If I have to buy a car for travelling purposes...Like travelling for long distances itwould be a TATA SUMO because of the trust that I have in TATA but for a statussymbol I would never go in for a local brand it would probably be Mercedes” pointedanother respondent. Quality and Trust was found to one of the major influencers forConsumer perceptions of Global and Local Brands in the Indian retail Industry 46

possessing local brands. Recognition and status had only a submissive role inrespondent’s perceptions who owned a local brand.Earlier Indians use to correlate to branded goods as luxury items but today due to theimmense exposure and more and more Indians travelling abroad there has been atremendous change in the way Indians perceive branded goods.4.2Theme Two: Cues of Product and Service Qualities that Affect ConsumerPurchases.Similar to the findings of Cateora and Ghauri (2000) it was found that consumers usedcertain intrinsic (reliability, performance, aesthitics etc) and extrinsic cues (Price,Country of Origin and Brand Image) to evaluate quality of products and services. In thestudy conducted by Garvin (1984: 1987) eight dimensions were identified which affectproduct quality. However when this study was analysed only three intrinsic cues wereidentified. Product Performance, Aesthetics and Reliability were prevalent amongst theconsumer responses.In terms of aesthetics consumers felt that global brands were more appealing than localones. “My ideal brand is Mango (apparel brand).I like it because the finishing of theirgarments is excellent and their quality is very good. Their styles and designs are alwaysin sync with the forthcoming trends”. Global brands evaluated higher in terms Productperformance and reliability especially in products pertaining to automobiles andelectronics. “My favourite brand is Apple..it symbolises the youth and constantly keepscoming up with newer products for generation next- the I pod is the biggest example.The performance of Apple Products is very steady...in my social set of friends I thinkall of us possess an I-Pod and never have I never heard of any of us complaint that…freak my ipods giving problems or Mac notebook has crashed”As far as extrinsic cues are concerned Price and Brand Image were found to be the mostimpactful on quality. Price and Brand Image were found to be correlated by theConsumer perceptions of Global and Local Brands in the Indian retail Industry 47

consumers which were in relation to the findings of Hooley et al (1998) that consumersoften relate pricing and brand image to superior quality. “Louis Vuitton and Gucci aremy ideal brands…I mean they are high priced but u know one has to pay for thequality of products. The fact that these brands are expensive and global recognised(higher brand image) says it all”.Country of Origin seemed to affect very few consumers. When asked how big a role didcountry of origin play in terms of product purchases, most of the consumers replied ‘Notthat much,…, depends from product category to product category, but I woulddefinitely not pay too much for a made in India label not because of quality standardsbut because its made in my country.. These were the standard replies of most of therespondents. These findings seemed to be in consistent with the findings of Lotz and Hu,(2001) who assert that consumers tend to generalise products based on familiarity andbackground such as “technological superiority”- which was associated by the Indianconsumers from Goods that originated from China, “status and esteem” –were mainlyassociated to goods from European countries, and “design”- goods from U.S.A and U.kand “value for money”- to Indian goods.As far as service quality was concerned in line with the thinking of Parsuraman et al(1988) who identified five dimensions that consumers use to evaluate service quality,consumers conformed to three dimensions: Assurance, reliability and responsiveness.When asked consumers what aspect of service quality they consider extremely importantfor customer satisfaction? The above three dimensions were the most common.“If I go and buy clothes from Mango..and the next day if I decide to go and return itdue to my mind change..i don’t have to think twice ya…they are very quick in actionConsumer perceptions of Global and Local Brands in the Indian retail Industry 48

and would change it instantly for me providing my full money back. Well something ofthis an Indian brand would not do..Definetly not provide me with the money back”!It was observed that most of the respondents when asked the above question along with abrand example revealed global brands like Dell-for reliability and assurance, Sony forreliability hardly any Indian brands (local) brands were named.As far as Country of Origin effects on service quality were concerned it did not affect theIndian consumers to a great extent. “I do believe that foreign brands are capable ofdelivering service quality, but its not that brands like Reliance, Parle, and Tata do notoffer good quality services…its not that I am not going to purchase a made in Indiabrand because of lower quality judgements or so…” replied one of the respondents.From the above analysis it can be concluded customer satisfaction is enhanced by productand service qualities which are found to higher in global brands (H1). Consumers stillprefer brands that hail from countries that are considered to have particular expertise:Switzerland chocolates, Italy in clothing, France in cosmetics, Germany in cars, Japan inelectronics, for example. And hence (H2) also gets accepted.Service quality is not influenced to a great extent while purchasing of brands. Our H3which proposes that country of origin which affects service quality influences consumerdecisions of local brand purchases gets rejected.4.3Theme Three: Consumer SegmentationAs presented in the literature review different classes of people have differentconsumption patterns. As a developing country India is very different from the West. MrKishore Biyani of Pantaloons says “Indian consumers can be divided into three sets-India One, India Two and India Three. These groups can be understood as the consumingclass, the serving class and the struggling class. Studies show that India One (consumingclass) constitutes only 14 % of the country’s population. Till recently all modern retailformats including Big Bazzar, were attracting customers mostly from this segment. Mostof these customers have a substantial disposable income and form part of what areConsumer perceptions of Global and Local Brands in the Indian retail Industry 49

usually called the upper middle and India two (serving class) includes people likedrivers, household helps, office peons, liftmen, washer men, etc. They are the people whomake life easier and more comfortable for the consuming class or India One. For everyIndia One there are at least three India Twos, making up almost 55% of the population.But India One doesn’t care to pay India Two too well. While their numbers are huge theystill have disposable income to spend on buying aspirational products and services.Then there is the struggling class or India Three, which lives a hand –to-mouth existenceand cannot afford to even aspire for a better living. Unfortunately, this segment willcontinue to be on the peripheries of the consumption cycle in India for quite a few years tocome. Their needs cannot be addressed by the business models”.From the interviews it was observed that Upper middle class popularly called as the‘socialites’ or India One are becoming more and more brand conscious. They considerpossession of global brands as status symbols which give them self identity. This is veryevident from responses like “People don’t admit it-but I feel Global brands can becorrelated to symbols of identity and status”In relation to the findings of Tam and Tai it can be concluded that India Two could becalled as ‘‘Achievers’- who valued achievement and materialism, and they are more keenon luxuries that they constituted a special hub and India One the upper middle class can becalled as ‘Strivers’- very materialistic and immersed in an aggressive pursuit ofachievement.4.4Theme Four: Impact of Culture on Consumption PatternsCulture amongst the Indians depicted status, gratitude, approval and disapproval whichwere consistent with the findings of Usunier (2000). India represents a collectivist societywhere people are seen as not fully separable: they are connected to other people by amultiple of overlaps and links). They come to represent the interdependent selveswherein identity lies in familial and social relationships and they tend to move in theirsocial circles. Class and Status also need to be maintained in the social circles in whichone moves. This was very evident from responses of consumers when asked how muchConsumer perceptions of Global and Local Brands in the Indian retail Industry 50

does culture affect their purchase decisions?. Responses like “One always has in mindtheir culture and styles of living so one will always buy products that suit that.”“When I go shopping...particularly for clothes I sometimes do have to keep in mindwhat the neighbour will think… like picking up short clothes for instance and shop ...Imean we live in a society which has certain norms and conducts. I rather stick bythem”“I am a completely brand conscious person ...Cause people really notice what brandsyour wearing. If I enter a party the first thing that I am asked is oh so what brand isyour watch….I guess it’s the people you move around with make you all the morebrand conscious” confirm that Indian culture is subjected to status, gratitude, approvaland disapproval.Due to travelling and exposure a lot of Indians are exposed to the host culture and havebegun to acculturate and adopt its norms and behaviour (Douglas and Craig, 1997).“Culture does play some part while buying the brands in the U.K. You get use to theplace you stay in and you tend to follow what’s happening there” replied a respondentfrom Chandigarh studying in the U.K. It was noticed that Indian consumer’s seeked toemulate Western consumption practices and lifestyles which are consistent with thefindings of Peterson and Jolibert (1995). It was noticed among the respondents that due totravel and exposure more Indians have started becoming aware of global brands but theywould yet purchase brands that are recognised in their social groups.If given a choice between Dior and Chloe, I would rather purchase Dior as it is morerecognised back home, particularly the social group that I hang out with’.Hence it can be concluded that culture and acculturation leads to westernisation ofconsumption patterns which affects brand image (H4) and hence global brands areperceived to have a higher image.4.5Theme Five: Materialism and Social IdentityIn India the collectivist culture is at its peak. It was observed from the respondent’sreplies that Indians tend to identify themselves not on the basis of personal identity butConsumer perceptions of Global and Local Brands in the Indian retail Industry 51

social identity. Respondents tended to purchase belongings that were socially recognisedas it gave them a sense of status and recognition.“I am a kind of person who even if you tell me that an Indian brand is better in qualitythan a foreign brand ...that’s why I should buy it I yet wouldn’t. Cause it’s a mindset Iguess that Foreign brands can be that wow image amongst my friend circle…At leastthe people who I hang out with all go in for foreign brands…Indian brands must befor the masses (the middle and lower middle class)- replied one of the respondents.It could also be seen that increase in westernisation due to cultural impact was leadingconsumers to develop a more materialist attitude as far as consumption was concerned.It was also observed among the participants that increase in materialistic attitude was alsobecause many Indians had faced hardships in their early age. “If you have the money,then why not spend on branded goods that give you status and symbol”, “If I can affordthe best for my children then why not provide them with the best of branded products thatgive them luxuries and represent my status as well”- were some of the replies from therespondents indicating that when one experiences economic instability as a child amaterialistic culture tends to develop (Inglehert, 1990, 1994).Indians are very vulnerable to influences such as group norms. The interdependent self ofthe Indians tends to focus more on the crowd and public appearances. Thereforepossessions like car, jewellery, good designer brands hold a lot of importance for them.Thus it can be concluded that collectivist societies can also be viewed as materialisticsocieties. In other words India can be perceived as a materialistic society hence our H5 getsaccepted.4.6 Discussion and FindingsFrom the above analysis various findings have been concluded in relation to the literaturereview which shall be discussed in detail below.Consumer perceptions of Global and Local Brands in the Indian retail Industry 52

1. Increase In WesternisationIt can be seen from the above analysis that consumption patterns have changed to agreat extent. It has been taken for granted that westernisation in India is on a rise.With the entry of foreign brands in India and more Indians travelling abroad there hasbeen an immense exposure to these brands and western culture. Indians travellingabroad tend to dress and imitate the western styles particularly the manner in whichthey dress thereby leading to western consumption behaviour. This is very evidentwhen consumers particularly studying in the U.K. were asked how their shoppinghabbits have differed after coming to the U.K.“When I got to the U.K. I was very fascinated with the way women dresshere…boots, scarf’s and long over coats and lots of makeup….it mad them lookvery attractive and pretty…I know its kinda embarrassing for me to say…but I toowanted to look like them and dress the way they are’“After coming to the U.K I have become terribly brand conscious…my shoppinghabbits have changed to a great extent especially the way I dress the most…I meanit has become more western and modern…not typical Indian types”Similar to the above replies were noticed amongst Indian students studying in theU.K.It can thus be concluded that increase in Westernisation which has resulted in the changeand needs of the consumers has led to a transformation of the Indian economy from asocialist to a consumption-led economy. The current generation is therefore more proudof being an Indian, and more modern when it comes to their lifestyles, than theirpredecessors. It is a generation that feels that everything is within their each and aspiresfor it. And this is true for everyone, whether they live in large metros or small towns. Icall this paradigm shift- the 3-C theory: Confidence AND Change bringing in anunprecedented era of Consumption. The increase in Westernisation is responsible for thematerialistic attitude among the Indians which have led them to consume brands assymbols of status and prestige.2. Symbolic Consumption of ProductsConsumer perceptions of Global and Local Brands in the Indian retail Industry 53

Due to westernisation of consumption patterns more Indians particularly who belong tothe upper middle classes are developing a materialistic attitude and consuming more andmore brands for symbolic purposes. Consumption in India is affected by a symbolicidentity which basically means that brands are creating a social identity for the consumersthus affecting their purchase behaviour.India represents a collectivist society wherein a lot of emphasis is given to the outer self,basically the way in which a person carries him/herself in public. A lot of importance isgiven to society, norms and values. From the replies of the respondents it was observedthat people had to maintain a particular status amongst the reference groups that theymove in and this prompted them to purchase global brands in order to maintain aparticular status.3. Key Discrepancies between Manager and Consumer PerceptionsA set of key discrepancies or gaps exists regarding executive perceptions of product andservice quality and the tasks associated with service delivery to consumers. These gapscan be major hurdles in attempting to deliver a service or a product which consumerswould perceive as being of high quality. From the replies of the managers it was reviledthat they gave a lot of importance to the concept of ‘Indian-ness’ –the younger generationwill continue to embrace the values of family and community and live the Indian way.They have managed to interpret, understand and deliver consumer satisfaction in a waythat takes into account the Indian context. But due to increase in westernisation theconsumers feel that in when judging a product quality in terms of aesthetics they havefailed to understand the needs of the audience and hence pushing consumers to look forbrands outside India (Global brands). This is very evident as when consumers were askedthat do you think Local retailers understand the needs of the Indian consumers well anddeliver better customer satisfaction. Replies like “Get life and colour in theclothes…Copy some of the big designer brands I would definitely purchase”…“Today brands like Gucci, Dior etc can give me the status symbol that I want...tellme of any one single good local Indian brand that can give me the status that Iwant….ah I seriously can’t think of any’.In terms of service delivery too there existed a gap between consumer expectancy andmanagement delivery especially in terms of responsiveness. The consumers reviled thatConsumer perceptions of Global and Local Brands in the Indian retail Industry 54

local retailers were not really prompt and responsive to their service complaints. Asmentioned above respondents felt that Indian brands when purchased and returned nextday would never give you the money back without purchasing something else whereasthat wasn’t the case with global brands. Once the money comes in. never let go’commented one of the respondents which was believed to be the philosophy of most ofthe retailers by the consumers.The gaps between manager and consumer expectancy has led to the demand for low costglobal fashion brands like H&M, Primark and Zara, and Forever 21. These brands wouldcater to the needs of not only the upper middle class by providing them with betteraesthetics of products and better services but also cater to the price sensitive segments ofIndia like the lower middle classes who desire to be trendy and fashionable but cannotdue to unavailability of these characteristics in local Indian brands.4. Growth of the Indian Retail SectorThe gradual trend towards liberalization of the Indian economy during the past decadehas served as a major factor in its progressive shift towards a global economy and theentry of foreign brands from Europe and US into this market.The materialist attitude among the Indians to possess products that provide them with asense of self-identity and status and also due to changes in consumption patterns hasincreased the popularity of these brands thereby resulting in higher purchases of globalbrands as compared to local brands. Although this attitude is prevalent only in urbancities of India, times are not far where such an attitude will prevail amongst all the classesof people. Global brands have a tendency to focus on the upper middle classes and theyoften fail to address the needs and demands of the lower classes in India. Recent timeshave seen an array of Local retail outlets like Pantaloons, Big Bazaar, and Shoppers Stopetc that have rewritten the retail rules in India. The Indian retailers agree upon theupcoming trends of foreign brands in India and they being acceptable by the upperclasses, but sustainability of these global brands is a major criterion that needs to belooked into. Their sustenance was guaranteed since they focused on the market as awhole which made them earn higher profits than international retail stores in India. Theyfocus not only on the upper classes but also meet the needs and wants of the lowerclasses. “Marketers are prone to classifying consumers into various categories, subConsumer perceptions of Global and Local Brands in the Indian retail Industry 55

categories, income strata, etc...But For us very Indian who has aspirations is apotential customer” replied one of the retailers when asked who the success mantra forhis retail business.Hence for sustainability and profits managers of multinational companies should lookinto all the segments of the Indian markets. The next chapter therefore provides certainimplications for managers of global brands who waiting to tap the Indian markets.Consumer perceptions of Global and Local Brands in the Indian retail Industry 56

Chapter FiveConclusionThe basic aim of this chapter is to provide recommendations and guidelines to thoseforeign investors who want to tap the Indian markets. It also provides a key summary offindings and provides limitations to the study.6.1Managerial ImplicationsOn the basis of the replies and observations of various retail executives, foreign brandslike Tesco, H&M and Wal-Mart who are on the verge of entering the Indian markets canget valuable insights as to what they should keep in mind before entering the Indianmarkets.This diagram below has been developed and explains the basic objectives that ForeignInvestors should focus on, for them to be successful in the Indian Markets.o Emergent Strategies necessaryAs advocated by Mr Biyani Global brands in India tend to appeal particularly to IndiaOne, the upper middle class which is a very niche segment considering our population.One of his key observations about the Indian consumers was that the master (uppermiddle class) and lower classes never shopped at the same store. While the lower middleConsumer perceptions of Global and Local Brands in the Indian retail Industry 57

class visits hypermarkets and discount chains, the upper middle class frequentsdepartment stores and speciality chains as well as supermarkets. And even though IndiaTwo may be buying some of the same products that India One consumes –albeit insmaller quantities they never visit the modern retail chains. For them, the clean and shinyenvironment of modern retail stores creates the perception that such stores are tooexpensive and exclusive, and are therefore not meant for them. India two tends to feelalienated in environments frequented by India One. But with his format of Big Bazaarwhere goods were offered at reasonable prices and at much lower prices as compared toother stores he was able to attract the lower classes as well (India Two).“The key to success in the retail business in India is firstly getting the retail modelright and then scaling up quickly. The Indian customer needs an indigenous solutionto her shopping needs- that gives her the best value for money in an environmentwhere she is comfortable. At the same the heterogeneity of our country doesn’t providethe luxury of following a cookie-cutter approach for setting up a store.” replied B SNagesh (Managing Director and CEO of Shoppers Stop Ltd)What sets India apart is the diversity and uniqueness of the Indian market. The rice thatwe eat, the apparel that our women wear, the dialects we speak, change every hundredkilometers in our country. There are a lot of conflicting trends and paradoxes that areevident across the country. Logic and emotion, individuality and social feeling, povertyand affluence, life and lifestyle, value and indulgence, and the past and the futuresimultaneously co-exist in India. And all these paradoxes converge to make India what itis. To the external world, this harmonious coexistence of seeming contradictions is one ofthe most confusing aspects of the Indian consumer market. But this signifies ourcountry’s openness to change and its ability to add new dimensions to its social structureConsumer perceptions of Global and Local Brands in the Indian retail Industry 58

without losing the old ones. This opens up new and unique opportunities as well as bringsforth challenges for marketers and retailers.Given above the unique characteristics of a specific market/industry like India “emergentstrategies” (Shiner, 1988) would be more appropriate for multinational firms. Emergentstrategies increase a firm’s flexibility and adaptability to environmental changes andfluctuations in consumer’s demand (Shiner, 1988).o Flexibility and AdaptabilityA critical factor influencing brand structure is the degree of cultural embededness of aproduct. This can be defined as the extent to which there are strong and deeply ingrainedlocal preferences for specific products or product variants (e.g. food) or the productswhich are an integral part of the culture (Douglas et al, 2001). The consumers in Indiahave exhibited a strong preference for local brands when it comes to food and householdcommodities. “Most of the Indians are accustomed to shopping at smallneighbourhood stores or purchasing from street hawkers, only a fraction of thepopulation have become comfortable with the whole ‘ organized retail stores’. Topersuade the consumers to try Big Bazaar, the company incorporated elements of thebazaar experience into its stores. For example, while shopping for food grains locally,consumers usually touched the products to assess quality. Hence, in addition tooffering pre-packaged grains, Big Bazaar stores were designed to offer loose, self-servegrains that customers could touch” said Mr Biyani (director of Future Group).When asked Mr Nagesh what were his views about the success of retail models like Wal-Mart entering India he replied “I strongly believe that in retail, the winner doesn’t takeit all. And this applies globally, too. Let’s take the example of a big giant, Wal-Mart, inConsumer perceptions of Global and Local Brands in the Indian retail Industry 59

the US. The fact is it has an approximate 9.8 per cent share of a $3 trillion market!Maybe we need to look at why Wal-Mart was not successful in Germany and Korea, orwhy it was successful in some other markets. It all boils down to market dynamics. Youcan’t take one model and apply it elsewhere”.Each and every store in India needs to be customized after taking into account the diverseculture, tastes and preferences of every city or locality that multinationals want to set uptheir stores in. Indians belonging to any class always prefer to touch, smell and feel thewheat grains before they buy them and such an Indian psychology helped in thedevelopment of Food Bazaar where staples are sold loose. They have become a standardfeature of most of the supermarkets in India. Hence if multinationals like Tesco or Marksand Spencer’s who want to venture into food hypermarkets as they offer big retailopportunities in India should adaptthemselves to the consumers psychology andpreferences in a country’s product markets, But however companies should retain theircore business propositions even as they adapt their business models. As suggested byJohansson and Ronkainen (2005) one of the marketing mantras is ‘being local on a globalscale’, it is imperative to localize some features of the marketing approach.Multinationals should adopt a ‘country centred strategy’ (Douglas et al 2001) whichrequires them to be extremely flexible and build or acquire a mix of national andinternational brands like Nestle and Uniliver have traditionally done.o Build Brand equity and avoid direct competitionOperationalizing brand equity generally falls into two groups: those involving consumerperceptions such as awareness, brand association or perceived quality and those involvingconsumer behavior such as brand loyalty (Barbara, 2003). In terms of the household andfood brands, local Indian Brands like Amul, Parle and Sunfeast have exhibited higherConsumer perceptions of Global and Local Brands in the Indian retail Industry 60

and preferences and equity not only in terms of awareness, brand association orperceived quality but also brand loyalty. This is solely due to the fact that these brandshave understood the Indian customers well and they deliver value for money products.The Foreign multinationals entering India try to compete with local brands for e.g. (Heinztried competing with Kissan but was not successful), they instead should try and build astrong brand equity and lay more emphasis on the needs of the Indian consumers.“A weakness of European retailers is that they are often stuck with old technology andsystems. They are often too inward looking! Do not spend too much time worryingabout the detail of what the competition is doing: look instead at the consumer” saidJayani (Production Head Westside)o Strong Presence in all the Segments for Profitability and SustainabilityKnowing the market, and identifying and catering to the need of the consumers areessential. Products transplanted from affluent, developed nations tend to appeal torelatively small elite (Douglas and Wind, 1987). The above analysis and discussionreveals that global Brands are generally perceived to be high priced but often deliveringbetter quality. Due to their premium pricing they tend to appeal to the higher classes inIndia which is a very niche segment. Their premium pricing should be lowered as soon assuccess follows in order to tap larger market segments which comprise of almost 70% ofthe Indian population.The above analysis and discussion indicates that there is a gap in the Indian markets forlower priced foreign retail brands like Zara and H&M. Hence if Brands like H&M andZara enter the Indian markets they should follow a ‘need based” positioning as suggestedby Porter (1996 cited in Hooley et al, 1998): seeing that the offerings according to theaudience’s expressed needs. Even though the initial positioning would focus on narrowsegments the future positioning should attract customers from broader segments forsustainability and larger profits. International companies have to delve deeper into thelocal consumer base in order to tap the potential of the ‘billion-consumer markets’.” WeConsumer perceptions of Global and Local Brands in the Indian retail Industry 61

think the best opportunities are in rural markets”, says a leading retailer. They have todevelop ‘value propositions’ that appeal to mass market.6.2 Key FindingsIndian consumers demonstrate unique purchasing behavior due to these differences. Dueto the diversity of population, it is not unusual to see that a bullock cart, a bicycle and aBMW 7-series car traveling on the same roads in India. It is very important to understandthe perceptions in such a vast and growing market. India One (consuming class)popularly referred to as the socialites (Biyani, 2000) are becoming immensely brandconscious and are constantly looking out for globally recognized brands that give them astatus in society.Key findings from the study can be summarized as follows:o Brand evaluations are related to consumer’s income, and as such higher incomegroups show preference towards foreign brands. Similar to Batra et al (2000), wefound that brands from a developed country (UK) are perceived to be superior andpreferred to those from a less than developed country (India).o In particular, it was found that just over than half of the sample preferred foreignbrands to comparable local brands and brands in India are perceived to be reliable,good performance, hand made, and reasonably priced but to be of poor design,imitative, technically backward, and meant for the lower classes. In contrast, thebrands in UK and USA are perceived to be technically advanced, good design,good quality, and reliability for the upper classes to be proud of ownership butmass produced, and unreasonably priced.o While globalness has become a stronger quality signal than nation of origin,consumers still prefer brands that hail from countries that are considered to haveparticular expertise: Switzerland chocolates, Italy in clothing, France incosmetics, Germany in cars, Japan in electronics, for example.o Increase in Westernization has led Indians to develop a materialistic attitudetowards possession of goods that are consumed for symbolic consumption.o There is a gap in the Indian markets for low cost retailer brands like Zara andH&M and Primark.Consumer perceptions of Global and Local Brands in the Indian retail Industry 62

These findings would be of interest to companies in their formulation of foreignmarketing strategies by offering a better understanding of how foreign brands are likelyto be perceived in relation to domestic products and those originating from othercompeting countries in the market.6.3Limitations of the Studyo The dissertation restricts itself to the perceptions of global and local brands onlyin the Indian retail markets. The scope of this study would envelop onlyconsumers from the upper middle classes which comprise of only 10% of theentire Indian population.o Gathering adequate information during the collection of secondary data was anissue, due to limited information on consumer perceptions of global and localbrands in emerging markets as consumption patterns differ in the East and West.o Due to time and resource constraints, only a limited number of retail executivescould be approached. Furthermore only four retail executives and 14 consumerswere interviewed to unravel the views about what leads consumers to purchasebranded goods in the retail sector.o The views of the interviewees may have been based on intuition, current factorsand experiences of the respondents and is not based on any quantitative facts ortracked datao The use of convenience and judgment sample was an additional limitation. Thefact that data was obtained solely from one geographical location, createduncertainty about the sample representing the entire population.o The proposed model identified certain factors that were believed to affectconsumer brand purchases. However the chosen set of variables and antecedentsare not the only determinants that lead to global brand purchases. Factors likeConsumer ethnocentrism and Brand Origin were also found to be high insusceptibility to normative influence and for product categories high in socialsignalling value (Batra et al, 2000) which haven been discussed and incorporated.Consumer perceptions of Global and Local Brands in the Indian retail Industry 63

ReferencesAaker, D. (1991), “Using Free Association to examine the relationship between thecharacteristics of brand associations and brand equity”, Journal of Product and BrandManagement”, Vol. 10, no. 7, p.p.439A.T. Kearney (2005). The Global 2005 Retail Development Index,www.atkearney.com/main.taf?p+5,3,1,108,1), visited on 7.7.2007Alden, D.L., Steenkamp, J.E.M. and Batra, R. (1999), “Brand Positioning throughadvertising in Asia, North America and Europe: the role of global consumer culture”,Journal of Marketing, Vol. 63, pp.75-87.Andreasen, A.R. (1990), “Cultural interpenetration: a critical consumer research issue forthe 1990s”, in Goldberg, M., and Gorn and Pollay, R. (Eds), Advances in ConsumerResearch, Association for Consumer Research, Provo, UT, Vol. 17, pp.847-9Baalbaki. I and Malhotra. N, (1991), “Marketing Management Bases for InternationalMarket Segmentation: An Alternate Look at the Standardization/Customization Debate”,Vol. 10, No.1, pp.19-44.Batra et al, (2000) “Effects of Brand Local and Nonlocal Origin on Consumer Attitudesin Developing Countries”, Journal of Consumer Psychology, Vol. 9 (2), 83-95.Barbara, S. (2003), “Managing Brand Equity, A look at the impact of attributes”, Journalof Product and Brand Management, Vol. 12, p.39Canli. Z, & Maheswaran. D, (2000), “Determinants of Country of Origin Evaluations”,Journal of Consumer Research, Vol.27, p.96-108.Corsby, Philip B. (1979), Quality Is Free: The Art of Making Quality Certain, New York:New American Library.Coleman and Briggs (2002), Research in Educational Leadership and Management.London: Paul Champan.Crouch, S. and Housden, M. (1996) Marketing Research for Managers, Published onbehalf of The Chartered Institute of Marketing.Dawar, N. and Parker, P. (1994), “Marketing universals: consumer’s use of brand name,price, physical appearance, and retailer reputation as signals of product quality”, Journalof Marketing, Vol. 58, pp.81-95.Denzin, N.K. and Lincoln, Y.S. (1998) Introduction: Entering the field of QualitativeResearch. In Denzin and Lincoln, Y.S. (eds). Strategies for Qualitative Inquiry. LondonSage.Consumer perceptions of Global and Local Brands in the Indian retail Industry 64

Douglas. B, John. A, Quelch, and Taylor. E, (2004), “How Global Brands Compete”,Harvard Business ReviewDouglas S.P. and Craig, C.S. (1997), “The changing dynamic of consumer behaviour:implications for cross-cultural research”, International Journal of Research in Marketing,Vol. 14, pp.379-95.Douglas et alDomzal, T. and Ugner, L.S. (1987), “Emerging positioning strategies in globalmarketing”, The Journal of Consumer Marketing, Vol. 4 (4), fall, pp.23-40.Ghauri, P. and Cateora, P (2006), International Marketing, 2 ND EDN, McGraw-HillCompanies, Berkshire.Greenfield, T. 1996 , Research Methods, Guidance, Sage Publications.Holt, Douglas, Quelch, J., Taylor. E, (2003), “Managing the Transnational Brand: HowGlobal Perceptions Drive Value,” working paper, Harvard Business School.Homburg, C. et al, “Do Satisfied Customers Really Pay More? A study of theRelationship Between Customer Satisfaction and Willingness to Pay”, Journal ofMarketing, Vol. 69, p. 84-96.Hofstede, G (1994), “The Business of International Business is Culture”, InternationalBusiness Review, Vol.3, No.1, pp.1-14Hooley, G.J., Möller, K. and Broderick, A.J. (1998) “Competitive Positioning and theResource Based View of the Firm”, Journal of Strategic Marketing, 6(2), 97-115.Inglehert, R. (1994) “Economic Security and Value Change”, The American PoliticalScience Review,Javalgi, R., White. D. (2002), “ Strategic Challenges for the marketing of servicesinternationally”, International Marketing Review, VOL.19, no.6, pp.563-581Johansson. K, and Ronakainen. I (2005), “The esteem of Global Brands”, BrandManagement,Vol. 12, No. 5, p. 339-354.Kapferer, J.N. (1997) Strategic Brand Management, 2 nd edn, Kogan Page: Dover, NH.Kinra, N. (2006), “ The effect of country of origin on foreign brand names in the IndianMarket”, Marketing Intelligence & Planning, Vol.24(1), pp.15-30.Kirmani, A. and Baumgartner, H. (2000), “Reference Points Used in Quality and ValueJudgements”, Marketing Letters, Vol. 11 (4), pp. 299-310.Consumer perceptions of Global and Local Brands in the Indian retail Industry 65

Kotler et al, (2004). Marketing Principles, Pearson Addition.Lewis, Robert C. and Bernard H. Booms (1983), “The Marketing Aspects of ServiceQuality,” in Emerging Perspectives on Services MarketingLuna and Gupta (2001), “An integrative framework for cross-cultural consumerbehaviour”, International Marketing Review, Vol. 18, No. 1,pp.45-69McCracken, G. (1986), “Culture and Consumption: A Theoretical account of thestructure and movement of the cultural meaning of consumer goods”, Journal ofConsumer Research, Vol. 13, pp. 71-84.Miles and Huberman (1994), “Qualitative Data Analysis”, Sage Publications, SecondAddition.Nowak, J.D. & Gowin, D.B. (1984). Learning How to Learn. Cambridge, MA:CambridgeUniversity Press.Parsuraman et al (1998), “ SERVQUAL: A Multiple-Item Scale for Measuring ConsumerPerceptions of Service Quality”, Journal of Retailing, Vol. 64(1)Peterson, R.A. and Jolibert, A.J.P (1995), “A meta-analysis pf country-of-origin effects”,Journal of International Business Studies, Vol. 26 (4), pp. 883-900Pradhan. G. (2007) “The Retail Management Book”, Sage Publication, Pearson LtdQuelch, J. (1999), Global brands: taking stock”, Business Strategy Review, Vol.10 (1),pp.1-14.Rao, V. (1972), “Changes in explicit information and brand perceptions”, Journal ofMarketing Research, Vol. 9 (9), pp.209-13.Roslow, P. and Nicholos, J.A.F. (1996), “Targeting the Hispanic market: comparativepersuasion of TV commercials in Spanish and English”, Journal of Advertising Research,Vol. 36, May/June, pp.67-77.Richins. M, and Dawson. R, (1992), “A Consumer Values Orientations for Materialismand Its Measurement: Scale Development and Validation”, Journal of ConsumerResearch, Vol.19, pp.303Richard and Dawson (1992) “A Consumer Values Orientation for Materialism and itsMeasurement: Scale Development and Validation”, Journal of Consumer Research, Vol.19, pp.302-315.Rubin, J.H. and Rubin, S.I. (1995), “Qualitative Interviewing: The art of Hearing data”,London Sage.Consumer perceptions of Global and Local Brands in the Indian retail Industry 66

Roy, S. (2005), ‘Letter India’, www.indiaretailing.com (visited on 2.7.2007)Roslow, P. and Nicholls, J.AF (1996), “Targeting the Hispanic market: comparativepersuasion of TV commercials in Spanish and English, Journal of Advertising Research,Vol. 36, May/ June, pp.67-77.Sebastianelli et al, (2002) “How product Quality dimensions relate to defining Quality”International Journal of Quality and Reliability Management, Vol. 19, No. 4, pp. 442-453Schuiling, Isabelle and Jean- Noel Kapferer (2004), “Real Differences between Local andInternational Brands: Strategic Implications for International Marketers, “Journal ofInternational Marketing, Vol.12 (4), 97-112.Steenkamp, J.E.M., Batra, R. and Alden, D.L. (2003), “How perceived brand globalnesscreates brand value”, Journal of International Business Studies, Vol. 34 (1), pp. 53-65.Schooler, R. D., & Sunoo, D. H. (1969, March). Consumer perceptions of internationalproducts: Regional vs. national labelling. Social Science Quarterly, 50, 886-890.Strauss, A. & Corbin, J. (1998). Basis of Qualitative Research: Techniques andProcedures for Developing Grounded Theory (2 nd ed.). Thousands Oaks, CA: Sage.Shiner, D.V. (1988), “Marketing’s Role in Strategic and Tactical Planning”, EuropeanJournal of Marketing, 22 (5), 22-31The Ecnomist, (2003), “The Case for Brands”, September.Tam and Tai (1996), “The psychographic segmentation of the female market in GreaterChina”, Department of Buisness Studies, The Hong Kong Polytechnic University,Kowloon, Hong Kong.Usunier. J, (2000), “Marketing Across Cultures”, Chapter 3 and Chapter 4, Third Edition,Prentice Hall, Pearson Education.Ueltschy, L.C and Krampf, R.F. (1997), “The influence of acculturation on advertisingeffectiveness to the Hispanic market”, Journal of Applied Business Research, Vol. 13,No.2, pp.87Wallendorf, M. and Reilley, M. (1983), “Ethic migration, assimilation, andconsumption”, Journal of Consumer Research, Vol.10, December, pp. 292-302.Wolfe, Alan (1991), “The Single European Market: National of Euro- Brands,”International Journal of Advertsing, 10 (1), 49-58.Wong and Ahuvia (1995): “Self-Concepts and Materialism: a Cross Cultural Approach”,American Marketing Approach, pp.112-119.Consumer perceptions of Global and Local Brands in the Indian retail Industry 67

AppendixBackground of RespondentsConsumers studying in the UKName Age City GenderSilky Kothari 22 Mumbai FemaleKartika Godha 21 Jaipur FemaleRahul Gupta 26 Delhi MaleNayan Prasaran 24 Delhi MaleVikas Arora 24 Chandigarh MaleAnvita Khandwala 23 Mumbai FemaleSaru Deswal 24 Haryana FemaleConsumers living in India (residing in the city of Mumbai)NAME Age Profession GenderIsha Bhansali 24 Fashion Stylist FemaleKaran Aldreja 22 Engineer MaleSeema Bajaj 30 House Wife FemaleRishabh Pareikh 25 MBA MaleHarsh Kapadia 23 CommunicationsDesignerMaleShreya Bubna 24 Fashion Designer FemaleDarshan Gandhi 28 Project Manager MaleExecutive InterviewsName Company Designation GenderMr Kishore Biyani Future Group Managing Directorof Future GroupMaleBS NageshRaheja Group(Shoppers Stop)MD and CustomerRelationshipManagerMaleConsumer perceptions of Global and Local Brands in the Indian retail Industry 68

Jayani West side Production Head(Mens Wear)Anjani Casliwal Reid and Taylor Customer RelationsManagerFemaleFemaleTable 2A template of the Consumer Interview questionnaire along with the rationalebehind asking such questions.All the questions were asked keeping the primary objective in mind: to gain an insight ofconsumer perceptions of global and local brands.Question No Question Rationale1. What do you perceive tobe the key attributes of abrand and what do uassociate it with?2. Which is your favoritebrand and why?3. What do u associateproduct and servicequality to?4. How does the ‘made inlabel’(COO) affect youpurchase decision?5. How does culture play arole in terms of yourpurchase decision?This is a direct questionto determine thedifferent attributes of abrand like quality,status, PersonalityThis question was askedto gain consumerperceptions of globaland local brands andalso depict their brandpurchases preferences.This question was askedfind out the variousproduct and servicequality cues that have animpact on customersatisfaction.This question was askedto unveil the impact ofCOO on consumerbrand purchases.This question was askedin order to find out theaffect of culture onbrand image andchanges in consumptionpatterns subjected toacculturation.Consumer perceptions of Global and Local Brands in the Indian retail Industry 69

6. Do you think that localretailers understand theirhome markets better anddeliver better customersatisfaction and value tocustomers?7. Has the perception aboutdomestic brandschanged with thecoming in ofinternational brands? Ifso why has this changeoccurred?8. What do you think is themain difference betweena global and localbrand?9. Do you think shoppingfor global brands abroaddiffers from shopping inIndia?This question was askedto find out thedifferences in thoughtbetween managers andconsumers.This was asked to findout the main differencebetween global and localbrands that have createda gap in the Indianmarkets.This question was inrelation to the primaryobjective of thisresearchThis was asked tobasically find out theareas in which globalbrands need to improvebefore enteringemerging markets.Table 2Executive Interview QuestionnaireNo Question Rationale1 In the face of retail boomin India, as one of theleading retail companiesin the country I wouldlike you to comment onthe current retail scenarioand the future outlook?2. How has the coming in ofthe international brandsaffected the domesticretailer and the local retailstores?This question was askedto find out the growth ofthe company and itssuccess in India.This question was askedto find out to gain aninsight as to how Indianretailers view foreigncompetition.3. Big retailers like Wal-Mart etc are coming toIndia. Most of these willThis question was askedto find out the success oflocal retail formats andConsumer perceptions of Global and Local Brands in the Indian retail Industry 70

have large and deeppockets and an edge overtechnology. How will youhandle competition?4. How do u segmentconsumers in India?5. Do you feel foreignretailers can addsignificant value in theIndian retail sector?6. At present India’s retailsector is largelyunorganized, with about15 million outletscatering to consumerneeds across the countryso do you think there isenough ground formodern retail formats toco-exist?what are the key pointsthat foreign investorsshould keep in mindbefore entering the IndianmarketsThis question was askedto gain an understandingabout Indian consumermarketsThis was asked to findout the managerperceptions of globalbrands.This question was askedto basically find out thesuccess behind modernretail formats in India inthe midst of large numberunorganized retail outlets.7. Do you think that yourretail formats arematching up to theexpectations of theconsumers?8. Do the Indian Consumerssuffer from overseasshopping addiction?This question was askedto find out thediscrepancies that existbetween managers andIndian consumers.This was asked to gain aninsight on the consumersegments in India.Consumer perceptions of Global and Local Brands in the Indian retail Industry 71

A TRANSCRIBED INTERVIEW OF A INDIAN CONSUMER1. What to you perceive to be the key attributes of a brand and what do you associateit with?a. Qualityb. Pricec. Statusd. Personalitye. AestheticsI think I would associate it to quality and status particularly. I also relate brands to mypersonality…especially the foreign brands.“People don’t admit it-but I feel Global brandscan be correlated to symbols of identity and status”. “Louis Vuitton and Gucci ares…Imean they are high priced but u know one has to pay for the quality of products. The factthat these brands are expensive and global recognised (higher brand image) says it all.2.Which is your ideal brand and why?“My favourite brand is Apple..it symbolises the youth and constantly keeps coming upwith newer products for generation next- the I pod is the biggest example. Theperformance of Apple Products is very steady...in my social set of friends I think all of uspossess an I-Pod and never have I never heard of any of us complaint that …freak myipods giving problems or Mac notebook has crashed”3. What do u associate product and service quality to?I think it would be the looks and appearances of the product (aesthetics)“If I go and buy clothes from Mango..and the next day if I decide to go and return it dueto my mind change..i don’t have to think twice ya…they are very quick in action andwould change it instantly for me providing my full money back. Well something of thisan Indian brand would not do..Definetly not provide me with the money back”!Consumer perceptions of Global and Local Brands in the Indian retail Industry 72

3. How does the made in label affect your purchase decision?I think when I see a made in label it gives me a certain kind of an information that makesme aware that if an electronic is made in China…I know for a matter of fact it is of goodquality…u see it depends from product category to product category, but I woulddefinitely not pay too much for a made in India label not because of quality standards butbecause its made in my country.4. How does culture play a role in your purchase decision?“One always has in mind their culture and styles of living so one will always buyproducts that suit that.” “When I go shopping...particularly for clothes I sometimes dohave to keep in mind what the neighbor will think… like picking up short clothes forinstance and shop ...I mean we live in a society which has certain norms and conducts. Irather stick by them”5. Do you think that local retailers understand their home markets better and deliverbetter customer satisfaction and value to their customers?Yes obviously in terms of household products it is only the Indian retailer who canunderstand the mindset of the consumer. They know the way of thinking, changingtrends, people’s priorities when buying a product. They can conduct market researchbefore launching products. They can get feedback from local customers more easily andmake changes in the products easily. They only can render services that the consumerexpects out of them.6. Has your perception about the domestic brands changed with the coming in ofinternational brands? If so why has this change in perception occurred?Yes in terms of Quality definitely. The quality expectations of the consumers is on a risedue to the coming of these international brands. International brands generally are bettersince they have more resources to work on and hence they offer better service ascompared to a local brand. This does affect the local brands as they do not have the sameresources. Hence the perception towards local brands does get changed.Consumer perceptions of Global and Local Brands in the Indian retail Industry 73

7. What do you think is the main difference between a global and local brand?Generally an international brand is much more expensive compared to an Indian brand.They are even generally better in quality. There will be much more variety availablewhen it comes to international brands. For eg: If one wishes to buy breakfast cereals inIndia one can choose from maximum 5 different types but in the U.K. one has 25different types of cereals.6. Do you think shopping for brands abroad differs from shopping in India?In the U.K. one gets to buy the latest collections and a huger variety is available. In Indiaone may have to make do from a limited choice and outdated trends. In the U.K. one getsto see more brand compared to the ones we have in India and thus one can make a propercomparison and then buy products. In the U.K. one is offers certain services like fullrefund of money if one doesn’t like the product. In India brands never allow suchpolicies.(Further additional questions will be asked during the interviews based on theinterviewee’s responses and questions also differed for those consumers who werestudying in the U.K.)TRANSCRIBED INTERVIEW OF AN INDIAN RETAILER1. In the face of retail boom in India, as one of the leading retail companies in the countryI would like you to comment on the current retail scenario and the future outlook?India is still in the nascent stage of organized retailing and is constantly evolving.Pantaloon Retail (I) Limited is a front runner in India’s modern retail space and werepresent fashion ,food, general merchandise and other lines of business, through multipledelivery formats, primarily catering to the lifestyle and value customers.The company has stores in nearly 30 cities across the country, constituting over 2.7Consumer perceptions of Global and Local Brands in the Indian retail Industry 74

million square feet of retail space. The company has also signed close to 10 million sq. ft.of retail space to be operational by end 2008, which represents 20-30 % of all modernretail space coming up in the next three years.I believe that consumption will be the next big driver of India’s economic growth. Risingincomes and increased exposure to global products and global consumption patterns havechanged the average Indian’s attitude towards consumption and savings.Consumption = Development. Increased and channelised consumption would lead tothe development of the nation through improved and better infrastructure facilities,greater employment generation possibilities will emerge with increased consumption,leading to people wanting to spend more on themselves. This cycle is what will fuel theconsumption boom in the country.2. How has the coming in of the international brands affected the domestic retailer andthe local retail stores?I think these International brands tend to classify only appeal to the upper middle classesthat is India One which I call. They do not appeal the masses whereas are retail modelsare for everyone. Most of the Indians are accustomed to shopping at small neighborhoodstores or purchasing from street hawkers, only a fraction of the population have becomecomfortable with the whole ‘ organized retail stores’. To persuade the consumers to tryBig Bazaar, the company incorporated elements of the bazaar experience into its stores.For example, while shopping for food grains locally, consumers usually touched theproducts to assess quality. Hence, in addition to offering pre-packaged grains, Big Bazaarstores were designed to offer loose, self-serve grains that customers could touch and thiswas our success factor.Marketers are prone to classifying consumers into variouscategories, sub categories, income strata, etc...But For us very Indian who has aspirationsis a potential customer”. India has a vast consumer market presenting opportunities for aConsumer perceptions of Global and Local Brands in the Indian retail Industry 75

whole lot of new investors. So even if these brands enter our country they are not indirect competition with us”3. Big retailers like Wal-Mart etc are coming to India. Most of these will have large anddeep pockets and an edge over technology. How will you handle competition?“I strongly believe that in retail, the winner doesn’t take it all. And this applies globally,too. Let’s take the example of a big giant, Wal-Mart, in the US. The fact is it has anapproximate 9.8 per cent share of a $3 trillion market! Maybe we need to look at whyWal-Mart was not successful in Germany and Korea, or why it was successful in someother markets. It all boils down to market dynamics. You can’t take one model and applyit elsewhere”.4. How do u segment consumers in India?“Indian consumers can be divided into three sets- India One, India Two and India Three.These groups can be understood as the consuming class, the serving class and thestruggling class. Studies show that India One (consuming class) constitutes only 14 % ofthe country’s population. Till recently all modern retail formats including Big Bazaar,were attracting customers mostly from this segment. Most of these customers have asubstantial disposable income and form part of what are usually called the upper middleand India two (serving class) includes people like drivers, household helps, office peons,liftmen, washer men, etc. They are the people who make life easier and more comfortablefor the consuming class or India One. For every India One there are at least three IndiaTwos, making up almost 55% of the population. But India One doesn’t care to pay IndiaTwo too well. While their numbers are huge they still have disposable income to spendon buying aspirational products and services.Then there is the struggling class or India Three, which lives a hand –to-mouth existenceand cannot afford to even aspire for a better living. Unfortunately, this segment willcontinue to be on the peripheries of the consumption cycle in India for quite a few years tocome. Their needs cannot be addressed by the business models”.Consumer perceptions of Global and Local Brands in the Indian retail Industry 76

5. Do you feel foreign retailers can add significant value in the Indian retail sector?“Yes definitely. But again I think it depends who your target audiences are. Internationalbrands tend to focus on the upper segment of the society as they are priced higher and canbe afforded only by that class. Whereas our retail formats focus on all the segmentswhich I think is one of the advantage that we have as India One represents only 30% ofour population.6. At present India’s retail sector is largely unorganized, with about 15 million outletscatering to consumer needs across the country so do you think there is enough ground formodern retail formats to co-exist?Modern retail is booming in India. Consumers are becoming more and more demanding.It is this demand of the consumers which have led us to develop modern retail formatswhich have proved extremely successfulThe current generation is therefore more proud of being an Indian, and more modernwhen it comes to their lifestyles, than their predecessors. It is a generation that feels thateverything is within their each and aspires for it. And this is true for everyone, whetherthey live in large metros or small towns. I call this paradigm shift- the 3-C theory:Confidence AND Change bringing in an unprecedented era of Consumption.7. Do you think that your retail formats are matching up to the expectations of theconsumers?Change is something constant that we need to bring about there are couple of emotionsthat determine shopping behavior in India. The most fundamental of them are greed,altruism, fear and envy. Greed drives a customer to purchase more than what he or sheneeds. A wide range of options, better products and lower prices generate that increaseddesire to purchase. Often a customer would consider it a good opportunity to buy morethan what she needs and gift to others as well. Higher purchase is also driven by the fearthat current price offer may not be available for long and so the product has to bepurchased right away. And envy sets in when one sees others buying and making the bestout of deal. Big Bazaar and Pantaloons which are example of modern retail formats wassuccessful because it effectively capitalizes all of these emotions.Consumer perceptions of Global and Local Brands in the Indian retail Industry 77

8. Do the Indian Consumers suffer from overseas shopping addiction?Again you see its all depends upon the classes. As I mentioned earlier India One whichrepresents the upper section of the society in my opinion shops a lot from abroad and whoare prone to more western influences. Whereas India Two and Three are yet verytraditional in thinking and demand for the Indian ways of doing things. They are lesssubject to western influences.Consumer perceptions of Global and Local Brands in the Indian retail Industry 78