QUESTION 1:

1) Changing behaviour of Indian consumer spending

a) People became more experimental and treated shopping as a therapy/entertainment.

b) There was a significant shift from traditional/conventional shopping behaviour to pleasure
driven habits like duplicate goods always had greater market share but now people are
looking for branded products and wants to experience their brand values.
c) Infrastructure development and international connectivity penetration to tier 2 and 3 cities
Exhibit 1
d) Middle class spending increased because of the availability of comfortable and pleasurable
retail experience
Exhibit 2 (globals, strivers, seekers, aspirers etc)
The globals are India's urban elite, with their new cars and frequent trips abroad.
Strivers and seekers are the middle class, with rising incomes and robust consuming
habits. Aspirers are those who seek to break into the middle class, but haven't made it yet. 
e) India was a young country whose median age was estimated at 26.7 years. By 2020, India
was set to become the world’s youngest country with 64 per cent of its population in the
working age group. Indians are optimistic about their job prospects and felt spending now
can be considered a good time
Exhibit 3

2) Growth of organised retail

a) Rapid growth of new retailing formats like shopping malls, supermarkets, hypermarkets etc
that offered a wide assortment of products and services from around the world. Estimated
forecasted growth was 14 to 18 percent by 2014/15 and would reach $3600 billion by 2020.
b) Marketers also forecasted that shopping for men’s fashion accessories was also increasing
and exciting. They tried figuring out specific trends associated with seasons and occasions
which might accelerate impulse buying among men, in both large and small towns.
c) Initially people didn’t bother much about the quality in accessory markets as they were
more concerned about colour, design etc. But now people are looking for branded fashion
accessories.

QUESTION 2:
Product assortment:

Addons Men included socks, ties, hats, caps, scarves, mufflers, cufflinks, wallets and handkerchiefs;

Addons Women offered costume jewellery, hair accessories, bags, purses, scarves, caps, hats,
sunglasses, footwear and hosiery.

 The collection for men was much greater than any pre-existing competitive brands
as compared to standalone stores and the local markets which consisted of options catering to
majorly female requirements, leaving out very few options for men.
  Their branded to unbranded ratio was almost opposite among the two stores catering to men
and women in Addons.
 The product range varied from punk to gothic to flowery and feminine. The store sold an
assortment similar to Accessorize. However, it also sold sterling silver and 14 carat gold-
plated jewelry, stuffed toys and its own perfume brand.
 Addons lacked choices of perfumes and luxury jewelry which was offered by Claire.
 Addons further lacked beach accessories, bridal accessories, stationary items and soft toys.

Target Customer:

 Standalone Stores: Majorly women which were did not further target any specific category of
women.
 Competing brands: (Neither covering men)
o Accessorize: Fashion conscious women who preferred universal and diverse appeal.
o Claire’s: Teen to young adults of 25 years.
 Addons:
o For Men: Young professionals
o For Women: 16-21 year old women

Store Presence, Retail Format, Store Size:

 Standalone:
o 100-500 sqft
o Some of the larger stores also existed.
o Type – Mom & Pop type, home establishments.
 Kiosks:
o 50-75 sqft
o 2*2 wooden stool used to sell artificial jewelry
o Busy street, Local or high fashion, or in a mall
 Competing brands:
o The store size was usually 1,500 to 3,000 square feet
o Franchised stores
o Majorly targeted presence in tier 1 cities.
o Majorly located in shopping malls and high fashion streets
o Good online presence

 Addons
o The retail chain had grown to 80 stores, including interesting forays into Tier II and
III cities
o If located in a mall, the store had an open layout with no doors, and in case it was on
a high street, there was a clear glass fascia

o Addons had also opted for this unique partnership, where it had a four foot by eight
foot counter in a large stand-alone, family-owned department store. This turned out
 to be a viable mode to reach the Tier II and Tier III customer who was not
habituated to shopping in a mall or on a high street.
o most of the SIS(Store in store) were located in Central, although the company had
signed a contract for setting up a similar SIS concept in Reliance Trends.
o For tier 1 and tier 2 cities, Addons decided to open the stores only in shopping malls
and high end streets
o Online presence with amazon and jabong

 Price Range:
o Standalone: 100-5000 Rupees
o Kiosks: 50-500 Rupees
o Competing Brands:
 Accesorize – 495-4500
 Claire’s – 199-2500
o Addons:
 Men: 699-4999
 Women: 99-3799

Special Services and Promotions:

 Competing Brands:

o Claire’s:

 Special Services: The shop featured a lot of carousels and had a boutique
layout that required the customer to go through various aisles to reach the
cash counter. Customers could try on different accessories in front of long
mirrors on different walls. Claire’s also offered a unique service: its staff
were trained to pierce ears with a Studex piercing gun.

 Promotion: The store ran continuous promotions such as buy-one-get-one-

free and half-priced products.

o Accesorize:

 Promotions: Merchants held regular mid-season and end-of-season sales

before they put fresh stock on display.

 Special services: The store made use of LED lighting, which was
strategically focused on the latest collections. The payment desk was in the
centre of the store, and there were three to four sales personnel in the
background who came forward only if the customer sought assistance.

o Standalone:

 Promotional activity: Loyalty discount or service for there regular clientele.

 There were no planned in-store promotions; instead, the retailer had

a flexible pricing policy where the customer with a larger billed
assortment (say, more than INR500) was able to get a 5 to 15 per
cent reduction on the total bill.
  Most stores had a counter and a set of chairs for the customer to sit
and look at the offers; there were also hand-held or wall-mounted
mirrors to facilitate customer trials. Most stores were traditional in
terms of an over-the-counter display of store offerings by the sales
personnel based on the consumer’s request.

 Special Services: Polishing Jewelry, Repairing bags and jewelry.

o Addons:

 Promotional Activity: The retailer did not have a formal communication

strategy and instead carried out a number of in-store promotions, sponsored
youth events and hosted occasional events with popular cafes, such as Café
Coffee Day. The in-store promotions varied depending on the time of year.

 Occasional end-of- season in-store promotions. Also do so for a line

that is not doing so well

 Whereas in (the buying) season, when the intent is more to

encourage the consumer to explore and convert into a full- priced
offering, we usually offer combo deals.

 Special Services:
 The retailers kept a record of the customers who shopped at their
stores and maintained a database in which the customer’s name,
gender and contact number were recorded. Any time there was a
promotion or a new line was introduced, the information was
immediately sent to all customers in the database.
 The store had overhead flexible lighting fixtures that could be
moved to focus on the latest offerings and created an intriguing
atmosphere.
 The display was a coordinated theme that showcased new offerings
or designs; occasionally, a collection that was at the back of the
store was given central space to generate interest.

QUESTION 3:

CONTEMPLATIVE BUYING

a) The first step is to recognize a need - What is the main motive for buying a product has to be
established.

b) Zero down on products/brands that suit the need.

c) Search for alternative solutions

d) Evaluation of alternatives

e) Purchase.

Contemplative buying is about researching the product(s). The whole layout of assessment of
various aspects around the product from features to price etc. Considering the alternatives and
weighing them with the chosen product and evaluating varied factors like finance, current need etc
and then going ahead and purchasing the product.
IMPULSIVE BUYING

a) Need for the product but the next step is purchase without any assessment / evaluation of
alternatives.
It depends on
1) Product availability
2) Advertisements
3) Sales/offers/discounts
4) Newer product range

External motivator for impulsive buying:

External factors of impulse buying

refer to marketing cues or stimuli
that are placed
and controlled by the marketer in
attempt to lure consumers into
purchase behavior
External factors of impulse buying
refer to marketing cues or stimuli
that are placed
and controlled by the marketer in
attempt to lure consumers into
purchase behavior
External factors of impulse buying
refer to marketing cues or stimuli
that are placed
and controlled by the marketer in
attempt to lure consumers into
purchase behavior
External factors of impulse buying
refer to marketing cues or stimuli
that are placed
and controlled by the marketer in
attempt to lure consumers into
purchase behavior
It refers to marketing cues or stimuli that are placed and controlled by the marketer in an attempt to
lure consumers into purchase behaviour. These motivators can be:

1. Promotional incentives
2. Aggressive marketing programs such as direct e-mail promotions, free shipping, gift idea
centres, suggested items and featured sales item pages
3. Advertisements

Internal motivator for impulsive buying:

It focuses directly on individual examining the internal cues and characteristics of the individual that
engages him in impulse-buying behavior. Such factors involve:

1. Consumer’s personality traits which determine the degree of their impulse-buying tendency
2. Emotional states
3. Demographic factors
4. Individual’s affective and cognitive state

B) EXTERNAL AND INTERNAL FACTORS OF IMPULSIVE BUYING:

EXTERNAL FACTORS:
The influence of in-store stimuli like product displays, shelf positions, packaging, product line and
price becomes more important for impulse buying than pre-planned purchase decisions. External
motivation factors of impulse purchase are specific stimuli associated with related variables and with
shopping environment.

a) Store Environment
1) Store Atmosphere
2) Salesperson
b) Product Characteristics
1) Product Category
2) Product Brand and Package
3) Product Distribution
c) Promotional Activities

INTERNAL FACTORS:
Internal factors of impulse buying are related to the different personality related which characterizes
an individual rather than the shopping environment. Internal factors denote the individual’s internal
cues and characteristics that make him/her engage in impulse buying.

a) Consumer Characteristic
1) Age
2) Gender
3) Mood
4) Perceived Risk
5) Materialism

QUESTION 4
Q4. Brand Loyalty or Store Loyalty

Brand loyalty refers to the commitment to repurchase a preferred product/service rather than any
competing brands. This results in greater market share, lower marketing costs & a premium price.

Consumer’s brand loyalty may drive them to switch stores instead of switching brands because
brand has low substitutability for consumers with high brand loyalty.

Store Loyalty

On the other hand, refers to consumer’s repurchasing products/services in the same store over time
because of his/her emotional commitment to the retail store. It’s positively related to the store
image, satisfaction & trust.

Addon should stick to Store Loyalty for Women because:

 An eminent trait of young people is that they are open to experimenting. They are more
likely to try out different brands and might not decide to stick with just one and Addons
offerings were mainly targeted towards young women of the age 16-21 who might be
comfortable with experimenting with different stores.
 Fashion Accessories attract little customer loyalty because of its impulse driven nature. This
impulsive urge to buy is fulfilled when the retail stores are well present & established.
Hence, investing more on stores makes more sense rather than building it as a brand.
  Also, for Indian accessory buyers, product quality is not as much a concern as variety, colour
and unique designs. Addon provided them with that well.
 Along with that Addon also provided competitive pricing to take care of the price sensitive
middle-class population which is now growing in numbers along with its purchasing power.
 Addon’s product styling, store design, visual merchandising and availability of high-fashion
accessories at competitive pricing under one roof ensured a good customer experience and
an outstanding customer service may not always be recognized with sales. But most
consumers remember great customer service and return to a specific store as a result.

 The number of in-store promotions, sponsored youth events, discounts, combo deals etc.,
worked for Addon to attract customers. The focus was more on in-store promotions than
on promoting Addon as a brand which can be continued.
 Most Addon stores are located in malls and high-fashion streets which itself gives trust to
people upon the quality maintained by a store even if it’s not a very well-known brand.
 Lastly, women have more capacity to spend time on shopping and enjoy its experience as
well. They purchase more often as well. These are the reasons why their loyalty does not
belong to one single brand but to discounts and offers.

Store loyalty can be encouraged and improved by maintaining overall low prices and offering regular
loyalty discounts, special offers or multi-buy deals. This will convince your regular customers that
you are still the cheapest merchant on the market. In this way it will prevent them from purchasing
their products elsewhere.

Addon should stick to Brand Loyalty for Men because:

Men, as shoppers take less time to make a purchasing decision, and generally like to stick to one
brand if they’re satisfied with it. They also purchase less often than women so they can have a
greater spending capacity. Hence, continuing with the brand loyalty for men seems like a good
option.

As long as your product quality and the level of service you provide remains the same, brand-loyal
customers will feel little need to check out the competition. In that sense, brand loyalty is less risky
and requires little effort to keep.

QUESTION 5:
ANSOFF MATRIX

 Market development
 Market penetration
 Product development
 Product penetration

Addons aim is to increase to a whooping 500 stores so they need to tackle all the above.

a) Market Development
1) Advertising and promotion of products
2) Education about product consumption.
b) Market Penetration
1) Geographical expansion
a) The company can expand into other markets through its previous experience, as well as
through partnerships and contracts with other agents and parties.
b) The company can also develop subsidiaries, as well as offer its products through franchising
as well as licensing.

c) Product development
  1)Research and development
a) To be able to develop new products, the company should have a focused interest and budget
sending allocated to new product research and development.

d) Product penetration
1) Acquiring personally owned retail to strengthen its presence.
a) One way of increasing product penetration is that the company directly manages and controls
sales operation through owned retail.
2) Diversification of portfolio