Shopping

Shopping

16

CONTENT

Abstract

Introduction

Literature Review

Methodology

Results

Conclusion and Recommendations

Bibliography

Appendix

ABSTRACT

This report will illustrates the reader with analysis and research done emphasized on the question of why Uzbek people like shopping for foods-products in supermarkets whereas Europeans prefer to shop in bazaars. In this report, the research group identifies the objectives and then research instrument is chosen in order to obtain the reliable data and clearly answer for the stated question.

There were chosen deductive approach in order to conduct the research, and survey strategy was chosen to obtain the necessary data. Also, convenience sampling method for questionnaires is used and the sample size was decided to be 50 respondents.

The result of the research illustrates that people in Uzbekistan purchase food in supermarkets, because it is considered that supermarkets offers high quality products and additionally other factors like the quality of variety of services offered by them impacts on their choice. While in Europe, according to secondary research, the reason of popularity of bazaars is affected by factors such as freshness of the food, cheaper prices compared to supermarkets and peoples perception to bazaars as exotic place to shop.

It is very important to determine the changes of people's behavior to shop in different countries for people who is willing to find the proper channel of distribution for their products in different regions.

INTRODUCTION

Research Question

The research conducted by various researchers demonstrated the tendency towards high popularity of bazaars in European countries and developing industry of supermarkets in Asian, and Uzbek region in particular regarding food markets. However, it did not clarify the reason why people in Uzbekistan are making a habit of buying imported fruits and vegetables in closed areas with special safety conditions while Europeans do opposite. Goal of this project is to investigate whether Uzbek consumers are consistent to their traditional way of shopping in bazaars or willing to explore the “new ways” of shopping in supermarkets. Moreover, it is essential to identify the factors influencing consumers' choice between supermarkets and bazaars as well as to find out the significance of both in the consumers' lives.

So, the research question of this project is why Uzbek people like shopping for foods-products in supermarkets whereas Europeans prefer to shop in bazaars.

Research Objectives

In order to answer the questions above, the following research objectives were set:

· To identify demographic characteristics of consumers shopping in supermarkets

· To determine the factors influencing consumer's way of shopping and the level of their satisfaction (prices, quality, services offered, etc in supermarkets and bazaars)

· To analyze the frequency of shopping in supermarkets and try to explore the seasonal effect on it

· To identify the factors providing high popularity of bazaars in European countries.

LITERATURE REVIEW

One of the most used retail outlets, nowadays known as supermarkets, was firstly originated in US with the main aim to provide high quality products in large assortment (Vasilyeva, 2003). In recent years supermarkets are becoming fast growing in developing countries such as Turkey, China, Turkmenistan (Sirtioglu, 2004, Gale, 2005, Zharan, 2005). However, rapid development of supermarkets greatly affects the traditional retail concepts known as Bazaars (markets). They were emerged as a result of caravan trade of ancient times, particularly Great Silk Road (Vasilyeva, 2003). Traditionally the main items of commerce in both bazaars and supermarkets are consumer goods and foods in particular.

In recent years different types of bazaars were opened throughout the Europe, for example Italian bazaar recently started its operations (Atlantic, 2007). As Kummer (2007) reports, this bazaar can be named as “supermarket of the future”, because it offers organic and fresh foods comparing to other markets in the country. The owner of Eataly bazaar Farinetti (2007) developed plan which helped to resolve transport logistics issues and by this cut down distance from farm to customers market. Moreover, prices of the goods offered to customer are below the prices compared to “gourmet boutiques” or other shops (Atlantic, 2007).

According to the research done by Poulsen and Sonne (2004), bazaars in the European countries are considered to be “new phenomenon” and perceived as exotic places where people can find non-traditional and hand-made products. The research was conducted in three European cities - Paris, London, Aarhus - and was aimed to analyse the influence of bazaars on the economy and the society of these cities. So, in Bazaar Vest located in Aarhus (the second largest city in Denmark) the customers are mainly immigrants who can find non-standard product, and the local government saw this place as one of the ways of economic support of immigrants and refugees. When visiting there, Danish people have “the impression that they are entering a foreign, and maybe, a Middle Eastern country” (Poulsen and Sonne, 2004).

Another fact, it is considered that bazaars in France are popular among only rich people who can afford high quality food for high prices (Vasilyeva, 2003). Nevertheless, Poulsen and Sonne (2004) have characterized the French bazaars as the place where separation takes place according to differences in nationalities, religions and social classes. Comparing bazaars and supermarkets, the researchers claim that “the variety and the freshness of the products, their high quality and the cheap prices combined with the availability of special products are important reasons for visiting and using the market” (Poulsen and Sonne, 2004).

Graham (cited in Poulsen and Sonne, 2004) explains the growing popularity of bazaars in London by changing in the wishes and desires of people, creative environment and different backgrounds. The main customers - students, families, and elderly people - are attracted by diversity of organic food that bazaars offer, history of the market, and by its function of place for meetings.

Considering eastern countries with developing economies, survey done by IFPRI (2003) illustrates, that nowadays they are experiencing rapid progress in supermarket development and also number of people who are willing to shop in them significantly rose. For instance, from 1999 and 2001, in China the percentage of sales in supermarkets increased to 2-3%. Moreover, Fritschel (2003) mentioned that by this day China has about 3000 supermarkets and it is predicted to increase this number by 5 to 10 times in next 5-7 years. Those newly opened supermarkets in east are mostly “chains from Europe and United States like well known Carrefour (France), Wal-Mart and others” (Fritschel, 2003). Gulati (cited in Fritschel, 2003) declared that the reason of opening branches of these well-known hypermarkets in developing countries is that the domestic market is already overfilled. Referring to Reardon (cited in Fritschel, 2003), the professor of international development and agribusiness/food industry at Michigan State University, “consumers are satisfied with the provided range of products, but this retail revolution poses serious risks for the developing-country farmers who have traditionally supplied the local street markets”. To these issue the general director of IFPRI, Joachin von Braun (2003) added:

“We need to look more comprehensively at the whole picture, whether the poor benefit or lose from supermarket expansion depends on their net benefits as consumers through prices, time costs, and food safety, on their access to markets as farmers, and on employment, skills, and wage effects in the whole value-added food chain.”

In support to these facts, many studies were conducted to research the impact of westernization in retail business of developing countries (PriceWaterhouseCoopers, 2005-2006). In Turkey it is claimed that supermarket business is experiencing real boom due to rise in disposable incomes of population. However, numbers are much lower then average European standards. Research found that the possible reasons for millennial popularity of bazaars in Turkey might be their “convenient locations and lower prices for products such as fresh fruits and vegetables” (PriceWaterhouseCoopers, 2005-2006).

Moreover, Vasilyeva (2003) states that it's become more difficult for bazaars and street markets to compete with supermarkets. The profit of supermarkets is generated not from the high prices set for their products but from the large volume of goods offered, their broad assortment, and high turnover. So, the share of supermarkets in Western Europe trade markets is approximately 80% and in Eastern Europe - 25-45% (Vasilyeva, 2003).

Considering Uzbekistan, Turdimov (2003) from the centre of economic investigation suggested that supermarkets are “western products on eastern ground”, where people get high quality service such as parking, place to eat, free bags for customers, and after-sales services. So, for the last 5 years popularity of supermarkets among consumers with mid- and high-income levels increased rapidly in Tashkent.

Despite, the popularity of supermarkets within Uzbek region, the major preferences are given to bazaars. Comparing these two types of markets, Turdimov (2003) says that supermarkets offer relatively high quality products but rather expensive than on bazaars. Moreover, according to Sairamtour (2006), eastern bazaars, like Uzbek ones, are considered to be the traditional pattern of eastern people.

A lot of research has been carried out to determine why in East people start shopping at malls and supermarkets while Westerners are rediscovering the beauty of shopping at bazaars. In most of the cases supermarkets are gaining popularity in East due to all but the same reasons why Bazaars are becoming popular in the West. The goal of the research group was to investigate what factors influence people to choose supermarkets in order to shop for food instead of traditional shopping in bazaars in Uzbekistan and the reason of popularity of bazaars in western cultures. Significant part of our research would consist of comparisons and contrast of Uzbek and European retail markets.

METHODOLOGY

In order to have accurate results, proper research methodology was designed. It is essential to choose appropriate research approach, strategy, sampling method and research instruments to find the most suitable answers to the objectives set.

As it could be inferred from the discussion of the research question, the inductive approach is the most applicable technique in this case. It means that basing on the collected data, a theory needed to be developed as a result of data analysis (Saunders, 2003). Wide variety of literature had been reviewed which, although not clearly, showed the difference between IAS 2 and NAS 4. Thus based on those ideas the hypothesis had to be developed. Then, by collecting and analyzing the all data (primary data and secondary), the theory would be proved or modified

The next stage was identifying the right research strategy (the way of collecting data) to answer the research question. One of the strategies related to the deductive approach was the survey strategy. This strategy implies the usage of multiple data collection methods such as questionnaires, structured observations and interviews in order to prove the expressed hypothesis (Saunders, 2003). So, considering the research objectives, the investigation of difference between two standards was conducted by using unstructured interviews and documentary analysis. The interviewees for this research were accountants and auditors of supermarket shopping behaviour of local consumers was conducted by using questionnaire (See Appendix). The respondents for this research were buyers in supermarkets. Approximately 50 people in supermarkets in random were asked to fill in questionnaires with clear instructions which were given in order to prevent research from errors. Because of the comparative idea of the research question about the trends in east and west, it was necessary to conduct both primary (collect data from local consumers about eastern tendency) and secondary (collect data from electronic and printed sources about western tendency) researches. The results, which were received from these researches, were needed to be examined by using the quantitative and qualitative analyses. These analyses then would show whether the hypothesis was proved or not.

Sampling

The research team decided to use one of the non-probability sampling techniques, which is known as convenience sampling. As in order to obtain qualitative information in the primary research, people in the supermarkets will be questioned at random. The use of this sampling technique allowed conducting the survey at a convenient time for the researcher and ease of obtaining the respondents. As the team conducted research in the supermarket, people will not be divided into specific sub-groups, instead they will be asked in random to fill in questionnaires. The size of sample is decided to be 50 respondents from people who shop in supermarkets of Tashkent and this number will represent the whole population.

Access and Ethics

One of the most important factors which influenced the process of conducting research and gathering necessary information is concerned with access (Saunders, 2003). In our case, in order to find out required data, people in supermarkets were asked to complete given questionnaires. However, the first obstacle for the group was physical access which was in most cases the potential respondents' willingness to answer to the questions because of no interest to the research topic. Moreover, people who came to shop could have lack of time to fill in questionnaires and there could be no trust to research team. In order to overcome the problems concerned with physical access, the research group used different approaches classified by Saunders (2003). Firstly, it was considered to use all existing contacts in supermarkets of Tashkent in order to get permission to conduct questionnaire in the supermarket area. Secondly, team tried to effectively communicate the objectives and purpose of the research and possible benefits to society in general to the consumers. Additionally, the use of right language and “friendly look” helped to get respondents to answer the questionnaire.

The group also took into account the ethical concerns of the research during the whole research project, so that unethical issues were excluded. As the group decided to gather information by asking people, at this stage of the research more ethical concerns were considered. For example, the individuality of each respondent was considered. The team had decided to make the survey anonymous as there was no need to know names of respondents. Also, it was tried to develop questions which included all possible option answers, so that discrimination was excluded to any kinds of groups.

RESULTS

Following results are obtained by using research instrument discussed above - questionnaires. Six questions were given in questionnaire for respondents, 5 of them are multiple choice questions and the last is open one (See Appendix).

Objective 1: To identify demographic characteristics of consumers shopping in supermarkets

In order to identify the demographic characteristics of the population who prefer shopping in supermarkets, the question on the belonging for the certain age groups was set. So, the graph below represents the relationship between age groups and the frequency of visiting supermarkets.

Graph 1

The graph presents the fact that the major part of respondents is people belonging to the age groups of 18-25 and 26-40 ages. That means that supermarkets are popular among people of these age groups.

Moreover, the hypothesis testing was conducted in order to identify whether there is a relationship between the age group and the popularity of supermarkets to shop in:

H0: there is no the relationship between age and frequency of shopping in supermarkets

H1: there is a relationship between age and frequency of shopping in supermarkets

So, the chi-test was implemented in order to prove or reject our hypothesis (see Appendix). The result is 0.876, which is showing that there is 87.6% of possibility that our sample was come from the population with no such a tendency. Since the result is higher than 0.05, the null hypothesis is not rejected. This means that there is no relationship between age of respondents and the frequency of visiting supermarkets.

Objective 2: To determine the factors influencing consumer's way of shopping and the level of their satisfaction (prices, quality, services offered, etc in supermarkets and bazaars)

Question 3 in the questionnaire indicates answers for this objective. Respondents were asked to rank factors in order of importance which affects their choice between supermarkets and bazaars. In this case, number 1 considered as the most important factor and gets the highest score, while 9 is the least vital and gets the lowest score. As a result the factor with the highest score figure considered to be the most important. It can be seen, from the graph that the most significant factor is the quality of the food (332 points) offered by supermarket. In the second place of order of significance is regarded the price (238 points). Other factors like location, range of products offered, income level, and time spent on shopping are less essential, but parking conditions offered by supermarket is not regarded as the influencing factor to the choice between supermarket and bazaar.

Graph 2

Question 4 gives information about the level of satisfaction with the main services offered by each supermarket in the city. The marks received for each service, then their average were found. According to graph below, the highest average mark was given to the physical factor (mark is 4.7), which includes convenience, cleanliness, music, conditioning, design of supermarket. Food quality also regarded as good, with the average 4.12, while other types of services such as the service quality, price and range of products were rated below 4 marks.

Graph 3

Question 6 was used to identify what makes consumers level of satisfaction to decrease, where open question is used. Answers given by respondents were put into 5 main categories:

· high prices

· small range of products

· untrained personnel providing service

· long queues

· others

Graph 4

Collected data is represented by the bar chart above, where it can be seen that the higher prices (44%) is the major cause of dissatisfaction of customers. While another main influences are limited assortment of products, long queues near cashier's desk, untrained and rude personnel who is not able to serve consumer. 16% of respondents answered that other factors like low quality of some national product, poor arrangement of products within supermarket, and no bargaining power as in bazaars can cause disappointment for customers.

Objective 3: To analyze the frequency of shopping in supermarkets and try to explore the seasonal effect on it.

To examine the objective, respondents were asked to answer where they shop for food in particular season during the year. Question 5 was designed to identify is there any seasonal effect on choice of customers. So according to data obtain, 85% of respondents shop in supermarkets in winter, 44% and 42% - in spring and autumn respectively, and only 26% of respondents purchase products in supermarkets in summer.

Objective 4: Identify the factors providing high popularity of bazaars in European countries

In order to identify what factors influence the growing popularity of bazaars in European countries, the secondary research was applied. So, according to the research done by Poulsen and Sonne (2004), the analysis of open markets was done in three cities of different countries:

Table 1

CONCLUSION AND RECOMMENDATIONS

The conducted research was intended to investigate the popularity of supermarkets in Uzbekistan and the opposite trend in Europe. All of the objectives stated above were achieved and explained in the results section. First of all, referring to question 1, it can be seen that the majority of respondents who usually shop in supermarkets are people between ages 18-25. However, it was found out by making chi test, that possibility that there is no relationship between the frequency of shopping in supermarkets and the age of respondents is 87%. This results that our hypothesis is proved.

The analysis of the objective 2 illustrates that the main factor which influence the choice of the respondent is founded as quality of product offered by supermarket, the perception of people that the supermarket offers high quality food compared to bazaars have great impact in this case. Additionally, respondents also think that the price and the quality of service are the significant factors which could differentiate supermarkets from bazaars, while parking conditions has almost no impact on consumers. Furthermore, team group has found out that the majority of respondents are mostly satisfied with physical factors (environment of supermarkets, cleanness, air-conditioning, music), while others answered that there is still organization which should be improved, especially with arrangement of products and long queues. Moreover, it was clarified that also personnel (shop assistants) are not trained well in order to help customers and sometimes they are rude with them. This type of small issues has great impact on the consumer's preference and decreases their dissatisfaction from purchased goods in supermarkets.

Furthermore the objective 3 was achieved which illustrates that there is seasonal effect on consumers choices to choose place for shopping. From the results, it is inferred that the supermarkets are at the pick of their popularity during the winter season.

The consideration of western situation, it can be inferred that the main factors influencing the increasing popularity of bazaars are freshness of the products, cheap prices, wide range of food-products and availability of exotic and special products. These factors cannot be applied to the supermarket features both in east and west. This trend in west comes from a change in the customers' wishes. Europeans now want something else other than big chain stores. That is why the experience of bazaars in the west is becoming more and more popular. However, the globalization and modernization, which are being introduced in the last year in the local area, plays a great role in the growing popularity of supermarkets in the east.

This conducted research and its results could be helpful for people who are willing to identify the profitable way of distribution channel to sell their products, because research illustrates the factors influencing the choice of shopping place. Moreover, by identifying the significance of different aspects of shopping for consumers, the owners of supermarkets are able to improve the service provided and attract and maintain new customers. Potential investors who are willing to open supermarkets also could use this obtained information for deciding weather their need to open it in Uzbekistan or diversify across the country in order to be more profitable.

Limitations of the project:

· The research covered small sample size, which can poorly represent the whole population.

· Respondents could answer the questions not properly by devoting less time and attention to the research questions.

· The misunderstanding of the context of the questions could occur.

· The research was done only in few supermarkets and only in Tashkent city, which could not represent the whole population of Uzbekistan.

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APPENDIX