B) SECONDARY DATA
5. DISCUSSION
modern units consists of large milk production plants. Seasonal labours were employed for a period of 6 months only in production plants.
In traditional outlets there was existence of family labour which was not observed in the case of modern units, which shows that, the traditional outlets were using their own family labour and reducing their monthly recurring costs compared to the modern retail outlets which were employing more persons compared to the traditional outlets.
5.2 TYPES OF PACKAGING MATERIALS
5.2.1 Packaging materials used for different products
From Table 4.6, it is evident that, the packaging materials used in traditional outlets were completely different from those used in modern outlets except HDPE which was used in both type of outlets but the quality was different. In traditional retail outlets, Food grade plastic and Pp kirana cover of 150 gauge strength, Plastic of 2 types, were used to pack lesser quantities (upto 5-10 kg), since they can withstand quantity of upto 10 kg. HDPE of 20 microns strength was used to pack higher quantities (25-50 kgs), which could hold higher quantities. Polythene films of 25-30 microns strength was used to pack milk of quantity ranging from 200 ml to 1 litre.
In modern outlets, Plastic HDPE, Plastic FB and Plastic PNP of 20 microns strength, were used to pack lesser quantities of products (500 gm to 5 kg), HDPE of 30 microns strength was used to pack higher quantities (25 kg and 50 kg); Milk was packed in Polythene films of 46-55 microns for 200 ml and 500 ml and 55-60 microns for 1 litre. Packing of pickles, vermicelli and papad was not taken up by modern outlets.
5.3 COST OF PACKAGING
5.3.1 Quantity and value of different packed products in traditional and modern outlets
With regards to quantity and value of different products, the results (Table 4.7) revealed that, in traditional retail outlets the price per kg of any product was less compared to the price per kg of the same product in modern outlets. Further, in traditional outlets, it could be seen that, there was lot of variation in price of the products as the quantity of pack increased. In the case of rice and wheat, the average price of the product reduced for 5 kg and above packs, where as for tur and green gram, the price decreased as the quantity of each pack increased. In cashew, the per kg price for 250 gms, 500 gms and 5 kg packs was high as compared to the price for 50 gm and 100 gm packs. For raisins and pickle, per kg price decreased as the quantity of pack increased. In milk also per litre price decreased as the quantity of pack increased. In modern outlets, except the variations in some products, in all the products the price per kg decreased as the quantity of pack increased.
5.3.2 Purchase pattern of packaging materials by retailers
The results on purchase pattern of packaging materials (Table 4.8) revealed that, in traditional outlets, most of the retailers (61.1%) purchased the packaging materials in bulk where as in modern outlets cent per cent of the retailers purchased in bulk due to their multi outlet operations and organized form of retailing.
5.3.3 Sources of purchase of packaging materials by retailers
Table 4.9 reveals the sources of purchase of packaging materials by retailers of traditional and modern outlets. In traditional outlets, majority of the retailers purchased from local market (55.5%) as and when required, followed by local factory (27.8%) and through dealers, where as in modern outlets equal number of them (3 each) purchased from industry and local industry, since these outlets were more particular about using quality packaging materials; moreover, the packaging material industries gave free door delivery of packaging materials.
5.3.4 Mode of purchase of packaging materials by retailers
With regards to the mode of purchase of packaging materials by retailers, the results (Table 4.10) revealed that, in traditional outlets, majority of retailers (66.7%) purchased the packaging materials on cash basis, due to non availability of credit facilities. In modern outlets, retailers purchased either only on cash or credit basis. Here no retailer purchased on cash+credit basis. Most number of retailers (71.4%) purchased on credit basis, since the industries from where they buy packaging materials provided credit facilities.
5.3.5 Cost of packaging
Table 4.11 depicts the cost of packaging per month in traditional and modern outlets.
In traditional outlets, the cost per kg of packaging was highest in case of Pp kirana cover in general and cashew in particular, may be de to the reason that cashew was packed in lesser quantities of mainly 25 and 50 gm packs, as compared to other products. In modern outlets, the cost per kg of packaging was very high in Plastic PNP used for packaging of cashew and raisins, since these products were packed in smaller quantities of mainly 50 gm and 100 gms, which was not the case in other products. The least cost of packaging was in case of polythene films in both traditional and modern units. In all these products, the costs incurred on packaging materials followed by labour charges for cleaning and packaging constitute the cost components. The cost component of milk was composed of only packaging material (polythene films) cost.
Packaging is an important cost component in retail outlets as it involves costs in getting good quality packaging materials which should have good appearance, durable and printable form to deliver the products in exciting presentations with different sizes and weights of packets with their own brand names. Most of the modern outlets had their own brand names which created an image in the minds of customers in turn help in attracting them.
5.3.6 Frequency of purchase of packaging materials by retailers
Table 4.12 reveals the frequency of purchase of packaging materials by retailers of traditional and modern outlets. In traditional outlets, majority of retailers purchased packaging materials once in a month and once in a week (33.3%), whereas in the case of modern outlets, majority of retailers purchased packaging materials once in 3 months (71.4%). With respect to composition of packaging materials, 72.23 per cent of traditional retailers purchased plastic whereas polythene films and plastic HDPE was purchased mainly by the modern retailers.
5.3.7 Agreement regarding purchase of packaging materials by retailers
From the Table 4.13, it is evident that, there was no agreement regarding the purchase of packaging materials by traditional retailers. In the case of modern category, 2 units had contract arrangement for quality, constituting 66.67 per cent and 1 unit has tender system. All these agreements existed in the case of procurement of packaging materials for milk only.5.3.8 Costs incurred in procurement of packaging materials by traditional and modern retailers
The results on costs incurred in procurement of packaging materials (Table 4.14) revealed that, in traditional outlets, the cost per kg of Food grade plastic (Rs. 144.71) was highest, due to high cost, whereas in modern outlets, the cost per kilogram was highest for Plastic HDPE (Rs. 135.5), followed by Plastic FB and Plastic PNP.
5.3.9 Opinion of retailers regarding purchase of packaging materials from a particular agency
Table 4.15 reveals the opinion of retailers regarding the purchase of packaging materials from a particular agency. In traditional as well as modern retail outlets, most of the consumers preferred to purchase packaging materials from a particular agency due to good quality packaging materials, followed by cut in margins and remunerative price.
5.3.10 Credit facilities given to consumers by retail outlets
As depicted by table 4.16, traditional retailers gave credit for a longer duration compared to modern retailers. Modern retailers gave nearly half the number of days of credit of that of traditional retailers, may be due to the reason that they maintain their transactions on cash and carry basis. On an average, traditional outlets gave 26-30 days credit on various commodities. On the other hand modern retail outlets gave only 16 days of credit on their products and that too they gave credit only to their privileged customers.
5.4 VALUE ADDITION
5.4.1 Quantity and value of products procured by traditional and modern retail outlets
The monthly quantity and value of products procured by retail outlets are presented in Table 4.17. As depicted by the table, the average quantity procured in traditional units was found to be high in milk (40666.67 litres), followed by rice (1086.67 kgs), wheat (630 kgs), tur (323.33 kgs), etc. The average procurement in milk, cereals and pulses was high because of the high turnover and demand from the consumers as these are the daily use items. The total amount spent by these units on procuring the commodities was maximum in milk (Rs.
575333.33) due to its high quantity of procurement and the minimum was found in vermicelli (Rs. 724.00) as it was demanded in small quantities.
In modern units, quantity procured was found to be highest in milk (1795295.67 litres) followed by rice (2812.50 kgs), wheat (1775 kgs) and tur (1075 kgs) and which was similar to that in traditional outlets. The price per kg of procurement was highest in cashew (Rs.
268.40). The total amount spent by these units on procuring the commodities was maximum in milk (Rs. 23106618.67) due to its high quantity procured and the minimum was found in greengram (Rs. 2180.00) as it was demanded in small quantities in modern units.
5.4.2 Quantity and value of packed products sold by traditional and modern retail outlets
Table 4.18 reveals the monthly quantity and value of products sold by retail outlets.
As depicted by the table, the average quantity sold by traditional units was found to be high in milk (40666.67 litres) followed by rice (690 kgs), wheat (470 kgs), tur (256.67 kgs), etc, since the quantity procured was also highest in this product. The respective values in accordance with the quantity sold were Rs. 847333.33, followed by, Rs. 13386.67, Rs. 7810.00, Rs.
10750.00, etc.
In modern units, quantity sold was found to be highest in milk (1795295.67 litres) followed by rice (2812.50 kgs), wheat (1775 kgs), tur (1075 kgs), etc, since the quantity procured was also highest in this product. The respective values in accordance with the quantity sold were Rs. 35905913.33, followed by, Rs. 57822.50, Rs. 30852.50, Rs. 53800.00, etc. The average turnover of selected products was found to be highest during 1st week of the month in both traditional and modern retail outlets, since majority of consumers prefer to buy them during this period.
5.4.3 Extent of activities undertaken in preparation of the product for sale in retail outlets
The results of the Table 4.19 revealed that most of the retailers took up various activities like cleaning, packaging, labelling and so on. In traditional outlets, majority of the retailers took up packaging in cashew and raisins (83.33%), followed by cleaning (72.22%) in various products to maintain good relationship with the consumers by providing good quality products. In addition, it is very much necessary and the only way to compete with the conventional stores.
Processing in modern retail outlets involves only four steps or stages such as cleaning, packaging, chemical treatment and labelling. In modern outlets cent per cent of retailers took up cleaning, packaging, chemical treatment and labelling in rice, wheat, tur and green gram. In cashew and raisins cent per cent retailers take up packaging and labelling to maintain good relationship with the consumers by providing good quality products. In addition, it is very much necessary and the only way to compete with the conventional stores. On the
other hand, these activities help in market segmentation with price differentiation. In case of milk 3 production plants go in for processing, chilling and packaging constituting 60 per cent each.
5.4.4 Cost of value addition in retail outlets
Table 4.20 reveals the cost of value addition in traditional and modern outlets. It was observed from the table that in traditional outlets the total cost of value addition was highest in milk (Rs. 0.73), due to high cost of processing and chilling, followed by, rice, wheat, tur and green gram (Rs. 0.44), of which packaging occupied the highest cost with Rs. 0.23 followed by cleaning and labelling.
In modern outlets, the total cost of value addition was highest in rice, wheat, tur and green gram (Rs. 1.3), of which packaging occupied the highest cost with Rs. 0.54, followed by chemical treatment (Rs. 0.50), and cleaning (Rs. 0.23). In milk it was Rs. 1.09 of which packaging accounts for Rs. 0.59 followed by processing (Rs. 0.36) and chilling (Rs. 0.14).
5.4.5 Value addition in retail outlets for selected products
The value addition in traditional and modern outlets is depicted in Table 4.21. It was observed from the table that, in traditional outlets the average value added was highest in case of milk (42.12 per cent) followed by cashew (12.96 per cent), pickles (12.82 per cent), green gram (7.65 per cent), wheat (7.36 per cent), raisins (7.33 per cent), tur (6.33 per cent) and rice (2.48 per cent).
In modern outlets, the average value added was highest in case of raisins (60.44 per cent) due to absence of cleaning and higher prices obtained, followed by cashew (50.63 per cent), milk (46.93 per cent), green gram (45.52 per cent), tur (30.17 per cent), wheat (21.54 per cent) and rice (20.22 per cent) due to higher prices obtained and relatively lower percent of wastages. No value was added either by processing or packaging in case of vermicelli and papad in either traditional or modern outlet.
5.4.6 Labour required to pack the products
Table 4.22 presents the labour required to pack the products in retail outlets. As shown in the table, in traditional outlets an average of 0.56 women labours are required, as against 1 men labour and 3.4 women labours in modern outlets depending on the turnover of the modern outlets.
5.4.7 Buying activities of packaging materials by retailers
The results on buying activities (Table 4.23) revealed that, most of the traditional as well as modern retailers buy the same quantity packaging materials every time, may be due to their buying habits and they may purchase the packaging materials as and when required.
5.4.8 Additional concessions given to consumers by retail outlets on purchase of packed products
Table 4.24 depicts the additional concessions given by retailers to consumers on purchase of products from their outlets. As revealed by the table, 40 per cent of the traditional outlets give discount on purchase of Cereals, Pulses, Processed dry and wet products and Ready to eat products, followed by gifts. In modern outlets, cent per cent of the outlets give gifts and 50 per cent of them give discount, may be to attract the consumers to buy the products from their outlets.
5.5 CONSTRAINTS IN PACKAGING AND CONSUMER PREFERENCES FOR PACKED PRODUCTS
5.5.1 Problems in procurement of packaging materials
The problems faced by the retailers in procurement of packaging materials are shown in Table 4.25. The table reveals that most of the traditional as well as modern retailers faced the problem of non availability and low quantity of products during the time of strikes, bandh, etc. In case of processing, majority of the traditional retailers (50%) have faced the problem of non availability of labour. In case of packaging, majority of traditional and modern retailers have faced the problem of high cost of packing materials.
5.5.2 Opinion of retailers regarding fast movement of packed products in the market
Table 4.26 presents the opinion of retailers regarding fast movement of packed products in the market. As the table depicts, most of the retailers of traditional outlets thought that quality of the product, reasonable price, after sales service, satisfactory performance and so on were the reason for fast movement of their products in the market.
In modern outlets, majority of the retailers opined about the quality of the product, satisfactory performance, after sales service, clean products, correct qty, free home delivery, etc as the reason for fast movement of their products.
5.5.3 Problems faced by traditional and modern retail outlets
As depicted by the Table (4.27), the demand for new products, credit and bargains from the customers are as usual in any business activities. The demand for discounts and offers from the customers may be due to general tendency of the customers for discounts and offers; as the world is open for general competition it has an impact on the business; every business has to undergo the prevailing rules and regulations and there is no quid pro quo hence the retailers felt these things as the problems. The other problem quoted by the retailers was demand for new products from the customers. Looking into the listed problems the retailers must learn to cope up and solve the problems efficiently to be the leader in the business.
5.5.4 Socio-economic status of the consumers shopping at a retail outlet
Table 4.28 reveals the socio-economic status of the consumers shopping at a retail outlet. It was observed from the table that, in traditional as well as modern outlets, majority of the respondents were from the middle age group and females. The respondents of both the outlets were well educated and were office goers, however they belonged to different income groups based on their income classification. With respect to family type and food habit, majority of them from both the outlets were from nuclear family and equal number of them were vegetarians and non vegetarians, in both the outlets.5.5.5 Frequency of purchase of products by consumers
The frequency of purchase of products by consumers of traditional and modern outlets is presented in Table 4.29. As shown in the table, majority of the consumers buy the products during the 1st week of the month in both the outlets (50% and 71.7%, respectively), followed by, as and when required and occasionally.
5.5.6 Opinion of consumers regarding factors influencing preference for packed products
Table 4.30 presents the opinion of consumers regarding factors influencing preference for packed products. As shown in the table, in traditional outlets, majority of the consumers (98.33%) preferred to purchase packed products due to availability of quality products and readily/timely availability, followed by cleaned products (56.67%), improves the keeping quality (48.33%), etc. Least number of consumers (1.67%) preferred packed products due to attractive packaging.
In modern outlets, 98.33 per cent of the consumers preferred packed products due to availability of quality products, followed by readily/timely availability (96.67%), labeling (85%), consumer packs (80%), etc. Least number of consumers (10% each) preferred packed products due to exposure to all the products and ease in picking up the products.
5.5.7 Problems faced by the consumers in the purchase of packed products
Table 4.31 presents the problems faced by the consumers in the purchase of packed products. As shown in the table, in traditional outlets majority of the consumers faced the problem like very high prices, no timely availability of the product, unhygienic condition and so on, in different products category like cereals, pulses, processed dry and wet products and ready to eat products.In modern outlets, non availability of trained employees was the key problem. As the modern retail business is new approach towards organized marketing hence there may be a lack of availability of trained personnel; as the business requires huge investments and uncertainty of the success may restrain financial sector towards retailing business. This indicated that there is a need to train the employees as per supermarkets requirement and bring confidence of the business in financers to get the support.