“RESEARCH PROPOSAL ON”

FACTOR AFFECTING
CUSROMER SATISFACTION
AN EMPERICAL STUDY OF SOMEOF THE
DEPARTMEVTAL STORES IN MUMBAI

Prepared By:
ANKUSH NAGARWAR
AMIT KALDATE
ARPIT MANKAR

INSTITUTE OF MANAGEMENT & COMPUTER STUDIES, THANE

 Factors affecting Customer Satisfaction- an empirical study for
some departmental stores in Mumbai
ABSTRACT:
Every day people encounter situations that can affect their views of particular product or
service. Emotional and rational factors shape our opinions. Customers are subjected to a barrage of
advertising and other ‘messages’ from the products and the media that can influence their view of
product and service they receive from them. In retailing, emotional factor plays an important role in
customer satisfaction.

Indian retail industry is a derivative of the growing economy, changing demographics and
preferences of the Indian consumers. Retailing format like supermarkets, department stores, mega
stores, shopping malls and retail chains had come up on the country with varying intensity during the
1980’s and 1990’s, have now started proliferating. Organized retail is booming and creating huge
opportunity for enterprises. Ever increasing number of hypermarkets, departmental stores and
shopping malls need continuous attention from customers. In order to gain and retain this attention,
improvements are been done in the ways these stores deals with customers.

Keywords: Customer satisfaction; Quality; Ambience; Product; Customer Value.

INTRODUCTION
Customer satisfaction is the key factor in knowing the success of any departmental
stores or business therefore it is very important to measure it and to find that what the factors
which affect the customer satisfaction. The Total Quality Management is based on this idea of
customer satisfaction.
Customer satisfaction refers to the extent to which customers are happy with the products and
services provided by a business. Customer satisfaction levels can be measured using survey
techniques and questionnaires. Gaining high levels of customer satisfaction is very important to a
business because satisfied customers are most likely to be loyal and to make repeat orders and to use a
wide range of services offered by a business. Customers are most likely to appreciate the goods and
services that they buy if they are made to feel special. This occurs when they feel that the goods and
services that they buy have been specially produced for them or for people like them. It should be
always keep measuring in order to get feedback for the product and service in order to develop it
further with wide customisation. We cannot create the customer satisfaction by just meeting the
customer requirement fully because this has to meet in any case. The customer satisfaction
index represents the overall satisfaction level of that customer as one number, usually as
percentage.
BRIEF ABOUT DEPARTMENTAL STORES IN MUMBAI.
AN OVERVIEW:
Department store offers a wide range of products in an organized fashion that are easily
accessible to the consumers. The product line of the departmental stores is substantially long. The
department stores provide better amenities to the consumer for shopping by developing adequate
infrastructure for parking, leisure, coffee shops etc. Departmental stores contain 'a pin to plane' under
a single roof. Therefore the customers are able to purchase whatever they want from a single Roof. In
Mumbai, most of the departmental stores attract customers with attractive formats of apparels and
discount based daily needs (FMCG) products etc. As Mumbai is considered one of the most crowded
cities in India and so has good income earning consumer society due to industrialization and
modernization to the greater extent. So it always provides a huge amount of customers to be served.
But when it comes to population it comes to variation in families having various household habits as
well as buying behaviour. And here arrives the need of Departmental Stores.

Departmental stores are different from discount departmental stores because most
departmental stores have checkout registers within individual merchandise departments as opposed to
having a central checkout area. As Departmental Stores are the products and therefore connected to
the Retail sector in flourishing in India fromlast years. The contribution of Retail Sector to GDP of
India is constantly growing and expected to 22% by 2010. The retail consulting and research agency
KSA-Technopak predicted in an Nov2008 report that by 2010 annual retail sales by chain stores will
reach 21.5 billion dollars, from 7.5 billion dollars now in Indian Metros.

Government Policies are also favourable to Indian Retail sector in regard to FDI due to which
this sector remains undominated by foreign players which ultimately going to be beneficial for
Departmental Stores as they forms a part of it

Formation of Departmental Stores in Mumbai is the population it is offering and constantly

growing. Also the population of Mumbai which includes people from various class and culture
gathered in search of jobs as it is a constantly growing in the sense of industrialization are seeking a
wide product line suitable to their needs consisting various brands as well as the time saving factor
which they prefers while going for Departmental Stores which are categorized according to nature of
products in order to easily locate the product and Mumbai is no exception to it. Following are some
famous Departmental Stores in Mumbai-

Asiatic
Big Bazaar
Hyper city
KBN Stores
A To Z Super Market
Z Mart
Subhiksha
Amarsons

CUSTOMER SATISFACTION INDEX (CSI)

The customer satisfaction Index represents the overall satisfaction level of that customer as
one number, usually as a percentage. Plotting this Satisfaction Index of the customer against a time
scale shows exactly how well the supplier is accomplishing the task of customer satisfaction over a
period of time.

The customer satisfaction Index is calculated as follows: Calculate the average important
score assigned by respondents for each parameterof all the weightings given by the customer. Find
out the weighting factor (divide the average important score assigned by all respondents for each
parameters by the sum/total of the importance score). Multiply the weighting factor with
corresponding satisfaction score you can get the weighted score. Sum of the weighted score gives
total customer satisfaction.

OBJECTIVE OF STUDY:
 The primary objective of the study is to know the factors which are affecting the
customer satisfaction of service provided by some of the departmental stores in Mumbai
using customer satisfaction index.
SECONDORY OBJECTIVE OF STUDY
1 .To determines the level of customer satisfaction about different parameters of services
provided by the departmental stores on Mumbai.
2. To find the most important areas which required immediate improvements.
FOLLOWING HYPOTHESIS WILL BE TESTED AT 95% CONFIDENCE LEVEL
1. Individual parameter is less or more important than researcher hypothesis
2. There is significant difference between expectation and satisfaction.
3. There is significant association between satisfaction and area of residence.
RESEARCH METHODOLOGY:
1. RESEARCH DESIGN:
It is an overall framework that indicate what information is to be collected and from which
source and by which procedure in research project. In this research, the first stage is
exploratory, in which clarification of the specific problem is identified, in second stage we are
interested in knowing the characteristics of certain group such as – age , sex , income ,
education , occupation for which descriptive study is necessary.
This study involves the field survey conducted across different departmental stores in
Mumbai. The respondents were approached outside the billing counter of departmental stores
after they had finished shopping, before leaving stores. It also focused on the decision about
choice of stores for specific purchase incident, since each purchase occasion might actually
be a different decision.
The respondents were given the questionnaire to respond their views about particular
departmental stores. In some of the cases respondent were subjected to personnel interview.
Responses were sought regarding customer patronage behaviour.
In India departmental stores are proliferated with number of brands and their offering
and almost all the stores is used for stocking or displaying the merchandise. The
departmental stores are larger mostly 2000-3000 sq. ft. But very few of them have more than
5000 sq. ft. and are being designed for better display and browsing by the shoppers. The
format was distinguished based on the facility provided to the shopper to browse and choose
by themselves. This study was conducted in old as well as new format of departmental stores.
The store was chosen from different part of city to enable a wider spread of sample.
The general hypothesis about stores choice drivers were that for routine purchase
such as grocery items and apparels choice driver should be include in stores services
dimensions and attractiveness of the physically layout. It is important to validate this
hypothesis. Since the indication is that departmental stores in Mumbai should be providing
more evolved dimensions of services to attract shopper it remain to be proven that such
dimension do actually improved departmental stores.
2. SAMPLING DESIGN:
For this research, the non probability sampling method is used. Sample size is 50 respondents from
different departmental stores in Mumbai. A customer of the departmental stores who have done their
shopping and are waiting for billing counter is taken as sample.

3.FINDING OF DESIGN:

1. Reliability Test:

Reliability test is to find out the reliability of the instrument. In this test the value of alpha is
found to be 0.783 which is nearly equal to 0.8, and according to the thumb rule of alpha reliability is
good.

2. One Sample Test

From the results of one sample test (refer table IV), we can say that:
1. Respondent are considering adequate sign board, quality of products, variety of
products, plastic money service as important factor in deciding where to shop.
2. Parameters which less important for deciding where to shop are availability of open
space, layout of the place, offer coupons and mobile charging zone.
3. Furniture and decor, colour and lighting, comfort and feel, adequate sign boards,
courtesy and friendly atmosphere are moderately important.

The broad conclusion about store choice among consumer indicates that image and
perception have significant impact on final outcome. Perception about is driven substantially
by tangible characteristics of departmental stores such as format of stores, size, distance from
home, looks, as well as intangible factor like environment of stores. Given the limited
information is available on shopping behaviour of customer in Mumbai as even customer
doesn’t know that what they like, so it was decided to design an exploratory study to identify
major factor which affect behaviour of customer and their satisfaction.

3.ANNOVA test
From the results of ANOVA test (refer table V), we can say that:
1. The F value of table is 2.18. Thus, we can accept the hypothesis that the factors
quality of products, coupon and advertisement, variety of products, overall ambience
affects the customer satisfaction.
2. Value of nearness to store is 3.586. Thus, we reject the hypothesis that nearness to
store affect the customer satisfaction.
It was observed that customers are ready to travel even far from their residence for buying in
departmental stores because of quality services and products.

4. Overall customer satisfaction index:

Customer satisfaction index has been calculated for all parameters taken together. Total
customer satisfaction index for departmental store is found to be 61.07% (refer table VI)
This study has research the store choice behaviour based on the several dimensions.
The broad research questions formed on this exploratory research are:
1. How do consumers perceive the service dimensions in retailing?
 2. Are service parameters influencing the buying behaviour among current
customers?
3. What are the service dimensions that departmental stores ought to pay attention to
increase customer satisfaction in departmental stores?
4. FINDING ANALYSIS:
Customers have several reasons to choose any departmental store. But the primary
reasons are ‘value for money’, ‘quality of product’, ‘variety of product’ and ‘service of the
store’. More than 80% respondent indicated that these are the important reasons. Out of all
respondents provided, 70% respondent responded that ‘ambience and layout’ was equally
important as a buying behaviour. This indicated that customer have one or mostly two good
primary reason and other reason to visit departmental stores.
The responses were gathered through close ended questions. The respondents were
probed for much reason the first reason being the top of the mind. The responses which were
gathered through the questionnaire is used for further analysis. The study captured about
different responses that could be classified into seven important categories.
PRIMARY STORES CHOICE VARIABLES BY CATEGORY OF STORES:
Grocery and food items are choose by the customer strongly based on the more
proximity and patronisation. The customer would like to reduce the time. However as
indicated by the higher scores if customer have been buying for longer period off time , they
do not mind buying from a store located at greater distance. The importance of relationship,
comfort level with the departmental stores is stressed with regard to grocery and food items
story
This seems to be some indication of an inherent loyalty to the stores in this category.
So when experience of shopping is good there is a high chance of next visit. The customer is
willing to trade-off the extra travel with the experience. However the proximity is the most
important driver of loyalty to a grocery store. Ambiance is not important factor for customer
in this category.
In the case of consumer durable stores, consumers attract more importance to
merchandise, referral, and ambience. They prefer to visit those stores that depth and wide
range of product. Customer in these stores looks for variety. Stores that offer good price and
discount are also visited. The ambience reflected in terms of lighting, setting and comfort is
also relevant in determining store choice. A good display of product, so that customer can
look around and touch and feel the product becomes an important consideration in
departmental stores.
Leisure sections of departmental stores (books and music, accessories and lifestyle
products) tend to attract customers on the basis of ambience of stores. The customer wants
comfortable store as they tend to stay for longer on each visit. The lighting display and
attractive decor of the store become an important factor.
In case of apparels, customers value merchandise, ambience and brand. They want
variety and would like to touch and feel the product. Range of merchandise, in terms of
product and price, attract shopper to a store. They would like to satisfy themselves about
making right choices by trying them out before finalizing their product.
Conclusion and recommendations:
Customer satisfaction is the key to keep existing customer. Customer satisfaction must be
matching or greater than the customer expectation. From the research study we have done, we
concluded that the overall customer satisfaction regarding the departmental stores in Mumbai
is reasonably good. If we define it in percentage term then it is approximately 61%. Yet there
are some aspects as noted in guideline section where the departmental stores in Mumbai need
to focus more in order to achieve optimum customer satisfaction:
1. The checkout counters are crowded, especially in peak hours and holidays. Customers
have to spend 20 minutes to 45 minutes in queue. Departmental stores should take
proper measures to increase number of checkout counters in case of such occasions.
2. Products kept in sections such as toys and children’s sections should not be kept at
height. According to suggestions given few customers, specially children, find it
difficult to get access to such products.
3. In case of trolleys used, there is not enough space to move around the departmental
stores on holidays or in peak hours. This may cause hindrance in case of emergency
or in case of families with small children. Departmental stores to take proper measure
so as to allocate enough space for movement of trolley even during holidays or peak
hours.
TABLE: 1 SAMPLE PROFILE
Gender
Male 24
Female 26
Age group
20-24 17
25-29 10
30-34 12
35-39 11
Monthly income
10000-20000 16
21000-30000 24
31000-40000 10
Total 50

TABLE: II BUYING BEHAVIOR

Frequency of visit Money spend Time spend
Seldom 4 Less than Rs.1000 4 Less than ½ hour 4
Once a month 24 Rs. 1000- Rs. 2000 20 ½ hour to 1 hour 13
Once a week 13 Rs. 2000- Rs. 3000 11 1 hour to 1 ½ hour 12
More than once a week 9 Rs. 3000- Rs. 4000 9 1 ½ hour to 2 hour 11
Rs. 4000- Rs. 5000 2 2 hour to 2 ½ hour 3
More than Rs. 5000 4 More than 2 ½ hour 7

TABLE III PRIMARY AFFECTING FACTORS

MERCHANDISE AMBIENCE SERVICE
Value for money Availability of open space Security and safety
Quality of product Furniture and decor Ease of movement for
trolley
 Ambience/ experience Colour and lighting After sale service
People and service Comfort and feel Plastic money service
Fast checkout Adequate sign board Hygiene and sanitation
Close to where customer Other entertainment Complaint cell
live (music, T.V., games, First aid service
Variety of product books) Personal assistance
Convenience of parking

TABLE IV ONE SAMPLE T TEST

Std.
Mean Sig. (2-tailed) Deviation t
Availability of open space 3.96 .000 .935 -5.564
Furniture and decor 4.00 .000 1.190 -4.201
Layout of the place 3.92 .000 .909 -5.939
Colour and lighting 4.28 .001 .980 -3.674
Comfort and feel 4.04 .000 .790 -6.080
Sight-seeing experience 3.88 .000 1.130 -4.956
Ease to search the product 4.12 .000 1.092 -4.028
Adequate sign boards 4.04 .001 1.207 1.455
Other entertainment 4.24 .006 1.268 -2.998
Overall ambience of the store 4.13 .003 1.296 -3.308
Value for money 4.44 .032 1.227 -2.281
Quality of products 4.72 .110 .843 1.661
Ambience/ experience 4.04 .000 1.020 -4.707
People and services 4.16 .000 .987 -4.257
Close to where customer live 4.56 .053 1.083 2.031
Courtesy and friendly atmosphere 4.08 .001 1.152 -3.994
Offer coupons in advertisement 3.80 .000 1.041 -5.765
Variety of products 4.56 .069 1.158 1.901
Convenient stocking/ display 4.16 .000 1.028 -4.086
After sales service 4.28 .007 1.208 -2.979
Plastic money service 4.32 .008 1.180 2.880
Mobile charging zone 3.48 .000 1.418 -5.361
Home delivery services 4.12 .001 1.166 -3.773
TABLE V ANNOVA TEST

Sum of Mean
Squares df Square F Sig.
Quality of Between
5.058 8 1.265 2.111 .117
products Groups
Within Groups 11.982 40 .599
Total 17.040 48
Money spend Between
5.912 8 1.478 1.018 .422
Groups
Within Groups 29.048 40 1.452
Total 34.960 48
Nearness of Between
11.762 8 2.940 3.586 .023
store Groups
Within Groups 16.398 40 .820
Total 28.160 48
Coupons and Between
4.474 8 1.119 1.039 .412
advertisement Groups
Within Groups 21.526 40 1.076
Total 26.000 48
Variety of Between
5.557 8 1.389 1.044 .409
products Groups
Within Groups 26.603 40 1.330
Total 32.160 48
Overall Between
11.289 8 2.822 1.962 .142
ambience Groups
Within Groups 27.336 40 1.439
Total 38.625 48

TABLE VI CALCULATION OF TOTAL CUSTOMER SATISFACTION INDEX

WEIGHTIN weighted
SCORE SATISFACTIO G FACTOR score
PARAMETERS (A) N SCORE (B) (c)=(a/T) (d)=(b*c)
value for money 4.44 4.075 0.032 0.1304
quality of products 4.72 4.067 0.034 0.138278
ambience/ experience 4.041 4 0.029 0.116
people and services 4.167 4.087 0.03 0.12261
fast checkout 4.12 3.394 0.029 0.098426
 close to where you live 4.56 4.234 0.033 0.139722
courteous and friendly
employee 4.08 4.12 0.029 0.11948
offer coupons in advertisment 3.8 3.87 0.027 0.10449
variety of products 4.56 3.067 0.033 0.101211
convenience of parking 4.16 4.67 0.03 0.1401
convenient stocking / display 4.167 4.82 0.03 0.1446
avaliability of open space 3.96 3.967 0.028 0.111076
furniture and décor 4 3.789 0.028 0.106092
colours and lighting 4.28 4.234 0.232 0.982288
layout of place 3.92 4.9 0.27 1.323
comfort and feel 4.04 3.69 0.029 0.10701
sight seeing experience 3.88 4.3 0.028 0.1204
adequate signboards 4.04 4.867 0.029 0.141143
ease to search the products 4.12 3.234 0.029 0.093786
other entertainment 4.24 4.45 0.03 0.1335
overall ambience 4.125 3.6 0.029 0.1044
security and safety 3.76 4.65 0.027 0.12555
ease of movement of trolley
and basket 3.64 4.87 0.026 0.12662
parking in and out 4.16 4.12 0.029 0.11948
after sales services 4.28 4.65 0.03 0.1395
plastic money service 4.32 4.67 0.031 0.14477
hygience and sanitation 4.36 4.346 0.031 0.134726
smoking zone 3.4 3.534 0.024 0.084816
home delivery services 3.48 3.56 0.024 0.08544
complaint cell 4.12 4 0.029 0.116
first aid services 3.84 3.96 0.0267 0.105732
handicap parking space 3.72 4.36 0.0267 0.116412
pavement surface at the entry
and exit 3.8 4.34 0.027 0.11718
personal assistance 4 3.89 0.029 0.11281
138.3 6.107048

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