Post Liberalization Non-Interest Diversification in Banking and Its Relevance

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Page 1 of 131 Non-interest diversification in Banking, the new paradigm shift after liberalization and its relevance as a Marketing Strategy Subrato Bhadury Abstract The Indian commercial banking system partly because of its strategic marketing shift and partly due to investment management and volatility reduction effort is gradually inclining towards non-conventional activities that generate non interest income in the form of fee based income and earnings from currency exchange brokerage and miscellaneous income.

Although diversification effort is welcome in view of stringent Basel II norms coupled with global recessionary tendency, but there is always a hidden danger that it’s over emphasis as a marketing tool may lead to higher volatility in bank revenue and lower risk adjusted profits while bank’s bread and butter earning (interest income) may remain grossly overlooked. Keywords: non-interest income, diversification, panel regression, stationary Introduction

After nationalization and prior to liberalization bank business was mainly focused towards interest earning activity by way of loans and advances which was guided by the administered rates. Banks were provider of few basic services, which used to generate even and predictable revenue. Liberalization of the financial sector brought a total paradigm shift, with increasing frontiers of demand. Banks have now become provider of a wide range of solutions. One such prominent field is non-interest income.

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However non interest income related activities of banks which has the potential to contribute substantially to bank profitability, involving much lower cost and operational problems, remained by and large overlooked. This is more important because in the face of severe competition and adherence of various prudential norms (Basel II), the business opportunities as well as the scope of earning profit in the traditional interest earning business activities are slowly getting restricted. In order to address the above research issues the study hypothesizes the following: 1.

There exists variation among the different bank groups (by ownership category) in their operational strategy towards relying upon non-interest income for enhancing profitability in the post liberalization period. 2. Secondly there is difference between individual banks in the same group as well. Page 2 of 131 Sources of secondary data The present study is empirical by nature and is based on the Indian banking data for the period 1991-2006 collected from Reserve Bank of India’s official web site (www. bi. org. in) ? Annual accounts data of commercial banks?. We have selected our sample of commercial banks as 2 independent sample groups according to their ownership. The 2 main commercial bank groups undertaken are: 12 foreign banks &14 private commercial banks. In the representative sample we included those banks for which the data for the reference period (1991-2006) are continuously available. Banks under consideration

Private commercial banks are- Bank of Madura, Catholic Syrian Bank, Sangli Bank, Tamilnadu Mercantile Bank, Nainital Bank, Bharat overseas Bank,Lord Krishna bank, Jammu & Kashmir Bank, Bank of Rajasthan,Laxmi Vilas Bank, Federal Bank, Dhanalaxmi Bank. Foreign banks are-ABN Amro Bank, Abu Dhabi Commercial Bank, American express Bank, ,Bank of America, Bank of Tokyo, Barclays Bank ,BNP Paribus, CITI Bank, Deutsche Bank, ,Hong Kong and Sanghai Bank, Bank of Nova Scotia, Oman International Bank, Sonali Bank, Standard& Chartered Bank, Financial data for time trend analysis

The data selected for all commercial banks and financial variables for the time period 1991-2006 are as follows-total income of commercial banks, interest income, other income and its 6 different components (Commission exchange and brokerage, Net sale investment, Net revaluation of investment, Net land, Net exchange income), Profit, Assets and Reserves of the commercial banks. Methodological Approach The research attempts to capture both the time perspective and the cross sectional bank specific and ? ther income’ component specific aspects and hence time series data is considered first. Growth of other income component and its sub elements over time has been examined by using the linear trend model of the form: Y = a + b*T+ u Results of Trend analysis As hypothesized other income and its components increased over this period, although the rates are different for different banks and different for individual banks also in the same ownership group. The ? t? ratio of other income/total income is significant for most of the banks in the Page 3 of 131 rivate and foreign bank group at 5% level of significance. Out of all the 6 components ? t? ratio of net sale investment as a proportion of other income is highly significant followed by of net exchange as a proportion other income. Determinants of profitability The dependent variable in the study is profitability, here profit as a % of income ie (profit/income) x100 is considered. The independent variables are the six components of other income as mentioned earlier and indicated by X1, X2, X3, X4, X5, and X6. Empirical analysis

The research question pertaining to Hauseman test1 at the next step is whether there is significant correlation between the unobserved (unit of observation) specific random effects and the regressors. If there is no such correlation, then Random Effect Model (REM) will be more powerful. If there is correlation then the Fixed Effect Model (FEM) will be of choice. Panel regression results Panel data set representing the private bank group comes under REM after Hauseman test. For that reason we prepare GLS model for our subsequent analysis. So the functional form takes the form of Yit = ? 1i + ? 2 X2it + ? X3it + uit Panel data set which is representing the foreign bank group come under FEM after Hauseman test, hence we have chosen least square dummy variable model (LSDV) for our subsequent analysis. Empirical analysis Panel regression technique is used to find how different components of other income affect profitability of the concerned banks or the group of banks differently. For this few routine tests are conducted. Augmented Dickey Fuller (ADF) tests are performed to see the stationarity of the series. Test statistic values for all independent variables show that the series is stationary.

Since hateroscadasticity and muliticollinearity can bring formidable problems afterwards so correlation matrix is verified and Breusch –Godfrey serial correlation Lagrange Multiplier test (LM test) is performed to identify the form of regression whether ordinary least squares estimates without group dummy variables are appropriate or fixed / Random effect is more 1 Hauseman,J. A. ,? Specification Tests in Econometrics,? Econometrica, Vol. 46,1978. Page 4 of 131 suitable and significant LM values indicated that, the Houseman test to be performed to justify whether the panel dataset follows the fixed effect or the random effect model.

With the understanding above we perform Hauseman test on panels representing 2 different bank groups and the test result has an asymptotic ? ? distributions with the formula: ? ? = (?? FE –?? RE )'(Var FE- Var RE)?? X(?? FE –?? RE ), the chi-squared test is based on Wald criterion W= ? ? (K-1) = (?? FE –?? RE) ‘ ??? X (?? FE –?? RE) Where ? = (Var FE- Var RE) For ? , we use the estimated covariance matrices of the slope estimator in the LSDV model and the estimated co variance matrix in the random effect model, excluding the constant term(C) .

We test the significance with k-1degrees of freedom (we have six variables X1, X2…X6) Estimated results of Private group of Banks (REM) Dependent Variable: Y Method: GLS (Variance Components) Sample: 1991 2004 Included observations: 14 Balanced sample Total panel observations 168 Variable Coefficient Std. Error t-Statistic Prob. C 4. 411808 1. 240443 3. 556638 0. 0005 X1 0. 199928 0. 156693 1. 275918 0. 2038 X2 0. 265648 0. 056366 4. 712947 0 X3 -0. 29492 1. 668444 -0. 17677 0. 8599 X4 -0. 05722 0. 650839 -0. 08791 0. 9301 X5 0. 058266 0. 056979 1. 022596 0. 308 X6 0. 046738 0. 126901 0. 368302 0. 7131 Random Effects NAI 0. 380228 _SANG -2. 24004 _TAMI 3. 763579 _BANK 0. 173137 _JAM 1. 70668 _LAK 0. 8009 Variable Coefficient Std. Error t-Statistic Prob. _LORD -0. 19695 Page 5 of 131 _CATH -2. 02562 _UNI -1. 53659 _BHA 1. 128198 _DHAN -1. 79816 _FED -0. 15537 Unweighted Statistics including Random Effects R-squared 0. 347999 Mean dependent var 6. 740833 Adjusted R-squared 0. 323701 S. D. dependent var 4. 351405 S. E. of regression 3. 578482 Sum squared resid 2061. 691 Durbin-Watson stat 1. 541712 Hence it can be concluded that, profitability of different banks in the private group at individual level was influenced by ? ther income’ component. The other income as a proportion of total income has positively contributed towards the profitability of all the banks in the private bank group. Empirical analysis for Foreign Bank Group Panel data set representing the foreign bank group come under fixed effect model after Hauseman test and after analyzing the total set of trend equations we find that, although their intercepts vary across different banks but each individual banks intercept does not vary over time (time invariant), hence we chosen Least Square Dummy Variable model (LSDV) for our subsequent analysis.

The names of dummy variables are the corresponding bank names or d2, d3,………d14. The final fixed effect panel regressions equation is as follows: (PR)it = ? 1 OICEB + ? 2 NETSI + ? 3 NETRI+ ? 4 NETLD + ? 5 NETEX+ ? 6 MISC + ? 1 + ? 2 d1+ ? 3 d2 + ? 4 d3 + ? 5 d4+ ? 6d5+ ? 7 d6+ ? 8 d7 + ? 9d8+ ? 10d9+ ? 11d10+ ? 12d11+ ? 13d12+ ? 14d13+ eit ……………………………………5) Where (PR)it represents profitability, Putting bank dummies as d’s in the term ? 1 OICEB, ? 1stands for the regression coefficient of the explanatory variable and OICEB explains the effect of other income from commission exchange and brokerage on profitability of the bank.

Here d2,…….. d14 are 13 dummy variables against 14 foreign banks. Here only 13 dummies are used to avoid falling into the dummy-variable trap, i. e. , the situation of perfect collinearity. Incidentally there is no dummy for the ABN Amro Bank or in other wards ? 1 represents the intercept of ABN AMRO Bank and ? 2, ? 3,……… ? 14 the differential intercept coefficients Page 6 of 131 indicate how much the intercepts of Abu Dhabi Bank,, American Exp Bank……….. ….. Hong Kong Bank differ from the intercept of ABN Amro. Foreign group of banks LSDV results Dependent Variable: Y Method: Least Squares Sample(adjusted): 1 196

Included observations: 196 after adjusting endpoints Variable Coefficient Std. Error t-Statistic Prob. C 12. 33308 3. 494586 3. 529196 0. 0005 X1 -0. 11836 0. 13519 -0. 87547 0. 3825 X2 0. 685731 0. 127513 5. 377712 0 X3 3. 509234 2. 236893 1. 568799 0. 1185 X4 0. 231067 0. 136471 1. 693156 0. 0922 X5 1. 273212 0. 310994 4. 094006 0. 0001 X6 0. 246502 0. 116072 2. 123703 0. 0351 C1 -0. 00025 0. 000663 -0. 38308 0. 7021 C2 0. 007923 0. 014311 0. 553625 0. 5805 D2 -10. 2175 4. 295651 -2. 37856 0. 0185 D3 -5. 49197 4. 064053 -1. 35135 0. 1783 D4 4. 735522 3. 9786 1. 190248 0. 2356 D5 0. 712112 4. 874877 0. 46078 0. 884 D6 -14. 3352 4. 654206 -3. 08005 0. 0024 D7 -4. 87687 3. 889537 -1. 25384 0. 2116 D8 -3. 0053 4. 054368 -0. 74125 0. 4595 D9 -3. 54651 3. 849858 -0. 9212 0. 3582 D10 -11. 2437 4. 515148 -2. 49022 0. 0137 D11 9. 142987 4. 79393 1. 907201 0. 0581 D12 9. 414743 7. 463942 1. 261363 0. 2089 D13 -1. 27304 3. 95017 -0. 32227 0. 7476 D14 -4. 8711 3. 880676 -1. 25522 0. 2111 R-squared 0. 453973 Mean dependent var 14. 8623 Adjusted R-squared 0. 388073 S. D. dependent var 12. 86979 Page 7 of 131 S. E. of regression 10. 06749 Akaike info criterion 7. 561931 Sum squared resid 17635. 66 Schwarz criterion . 929882 Log likelihood -719. 069 F-statistic 6. 888833 Durbin-Watson stat 1. 506771 Prob(F-statistic) 0 Analysis of the estimated LSDV results From estimated coefficients of the equations by LSDV model it is found that out of six coefficients, four are highly significant as their ? p? values of the estimated ? t’ coefficients are not small. The estimated coefficient of the explanatory variables X2,X4, X5, X6 are individually highly significant and their ? t’ statistics are very high(5. 38,1. 69,4. 09,2. 12 respectively) and p values of the estimated t coefficient are very small(0. 00, 0. 12, 0. 00, 0. 3 respectively). However from the result it appears that, explanatory variables X1, X3 are not very significant at all to explain the dependent variable –profitability since their p values are high and t values are small. Among the explanatory variables, barring X1 all the other explanatory variables X2, X3, X4, X5, and X6 are positive indicative of the fact that these 5 constituents are having positive role towards increasing profitability of foreign banks. The coefficient of the dummy variables gives the intercept values and they are statistically different for fourteen different foreign banks.

The mean value of the random error component ie ? i is the common intercept value of +12. 33. The random effect value tells us how much the random error component of bank of America differ from the common intercept value and so on. From the panel data results it appears that the adjusted R –squared for banks is 0. 39, which means that the explanatory variables explain the dependent variable or profitability by about 39%. The Durbin Watson statistic is 1. 51, which means that there is no auto correlation in the data.

This empirical estimation thus validates our hypothesis that, different banks in the foreign group of banks at individual level are influenced by other income components but differently. These differences in the intercepts might be due to unique features of each bank, such as differences in attitudes towards risk taking, marketing edge or overseas effects. From the trend analysis it is observed that other income as a proportion of total income and other income as a proportion of interest income both have gradually increased over time (1991-2006) for almost all banks in private and foreign bank group.

Of the components of other income, commission exchange Page 8 of 131 brokerage showed declining trend for all banks but net sale investment went up. For other components no distinct trend is found. From the panel regression results it is revealed that out of all six components of other income, X2(net sale investment), X5 (net exchange) were individually highly significant and they contributed much higher towards profitability, while for X3 (net revaluation of investment) & X4(net land) the contribution is negative for both groups. However on absolute terms these two components are very small.

Directional shift in marketing for this diversification Though the study considers the time period 1991-2006, it needs to be mentioned that the recent global meltdown has intensified the pressure on banks in addition to the existing pressure of competitiveness in the global market and implementation of Basel II norms. If concerted effort were undertaken towards promoting the different ways of non-interest earning activities, then this would act as a supportive cushion to the banks and help them to deal with the current situation and face the global challenge more confidently with proactiveness in marketing.

Further as risk factors are also addressed in the process, this diversification would also place banks on a stronger footing. India being a bank based economy, an all out effort towards promoting this non interest avenue of income generation will also have far reaching impact on the macro economic variables at large. Conclusion The study has implications for contemporary situation of the Indian commercial banks. All banks after liberalization gradually shifted their marketing attention more towards diversification in other income related instruments; but there was no robust policy norm stipulated by RBI to this effect.

Moreover there was high competition which may perhaps increased volatility of income. The other important reason is that, our net exchange earnings are highly fluctuating component and since all banks especially those banks whose branches in rural and remote locations do not have much scope to earn exchange income remained partly insulated but only handful of private banks and foreign banks in major cities could take part into major diversification in net exchange operations.

This helped the private banks and the foreign banks more than other 2 groups in term of revenue earnings but with increased volatility. This is precisely the reason also why 8 SBI group of banks and 19 nationalized banks are kept outside the spectrum of present study. Page 9 of 131 If concerted effort is undertaken towards promoting the non-interest earning related marketing activities, then this would act as a supportive cushion to the banks and help them to deal with the current situation and face the global challenge more confidently.

Thus in a changed environment after liberalization of the financial sector there was a total paradigm shift in the business and marketing strategy of banks which made the growth of other income related business almost vitally essential. Further as risk factors are also addressed in the process, this diversification would also place banks on a stronger footing. References: 1. Banerjee, S. S. ,(2007) : ? Simultaneity between bank profitability and regulatory capital,? Prajnan, Vol. XXXVI. No. 1, 2. Bhattacharya, H. ,(1998 ): Banking Strategy ,Credit Appraisal and Lending Decisions, a Risk-Return Framework, second edition, N.

Delhi ,Oxford University Press. 3. Casu, B. and Girardone, C. , (2005): ? An Analysis of the Relevance of Off-Balance Sheet Items in Explaining Productivity Change in European Banking,? Applied Financial Economics, vol. 15, issue 15,pp. 1053-1061. 4. Das. A. and Ghosh. S. (2003): ? The Relationship Between Risk and Capital: Evidence from Indian Public Sector Banks? RBI occasional papers,pp. 1-10. 5. Feldman. RJ, (Oct 1999) ? Non interest income:a potential for profits, risk reduction and some exaggerated claims? Fedgazette, 6. Ghosh. C. ,(2008): ?

Does liberalization reduce agency costs? Evidence from the Indian banking sector,? Journal of Banking and Finance, Vol. 42, Issue. 3, pp. 405-419. 7. Green,W. H. ,(2000)? Econometric Analysis? , Prentice Hall, Englewood Cliffs, N. J. ,2000. pp-283-321. 8. Hauseman. J. A, ? Specification Tests in Econometrics,? Econometrica, Vol. 46,1978, pp. 1251-1271. 9. Havrylchyk. O. , (2005): ? Efficiency of Polish banking industry: Foreign versus domestic banks,? Journal of Banking and Finance, Vol. 30. , Issue 7. pp. 1975-1996. 10. Jeitschko, T. D. and Jeung, S. D. , (2003) ?

Incentives for risk taking in banking-a unified approach,? Journal of Banking and Finance, Vol. 29, Issues. 3. june, pp. 759-777. 11. Nachane,D. M. and Ghosh,S. , (2002. ): ? Determinants of Off-Balance Sheet Activities ,An Empirical Analysis of Public Sector Banks,? Economic and Political Weekly, pp. 421-27. Page 10 of 131 12. Reddy, Y. V. (2002): ? Indian Banking –Paradigm Shift in Public Policy,? BIS Review, pp. 1-21. 13. Stiroh. K. J. ,(2002): ? Diversification in Banking: Is Non interest Income the Answer?? Journal of. Money,Credit and Banking, 36(5), pp. 53-882. 14. Wooldridge . J. M. ,(2004) ? Introductory Econometrics: A modern approach,” South- Western College Publishing.. About the Author Subrato Bhadury Faculty of marketing at Heritage Institute of Technology, Management Education Center, Kolkata Email: [email protected] co. in Page 11 of 131 Consumer Choice towards Private Labels Kamaladevi B Abstract This paper deals with the consumer choice towards private labels in modern retail market. Globally, own store brands or private labels are rapidly gaining share at the cost of manufacture brands.

In India, where the share of organised retail is minuscule, manufacture brands still dominate. With the retail sector poised for growth, national brand manufacturers will have to contend with competition within distribution channel, which calls for revised marketing strategy locally, to thwart the threat of the private label in a store. The phenomenon also offers national brand manufacturers the opportunity to serve the production needs of the private labels efficiently. The problem is India’s Internet-savvy consumers aren’t as convinced about Private labels as their global counterparts.

Consumers may be happy with the quality of private label when it comes to kitchen towels & staples like wheat flour but are wary when it comes to buying a store version of, say, baby food or shampoo. A few lines of possible research are also suggested at the end. Keywords: Retail Industry, Private Labels, National Brands, Retailer strategies, Retail Brand Development Strategy, Adequacy-Importance model 1. Introduction Anybody who’s taken note of Wal-Mart’s phenomenal growth in the U. S is aware that the balance of power in the market place is shifting in favour of the retailer.

As if that weren’t bad enough for the marketers hears another growing phenomenon that threatens to further weaken their hold on shop shelves and this is the growing popularity of private label brands which are essentially the retailers own brands. However in countries like India a lot of shoppers are only just getting used to visiting supermarkets and hypermarkets regularly for their groceries and private label is still a relatively new concept for them. Additionally, the attraction of major well-known multinational brands supported by heavy advertising, means that the appeal of private label will likely be limited by its own ? ocalized? nature. Page 12 of 131 Though private labels attracted attention of channel researchers about forty years ago, in India, private brands attracted attention primarily only in the last decade. However, research work in this area appears to leave a void. For Indian conditions, the current era symbolises the wake up call that national brand manufacturers should take note of, to effectively combat the threat of private labels. This paper assesses the recent trends in the changing scenario of distribution in India with specific reference to the growth of large retail stores and their private labels.

It delves deeper into the performance of private labels and its implications to national brands in their marketing strategy. 2. Review of Literature Modern trade retail chains and their private labels are some of the most visible elements of the transformation in Central and Eastern European countries in the last 15 years. Roman Baszun,s paper describes the situation and the potential of private labels in seven CEE countries (Hungary, Czech Republic, Slovakia, Poland, Lithuania, Latvia, Estonia) and Russia. Helen Passingham-Hughes, anaging director of TNS’s Asian panel network, reports on the size and growth of the private label fmcg sector in 48 countries. Worldwide private label is growing, though there are vast differences in penetration depending on retail structure, culture and geography. Seonaid Anderson and Helen Passingham’s paper outlines the current status of private label in Asia and predicts the future of both brands and private label in Asia. The presence of private label in Asia is linked to the development of the trade structure by country as well as the presence of the global retailers.

Thomas Bachl’s paper addresses the role of private labels within the perspective of Western Europe and reviews the main factors affecting private label development within the region, the future of private labels vs. brands, and the impact of supercenters and hypermarkets in the changing equity of private labels. Just analyzing is not enough. Do Private labels really win? It may win in developed economy but still a question mark in developing economy. This paper deals with the consumer choice towards private labels in modern retailing. 3. Retail Scenario in India As the corporates – the Piramals, the Tatas, the Rahejas, ITC, S.

Kumar’s, RPG Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race to revolutionize the retailing sector, retail as an industry in India is coming alive. Retail sales in India amounted to about Rs. 7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are Page 13 of 131 also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is 8. % per year, compared with 7. 1% for consumer expenditure. Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hypermarts. Sales from these large-format stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a latest report by Euromonitor International, a leading provider of global consumer-market intelligence. A. T. Kearney Inc. places India 6th on a global retail development index. The country has the highest per capita outlets in the world – 5. 5 outlets per 1000 population.

Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA. In a developing country like India, a large chunk of consumer expenditure is on basic necessities, especially food-related items. Hence, it is not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The share of food related items had, however, declined over the review period, down from 73% in 1999. This is not unexpected, because with income growth, Indians, like consumers elsewhere, have started spending more on non-food items compared with food products.

Sales through supermarkets and department stores are small compared with overall retail sales. Nevertheless, their sales have grown much more rapidly, at almost a triple rate (about 30% per year during the review period). This high acceleration in sales through modern retail formats is expected to continue during the next few years, with the rapid growth in numbers of such outlets due to consumer demand and business potential. 4. Current Scenario in Modern Retail Retail branding has developed to such an extent that, today, retailers are perceived as being brands in themselves rather than distributors of manufacturer brands.

Many retailers have developed such a strong consumer franchise that customers are more loyal to the retailer than they are to the manufacturer’s brand. This shift is mainly due to the extensive development of own brands and a more marketing oriented approach to retailing. Retailers have been rewarded for their focus on customer needs and aspirations by increased level of trusts from customers. Page 14 of 131 Although in the past, own-brand products were positioned as cheap alternatives to manufacturers’ brands, in recent years retailers have upgraded the quality of their own branded goods. Growing popularity of private label brands, which are essentially the retailers’ own brands. ? Recent AC Nielson retail audit of private labels across 38 countries 80 product categories, in more than 2/3 of the countries surveyed, private labels grew faster than manufacturer brands. ? Consumers in developed markets (Europe & North America) are already big believers in private label, the next round of converts will come from emerging markets. ? At present modern or organized retail accounts for a bare 3% of the overall market in India.

The reasons for growing popularity of private labels are analysed as follows: On average private labels cost a third less than comparable market brands. The reason for intense penetration of private labels in the market is retail concentration (the more the number of retailers the larger the number of retail brands). 56% of consumers in 38 countries consider private label to be a good alternative to manufacture brands. Key dimensions for own brand development are the degree of innovation, positioning (i. e. , the degree of identification with the retailer and its market positioning) and strategic role of the own brand.

Such clear positioning has allowed supermarkets to move the rest of their own-brand offer up market. For example, Tesco’s finest line of chef quality meals, which now includes fruit and vegetables and features the characteristic silver labels, small images and typeface across categories. This allows shoppers to instantly recognise that the products are of premium quality anywhere in the store. The increasingly sophisticated use of branding by retailers and their closeness to customer means that own brands will increasingly become leaders in many product areas. 4. New Developments In Own Brand Strategy ? Retailers are now developing their own brand packaging to project a clear corporate signature with distinct entities on their own ? In order for retailers to successfully position themselves against manufacturer’s brands they need to communicate the improved quality of the products to customers ? The success of own-label products has occurred because retailers have demonstrated that they can perform the four main functions brand manufacturers perform. Page 15 of 131 ? Identification ? Information ? Guarantee of product quality Symbolic associations ? Identification & informational aspects of brand increase shopping efficiency, guarantees reduced consumer risk. ? Symbolic associations on the other hand provide psychological utility to consumers and allow them to make a social statement about themselves. 4. 2 Retail Brand Development Strategy Retailers can start own-brand development strategies by beginning with generics and then moving up to re-engineered low-cost brands, store brands and finally price parity as they gain experience to build confidence in own-brand development.

Follow generics by cheap store brands which are a step above generics but still of inferior quality, offering a large discount against manufacturers brands. Reengineered low-cost brands are the next step up where the retailer proactively examines the product and packaging to see how costs can be reduced, whilst offering the same functionality of the branded product. The next stage is to offer par quality store brands. In final stage retail brands take leadership roles through positioning and innovation with price parity. PRICE-QUALITY STRATEGY Private Label –Product Attribute and Category Choice Implications . Lower price-higher quality The most beneficial category to enter if the lower price can come from disintermediation and part of the savings can be used to enhance quality and raise the retailer’s margin. 2. Lower price-lower quality CAUTION: The retailer must know his segment. Is he inventing a new segment? He needs to be sure of the PQ-WP equation. 3. Higher price-higher quality CAUTION: Niche. Does the retailer have customers who will paya premium for premium? 4. Higher price-lower quality Reject Page 16 of 131 5. Research Methodology 5. 1 Research Questions The objectives of this research are two-fold: 1) What are the salient attributes on which consumers choose both private labels and national brands? and (2) What are the attitudes of consumers towards private labels and national brands? 5. 2 Research Design An exploratory research design suits for this type of research. 5. 3 Conceptual Background Brands attributes & Multi-attribute models drawing from past studies, various attributes have been identified to assess the consumer evaluations of private labels based on the review of the studies from which the following private labels attributes have been included: ? Brand image ? Freshness ? Healthy ? Packaging Prestigious ? Price ? Quality ? Risk To assess the consumer evaluation of private labels the multi-attribute model will be used. Here we use the ? Adequacy-Importance? model which also happens to be one of the most widely used model appearing in consumer behavior research. This ? Adequacy-Importance? model can be described as follows: A= ? P* D Where- A= an individual’s attitude toward the brands P= importance of attribute (dimension) for the person D= individual’s evaluation of brands w. r. t the corresponding attribute (dimension). 5. 4 The Survey Instrument The 8 brand attributes identified will be fit into the model.

For measuring the importance (This is ? P’ in the ? Adequacy-Importance? model) accorded to each of the eight brand-attributes on a Page 17 of 131 5 point category scale where 1= least important and 5= most important, the following questions were asked: ? I believe that the quality that I should get when I buy a product is… ? I believe that the price I pay for goods should give me value for money is… ? I believe that it is …that the products i buy are risk-free ? I believe that buying fresh goods is… ? I believe that good quality packaging of goods is… ? I believe that buying healthy goods is… I believe that it is… that the goods are buy are prestigious ? I believe that buying goods with a very good brand image is… The individual brand-attribute question will then be multiplied with a corresponding question evaluating the degree of presence of the attribute in both private labels & national brands. These questions measuring ? D’ in the ? Adequacy-Importance? model were rated on a 5 point Likert type scale where 1= strongly disagree and 5= strongly agree: ? I believe that the store brands available in this store have excellent quality… ? I believe that the store brands available in this store are excellent value-for-money… ?

I believe that the store brands available in this store are not risky to buy… ? I believe that store brands available in this are fresh… ? I believe that store brands available in this store have excellent packaging… ? I believe that the store brands available in this store are healthy… ? I believe that the store brands available in this store are prestigious… ? I believe that the store brands available in this store have an excellent image… The same questions will be asked by replacing ? store brands? with ? national brands?. 5. 5 Sampling Design and Data Collection 100 shoppers were contacted to respond to the survey questionnaire.

Only shoppers for grocery and food products were included in the study. 96 complete and correct questionnaires were received giving a conversion rate of 96 per cent. The respondents were contacted outside organized sector retail stores in Bangalore. A team of trained MBA students administered the questionnaires. Only those individuals were requested to fill the questionnaires that stated that they shopped for food and grocery at least twice a month from organized sector retail stores. The Page 18 of 131 names of well-known organized sector stores were listed to enable them to respond to this qualifying question. . 6 Data Analysis Attitude towards PLs for the 96 respondents will be calculated as per the following: Apl=P1*Dpl1+P2*Dpl2+P3*Dpl3……P96*Dpl96 Where Apl= an individual’s attitude toward the PL P= importance of attribute (dimension) for the person Dpl= individual’s evaluation of PL w. r. t the corresponding attribute (dimension). This calculation is given in Table 1. For attitude towards national brands for all 96 respondents the same formula will become: Anb = P1* Dnb1+ P2*Dnb2+ P3*Dnb3……P96*Dnb96 Where Anb= an individual’s attitude toward the national brands P= importance of attribute (dimension) for the person

Dnb= individual’s evaluation of national brands w. r. t the corresponding attribute (dimension). These calculations will be done for all 8 Attributes. Table 1: Test of significant difference between attitudes towards PL vs. NB Brand Attribute N=96 Attitude towards PLs Attitude towards NBs t-test for equality of means; df: 94 Mean Std. Dev. Mean Std. Dev. Brand image 11. 1 1. 66 1. 30 1. 21 8. 19* Freshness 13. 2 1. 81 13. 5 1. 99 -1. 35 Healthy 14. 1 0. 99 13. 8 1. 13 1. 99 Packaging 12. 5 1. 12 14. 6 1. 81 -104. 07* Prestigious 12. 1 0. 34 13. 5 1. 35 10. 54* Price 17. 2 1. 15 15. 4 2. 24 6. 26* Quality 12. 4 1. 33 6. 8 1. 23 -17. 94* Risk 13. 5 2. 44 16. 5 1. 29 -40. 03* The t-test values denoted by asterix (*) convey that there the difference in means is statistically significant at the 5% significance level (calculated t-value greater than 2. 0). Page 19 of 131 5. 7 Discussions & Managerial Implications The data analysis of consumer attitudes towards private labels (PL) & national brands (NB) (Table 1) shows that there was a perceived difference between PLs & NBs on the attributes of quality, price, risk, packaging, prestigious and image. However, there was no perceived difference on the attributes of freshness and health.

This could be due to the sustained efforts on in-store promotions of private labels. On all other factors, the comparison between private labels & national brands is as follows: ? NB>PL (NBs perceived to be better than PLs): Quality, Risk, Packaging, Prestige & Image. ? PL>NB (PLs perceived better than NBs): Price. ? PL=NB (PLs and NB perceived to be the same): Health & Freshness. Within brand-type, the top three attributes for NBs are quality, price and packaging, and for PLs they are price, health and risk. The results of this study are not very different from the results obtained in other retail markets.

Perception of quality is an important element relating to private-label brand use, if all brands in a category are seen as sharing a similar quality, then private-label brand use is often observed to increase. But as proven in this study and other global studies, one constant finding of private-label research had been that quality is more important than price to shoppers. Support for this belief was challenged, however, by Ailawadi et al. (2001). Burton et al. (1998) pointed out that the danger for a retailer using low prices alone with which to compete is that some consumers may use price as a proxy for quality. Richardson et al. 1994) found that private-label brands were considered by shoppers to be inferior in quality terms to national brands. It is also important to recognize the role of the quality of the store brand. Previous research has proven that if the higher quality of the store brand results in an increase in the fraction of consumers that perceives the store brand to be of acceptable quality, profits to the stores increase with increases in the quality of the store brand. 6. Conclusion Literature review on store brands indicate that consumers’ perceived quality and reliance on the extrinsic attributes have shown to be among the most elevant variables in explaining store brand purchase decisions. It has been well accepted in the field of marketing that improved Page 20 of 131 understanding of customer perceptions is crucial for marketers for successful customer satisfaction. To this end, to manage retail brands successfully, marketers have to learn more about customer needs and desires and study their perceptions of quality. This research shows that even in an emerging market like India, where perceptions towards PLs should have taken more time to be established, NBs are definitely considered to be superior vis-a-vis PLs.

According to Chavadi & Kokatnur(2008) in a study conducted by A C Nielsen in 2005, on private labels in India, it was found that 56% of the respondents believed that private labels are good alternatives to national brands. The study also highlighted that 62% of the respondents feel that private labels are good value for money. But, almost four years later, PLs do not seem to have lived up to their expectations. The customer has really not much interest in the success of PLs. Customers want good brands irrespective of their ownership, origin or sponsor.

However, the success of PLs is important to retailers and could be a critical part of their strategy in terms of competition, sourcing, supply chain management, positioning, profitability and expansion. Development of acceptable- and sought after- PLs will take time, effort and strategic vision on the part of retailers. 7. Future Research Prospects Based on the foregoing analysis, the following aspects can be researched taking the retail sector in India separately: • What are the different strategies adopted by retail stores to promote their private brands? What explains the commonalities and what explains the variations? How are the national (or even regional) brands disposed toward the phenomenon of private labeling? Is there a difference in the promotional practices of the national brands between the private labeled stores and others? • Current literature, mainly based on the Western nations’ experiences, deal with national brand versus retail brand as one-on-one issue. However, in reality, a national brand manufacturers / marketers sell many product categories through retail stores. In the context of multiple brand sales by a national brand manufacturer, what is the effect of the product-range sales on the power osition in the channel? This aspect can be effectively studied through case study research method. • Does private label result in better store loyalty? Or, does perceived store loyalty cause retailers to introduce store brands? Alternatively, what is the cause-effect direction between store-loyalty and private labeling? Page 21 of 131 • Are there differences in the way in which channel conflict due to store brands is perceived by the stores and the national brand manufacturers? Intuitively, it ought to be so. Is there significant difference? Why? Has there been an impact on the prices of national brands sold in the specific store after the store has launched its own brands in a specific category? • In what categories, store brands are imitations of national brands? How are they positioned against the original? (Premium, economy or fringe) • What research methods stores that own private brands use to collect consumers’ perception about their brands? Is systematic research pursued? This can be studied through case method research. References 1. ?HSIL: From Homes to Malls? , Images Retail, Sep. 30, 2004. 2. ?Into Our Own? Retail Biz, September 2004, p. 17-18 3. ?Invading Private Labels? , Retail Biz, September 2007, p. 19-20 4. ?The Ebony In-house? , Retail Biz, September, 2008, 21-22. 5. Ashokkumar, S. and Gopal, S. (2009), ? Diffusion of Innovation in Private Labels in Food Products,? The ICFAI University, Journal of Brand Management, 6(1), pp 35-56. 6. Cunningham, Isabella C. M. ;Hardy, Andrew P. , and Imperia, Giovanna. (1982), ? Generic Brands Versus National Brands and Store Brands,? Journal of AdvertisingResearch,22, (Oct/Nov), pp 25-32. 7. Dunne, David and Chakravarthi Narasimhan, 1999. The New Appeal of Private Labels? , Harvard Business Review, May, pp. 41-52. 8. Kotler, Philip, 2000. Marketing Management, The Millenium Edition, Prentice-Hall India. 9. Pauwels, Koen and Shuba Srinivasan, 2004. ?Who Benefits from Store Brand Entry?? , Marketing Science, Vol 23, No. 3, Summer, pp. 364-390. 10. Perrault, William D. , Jr and E. Jerome McCarthy, 2000. Essentials of Marketing, McGraw-Hill. 11. Private Label Manufacturers’ Association (PLMA). The definition is found on their website http://www. plmainternational. com/plt/WPL-WEB-2K5-PLT_en. html 12. Quelch, John A. nd David Harding, 1996. ?Brands Versus Private Labels: Fighting to Win? , Harvard Business Review, Jan-Feb. 13. Raju, Jagmohan S. , Raj Sethuraman and Sanjay K. Dhar, 1995. ?The Introduction and Performance of Store Brands? , Management Science, Vol. 41, No. 6, pp. 957-978. Page 22 of 131 14. Rao, Akshay R. , Mark E. Bergen and Scott Davis, 2000. ?How to Fight a Price War? , Harvard Business Review, March-April, pp. 107-115. 15. Salmon, Walter J. and Karen A. Cmar, 1987. ?Private Labels are Back in Fashion? , Harvard Business Review, May-June, pp. 99-106. 16. Sayman, Serdar, Stephen J.

Hoch and Jagmohan S. Jaju, 2002. ?Positioning of Store Brands? , Management Science, Vol. 21, No. 4, Fall, pp. 378-397. 17. Scott-Morton, Fiona and Florian Zettelmeyer, 2000. ?The Strategic Positioning of Store Brands in Retailer-Manufacturer bargaining? , Working Paper Series H (Economics), Working Paper # 10, Yale School of Management. The paper can be downloaded from http://papers. ssrn. com/ 18. Signorelli, Sergio and James L. Heskett, 1984. ?Benetton (A)? , Harvard Business School Case 9-685-014, p. 4. 19. Stern, Louis W. , 1966. ?The New World of Private Brands? California Management Review, Spring, pp. 43-49. About the Author Kamala Devi Research scholar at Dravidian University, Andhra Pradesh, India Email: [email protected] com Page 23 of 131 Experiential Branding in Retail Practices- The Road Ahead Dr. Ramkishen Y* Riddhi Shah** Abstract As more and more brands add clutter to the marketplace, it has become increasingly important for the brands to differentiate themselves in the customer’s mind. Today, marketing is shifting to services as an increasing number of customers look for solutions and not brands when they make a purchase.

With increasing customer segmentation, retaining existing customers has become more important than acquiring new ones. As the retailers increase their focus on perfecting their backend operations to manage their costs, they miss out on perfecting their frontend operations that give customers the experience that bring them to that retail shop. As a retailer is the last link in a product’s value chain, it becomes increasingly important for the brands to ensure that its customers get the experience to know and live the brand.

Hence, it is the retailer who should provide an experience through several activities that target one or more sensory organ of the consumer. In the long run, business would be driven by these intangibles that touch the consumer and encourage him/her to stay with the experience providing retailers. This research paper aims to focus on developing a model that can guide retailers to provide the perfect retail experience to their customers and ensure that those profitable customers are retained for a long period of time.

Keywords: Experiential Marketing, Experiential Branding, RBE Model (Retail Brand Experience), Senses in Visual Merchandising. Introduction We have evolved from the traditional marketing era where brands were communicated in one-dimensional way, competition was narrowly defined and marketers survived with a myopic view of the environment, allocating a lot of advertising and promotion budget for IMC was enough to create awareness and trial for a new product in the market, marketers had enough time to react to Page 24 of 131 he changes in the environment, dissatisfied customers could only bad mouth the brand to a his family and friends. Today is the age of communication and customer, who is no more just a part of the company’s value chain. He is well informed, updated, demanding, intelligent and well connected with a lot of people on the globe and that is why he is powerful. He is not affected by meaningless talk about strategy, positioning, brand statements, mission and values of companies and quality claims. He wants to see the company care about what he wants and pays for and not just what the company talks about.

The definitions of branding so far, have only spoken about what the brand can do for the company and products and what can they signify to the customers. But the definitions have to change to focus on what how the brands can act as a rich source of sensory, affective and cognitive associations that result in memorable and rewarding brand experiences. Recognizing that most sales environments are multichannel experiences, with customers learning about products and services online and offline, it has become increasingly important to provide the same engaging and rewarding experience at every touch point.

What Is Experiential Branding In Retail? Experiential branding in retail is a process of understanding, analyzing and implementing the sensory experiences at the store level, merchandise, corporate brand; which generates a holistic experience and contributes in creating value and identity for the retailer. Various IMC tools are used to complement the customer brand experiences for a long period of time so that the impact stays and the benefits can be reaped for a long time. From the above definition we can understand the following: ? Experience in retail means using sensory inputs to create brand experiences. Experiences can be created in retail through merchandise, store and corporate brand. ? Experiential branding in retail means creating holistic brand experiences by using advanced tools of visual merchandise like point of sales and store atmospherics. Page 25 of 131 Where Can Retailers Use Experiential Branding? Literature Review Experiential elements do not work in isolation; they function as a holistic mechanism driving customer’s retail experience because they consist of holistic realms which allow flow between the various static and dynamic elements within the retail environment.

The researcher is required to look at a wider sweep of contexts, such as temporal, spatial, social and personal. Insights from a ? living’ retail environment can lead to revelations on how to tailor experiential designs to: (1) The customer’s desired level of functionality; (2) The correct emotional characteristics that facilitate consumption; (3) Types of behavioral responses to holistic in-store cues; (4) Ongoing relationships with the store brand after they have left the store; (5) Experience design fit with the store brand; (6) Competitiveness of current/proposed experience strategy. Micheal John Healy, Michael Beverland, Harmen Oppelwal, Sean Sand,2007). Three key factors that create experience for a visitor in a designed environment are drama and the design of the actual, arousal and the mental predisposition of the visitor to your environment; and the impact of crowds. (Stephen Mapes,2007) Page 26 of 131 Experiential benefits relate to what it feels like to use the product and also usually correspond to product attributes. These benefits satisfy experiential needs such as sensory pleasure and cognitive stimulation. (Ulrich R. Orth, Renata De Marchi,2007) Retail Brand Experience Model

GENERATES FOOTFALLS AND CONVERSION SELECT AND IMPLMENT STORE ATMOSPHERICS EARS NOSE INTRODUCE STORE MERCHANDISE VISUAL MERCHANDISE CREATE BRAND EXPERIENCES STORE DESIGN/ LAYOUT TARGET AUDIENCE REASONS FOR GENERATING RETAIL BRAND EXPERIENCES STORE FORMAT (MERCHANDISE) MOUTH (TALK) SKIN (FEL) EYES INCREASED ROI FOR RETAILER Page 27 of 131 Explaining The Model 1. Why generate retail brand experiences? ? Omnipresence of information technology ? It is a new entry in the communications industry and the agencies need to offer what the customer and the market demands. Standard IMC tools are losing their charm. ? Increasing competition pressurizes brands to differentiate themselves. ? Customers’ involvement in the brand has become important. ? Experiences create scope for better CRM activities. ? Increased footfalls have a direct impact on the ROI. 2. Store Format: Decide Merchandise The look of the store is the first thing that gets in touch with a customer. Based on the store format the merchandise should be arranged. Visual merchandisers take care of the look of the store. The look of the store should appeal to the store’s target group too. 3. Target Audience

Satisfied targets become loyal customers and then advocates for the brand. Hence, it is necessary to make them feel special, increase their loyalty using experiences and offer exclusive products and services to them. All about the store may be forgotten but not the experience. 4. Store Design/ Layout Successful brands are those that focus on what design makes the customer feel comfortable with the brand rather than how the brand wants to project itself in front of the customer. 5. Create Brand Experiences A retail store can create experiences through aesthetics, creating excitement, pleasure, beauty, satisfaction. . Visual Merchandise ? POP: window displays, mannequins, facade flagpost ? POD: Danglers, Signages, Kiosk at billing counters; salesperson ? Eyes: tiffany, nose: shopers stop, ears: Raymond, skin: AC red lounge, mouth: fabindia Page 28 of 131 7. Store Atmospherics These are ambient conditions of the store (visual, aural, olfactory and tactile cues), which can be used to increase a consumer’s rate of consumption, and influence customer product evaluations and purchase behavior. 8. Select and implement store atmospherics 9. Footfalls and Conversion

Happy and satisfied customers visit the store again and again to relive the experience provided by the store. 10. Incremental Returns to the Retailer A store that can create the right experiences for its customers ends up converting them into loyal customers and hence guarantees itself returns on investment. Some Ways Of Understanding The Underlying Needs Of Customers ? Image sorting- Participants sort images based on similarity. Researchers analyze the underlying meaning. ? Visual elaboration- Participants generates another picture that would reinforce the meaning of the current one. Sensory explorations of images- Participants use non visual senses to convey core meaning of the picture. ? Vignette generation- Participants describe a short movie that portrays their feelings. ? Creation of digital image- Participants are asked to digitally manipulate scanned pictures. Issues in Implementing Experiential Marketing Tools ? Should the organization enrich a given experience by adding additional experience providers that provide the same experience or simplify the experience by concentrating it into certain experience providers? The organization should stick to one experience or should it broaden its experiential appeals from individual experiences to experiential hybrids and holistic experiences. ? Implementing experiential marketing for a brand is costly. A company has to complement it with the use of standard IMC. Page 29 of 131 ? Each customer has a different experience and hence, it is difficult to measure and evaluate the impact, the benefits cannot be reaped in framing strategies for the future and consistency cannot be maintained. Scope for Future Research The only thing that is constant is change.

The market has been changing its orientation from commodities to goods to services and now to experiences. The era of experiences will stay till the market is looking for something new. The theory of lifecycle works here too. When experiences were new, every company that gave experiences to its customers was successful in converting the expenses to investments and reaped benefits from them. At some point in time, customers will get bored of experiences everywhere they go. Like products and brands, experiences will also get commoditized one day.

With a shortage of retail spaces, the kind of experiences that brands can provide will also change. Companies would have to innovate ways of optimizing the use of the limited physical spaces available. Competition will get bloodier and marketing warfare would get intense. As customer lifestyle gets more hectic each day, there would hardly be any time to go to shops and know more about the brand. Internet is also making inroads in the market. Communication is bringing people closer and becoming the centre of everything. Customers are going online.

Market demands companies to be innovative in reaching out its customers. The warfare tool is the internet and only time will tell how marketers can explore this tool and survive in the new era of marketing. Darwin has rightly said in theory: Only the fittest will survive. Conclusion This research paper focuses on experiential branding in retail only because in the current scenario, many brands are creating experiences for their customers in some way or the other. Every touch point for the customer has been explored to create a connection with the brand.

To keep the research paper focused on a particular topic, experiential branding was narrowed down to retail. Page 30 of 131 With the change in consumer tastes, preferences and wants, brands have to continuously work hard to stay relevant to the consumer. Providing experiences is the new ? in? thing of reaching out to the customer. Companies are banking on the experiences to acquire and retain customers. Various senses of the customers are utilized to create experiences in the retail stores. The strategy changes with respect to the store format, design, target audience etc. isual merchandisers are being appointed to take care of the first touch point of a store: the overall look. Internet is the next big thing in reaching out to the customers. As the blue ocean of experiential marketing gets bloodier, marketers may have to explore internet to differentiate them from the clutter. Further research can be done to look into the next era of marketing. Case study: Colors by Asian Paints The company Asian Paints is India’s largest paint company and the third largest paint company in Asia. It operates in 22 countries and has 30 paint manufacturing facilities in the world.

It operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Taubmans. Its rivals include Kansai Nerolac, Berger and ICI (Dulux and Velvet Touch). Its volume growth has been driven largely by Tier II and Tier III cities, which today fetch approximately 65 per cent of its revenues. ? Asian Paints has opened a 6,000-sq feet signature store in Bandra to show customers how a home can be done up. The place doesn’t sell a single can of paint — it is merely a meeting ground for customers and interior designers. A brand new chain of smaller premium retail stores called “Color Ideas” has been rolled out to provide the consumer with the right ambience in which to check out all the options and get some advice. ? Asian Paints also connects with customers through the Home Solutions initiative — a home-painting service which was started in 2000. Page 31 of 131 Asian Paints’ Emotional connect ? Asian Paints has several decorative paint brands. For exteriors, there are Apex, Ultima and Duracast. For interior distempers, there are Tractor and Utsav. In emulsions and enamels, its flagship is Royale. In the early part of the decade, Asian Paints was not the leader in the premium space — the spot belonged to ICI’s Velvet Touch. The company felt it needed to create a campaign that positioned Royale as a lifestyle brand. ? The benefits of aspirational positioning are paying off because spending power has increased; top-end products that fetch higher margins sell more than the products in the value-for-money range. Emulsions are outselling distempers. ? Asian Paints decided it needed a twin branding strategy and so it launched the umbrella brand through the Har ghar kuch kehta hai campaign. The Color store

The Asian Paints Color Store, a home decorating showroom and flagship store in India, was honored as Store of the Year by the Retail Design Institute (RDI) in its 38th annual competition. Designed by Fitch world, the store sells no products and is inspired by ? holi,? the Indian color festival. It’s meant to create an environment that is ? a walk in a home decor magazine.? The color store gives a warm welcome to those who enter. When you enter the store, a well dressed salesperson welcomes you and takes you through the store. He educates you about the moods of various colors and their light requirements.

The store is very big and every section is designed as if it were a separate room. When you enter the store, you are offered to pick a softwood pencil of your choice. You can choose between orange, green, red, blue and purple. The color of the lights in a particular area changed according to the color tile you put your feet on. Page 32 of 131 What can you find at Colors? ? Shade Display Unit: National Institute of Design, Ahmedabad specially designed each of the 1000 unique shades for the Indian tastes. Each shade is present with a ready to use combination.

An extensive range of 1500 pastels and super pastels are arranged in a spectrum provided over 150 shade combinations. ? Interactive Computer System: There are several living room, bedroom and kitchen setups already fit in the software. The user has to select one color and the software will paint the walls with those colors. ? Corob Tatocolour Automatic Simultaneous Dispenser:It is used to get the tinting bases for the colors the customer has selected. ? Take Away Shade Strips: With suggestions about the appropriate lighting and furniture, these take away strips act as interior design guide for the user. Assistance: The color experts in Colors help the customers with tips on which paint to use depending on the surface and also the cheapest price possible for those paints. ? Timely delivery: Colors makes it a point to deliver the buyer’s choice of colors in the right quantity and time. ? Gyroshaker: 1/4/10/20 liter gyroshakers have been installed for paints mixing at the store. ? Experiencing the joy of painting: There is a space where a painter teaches the visitor how to paint different kinds of textures free of cost.

The painted canvas joins other such canvases on the wall dedicated to the visitors, who painted while they came to colors. ? Workshops: Colors conducts free workshops during weekends for all those who are interested in painting. ? Knowledge of colors: The color expert at Colors spends adequate time with each visitor. He shares his knowledge about colors, educates about the nature of different colors, how colors complement the furniture and light and mood of the room. ? Sample colors: Colors sells small bottles of Asian Paints’ shades for convenience of the users.

One leaves Colors with the thought that when he builds his own house, he will paint it with Asian Paints only. What more can a brand ask from a customer who spends 30 minutes in its store? Page 33 of 131 References: 1. Experiential Marketing as a Wundt( erful) Experience by Stephen Mapes 2007 2. Experiential Marketing by Bernd Schmitt. 3. Journal of Marketing theory and practice Volume 15, no. 3- Understanding the relationships between functional, symbolic, and experiential brand beliefs, Product experiential attributes, and product schema: Advertising trial interactions revisited.

By Ulrich R. Orth and Renata De Marchi. 4. Understanding retail experiences- the case for ethnography. International journal of market research volume 49. Issue 6. By Micheal John Healy, Michael Beverland, Harmen Oppelwal, Sean Sand,2007 About the Authors: *Dr. RamKishen Y Faculty of Marketing at K J Somaiya Institute of Management Studies and Research, Mumbai. E-mail: [email protected] com **Riddhi Shah Second year student pursuing MBA(University of Mumbai) from K. J. Somaiya Institute of Management Studies and Research, Mumbai.

E-mail: [email protected] com Page 34 of 131 Green Marketing in India –Way Ahead to Sustainability Artee Aggrawal*, Richa Chaudhary** and Dr. R. Gopal*** Abstract Indian market has a great challenge for the eco –responsible organization as it is not only one of the world’s largest consumption bases but also it is very price sensitive. Eco-responsible (Green) organizations have a tough task to optimize their product offering mix in such a way so that they can not only attract consumer towards them but also can have their products price competitive.

As India is one of the fastest growing economy therefore it has drawn attention of most of the global companies to set up their base in India to tap this lucrative market. As Indian market is still in evolving phase there is a huge potential to bring awareness for eco-friendly products. As India is world’s 2nd largest populated country the natural resources are already under tremendous pressure and therefore there is an urgent need to pay attention for a right balance between consumption with conservation of natural resources.

This paper discuss the role of different stakeholders in ? Go Green strategy’, the scope of green marketing in India, the challenges and opportunities for the eco-companies for marketing in Indian context. Introduction Today’s scenario of continuous change in lifestyles and demands of consumers has raised the concern of the organizations to tap the market with new strategies and environmental concern is a new mantra today to showcase their contribution for environmental awareness and corporate accountabilit