Managing Retailing

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
Batch (2008-2011)

ACKNOWLEDGEMENT

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. hotels and hair salons.The process of bringing the ultimate user to the main producer. through a series of stages. is "Retail Management"(RM). and necessitates employing several tools of logistics management for a complete end user satisfaction. Department stores. RM. RM . It is not limited to quantities. and on-line stores. discount stores like Wal-Mart and K-Mart. What is retailing? Retailing involves selling products and services to consumers for their personal or family use. like Burdines and Macy's.is an art. and creating an environment so compelling that he looks nowhere else. like Amazon. is also retailers.is a process of facilitation. bringing about operational efficiency at this last stage. like dentists. . Zales Jewellers are all examples of retail stores. Therefore. Service providers. RM .is getting to know the final user on behalf of the producer. where retailing is the last one. but limited to the exact requirement of the ultimate user.com.

or by a car rental agencies. However. Retailing encompasses selling through the mail. who links the producers and the ultimate consumers. Retailers perform specific activities such as anticipating customer’s wants. company. the internet. agency. merchandise. meaning ‘to cut a piece off’ or ‘to break bulk’. The selling need not necessarily take place through a store. or services to the ultimate consumer. and financing. Between the producer and the consumer there is a middleman-the retailer. A common assumption is that retailing involves only the sale of products in stores. agent. The word ‘retail’ is derived from the French work retailer. parlour. door-to-door visit s—any channel that could be used . or organisation which is instrumental in reaching the goods. acquiring market information. 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. it also includes the sale of services like those offered at a restaurant. developing assortments of products. Manufacturer Wholesalers Retailers Consumer A retailer is a person.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer.

.e. Therefore. As we all know. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted.. a firm do a satisfactory job in its primary role i. the ease of entry into retail business results in fierce competition and better value for customer. catering to customers. To enter retailing. is easy and to fail is even easier.to approach the consumer. freedom of choice and higher levels of customer service. 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. in order to survive in retailing.

as both the present players and new entrants are gearing up to explore the market. 1500 supermarkets and 325 departmental stores currently under construction. like the Internet. Germany's Metro AG and many others are ready to enter the retail markets.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. The Future of Retailing Advances in technology. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. This sector contributes 10% of India's GDP and the current growth rate is 8. There are about 300 new malls. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. have helped make retailing an even more challenging and exciting field in recent years. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. The nature of the business and the way retailing is done are currently undergoing fundamental changes. The sector is set for a revolution. Tesco. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. .5%. Many players are coming up with huge investments. Global retail giants such as Wal-Mart.

com.However. retailing in some form will always be necessary. will need to have face-to-face interaction with the consumer. Of course. retailers who offer personal services. With new boom in the retail industry. This sector contributes 10% of India’s GDP and the current growth rate . traditional retailers with physical stores will continue to be necessary. 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. as both the present players and new entrants are gearing up to explore the market. For example. Also. and perhaps most importantly. The sector is set for a revolution. In addition. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. Retail is clearly the sector that is poised to show the highest growth in the next five years. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. they may want products immediately and won't want to wait for them to be shipped. in many cases the experience of visiting the retailer is an important part of the purchase. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. consumers often want to see. On-line retailers. like hair styling. touch and try them before they buy. the country has identified new scope for retail sector development. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. Or. like Amazon.

5%. 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. . The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010.5 million people by the year 2010.9 billion in 2009 from US$394 billion in2005. Many players are coming up with huge investments. 1500 supermarkets and 325 departmental stores currently under construction.  Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey.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. • The retail sector would generate employment for more than 2. says an analysis by Ma Foi Management Consultants Ltd.

Employment would increase and skills & manpower will develop.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. Technology would be upgraded in terms of logistics. • • Better lifestyle as better products would be introduced. . production. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. and distribution channels. • • A strong retailing sector would promote tourism. Exports would increase due to greater sourcing of major players. • • The markets of the sector would flourish and develop. • • Investment in whole supply chain would increase. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries.

Tesco. Boots Group. Food Bazaar. etc.. Global retail giants such as Wal-Mart. Titan Industries.. Liberty shoes Ltd. Globus Stores Pvt. 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. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market.. Crossword. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. Music World Entertainment Ltd.. Wal-Mart Stores. · Biggest player in India is Pantaloon Retail India Limited. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities. Subhiksha. EU & Japan constitute 80% of world retail sales. Ltd.. Carrefour. Pantaloon Retail India Ltd. Germany’s Metro AG and many others are ready to enter the retail markets. Leading Indian Retailers: Bata India Ltd. Shoppers Stop. Big Bazaar. Tesco. Ebony Retail Holdings Ltd. .

the sheer size it will develop into. There are. which comprised merely shops offering a variety of goods and services clubbed together. owner-managed shops. certain bottlenecks as well. coupled with the stringent provisions of the Rent Control Act. toilets and maintenance. the scarcity of space. 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 opening up of the economy only fuelled this globalization. The next step was the commercial plazas. independent.  RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. 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 origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. however. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. is grabbing attention.RETAILING IN INDIA  ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. Retailing is India’s largest industry in terms of contribution to GDP (Gross . which became a part of the civic planning.

400. However. In 2000. The turnover from private labels by major retail chains was estimated at around Rs. the global management consultancy AT Kearney put retail trade at Rs. ft. mt. per outlet. There are around 5 million retail outlets in India. which is quite low in comparison to the developed economies. with an average selling space of 29. snack centres.food sales were worth Rs. 20.7% in 2001. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. barber shops) and pushcarts mobile vendors.2 billion.4189. There is no integrated supply chain management outlook in the Indian traditional retail industry. which is expected to increase to Rs. only Rs. According to a survey by AT Kearney an overwhelming proportion of the Rs.1200 million in 2000.000 crore.5 billion. In India. In 2001.Domestic Product).4 sq. The share was 62. the per capita retailing space is about 2 sq. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. 000 crore segment of the market is organized. 400. mt. 7. worth approximately Rs. Total retail sales area in India was estimated at 328 million sq. In fact. Food sales constitute a high proportion of the total retail sales. 000 crore retail markets are unorganized. while non. There are also an unaccounted number of low cost Kiosks (tea stalls. . 000 crore by the year 2005-an annual increase of 20%. 039..800.

In urban India.3% 6. families are experiencing growth in income but dearth of time.7% 4. pan stores Others COMPOSITION 34. especially in south India and are spreading all over India at a rapid pace. organized retail trade in India was worth Rs. 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.11. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.6% 14. which is adding to the .0% 6.7 billion. 228. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. In 2001. Women are taking up corporate jobs.0% 17. However.4% 17.0%  EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market.

Therefore. provision stores. ready-to-eat food has been on the rise. The demand for frozen. government has discouraged FDI in the retail sector. such as joint ventures where Indian . there are periodic or temporary markets. 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. At present. foreign retailers can enter the retailing sector only through restricted modes. peeth and melas that come up at the same location at regular time intervals. such as haats. Global players in the retail segment have been entering the market for a while now.6 million outlets cater to more than 700 million inhabitants of rural India. instant. Here. paan shops and ration shops are the most popular vehicles of retailing. lead to the closure of many small businesses and result in large-scale unemployment. Rural India continues to be serviced by small retail outlets. especially in the metropolitan and large cities in India. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. 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. Apart from this. Only 3. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010.

Pizza Hut). The chief driver of growth in the retail sector has been the consumer. cash and carry operations (Giant) and licensing (Marks & Spencer’s). 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 organized retailer should be able to. In interesting to note. with the spending . 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.  CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. is an astounding 250 million in size is growing at healthy rate of 7% per annum. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. that the Urban Population although just 25% of the total. through diversified risks and volume sales command huge concessions on prices from the manufacturers. 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. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. The 12 million retail outlets in India are the highest in the world.partner is an export house (Total Health Care).7%. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26.

India will have 358 malls by 2007. for instance in Pune there is MG Road. Bangalore has Brigade Road and Commercial Street. Kiosks. 2005). 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 . The core and the Lower middle have increased their share in the Growth. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. At present (September 23. And by year end the count will shoot up to 158 malls.increasing at an average of 11% per annum. In India we have 96 malls.6 million sq ft. street vendors and high-street shops for consumer durables and luxury goods. Karol Bagh and South Extension. organized parking lots and other public amenities. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. Delhi has Connaught Place. covering an area of 21. each city developed its own identity and shopping cluster. It will cover 34 million sq ft area. To cater to this. according to a study by a fashion magazine Image.

Retailers undertake risk in selection of goods to be sold given the following major concerns: . then to retailer and finally to the user of the product. Retailers want of optimize sales within the limited shelf space. and in the value chain in particular. This is especially true in the case or new products.In today’s competitive environment retailers have redefined their role in general. 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. governed by their individual sales philosophy. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy. As a result. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. A product manager of household appliances claimed. and market profile in order to ensure a competitive edge. they have a strong say in the success of the product or service launched by a business firm. brand image. first within the company. ‘Marketers have to sell a new product several times.

Therefore. In the backdrop of globalization. such as Wal-Mart. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. Selecting target markets. determining what merchandise and services to offer. Marks and Spencer. it will not result in profit. 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. Sears. The larger retailers have managed to set up huge supply/distribution chains. If such space is occupied by merchandise that is not moving. 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. Retail formats and companies that were unknown three decades ago are now major forces in the economy. McDonald’s. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. liberalization and highly aware customers.• Selling space available is relatively fixed and returns maximum profits. financing pacts and wide-scale marketing plans. a retailer is required to make a conscious effort to position himself distinctively to face the . inventory management systems.

retailers make it possible for products to be sold. retailers are a vital part of the business world. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. . This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. Provides two-way information . and.The retailer buys a variety of products from the wholesaler or a number of wholesalers. He thus performs two functions like buying of goods and assembling of goods. consequently. By bringing multitudes of manufacturers and consumers together at a single point. It would be very costly and time consuming for you to locate.  • • In brief they provide us with following functions: Provides personal services to all. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. a sweater or a bar of soap. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. Similarly. business to be done.competition.

• Extend credit facility . He bears the risks in connection with Physical Spoilage of goods and fall in price. • • Create demand by window display etc.He resorts to standardization and grading of goods in such a way that these are accepted by the customers. .He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer. theft.The retailer performs storing function by stocking the goods for a consumer.• Facilitate standardisation and grading . deterioration in the quality and spoilage of goods.He develops personal contact with the consumers and gives them goods on credit. Stock goods for ready supply to buyers. Besides he bears risks on account of fire. • Undertake physical movement and storage of goods . • • Assembles goods from various sources.

cosmetics. About four out of five wholesaling establishments in the United States are merchant wholesalers . and cafeterias across the United States. These wholesalers originally developed to .and they handle about 59 percent of wholesale sales. and automobile equipment. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. hotels. 2. For example. electrical supplies. Merchant wholesalers: These wholesalers own the products they sell. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. For example. furniture.takes title to the plywood for some period of time before selling to its customers. plumbing supplies. drugs. It actually owns . about 3. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware.000 specialized food wholesalers compete for the business of restaurants.TYPES OF WHOLESALERS 1. And several wholesalers may be competing for the same customers.

.serve the early retailers . and travel books. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. 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 the single. 3. Now. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products .the general stores. or certain types of industrial tools or supplies. For example.and offer more information and service than other service wholesalers. The company offers hardcover best sellers. Specialty wholesalers often know a great deal about the final target markets in their channel. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. drugstores. cookbooks. electric appliance shops. they serve hardware stores. 4. In consumer products. For example. they cover a wide geographic area and offer more specialized service. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. basic reference books. popular paperbacks. and small department stores. Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers. with their broad line of convenience and shopping products.and limited-line stores. In business products. they might carry only food. wearing apparel.

retailers.but they do not actually handle. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. . Drop-shippers: These wholesalers own (take title to) the products they sell . These wholesalers are mainly involved in selling. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers . are too small to be served profitably by a service wholesaler. their operating costs are lower. stock. 6. or other business users .except that the customer must pay cash. So service wholesalers set a minimum charge . These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. Because drop-shippers do not have to handle the products.5. Some retailers. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. or deliver them.or just refuse to grant credit to a small business that may have trouble paying its bills. They get orders from wholesalers. And using cash-and-carry outlets may enable the small retailer to stay in business. Then the producer ships the order directly to the customers.and pass these orders on to producers. such as small auto repair shops. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions.

These wholesalers operate almost as fullservice wholesalers .truck wholesalers may provide almost the same functions as full-service wholesalers. and France. Some truck wholesalers operate 24 hours a day. Mail-order wholesalers. Inmac uses a catalog to sell a complete line of 3. jewellery. By handling perishable products in general demand . Canada. Sweden. 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. For example.with the "profits" going to the cooperative's customer-members. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. Germany.tobacco. and salad dressings . Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. every day .especially those in smaller towns .7. sporting goods. Producers' cooperatives. candy. 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. 9. potato chips. Cooperatives develop in agricultural markets . Many of these customers . the Netherlands. and general merchandise lines.don't have a local wholesaler. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. the United Kingdom. These wholesalers operate in the hardware.000 different computer accessories and supplies.and deliver an order within hours.

Rack jobbers are almost service wholesalers . Examples of such organizations are Sunkist (citrus fruits).and then promote the brands. 10.where there are many small producers. the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand.and they often display them on their own wire racks. Sunmaid Raisin Growers Association. Inc. .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 books and magazines) because they sell small quantities of so many different kinds of products. For example. Some also brand these improved products . Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . and Land O' Lakes Creameries.except that they usually are paid cash for what is sold or delivered. Successful producers' cooperatives emphasize sorting . hardware items.

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 even act as an advisor and guide to the consumers by bringing new products to their notice and educating them about its diverse uses. etc.  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. credit facility.  They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. 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 may also perform storage function by keeping stocks of goods.  They also provide other services to the consumers such as free home delivery.

. Partnership: .The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person. Sole proprietorship: . usually the individual who has the day-to-day responsibility for running the business. In a partnership. 2.KINDS OF RETAILERS  On the basis of ownership- There are four basic legal forms of ownership for retailers: 1.A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. two or more people share ownership of a single business.

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. and the duration of the LLC is usually determined when the organization papers are filed. 4.The total number of retailers in India is estimated to be over 5 million in 2003. About 78% of these are small family businesses utilizing only household labour. sometimes at maximum marginal rates.  Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure.3. The owners are members. joint ventures may be taxed like association of persons. It acts like a general partnership.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. .A joint venture is not well defined in the law. but is clearly for a limited period of time or a single project. Joint venture: . Operational structure defines the key strategic decision of retail entity. Unless incorporated or established as a firm as evidenced by a deed. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. An independent retailer owns one retail unit. Limited liability Company (public and private): . Independent retail unit: .

A chain retailer operates multiple outlets (store units) under common ownership.2. a wholesaler. Retail Chain: . or a service sponsor) and a retail franchisee. 5.Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer. in discount stores. 3. 4. it usually engages in some level of centralized (or coordinated) purchasing and decision making.It refers to department in a retail store that are rented to an outside party. In this context the detailed example of Kendriya Bhandar in India. Usually this is done in case of department and specially stores and also at times. Co-operative Outlets: . Leased Department or Shop – in – Shop: . Franchising: . .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.

offering a variety of merchandise.  Classification of retailers on the basis of location 1. easy parking and lower property costs.associated Locations:. Retailers in a free-standing location: . 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.In this case. a retailer locates his store in a place where a group o retail outlets. . 2. This type of location has several advantages including no competition.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. and better visibility from the road. which attracts the customers staying close by. For example the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi Ludhiana highway. and also compete against each other for the same customers. Retailers in a Business. low rent. work together to attract customers to their retail area. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location.

we also have in India-retailers who prefer specialized markets. Usman Street for jewellery. Retailers in Specialized Markets: .Besides the above location-based classification. Previously. In India. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. Lately. Govindappan naicleen street for grocery. service. Now everything is different. MARKETING DECISIONS BY RETAILERS Today. At . most of the cities have specialized markets famous for a particular product category. and Internet presentations credit cards that buyers can make purchases on credit.3. 4. T Nagar for ready-made garments. particularly traditional independent retailers or chain stores.For quite some time. in Chennai. For example. better than the competitor. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Poo Kadia for food and vegetables. special or unique assortment good. Airport Retailing: . Godown Street is famous for clothes. Bunder treet for stationary products. it suffices was to offer people the convenience of location. retailers are looking for new marketing strategies to attract and retain customers.

experimenting with trading by mail and tele marketing. trying to regain former popularity. department stores. the manufacturers sell their products wherever possible. 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. faced with competition from specialized and trading at a discount store. to reduce its dependence on marks on a national scale. increased their number. What customer oriented shop: high. where there is always space on the Parking. medium. Not they need a credit card of a shop. because bank cards now accepted almost universally. People are not going to pay for the same or similar mark more. Superstores compete with supermarkets. and so have to open offices with a large range and variety of goods. started a real war. Example. depth of assortment. Supermarkets more money spent on activities sales promotion. Many stores cut its own set of services and shops reduced prices. opening their offices in the suburbs. especially if the amount provided in this service is reduced. rebuild their stores. low-income? Do buyers diversity. Many of them have historically located in the centre of cities. upgrade their facilities. Others are increasingly satisfied with the sale. on the contrary.trying to reach maximum volume of sales. moving to “small” private brands.many stores you will find quite the same range . convenience? Yet will identify and describe the target . and higher income families.

store environment. Some retailers target market determined fairly accurately. Such retailers are very large in number but account for a small portion of the total retail business. simple and flexible way of distributing the products to the final consumers. Trying meeting the needs of a large number of different segments. small-scale retailing is a very common. It incurs low operating costs and is usually owned and operated by a proprietor.market. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. They generally hold small stocks of the products of regular use. means and content of advertising. . the price level. Many companies do not have a specific target market. the retailer will not make informed decisions on assortment. lack of professionalism and low purchasing power. But. The most important feature is that the small-scale retailers have a direct and personal contact with their customers.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. they are not satisfying either one of them. TYPES OF RETAIL DISTRIBUTION OUTLETS  Small-scale retailers: . This form of retailing faces the problems of small capital.

.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: .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 serve either at the consumer's doorsteps or on busy places frequently visited by the customers. cheap jacks. The hawkers and pedlars. They save time and efforts of customers in buying articles of ordinary use. They change their place of business according to their convenience and sales prospects. They do not have any particular line of business and carry very little stock of those goods. market traders and street sellers fall under this category.

are the small shops on the roadside.are engaged in purchase and sale of used goods like books. sweets shop. (iii) general stores or variety stores: . They provide services like goods on credit and home delivery to their customers. butter.They are set up in residential areas or busy markets. etc. etc. chemist shops. paper and pencils. For example.• Fixed Shop Retailers: . (iv) speciality shops: .are the shops which deal in all types of general consumer goods of regular use like bread. etc. clothes.(i) street stalls: . readymade garments shop. grocery. bus stops.are the shops which deal in only one or two special types of goods.are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. etc. grocery shops. They mainly include: . They sell a limited variety of products of regular use like stationery. etc. They are generally located in shopping centres. (ii) dealers of second hand goods: . . street-crossing.

All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product. publicity. They offer a . etc.are large scale retail establishments comprising of a number of departments in the same building. sales promotion. Such retailers are not very large in number. The various forms of large scale retailers are:- • Departmental stores: . Large-scale Retailers: . They have a fixed line of business in which they have invested huge capital.are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. This form of retailing involves high operating costs and lacks personal contact with the customers. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising.

They sell goods at lower prices than the departmental stores.  Supermarkets: . They also provide many amenities for customer's convenience such as restaurants. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers.are large scale retail shops operating at lower costs. Customers select the goods . and post and telegraph offices and so on. car parking. recreation rooms. They sell a wide variety of consumer goods of regular use such as food items. groceries.wide choice of products to the customers under one roof.etc at one place.

It is also called self-service stores.are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. They offer goods at lower prices as they enjoy economies of bulk buying. 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. they do not provide additional facilities to their customers. But. • Multiple Shops or chain stores:. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers.

Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts. • Consumer cooperative stores: . However.• Mail order houses: . 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.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express.are the cooperative stores which are owned and operated by the consumers themselves. They are incorporated as an association under the cooperative societies act.

of such cooperative stores is to render service to its members and not to maximise profits.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. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. buyers receive a specified quantity of the product from the machine. tickets. . In return. For example. These are used to sell prepacked and low cost products of mass consumptions like beverages. etc. • Automatic vending machines: .

Bangalore and Gurgaon (delhi). The company is headquartered in Mumbai with zonal offices at Kolkata. It has 4 .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.

kinds of stores: 14 pantaloon family stores. Ahmadabad. Kishore Biyani. Bangalore. The brands include Pantaloon. 7 big bazaar discount hypermarkets. Pantaloon plans to target the upper middle and the middle class segment. Mumbai. It has been one of the pioneers in organized retailing in India. Big Bazaar has strong own brand names in its portfolio across product categories. 6 food bazaar stores with over 6. and Delhi. Pune. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr.ft retail space across Kolkata. Hyderabad. Kanpur. which targets the large and growing upper-middle and middle class of Indian society. This segment is very price conscious and always looks out for value for money. Chennai.5 lakh sq. which forms the large chunk of Indian population. focussing on ‘value for money’ segment. Pantaloon successfully launched its discount store chain. John Miller and Bare. . Pantaloon has come up with an excellent revenue model. Bagpur.

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com www.BIBLIOGRAPHY  BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz  SITES: www.msn.google.com .

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