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INSTITUTE OF INFORMATION TECHNOLOGY & MANAGEMENT (IITM)
Submitted in partial fulfilment of the requirements for the award of the degree of Bachelor of Business Administration (BBA)
To Guru Gobind Singh Indraprastha University, Delhi
Guide: (Mr.Anmol Poddar )
Submitted by: (Aarushi Singh) Roll No.01521101709
Institute of Information Technology & Management, New Delhi – 110058
I am very grateful to my guide Mr. Anmol Poddar without whom this project would not have been possible. My guide’s provisions of proper guidelines helped me a lot. The help provided by various councils, books, and internet cannot be expressed in words.
I wish my sincere gratitude to my parents n friends who supported me in every little way they could, to complete the work.
I wish my sincere, whole-hearted thanks to all those who helped me in making this project.
Institute of Information Technology and Management Paper Title-Personality Development & Communication Skills-III (Minor Project Report) Paper Code-211 Assignment-MM: 18 Topic: Managing Retailing The topic must cover the following aspects: Meaning and Definition Concept and scope of Retailing Position of Retailers in modern marketing Functions of retailers Types of wholesalers Services rendered by retailers Kinds of retailers Marketing decisions by retailers Types of Retail Distribution Outlets mall scale retailers S Departmental stores Multiple shops or chain stores Mail order house Consumer’s cooperative store Supermarket Include relevant examples and figures in your assignment.
DEFINITION AND MEANING
Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.
and specialty stores like The Gap. like Burdines and Macy's. is "Retail Management"(RM). and creating an environment so compelling that he looks nowhere else. hotels and hair salons.is getting to know the final user on behalf of the producer. where retailing is the last one. and necessitates employing several tools of logistics management for a complete end user satisfaction. Therefore.com. RM. Department stores. bringing about operational efficiency at this last stage. What is retailing? Retailing involves selling products and services to consumers for their personal or family use.is a process of facilitation. Zales Jewellers are all examples of retail stores.is an art. . but limited to the exact requirement of the ultimate user. through a series of stages. discount stores like Wal-Mart and K-Mart. RM . like Amazon. Service providers. It is not limited to quantities. like dentists.The process of bringing the ultimate user to the main producer. RM . is also retailers. and on-line stores.
or by a car rental agencies. the internet. developing assortments of products. meaning ‘to cut a piece off’ or ‘to break bulk’. and financing.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. The word ‘retail’ is derived from the French work retailer. Manufacturer Wholesalers Retailers Consumer A retailer is a person. Retailers perform specific activities such as anticipating customer’s wants. Between the producer and the consumer there is a middleman-the retailer. However. merchandise. agent. it also includes the sale of services like those offered at a restaurant. or organisation which is instrumental in reaching the goods. company. who links the producers and the ultimate consumers. The selling need not necessarily take place through a store. agency. or services to the ultimate consumer. parlour. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. acquiring market information. door-to-door visit s—any channel that could be used . A common assumption is that retailing involves only the sale of products in stores. Retailing encompasses selling through the mail.
in order to survive in retailing. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. the ease of entry into retail business results in fierce competition and better value for customer.to approach the consumer. Therefore.e. catering to customers. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer-an easier access to a variety of products. freedom of choice and higher levels of customer service.. As we all know. a firm do a satisfactory job in its primary role i. is easy and to fail is even easier. To enter retailing. .
like the Internet. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. This sector contributes 10% of India's GDP and the current growth rate is 8. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. There are about 300 new malls. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. have helped make retailing an even more challenging and exciting field in recent years. The Future of Retailing Advances in technology. . Tesco.5%. 1500 supermarkets and 325 departmental stores currently under construction.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. Many players are coming up with huge investments. Global retail giants such as Wal-Mart. The nature of the business and the way retailing is done are currently undergoing fundamental changes. The sector is set for a revolution. as both the present players and new entrants are gearing up to explore the market. Germany's Metro AG and many others are ready to enter the retail markets.
Retail is clearly the sector that is poised to show the highest growth in the next five years. like hair styling. Of course. In addition. retailers who offer personal services. consumers often want to see. like Amazon. This sector contributes 10% of India’s GDP and the current growth rate . even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. With new boom in the retail industry.com. in many cases the experience of visiting the retailer is an important part of the purchase. Or. as both the present players and new entrants are gearing up to explore the market. touch and try them before they buy. they may want products immediately and won't want to wait for them to be shipped.However. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. and perhaps most importantly. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back. But even with products. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. The sector is set for a revolution. Also. retailing in some form will always be necessary. traditional retailers with physical stores will continue to be necessary. On-line retailers. will need to have face-to-face interaction with the consumer. the country has identified new scope for retail sector development. For example.
5%. Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. . • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. says an analysis by Ma Foi Management Consultants Ltd. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. Many players are coming up with huge investments. • The retail sector would generate employment for more than 2.5 million people by the year 2010. There are about 300 new malls. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608.is 8.9 billion in 2009 from US$394 billion in2005. 1500 supermarkets and 325 departmental stores currently under construction.
• • Investment in whole supply chain would increase. • • The markets of the sector would flourish and develop.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. production. Exports would increase due to greater sourcing of major players. Employment would increase and skills & manpower will develop. Technology would be upgraded in terms of logistics. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. • • Better lifestyle as better products would be introduced. • • A strong retailing sector would promote tourism. and distribution channels. . • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries.
etc. Global retail giants such as Wal-Mart. Carrefour.. Music World Entertainment Ltd. Wal-Mart Stores. Big Bazaar. Liberty shoes Ltd. Globus Stores Pvt. Leading Indian Retailers: Bata India Ltd. Pantaloon Retail India Ltd. Boots Group. Ebony Retail Holdings Ltd. Tesco. . Titan Industries. Tesco. Subhiksha. EU & Japan constitute 80% of world retail sales.. Ltd. A glimpse of the International Retail: · One of the world’s largest industries exceeding US$ 9 trillion · 47 global fortune companies & 25 of Asia’s top 200 companies are retailers · Dominated by developed countries · US. Germany’s Metro AG and many others are ready to enter the retail markets. Shoppers Stop... Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities. Crossword. Food Bazaar. · Biggest player in India is Pantaloon Retail India Limited.. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market.
The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. The inconveniences caused by lack of parking place. the scarcity of space. which comprised merely shops offering a variety of goods and services clubbed together. The opening up of the economy only fuelled this globalization. independent. The next step was the commercial plazas. certain bottlenecks as well. coupled with the stringent provisions of the Rent Control Act. is grabbing attention. which became a part of the civic planning. toilets and maintenance. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. ushered in the entry big international brands opening their exclusive showrooms. the sheer size it will develop into. Retailing is India’s largest industry in terms of contribution to GDP (Gross . act as a dissuasive factor for many players to initiate operations in the main markets. There are. owner-managed shops. however.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry.
400. snack centres. 039.7% in 2001.800. the global management consultancy AT Kearney put retail trade at Rs. 7. Food sales constitute a high proportion of the total retail sales. per outlet. while non. with an average selling space of 29. which is quite low in comparison to the developed economies. In India.. There is no integrated supply chain management outlook in the Indian traditional retail industry.4 sq. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. There are also an unaccounted number of low cost Kiosks (tea stalls. According to a survey by AT Kearney an overwhelming proportion of the Rs. 000 crore retail markets are unorganized.000 crore. barber shops) and pushcarts mobile vendors. 000 crore segment of the market is organized. . 20. In fact.Domestic Product). The share was 62.4189. Total retail sales area in India was estimated at 328 million sq. mt.food sales were worth Rs. In 2001.1200 million in 2000. which is expected to increase to Rs. 000 crore by the year 2005-an annual increase of 20%. In 2000. only Rs.5 billion.2 billion. The turnover from private labels by major retail chains was estimated at around Rs. mt. the per capita retailing space is about 2 sq. There are around 5 million retail outlets in India. However. worth approximately Rs. 400. ft. the nonfood retailing sector registered faster year-on-year growth than the food sales sector.
0% 6.0% EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. pan stores Others COMPOSITION 34.4% 17.3% 6. 228.11. space and rentals are providing to be the biggest constraints to the development of large formats in metropolitan cities since retailers are aiming at prime locations. Women are taking up corporate jobs. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. especially in south India and are spreading all over India at a rapid pace. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities. families are experiencing growth in income but dearth of time. In urban India.7% 4. However.0% 17.6% 14. which is adding to the .7 billion. In 2001. organized retail trade in India was worth Rs.
The demand for frozen. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. foreign retailers can enter the retailing sector only through restricted modes. paan shops and ration shops are the most popular vehicles of retailing. There is also a strong trend in favour of one-stop shops like supermarkets and department stores.family’s income and leading to better lifestyles rising incomes has led to an increased demand for better quality products while lack of time has led to a demand for better quality products while lack of time has led to a demand for convenience and services. such as haats. Therefore. lead to the closure of many small businesses and result in large-scale unemployment. instant. Global players in the retail segment have been entering the market for a while now. provision stores. especially in the metropolitan and large cities in India. peeth and melas that come up at the same location at regular time intervals. Only 3. there are periodic or temporary markets.6 million outlets cater to more than 700 million inhabitants of rural India. Rural India continues to be serviced by small retail outlets. Apart from this. At present. Here. such as joint ventures where Indian . There has been a strong resistance to foreign direct investment (FDI) in retailing from small traders who fears that foreign companies would take away their business. government has discouraged FDI in the retail sector. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. ready-to-eat food has been on the rise.
The 12 million retail outlets in India are the highest in the world. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. through diversified risks and volume sales command huge concessions on prices from the manufacturers. that the Urban Population although just 25% of the total.7%. is an astounding 250 million in size is growing at healthy rate of 7% per annum. The organized retailer should be able to.partner is an export house (Total Health Care). The main condition for organised retailing is that the retailer should be able to manage and influence the supply chain variables in a commercially viable and sustainable manner. Retail in India’s largest industry after Agriculture with around 20% of the economically active population engaged in it and generation 10% of India’s GDP. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. In interesting to note. Pizza Hut). The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. The chief driver of growth in the retail sector has been the consumer. cash and carry operations (Giant) and licensing (Marks & Spencer’s). CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. with the spending .
for instance in Pune there is MG Road. At present (September 23. each city developed its own identity and shopping cluster. 2005). covering an area of 21. DRIVERS OF CHANGE IN RETAILING • • • • • • • Changing demographics and industry structure Expanding computer technology Emphasis on lower costs and prices Emphasis on convenience and service Focus on products Added experimentation Continuing growth of non-store retailing . Delhi has Connaught Place. And by year end the count will shoot up to 158 malls. street vendors and high-street shops for consumer durables and luxury goods.increasing at an average of 11% per annum. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. Karol Bagh and South Extension. The core and the Lower middle have increased their share in the Growth. according to a study by a fashion magazine Image. To cater to this. organized parking lots and other public amenities. Bangalore has Brigade Road and Commercial Street. In India we have 96 malls.6 million sq ft. It will cover 34 million sq ft area. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. Kiosks. India will have 358 malls by 2007.
Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. governed by their individual sales philosophy. Retailers want of optimize sales within the limited shelf space. and in the value chain in particular. ‘Marketers have to sell a new product several times. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. As a result. they have a strong say in the success of the product or service launched by a business firm. This is especially true in the case or new products. Retailers undertake risk in selection of goods to be sold given the following major concerns: . brand image. then to retailer and finally to the user of the product. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. The role of retailers in the present competitive environment has gained attention from manufacturers because external parties such as market intermediaries and supplying partners are becoming increasingly powerful. A product manager of household appliances claimed.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy.In today’s competitive environment retailers have redefined their role in general. and market profile in order to ensure a competitive edge. first within the company.
Sears. McDonald’s. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. The larger retailers have managed to set up huge supply/distribution chains. financing pacts and wide-scale marketing plans. Marks and Spencer. In the backdrop of globalization. Retail formats and companies that were unknown three decades ago are now major forces in the economy. liberalization and highly aware customers. such as Wal-Mart. If such space is occupied by merchandise that is not moving. the challenges for retail managers the world over are increasing-they must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. inventory management systems. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. The world over retail business is denominated by smaller family run chain stores and regionally targeted stores but gradually more and more markets in the western world are being taken over by billion dollar multinational conglomerates. Selecting target markets.• Selling space available is relatively fixed and returns maximum profits. it will not result in profit. negotiating with suppliers. Therefore. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. a retailer is required to make a conscious effort to position himself distinctively to face the . determining what merchandise and services to offer.
The retailer buys a variety of products from the wholesaler or a number of wholesalers. consequently. Provides two-way information . . This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. Similarly. Retailers add value to products by making it easier for manufactures to sell and consumers to buy.competition. • • In brief they provide us with following functions: Provides personal services to all. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. and. He thus performs two functions like buying of goods and assembling of goods. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. By bringing multitudes of manufacturers and consumers together at a single point. retailers make it possible for products to be sold. retailers are a vital part of the business world. a sweater or a bar of soap. business to be done. It would be very costly and time consuming for you to locate.
• Undertake physical movement and storage of goods . Stock goods for ready supply to buyers. theft. • Extend credit facility . • • Create demand by window display etc. • • Assembles goods from various sources.The retailer performs storing function by stocking the goods for a consumer. deterioration in the quality and spoilage of goods.He resorts to standardization and grading of goods in such a way that these are accepted by the customers. .He develops personal contact with the consumers and gives them goods on credit. Besides he bears risks on account of fire.He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer. He bears the risks in connection with Physical Spoilage of goods and fall in price.• Facilitate standardisation and grading .
About four out of five wholesaling establishments in the United States are merchant wholesalers . and automobile equipment. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. drugs. electrical supplies. and cafeterias across the United States. furniture. plumbing supplies. about 3. Merchant wholesalers: These wholesalers own the products they sell. It actually owns . These wholesalers originally developed to .TYPES OF WHOLESALERS 1. 2.takes title to the plywood for some period of time before selling to its customers. For example. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. cosmetics. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. hotels.and they handle about 59 percent of wholesale sales.000 specialized food wholesalers compete for the business of restaurants. And several wholesalers may be competing for the same customers. For example.
and travel books. basic reference books.and limited-line stores. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. The company offers hardcover best sellers. they serve hardware stores. . Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store. popular paperbacks. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. cookbooks. drugstores. In business products. they serve the single. they cover a wide geographic area and offer more specialized service. For example. Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers. 3. with their broad line of convenience and shopping products. In consumer products. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . Now.the general stores. they might carry only food. For example.and offer more information and service than other service wholesalers. electric appliance shops. 4. or certain types of industrial tools or supplies. wearing apparel.serve the early retailers . and small department stores. Specialty wholesalers often know a great deal about the final target markets in their channel.
retailers. So service wholesalers set a minimum charge . .but they do not actually handle. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers . or deliver them. Drop-shippers: These wholesalers own (take title to) the products they sell . These wholesalers are mainly involved in selling. are too small to be served profitably by a service wholesaler. such as small auto repair shops.or just refuse to grant credit to a small business that may have trouble paying its bills.and pass these orders on to producers.except that the customer must pay cash. stock. or other business users . Because drop-shippers do not have to handle the products. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. 6. Some retailers. And using cash-and-carry outlets may enable the small retailer to stay in business. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions. their operating costs are lower. They get orders from wholesalers. Then the producer ships the order directly to the customers.5. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter.
tobacco. the Netherlands. and France.don't have a local wholesaler. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. the United Kingdom. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. potato chips. Mail-order wholesalers.truck wholesalers may provide almost the same functions as full-service wholesalers. These wholesalers sell out of catalogs that may be distributed widely to smaller industrial customers or retailers who might not be called on by other middlemen. A 7-Eleven store that runs out of potato chips on a busy Friday night doesn't want to be out of stock all weekend! 8. For example. Germany. jewellery. 9. and general merchandise lines. Some truck wholesalers operate 24 hours a day. sporting goods. and salad dressings . Sweden. These wholesalers operate almost as fullservice wholesalers . Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry.and deliver an order within hours. These wholesalers operate in the hardware. Inmac uses a catalog to sell a complete line of 3. Many of these customers . candy.000 different computer accessories and supplies. every day .with the "profits" going to the cooperative's customer-members. Canada.7. Producers' cooperatives.especially those in smaller towns . By handling perishable products in general demand . Cooperatives develop in agricultural markets .
hardware items. Some also brand these improved products . Rack jobbers are almost service wholesalers . Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . and Land O' Lakes Creameries. Inc. Successful producers' cooperatives emphasize sorting .except that they usually are paid cash for what is sold or delivered. For example.where there are many small producers. and books and magazines) because they sell small quantities of so many different kinds of products.and they often display them on their own wire racks. Sunmaid Raisin Growers Association. the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. 10.to improve the quality of farm products offered to the market. Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares.and then promote the brands. Examples of such organizations are Sunkist (citrus fruits). .
SERVICES RENDERED BY RETAILERS Services provided by the retailers to the wholesalers and manufacturers: They provide selling outlets to wholesalers and manufacturers. . They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers. They communicate the needs and desires of consumers to the manufacturers. They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers.
They keep the consumers informed about the changing trends in the market about the different varieties of products. . Thus they satisfy their demands and provide them a wide choice of goods. They may also perform storage function by keeping stocks of goods. Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. after sale services. credit facility. They also provide other services to the consumers such as free home delivery. etc. They even act as an advisor and guide to the consumers by bringing new products to their notice and educating them about its diverse uses.
2.KINDS OF RETAILERS On the basis of ownership- There are four basic legal forms of ownership for retailers: 1.The vast majority of small businesses start out as sole proprietorships. two or more people share ownership of a single business. Partnership: .A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. usually the individual who has the day-to-day responsibility for running the business. These firms are owned by one person. . In a partnership. Sole proprietorship: .
but is clearly for a limited period of time or a single project. Joint venture: . It acts like a general partnership. and the duration of the LLC is usually determined when the organization papers are filed. whether to hire employees and manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by the local entrepreneurs. joint ventures may be taxed like association of persons. 4. Independent retail unit: .A joint venture is not well defined in the law. An independent retailer owns one retail unit. sometimes at maximum marginal rates. . The owners are members. Limited liability Company (public and private): . Retail firms can be classified into five heads on the basis of their respective operational structures: 1. Operational structure defines the key strategic decision of retail entity.The total number of retailers in India is estimated to be over 5 million in 2003. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. About 78% of these are small family businesses utilizing only household labour.3. Unless incorporated or established as a firm as evidenced by a deed.
3.A chain retailer operates multiple outlets (store units) under common ownership. 5. .2. 4. in discount stores. Franchising: . In this context the detailed example of Kendriya Bhandar in India.Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer. Leased Department or Shop – in – Shop: . Retail Chain: . or a service sponsor) and a retail franchisee. Usually this is done in case of department and specially stores and also at times. Co-operative Outlets: .It refers to department in a retail store that are rented to an outside party. it usually engages in some level of centralized (or coordinated) purchasing and decision making.Co-operative outlets are generally owned and managed by co-operative societies. which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business. a wholesaler.
which attracts the customers staying close by.associated Locations:. low rent. This type of location has several advantages including no competition. work together to attract customers to their retail area. offering a variety of merchandise.In this case. 2. For example the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi Ludhiana highway. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location. and better visibility from the road. a retailer locates his store in a place where a group o retail outlets. Classification of retailers on the basis of location 1. Retailers in a free-standing location: . and also compete against each other for the same customers.Retailers located at a connected to other retailers depend entirely on their site which is not sore’s drawing power and on the various promotional tools to attract customers. . Retailers can locate their stores in an isolated place and attract the customers to the store on their own strength-such as a small grocery store or paan shop in a colony. easy parking and lower property costs. Retailers in a Business.
Usman Street for jewellery. T Nagar for ready-made garments. particularly traditional independent retailers or chain stores. service. Previously. retailers are looking for new marketing strategies to attract and retain customers. MARKETING DECISIONS BY RETAILERS Today. Bunder treet for stationary products. Godown Street is famous for clothes. For example.3. most of the cities have specialized markets famous for a particular product category. in Chennai. better than the competitor. Airport Retailing: . Now everything is different. Govindappan naicleen street for grocery. In India.Besides the above location-based classification. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space.For quite some time. Poo Kadia for food and vegetables. special or unique assortment good. At . 4. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Retailers in Specialized Markets: . we also have in India-retailers who prefer specialized markets. and Internet presentations credit cards that buyers can make purchases on credit. it suffices was to offer people the convenience of location. Lately.
to reduce its dependence on marks on a national scale. and so have to open offices with a large range and variety of goods. faced with competition from specialized and trading at a discount store. One of the most important and most responsible decisions that have to take a retailer associated with the target market. department stores. Superstores compete with supermarkets. and higher income families. convenience? Yet will identify and describe the target . started a real war. Many of them have historically located in the centre of cities. increased their number.many stores you will find quite the same range . upgrade their facilities. rebuild their stores. Supermarkets more money spent on activities sales promotion. Others are increasingly satisfied with the sale. What customer oriented shop: high. Not they need a credit card of a shop. depth of assortment. low-income? Do buyers diversity. trying to regain former popularity. experimenting with trading by mail and tele marketing. opening their offices in the suburbs.trying to reach maximum volume of sales. moving to “small” private brands. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. where there is always space on the Parking. the manufacturers sell their products wherever possible. because bank cards now accepted almost universally. medium. Example. Many stores cut its own set of services and shops reduced prices. on the contrary. People are not going to pay for the same or similar mark more. especially if the amount provided in this service is reduced.
market. They generally hold small stocks of the products of regular use. This form of retailing faces the problems of small capital. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. the retailer will not make informed decisions on assortment.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. Trying meeting the needs of a large number of different segments. But. Some retailers target market determined fairly accurately. means and content of advertising. they are not satisfying either one of them. small-scale retailing is a very common. lack of professionalism and low purchasing power. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. Such retailers are very large in number but account for a small portion of the total retail business. . Many companies do not have a specific target market. store environment. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . It incurs low operating costs and is usually owned and operated by a proprietor. the price level. simple and flexible way of distributing the products to the final consumers.
The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . The hawkers and pedlars. cheap jacks. They do not have any particular line of business and carry very little stock of those goods. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. market traders and street sellers fall under this category.are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises. . They change their place of business according to their convenience and sales prospects. They save time and efforts of customers in buying articles of ordinary use.
bus stops. For example.are the shops which deal in all types of general consumer goods of regular use like bread. grocery shops. They provide services like goods on credit and home delivery to their customers. (ii) dealers of second hand goods: . (iii) general stores or variety stores: . etc. They are generally located in shopping centres. street-crossing. grocery. etc.They are set up in residential areas or busy markets. etc. butter. paper and pencils.(i) street stalls: . . readymade garments shop.are the small shops on the roadside. sweets shop.are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. etc. chemist shops. clothes.are engaged in purchase and sale of used goods like books. etc. They mainly include: . (iv) speciality shops: . They sell a limited variety of products of regular use like stationery.are the shops which deal in only one or two special types of goods.• Fixed Shop Retailers: .
All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product. This form of retailing involves high operating costs and lacks personal contact with the customers. Such retailers are not very large in number. sales promotion. etc. They have a fixed line of business in which they have invested huge capital. publicity. The various forms of large scale retailers are:- • Departmental stores: .are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. They offer a . Large-scale Retailers: .are large scale retail establishments comprising of a number of departments in the same building. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising.
Customers select the goods . groceries.are large scale retail shops operating at lower costs. They sell a wide variety of consumer goods of regular use such as food items. Supermarkets: .wide choice of products to the customers under one roof. car parking. They sell goods at lower prices than the departmental stores. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers. and post and telegraph offices and so on. recreation rooms. They also provide many amenities for customer's convenience such as restaurants.etc at one place.
The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers.are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. It is also called self-service stores. they do not provide additional facilities to their customers. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions.themselves without salesman's assistance. • Multiple Shops or chain stores:. . They offer goods at lower prices as they enjoy economies of bulk buying. But.
are the cooperative stores which are owned and operated by the consumers themselves.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. They are incorporated as an association under the cooperative societies act. it helps the consumers to get their requirements at their own place and thus saves their time and expenses. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.• Mail order houses: . The post office is their main channel of distribution. But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. The aim . • Consumer cooperative stores: . They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. However.
These are used to sell prepacked and low cost products of mass consumptions like beverages. In return. buyers receive a specified quantity of the product from the machine.is a new and complementary form of retailing operated by inserting coins or tokens into the machine by the buyers. mother dairy sells milk through such vending machines. For example. etc. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. • Automatic vending machines: .of such cooperative stores is to render service to its members and not to maximise profits. tickets. .
It has 4 . The company is headquartered in Mumbai with zonal offices at Kolkata.RELEVANT EXAMPLE • Big Bazaar: the Indian wall-mart (organised retailer) Pantaloon retail (India) limited is today organised as one of the pioneers in the business of organised retailing in the country with a turnover of Rs 400 crores. Bangalore and Gurgaon (delhi).
Mumbai. Bagpur. focussing on ‘value for money’ segment. 6 food bazaar stores with over 6. Pantaloon has come up with an excellent revenue model. Chennai. Kishore Biyani. Big Bazaar has strong own brand names in its portfolio across product categories. . This segment is very price conscious and always looks out for value for money. Ahmadabad.ft retail space across Kolkata. It has been one of the pioneers in organized retailing in India. Kanpur. John Miller and Bare.kinds of stores: 14 pantaloon family stores. Pune. and Delhi. Hyderabad. 7 big bazaar discount hypermarkets. which forms the large chunk of Indian population. The brands include Pantaloon. Pantaloon successfully launched its discount store chain. which targets the large and growing upper-middle and middle class of Indian society. Bangalore. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr. Pantaloon plans to target the upper middle and the middle class segment.5 lakh sq.
com www.BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.com .google.msn.
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