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Consumer Behavior @ Airport Retail Outlets: Vineet Verma’s Consumer Research Dilemmas

CASE STUDY, CONSUMER BEHAVIOR
ET Cases, 13 pages

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Consumer Behavior@Airport Retail Outlets: Vineet Verma’s Consumer Research Dilemmas

 

On September 26th 2014, Mr.Vineet Verma (Vineet) was sipping his ‘filter coffee’ overseeing a multitude of passengers checking into several shops in Hyderabad International Airport (HIA). Vineet, a first-generation entrepreneur nurtured his ethnic food business (Andhra delicacies and savories), ‘Swagruha Foods’ (Annexure I) into a fairly successful business over the last 11 years having raked in `28 crore sales revenue in the recent financial year. The profit margins (because of centralized kitchen and other economies, etc.) were fairly commendable. It had been operating only in Hyderabad. As of September 2014, 16 stores were in operation. He had been toying, over the last 2 years, the idea of having his Swagruha foods outlet at Hyderabad International Airport. While the encouragement came from several quarters, he was not sure to go ahead as one of his confidante Rajesh Talwar ( Rajesh) advised him to undertake a research to find out the feasibility before committing his resources. Several questions crisscrossed his mind, for instance, would consumers buy ethnic food with relatively shorter shelf life? What would consumers prefer to buy at an airport? Where should the outlet be setup within HIA? What should be the ideal inventory? What should be the ideal product assortment? Rajesh presented him with the following information to enable him to take an appropriate decision.

Indian Airports

In India there are six categories of airports (Exhibit I) comprising of Customs, Civil Enclaves, Domestic, Future, International and Private. According to Airport Authority of India (AAI) there are total 114 airports, out of which 19 are International, 44 Domestic, 7 Customs, 6 Private, 33 Futuristic and 5 Civil Enclaves.1 The aviation sector in India, for long dominated by flag carrier (Air India & Indian Airlines) is now dominated by privately owned Full-Service Airlines (FSA) and Low-Cost Carriers (LCC).2 The private airlines have a share of 75% of the Indian domestic air traffic. The retailing customers at airports shop for various product categories, therefore, airports are striving hard to position themselves as hubs for commercial activity.3

 



  • 1 “All Airports”, Airports Authority of India, http://www.aai.aero/allAirports/airports.jsp
  • 2 Sunanda Bhattacharjee , et al., “Taking Off With Airport Retailing”, http://retailing360.com/index.aspx?Page=article&sectname=Magazines+-+Retail+Insight&sectid=15&contentid=20090905200910022116278122499e4b8, September 5th 2009
  • 3 Ibid.

Teaching Note Preview

Consumer Behavior@Airport Retail Outlets: Vineet Verma’s Consumer Research Dilemmas

 

Synopsis

The importance of consumer research in deciding the launch of an established product through its company outlet in the airport retail need hardly emphasized. When that research dynamics are defined by the exact location of the outlet inside the airport, greater convenience, product variety, customer value and best customer service rather than the entrepreneur’s gut feeling it becomes even more challenging. This case study enables a discussion on the type of consumer research a company should undertake in order to launch its product range at Hyderabad International Airport (HIA).

Given the unprecedented growth of the airport retail in India and its promising opportunities, Mr.Vineet Verma (Vineet), a first generation entrepreneur wanted to grab his fair share in the buzzling airport retail zone in India. Vineet was keen to launch his ethnic retail food brand Swagruha Foods at HIA. He was aware that some of the products and services sold are airport specific and it depended upon the passenger traffic as well as the geographic, demographic and economic specificity of the region where the airport is located. Vineet wanted to know if there mere takers for his ethnic brand? What would be the ideal location for his outlet to gain the maximum attention and traction? What would be the inventory (product mix)? What would be the ideal product assortment? This case study analyzes the role of quantitative consumer research in aiding the relevant business dilemmas.

Prerequisite Conceptual Understanding/Before the Classroom Discussion

Prerequisite Conceptual Understanding (PCU) material is the mandatory background material that would aid immensely in mapping the decision areas of this case study and bring a synthesis amongst the relevant concepts. The participants/students should be encouraged to read this material to benefit from the broader perspectives outlined in the case study.

The participants in this case study analysis and discussion were asked to read the following chapter from – Leon G. Schiffman, et al., Consumer Behavior, Pearson Publications, 10th Edition..............

Expected Learning Outcomes

The primary objective of this case study is to sensitize the participants to connect Vineet’s business dilemmas with Consumer Research process and especially encouraging them to see how research inputs can be used for taking appropriate business decisions. The case study helps in understanding the following:

  • • The role research objective plays in defining a robust consumer research process – In launching the established ethnic food outlet ‘Swagruha Foods’ in the Hyderabad International Airport
  • • Which research methodology (Qualitative or Quantitative) suits best for setting up a retail outlet?
  • • The type of airport consumer segmentation and which segment the Swagruha Foods brand should be targeted at?
  • • The ideal place, product mix, product assortment, preferred packaging material, branding, staff and size of the outlet of Swagruha Foods and the positioning of the outlet

 

Assignment Questions

I.

  • a. What is your analysis of the retailing potential in Indian airports? (Infer using data given in: Exhibits I to Exhibit V and Annexure I & Annexure II)
  • b. What’s your analysis of the product categories being sold in airports? (Infer using data given in: Exhibit VII (a) & Exhibit VII (b))
  • c. What is your analysis of airport consumer behavior (Infer using data given in: Exhibit VIII (a), Exhibit VIII (b) and Exhibit IX)

II........................

Case Analysis

The classroom discussion was carried out under four main sections as explained below. At the end of each section, the participants were able to arrive at the key insights from the discussion. The Board Plan [Exhibit (TN)-I], given at the end of this Teaching Note summarizes the orchestration of this case study in the classroom................

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Abstract


How can Consumer Research process be used to aid decision-making? How to connect the consumer research process with business dilemmas? Presented through, a first generation successful entrepreneur, Mr.Vineet Verma's (Vineet) dilemmas, this case study can be used very effectively to sensitize the participants/students to connect consumer research process with Vineet's business dilemmas.
While seemingly convinced by the retailing potential of his ethnic food retail outlet in Hyderabad International Airport (HIA), Vineet was unsure of the preferred business architecture –place, price points, packaging sizes and types, etc. Given the dynamics of the potential growth of air traffic in India, and increasing airport retailing in India, would an ethnic food retail outlet stand a fair chance of success? How to define the research objective and design the appropriate consumer research process to address Vineet's business dilemmas outlined in the case study? Which kind of research techniques Qualitative or Quantitative would be appropriate to take a decision?



Pedagogical Objectives

  • To identify the relevant and appropriate consumer research technique/tool with the given business requirement
  • To sensitize the criticality of defining a research objective and understanding its efficacy in resolving research dilemmas
  • To familiarize with designing an elaborate consumer research process to address business dilemmas



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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