Retail Marketing Strategies in India Advertising Merchandising
It is the practice of making products in stores available to consumers, primarily by stocking shelves and displays. Types include: Creating attractive displays (ITC Bingo), Trade shows, Visual display photo galleries. Private Branding
Products (or services) which are generally manufactured or provided by one company under the retailer’s brand. Ex: Big Bazaar has its own line of towels and apparels.
While many elements may make up a firm’s retail marketing mix, the essential elements may include: Store location Store image Store design Sales incentives Merchandise assortments Store ambience Customer service Price Communication with customers Personal selling
The retail marketing mix must be consistent with the expectations of customers and must be responsive to competition. The important factors in retail marketing include: Store location Target market Channel structure Channel management Retailer image Retail logistics Retail distribution
and unsustainable operational costs have adversely affected India’s organized retail sector Till recently. the size of the retail industry was pegged at US$ 353 billion in an ASSOCHAM-KPMG joint study. Aditya Birla Group.600 stores till December 2008. the faltering of Subhiksha. most of these plans have been put on the back burner and many are contemplating exit strategies.South India-based retail major Subhiksha is busy denying media reports of its selloff plans even as rumours of smaller retail chains looking for buyers flying thick and fast. India Inc’s heavyweights in the organised retail — Reliance. On the other hand. But. Even foreign players like Walmart and Carrefour have shown interest in entering the Indian retail sector. In 2008. Tata — are back to drawing boards taking a relook at their strategies. Mahindra & Mahindra and the Tatas have expanded into this market. Birla. the organized retail sector accounted for only 5 to 7% in 2008. and largely unexplored markets anywhere in the world — the $350 billion Indian retail market. However. soaring rates of interest and supply chain challenges that have exposed them to unbearable pressures. touting it as the growth engine for job creation and economy. which is the highest in any country. There was heavy expansion with a lot of foreign players showing interest and private players making in grand entry into what remains one of the biggest. squeezed profit margins. So what went wrong? Does it mean that the business model that supports discounted small-stores format is flawed or is Subhiksha only an exception? The retail scene The Indian retail sector is largely dominated by nearly 12 million unorganized players. Of these. which had 1.People element Staff capability Efficiency Availability Effectiveness Customer interaction Internal marketing
Retail Scene in India Organised retail was hit by a huge setback in the wake of the economic crisis. it was the shining example of a successful retail venture. Its founder R Subramanian was the blueeyed boy of the industry. Before Subhiksha’s debacle came into public glare. Verambitious expansion. who constitute nearly 90 to 95% of the sector. Domestic players like reliance Industries. the government and the industry alike were betting big on the country’s organized retail sector. seems to have shattered the hopes. It estimated that the sector
. nearly 80% of such outlets are small family-owned businesses. Most seem to be trudging cautiously on their multi-faceted plans in the face of the continuous northbound march of property prices. Bharti Group.
Their expenses. Rs 20 crore to employees and Rs 24 crore as rentals for various stores! Subhiksha’s troubles started when it began expanding at a rate of 800 stores a year on debt capital. distinct strategies should have been adopted for different regions. However. may not be the same as those of consumers in another city such as Chennai. for example Delhi. cost of monitoring etc.600 stores across 110 cities. This had prompted many big and small players to grab a pie in the organized retail sector. So. On the contrary. more money was seeping out in the form of discounts and operational costs. Thus. The food and groceries segment is estimated at $152 billion. The retail sector can broadly classified into four major categories—food and groceries. macro strategies may not work all the time.
. It is not a business that can be pushed from top to down. The fact is that almost everybody has grown far too soon too quickly. consumer durables.would grow to $410 billion by 2010. players like Subhiksha. inventory. The organized retail would value approximately $51 billion by 2010. was reportedly planning to add two million sq ft by the end of the fourth quarter of 2009. It is just that some have been impacted more and some less. More etc. Unmindful expansion strategy This one seems to be the biggest demon of all. What one must keep in mind is that if you are opening a store such as a grocery store then you have a catchment area. the company has closed its 1. When the era of organized retail started in India. in Jan 2007. a lot of players entered this segment. organized retail in this sector is just about 1% of the total share. with R Subramanian reportedly saying that his company owes Rs 45 crore to suppliers. More etc started opening outlets and most of them adopted the discounted small-store format. while less was coming back into the kitty. In the food and groceries section itself. Thus. Of these four categories. with rumors afloat that a number of stores have been shut and several employees have been sacked. which also indicates the lowest penetration level amongst other major categories. No localized approach The business of retail (food and grocery) is very localized. The situation is not very different with Reliance Retail. which included rentals. Therefore. food and groceries account for the largest share of 74%. Big Apple. Spencer’s. It is a very localized business that has to be built bottom up. This is a factor that has impacted all retailers. Reliance Retail. An industry insider says the model that these companies adopted was flawed because their expenses far outstripped profit margins. has designed a new retail strategy that is based on the classification of customers into 4 groups based on the income level. The consumer behavior in a particular area. The major players are Subhiksha. Sabka Bazaar. apparel. were higher than their margins. employee salaries. and pharmaceuticals. according to India Brand Equity Foundation (IBEF).
Example1: Nokia. Reliance Fresh. Till recently discount store Subhiksha. which is currently neck-deep in debt of more than Rs 750 crore. Spencer’s. These together account for almost 60 to 70% of the total retail market. the consumer needs differ widely across the country.
Achieve segment looks at enterprise users who need to have business functionalities in their phones.The first of these segments Live. would have basic handsets low on features and price.
. Nokia’s new E-series has been put under this segment with handsets having QWERTY keyboards and full Internet capabilities. phones in this segment would have GPRS. are aimed at high-end users and have Nokia’s top-end handsets. Aimed at high-end lifestyle users. imaging.ﾝ The second segment Connect looks at more evolved users who look for more functionality and features and connectivity. mobile TV. For example. Accordingly. music and gaming. aimed a first time users whose basic need is to stay in touch with voice as the main driver. The next two categories. This segment would see the most vibrant growth in the coming year. camera and music capabilities. Achieve and Explore. It will look at five different areas applications. Explore would be the most prominent segment for the company in the coming years. These may be functional phones but the target group for these phones range from SEC C (low socio-economic class) to SEC A1+ (very high socio-economic class) markets.