Free Marketing Essay | Retail India Tesco
2.1 Introduction to Marketing
Marketing? When you hear the word what does come in your mind, let us take few authors thought and define the concept behind the word marketing. Marketing is the tool which helps to promote the product in the market and to satisfy the business with exchange relationships. According to Dibb et al marketing holds the key expect of any organization in order to achieve its goal, determining the needs and wants of the target market and delivering the desired satisfaction against its competitors. The author also stated that some of the companies buy lands, build up the factories, gather man power and later decide to make the product what they believe to be are consumers needs. But these organizations have failed to attract buyers as what they offered was defining ‘the making of product' rather than ‘helping customer to satisfy their needs and wants'. These organizations have failed to implement the marketing concept. Thus an organization must try to provide product that satisfy the customer's needs through co-ordinate set of activities and also achieve its goals. (Dibb et al, 2001). Marketing is the functioning tool of any business that deals with the customers. Its practice involves creating customers vales and satisfaction. Marketing is the process which is carried on in every business; were the size of the company does not matter. (Kotler et al, 1999, P14).
As per Kotler et al marketing is define ‘as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others'. Marketing is not only the tool for advertising or selling the product but it is related to costumer's satisfaction. Marketing concept says that achieving the goal of an organization depends on the identifying the needs and want of the target market and providing the necessary satisfaction more effectively than the competitors. As the current market keeps on changing the marketing managements are changing the objectives and practices accordingly every year.
The growth in world's economy, information technology, rapid globalization and social changes has made it possible to give a new way to marketing. These innovative ideas prove to be profitable for many companies (Kotler et al, 1999, P14). According to Lancaster and Reynolds Marketing is the process of planning and conception, pricing, promotion and distribution of ideas, goods and services to make exchanges and to satisfy the objectives of an individual or organizations. The elements which make marketing as a strategy are the marketing mix, microenvironment, macro-environment, marketing management, segmentation, targeting, positioning and many more. (Lancaster & Reynolds, 1999).
Marketers should be able to recognize and analysis the market opportunities in-order to review the internal and external factor and target the market with marketing mix that fits the needs of customers in that particular region. (Dibb et al, 2001). As per my opinion Marketing is tool which help the companies to understand its target market, customers' behaviors, packing and branding factor, the four P's and then build up the marketing strategy before launching the product in desirable market to achieve its goal. Marketing can help any business to grow at a tremendous rate. The process of marketing is always related to a great skill of communication which helps organizations to run their business smoothly, wither it is within the country or internationally as a promotional tool. The basic idea of organizations by doing the marketing (product or an organization as a whole) is related to increment of profit in overall business of organization.
2.2 International marking and retailing.
Marketing is not a narrow scenario which is limited with in the country itself but it is the broader concept which involves the international sector as well. International marketing deals with marketing of the products or an organization in the international sector of the business. International marketing is simply the application of marketing concept to more than one country. According to Doole and Lowe international marketing involves two main levels- simplest and complex. The simplest level of international marketing involves the firm in making one or more marketing mix decision across national boundaries while complex level involves with firms that set up the manufacturing unite overseas and establishing the marketing strategy across the globe.(Web 2).
The main expect which deals with the product of going international is growing competition within the local boundary which reduces the profit percentage of the business. As per Ricardo's theory of Comparative Advantage which speaks about competition within the nation, we have move a step further where the competition races globally. (Paliwoda, 1993). According to Keegan, if we look in the history after the World War II, there has been an unparallel expansion into the global markets by the local companies that use to serve only to customers in the home country. The company that fails to become global is at risk of losing the business to its competitors having lower costs, greater experience and better products. Moreover, the marketing concept has been changing dramatically in past three decades.
It has change from focusing on product to internal standards and value of consumers. Keegan has specified that a company which is engaged in global marketing conducts important business activity outside the home market. It also involves the understanding of specific concepts, considerations and strategies which are applied with universal marketing fundamentals in order to ensure success in international market. (Keegan, 1998). International marketing involves recognizing that people all over the world have different needs. So to meet this need of the people many companies are targeting the international customers using a consistent marketing mix which prove to be profitable for them. The products characteristics that make it acceptable in the market are the features of the product like- size, design, performance and color. As an example color red is popular in Chinese culture. (Web 1).
The overseas potential of the markets has to be carefully figure out. Searching out the relevant information takes longer because of the unfamiliarity of the some location. The potential market size, degree of competition, price, promotion, product differences, the trade barriers, cost-effectiveness and transport have to be analyzed. The organization must then consider the scale of investment and also their target for adequate returns. (Web 1).
The companies which are trying to achieve its marks in international sector are not only related to companies which are concern with technology but also in retails sector (i.e. the companies related to food products and household thing). Retail sector is expanding on a greater scale than any other reforms of business. As per Gilbert retailing shapes the way of our life as it is not only an integral part of our economic structure. He has also stated that retailers are becoming intermediate between the channels of distribution of the product. The key objective of any distribution channel is to ensure the right product, in right quantity, at right time. (Gilbert 1999). According to Omar, in Retail accordion theory which is also known as general-specific-general process has explained ‘the changing character of retail competition stems from strategies that alter the selection of the merchandise mix'.
This working hypothesis means that retailing varies from general to specific and then again switching back to general again. As an explanatory to this is; predominantly people were served by general store and later by the specialist store. But again people are moving towards general store. Thus retail system has undergone an era of an extremely wide variety offered by the retailers. The drawback of this hypothesis is that it is not been tested further. But the specific stores which are still today provide evidence that support this theory. (Omar, 1999). There are other many theories which are related and explain the retailing segment; but I am not explaining them as per limited time.
2.3 Comparative study of retail in India and U.K.
Retail sector is transforming in to the highest industrial firm around the globe. As it is evolving, it is creating different speedy level for different parts of world. By which some part are in developing stage while some are developed. As we take the comparison between the world retail sector, the western and some parts of middle east countries have develop in the rapid stage of time; also some part of far eastern part of the world have made a rapid development while certain parts of the east are in under-develop stage of retail industries. It is majorly because of the growing world economic and also the growth in their particular economic has made it possible for these under-develop countries to reform and build-up a strong retail business.
Lets us take a develop country (U.K.) and the under developing country (India) to make a comparison between the retail sector of both the countries. The economic growth rate of India is tremendous; it is growing at the rate of 7% per annum in the year 2007. (Web 3). As, when it is compare to rest of the world is growing at very fast rate. But on other hand economic growth of U.K. is 3.1% per annum in the year 2007. (Web 4). This growth in the economic is making the attraction for many foreign companies to invest in Indian markets. (Web 3).
The recent news tells that retailers like Wal-mart, Carrefour, Argos, Tesco and many others retailers with joint venture with different Indian companies are investing US$300 billion in Indian retail industries. By the year 2010 it is expected to increase to US$427 billion and by the year 2015 to US$637 billion. This also highlight that organized retailing which is only 3% of the total retail market in India will increase its share to 18% by the year 2015. According to the study by ICICI Property Service- Technopak Advisors, most of the investments which are being planned in food and groceries related household goods are in supermarket and hypermarket format. This sector account about 70% of the total retail sales in India. (Web 5).
The comparison of retail development between both the country (India and U.K.) can be seen in history. In U.K., until mid 1960s, retail development was along the town centres or suburban areas on large scales. The retail decentralization based growth of retail development in out of town areas were the major issue of that period. In the year 1980s and the early 1990s the encouragement was made to increase the development along the town areas, which was been focused by the PPG6 (a development agency in U.K.). Retail development in U.K. was considered to be the three wave's format.
The first wave which is focusing on the food and convenience retailing was moving toward the supermarket and hypermarket format which was largely away from the town and city centre. The second wave was related to comparison goods of retail (like electronic appliance, furniture and DIV equipments) initially opening in the form of warehouses on industrial estates and later in warehouse retail parks. The third wave was development of the full out of town shopping centre's which offers complete range of convenience and comparison retailing under single roof with ample of space for car parking.
However the writer has also argued that as the third wave developed, the planning policy started current focus on restricting such developments and encouraging town centre development. As the development progress during the year 1980s and 1990s the retailers started focusing on the cheap land and the road links made outside the town areas and this dynamic development is still continued till today. (Web 7). The current scenario of U.K. retail industries is developed at a very rapid stage. The world renounced brands (like Next, Peacock, Dehberham, River Island, etc for textile and household accessories; Tesco, Asda, Sainsbury, Iceland, Macro, cash and carry, etc for food and groceries; PC World, Currys, Maplin, Carphone warehouse, etc for electric appliance and accessories) of retail are all well set-up in the markets of U.K.
However if we look in the retail sector of India which still in under developing stage is making progress every year. The retail sector in India was known to be unorganized type but in centre part of south India the grocery retail was of organized type. This was because of the traditional family owned retail chain in the early of 1904s the Nilgiri's which focused preliminarily in the markets of south India. But most over in rest of the India the retail sector was unorganized; especially in the food and grocery sector which was divide in to two formats the road side hawkers or the mobile retailers and the kirana stores (equivalent to mom-and -pop store of U.S.). This retailing sector is continued till dates in India. (Web 8).
Retailing, which is considered to be one of the largest sectors in the global economy, is going through a transition stage in India. As for the long time the customers had only one choice of grocery store segment in the urban areas but this is slowly changing to the international formats of retailing. By which the traditional grocery stores are turning into supermarkets. However the boom in retailing has been confined primarily towards the urban area of the country. Thus it is focusing only on certain class of society which is in urban areas of the country. In-order to apple it to all classes of the society, the retailer will have identify with different lifestyles.
The author has argued that this trend is visible with the emerging stores which are focusing ‘value for money' image. The attractiveness toward other stores actually appeals to the existing class as well as those who aspire to be the part of this class. Thus we can assume that retailing revolution is emerging along with the economic evolution of the society. (Web 9). In the recent years retail sector in India comprises of many hyper malls which are targeting the metro cities of the country. Retailers like Pantaloon, Reliance, and Apan Bazaar are inspiring people towards hyper-malls shopping as it make beneficial for customer to shop all in one roof. Retailers are also joining hands with the international retail sectors to bring the retail revolution in India.
According to the Dutta India is way behind the developed economies in per capita availability of retail space. As estimated for the per capita retail space vary, only 3 sq. ft. per capita includes the informal retail and when compared with U.K. which is 16 sq. ft. per capita, a country which many analysts have decried as “over shopped” but where retail evolution continues apace. And that the reason she concludes that the real explosion in modern retail in India is yet to come. (WEB 6).
Thus it has been found that retail sector's comparison between two countries has a vast difference as both the countries are in different stages of progress. It is mainly because of the vast difference in their economy and sq. ft. per capita. But the retail sector is still on progress with the progress in the economy of India.
2.4 Branding and packaging factors of retail in India and U.K. (Tesco).
Retail sector is related to the brand and package of the product as to define different variety of products of same type but from different companies. Some retailers have started selling their own brand products which are at cheaper rate and are much cost effective for the customers. As the rate is cheap the customer are more attracted towards this products and thus it give more profit to the retailers.
Brand is the name, term, sign or symbol which defines the product. As per Kotler et al customers view the brand as the important part of the product and branding can add value to a product. They have also said that developing a branded product needs a great deal of long term marketing investment in advertising, promotion and packaging. But on other hand they argued that most of the manufacturers find that the power to control the brand name lies with the companies. (Kotler et al, 1996)
The brand name must be chosen carefully as the good name can add more success to the product's success. Just as the product's brand name is important its package also plays an important role in success of the product. As per Kotler et al packaging is the activities of designing and producing the container or wrapper for a product. Packaging of the product plays a vital function for most of the product. It plays the key function of protecting the product from being damaged and also from the unhygienic condition and stored its freshness. Packaging also provides space for labeling and other information of the products. (Kotler et al, 1999) & (Kotler et al, 1996)
Package of the product is design only after the product is finalized. When the package is designed, one should take care about size, colour, prize, quantity and the cultural aspect should be kept in mind. (Kotler and Keller, 2006).
Everyone today is aware of the hazardous effect of the pollutant which is causing environmental related problems. These pollutants are found to be the part of industrial and household waste which includes the packages of various products which has a great impact on environment. Thus industries are focusing on the sustainability of the packages used for the products in-order to develop eco-friendly product's packages. The U.K. government has changed its attitude towards recycling and recycling the populace.
These new powers have made industrial, commercial and domestic consumers to recycle the recyclable and the industries to use the materials which are recycled in packaging. (Web 11). The leading U.K. retailers Tesco, has put emphasis on sustainability of the product which has effected not only on the product packages but even the carrier bags. This has led Tesco to consider the materials which are easily recycled for its packages. Cost cannot be ignored but Tesco cannot intractable the barrier to its development for better environmental policy. As Mr. Hunt, the employee of the company said, “The environmental projects that we look at can cost our company more, so we must be sure they are the right things to do. There is an added cost to the supply base, but there are commercial benefits as well.” (Web 10).
In India the packaging revolution was also taking place with some new policies made by the packaging industries of India. As it control the overall packaging industries, made it legal for the companies to use the recycle material in packaging of the products. Later Indian government along with Municipal cooperation put considerable efforts to bring out these changes. Thus the entire retailer of India had to use the recycling material for their packaging and other activities. (Web 12).
Tesco have already opened its first retail store in Indian market with collaboration (joint venture) with Bharti Tele ventures of India in February, 2008. The branding and packaging factor of Tesco for Indian market is same as in U.K. (Web 13). So by keeping all the policies of Indian markets Tesco, which is known as Tesco HSC in India has invaded its strategy of the range of products as follows: Value, Colour, Organic, Healthy living and Finest. And thus the special packages for this range of products. As an example the Tesco Value brand image is of cheap product and the packages used for these brands are cheap as well. But the business by this brand of Tesco is more than any other brand in Tesco stores.
We are especially involved in looking at biodegradable material for packaging. We are also looking at the supply chain to try and improve all aspects of packaging material including pallets for loading and moving efficiency so as to make the deliveries in stores easier. Thus we are constantly exploring and looking for new ideas which would offer retailers an innovative style of packaging. However in terms of cost we will have to take care that packaging is important for safe distribution till it is with the customers on their table and once it is it's the contents that really matters. (Web 13).
2.5 Socio-Economic factors affecting retailer (Tesco) referring India and U.K.
Every company had its operational functioning within its marketing environment. The marketing environment consists of factors and forces that affect the company's ability to perform in the target market. Marketing environment consist of microenvironment and macro-environment. (Kotler et al, 1999). Marketing concepts and practices have been actively adopted in many countries, even those which don't share the same cultural background. Every companies has their own trade and merchants system which makes its own culture but while going aboard in other countries they tend to follow the trade and merchants of that country, thus they practice and follow that culture and establish it as their own. (Usunier, 1993).
The social life of the country not only depends on the culture but the different element of culture like language, sex, age, and so on. So if the country try and make an entry in international market it must have to look into the micro and macro environment which include the cultural expect. As per Usunier cultural variable is complex and it is difficult to analyze the way in which it influences its behavior. Usunier has also said that many definitions have been formulated from the word ‘culture'. And According to Usunier, Kroeber and Kluckhohn (1952) wrote an article defining culture with the list of 164 definitions of culture. (Usunier, 2000).
When the company moves to international market it has its objective to be fulfilled in terms of profit and market share. If the company fails to achieve its objective, the major reason could be the difference in the culture. For example the promotion of life insurance in Islamic countries, as in Islam it is evil to talk about dead. So it is important for the companies going abroad to do a good research of the culture. (Usunier, 1993). For this kind of researches the cross-culture market research is the best to learn all the cultural differences between the two countries.
The U.K. largest retailer Tesco has been building and rebuilding its culture as the changing economic of the country. As in last few years, optimistic UK economy with low levels of unemployment, low-medium interest rates and inflation has race the growth in PDI. (Web 14, Mintel, 2007) This large availability of credit has provided a financial confident to the customer by which the premium foods sale increases causing less effect on economy products. Inorder to improve the competitive market in U.K., the grocery retail is now moving towards the non food retailing which comprises about 8% of the market share.
Though the non food retail sector is higher on price it can be improve with adjustment in supply chain process. (Web 14, Mintel, 2007). The U.K. retailers have cut short the skillful jobs in-order to increase their profit margin. The increasing number of single-person households and working women are forcing the U.K. retailers to focus on value added products like ‘food-to go'. (Web 14, Mintel, 2007). The retailers have try to maintain the flexible working hours for the employees and for customers, they added extra shopping day ‘Sunday Shopping' There has been an increase in spending on leisure, which rose by 4.2% between year 2003 to 2007, thus shifting away from food and household product. (Web 15, Tesco, 2007) The retailing culture of India is setting up the same pattern as in Western countries as the economy of the country is rising with 7% per annum.
According to Biswas R, The head of Market and Retail Industry Leader, Ernst & Young, India the research reveals that 30 million of total population of India (1.07 billion) spends about USD 30,000 which is only 2.8% of total population which is the market next to U.S.A, China and Japan. The economy growth in Indian middle class is 22% which is estimated to grow 38% by 2010. And the disposable income will rises to 8.5% .p.a. by 2015. More than 50% of the population is below age 25 years and a strong growth is expected to grow in this age group. The urban population of India is expected to grow from 28% to 40 % by the year 2020 and thus the incomes will grow alongside. Another key drive is that the number of mall in India is increasing from 158 in 2005 to 600 in 2010. Indian government is also concentrating on building world class infrastructure with the spent of USD 150 billion in next few years. (Web 16, The great Indian retail story)
In additional to this we are considering the retail marketing mix which will provide the comparative analysis about the other Hyper malls and Tesco in India. The four P's which are Product, Price, Promotion and Place.
- The product includes services, store layout, merchandise and the company. As Tesco mainly deals with food retail sector, its primary focus will be on the food retail sector. The other sector of the products includes Non-food retail, Petrol station, Financial services, Internet services. The Standardization, Modification, Branding and Packaging of all varieties of products (i.e. Value, Tesco Colour, Finest, Healthy living, Organic) must be considered. By focusing on such products in Indian retail market it will generate the background information about the other product.
- The price is related to perception of the value based upon the way the market and transaction work. As in India most of the population is from middle class so the pricing should be focus keeping in mind to target this sector. The pricing strategy should focus on the cost related issues and also must consider the discount, forfeiting, fix price, etc. Tesco must also focus on the prices of other malls in India related to similar products.
- The promotion in related to relationship marketing in which the advertisement plays important role. In retail industries promotion of the product is considered to the key factor which can capture the market. While advertising the product in market it must balance its information and also the emotional appeal of the product to its customers. Tesco has its own brand label which is considered to be plus point for its promotion in Indian retail market.
- The place is based on the retailer's activities which supply channel service. Tesco must consider the place perfection for its retail openings as the India's income group is unevenly distributed only along the major cities. So Tesco must currently focus on the urban areas rather than remote areas where the retail is booming.
Sources: (Kotler et al, 1999) (Gilbert, 1999) & (Paliwoda, 1993)
Thus the world class retailers have a great change to invest and make profit in Indian market. Tesco which has invaded India in the year 2008 has a great chance of survival in Indian market as it is the rising market for retail industries.
2.6 Porter's Five Force Analysis of competitive environment.
The industrial analysis begins with a general examination of the factors influencing the nature of competition for that industry. The basic idea is to develop an understanding of the industrial environment which facilitates an organisation to establish a competitive advantage against its rivals (Lynch, 2006). This analysis can be studied by Porter's five force model. According to Porter (1998), the nature of competition depends upon the five forces: (1) the threat of new entrants, (2) the threat of substitute products or services, (3) the bargaining power of suppliers, (4) the bargaining power of buyers & (5) the rivalry among the existing competitors.
Figure 2.6.1 Porter's Five forces Model
Source: (Web 17)
Every industry has a set of fundamental economic and technical characteristics which give rise to these competitive forces (Mintzberg et al, 1999). These forces determine industry's profitability as it shapes the prices, the costs and the investment in an industry. (Wit & Meyer, 1998).
The threat of new entrants limits the overall profitability of the industry as the new entrants add to competition which bring new capacity and seek market share bringing down profit margins. (Porter, 1998). The threat of new entrants is determined by the height of barriers to entry that exist for new firms. (Haberberg & Reiple, 2001). Barriers to entry are factors that need to be overcome by new entrants in order to compete successfully. These barriers to entry include; economies of scale, the capital requirement of entry, access to supply or distribution channels, customer or supplier loyalty, product differentiation, legal and regulatory barriers and expected retaliation (Johnson et al, 2006).
The strength of these five forces is different from industry to industry and can change as the industry evolves. In any particular industry, all of the five forces will not be equally important and the particular structural factors that are important will differ (Wit & Meyer, 1998). The strongest force or forces determine the long-term profitability of an industry and thus are of importance in strategy formulation (Mintzberg et al, 1999).
Porter's five forces model is a useful in analysing the environment, but it is not without its share of critics. Central to the criticisms of Porter's five forces framework is its disregard of the competitive interaction between firms (Grant, 1995). Lynch (2006) has further described this approach to industrial analysis as it fails to define the dynamic nature of competition and industry structure. The analytical framework is essentially static, whereas the competitive environment in practice is constantly changing.
In spite of these critical comments, Grant (1995) concedes that the merit of this model is that it provides a simple but powerful framework and classifying information about the forces that can affect the industrial structural environment and using the implications of these structural features one can predict the competitive behaviour.
These industry forces are all heavily influenced by macro-environment that shape opportunities and pose threats to all firms (Haberberg & Rieple, 2001). According to Johnson & Scholes, the PESTEL analysis which categorises these environmental influences into six main types: political, economic, social, technological, environmental and legal is a useful tool for analysing the overall market environment of firms, as it consider the forces beyond the scope of industry structure that influence the operations and strategies of all firms in a market. (Johnson & Scholes, 2002). Porter's five forces model and the PESTEL framework can be used together as the tool to analyse and helps to shape the strategies of organisations (Haberberg & Rieple, 2001).
Once firms have evaluated the forces affecting competition in the market and also their causes, they can identify their strengths and weaknesses. These strengths and weaknesses are determined by the firm's position and by underlying the causes of each force (Mintzberg et al, 1999). According to Lynch, it is important for an organisation to clear statement of the competitive advantages against its rival. He also suggests that a useful means of summarising this is the SWOT analysis developed by Professor Kenneth Andrews. “The SWOT is an analysis of the Strengths and Weaknesses present internally in the organisation, coupled with the Opportunities and Threats that the organisation faces externally” (Lynch, 2006).
According to White, creating a competitive advantage is necessary but it is not sufficient for the continuous returns of profit and market share in an industry. If the firm develops a competitive advantage, it is in well positioned against its competitors but failure to do that can cause a serious damage to its profit and market share. (White, 2004). Thus to gain an advantage in Indian retail sector Tesco have consider its competitors which may cause damage to its profit and market share in Indian market. By considering these tools Tesco can identify its competitive strategy and work accordingly to overcome its weakness in order to attained profit and market share.
The meaning of the word marketing is rivaled in this literature and also the different definition of different author's are used to try and explain the concept of marketing in today's world. The world is global place for marketing where every organization is trying to race and entry the international market in-order to capture the market share and increase their profit. International marketing deals with the understanding of international market which involves recognizing of people all over the world that they different needs. By the use of different marketing mix of international marketing, one (organization) can try and achieve its objective (i.e. to target profit and market share).
Retail is a huge booming business around the world and is expanding on a greater scale. This is because of the growing economy of the world. Retail sector of two countries are viewed and a comparative study is presented. Out of which one (U.K.) is developed and other (India) is under-developing in retail sector. Indian economy is growing at tremendous rate which is attracting many foreign investors to invest in Indian market. The U.K. top leading retailer ‘Tesco' has opened its first store in Indian market with collaboration of Bharti Tele ventures. It is very important for the companies which are going internationally to look into the branding and packaging as it can affect the market share and profit.
The author has try to point the branding and packaging of and India and U.K. and has also try to point out the facts of packaging and branding with respect to Tesco. The different in the packaging and branding factor between the two countries in related to the environmental factor i.e. microenvironment and macro-environment. There is a large difference between the two countries and so as in their culture. And also the retail sector varies between the two countries with respect to the culture.
If we look in to the Tesco culture it is mostly focusing on customer's needs and wants. The Tesco in India will have to look at its competitors in Indian market accordingly plan for its success. The four P's (prices, product, place and promotion) are use to explain the comparative study about the between the Tesco and other hyper malls in India. These four P's also explain about what Tesco's is doing to overcome its competitors.
At the end, the researcher has try to explain about Porter's five forces model which is use to explain the meaning of competition in the industrial sector. And with the use of PESTOL and SWOT analysis, one can try and figure out the environmental factors and strengths, weaknesses, opportunities and threats which can help to evolve the companies to build up its strategy to compel its competitors. The tools of Porter's five forces model are use by the companies to compare their competitors and conclude to build up better business for them.
This chapter describes about the methodology approach which is used in the current research. It also explains the qualitative and quantitative method, their advantages and disadvantages followed in this research. The general research design, data collection and analysis method of this research are discussed.
3.1 Research Process
Research is the frame work that determine to process of collecting and analysing the data. According to Saunders et al (2005) research is define as “The systematic collection and interpretation of information with a clear purpose, to find things out”. The author has explained the research process in the form of ‘onion layers', in which each layer describes the pattern of research methodology. The first layer describe about Research philosophy, second describes about Research approaches, third describes about Research strategies, forth describes about Time horizons and fifth one describes about Data collection methods.
Source: Saunders et al (2005, p.83)
The research design described by Saunders et al (2005) explains the proper understanding of conducting the research. The author's framework ‘onion' can be used for identifying and analysis the different research strategies that are available for conducting research. Hence this framework will be used to describe the various research methods and will specify the research approach suitable for this project. The description about this framework is as follows:
Research philosophy is the first layer of the framework ‘onion' which deals with the way of thinking about the development of knowledge. There are three views which are dominating the research process: positivism, interpretivism and realism. All these three have different way in which the knowledge is developed and plays an important part in business and management research.
If the research is conducted on the principles of positivism, it will lead to adoption of philosophical stance of the natural scientist. The researcher assumes the observation made by the data collected but this data collected is only automated responses which are caused by external resources. (Gill & Johnson, 2002). This method is not suitable for this topic as every business management deals with single and composite type of situation, so it is difficult to simplify.
If the research is conducted on the principles of realism, it permits the researcher to indentify the reality existing independently of the cognitive structures of observers. (Gill & Johnson, 2002). In the study of business and management, realism reflects as a philosophical stance thus this limits its value in application of business research methods. Moreover it useful in the study of human subjects, like importance of understanding people's views and behaviours. (Saunders et al, 2005).
If the research is conducted on the principles of interpretivism, it permits the researcher to explore the details of complex situations that occur in the case of business and management world. The interpretivism plays an important role which helps the researcher to understand the current situation of the business making it more realistic to what they study. It has been also said that the social world of business and management is of complex type and the right insights are lost if the complexity is reduced to law-like generalisations. Moreover this research is likely to fit in interpretivism as it understand the subjective reality of those what they study. (Saunders et al, 2005).
The practical reality is that the researcher falls with philosophical domain which is mention in the ‘onion'. Business and management research is often a mixture between positivism and interpretivism, though realism reflects the stance. (Saunders et al, 2005).
This is the second layer of the framework ‘onion' is related to research approach which is followed the research philosophy. It is used to find the way of using theories in the research design. It has two main approaches which are used for conducting research, they are deductive and the inductive approach.
The deductive approach is also refers as scientific research and involves the development of theory and hypothesis before the collection of data. According to Gill & Johnson the deductive approach involves verifying the data which are in the form of theory or hypothesis by observing them along with facts collected by observation. (Gill & Johnson, 2002). The authors have also said that deductive approach is closely bounded with the philosophy of positivism. It has its origins in research in natural sciences. (Saunders et al, 2005).
Inductive approach is related to structures of explanations and theories about the observe data. Thus it is closely related to interpretivism. Inductive approach is the opposite of deductive approach because it involves in making a theory that stand on analysis of data collection. (Gill & Johnson, 2002). The inductive approach is a better option because the tendency of deductive approach to construct a rigid methodology that restricts the development of alternative explanations of research problems. (Saunders et al, 2005).
This dissertation will evaluate the retail sector of India with reference to Tesco. However the result will not completely figure out about the market entry strategy of Tesco in India (i.e. the beginning). So this research is more to inductive approach as the conclusions and theories developed will depend on the analysis of the data collected.
This is the third layer of the research framework ‘onion' which is related to selection of a particular research strategy. The different research strategies available for conducting a research design are Experiment, Survey, Case study, Grounded theory, Ethnography and Action research. The research strategy is an overall planning made to answer the research problem to its best possible way. (Saunders et al, 2005).
This dissertation is best explained on the principles of Case study research strategy. The case study is defined as “a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence.” (Saunders et al, 2005). The case study approach is more likely to unobtrusive measures like documents, historical evidence as it is not made up of manipulate behaviours. Moreover unobtrusive measures can only rely on the use of existing documentation; case study tends to focus on collecting up-to-date information. Thus data collection may involve the use of direct observation and systematic interviewing and not only the contemporary documentation. (David, 2004). The strength of case study method is that it allows the researcher to think on a specific situation in-order to find the various interactive processes at work. It also gives a change to study one problem in significant depth with limited time. (Saunders et al, 2005).
The case study research can be classified in terms of exploratory, descriptive and explanatory studies. The exploratory study deals with improvement in the undergoing problem by assessing it in new light. The descriptive study deals with accuracy of events and situation. The explanatory study deals with accurate situation explaining relationship between variables. (Saunders et al, 2005).
This dissertation will use multi-method technique with descriptive study tools to define the generic strategies for the competitive environment between booming retail industries in India and in U.K. with reference to Tesco. The use of different research methods of data collection will be used like ‘questionnaires', ‘interviews' and resources of secondary data.
Time horizon is forth layer of the framework ‘onion'. It has two main approaches cross-sectional and longitudinal. In the case study research cross-sectional or the longitudinal study can be used. In the cross-sectional research a particular phenomenon at a particular time is studied. This approach is suitable for the academic courses in the particular subject area since there is time limitation in doing an academic research. This research is intended to use cross-sectional approach.
On the other hand the longitudinal research involves the study of changes or development in a phenomenon over a period of time. This makes it difficult for the proposed study due to time limitation. (Saunders et al, 2005).
Data Collection Methods:
This is the fifth and the final layer of the framework ‘onion' which identifies the specific methods chosen for collection of data to any research. The data collection methods are of many types such as Interviews, Questionnaires, Sampling, Observation and Secondary data.
This dissertation will use Interviews, Questionnaires and Secondary data for understanding and analysis of the data. Sampling theory can be taken into account for trying and ensuring good representation. (Saunders et al, 2005).
3.2 Research Design in general:
The research carried out is divided into three sections which are related to analysis of obtained data. The qualitative approach- which included the semi-structured interview and questionnaires, together they formed the primary sources and the quantitative approach which includes the data from journals, books and other publication of articles, this forms the secondary source. Research design is the plan that helps in determining the methods and procedure for collecting of data and analyzing them. Research design is defined as “a logical plan for getting from here to there, where ‘here' may be defined as the initial set of questions to be answered and ‘there' is some set of conclusions or answers about these questions” (Yin, 2003, P.21) In general the research design is a strategy which helps in determining what to do, how to do and when to do.
Qualitative and quantitative approaches are use accordingly to character of the research design. The qualitative data collected shows the different opinion in the interviews and questionnaires which will be evaluated using the similar factors in them. This will be presented with views of different personal. The quantitative data which is collected will be presented in words and the use of organised table format like pie-chart is used to support the theories.
According to Van Maanan, qualitative techniques is ‘an array of interpretative techniques which seek to describe, decode, translate and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world.' (Easterby-smith et al, 2003, p.85) Qualitative data is which are collected are in the form of interview based case studies.
Other forms of research approaches are also used along with it like discourse analysis, focus groups, narrative interviews and unobtrusive methods such as archival research. (Marschan-Piekkari & Welch, 2004). Qualitative research is the best method for understanding the attitudes, opinions, behaviour of an individual or group. But in quantitative research the outstanding medium for gathering information regards to questions like ‘How many?' or ‘How much?' Quantitative research is based on analysis of numerical values from statistical data. (Saunders et al, 2005).
Qualitative research have some disadvantages which is often very subjective as the researcher includes personal experience and insight as part of the relevant data which makes it less objective in nature. Quantitative research is an objective truth which allows scientific methods and systematic relationships which allow specific linkages between elements of problem. (Marschan-Piekkari & Welch, 2004).
This dissertation has undertaken the qualitative data collected through semi-structure interview conducted in the retail sector of manager/sales in India. The qualitative data obtained through questionnaires are from the customers of Tesco in the market of India and U.K., to evaluate the impact of socio-cultural changes in Indian retail with reference to Tesco. My friends working in retail sector of India has provided me with necessary data. This Interviews and Questionnaires form the primary sources of the data collected. The quantitative data, which forms the secondary sources, was collected from statistic of retail sector in India and U.K. and also journals, books and publication on retail.
Interviewing is a technique that is used for collecting data which is analyzed later and it also provide the different views of individual interviewee. In general the interview is conservation between one person and the researcher. The importance of interview is that ‘it provides the opportunity for the researcher to prove deeply to uncover new clues, open up new dimensions of a problem and to secure vivid, accurate inclusive accounts that are based on personal experience.'(Easterby-smith et al, 2003).
The well conducted interview is a powerful tool for eliciting rich data on people's views, attitudes and the meanings that underpin their lives and behaviors. According to Cohen & Manion (1997), interview can serve a number of distinct purposes. Firstly it is used for gathering information about person's knowledge, value, preferences and attitudes. Secondly, it can be used to identify the variables and their relationship. Thirdly, it is used with other research technique like survey to follow the issue. (David, 2004). Interviews are of different types which the researcher used according to their research.
Interview can be conducted in structured & systematic, semi-structured, unstructured format. In structured and systematic interview there is a standardized set of questions in which the researcher asks the questions and respondent gives answer to that particular question. In semi-structured interview the researcher has a list of questions but may omit some questions in particular interview and order of questions also varies depending on the conversation. Unstructured interviews are informal and it involves in-depth discussion about the topic & interviewee has the opportunity to talk freely about events, behavior & beliefs. (Thietart et al, 2001)
Interviewing can be used in other combination like group interview which involves multiple interviewers, joint interviewers and the focus group. In this kind of interview there are various views which are raised at the same time and the advantage of using this that the costs can be drastically reduced and also chance of non-response also reduces. But the drawback is that social nature of responding may have an influence on the answer of the question asked in the interview. (i.e. people change their view at the end in the answers.) (David, 2004).
This dissertation will focus on the semi-structured interview and personal telephonic interview as in semi-structured interviews, the researcher will have the list of question that will cover its objective although these may vary from interview to interview. Moreover in semi-structured interview the interviewee is allowed to have an open ended nature which enables them to expand their area of interest. The discussion of the interview can be recorded by note taking or by tape recording the conversation.
In personal telephonic interview, the researcher comes in direct contact with the interviewee over telephone by taking prior appointment. Even in telephonic interview the interviewee has open-ended nature for answering the questions involve in the interview. The semi-structured interview was taken from the manger of Tesco store in U.K. while the telephonic interview was taken from the manager of retail in India. There are only three interviews taken, one in U.K (semi-structured type) the other two were telephonic interview from India.
Questionnaires are research tools through which people are asked to respond to the same set of questions in a predetermined order. The purpose of the questionnaire method is to find the variable and range of possible answers, where every question or part of that question represents variable. (Clark et al, 1998). Questionnaire method is usually used to collect primary data which are collected from the persons who are working or responsible for supervising the organization.
Questionnaires are having many advantages:
- They are low cost in term of both time and money.
- The inflow of the data is quick and from many people.
- Respondent can complete the questionnaires wherever and whenever they want.
- Data analysis of closed questions is relatively simple.
Sources (David, 2004).
The drawback of questionnaires is that the response rate is very low. If the questionnaire is too long then respondent tend to try quickly; answer to whatever they can and leave the rest which is more dangerous. (David, 2004).
There are basically fives type of questionnaire approaches which can be used, such as On-line, Postal, Delivery & collection, Telephone and Interview face-to face/group.(Web 18). There are basically two types of questions, the open ended and close ended. Close ended questions have a restriction for the respondent to answer small set questions that are provided. And also the researcher setting close type of questions should have good knowledge of the options available in that particular subject. Whereas open ended questions does not impose any restrictions but it is hard to aggregate the final outcome. It has the advantage of offering wide and rich responses. (Clark et al, 1998).
Moreover in open ended question there is no limit of an answer to either yes or no, or to specific range of options. But the close ended questions impose the answer to the forces of chosen alternative only. (Web 18).
For this dissertation Postal questionnaire approach and Interview face to face/group questionnaire were used. In the postal questionnaires, it is usual to be accompanied by a letter that provides the aim of the research and the time taken to complete the questionnaire. In interview face-to-face/group the respond can be taken hand to hand from the person after he/she agreed to take the questionnaire.
This is fieldwork which was done by the researcher in-order to gather data. The question which was formed was of open ended question as it provides the respondent to give the answer in their way and also the close ended question was used which instruct the respondent to chose between or rank the options available. The postal questionnaire approach was used to generate the data from India while the interview face-to-face/group questionnaire approach was used to generate data from U.K.
After collecting all the data from interviews and questionnaires, the researcher assured the respondents that the information gained will be kept strictly confidential. So, all the detail of the respondents has been removed to make sure that their identities are not coded out.
3.5 Data Analysis:
Once the data collection was done by the above methods, it was logically analyzed and the final outcome was noted. These outcomes were presented in the form of systematic pattern which represents every respondent's views and ideas. These views and responses of each question then written and analyzed. This research involves both the qualitative and quantitative analysis. The analysis is complex and thus involves percentages, so the end result is represented in the form of tables, graphs and pie-chart. Statistical method like mean, deviation, etc were used in order to analyze the data.
3.6 Validity and Reliability:
Validity is to check the findings of research that we got are really what they seem to be. It can be checked by comparing the data with other person's finding. The format of questionnaires i.e. wording and sequence of questions affects the validity of the responses. (Saunders et al, 2005). Whereas reliability can be judged by putting three questions-will the measures produce the same result during different time or not, can others establish the same observation, and the results which are obtained from the raw data is transparent or not. Reliability can be addressed by using methods to write field notes and prepare transcripts. (Saunders et al, 2005).
In accordance with these assumptions, all the questionnaires were checked and tested before distributing them and field notes of the interview were written on notepad. Thus great care was taken to ensure the validity and reliability for presenting the data.
The limitations faced by the researcher were gathering data and writing literature review as the latest update for the current topic was least available. The topic is related to Tesco which has launched its first store in February in Indian market so nothing much information is available in the University's library. The researcher has to depend on the internet sources and partially on his sister and friends in India to find the latest update from their work places. Also the internet sources providing the information for the latest updates are limited.
The limitation was also caused by time constraint, distance barrier and financial/money constraint; as it was not possible for the researcher to go to India and find the research data by himself. Moreover it was difficult to find the right person for interview in India as the researcher was in U.K. who would agree to give the interview and make discussions related to the topic on phone. Even in U.K. it was difficult to find the right person for interviewing. The method to avail the responses through questionnaires, from the managers and customers implemented the non-availability of completely different response from the options supplied. This otherwise would have been better to related the literature review. It was also difficult for the researcher to get the answers from questionnaires as the people in U.K. have very tight schedule at work place and even in India the questionnaires response is very low between the people at work.
This chapter presents the complete picture of methodologies that is involved in this research. The first section describes about the research process ‘onion', which is the commonly used method. The following section describes about the research design which involves the primary & secondary data used in this research. The later section describes about validity & reliability and limitation involved in this research.
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