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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.
is also retailers. like dentists. like Amazon. RM . but limited to the exact requirement of the ultimate user. Zales Jewellers are all examples of retail stores.The process of bringing the ultimate user to the main producer. hotels and hair salons. bringing about operational efficiency at this last stage.com. discount stores like Wal-Mart and K-Mart. and necessitates employing several tools of logistics management for a complete end user satisfaction.is getting to know the final user on behalf of the producer. through a series of stages. Department stores. RM . and on-line stores. and creating an environment so compelling that he looks nowhere else. Service providers. . where retailing is the last one.is an art. It is not limited to quantities. is "Retail Management"(RM). What is retailing? Retailing involves selling products and services to consumers for their personal or family use. and specialty stores like The Gap. RM.is a process of facilitation. Therefore. like Burdines and Macy's.
agent. the internet. parlour. or organisation which is instrumental in reaching the goods. meaning ‘to cut a piece off’ or ‘to break bulk’. Between the producer and the consumer there is a middleman-the retailer. The selling need not necessarily take place through a store. and financing. company. Retailers perform specific activities such as anticipating customer’s wants.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. acquiring market information. The word ‘retail’ is derived from the French work retailer. However. door-to-door visit s—any channel that could be used . agency. it also includes the sale of services like those offered at a restaurant. or services to the ultimate consumer. 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. A common assumption is that retailing involves only the sale of products in stores. or by a car rental agencies. who links the producers and the ultimate consumers. Retailing encompasses selling through the mail. developing assortments of products. merchandise. Manufacturer Wholesalers Retailers Consumer A retailer is a person.
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. a firm do a satisfactory job in its primary role i. As we all know. To enter retailing. catering to customers. in order to survive in retailing. is easy and to fail is even easier. the ease of entry into retail business results in fierce competition and better value for customer. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted.e. .to approach the consumer. Therefore..
have helped make retailing an even more challenging and exciting field in recent years. Germany's Metro AG and many others are ready to enter the retail markets. This sector contributes 10% of India's GDP and the current growth rate is 8. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. like the Internet.5%.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. . The nature of the business and the way retailing is done are currently undergoing fundamental changes. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. Tesco. The Future of Retailing Advances in technology. as both the present players and new entrants are gearing up to explore the market. 1500 supermarkets and 325 departmental stores currently under construction. The sector is set for a revolution. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. Global retail giants such as Wal-Mart. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. There are about 300 new malls.
In addition. will need to have face-to-face interaction with the consumer. retailers who offer personal services. Also. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly.com. in many cases the experience of visiting the retailer is an important part of the purchase. traditional retailers with physical stores will continue to be necessary. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. they may want products immediately and won't want to wait for them to be shipped. retailing in some form will always be necessary. Or. like hair styling. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back. Of course. and perhaps most importantly. The sector is set for a revolution.However. the country has identified new scope for retail sector development. as both the present players and new entrants are gearing up to explore the market. consumers often want to see. Retail is clearly the sector that is poised to show the highest growth in the next five years. This sector contributes 10% of India’s GDP and the current growth rate . touch and try them before they buy. On-line retailers. For example. With new boom in the retail industry. like Amazon. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. But even with products.
The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. 1500 supermarkets and 325 departmental stores currently under construction.5 million people by the year 2010. There are about 300 new malls. Many players are coming up with huge investments. • The retail sector would generate employment for more than 2. Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. .is 8. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. says an analysis by Ma Foi Management Consultants Ltd.5%.9 billion in 2009 from US$394 billion in2005. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010.
• • A strong retailing sector would promote tourism. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. • • Better lifestyle as better products would be introduced. production. and distribution channels. Exports would increase due to greater sourcing of major players. Technology would be upgraded in terms of logistics. . • • The markets of the sector would flourish and develop. Employment would increase and skills & manpower will develop. • • Investment in whole supply chain would increase.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services.
Food Bazaar. · Biggest player in India is Pantaloon Retail India Limited. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. Boots Group. Subhiksha.. Ebony Retail Holdings Ltd.. Pantaloon Retail India Ltd. Global retail giants such as Wal-Mart. . EU & Japan constitute 80% of world retail sales. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd.. Big Bazaar. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities.. Liberty shoes Ltd. Music World Entertainment Ltd. Shoppers Stop. Tesco. Globus Stores Pvt. Tesco. Carrefour. A glimpse of the International Retail: · One of the world’s largest industries exceeding US$ 9 trillion · 47 global fortune companies & 25 of Asia’s top 200 companies are retailers · Dominated by developed countries · US. Wal-Mart Stores. Crossword. Ltd. Titan Industries. Leading Indian Retailers: Bata India Ltd.. etc. Germany’s Metro AG and many others are ready to enter the retail markets.
The next step was the commercial plazas. independent. The inconveniences caused by lack of parking place. is grabbing attention. Retailing is India’s largest industry in terms of contribution to GDP (Gross . which became a part of the civic planning. ushered in the entry big international brands opening their exclusive showrooms. act as a dissuasive factor for many players to initiate operations in the main markets. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. which comprised merely shops offering a variety of goods and services clubbed together. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. the sheer size it will develop into. the scarcity of space. There are. certain bottlenecks as well. owner-managed shops. The opening up of the economy only fuelled this globalization. however. coupled with the stringent provisions of the Rent Control Act. toilets and maintenance.
which is quite low in comparison to the developed economies. There are also an unaccounted number of low cost Kiosks (tea stalls. 400. barber shops) and pushcarts mobile vendors.food sales were worth Rs.7% in 2001. 20. only Rs. while non. . There are around 5 million retail outlets in India. the global management consultancy AT Kearney put retail trade at Rs.1200 million in 2000. However. The turnover from private labels by major retail chains was estimated at around Rs. In 2001. The share was 62. per outlet. snack centres. 000 crore by the year 2005-an annual increase of 20%. In fact. 000 crore retail markets are unorganized. 7. ft. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. 039.5 billion. which is expected to increase to Rs. the per capita retailing space is about 2 sq. In 2000. worth approximately Rs. 400. There is no integrated supply chain management outlook in the Indian traditional retail industry. 000 crore segment of the market is organized.4189. mt.2 billion. with an average selling space of 29. Food sales constitute a high proportion of the total retail sales..000 crore. Total retail sales area in India was estimated at 328 million sq.4 sq. In India. According to a survey by AT Kearney an overwhelming proportion of the Rs. mt.Domestic Product).800. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins.
COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco.0% EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. organized retail trade in India was worth Rs. However. In urban India. 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. In 2001. especially in south India and are spreading all over India at a rapid pace. which is adding to the .0% 17.7% 4.7 billion.4% 17. 228.0% 6.3% 6. Women are taking up corporate jobs. families are experiencing growth in income but dearth of time.6% 14.11. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities. pan stores Others COMPOSITION 34.
Therefore. Players that entered before the easing of restrictions on FDI in retail had to come through different modes.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. instant. 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. Rural India continues to be serviced by small retail outlets. Apart from this. paan shops and ration shops are the most popular vehicles of retailing.6 million outlets cater to more than 700 million inhabitants of rural India. The demand for frozen. At present. ready-to-eat food has been on the rise. foreign retailers can enter the retailing sector only through restricted modes. provision stores. such as haats. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. such as joint ventures where Indian . peeth and melas that come up at the same location at regular time intervals. there are periodic or temporary markets. especially in the metropolitan and large cities in India. There is also a strong trend in favour of one-stop shops like supermarkets and department stores. Global players in the retail segment have been entering the market for a while now. lead to the closure of many small businesses and result in large-scale unemployment. Here. government has discouraged FDI in the retail sector. Only 3.
with the spending .partner is an export house (Total Health Care).7%. In interesting to note. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. is an astounding 250 million in size is growing at healthy rate of 7% per annum. Pizza Hut). cash and carry operations (Giant) and licensing (Marks & Spencer’s). franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. that the Urban Population although just 25% of the total. The organized retailer should be able to. 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. through diversified risks and volume sales command huge concessions on prices from the manufacturers. The 12 million retail outlets in India are the highest in the world. The chief driver of growth in the retail sector has been the consumer. 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. 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. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs.
And by year end the count will shoot up to 158 malls. The core and the Lower middle have increased their share in the Growth. for instance in Pune there is MG Road. street vendors and high-street shops for consumer durables and luxury goods.increasing at an average of 11% per annum.6 million sq ft. At present (September 23. Delhi has Connaught Place. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. Bangalore has Brigade Road and Commercial Street. 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 . India will have 358 malls by 2007. To cater to this. covering an area of 21. organized parking lots and other public amenities. according to a study by a fashion magazine Image. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. It will cover 34 million sq ft area. 2005). Kiosks. Karol Bagh and South Extension. In India we have 96 malls. each city developed its own identity and shopping cluster.
The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. first within the company.In today’s competitive environment retailers have redefined their role in general. As a result. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. governed by their individual sales philosophy.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy. Retailers undertake risk in selection of goods to be sold given the following major concerns: . and market profile in order to ensure a competitive edge. A product manager of household appliances claimed. and in the value chain in particular. brand image. This is especially true in the case or new products. they have a strong say in the success of the product or service launched by a business firm. 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. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. then to retailer and finally to the user of the product. ‘Marketers have to sell a new product several times. Retailers want of optimize sales within the limited shelf space.
financing pacts and wide-scale marketing plans. such as Wal-Mart. it will not result in profit. The larger retailers have managed to set up huge supply/distribution chains. 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. determining what merchandise and services to offer. If such space is occupied by merchandise that is not moving. McDonald’s. Therefore.• Selling space available is relatively fixed and returns maximum profits. a retailer is required to make a conscious effort to position himself distinctively to face the . training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. In the backdrop of globalization. negotiating with suppliers. 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. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. Marks and Spencer. liberalization and highly aware customers. inventory management systems. Selecting target markets. Sears. Retail formats and companies that were unknown three decades ago are now major forces in the economy.
retailers make it possible for products to be sold. • • 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. Provides two-way information .The retailer buys a variety of products from the wholesaler or a number of wholesalers. retailers are a vital part of the business world. . He thus performs two functions like buying of goods and assembling of goods. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. Similarly. By bringing multitudes of manufacturers and consumers together at a single point. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. consequently. This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. business to be done. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers.competition. a sweater or a bar of soap. and. It would be very costly and time consuming for you to locate.
Stock goods for ready supply to buyers.He resorts to standardization and grading of goods in such a way that these are accepted by the customers. • • Assembles goods from various sources. Besides he bears risks on account of fire. theft. deterioration in the quality and spoilage of goods. . He bears the risks in connection with Physical Spoilage of goods and fall in price. • Extend credit facility .He develops personal contact with the consumers and gives them goods on credit.The retailer performs storing function by stocking the goods for a consumer. • Undertake physical movement and storage of goods .He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer.• Facilitate standardisation and grading . • • Create demand by window display etc.
takes title to the plywood for some period of time before selling to its customers. and cafeterias across the United States. plumbing supplies. drugs.and they handle about 59 percent of wholesale sales. For example. furniture. Merchant wholesalers: These wholesalers own the products they sell. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. cosmetics. and automobile equipment. about 3. 2. These wholesalers originally developed to . And several wholesalers may be competing for the same customers. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. It actually owns .000 specialized food wholesalers compete for the business of restaurants. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. electrical supplies. hotels. About four out of five wholesaling establishments in the United States are merchant wholesalers .TYPES OF WHOLESALERS 1. For example.
wearing apparel. basic reference books. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. cookbooks. The company offers hardcover best sellers. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . In business products. . electric appliance shops. they serve the single. drugstores. Now. 4. For example.and limited-line stores. For example.the general stores.and offer more information and service than other service wholesalers. or certain types of industrial tools or supplies. and travel books. Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers. 3. Specialty wholesalers often know a great deal about the final target markets in their channel.serve the early retailers . they cover a wide geographic area and offer more specialized service. they might carry only food. with their broad line of convenience and shopping products. In consumer products. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. and small department stores. popular paperbacks. Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store. they serve hardware stores.
Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. are too small to be served profitably by a service wholesaler. or other business users . such as small auto repair shops. 6. Drop-shippers: These wholesalers own (take title to) the products they sell . their operating costs are lower.but they do not actually handle. or deliver them. So service wholesalers set a minimum charge .and pass these orders on to producers. And using cash-and-carry outlets may enable the small retailer to stay in business. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers . They get orders from wholesalers. retailers. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. . Then the producer ships the order directly to the customers. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions.or just refuse to grant credit to a small business that may have trouble paying its bills. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. These wholesalers are mainly involved in selling. stock. Because drop-shippers do not have to handle the products. Some retailers.5.except that the customer must pay cash.
Many of these customers .tobacco. candy. Mail-order wholesalers. and salad dressings .7. potato chips. 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. Germany. By handling perishable products in general demand . Producers' cooperatives. These wholesalers operate almost as fullservice wholesalers .especially those in smaller towns . 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.truck wholesalers may provide almost the same functions as full-service wholesalers. sporting goods. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. and France. Some truck wholesalers operate 24 hours a day. and general merchandise lines. Inmac uses a catalog to sell a complete line of 3. jewellery. For example.and deliver an order within hours.000 different computer accessories and supplies. the Netherlands. Canada.with the "profits" going to the cooperative's customer-members. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. every day . 9. the United Kingdom.don't have a local wholesaler. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. These wholesalers operate in the hardware. Cooperatives develop in agricultural markets . Sweden.
For example. Rack jobbers are almost service wholesalers . Sunmaid Raisin Growers Association. . Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets .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. the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. and Land O' Lakes Creameries. Examples of such organizations are Sunkist (citrus fruits).and they often display them on their own wire racks. Some also brand these improved products . Inc. 10.where there are many small producers.except that they usually are paid cash for what is sold or delivered.and then promote the brands. and books and magazines) because they sell small quantities of so many different kinds of products. Successful producers' cooperatives emphasize sorting . hardware items.
They communicate the needs and desires of consumers to the manufacturers.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 save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers. .
They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. credit facility. Thus they satisfy their demands and provide them a wide choice of goods. They may also perform storage function by keeping stocks of goods. etc. after sale services. . Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. They keep the consumers informed about the changing trends in the market about the different varieties of products. 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. They also provide other services to the consumers such as free home delivery.
usually the individual who has the day-to-day responsibility for running the business. two or more people share ownership of a single business. These firms are owned by one person.KINDS OF RETAILERS On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. Sole proprietorship: . Partnership: .A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. .The vast majority of small businesses start out as sole proprietorships. In a partnership. 2.
Operational structure defines the key strategic decision of retail entity.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. joint ventures may be taxed like association of persons.3. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure.A joint venture is not well defined in the law. About 78% of these are small family businesses utilizing only household labour. sometimes at maximum marginal rates. Unless incorporated or established as a firm as evidenced by a deed. but is clearly for a limited period of time or a single project. An independent retailer owns one retail unit. 4. Joint venture: . Limited liability Company (public and private): . 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. It acts like a general partnership.The total number of retailers in India is estimated to be over 5 million in 2003. The owners are members. Independent retail unit: .
Co-operative Outlets: . In this context the detailed example of Kendriya Bhandar in India.Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer. Usually this is done in case of department and specially stores and also at times. Franchising: .It refers to department in a retail store that are rented to an outside party.Co-operative outlets are generally owned and managed by co-operative societies.2. in discount stores. a wholesaler.A chain retailer operates multiple outlets (store units) under common ownership. 3. which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business. 4. or a service sponsor) and a retail franchisee. it usually engages in some level of centralized (or coordinated) purchasing and decision making. Retail Chain: . Leased Department or Shop – in – Shop: . 5. .
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. a retailer locates his store in a place where a group o retail outlets. low rent. offering a variety of merchandise. easy parking and lower property costs. This type of location has several advantages including no competition. 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. Classification of retailers on the basis of location 1. and also compete against each other for the same customers. . which attracts the customers staying close by.associated Locations:. Retailers in a free-standing location: . Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location.In this case. work together to attract customers to their retail area. For example the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi Ludhiana highway. and better visibility from the road. Retailers in a Business. 2.
At . Now everything is different. Airport Retailing: .3. we also have in India-retailers who prefer specialized markets. MARKETING DECISIONS BY RETAILERS Today. better than the competitor. For example. Bunder treet for stationary products. it suffices was to offer people the convenience of location. in Chennai. Govindappan naicleen street for grocery. most of the cities have specialized markets famous for a particular product category. service.For quite some time. Lately. T Nagar for ready-made garments. retailers are looking for new marketing strategies to attract and retain customers. In India. and Internet presentations credit cards that buyers can make purchases on credit. Godown Street is famous for clothes. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. special or unique assortment good. Usman Street for jewellery.Besides the above location-based classification. 4. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Poo Kadia for food and vegetables. Retailers in Specialized Markets: . Previously. particularly traditional independent retailers or chain stores.
low-income? Do buyers diversity. on the contrary. Supermarkets more money spent on activities sales promotion. opening their offices in the suburbs. rebuild their stores. Superstores compete with supermarkets. especially if the amount provided in this service is reduced. Example. experimenting with trading by mail and tele marketing. and higher income families. started a real war. increased their number. department stores. People are not going to pay for the same or similar mark more. faced with competition from specialized and trading at a discount store. medium. convenience? Yet will identify and describe the target . Not they need a credit card of a shop. Others are increasingly satisfied with the sale. Many of them have historically located in the centre of cities. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. One of the most important and most responsible decisions that have to take a retailer associated with the target market.many stores you will find quite the same range . trying to regain former popularity. What customer oriented shop: high. upgrade their facilities. moving to “small” private brands. Many stores cut its own set of services and shops reduced prices. where there is always space on the Parking. because bank cards now accepted almost universally. and so have to open offices with a large range and variety of goods. depth of assortment. to reduce its dependence on marks on a national scale. the manufacturers sell their products wherever possible.trying to reach maximum volume of sales.
the retailer will not make informed decisions on assortment. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. store environment.market. Such retailers are very large in number but account for a small portion of the total retail business. lack of professionalism and low purchasing power. It incurs low operating costs and is usually owned and operated by a proprietor. This form of retailing faces the problems of small capital.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. Many companies do not have a specific target market. Trying meeting the needs of a large number of different segments. they are not satisfying either one of them. . They generally hold small stocks of the products of regular use. But. small-scale retailing is a very common. means and content of advertising. Some retailers target market determined fairly accurately. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . simple and flexible way of distributing the products to the final consumers. the price level.
are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . 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. They save time and efforts of customers in buying articles of ordinary use. They do not have any particular line of business and carry very little stock of those goods. The hawkers and pedlars. cheap jacks. They change their place of business according to their convenience and sales prospects. .
are the small shops on the roadside. etc.are engaged in purchase and sale of used goods like books. (ii) dealers of second hand goods: .are the shops which deal in only one or two special types of goods.They are set up in residential areas or busy markets. They provide services like goods on credit and home delivery to their customers.• Fixed Shop Retailers: .are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets.(i) street stalls: . (iii) general stores or variety stores: . street-crossing. (iv) speciality shops: . chemist shops. They mainly include: . grocery shops. clothes. grocery. butter. paper and pencils. They are generally located in shopping centres. etc. etc. readymade garments shop. sweets shop. etc. etc.are the shops which deal in all types of general consumer goods of regular use like bread. . For example. bus stops. They sell a limited variety of products of regular use like stationery.
They have a fixed line of business in which they have invested huge capital.are large scale retail establishments comprising of a number of departments in the same building. Such retailers are not very large in number. All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product. Large-scale Retailers: . The various forms of large scale retailers are:- • Departmental stores: . etc. This form of retailing involves high operating costs and lacks personal contact with the customers.are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. sales promotion. publicity. They offer a . But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising.
etc at one place. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers. They also provide many amenities for customer's convenience such as restaurants. Supermarkets: . Customers select the goods . car parking. groceries. recreation rooms. They sell goods at lower prices than the departmental stores. and post and telegraph offices and so on.are large scale retail shops operating at lower costs.wide choice of products to the customers under one roof. They sell a wide variety of consumer goods of regular use such as food items.
They offer goods at lower prices as they enjoy economies of bulk buying. • Multiple Shops or chain stores:.themselves without salesman's assistance. But. 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.
The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination. They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. 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 . it helps the consumers to get their requirements at their own place and thus saves their time and expenses. They are incorporated as an association under the cooperative societies act. • Consumer cooperative stores: .are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. However. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.are the cooperative stores which are owned and operated by the consumers themselves.• Mail order houses: .
buyers receive a specified quantity of the product from the machine.of such cooperative stores is to render service to its members and not to maximise profits. These are used to sell prepacked and low cost products of mass consumptions like beverages. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. For example. • Automatic vending machines: . In return. . etc. tickets.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.
Bangalore and Gurgaon (delhi). 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.
Kanpur. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr.ft retail space across Kolkata. . Hyderabad. 6 food bazaar stores with over 6. It has been one of the pioneers in organized retailing in India. Pantaloon has come up with an excellent revenue model. The brands include Pantaloon. which forms the large chunk of Indian population. focussing on ‘value for money’ segment. Kishore Biyani. Bagpur. Ahmadabad. 7 big bazaar discount hypermarkets. Bangalore.5 lakh sq. Mumbai. 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. Pantaloon plans to target the upper middle and the middle class segment.kinds of stores: 14 pantaloon family stores. Pantaloon successfully launched its discount store chain. Chennai. Pune. John Miller and Bare. which targets the large and growing upper-middle and middle class of Indian society. and Delhi.
BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.com .com www.msn.google.
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