2007045

IMPACT OF ATMOSPHERICS ON QUALITY INFERENCES,
STORE IMAGE AND BUYING BEHAVIOUR FOR RETAIL

STORES IN INDIA
Mudra Institute of Communications, Ahmedabad
Submitted By
Satish Kumar Singh
2007 45A
PGPCM - II
(2007- 2009)
Post-Graduate Diploma in Management (Communications)
Dissertation Guide:
Dr. Hemant Trivedi
Faculty, MICA
1 © Copyright, Satish Kumar Singh, 2009

ACKOWLEDGEMENTS
I would like to express my gratitude to Dr. Hemant Trivedi (Head-Retail Academic Area, Mudra
Institute of Communications, Ahmedabad) for guiding me through my dissertation.
A note of thanks to the store managers of Levi's - C.G.Road & ISCON Mall(Ahmedabad),Levi's
- ANSAL Plaza & Connaught Place(New Delhi), Cafe Mocha - Defense Colony(New Delhi),
World of Titan - C.G.Road & ISCON Mall(Ahmedabad), World of Titan - Connaught Place &
Cross River Mall(New Delhi) for granting me the permission to conduct my research at their
respective stores.
I also thank the entire team at KIEC, MICA for their continuous support in helping find whatever
information I needed while making the proposal.
A special thanks to RCM (2008-2009) for providing me with inputs relevant to this thesis
gathered from your retail tours.
Lastly thanks to my family and friends for their constant support and encouragement in all my
endeavors.
5th march, 2009 Satish Kumar Singh

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
The Indian organized retail market is estimated at US$202.6 billion as of 2005 and is expected to
grow at a compounded 30% over the next five years. The retail sector in India is witnessing a
huge revamping exercise as traditional markets make way for newer formats such as
departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have
also sprouted in the metros and tier-II cities. Moreover, retail formats in India are almost
becoming standardized with the same merchandise all over. Retailers can no longer rely upon the
traditional means of competitive differentiation like lower prices, value for money, variety etc.
The key driver if this change is the individualistic, indulgence-happy and confident, Indian
consumer. Today the Indian consumer demands a much more personalized and interactive
shopping experience. There is a major shift in a consumer's cognizance from buying goods to
feeling good while buying and after. There has been an emergence of the ‘Recreational
shopper’ as opposed to the ‘Convenience or Economical shopper’.
Thus, keeping in tune with the changing retail scenario and the rising expectations of the Indian
consumer, retailers are forced to re-examine their core value proposition and how it is delivered
to customers. There is a need to create a total shopping experience to keep the Indian consumer
satisfied and make him/her a loyal customer. There is a need to move away from the ‘one size
fits all’ retail philosophy and create a unique shopping experience that sets you apart from the
competition. The store has, therefore, emerged as powerful and effective communication
medium. This is done by implementing effective store atmospherics. In today’s competitive retail
landscape where traditional marketing tools such as product, price, and promotion are fast
getting neutralized, store atmospherics is likely to play a growing role in offering a source of
differential advantage to the retailers.
This study deals with the observational study of the chosen retail outlets in two cities which
would entail an analysis of the ambient & design elements used in the retail store design. It also
aims to study consumers’ shopping trip characteristics and their perceptions about store

ambience and also understands the extent to which ambient and design elements of store
atmospherics impact consumer shopping experience and retail store image perceptions.

TABLE OF CONTENTS
Chapter
No. Topic Page No.
1. INTRODUCTION TO THE STUDY 7
2. LITERATURE REVIEW 11
Concept of Retail Atmospherics 12
S-O-R Model 14
Knowledge Gap & Rationale for Study 25
3. RESEARCH DESIGN 27
Research Objectives 28
Research Methodology 30
Sample Design 30
4. DATA PRESENTATION AND ANALYSIS 32
Observational Study of Stores 33
Shopping Trip Characteristics 39
Shoppers’ Perception of the Retail Store Image 41
5. FINDINGS, IMPLICATIONS AND CONCLUSIONS 51
6. LIMITATIONS 58
7. BIBLIOGRAPHY 60
8. APPENDIX (Guideline for Exploratory Research) 62

INTRODUCTION TO THE STUDY

INDIAN RETAIL INDUSTRY
The Retail industry is one of India’s largest industries, contributing around 10 % to the GDP and
accounting for over 8% of the employment in India. The Indian retail market is estimated at
US$202.6 billion as of 2005 and is expected to grow at a compounded 30% over the next five
years. The Retail scenario in India is fragmented with over 12 million outlets operating in the
country. Only 4% of these are more than 500 sq ft in size.
However with the organized retail segment growing at the rate of 25-30% per annum, revenues
from the sector are expected to triple from the current US$7.7 billion to US$24 billion by 2010.
Retailing in India covers diverse products such as apparels, consumer goods, and leisure.
Clothing, textile and fashion accessories constitute the largest pie with an estimated 41% share,
followed by Food and grocery with an estimated 18%.
India is now in the in the accelerated development stage of the Retail Lifecycle. This stage is
characterized by rapid growth and increasing competition. The retail sector in India is
witnessing a huge revamping exercise as traditional markets make way for newer formats such as
departmental stores, hypermarkets, supermarkets and specialty stores.
The following are the emerging trends in the dynamic and fast paced Indian retail landscape:
• Evolving store formats - Newer and more organized formats like department stores,
hypermarkets and supermarkets, especially in food and grocery retailing.
• The annual growth of department stores has been estimated at 24%, which is faster than
that of overall retail trade.
• Expansion of retail space - by the end of 2007, 358 malls are coming and north zone will
account for major chunk (39%) of the total malls.

• Massive investments in retail space expansion- Major players are making massive
investments in the booming retail sector. Prozone Enterprises (P) Ltd, a wholly owned
subsidiary of Provogue India, plans 50 Prozone shopping malls with an estimated
investment of US$1 billion spread over the next five years.
• Global competition anticipated- Potential international entrants like Wal-Mart, Carrefour,

Tesco, and Casino etc actively seeking franchise, cash and carry models in wholesale
markets, joint ventures and licensing agreements, to enter the Indian retail industry.
Moreover international lifestyle brands as well as luxury brands are planning their foray
into the Indian market.
• Customer centric approach - Given the changing psychographic profile and shopping
patterns of the Indian consumer, metros like Mumbai, Hyderabad, Bangalore and
Chennai may soon allow shopping malls and retail chains to operate their outlets till late
night. Moreover, Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu state
governments are also trying to amend the Shop & Establishment Act in their states to
facilitate this.
A variety of factors seem to influence the growth in the retailing industry. The Urban Indian
Consumer, however, is the most important factor driving the growth of the retail industry? The
Indian Consumer market represents a large market with a middle class of nearly 300 million. The
economy also boasts of a young population, coupled with rising salaries - twenty five percent of
the population is in the age group of 20 to 34 years. About 6 million households are estimated to
be in the annual income group of more than Rs215, 000 and another 75 million in the middle
income group of Rs 45,000- 215,000.
Apart from the demographics, there has also been a change in the psychographic profile of the
Indian consumer. The Indian consumer today is individualistic, indulgence - happy and
confident. According to AC Nielsen's latest Consumer Confidence Study published in January,
2006, 77% of consumers are optimistic about further economic improvement over the coming
year.
Recent studies also indicate a shift from the traditionally thrifty mindset. The new age consumers
are spendthrift and highly influenced by the West due to the onslaught of media, the internet, and
increasing number of overseas travel by Indians. Urban consumers are willing to shell out more
for an enhanced shopping experience. Today the Indian consumer demands a much more
personalized and interactive shopping experience. There is a major shift in a consumer's
cognizance from buying goods to feeling good while buying and after. There has been an
emergence of the ‘Recreational shopper’ as opposed to the ‘Convenience or Economical
shopper’.

LITERATURE REVIEW

CONCEPT OF RETAIL ATMOSPHERICS
Atmospherics refers to the design of an environment via visual communications, lighting,

colours, music and scent to stimulate customers' perceptual and emotional responses and
ultimately to affect their purchase behaviour (Levy & Weitz, 2003, p. 609).
Atmospherics is the process managers use to manipulate the physical retail or service
environment to create specific mood responses in shoppers.
A store's atmosphere affects the shopper's mood and willingness to visit and linger. It also
influences the consumer's judgments of the quality of the store and the store's image. Perhaps
more importantly, it is believed that a positive mood induced while in the store increases
satisfaction with the store, which can produce repeat visits and store loyalty. Kotler, among
others, has emphasized the effects of atmospherics on emotions. His approach links the study of
atmospherics directly to the experiential perspective on consumer behaviour. Kotler defines
atmospherics as the effort to design buying environments to produce specific emotional effects in
the buyer that enhance his purchase probability.
Specific attention is given to lighting, colour, materials used for flooring, walls and fixtures,
along with the way merchandise is displayed and stocked. Other elements employed in
developing specific atmospheric components may include music and aromas. Retailers use a
store's physical characteristics to develop an image and draw customers. Thus, they create an
"atmosphere" or the psychological feeling a customer gets when visiting a retailer.
The subject of retail atmospherics is drawn from the application of environmental psychology in
retailing. Atmospherics entails the following elements:
• Ambience Factors like lighting, music, odours, colours, cleanliness and also the touch
factor.
• Design Factors like fixtures, store displays, signage, window displays, store layout in
terms of entrance, exit, billing counter, floor, ceilings, space, aisles, dressing areas,
merchandise display, movement of traffic

• Social Factors like In store service levels, interactions with sales personnel etc
The above factors, in synergy, create a unique store atmosphere and are also capable of
influencing shopping behaviour through mediating emotional states and perceptions of
consumers.
The atmosphere of a retail store is vital and often determines whether customers are prepared to
spend longer browsing and shopping hours in the store (Kotler, 1974). Apart from physical
layout and design of the store, ambient cues such as music, lighting, colours and smells can be
used strategically to influence in-store shopping decisions and ultimately store patronage.
Linking shopping behaviour to environmental factors through changes in emotional states,
perceptions of shopping experience, and merchandise evaluation is a significant aspect that needs
to be tracked by all retailers. Moreover, an effort shall be made to understand how different store
environment cues together shape consumers' value perceptions and how those perceptions, in
turn, influence store patronage intentions. It also needs to be understood whether it is the design
cues (which are visual in nature or the ambient cues (which tend to affect the sub-conscious
more) that dominate the consumer’s store patronage decisions.
In retailing, as in any other business, it is crucial to identify consumer needs and motives when
shaping the retail strategy. Components such as price, promotion, advertising and retail format
are utterly important parts of the retail marketing mix. One of the greatest challenges, however,
is to understand what satisfies customers as well as how to satisfy them. Merely identifying
costumer needs and motives is not enough to reach success, this knowledge has to be utilized and
conceptualized into the retail context, the location where shopping takes place. The reason for
this is that the retail store is not merely a place where products are sold. It is an extension of
retail advertising and promotion and should therefore take into consideration customer needs and
motives for shopping.
Given this, it is legitimate to ask why a customer choose to purchase one product and not another
inside the store. It is a debated question whether the purchase decision is made inside or outside
the store. These questions encompass the domain of in-store shopping behaviour and purchase
decision making.

Consumer behaviour and attitudes determine the relationship to products and consumption.
There is a truism that consumer attitudes determine what products the consumer will buy.
However, if the purchase decision is made in the store on impulse, then to what extent do
consumer attitudes influence this decision?
In order to understand this overall shopping behaviour, a lot of research has been done on
consumers and how they are affected by the store atmosphere and store environment.
Following are some of the breakthrough research carried out in the past:
Stimulus - Organism - Response (S-O-R) Model

One of the most important pieces of research on store environments has been the Mehrabian –
Russell model which applies the aspects of environmental psychology to retail context.
Environmental psychologists (Mehrabian and Russell 1974; Mehrabian 1980 and Russell and
Pratt 1980) have presented a potentially valuable theoretical model for studying the effects of
store atmosphere on shopping behaviour using a Stimulus - Organism - Response (S-O-R)
paradigm offering a description of environments, intervening variables and behaviours relevant
to the retail setting.
An adequate S-O-R model has the following requisites:
• A stimulus taxonomy
• A set of intervening or mediating variables and;
• A taxonomy of responses
The Mehrabian - Russell model particularly focuses on the intervening variables and response
areas.
Response taxonomy:
Mehrabian and Russell postulate that all responses to an environment can be considered as
approach or avoidance behaviours. Approach and avoidance behaviours are considered to have
four aspects:
• A physical desire to stay in the (approach) or to get out of (avoid) the environment.
• A desire or willingness to look around and explore the environment (approach) versus a
tendency to avoid moving through or interacting with the store environment or tendency
to remain inanimate in the environment (avoidance).
• A desire or willingness to communicate with others in the environment (approach) as

opposed to tendency to avoid interaction with others or ignore communication attempts
from others (avoidance).
• A degree of enhancement (approach) or hindrance (avoidance) of performance and

satisfaction with task performances.
Emotional states as intervening variables:
The Mehrabian and Russell model proposed three emotional states that mediate approach -
avoidance behaviour in environmental situations. These emotional states indicated by the
acronym PAD are as follows:
• Pleasure - Displeasure- refers to the degree to which the person feels good, joyful, happy,
or satisfied in the situation.
• Arousal - Non arousal- refers to the degree to which a person feels excited, stimulated,
alert, or active in the situation.
• Dominance - Submissiveness- refers to the degree to the extent to which the individual
feels in control of, or free to act in, the situation.
The Mehrabian Russell model involves a conditional interaction between pleasure and arousal in
determining approach and avoidance. Pleasure and arousal are hypothesized to interact in such a
way that arousal amplifies approach behaviour in a pleasant environment and avoidance
behaviour in an unpleasant environment.

Stimulus factors:
The Mehrabian and Russell model takes general account of the stimulus factors and postulate
that the degree of arousal evoked by an environment is considered to be a direct function of the
information load of the situation. A heavy load environment (novel, surprising, crowded
situation) will make a person feel stimulated, excited and alert and thereby aroused whereas a
low load environment will evoke calmness, relaxation and even sleepiness.
Moreover an individual’s arousal response to a stimulus is also mediated by his/her characteristic

way of responding to external information. Mehrabian has classified individuals on the basis of
their extent of filtering incoming stimuli. ‘Screeners’ are more relatively more selective and
therefore screen out less relevant components of the environment. They tend to impose a
patterning on the complex environment and are less moved by novel stimuli. Non screeners, on
the other hand, are more sensitive to novel stimuli and stimulus variations.
Donovan and Rossiter Study

The study “Store atmosphere and purchasing behaviour” done by Donovan and Rossiter (1982)
also proposed that consumers experience in store environments in terms of two major emotional
dimensions: arousal and pleasantness. The two emotional reactions in turn influence consumer’s
hopping intentions within the store.
The practical implications of this study were that if the consumers rate the store as pleasant, then
their shopping enjoyment can be increased by raising the arousal level of the atmosphere by
playing upbeat music, or bright lighting etc. However, if the store cannot be made easily
pleasant, then arousal level should be kept low by subdued lighting, spaced displays and relaxing
music. Therefore, in a pleasant store, retailer should make an effort to increase the arousal level,
and try to tone the arousal level down in an unpleasant or neutral store. This optimum
combination of pleasantness and arousal in the store can stimulate shopping behaviour within the
store.
The other findings of their study were:

• There is a direct correlation between the time spent in the store and expenditure. More
time spent might lead to more expenditure.
• Pleasures induced by the atmospheric elements in the store might be the actual cause for
the consumer to spent more time and money than intended.
• Emotional factors might be responsible for the extra time spent in the store whereas
cognitive factors might drive the consumer for the impulse spending.
Both the research mentioned above had been conducted according to a conceptual model, known
as the M-R model, which embraces environmental stimuli and its effects on behaviour
(Mehrabian & Russell, 1974). They, however, do not take into consideration the dependence of
product purchase decisions and consumer buying behaviour upon the strategies of the retail
organizations along with their atmospheric elements.
But a study done by Turley and Chebat was a significant contribution to this area of store
atmospherics which exposed the dynamics of atmospherics, shopping behaviour and retail
strategy.
Linking Retail Strategy, Atmospherics and Shopping Behaviour

Most of the work in atmospherics has focused on consumer reactions to environments while the
strategic dimensions of this decision have largely been ignored. None of the prior research
carried out in this area took into account a global or macro view of retail atmosphere creation
and discuss how retail managers can use this tool strategically. Whereas the study done by
Turley and Chebat attempts to fill that void in the research by offering a comprehensive view of
the store environment as a strategic retail tool. It also addresses issues like aligning the store
design with corporate & marketing objectives, using atmospherics as a segmentation tool and
using atmospherics and retail design as a differential advantage.

Store Atmosphere as a Retail Strategy:
The following figure represents an approach which would allow the atmosphere to be integrated
into the strategic planning process.
This figure can be divided into three separate stages which are as follows:
• In the first stage, general retail strategies are developed which would encompass a
number of controllable variables including the retail atmosphere.
• In the second stage a specific atmospheric outcome is designed and eventually

implemented through store redesigns and in newly constructed stores.

• Finally, the model recognizes that these designs will have some very specific effects on
shopping behaviour and may raise some issues which impact on these consumer
behaviour effects.
Retail Strategy
Retail firms interact directly with consumers and rely on being able to furnish goods and services
which satisfy their needs and wants; therefore, retailers need to embrace a consumer orientation
when thinking strategically. The three elements associated with retail strategies; choosing a retail
format, targeting a specific group of consumers and arriving at a defensible competitive
advantage. In this context, choosing a retail format involves choosing from among a number of
operating and merchandising tactics while a competitive advantage is a superior or unique aspect
associated with the retailer which is capable of delivering need satisfaction to the intended target
market.
Atmospheric Design
Once the role of the environment in the strategic goals for the retailer has been identified, the
specific atmosphere can then be developed. This can be a difficult task since the retail
environment is exceedingly complex and is composed of a wide variety of variables and
elements. Moreover, implementing a chosen design in large stores/chains takes time, money and
a great deal of managerial attention. Also, implementing a redesign in an established chain can
be even more complex for retail executives to accomplish.
According to the study done by Turley and Milliman (2000), this complex environment can be
divided into five categories of atmospheric cues which are as follows:
• The exterior includes cues such as the building size and shape, the marquee, exterior
windows, parking availability and the surrounding area.
• The general interior includes atmospheric variables like lighting, music, interior colours,
ambient scents, temperature and general cleanliness of the store.

• Layout and design variables are comprised of variables such as merchandise groupings,
traffic flow and aisle placements, department locations, racks and fixtures, and
placements of cash registers.
• Point-of-purchase and decoration variables are composed of atmospheric elements like

point-of-purchase displays, signs and cards, product displays and interactive displays and
kiosks.
• Human variables in the environment include dimensions such as employee

characteristics, employee uniforms and retail crowding and density.
The elements associated with these five categories of the retail environment should be developed
coherently to accomplish the goals associated with a chosen retail strategy.
Outcome Issues and Shopping Behaviour
The final stage in this strategic view of the retail environment focuses on the outcome issues and
shopping behaviours. The atmosphere can influence a wide variety of attitudes and behaviours in
consumers which are as follows:
• Sales Effects - Turley and Milliman's (2000) review of experimental atmospheric and
servicescape studies noted that the link between atmosphere and sales is very strong and
robust. Several studies on environmentally related sales effects have focused on a wide
variety of atmospheric stimuli including music, product display and shelf space, in-store
signage, atmospheric colours, window displays and odours. Hence one can say that the
store environment has the capacity to influence purchasing behaviour of shoppers and a
different combination of elements of store atmospherics has a different impact on sales
and purchasing behaviour.
• Approach-Avoidance Behaviour - A study done by Donovan and Rossiter (1982),

which was an extension of Mehrabian and Russell's work into retail environments,
suggested that the effects of a store's atmosphere are manifested in emotional states
which are difficult to express verbally, are transient and may not always be fully recalled
when questioned later, and are likely to influence in-store behaviours more than store
choice decisions. Donovan and Rossiter's conceptualization of store atmosphere clearly
saw this as a tool which affected consumers emotionally and had the ability to influence
shopping behaviour at the point of sale. In addition, Mehrabian and Russell (1974) also
postulated that three emotional states mediated approach-avoidance behaviours: pleasure,
arousal and dominance which are often referred to as the PAD dimensions.
• Impact on Store Image - Retail image can be described as "the way a retailer is defined
in a shopper's mind, partly by its functional qualities and partly by an aura of
psychological attributes" (Martineau 1958, p. 47).The formation of store image is a
complex process which can be influenced by a number of variables and is not an easy
task for researchers to conceptualize. Store image is associated with a number of critical
behaviours and variables including store patronage, store loyalty, proportion of the
household budget spent at the store and the image of the brands carried in the store.
• Atmospherics as a Segmentation Tool - It has been earlier stated that retail

environments affect various groups of consumers differently. Although this issue has not
been formally addressed in more than a handful of studies, different researchers have
reached this same conclusion. According to a study done by Bitner (1992), consumers do
respond to retail store cognitively, emotionally and physiologically. Moreover he also
argued that segmentation variables, such as age and gender, may influence reactions to,
and perceptions of, a retail atmosphere.
For example, Gulas and Schewe (1994) found age-linked effects between in-store music
and shopping behaviour. They reported that baby boomers purchased at significantly
higher rates when classic rock was played inside the store and that this type of music had
a negative effect on older consumers.
• Uniformity Issues - One of the most basic atmospheric problems many chains face is
deciding how uniform their store designs should be. Some chains opt for building
prototype designs, i.e. stores which are virtual carbon copies of each other. These types of
store designs tend to be developed centrally and local store managers are expected to
rigidly follow the designs and displays which have been centrally adopted for the chain.
In some of these chains store managers are sent detailed step-by-step instructions of what
the display should look. The thinking behind this approach is that these types of rigid

environments are likely to yield more consistent perceptions and expectations of the
store.
Disadvantages of this approach include high costs during periods when chain-wide store
redesigns occur, the inability to capitalize on local themes, and centralized planners who
are distant from final consumers and may not fully understand their tastes and
preferences.
On the other hand some stores decentralize store design and allow for a variety of
atmospheres to be created by local store personnel. In some cases these designs are
"localized" and feature images and decorations which are indigenous to that particular
community or region. This approach may also recognize that, in some contexts and
situations, regional subcultures may mediate perceptions of a prototype design and yield
different perceptions to the same design.
Disadvantages of this approach include the possibility of very diverse images and general
attractiveness of outlets as well as the fact that store image is being constructed by a wide
variety of differently trained personnel. Because of the problems associated with the
possibility of widely discrepant images for outlets in the same chain, this option appears
to have become less popular in recent years.
And, some retail organizations use a blended approach. In these chains every store has
some similarities, perhaps in marquees, promotional signage material and colours, but
also leaves room for variations in design where needed. This approach tries to combine
the advantages of both the prototype and decentralized designs while minimizing their
disadvantages. The extent to which this model works is obviously dictated by what
degree of standardization is required and what types of variations are allowed. Many
chains have been forced into this option due to the lack of uniformity in size and shape of
spaces available in many shopping centres.
• Implementing an Environmental Design - An issue that is strongly related to

atmospheric uniformity concerns implementing a chosen plan for a chain's atmospheric
design. Obviously this becomes a more problematic issue as the number of stores in a
chain increases and the geographic coverage of that chain increases. Ideally the first step
is to conduct an atmospheric audit. An atmospheric audit involves an in-depth and
systematic examination and evaluation of the retail selling environment. An atmospheric
audit consists of recording and evaluating each variable in a retail environment. The
auditor ideally evaluates each element or variable in the environment to see if, as a
whole, this atmospheric design is consistent, effective and has the potential to positively
influence the customer's image of the store. The objective of the atmospheric audit is to
determine whether the retail environment is communicating the desired message about a
retail organization to its customers or not.
It is vitally important that retailers conduct atmospheric audits on a regular basis (Turley
2000). The retail business is constantly changing and new design trends emerge as
consumers embrace some changes and reject others. New merchandise also sometimes
requires changes in merchandise arrangements and layouts, and is sometimes
accompanied by new point-of-purchase display material. Also, because of the high traffic
in many retail stores, stores periodically can become "shop-worn" and appear tired to
consumers. Because retail managers are constantly in these stores they may not see them
objectively and in the same way that consumers do. An atmospheric audit helps retail
management take a critical look at this aspect of their business. After conducting the
audit, retail executives must then decide if a redesign of the store is needed, how much
change is needed, and if all stores in the chain will adopt uniform or prototype designs.
One of the most troublesome implementation issues facing stores seeking a new
atmospheric design is agreeing internally on what that plan should be. There are almost
endless possibilities for themes and designs and choosing just one can be a very difficult
decision for upper management to make (Turley 2000). Many large chains bring in
outside designers to help make these decisions rather than forming internal committees
and tasking them with finding the right blend of themes and atmospheric variables.
Smaller stores and chains, however, often must make these decisions on their own
(Turley 2000).
The second implementation stage entails taking a design "off the drawing boards" and
actually into the field. This whole issue of transferring an idea from paper into a physical
reality becomes even more complicated when store sizes vary and when some degree of
decentralization in a design is allowed by a chain. Implementing a decentralized design
has increased risks since a mistake at the local level requires modifying the new look
after implementation, which makes the whole process more expensive and time
consuming than it already needs to be.
• The Impact of the Environment on Employees - Although a lot of research carried out
in the past focused on the impact of store atmosphere on customer shopping behaviour,
the atmosphere also influences the way employees function and behave. Both employees
and customers respond to marketing environments cognitively, emotionally and
physiologically and those responses guide their behaviours in the store (Bitner 1992).
According to Dube, Chebat and Morin (1995), an environment meant to elicit particular
behaviour from consumers during a relatively short stay may have very different effects
on store personnel who are spending much longer time periods in the store. One former
executive for a major shoe retailer indicated to one of the authors that one of the biggest
sources of complaints made by store personnel in this chain was over the music played in
the store. The chain was attempting to create an atmospheric image that included using
mostly 195O's rock classics while most store personnel were of an age where this music
had no relevance to them, and they found the continual exposure to it irritating.
• Shopping as "Entertainment" - Although not present in any prior research or academic

literature associated with retail atmospherics, modern consumers often expect shopping
to be more than simply the purchase of products. They are no longer “Convenience or
Economic” shoppers. For many consumers, shopping is an experience which should be a
"fun" activity. These consumers seek excitement and arousal from the environment of a
retail store and tend to spend more money in these types of environments.
Atmospheric elements which can be used to entertain consumers include music, in-store
televisions, interactive displays and kiosks, live performances by a variety of artists,
product use demonstrations and seminars and in-store restaurants. Most of these attempts
at entertaining customers recognize that keeping shoppers in stores longer is likely to
result in increased browsing behaviour, which in turn is likely to cause increased impulse
purchasing. Also, keeping customers in one's store longer may also decrease the time

available to shop in a competitor's store making this a good defensive weapon for
retailers.
• A Differential Advantage against E-tailors - Although the long-term impact of the

Internet on retailing is still not clear, at least some consumers appear to be willing to shop
for a wide variety of merchandise on the Web. Even though shopping on the Internet
provides consumers with a number of advantages, there are also some weaknesses
associated with this medium. One of the most glaring disadvantages is that a website can
not completely surround the product, or the fill up the consumer's senses, the way an
atmosphere can when a consumer is physically inside a store. Reaction to the
environment is a strong influence on consumers' perceptions of the quality of the
merchandise in the store which may provide an advantage to retailers that operate
traditional brick-and-mortar stores.
KNOWLEDGE GAP & RATIONALE OF THE STUDY
As of now most of the published research on atmospherics has adopted a consumer rather than
managerial perspective which leaves a lot of scope for managerial and strategic issues to be
addressed in future research. The existing research articles strongly suggest that a retail
environment is very complex and that minor changes in the retail atmosphere can trigger
different behaviours from consumers. However, at present we do not know which atmospheric
elements are the most salient for consumers when forming impressions and perceptions of a
retail store and its merchandise quality.
Hence this study is aimed at understanding the level of individual impact of all the elements of
store atmosphere on quality perception, store image and buying behaviour. Questions like
“Which atmospheric elements do they use to decide whether a store is acceptable, appropriate
and inviting?”, “Is the music played in the store more or less important than the colour scheme
and layout design?”, “Or, do consumers make this decision based upon a holistic or macro
interpretation of the environment?” etc would be addressed in this study.
The findings/result of this study could be of immense help to the retail managers in
understanding how consumers process a retail environment and its elements make their
perception about the quality of the in store merchandise, store image and their buying behaviour
in that environment.

RESEARCH DESIGN

RESEARCH OBJECTIVES
The three primary objectives of this study are to:
1. Observational study of the retail stores so as to analyse the usage & importance of
ambient & design elements needed for an efficient store design.
2. Study consumers’ shopping trip characteristics and their perceptions about store
ambience.
3. Understand the extent to which ambient and design elements of store atmospherics
impact consumer shopping experience and retail store image perceptions.
The following information areas were explored in the study towards the above mentioned
objectives:
Shopping trip characteristics and ambience perceptions
• Stores that would be visited by them
• Reason for store visit
• Frequency of store visit
• Their recall of the store design and ambience
• Merchandise perceptions
• Planned or impulse purchase made
Impact of Design and Ambient cues on in store buying decisions:
Design factors
• Store display
• Window display

• Merchandise display
• Decor
Ambience factors
• Lighting
• Colour
• Music
• Scent
Perception of retail store image based on atmospheric elements and merchandise quality.

RESEARCH METHODOLOGY
1) Observational study will be done to study how stand-alone outlet and an outlet in a shopping
mall (for the same brand) use atmospheric elements (ambient & design) in their store design.
2) Qualitative Exploratory Research will be carried out to gauge consumers’:
o Shopping trip characteristics
o Perceptions and attitude towards ambience
This research will be conducted using the in-depth interview technique on consumers upon
their exit from the store.
SAMPLE DESIGN
Sample Universe: People who visit the retail stores.
Sampling frame:
Research will be done for three brands in three different product categories across two retail
formats which are as follows:
• RETAIL FORMAT 1: Stand-alone retail store for a brand and
• RETAIL FORMAT 2: Retail store present in a shopping mall
Following is the sampling grid having the product categories, retail formats, brands under study
and the cities in which the research will be conducted.

PRODUCT BRAND RF1 RF2
CATEGORY
APPARELS & LEVI’S LEVI’S SHOWROOM,C.G LEVI’S OUTLET,ISCON

ACCESSORIES ROAD,AHMEDABAD MALL,AHMEDABAD
LEVI’S LEVI’S OUTLET,ANSAL

SHOWROOM,CONNAUGHT PLAZA,NEW DELHI
PLACE, NEW DELHI
WATCHES & WORLD OF WORLD OF TITAN,C.G WORLD OF TITAN, ISCON

SUNGLASSES TITAN ROAD,AHMEDABAD MALL,AHMEDABAD
WORLD OF TITAN, WORLD OF TITAN, CROSS RIVER

CONNAUGHT PLACE,NEW MALL,SHAHDRA,NEW DELHI
DELHI
COFFEE/REST MOCHA – MOCHA, OPPOSITE

O- BARS Coffee & IIM,AHMEDABAD NOT PRESENT IN ANY MALL
Conversations
MOCHA,DEFENCE
COLONY,NEW DELHI
Sampling technique: Convenience Sampling
Sample size: 60
Sampling Unit: Individual
Scope: Ahmedabad and New Delhi.

DATA PRESENTATION AND ANALYSIS

OBSERVATIONAL STUDY OF STORES
The study was carried out in Ahmedabad and New Delhi by observing the Visual Merchandizing
& Store Planning practices for three Retail stores.
NAME OF STORE WORLD OF TITAN LEVI’S CAFE MOCHA
TYPE Multi-Branded store Single-Branded store Single-Branded store
PRODUCT Watches & Apparels &

Food & Beverages
CATEGORY Sunglasses Accessories
LOCATION Delhi & Ahmedabad Delhi & Ahmedabad Delhi
No display window is
Glazed windows with
DISPLAY Opaque towards the used as such. Usually
mannequin displays
WINDOWS roadside acrylics are used on
and offbeat visuals.
the doors & windows.
Glazed glass door

Glazed glass door entrance with offbeat
Usually painted
entrance with design. E.g. use of
ENTRANCE wooden door entrance
Company LOGO on rivets on the door of
with an earthy touch.
it. Levi’s store, New
Delhi
Contrast lighting with Mid-tones yellow

Bright lighting for bright & mid-tones of lighting along with
LIGHTING
easier browsing yellow and milky the use of red & blue
white lights. decorative lights.
Story cards, Danglers,

POP etc during special Not much used. Not much used
occasions.

Eye-catchy signage in No distinct signage
SIGNAGE Distinct Logo
white & red colour. used.
Average interiors with Earthy tones & pastel

Very suitable to the
designer fixtures & shades possibly used
INTERIORS product category &
fittings used in all the interiors.
the Brand
throughout. Very relaxing & cosy.
Instrumental &
Usually soft rock & soothing music.
MUSIC Mostly Instrumental
hip-hop. Personal requests are
also catered.
Regulated & varied

Regulated Regulated Air-
TEMPERATURE temperature at
temperature conditioning
different floors.
Woody & Earthy

ODOUR Not very noticeable. Fresh & Woody fragrance with aroma
of Coffee
FIXTURES & 3-Dimensional and Antique & classy

Contemporary
FITTINGS trendy. setting.
VISUAL REPRESENTATION – Specific to World of Titan stand-alone store
The following are some of the snapshots which illustrate the interior & exterior design elements
of the World of Titan store in New Delhi.

Marquees
Display Windows
External Display Internal Display
Entrance

Store Plano gram
POP
Visuals

DEMOGRAPHIC PROFILE OF RESPONDENTS
The distribution of the respondents across the selected retail outlets are as follows:

The distribution of shoppers across gender & age group and are as follows:
GENDER
37%
FEMALE
MALE
63%

SHOPPING TRIP CHARACTERISTICS
The following section deals with the analysis of all the respondents’ responses that indicates their
shopping trip characteristics and gives an insight about their perception of the shopping
environment and store ambience. The key points are as follows:

• Most of the respondents love to shop. Around 80% of the respondents prefer to be
accompanied while shopping. The most preferred company to visit retail outlets are
friends and family. This also depends on the kind of shopping outlet in question. For
instance, a visit to Cafe Mocha & Levi’s outlets are usually accompanied by friends and
partners while in case of World of Titan stores, most of the respondents preferred family
as the companion. For Levi’s outlets, a handful of women shoppers preferred shopping
alone, the reason being either personal choice or surprise shopping for their loved ones.
Moreover, the choice of shopping partner also changes with age. Younger shoppers
prefer going out with friends while the older shoppers either alone or with members of
their family- spouse and children.
• Around 70% of the respondents prefer shopping on weekends because of their free
schedule. Rest of them prefer shopping on weekdays due to the fact that retail outlets &
shopping malls are flocked by a lot of shoppers during weekends which poses a lot of
congestion issues and hence wastage of time in terms of trials and billing. Similarly
around 83% of the respondents prefer to shop during evening-night as compared to the
rest who mostly prefer window shopping or shopping during the daytime because of the
less crowded density within the retail outlets.
• Most of the respondents prefer to visit a shopping destination in a location that is

convenient for them- either close to work, home or college, or in the vicinity of other
shopping areas. Convenience of location is of higher priority to the older age groups of
26-35 years and 35+ years. This is probably because the older consumer has several other
engagements to cater to such as work, home and children. In terms of choosing the retail
format for shopping, most of the respondents prefer shopping malls or multi-branded
outlets. A noteworthy comment from one of the respondent’s is as follows: “When I need
to check out a lot of brands/shops for a particular thing then Malls are better. But if I

know exactly what I want or need to check out the collection of one of my regular
shops then stand-alone shops are good.”
• Almost majority of the respondents across all age groups have visited the
respective outlet before. Most respondents across all age groups have visited the outlet at
least 5-8 times. This indicates that today most consumers look at shopping as a
recreational and entertaining activity rather than just a necessity. People visit outlets not
only when they have to purchase something, but also to check out new merchandise and
sales or just to window shop too. Especially the younger age group of 18-25 years are an
adventurous lot and are willing to try out new shopping destinations with friends to get a
better bargain or simply to check out new stores with promotional schemes and catchy
merchandise.
• Most of the respondents consider the image of the brand/retail outlet to be of utmost
importance as it affects their purchase behaviour. Especially the younger age group of 18-
25 years are very cautious of the brands & labels consumed by them because it gives
them self-confidence & social status. The younger shoppers also emphasised the need for
a proper store design in terms of ambient & design elements like music, odour,
merchandise display and the interiors of the store. They think that people buy what they
see. According to older respondent in the age group of 35+, quality of merchandise is the
appealing factor which drives their shopping behaviour. They also believe that service
level and the quality of store personnel has a direct bearing on the store’s image and
hence on its sales. And very few respondents are driven by factors like loyalty programs
in their shopping quest.
SHOPPERS’ PERCEPTION OF THE RETAIL STORE IMAGE

The following are the findings for each outlet against some of the crucial parameters such as
ambient elements, design elements, merchandise quality inferences along with their positive &
negative features of the above mentioned atmospheric elements :
LEVI’S (Ahmedabad & New Delhi)
Most of the respondents had already visited Levi's store under study. Around 60% of them had
visited the store for more than 5 times. A handful of them were unable to put a specific no. to it.
This shows that they are aware of the presence of the outlet and their loyalty towards visiting the
same outlet in spite of the presence of Levi's outlet in possibly every Shopping Mall.
Around 35% of respondents used their private vehicle for visiting the road-side Levi's store
while the rest used their private vehicles. The stand-alone Levi's stores in Delhi and Ahmedabad
have parking issues as compared to their counterparts present in Shopping Malls.
Store Ambience:
Most of the shoppers perceived the in store lighting to be of average level. Following is one of
the respondent's responses: "Lighting here is just fine, may be a little dim in some corners, but I
think it goes with the ambience of the store." In terms of music played within the store, most of
them liked the tune & genre played but demanded the volume to be increased. Most of the
shoppers in the age group of 35+ couldn't comment on the music being played within the store.
Almost all the respondents felt a distinct fresh smell within the store. Younger shoppers felt the
need for a stronger air-conditioning while the older shoppers were too satisfied with the
regulated temperature of the store. Around 80% of the respondents remember the colour schema
of Levi's store. Following is one of the comments:"The colour scheme is very distinctly Red.
Even the Couches, the floor mats, the trail rooms, everything is Red in colour."Stand-alone
Levi's stores are generally multi-floored and are well cleaned & maintained throughout.

Store Design:
Many respondents felt that since Levi's stores are generally located at prime shopping locations,
hence parking becomes a major problem. Levi's customers usually get very attracted to the
window and in-store displays .One of the respondent's comment: "The window display is very
eye catching. I am sure that every individual passing by the store looks at it once because the
entire exterior is made of Red Glass. The window display is also pretty. The in-store display is
also neat and easy to look at. Most things are put up on hangers, with the denims mostly
stacked. There is a different section for National and International Collection. They have
segregated the National and International Collection. The tops, shirts are hanging (most of
them) while majority of the denims are stacked up. There is a whole aisle of footwear. Also if I
remember correctly then the ground floor is for Guys while the Top Floor is for Girls There
are comfortable couches within the store, with a table et al. It is all very fancy and classy
looking."
Around 70% of the respondents noticed the signage and thought of it as a prominent feature of
store recall. Almost every respondent felt that the store layout is appropriate and allows the
shopper to browse and shop in a hassle-free manner. According to younger respondents, the trail
rooms are one of the best parts of the entire store because they are designed very well keeping
the entire look & feel of the store in mind. One of the Delhi respondent's commented the
following: "They are very spacious which is a rare thing. Also quite a few in number. In fact
the trail rooms are different for both the national and international collection. The
international ones are more grand, classy and bigger. They are made of red velvet and have an
exquisite mirror inside."
But Levi's respondents were unhappy with the billing counter because of the fact that it is
generally small in size, less in no. and somewhat hidden by the store interiors.
Merchandise Quality Inferences:

More than half of the respondents seemed to be satisfied with the stock availability in Levi's
store. Following is one of the key comments:"Some denims that were being advertised by their
brand ambassador Akshay Kumar were not in stock. Some were yet to be launched while some
had gotten over."But most of them raised their concern about the variety in merchandise
especially in terms of denim sizes & colour. The younger respondents perceived the Levi's
products to be value for money, whereas the older respondents felt the pricing of the products to
be over-priced. One respondent said "The price of Levis denims is not exactly cheap, but they
have been selling at around the same price point for some time now. Also, they have some
exclusive collections launched once in a while that are highly priced than the regular ones.
The international Stock is quite expensive and I don’t see too many people buying that."
Though almost everyone was satisfied with the quality of merchandise and the environmental
friendly paper-bags, many of them complained about the lack of sales promotion initiatives and
loyalty program. One of the key comments:"There are sales that take place, like end of season
and all. They give certain percent off either on individual pieces or sometimes on the number
of pieces you pick up. But overall it never seems to be too attractive for me to check out the
store. I don’t think they have any loyalty program or so. Do they have one?"
Other Key Comments:
Following are some of the noteworthy comments on the positives & negatives of the store’s
ambient and design elements:
Interviewer: What are the plus points of the store’s ambience?
Delhi Respondent (Levi's, Connaught Place): "The look and the feel of the place are very
good. As I said it gives the feeling of grandeur. Red as a colour is very bright, so the store looks
full of life. There are comfortable, big, classy looking couches, with a fur floor mat at places.
This adds to the ambience of the place. Kept a lot of free space, so nothing looks cluttered."
Interviewer: What are the plus points of the store’s design?

Ahmedabad Respondent (Levi's, C.G Road): "The store design is such that it is convenient
and easy for a shopper to locate what is where, so minimum help is needed on that regard. It has
clear segregation of shirts and denims, ladies and men, shoes, etc."
Interviewer: What are the negative points of the store’s design?
Delhi Respondent (Levi's, Connaught Place):"No negative point as such. May be sometimes
walking around the place can get irritating and tiring because the store is very big."
Cafe Mocha (New Delhi)
Most of the Mocha respondents belonged to the age group of 18-25 and had been to the outlet on
several occasions. Around 37% of them had visited the store for more than 15-20 times. Even the
rest of them had visited the outlet multiple times but couldn't exactly remember the frequency.
Most of them used to visit the outlet just after college or work. Around 60% of the respondents
took public transport to reach the place. This is primarily because of the fact that younger
shoppers did not own any vehicle.
Around 15% of respondents used their private vehicle for visiting the outlet and were very happy
with the valet parking offered by the retailer. Only 10% of the respondents could notice the
window display. Rest of them felt that there wasn't any specific window display in the store. One
of the respondent commented:"No! I did not notice any window display. I cannot see any
windows. But what I noticed is that there is a doorman. Since most Mocha outlets have an
open area and the closed, AC area, hence the door is always open...the guy is there just for
security reasons I guess."
Another respondent’s comment: “When I first walked into Mocha, I realized the chilled out
relaxed feel to the entire place. Every person/ group present has mostly come to while away
their time, barring a few who are there for specifics, like a small meeting, a quick coffee, etc.
People like to sit for a long time, talking to friends, smoking Hukka.”

Store Ambience:
Around 75% respondents found the in-store lighting to be perfect and complementary to the
store's image and offerings. One of them said: "There is only coloured lighting in the store if I
remember correctly. Outside area is of course naturally lit, while during the night, both inside
and outside areas have some beautiful coloured lamps that are lit." The shoppers in the age
group of 25-35 & 35+ loved the in-store music because of its genre and volume. Following is
one of the comments: "I love the music at Mocha. They always play instrumental music such
as Buddha Bar and similar kind of music.... I guess this kind of music definitely adds to the
relaxed feel of the place."
While commenting on the in-store odour, only younger respondents could respond to it clearly
and most of them felt it to be woody and fresh. One of the key comments: "The only smell I can
remember is that of different types of flavoured Hukka, and yes, sometimes even the fresh
smell of coffee! And the mix of all these makes the overall setting so intoxicating."
Many younger respondents in the age group of 18-25 years were unhappy with the Mocha's
varied temperature at different floors. Most of them who were smokers felt that all the floors
where Sheesha is served should also be strongly air-conditioned as compared to the non-smoking
floors. One respondent commented on the colour schema & cleanliness:"The colour scheme is
quite brown I think. It has a very bohemian yet an oriental look to it. The place has more or
less wooden furniture, hence the colour brown. And as far as cleanliness is concerned, there is
a decent level of cleanliness maintained. No particular dirty area as such. May be they can
maintain better cleanliness in the washrooms."
Store Design
Most of the respondents felt the outlet's parking space to be ample enough to park their vehicles
without any hassles. Moreover the valet parking offered by the outlet was highly appreciated by
everyone. One respondent said: "The two Mochas that I generally go to, have valet parking. So
wherever they are located it is not too much of a parking problem." When asked to comment on
Window Display, In-store display & Merchandise display, most of the respondents could not

give a clear response and rather felt that they noticed the ambience of the store more than the
interior design. But around 75% of them noticed the in-store furniture/fixtures and found it to be
very appealing and suitable to the brand. One of the comment's: "Furniture is mostly made of
wood. There are some tables on the outside that are made of coloured tiles. There are some
cane chairs on the outside, to go with the look. Inside area has some couches and sofas, too."
On washroom & billing counter, a respondent commented the following: "The washrooms are
very simple, colourful and old fashioned. They have some fancy stuff like beaded curtains and
all outside the restrooms. And as far as I remember there is no billing area, as it is Restaurant
cum Café, so the waiters get the bills to the tables."
Merchandise Quality Inferences:
Though Cafe Mocha outlets don't stock much merchandise on sale because of the type of service
& offering they have, but most of the items on their menu are available. Not many respondents
experienced an issue of non-availability of their product offerings.
While commenting on merchandise variety, one of the respondents commented the following:
"With regard to Mocha, I will assume that this means the items on their menu. They have a
good mix of snacks and desserts to go with the drinks on offer. They have a good range of hot
and cold coffees, some coolers, etc. There are a few USP dishes like the Chocolate Avalanche,
and Vertigo, which are famous desserts. Apart from this, they have a good variety of flavours
in Hukkas too."
Younger respondents felt that the items are overpriced but the earning lot in the age group of 25-
35 & 35+ were pretty much satisfied with the pricing policy of Mocha. A Delhi respondent said
"Some items like say a Maggi on the menu is a little highly priced according to me. Other
things like Chocolate flavoured Milkshakes (like the Oreo Cookie Shake or the Tobelerone
Shake) and Coffees are also a hole in the pocket, on a regular basis."
Other Key Comments:

Delhi Respondent (Cafe Mocha, Defence Colony): "The plus point of the store ambience is
that it provides a very relaxed yet cozy atmosphere, which makes people want to come back to
the place. One does not get extremely bored of the place, in fact it grows on you and you start
liking the music, the look, etc. It has a Buddha Bar kind of a feel to it and I suppose is mostly
meant for a young or middle aged crowd to the max."
Interviewer: What are the negative points of the store’s ambience?
Delhi Respondent (Cafe Mocha, Defence Colony): "The negative point is that it can get a little
noisy at times, and due to the open area being small, there is quite a lot of smoke at one place,
which can get irritating. Also, it is a little cramped up, with the tables being very close to each
other, which can intrude in your privacy sometimes.”
World of Titan (Ahmedabad & New Delhi)
Among the Delhi respondents, around 28% of the respondents had visited the store earlier and
the rest visited it for the first time. While only 8% of the Ahmedabad respondents had previously
visited the store. The major opinion of the respondents visiting the store for the first time was
that shopping for watches & sun-glasses is a need based phenomenon. One respondent said "I
came to buy a watch for myself..Though I did not like any, I would not be coming here in the
near future...If I will have a specific need for anything such as Watches, repairing, etc then I
will revisit the store."
Around 70% of the respondents visiting the store fell under the age group of 35+. However, only
the younger respondents could respond to the questions related to window display & store
ambience and design.

One respondent commented the following: "Though I did not pay much attention to the window
display, but I faintly remember looking at some watches in Glass boxes. The first thing that I
noticed was the use of Titan Logo everywhere and lots of Glass boxes."
Store Ambience:
Younger respondent did not seem to be happy with the store ambience in terms of in-store
lighting, music & odour. Most of them appreciated the strong yet regulated air-conditioning
within the store. Whereas their counterparts in the higher age bracket felt that the lighting was
apt and properly focussed to capture the attention of the shoppers. Almost all of the respondents
could not comment on the colour schema of the store. The general opinion was that the colour
scheme was very simple with shades of red & brown and with white walls.
Store Design:
Most of the respondents were unhappy with the parking space offered by the store which caused
a lot of time wastage & irritation. One of the young respondent commented: "This store has a
striking window display with posters of Brand Ambassadors (like Aamir Khan) on the outside,
and glass shelves holding watches. Even the in-store display is so neat and simply arranged. It
has glass boxes holding watches, there are aisles in an L shape and some gondolas in the
centre."
Almost all the respondents thought of the merchandise display to be spacious & shopper
friendly. But the most appreciated element of the store design was the fixtures/furniture which
attracted a lot of attention from all the age groups. One respondent said "There are wooden and
metal chairs with the Titan logo crafted on them. Apart from that, there are wooden and glass
shelves and boxes holding the watches."
Merchandise Quality Perception:

Only the respondents in the age group of 25-35 & 35+ were able to comment on the merchandise
quality and availability. This is primarily due to the fact that the younger shoppers were mostly
accompanied by family members who had a major opinion in the overall buying process.
One of the older respondents who had visited the store for more than 10 times had the following
opinion: "They usually stock almost everything which they have in their portfolio. Everything
was more or less available. All the designs advertised were present and the range/collection
was quite decent. Though the price differs according to the normal or the exclusive range, but
according to me, most Titan watches are quite affordable."
Other Key Comments:
Ahmedabad Respondent (Iscon Mall store): "It is a simple boring store, so not much of an
ambience in question. One does get the feeling of being in a quality store."
Interviewer: What are the negative points of the store’s ambience?
Ahmedabad Respondent (Iscon Mall store): "The negative point is that it can be made more
lively and stylish."
Interviewer: What are the plus points of the store’s design?
Delhi Respondent (Connaught Place store): "The store is easy to navigate for what a customer
is looking for. Everything is well placed in neat places."
Interviewer: What are the negative points of the store’s design?
Delhi Respondent (World of Titan, Cross River Mall): "The negative point is that there is not
much differentiation in the stocking of goods, so some things can be easily missed."

FINDINGS, IMPLICATIONS & CONCLUSIONS

ANALYSIS & FINDINGS FROM THE OBSERVATIONAL STUDY OF
STORES:
The following are the findings which have been deduced from the analysis of the results gathered
during the observational study of the retail outlets. The analysis of the various elements of all the
three stores is mentioned below in italics.
Marquee:
• It adds identity to the brand: The TITAN logo used in their marquees is an extension to
the brand which helps the consumer in the brand recall. It also helps the retail
managers/brand managers to build the corporate identity of the brand.
Display Windows:
• It acts as a bridge to the consumer & the internal setting of the store by showcasing the
products and the in-store interactions which forms an appealing quotient in the
consumer’s mind. E.g. LEVI’s window display has a transparent glass with theme display
of mannequins during all the special occasions like Valentine’s Day. It forms an effective
tool to target the right TG.
• On the other hand, coloured window display & acrylics are also emerging as an integral
component of Visual Merchandising. E.g. Use of acrylics like red, yellow & blue by Cafe
Mocha in their opaque window display is a proof of the fact that Visual Merchandising is
no more static today.
Visibility:
• Location of the store always has an impact on the consumer’s purchasing decision
sometimes barring their consideration for the Shop. E.g. Levi’s store in Connaught place
attracts more customers than the Levi’s store in Ansal Plaza due to the fact that there are
more alternatives in a shopping mall which attracts the customer.

• The way a store is planned has a direct connectivity with the increase in footfall; height
being one of the elements. E.g. World of Titan stores are mostly situated at a higher
plinth level, facilitating clear view and direct focus of the onlooker.
Lighting:
• Maximum emphasis in illumination is on the marquees. Neon back lit and spot lit are
some of the most common methods used. Illumination acts as a highlighter in the retail
stores. They help in achieving prominence. Spot lighting of products, mannequins are
also being extensively deployed in Levi's & Titan stores. Lit interiors visible through the
glass elevations of the shop create a dramatic impact on the overall ambience. It creates
some kind of visual appeal and enhances the products on display.
• Theme and type of illumination is also seen to be a direct reflective of the shop image
and décor. A theme enhances a consumer’s perception about the retail outlet. The dim
yellow lighting signifies the earthy tones in case of Cafe Mocha Outlets, which is a
representation of the kind of experience the brand sells.
Interiors:
• Unconventional themes are suddenly becoming a rave in the atmospheric design because
of the attention and novelty they provide. In big retail chains like World of Titan,
standardization of the in-store display is of key focus because it helps in achieving a
unified look.
• In-store lighting is a very important element of a good store planning. Stores that are
properly illuminated get very easily noticed. It is very important to set the appropriate
brightness of the store. In case of Cafe Mocha, neither very bright nor too dull works but
mid tones.
• Displays used within the store serves as an interesting and useful element by providing
related information about attributes, features, history, and anecdotes related to the
product/service. E.g. in Levi’s store uses framed photos and posters which denotes the
history of Jeans and its founder, Levis Strauss. Cafe Mocha also has a detailed menu
which associates its offerings with the history of the product.
Visuals:
• Visuals form a very important element in effective and quick communication of ideas and
proposition. The brand ambassadors add impact to the campaign. They provide an
identity to the brand. E.g. John Abraham (sunglasses) and Amir Khan (watches) visuals
help World of Titan to strengthen their retail image and eventually boost their sales.
Fixtures & Fittings:
• Designs in fixtures & fittings play an important role in forming customer perceptions of
the store and hence the brand.3-Dimensional fixtures are being used in Levi's store which
has a better recall than a two-dimensional design.
• Designer fixtures and fittings are being used in the World of Titan showroom which adds
an element of awe and innovativeness to the store. Innovativeness provides a
differentiating edge to the store and creates a curious environment compelling the
consumer to enter the store.
Music:
• Good Music plays a vital role to smoothen the mood of a shopper. It provides
comfort and sets the mood of the shopper to stay inside the store and shop for a longer
duration. In Cafe Mocha outlets, the music played within the store is complementary to
the setting of the store which helps the retailer to sell an awesome experience to its
customers.

Temperature:
• Temperature within the store helps in achieving the perfect ambience in any retail store.
Generally Levi's stores are trendy & offbeat in design with strong air-conditioning which
drives the customers to form a classy opinion of the store.
• It also acts as a differentiator in the consumer’s mind about the retail outlet & the brand.
E.g. Cafe Mocha outlets usually have multiple floors with distinct temperature so as to
allow the customers to enjoy the in-store ambience according to their choice.
FINDINGS FROM QUALITATIVE EXPLORATORY RESEARCH & ITS

MARKETING IMPLICATIONS
The analysis of the shopping trip characteristics of the respondents and their interaction with the
select retail outlets gives rise to following findings which in turn leads to generic marketing
implications for the retailers. They are as follows:
• Merchandise and Brand/Store Image are the top two factors that impact the shoppers’
decision to visit a particular store. Ambience comes only next in the list of factors
influencing store visit. Moreover, ambience has an impact on shopping behaviour only if
it is unconventional or exciting. Otherwise it is a given that ‘good ambience’ has to be a
part of the shopping experience at any good retail outlet. Therefore, it is necessary to go
beyond the basics of good ambience such as hygiene, good temperature, good lighting
and add a novel atmospheric element such as comfortable seating, good music, in store
television displays to make shoppers take notice of and appreciate the shopping
ambience.

• Recall of design elements does depend upon the product category and service offerings.
Moreover, in apparels & accessories category, design elements such as layout, window
displays, and merchandise display have a pronounced recall over softer ambience factors
like odour, lighting, temperature, music. For instance, people instantly mentioned the
window display and entrance of Levi's store that can be noticed from the parking lot and
the fixtures & furniture that is the first thing that can be seen upon entering the store.
Whereas, in Mocha outlets, ambient parameters had a powerful impact on the customers.
Therefore, retailers should spend more on making noticeable changes in the physical
design of the shopping environment like newer display media, in store coffee shops etc.
• Colour was instantly noticed and recalled - for instance people mentioned the red & white
interiors of Levi’s, the pastel shades used in the interiors of Mocha, etc. To aid recall and
awareness retailers should have a colour that can be immediately associated with them in
the minds of the shoppers. This should be consistently used across all the mediums of
communication with the shoppers- advertisements in papers, hoardings, the store
shopping bags, shopping windows etc. It would help the retailer to build a definite brand
identity.
• Most consumers look at shopping as a recreational and entertaining activity rather than
just a necessity. People visit outlets not only when they have to purchase something, but
also to check out new merchandise and sales or just to window shop too. Retailers should
take into cognizance this fact and make an effort to use this to the advantage of
promoting browsing time of shoppers which in turn could lead to impulse purchase.
Attractive displays with items of impulse purchase located strategically could be used
towards this effort. Comfort zones must be designed in the store to allow the customer to
linger longer - comfortable seating, interesting snippets of information in the trial rooms,
in store coffee shops, catalogues etc could be some options.

• Youngsters visit malls with their friends while the older ones do so with their family. Age
also has a bearing on the time spent by shopper in the store and also the amount of money
spent. Also women usually accompanied. These aspects can be used by the store owners
to design appropriate strategies for the different age groups to attract them to the store,
make them stay longer or spend more.
• Shoppers today are spending lesser time per visit in the retail outlets. This could be due to
more choices available to them in terms of newer formats, shortening interest thresholds,
paucity of time due to other commitments like work, study, home. Therefore retailers
must use strategies like placing their best products or best bargains in a manner that
catches the shopper’s eye.

LIMITATIONS

LIMITATIONS
Following were some of the difficulties encountered during the study:
• Observational study could not be done for Levi's and Cafe Mocha stores due to the
binding policy of the retailers which prohibited the use of cameras or recording
instrument to capture any element of the store.
• The qualitative study involved a Post Shopping interview with the shoppers. This was a
hard task because people were not very keen on answering questions post - shopping
(especially if they were accompanied) and hence responded to the interview in a rushed
manner.
• Out of the proposed sample size of 60 respondents, data could be collected for only 40.
This had a bearing on the study, as it becomes difficult to obtain significant and accurate
results with a smaller sample size.

BIBLIOGRAPHY

BIBLIOGRAPHY
1. Kotler, P. (1973), "Atmospherics as a marketing tool", Journal of Retailing, Vol. 49 No.4,

winter 1973-74.
2. Donovan,Robert J. And Rossiter John R. “Store atmosphere: an Environmental

psychology approach (1982)”, Journal of Retailing, volume 58, number 1.
3. Dube L., & Chebat, J.C. (1997), "Impact of Music on Consumers' Reactions to Waiting
for Service", Journal of Retailing, 73 (1), 87-104.
4. Turley, L., Milliman, R. (2000), "Atmospheric effects on shopping behavior: A Review of

the Experimental Evidence", Journal of Business Research, Vol. 49 No.August, pp.193-
211.
5. Baker, J., Parasuraman, A., Grewal, D., Voss, G. (2002), "The influence of multiple store
environment cues on perceived merchandise value and patronage intentions", Journal of
Marketing, Vol. 66 No.April, pp.120-41.
6. Turley L. W. and Chebat J-C., “Linking retail strategy, atmospheric design and shopping
behaviour”, Journal of Marketing Management, Vol. 18, 2002, pp. 125-144.
7. Baker, J.A., Levy, M., Grewal, D. (1992), "An experimental approach to making retail
store environmental decisions", Journal of Retailing, Vol. 68 pp.445-60..
8. Underhill, Paco, “Why we buy”.
9. Levy, M. & Weitz, B.A. (2003). Retailing Management. 5th ed., New Delhi, Tata
McGraw-Hill

APPENDIX
GUIDELINE FOR EXPLORATORY RESEARCH
Section I
Objective: Introduction
Hello. I am Satish Singh, a student of the Mudra Institute of Communication, Ahmedabad. As a

part of my MBA curriculum, I am working on a dissertation related to the impact of store
ambience/atmosphere on shopping behaviour, store image & consumer’s perception. Grateful if
you spare 10 minutes to answer a few questions related to this topic. Please feel free to express
your views as there are no right/wrong answers.
Section II
Objective: Understanding the Respondents’ Shopping Trip Characteristics
What do you love to do in your leisure time?
Do you like shopping? (YES / NO)
Do you prefer shopping on weekdays or weekends?
What time of the day do you prefer shopping? (Morning-Noon or Evening-Night)
Do you prefer shopping alone or accompanied?
Do you prefer shopping in Malls or roadside stand-alone stores? (Quote an example)
Do you go to the shop only when you have something to purchase or also for window-shopping?
Rank in order of importance and impact of the following factors in a store on your purchase
decision:
• Brand name/ Store Image

• Quality of Merchandise
• Design elements such as merchandise display, aisle, billing counters, etc
• Ambience factors such as music, lighting, scent, etc
• Service levels/Quality of Store Personnel
• Loyalty programs
• Promotional offers
Section III
Objective: To understand consumer’s perception & attitude towards store ambience and
design elements.
Have you visited ------------------- (insert store name) before?
If yes, how many times?
Did you park the car/bike yourself? Is it easy to find space here?
Did you notice the window display?
Was the door to the shop opened for you or did you have to open it yourself?
Were you greeted at the door?
What is the first thing you noticed when you first walked into ------------------- (insert store
name)?
What do you think about the store ambience? Please comment on the following elements:
• LIGHTING
• MUSIC
• ODOUR/SCENT
• TEMPERATURE
• COLOUR SCHEME
• CLEANLINESS
What do you think of the store design in terms of?
• PARKING SPACE
• WINDOW DISPLAY
• IN-STORE DISPLAY
• MERCHANDISE DISPLAY
• FIXTURES/FURNITURE
• SIGNAGE
• STORE LAYOUT
• TRIAL ROOMS (IF APPLICABLE)
• RESTROOM/WASHROOM (IF APPLICABLE)
• BILLING AREA
What do you think of the merchandise in terms of?
• AVAILABILITY OF STOCK
• VARIETY IN MERCHANDISE e.g. sizes, colours, designs, etc
• PRICE

• QUALITY
• SHOPPING BAGS
• SALES PROMOTION INITIATIVES
• LOYALTY PROGRAMS
What are the plus points of the store’s ambience? (Probe why)
What are the negative points of the store’s ambience? (Probe why)
What are the plus points of the store’s design? (Probe why)
What are the negative points of the store’s design? (Probe why)

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IMPACT OF ATMOSPHERICS ON QUALITY INFERENCES,

STORE IMAGE AND BUYING BEHAVIOUR FOR RETAIL

Mudra Institute of Communications, Ahmedabad

Post-Graduate Diploma in Management (Communications)

1 © Copyright, Satish Kumar Singh, 2009

5th march, 2009 Satish Kumar Singh

2 © Copyright, Satish Kumar Singh, 2009

3 © Copyright, Satish Kumar Singh, 2009

4 © Copyright, Satish Kumar Singh, 2009

5 © Copyright, Satish Kumar Singh, 2009

1. INTRODUCTION TO THE STUDY 7

Concept of Retail Atmospherics 12

Knowledge Gap & Rationale for Study 25

4. DATA PRESENTATION AND ANALYSIS 32

Observational Study of Stores 33

Shopping Trip Characteristics 39

Shoppers’ Perception of the Retail Store Image 41

5. FINDINGS, IMPLICATIONS AND CONCLUSIONS 51

8. APPENDIX (Guideline for Exploratory Research) 62

6 © Copyright, Satish Kumar Singh, 2009

7 © Copyright, Satish Kumar Singh, 2009

8 © Copyright, Satish Kumar Singh, 2009

• Global competition anticipated- Potential international entrants like Wal-Mart, Carrefour,

10 © Copyright, Satish Kumar Singh, 2009

11 © Copyright, Satish Kumar Singh, 2009

Atmospherics refers to the design of an environment via visual communications, lighting,

12 © Copyright, Satish Kumar Singh, 2009

13 © Copyright, Satish Kumar Singh, 2009

Stimulus - Organism - Response (S-O-R) Model

An adequate S-O-R model has the following requisites:

• A set of intervening or mediating variables and;

• A desire or willingness to communicate with others in the environment (approach) as

• A degree of enhancement (approach) or hindrance (avoidance) of performance and

Emotional states as intervening variables:

15 © Copyright, Satish Kumar Singh, 2009

Moreover an individual’s arousal response to a stimulus is also mediated by his/her characteristic

Donovan and Rossiter Study

The other findings of their study were:

16 © Copyright, Satish Kumar Singh, 2009

Linking Retail Strategy, Atmospherics and Shopping Behaviour

17 © Copyright, Satish Kumar Singh, 2009

• In the second stage a specific atmospheric outcome is designed and eventually

18 © Copyright, Satish Kumar Singh, 2009

19 © Copyright, Satish Kumar Singh, 2009

• Point-of-purchase and decoration variables are composed of atmospheric elements like

• Human variables in the environment include dimensions such as employee

Outcome Issues and Shopping Behaviour

• Approach-Avoidance Behaviour - A study done by Donovan and Rossiter (1982),

• Atmospherics as a Segmentation Tool - It has been earlier stated that retail

21 © Copyright, Satish Kumar Singh, 2009

• Implementing an Environmental Design - An issue that is strongly related to

• Shopping as "Entertainment" - Although not present in any prior research or academic

24 © Copyright, Satish Kumar Singh, 2009

• A Differential Advantage against E-tailors - Although the long-term impact of the

KNOWLEDGE GAP & RATIONALE OF THE STUDY

26 © Copyright, Satish Kumar Singh, 2009

27 © Copyright, Satish Kumar Singh, 2009

The three primary objectives of this study are to:

Shopping trip characteristics and ambience perceptions

• Stores that would be visited by them

• Reason for store visit

• Frequency of store visit

• Their recall of the store design and ambience