Professional Documents
Culture Documents
Submitted By: -
Submitted To:-
PankajTrivedi
ShwetaSolanki Maam
MBA IIIsem
Project Guide
PREFACE
Changing lifestyles are prompting changes in the retail environment. Paucity of time
and an increase in disposable incomes have created a need for new types of retail
formats. This means that retailers will have to become better at knowing their
customers and predicting their needs and wants. As the socio-economic structure in
India changed so did the field of retailing. A once unorganized sector became
transformed into an organized sector in the last decade of the 20 th century as
companies, both old and new, entered the arena.
In the course of making this report I have received much encouragement from
my guide and seniors. I gratefully acknowledge the significant contribution to
ShwetaSolanki Maam for editing majority of this report.
ACKNOWLEDGEMENT
I express my sincere thanks to my project guide Ms.ShwetaSolanki Maam,
Designation Project Guide, Deptt.Management., for guiding me right form the
inception till the successful completion of the project. I sincerely acknowledge
him/her/them for extending their valuable guidance, support for literature, critical
reviews of project and the report and above all the moral support he/she/they had
provided to me with all stages of this project.
I would also like to thank the supporting staffmanagement Department, for their help
and cooperation throughout our project.
(Signature of Student)
Executive Summary
The Indian retail industry is now beginning to evolve in the line with the
transformation that has swept other large economies. It witnesses tremendous
growth with the changing demographics and an improvement in the quality of life of
urban people. The growing affluence of Indias consuming class, the emergence of
the new breed of entrepreneurs and a flood of imported products in the food and
grocery space, has driven the current retail boom in the domestic market.
CONTENTS
PROJECT PROFILE
RETAIL MARKETING
INTRODUCTION
The word Retail is derived from the French Work. Retail meaning to Cut a piece
off or to break bulk A retailer is a person, agent, agency, company, or an
organization which is instrumental in reaching the goods, merchandise, or services
to the ultimate consumer. Retailers perform specific activities such as anticipating
customers wants, developing assortments of products, acquiring market information,
and financing. A common assumption is that retailing involves only the sale of
products in stores. However, it also includes the sale of services like those offered at
a restaurant, parlor, or by car rental agencies.
Retailing includes all the activities involved in selling goods or services directly
to the final consumer for personal or non-business use.
In other words, retailing is the sale of goods and services to the ultimate
consumer for personal, family or household use. Thus, retailing involves more than
selling tangible products. It includes every sale of goods and services to the final
consumer.
Retailing involves:
Retailing differs from marketing in the sense that it refers to only those activities,
which are related to marketing goods and/or services to final consumers for
personal, family or household use. Whereas marketing, according to American
Marketing Associations, refers to the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational objectives.
Wholesal
Natl.
Local
Natl.
Local
Retailer
Custom
ers
Wholesa
Custom
ers
Local
Local
Retailer
Retailer
Custom
ers
Natl.
Custom
ers
Custom
ers
CHARACTERISTICS OF RETAILING
Retailer
Custom
ers
Custom
ers
Retailer
Custom
ers
Custom
ers
FUNCTIONS OF RETAILERS
Retailers have multiple functions. At one end they create market for consumption of
the goods and services and on the other hand generate employment for millions of
people. Broadly speaking retailers perform following functions:
Understandin
g customer
needs and
wants
Breaking bulk
FUNCTIO
NS OF
RETAILER
S
Providing
services to
consumers
Providing
information to
suppliers
Functions of Retailers
The first and foremost function of a retailer is to understand its customers; their
needs and wants. It is only then other functions of retailer can be performed in a
manner satisfactory to the customer such as providing an assortment of products,
providing services etc, once the retailer understand what products and services are
desired by customers, other things follow.
BREAKING BULK
Manufacturers normally send their products in bulk to retailers to minimize
transportation cost. The retailers offer the product in smaller quantities to suit
individual consumers requirements. Breaking large shipments into smaller quantities
is called breaking bulk. Now the trend towards organized retailing is developing as a
result retail chains are established in an identified geographical location. These chain
stores purchase and distribute their products in such a manner that there is a
minimum loss of time and money in transportation of products to various stores.
They in turn provide the profits to the customers in a way by lowered minimum retail
price.
PROVIDING SERVICES
Retailers offer number of services to the consumers. Retail outlets may provide
some or all of these services to consumers. These services could be:
this facility)
Providing product guarantees, after-sales service and dealing with customer
HOLDING INVENTORY
11
A major function of retailers is to keep inventory, so that customers can buy the
products when they want. So as customers, we do not have to keep a large
inventory at home, knowing fully well that the product will be available at a relatively
stable price from retailers when we want them. Thus the customers money is not
blocked up in a large inventory and can be put to some other use or in bank earning
interest.
INTRODUCTION TO COMPANY
12
Pandya group the proficient pioneers of the grand Kota City Mall project have
diversified business establishments dealing with Petrol pumps, Vehicle finance,
Hostels and Real Estate. The group has its roots dating back to 1860 and has since
then achieved numerous milestones. The ventures undertaken by the group have
success stories which are a reflection of its farsightedness, profound business
acumen and commitment.
Today the group is growing from strength to strength under the dynamic leadership
of father son duo, Mr. Devendra Kumar Pandya and Mr. VirendraPandya. Being a
trendsetter, the Pandya Group is once again all set to create a landmark for the Kota
City with their latest venture KOTA CITY MALL.
PandyaGroup, stands for quality construction and honoring commitments to the
highest of ethics and standards. We envision satisfaction beyond comparison to our
customers and in building relations.
The innovative approach of the Group has given new dimensions to the real estate
market of Rajasthan. It has brought to the customer quality and comfort at affordable
prices.
A trusted name in the business of constructions and developing the nation through
its world class structures. The Pandya Group has a unique business model with
earnings arising from development and rentals. Its exposure across businesses,
segments and geographies, mitigates any down-cycles in the market. Pandya Group
has also forayed into infrastructure, SEZ and hostel businesses.
Pandya Group is now geared up to bring a paradigm shift in lifestyles of the
Rajasthanies through their world class structures.
OUR VISION
We follow a tradition of personal and professional integrity to provide people with the
best of facilities, luxurious amenities and salubrious environments. Flawless
designing, quality construction and superior specifications are the major thrusts for
this real estate investment company.
Our vision is to gain the loyalty of our customers by delivering more cost effective
projects. Our vision is to gain complete customer satisfaction. We followed this
thumb rule from the beginning and for this reason, our virtues have traveled through
generations and we have established a gigantic corporate image.
OUR GOAL
At Pandya Group, we follow a tradition of personal and professional integrity. We
have set high standards for ourselves and are determined to reach our goals without
compromising our values and beliefs.
The main objective of Pandya Group is to provide more and more innovative as well
as eye-catching projects with magnificent and modern lifestyle amenities.
14
15
16
The Indian Retailing industry stands poised to take off into the 21 stcentury, it is one of
the fastest growing sectors in the nation that caters to the worlds second largest
consumer market. Retail boom is unbolting. India have five million retailers with a
business volume of $ 180 million growing at 5 to 7 percent a year. The middle class
drives retailing anywhere in the world and this segment should have reasonable
income. The next driver is availability of variety of goods, products and brands. The
third one is sense of awareness.
In other developing economies, this transformation has already begun. In many of
these countries, organized retail already has a 40 percent share of the market,
compared to Indias current levels of 2 percent. As India goes through this
transformation, new businesses with sales of 1 billion 2billion US $ will be created
in grocery and of 250 million 500 million US $ in apparel. Smaller but still
interesting opportunities will be created in other sectors like books, electronics and
music. This transformation will also impact the supply chain in agriculture, the tax
collections from trade and the way people shop.
1.2 DURATION OF THE PROJECT
The project have been taken
Objective of the study
The overall objective of retail marketing is creating and developing services and products that meet
the specific needs of customers and offering these products at competitive, reasonable prices that
will still yield profits. Businesses must realize that, in retail, the customer lies at the center of any
organization's marketing efforts, determining the overall success of the product or service.
Make
17
The growth of scope in the Indian retail market is mainly due to the change in the consumers behavior. For
the new generation have preference towards luxury commodities which have been due to the strong
increase in income, changing lifestyle, and demographic patterns which are favorable.
The scope of the Indian retail market have been seen by many retail giants and thats the reason that many
new players are entering the India retail industry. The major Indian retailers are:
Shoppers Stop
Tesco
Metro AG
Wal- Mart
The scope for growth in the Indian retail market is seen mainly in the following cities:
Mumbai
Delhi
Pune
Ahmedabad
Bangalore
Hyderabad
Kolkata
Chennai
The scope of the Indian retail market is very vast. And for it to reach its full potential the government and
the Indian retailers will have to make a determined effort.
1.1
Retail, with total sales of $ 6.6 trillion, is the worlds largest private industry ahead of
financial industries $ 5.1 trillion. It is also home to a number of the worlds largest
enterprises. Over 50 of the Fortune 500 companies, and around 25 of the Asian top
18
500 companies are retailers. The industry accounts for over 8 percent of the GDP in
Western Economies.
Table 1:
Retail
Consumption US $ billion
areas
Food Retailing
130
12
Subhishka.
Pantaloon Westside, Shoppers Stop
Jewelry, Watches
Home Furnishing
Foot wear
1.7
Bata, Woodland
Beauty Care
3.6
retail is also one of the worlds largest employers, accounting for instance 16 percent
of the US workforce, Poland 12 percent, China 8 percent, India 10 percent and
Brazil 6 percent. Factors such as scale in sourcing, merchandising, operational
effectiveness and ambience have driven the spread of organized retail. Grocrey,
electronic are examples of categories that compete on the strength of better pricing,
which in turn is driven by superior sourcing and merchandising and cost-efficient
operations. Wal-Mart, Home Depot and Kingfisher are benchmark retailers in these
fields.
Over the last few decades, retail formats have changed radically. The basic
department stores and co-operatives of the early 20 th century have given way to
mass merchandisers, hypermarkets, warehouse clubs, category killers, discounters
and convenience stores. Each of these formats has been driven by marketers need
to offer relevant, distinctive and economic propositions to an evolving consumer
base.
Global retailers have also reached a position of strength that enables their brand to
be leveraged across a wide range of services. Many of them have expanded their
offering, over the years to include fuel retail, car retail, convenience services and
personal financial services. This has put them in a position where they are not only
beginning to capture growth from geographical expansion, but are also entering
large new areas of business.
The recent evolution of the internet has helped further broaden the scope of
operations of large retailers. Further, a large number of retailers are pursuing
innovative
aggregation
and
supply
chain-streamlining
initiative
using
B2B
technology.
21
22
23
Proprietorship
Proprietorship
24
Limited
Company
(Private or
These are three operational structures: the independent trader (usually operating
only one retail outlet, the multiple or chain store and the co-operatives.
Classification of Retailers Based on Operational Structure
Independent
Traders
Chain Stores
(Multiples)
Co-operatives
(LOW)
(HIGH)
A broad variety and deep assortment (to understand breadth and depth of
assortment)
Offer considerable customer services and physically separate departments.
amenities.
Special staff expertise in particular products demonstration.
27
A specialty store has a narrow product line with deep assortment (i.e., has more
depth in the same product category) and provides a high degree of customer
services.
A retail store selling a great variety of a particular characteristic group of
merchandise is known as an Emporium (Saree emporium, art emporium, etc.)
The examples of discount store chains are Wal-mart and K-mart. In India, so far
discount stores have not appeared on retail scene in a big way. The reasons are
three fold. Unlike most western countries, Indian manufacturers have much higher
bargaining power with their retailers. As there are very large number of small
retailers and no retail association with the influences negotiate with the
manufacturers. The other reason is that retailers themselves do not have economic
of scale to offer discounts on their own. In general, merchandise retailing, factors like
MRP prescribed pricing and single countrywide pricing policies adopted by most
organized vendors deter the growth of discount stores in the country.
Modern retail formats will have 10-15 per cent of total market in the next ten
years and while all formats will co-exist, large discount stores could be front runners
in this evolution. Says Raghu Pillai President and CEO, RPG Enterprises. The Rs.
6,000-crore, RPG group of Food world, Health and Glow and Music World fame,
opened its first discount store by the name of Giant early this year. The response
28
has been fantastic and we are growing month on month. If you look at the list of
top retailers in the world quite a few would be discounters.around 60 percent of the
business abroad comes from this format. Internationally, the largest retailer in the
world Wal-Mart is a discounter, says Kishore Biyani, MD Big Bazaar.
29
A single individual or sole trader owns the majority of shops in India. Even in US
more than 90 % of retailers own and operate single stores. Independents are defined
as retail organizations (other than co-operative societies) with less than ten branches
or no branches. The usual number of branches controlled by the sole trader is one or
at the most two. A family mostly owns this type of retail format with high dependence
on the owner. Kirana shops, drug store, STD/PCO outlets etc. are very good
examples of such retailers.
Advantages of the Independent Traders:
The main advantages of Independent traders are:
As the owner (management) has direct contact with the customers and
Price competition from retail multiples who can reduce their costs through bulk
30
In
cooperatives
aggregate
at
least
Rs.
400
Crores
annually.
SahkariBhandar and Apna Bazaar are two leading Mumbai based cooperative
chains. Delhi has couple of large cooperatives. Mother Dairy of Delhi even
distributes fresh vegetables from its milk distribution centres. Milk cooperatives
are believed to have a substantial 10 percentage share of the all India market,
which is about Rs. 60,000-70,000-crores.
2.3.4 CONCESSIONAIRE
31
The stopover store format is one that rides piggyback on another retail outlet,
say a petrol pump. This stopover format is a concession that offers instant use or
ready to eat categories of merchandise.
A Kiosk is one such concessionaire format placed in a mall or shopping centre or
a bus station, airport, etc. A kiosk is a small freestanding open pavilion ofter open on
one or more sides used for information, sales and promotion.
Partnerships and alliances for concessions offer a great deal of opportunity for
increasing customer contact, share of mind and share of heart especially in large
formats such as department stores, malls and hypermarkets. By striking trust, or with
complementary marketers who are concessionaires, a retailer can add value and
convenience, and broaden his relationship with customers.
The concessionaire concept is very common in Asia. Initially, the
decision to lease out departments was largely a matter of augmenting the
retailers own mix of goods and services, particularly in areas where he/she
lacked expertise or technical capabilities. With the ones of Asian currency
crisis, concessionaire agreements became the most viable option for Asian
retailers to stay afloat.
2.4. FRANCHISING
Franchising is the granting of sole selling rights within a given geographical area.
The franchising company (the franchiser) supplies equipment and/or raw materials
for a licensee who either pays a franchise fee or a percentage of turnover, or
contracts to buy supplies from the franchiser (or a mixture of these methods of
payment). The licensee is also helped in finding a location and is trained in all
aspects of the business. Generally, franchises are distinguished by three
characteristics:
32
The franchiser provides its franchisee with marketing and operations system
for doing business.
Free credit
Price stability over the lifetime of the catalogue
Savings in transport fares and petrol
Wide selection of merchandise
Wide selection of merchandise
This is the use of advertising literature sent directly to the potential customer for the
purpose of selling goods or services. The Readers Digest have been particularly
successful in selling books in this manner and records, tapes and collectors pieces
are also sold via direct mall.
Markets (Haats)
Haats or rural markets remain the traditional way of retailing in rural and semi-urban
India. In these markets, sellers bring their merchandise on one particular day (s) to
particular place. Vegetables, groceries and household items are sold in this type of
markets. Names of many localities were derived because on particular day a Haat
would be organized there. For example; Itwara, Budhwara, Mangalwara, etc.
and airports. This possible limitation reduces the main advantage of the machine in
that they can be in operation for twenty-four hours a day, seven days a wee. Banks
are providing this type of service through ATMs.
35
36
The overall purpose of the retailing is to provide goods and services wanted by
customers and to do so profitably so that business can be sustained. This means if a
retailer is to be successful and customer satisfied the retailer must understand the
three core factors of retailing, namely, customers, their needs, wants and buying
behavior, competition, their strategies.
Target Market
Pressure Groups & Govt. Policies
Organization/Firm
37
3.1.1 CUSTOMERS
Customers are the most important element for the retailers. To be successful retailer
must know its customers. Why customers shop, how they select a shop and how
they select among that stores merchandise. These can be:
Convenience- of hours, of location, of shopping ease
3.1.2 COMPETITION
A retailers competition does not only come from those competitors who are
using the same retail format but also from new competitors who are coming up from
new formats.
The competition between retailers using the same type of retail format is
known as intra-type competition. Examples of this type of competition are: a
department store competing with other department stores; a discount store
competing with other discount stores; a supermarket competing with other
supermarkets etc.
The competition to the retailers may come from same retailer located within
the vicinity of the target market or a similar kind of business in that locality. For
example, a retailer located in a suburb selling video and music cassettes would have
competition with the cable TV and the movie theatre located in that suburban area.
The retailer may also face tough competition for the scrambled stores, which in
addition to their merchandising products also provide videocassettes on rent.
Therefore the retailer has to identify, assess the strengths and weaknesses of his/her
competitor while designing the strategy for marketing its products.
38
Social Factors
Nuclear small family is becoming a norm in India with increasing number of
women working outside the four walls of home. Thus, there is increase in disposable
income of families, however there is paucity of time as in many families both
(husband and wife) work.
Brand Profusion
39
Compared to early eighties, India has seen brand explosion in almost all
goods. Earlier there was only one brand of salt, namely Tata Salt, now there are a
number of brands available. Many goods were sold in loose earlier, now there exists
number
of established
in
consumer durables,
automobiles, household items, garments et, have appeared in the Indian retail
horizon.
Psychographic change
There has been a perceptible change in the mental attitude of the people at
large. People specially in cities have become health conscious. Hygiene is a
prerequisite for any investment related to consumption and food items. Due to
change in earning, the concept of marketing has also changed.
Demographic Change
The people at large live in big apartments and isolated suburban areas. There
is a growth of clusters of population in identified geographical locations. A particular
geographic location is populated by people with distinct characteristics of demand
and consumption. This indicate that the requirement of different clusters may be
different depending upon the type of families living together.
Political Change
Since last two decades, India is facing severe political instability. This is
causing frequent policy changes and creation of pressure groups.
Technological Changes
Last decade saw tremendous change in technology specially information
technology. Information Technology has provided ways to network and increase
market share with profitability. There is a possibility of mutual growth and business
with collaborations.
40
3.2RETAIL MIX
The various components of the retailing mix as subcategories of the four Ps, which
is a very common terminology, adopted in marketing courses. These four Ps are:
PRICE
PRODUCT
RETAIL MIX
PLACE
PROMOTION
3.2.1 PLACE
The categories from the point of view of retailing Place are:
Convenience of shopping
Stores decor and interiors
Store location
Timings
How
Location
long
Is
Effort
it
Facilities
Does it offer What facilities
store
conveniently
assistance
remains
located
in selection
open?
Does
the customer
for
it
Car
space
ATMs
Credit
acceptance
Free
home
delivery
Ordering
by
phone
Availability
of
and
shopping to
remain
the
open
customers
Sundays
and
holidays?
all
parking
card
products
CONVENIENCE OF SHOPPING
Stores interior and dcor also form part of retail mix. A retail store can have
expensive fittings etc. (normally used for trendy products such as Titan Showrooms)
or can have inexpensive interior or dcor (normally used by discount stores). The
two important criteria for stores interior and dcor are:
It should be compatible with the products, for instance, for home furnishings
and decorative items would require an attractive and elegant interior and
dcor, whereas a store selling items would require visibility and hygiene rather
an elegant dcor.
42
It should be compatible with the target customers and retailers image, for
example, target customers of a five star hotel would like to have a good
interior and dcor, whereas a small restaurant may not much attention to its
interior and decor.
3.2.2 PRODUCT
Following factors of Product are useful for retail mix.
Breadth of merchandise
Depth of merchandise
Quality and fashion have of goods
D
e
p
t
h
P1
P2
P3
P4
P5
11
11
11
11
11
43
LEGEND
12
12
12
12
13
12
P product
13
13
I
14
U unit
Assortment in a discount store
D
e
p
t
h
P1
P2
P3
P4
P5
P6
P7
11
11
11
11
11
11
11
12
12
12
12
12
12
12
13
13
13
13
13
13
14
14
14
14
15
15
16
Assortment in a Departmental Store
Product Quality And Fashion Level Of Goods
Quality and fashion are important attractions at the high end. High quality,
newest fashions and exclusivity are major consideration for high income, fashion
conscious customers. Exactly opposite is true for low end. Low price and value for
money are major considerations for relatively lo income customers. Indian
consumers are famous for their attitude towards value for money and low price.
3.2.3 PRICE
In the past, price was considered a direct indicator of quality. However, this
trend is changing now, as many good quality products are being priced low. Price
44
has become a tool in the marketers armor to increase market share without
compromising quality.
Today, price is considered an indirect indicator of quality and fashion level of
goods. And to an extent it is. Higher quality goods and newest fashions usually
command higher prices. However, good quality may be available without the highest
prices. Private brands, which are retailers own brands usually, are priced lower than
nationally advertised brands. Often the difference in price between highest and
lowest price items doe4s not accurately reflect the difference in quality. Some
retailers, for example The Home Store have even introduced their own brands in
groceries at lower prices than national brands without compromising on quality.
Consumers often make judgment on products or indeed on the store as a
result of his or her response to the prices of merchandise. Thus for example a
retailer could adopt a strategy of offering goods at relatively high prices in order to be
consistent with a general strategy of appealing to consumers who want exclusivity.
The major appeal of discount stores I their low prices. Many other stores
direct the bulk of their promotional efforts, especially their newspaper advertising, to
sale and particular goods offered at special low prices. Most supermarket advertising
promotes low price special or leaders, designed to attract customers to the store so
that they may then buy other regular price items. Leaders are items sold at a below
average mark up sometimes even hear cost in order to attract customers to the
stores.
3.2.4 PROMOTION
The retailer has to communicate with customers, initially to make them aware
of his or her offerings and then to stimulate interest and desire. This is based on the
AIDA theory of promotion.
Awareness
Interest
Desire
Action
45
Awareness: The retailers first task is to make the customer aware of his
offerings.
It
should
communicate
property
to
its
customers
through
46
By 2010, the list of Indias top 10 retailers will have at least 5 Indian corporate. Retail
marketing will go through a tremendous change in India this millennium. It will
change Indias cities, its people, and its households. The Indian consumer is
reportedly the largest spender in Singapore and London. It is, therefore, strange that
there have, so far, been few efforts to present the product in the right kind of
47
environment in India. Indeed, the right shopping experience does induce Indian
consumers to spend more. This is evident from the experiences of retail-outlets like
Shoppers Stop, Music World, Food World, Crosswords etc.
However, the development of organized retail is dependent on the efforts of several
agencies and institutions. The first among these is the government. In a country as
big as India and with as many states as ours, it is imperative that the Central
government and all state governments bring in Value Added Taxation or a unified
taxation system to ensure that the tax-regimes are the same across the country.
The laws governing retail real estate should also be looked into, so that it is possible
to develop retail-estate beyond the city-limits.
Apart from providing entertainment and retail opportunities, this will also decongest
the city center and facilitate the development of suburbs. The relevant rules should
also be amended to allow retail-stores to operate 7 days a week, 12 hours a day.
Given the hours most urban consumers keep at work and keeping in mind the
increase in the number of nuclear families, this may indeed make sense. This will
also help people enjoy their evenings, out at malls.
The second group, whose participation is essential in making retail a boom-sector in
this millennium, comprises developers. Most properties are developed without
considering the end user, thus we sometimes find high-ceilinged offices and lowceilinged retail stores. Often, the shoppers convenience is not taken into
consideration while the property is constructed.
The third constituency that has a role to play in the fortunes of organized retail this
century is the education-sector. Retail is a people-intensive business and there is a
huge opportunity for retail institutes in India.
For manufacturers, retailing will present an attractive opportunity. Organized retail
allows them to expose their products to a large volume of customers in an
environment conducive to buying. Already, several transnational retail giants have
established their presence in India. Others, notably Chinese retailers, have visited
India and studied the Indian market. Theres a lot at stake here; even so early in the
21st Century. India is too large a market to be ignored by transnational retail giants.
48
Table 1:
Top 10 Retailers in World Wide
49
Rank
Retailer
No.
of
Store Sales in US $
owned
Million
4178
$180,787
8130
$61,047
3445
$49,000
1134
$45,738
7150
$45,729
Metro AG (Germany)
2169
$44,189
2105
$37,028
2231
$36,823
2512
$36,726
10
1307
$36,362
50
the end of the first decade of this millennium, several companies from the organized
sector have also jumped into the fray.
In this millennium, like in the last, customers will want to spend time with their family
and friends. They may like to visit malls on weekends where everything will be
available under one roof, India will benefit from these development because of
increased consumption through retailing and the corresponding increase in
employment created by retailing.
are
store
retailers, non-store
organizations. Consumers today can shop for goods and services in a wide variety of
stores. The best-known type of retailer is the department store. Japanese
department stores such as Takashimaya and Mitsukoshi attract millions of shoppers
each year. These stores feature art galleries, cooking classes, and childrens
playgrounds.
A retailer is at the end of the distributive channel. He provides goods and services to
the ultimate consumers. This he does through his small organization, with the help of
51
a few personnel. In an individual retail store there is not much scope for organization
except in the sense that the shopkeeper has to organize and apportion his time and
resources. The need for organization becomes essential as soon as he hires people
and enters into partnership or takes the help of members of his family in running his
store. A retailer deals in an assortment of goods to cater to the needs of consumers.
His objective is to make maximum profit out of his enterprise. With that end in view
he has to pursue a policy to achieve his objective. This policy is called retailing mix.
A retailing mix is the package of goods and services that store offers to the
customers for sale. It is the combination of all efforts planned by the retailer and
embodies the adjustment of the retail store to the market environment. Retailing mix
a communication mix and a distribution mix. The maximum satisfaction to the
customers is achieved by a proper blend of all three.
The success of the retail stores, therefore, depends on customers reaction to the
retailing mix which influences the profits of the store, its volume of turnover, its share
of the market, its image and status and finally its survival.
There are three main phases in the life of a retailing institution. These are:A. Innovation (Entry)
B. Trading up
C. Vulnerability
A. Innovation (Entry)
In the entry stage, a new retailer enters with new price appeal, limiting product
offering, Sparton Stores & Limited services. Its monopoly power over the others
is its price advantage, which means that it offers products at low prices so as to
get a competitive edge over its competitors.
B. Trading up
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4.2
4.2.1.2 Supermarket
These stores are relatively large, low cost, low margin, high volume, self service
operations designed to serve total needs for food, laundry and household
53
54
Each of the retail stars has identified and settled into a feasible and sustainable
business model of its own.
Shoppers Stop Department store format
Westside- Emulated the Marks & Spencer model of 100 per cent private
label, very good value for money merchandise for the entire family.
Giant and Big Bazaar Hypermarket/cash & carry store
Food world and Neelgiris Supermarket format
Pantaloons and The Home Store Specialty retailing
Tanishq has very successfully pioneered a very high quality organized
Current Format
Department Store
Department Store
Large bookstore
Department Store
New Formats
Quasi-mall
Quasi-mall, smaller outlets, adding food retail
Corner shops
Quasi-mall, food retail
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Pantaloon
Subhishka
Vitan
Foodworld
Glob us
Bombay Bazaar
Efoodmart
Metro
S Kumar's
Hypermarket
Considering moving to self service
Suburban discount store
Hypermarket, Foodworld express
Small fashion stores
Aggregation of Kiranas
Aggregation of Kiranas
Cash and carry
Discount store
56
and
57
58
Retail marketing is the most important part of the entire logistics chain in a business
especially in consumer related products. Without proper retailing the companies
cant do their business. Retailing is the process of selling goods in small quantities to
the public and is not meant for resale. There are various ways of making goods
available to consumers like:
Company to salesperson to consumer.
Company to consumers (online/phone/catalog ordering).
Company to distributor to wholesaler to retailer to consumer.
These three are among the most common ways of making the goods available to
consumers. But in India the three layered system of distributor, wholesaler and
retailer forms the backbone of the front-end logistics of most of the consumer-good
companies.
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In this system the company operating on all India basis appoints hundreds of
distributors across the country that supplies to various retailers and wholesalers.
Wholesalers in turn can either directly sell in the market or can supply to retailers.
The current retailing system prevalent across the country is highly fragmented and
unorganized. Anyone with some money and some real estate can open a small shop
and become a retailer catering to the locality in which he opens the shops.
There are a number of reasons behind this fragmented retail market. Some of
the major reasons being:
Besides this there is other reasons too which led to stifling of growth of organized
segment of retailing sector and which instead led to highly fragmented market.
Today in India we have more than 13 million retail outlets and most of them
are family run and locally owned. There are very few nationally present retail stores.
In India the process of buying and selling at these unorganized retail outlets is highly
characterized by bargaining and negotiations. But slowly with increasing influence of
media and urbanization the market is shifting towards organized segment. Seeing
the huge market size of retail business in the country and the current level of
organized segment many players have jumped into the fray and many are waiting for
the right opportunity to enter it.
Groups
Real Estate Developer
Retail Business
Globus
Chain
K, Raheja
departmental stores
Shoppers Stop - Chain
Hiranandani
departmental stores
Haiko supermarket, Loft sho
Tata
DS Group
stores
Ebony - chain of departme
stores
Foodworld supermarkets, Gia
RPG
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The retail movement in India has acquired the critical mass that is required for rapid
acceleration in terms of industry growth as well as geographical spread. The Indian
industry can no longer be called nascent.
The spread of super stores to the Northern cities such as Delhi, Chandigarh, Jaipur
and Kolkata is evidence of the fact that organized retailing in India has emerged from
its southern bastion.
The retailing boom is being driven by increased expectations as well as changing
shopping behavior of the urban Indian consumer. With the increasing number of
nuclear families, working women, greater work pressure and increased commuting
time, consumers are looking for convenience. And, convenience is defined as having
everything under on roof, longer hours and multiplicity of choice.
On the supply side, the current inefficient supply chain in India, particularly for food
items has led a few players to consolidate their operations to take advantage of
economies of scale and match consumer expectations in terms of delivery as well as
space. So, we have a situation where both demand and supply side dynamics are
fuelling the growth of organized retailing in India, although improvements in the
supply chain are yet to fully match with consumer expectations.
The future growth need not necessarily come only from the big metros, where there
already exists a good retail network. The fact that big Indian retail chains are moving
into places like Indore or Chandigarh is an important indicator of future growth. For
the Rs. 5000-crore organized retail industry it is, perhaps, time to tap the relatively
smaller cities. The share of organized sector in total retail sales will grow from one
per cent now to six percent by 2005. While projections can be slippery, hard facts
point to exciting growth ahead for this sector.
Modern malls made their entry in to India in the late 1990s. with the establishment of
Crossroads in Mumbai and Ansals Plaza in Delhi. By early 2001, several mall
projects were announced. According to market estimates, close to 12 million sq. ft. of
mall space is being developed across several cities in the country of which 10 million
sq. ft. is expected to be operational by end of 2003. With this, rentals for retail
properties have shown a marked decline, which has brought down the bread-even
level of the retail projects. Moreover, retailers would now have access to retailspecific properties, which will increase their efficiencies.
Table 5:
Crossroads
Ansals
Nirmal Lifestyle
Runweals Mall
Karnavat Mall
Raheja Mind space
Jogs Mall
Cable Corporation
Ansals
Sahara
MGF Malls Metroplitian& Plaza
DLF
Shipra
Forum
City Center
Rave 3
Inox
Forum
Spencers Plaza Phase III
Indore, Nasik and Jaipur Malls
Tardeo, Mumbai
South Ex, Delhi
Mulund, Mumbai
Mulund, Mumbai
Thane, Mumbai
Malad, Mumbai
Andheri, Mumbai
Borevali, Mumbai
East Delhi
Gurgaon
Gurgaon
Gurgaon
Noida
KolKotta
KolKotta
Kanpur
Baroda
Bangalore
Chennai
Indore
225-250
175-200
75-90
75-90
65-85
60-80
55-75
55-75
75
50-70
65-85*
65-85
80-180
100
55
45-55
75
70-90
70
45-55
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It looks like a virtual stampede, major players with a cumulative investment of Rs.
375-crore are set to change cityscapes across India. In 40 lakh sq. ft. of retail space
will be developed. In three years, this will rise to 70-lakh sq. ft.
As the retail industry evolves, consumers want more variety before making their
purchase decision. A study on consumer outlook suggests that over 80 percent of
consumers want a wide range of products at hand while shopping. This signifies that
people are finally ready for multioption complexes.
Many old-time corporate are seriously considering using their idle assets. It makes
sense for landowners to develop it and keep the returns rather than sell it outright or
even lease it, especially when there is opportunity here. It is perhaps the best way to
use an idle real estate asset.
The limited kitty of brands have yet another significant knock on effort on the typical
size of Indian malls. In the US and South-East Asia, malls are as large as 50-lakh sq.
ft. Spencer is by far the largest mall in India. It occupies 7 lakh sq. ft. and even that is
dwarfed by Asias largest mall, the 4-million sq. ft. mega mall in Malaysia. Even the
26 malls that are being planned are likely to measure between 50,000 sq. ft. and 2lakh sq. ft. The Indian mall cannot offer too many choices in terms of brands. So,
developing a very large mall can never be sustainable.
Emergence of Region-Specific Formats
For the first time in 10 years, the industry is witnessing the development of regionspecific formats. With organized retail penetrating into B class towns, retailers have
started differentiating in the sizes and formats of stores. For example, in
departmental store format, while most A class cities and metros have larger stores of
50,000 plus sq. ft. sizes, stores in B class towns have stabilized in the 25,000-35,000
sq. ft. range. Most players have started operating these two formats across various
cities, which has helped them to standardize the merchandise offering across the
chain.
Emergence of Discount Formats
Larger discount formats, popularly known as hypermarkets, are now emerging as
major competitors to both unorganized and organized retailers. Penetration of
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organized retail into the lower strata of income groups and consumer demand for
increased value-for-money has improved the prospects of these formats. These
formats span across the entire range of merchandise categories. Big Bazaar
promoted by Pantaloon and Giant promoted by the RPG Group, are examples of this
format.
Entry of International Players
A large number of international retailers have evinced interest in India, despite the
absence of favorable government policy for foreign players. A number of the major
brands have entered the country through licensing agreements with Indian players to
capitalize on the opportunities available in the sector.
Table6:
International Players
Landmark Group, Dubai
Metro, Germany
Shoprite, South Africa
Nanz, Germany
Marks & Spencer, UK
Mango, Spain
McDonalds, USA
Dominos USA
Tricon Restaurant, USA
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CHAPTER 6:
INFORMATION TECHNOLOGY IN RETAIL
Over the years as the consumer demand increased and the retailers geared up to
meet this increase, technology evolved rapidly to support this growth. The hardware
and software tools that have now become almost essential for retailing can be
divided into 3 broad categories:
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VISUAL MERCHANDISING
The decision on how to place & stack items in a store is no more taken on the gut
feel of the store manager. A larger number of visual merchandising tools are
available to him to evaluate the impact of his stacking options. The SPACEMAN
store Suit from AC Nielsen and Modcad are example of products helping in modeling
a retail store design.
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CHAPTER 7:
FOREIGN TOUCH IN INDIAN RETAIL
69
The chief of Marks & Spencer has been making trips to India over the past year.
Global investment bank Warburg Pincus is awaiting the Indian governments
clearance to pick up a 25.1 per cent stake, worth $13 million, in Shoppers Stop.
Dairy Farm international and Jardine Matheson are present here, through tie-ups
with the RPG Group. Fast food major McDonalds have already made a dent in the
marketplace and Indian palates.
The Dubai-based Landmark group is making its presence felt in Chennai through its
lifestyle mega store of over 30,000 sq. ft. landmark is owned by MukeshJagtiani, a
non-resident Indian. Lifestyle International Pvt. Ltd., formed in India recently, is a
wholly-owned subsidiary of the Mauritius-based lifestyle international which, in turn,
is wholly-owned landmark group. In India, according to lifestyle internationals
marketing manager, Roshan Mathew, the target is to have 12 to 16 stores by 2005.
These stores will sell all lifestyle products, barring furniture, under one roof.
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71
QUESTIONNAIRE
1. How frequently you visit city mall Kota?
a) Once in a week
b) Twice in a week
c) Monthly
d) Quarterly
2. What is the main attraction of City Mall?
a) McDonald
b) Dominos
c) Fun Cinema
d) Big-Bazar
3. What is the main purpose of your visit to City Mall?
a) Complete shopping under single roof
b) Freak out
c) Window shopping
d) For events
4. What is your average spending on single visit to City Mal?
a) Less than 500
b) 500-1000
c) More than 1000
d) Not specific
5. How many Malls in Kota City?
a) 1
b) 2
c) 3
d) 4
6. What is your more loyal to?
a) City Mall
b) Stand alone counters
c) Central city market
d) None
7. What is the daily footfall in City Mall?
a) Less than 200
b) 300-500
c) 500-700
d) More than 700
8. What is the strength of staff?
a) Approx 500
b) 500-1000
c) 1000-2000
d) 2000-3000
9. How many outlets in there?
a) D
b) D
c) D
d) D
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Once in a week
Twice in a week
Monthly
Quarterly
73
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
74
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
75
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
76
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
77
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
78
Sales
8%
24%
1st Qtr
2nd Qtr
8%
3rd Qtr
4th Qtr
60%
79
Sales
26%
29%
1st Qtr
2nd Qtr
3rd Qtr
15%
29%
80
4th Qtr
Sales
13%
11%
1%
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
75%
81
Sales
20%
30%
1st Qtr
2nd Qtr
10%
3rd Qtr
4th Qtr
40%
82
Sales
1%3%
1st Qtr
38%
58%
2nd Qtr
3rd Qtr
4th Qtr
83