An analytical study on behavioral changes of consumers of for household furniture in Pune region

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The purpose of the study was to test the extent of change of behavior over the period to plan effective strategies.

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International Journal of Management (IJM) Volume 7, Issue 7, November–December 2016, pp.313–319, Article ID: IJM_07_07_035 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=7 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication AN ANALYTICAL STUDY ON BEHAVIORAL CHANGES OF CONSUMERS OF FOR HOUSEHOLD FURNITURE IN PUNE REGION Dr. Dhananjay Mandlik Professor, Sinhgad Business School, Pune, Maharashtra, India Dr. Prashant Kotasthane Associate Professor, Sinhgad Business School, Pune, Maharashtra, India ABSTRACT Furniture market in India is predominantly an un organized retail market (85%) but gradually with large scale organizations (manufacturing & retailing) venturing into the sector has in the change in behavior of consumers Consumer behavior in recent past(five years since 2008) is changing its orientation form dissonance reducing behavior to branding. This is indicated by various activities the consumers undertake which are directly or indirectly responsible for furniture purchase. The purpose of the study was to test the extent of change of behavior over the period to plan effective strategies. Nine statements chosen which exactly described the consumer behavior. Each statement represented activities which depicted specific consumer behavior. These statements were constructed on the on the basis of extensive literature review & from pilot survey in Oct 2012. Respondents had given their opinion about the statements on 5 point Likert’s scale. Statements were positive indicating a negative difference on selecting choices if there was any difference in behavior. Results obtained were subjected to paired 2 sample test. Results showed a substantial change in consumer behavior on the nine dimensions considered for study. Key words: Consumer Behavior, Furniture, Likert’s Scale. Cite this Article: Dr. Dhananjay Mandlik and Dr. Prashant Kotasthane, An Analytical Study on Behavioral Changes of Consumers of Retail Outlets for Household Furniture in Pune Region. International Journal of Management, 7(7), 2016, pp. 313–319. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=7 1. INTRODUCTION 1.1. Indian Furniture Industry Profile In India Domestic furniture industry is estimated at around Rs 750 billion and is highly fragmented where around eighty-five per cent of national production comes from regionally small size firms falls into the unorganized sector and remaining comes from the organized sector comprising of leading manufacturer, importers and dealer/distributors. According to IBRD the organised international furniture industry is ex- http://www.iaeme.com/IJM/index.asp 313 editor@iaeme.com
Dr. Dhananjay Mandlik and Dr. Prashant Kotasthane pected to grow by 20% each year, and India will witness a boom. The branded furniture market, compri- sing residential and commercial furniture, was valued at US$1.3bl in 2008, and was expected to reach US$4.6.7bl in 2015. Table 1 Indian furniture industry statistics [Source: KPMG] Size of the Industry Estimated at around Rs. 35,00crore (Rs. 35 billion). Geographical distribution All the metropolitan cities Output per annum Wooden furniture solely owns the share of nearly Rs 60 % Percentage in world market India was one of the biggest furniture importer in 2011-12, with a 7 % share in furniture imports worldwide. Contribution to GDP Constitutes 0.5 per cent of GDP Imports Imports worth US$ 750 million, growing at 60 per cent CAGR Employment potential Employs 1,300,000 people Growth prospects Organized sector growing at 30 per cent CAGR The furniture sector makes a marginal contribution of 0.5% to India’s GDP. The entry of international brands and changing consumer preference has led to the emergence of furniture retailing in India. In fact, India has been classified as one of the large furniture markets in the world having a middle class population of over 450million & with a purchasing power on the upswing. Few more market details can be furnished as: 1. Highly unorganized – only about 15% in organized sector Organized sector (domestic players as well as imports )growing at 30% CAGR 2. About 5000 firms in the domestic organized sector, nearly 10500 importers 3. Products are classified based on material used, and consumer segment 4. Household furniture designs are region-specific. Increasing trend of imported furniture in affluent households 5. Imports worth about 750 Crs INR, growing at 60% CAGR 6. The branded furniture market is valued at US $ 3.3 billion in 2012 and expected to reach US$7.4 billion in 2015. Large scale furniture producing became a major manufacturing strategy with commercial ply or ready- to-assemble designed furniture. This innovation gave the way for firms to 1. Design, manufacture and ship products on a mass scale, 2. Supply products for the low- to medium-price markets globally. Disposable income of consumers in recent past has continuously increased specifically in Pune and areas around Pune due to fast industrialization and better employment opportunities. Consumers have now started dictating terms after gaining upper-hand due to stiff competition. It is observed that margins of consumer durables products are shrinking globally, inducing need for high volume and manufacturers are experiencing pressure for securing more durable ,more extensive and mare intensive consumer base. The Government of India’s nod to foreign direct investment in Feb 2014 single brand retail format, has opened the doors for Swedish furniture retailer giant IKEA to enter India. Online retailers off late have become increasingly active in this household furniture segment. All these factors may have contributed to change in behavior of potential consumers of furniture industry .The study intends to explore the extent of http://www.iaeme.com/IJM/index.asp 314 editor@iaeme.com
An Analytical Study on Behavioral Changes of Consumers of Retail Outlets for Household Furniture in Pune Region change in behavior of the consumer. The information will prove vital for the primarily unorganized furniture sector to plan future strategies to survive and grow in the market. 2. RESEARCH METHODOLOGY 2.1. Significance of the Research The research is useful for creating awareness and improving effectiveness of marketing strategies and understanding the strength and weaknesses of furniture retailing viz-a-viz marketing strategies. The research is useful for carrying the benefits and observations of buyer behavior study for effective and efficient work in furniture retail. 2.2. Objective of the Study The entire objective of the study is to find change in behavior of consumers for the benefit of the marketing organizations, intermediaries & end customers and ultimately the national economy. Literature review of various categories of documents as review of Ph. D. Thesis, Newspaper Articles, Books, Research papers and media reports on furniture sector. 2.3. Period of the Study Researcher has selected and reviewed period from 2012 to 2015. Data Collection: Data was collected by conducting structured interviews through structured questionnaires from the experts in wooden household furniture industry at strategic levels. Out of 550 registered furniture outlets about 300 deal in readymade wooden household and have experience of at least 5 years furniture in Pune region. 76 furniture outlets were chosen as samples using systematic random sampling. From the selected furniture outlets the primary data was collected by using questionnaires, and scheduled interviews of sales persons and consumers. Data Analysis: The data collected from primary sources has been analyzed by using statistical tools viz. percentage analysis, deviations analysis etc. The hypothesis has been tested with the help of paired student’s t-test. 4. DATA ANALYSIS 4.1. Study is based on following Hypothesis # Ha : The end consumer buyer behavior for purchase of furniture has changed in there cent past # H0 : The end consumer buyer behavior for purchase of furniture has not changed in the recent past Nine statements which describe recent changes in consumer attitude towards purchase in certain aspects were taken for study. They were tested on a Likert’s scale twice having a difference of a period of 5 years. Statements were as follows:- • Consumers are informed about products through brochures /e –brochures • Consumers have become brand conscious • Frequency of purchase of an average consumer has increased • Consumers are focusing on short term goals • Consumers are prepared to travel more distance for purchase of furniture • Consumers compromise on life of furniture • Consumers give preference to the design of products • Consumers are attracted to retail outlet by advertisements • Consumers show interest in bank proposal schemes offered by retailers http://www.iaeme.com/IJM/index.asp 315 editor@iaeme.com
Dr. Dhananjay Mandlik and Dr. Prashant Kotasthane Table 2 Paired sample test [SPSS Data Analysis Paired sample co-relations] N Correlation Sig. Pair 1 Information through brochures current v/s 5 years ago 76 .029 .801 Consumers have become brand conscious current v/s 5 Pair 2 76 -.012 .920 years ago Pair 3 Increased frequency of purchase current v/s 5 years ago 76 .253 .028 Pair 4 Focus on short time goals current v/s 5 years ago 76 .143 .216 Pair 5 Readiness to travel for purchase current v/s 5 years ago 76 .118 .309 Pair 6 Compromise on life of furniture current v/s 5 years ago 76 .478 .000 Pair 7 Preference to design of furniture current v/s 5 years ago 76 .174 .133 Pair 8 Attraction by advertisements current v/s 5 years ago 76 .218 .058 Pair 9 Interest in bank proposal schemes current v/s 5 years ago 76 .542 .000 Table 3 [Paired sample test [SPSS Data Analysis Paired sample tests] Paired Differences Std. Mean Std. Error Mean Deviation Pair 1 Information through brochures current v/s 5 years ago -.697 .849 .097 Consumers have become brand conscious current v/s 5 years Pair 2 -.882 .894 .103 ago - Pair 3 Increased frequency of purchase current v/s 5 years ago .900 .103 1.171 Pair 4 Focus on short time goals current v/s 5 years ago -.868 1.517 .174 Pair 5 Readiness to travel for purchase current v/s 5 years ago -.855 .962 .110 Pair 6 Compromise on life of furniture current v/s 5 years ago -.632 .877 .101 Pair 7 Preference to design of furniture current v/s 5 years ago -.934 .869 .100 Pair 8 Attraction by advertisements current v/s 5 years ago -.645 1.016 .117 Pair 9 Interest in bank proposal schemes current v/s 5 years ago -.697 .766 .088 http://www.iaeme.com/IJM/index.asp 316 editor@iaeme.com
An Analytical Study on Behavioral Changes of Consumers of Retail Outlets for Household Furniture in Pune Region Table 4 Paired sample test [SPSS Data Analysis Paired sample tests] Paired Differences 95% Confidence Interval of the Paired Samples Test Difference Lower Upper Pair 1 Information through brochures current v/s 5 years ago -.891 -.503 Consumers have become brand conscious current v/s 5 Pair 2 -1.086 -.677 years ago Pair 3 Increased frequency of purchase current v/s 5 years ago -1.377 -.965 Pair 4 Focus on short time goals current v/s 5 years ago -1.215 -.522 Pair 5 Readiness to travel for purchase current v/s 5 years ago -1.075 -.635 Pair 6 Compromise on life of furniture current v/s 5 years ago -.832 -.431 Pair 7 Preference to design of furniture current v/s 5 years ago -1.133 -.736 Pair 8 Attraction by advertisements current v/s 5 years ago -.877 -.413 Pair 9 Interest in bank proposal schemes current v/s 5 years ago -.872 -.522 Table 5 Paired sample test [SPSS Data Analysis Paired sample tests] Sig. (2- Paired Samples Test t df tailed) Pair 1 Information through brochures current v/s 5 years ago -7.162 75 .000 Pair 2 Consumers have become brand conscious current v/s 5 years ago -8.597 75 .000 Pair 3 Increased frequency of purchase current v/s 5 years ago -11.341 75 .000 Pair 4 Focus on short time goals current v/s 5 years ago -4.989 75 .000 Pair 5 Readiness to travel for purchase current v/s 5 years ago -7.751 75 .000 Pair 6 Compromise on life of furniture current v/s 5 years ago -6.278 75 .000 Pair 7 Preference to design of furniture current v/s 5 years ago -9.369 75 .000 Pair 8 Attraction by advertisements current v/s 5 years ago -5.533 75 .000 Pair 9 Interest in bank proposal schemes current v/s 5 years ago -7.934 75 .000 http://www.iaeme.com/IJM/index.asp 317 editor@iaeme.com
Dr. Dhananjay Mandlik and Dr. Prashant Kotasthane Result Ho : The end consumer behavior for purchase of furniture has not changed H1 : The end consumer behavior for purchase of furniture has changed a. H0: µd = 0 H1 : µd ≠ 0 b. α =0.05 c. d. t0,05,75 H0 is rejected if the value of t ≤ -1.667 or ≥ 1.667 Pair1 Pair2 Pair3 Pair4 Pair5 Pair6 Pair7 Pair8 Pair9 -7.162 -8.597 -11.341 -4.989 -7.751 -6.278 -9.369 -5.533 -7.934 Hence H0 is rejected andH1is accepted. 5. FINDING AND CONCLUSION Sales person’s views on the statements considered for study indicated that in a span of last 5 years: Consumers are more informed about products through brochures /e –brochures and hence there is an extensive need to contact potential consumers through internet Consumers have become more brand conscious and hence there is a need to plan and execute brand establishing activities as advertisements and sales promotions. Frequency of purchase of an average consumer has considerably increased hence there is a need to resort to customer relationship management to retain existing customer base and attract new customers Consumers are focusing more on short term goals than long term goals hence there is a need to revise the material used for furniture to lower down the cost of the products Consumers are prepared to travel more distance for purchase of furniture there is need to revise the reach of the advertisement media to attract distant consumers Consumers are compromising more on life of furniture hence there is a need to revise the material used for furniture to lower down the cost of the products. hence Consumers give preference more to the design of products hence there is need to revise the assortment in designs across the product ranges of furniture Consumers are more attracted to retail outlet by advertisements hence there is need to revise the merchandising strategies specifically related to store front Consumers show interest in bank proposal schemes offered by retailers hence there is need to have a MOU between financial institutions as banks to attract customer base by facilitating transactions. 6. SUGGESTION Unorganized individual furniture retail outlet owners should form a cluster or an association, which should upload a website which can be accessed on by consumers on cell phone. The furniture retailers should advertise their products in smaller/ local newspapers having a limited circulation and reach. The design of furniture items in unorganized retail sector should focus on highly economical standardized but adaptable designs as folding and space saving furniture. They also should revise the material used for furniture to lower down the cost of the products. Furniture retail outlet owner/sales in-charge should plan and execute few retail merchandising activities to enhance store front and window displays should be undertaken as :- http://www.iaeme.com/IJM/index.asp 318 editor@iaeme.com
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