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INSTITUTE OF INFORMATION TECHNOLOGY & MANAGEMENT (IITM)
Submitted in partial fulfilment of the requirements for the award of the degree of Bachelor of Business Administration (BBA)
To Guru Gobind Singh Indraprastha University, Delhi
Guide: (Mr.Anmol Poddar )
Submitted by: (Aarushi Singh) Roll No.01521101709
Institute of Information Technology & Management, New Delhi – 110058
I am very grateful to my guide Mr. Anmol Poddar without whom this project would not have been possible. My guide’s provisions of proper guidelines helped me a lot. The help provided by various councils, books, and internet cannot be expressed in words.
I wish my sincere gratitude to my parents n friends who supported me in every little way they could, to complete the work.
I wish my sincere, whole-hearted thanks to all those who helped me in making this project.
Institute of Information Technology and Management Paper Title-Personality Development & Communication Skills-III (Minor Project Report) Paper Code-211 Assignment-MM: 18 Topic: Managing Retailing The topic must cover the following aspects: Meaning and Definition Concept and scope of Retailing Position of Retailers in modern marketing Functions of retailers Types of wholesalers Services rendered by retailers Kinds of retailers Marketing decisions by retailers Types of Retail Distribution Outlets mall scale retailers S Departmental stores Multiple shops or chain stores Mail order house Consumer’s cooperative store Supermarket Include relevant examples and figures in your assignment.
DEFINITION AND MEANING
Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.
and specialty stores like The Gap. and on-line stores. like Amazon. RM .com. What is retailing? Retailing involves selling products and services to consumers for their personal or family use. through a series of stages. like Burdines and Macy's. It is not limited to quantities. bringing about operational efficiency at this last stage. is "Retail Management"(RM). Zales Jewellers are all examples of retail stores. Service providers.The process of bringing the ultimate user to the main producer. .is getting to know the final user on behalf of the producer. where retailing is the last one. and creating an environment so compelling that he looks nowhere else. Therefore. discount stores like Wal-Mart and K-Mart. RM . but limited to the exact requirement of the ultimate user. hotels and hair salons. like dentists. is also retailers. and necessitates employing several tools of logistics management for a complete end user satisfaction.is a process of facilitation. RM. Department stores.is an art.
the internet. or by a car rental agencies. meaning ‘to cut a piece off’ or ‘to break bulk’. Between the producer and the consumer there is a middleman-the retailer. it also includes the sale of services like those offered at a restaurant. developing assortments of products. Retailing encompasses selling through the mail. agency. and financing. parlour. or organisation which is instrumental in reaching the goods. company. agent. acquiring market information. door-to-door visit s—any channel that could be used . or services to the ultimate consumer. who links the producers and the ultimate consumers. The word ‘retail’ is derived from the French work retailer. merchandise. However. The selling need not necessarily take place through a store.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. A common assumption is that retailing involves only the sale of products in stores. Manufacturer Wholesalers Retailers Consumer A retailer is a person. Retailers perform specific activities such as anticipating customer’s wants. 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.
As we all know. catering to customers.to approach the consumer. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. . Therefore. the ease of entry into retail business results in fierce competition and better value for customer.. To enter retailing. a firm do a satisfactory job in its primary role i. in order to survive in retailing. freedom of choice and higher levels of customer service.e. 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. is easy and to fail is even easier.
due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. There are about 300 new malls. Germany's Metro AG and many others are ready to enter the retail markets. 1500 supermarkets and 325 departmental stores currently under construction. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. like the Internet. Many players are coming up with huge investments. . have helped make retailing an even more challenging and exciting field in recent years. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. Tesco. This sector contributes 10% of India's GDP and the current growth rate is 8.5%. The Future of Retailing Advances in technology. The sector is set for a revolution.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. The nature of the business and the way retailing is done are currently undergoing fundamental changes. as both the present players and new entrants are gearing up to explore the market. Global retail giants such as Wal-Mart.
In addition. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back. and perhaps most importantly. touch and try them before they buy. the country has identified new scope for retail sector development. The sector is set for a revolution. Of course. With new boom in the retail industry. 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 . But even with products.com. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. retailing in some form will always be necessary. Also. in many cases the experience of visiting the retailer is an important part of the purchase. will need to have face-to-face interaction with the consumer. For example. as both the present players and new entrants are gearing up to explore the market. like Amazon.However. retailers who offer personal services. On-line retailers. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. like hair styling. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. Or. consumers often want to see. traditional retailers with physical stores will continue to be necessary. they may want products immediately and won't want to wait for them to be shipped.
• A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. Many players are coming up with huge investments.is 8. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608.9 billion in 2009 from US$394 billion in2005. . 1500 supermarkets and 325 departmental stores currently under construction. • The retail sector would generate employment for more than 2.5 million people by the year 2010. Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. says an analysis by Ma Foi Management Consultants Ltd. 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.5%.
Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. Exports would increase due to greater sourcing of major players. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. Technology would be upgraded in terms of logistics. and distribution channels. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. production. • • Better lifestyle as better products would be introduced. • • Investment in whole supply chain would increase. • • A strong retailing sector would promote tourism. Employment would increase and skills & manpower will develop. . • • The markets of the sector would flourish and develop.
Pantaloon Retail India Ltd. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. Wal-Mart Stores. Music World Entertainment Ltd. Globus Stores Pvt.. Germany’s Metro AG and many others are ready to enter the retail markets.. . The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. EU & Japan constitute 80% of world retail sales. Leading Indian Retailers: Bata India Ltd. Crossword.. Titan Industries. Global retail giants such as Wal-Mart... Carrefour. Liberty shoes Ltd. Ebony Retail Holdings Ltd. · Biggest player in India is Pantaloon Retail India Limited. Big Bazaar. etc. Tesco. Ltd. Shoppers Stop. 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. Boots Group. Food Bazaar. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities. Tesco. Subhiksha.
act as a dissuasive factor for many players to initiate operations in the main markets. however. There are. certain bottlenecks as well. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. which became a part of the civic planning.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. the sheer size it will develop into. RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. The inconveniences caused by lack of parking place. The opening up of the economy only fuelled this globalization. is grabbing attention. which comprised merely shops offering a variety of goods and services clubbed together. The next step was the commercial plazas. coupled with the stringent provisions of the Rent Control Act. independent. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. the scarcity of space. Retailing is India’s largest industry in terms of contribution to GDP (Gross . toilets and maintenance. ushered in the entry big international brands opening their exclusive showrooms. owner-managed shops. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt.
only Rs. The turnover from private labels by major retail chains was estimated at around Rs. per outlet. the per capita retailing space is about 2 sq.7% in 2001.food sales were worth Rs.5 billion. Total retail sales area in India was estimated at 328 million sq. ft.800. snack centres. 000 crore by the year 2005-an annual increase of 20%. which is expected to increase to Rs. According to a survey by AT Kearney an overwhelming proportion of the Rs. . mt. 000 crore segment of the market is organized. 400. There are also an unaccounted number of low cost Kiosks (tea stalls. which is quite low in comparison to the developed economies. In 2001. In 2000. Food sales constitute a high proportion of the total retail sales. while non. barber shops) and pushcarts mobile vendors. 400.2 billion. 000 crore retail markets are unorganized.Domestic Product). There is no integrated supply chain management outlook in the Indian traditional retail industry.4189. 7. the global management consultancy AT Kearney put retail trade at Rs. worth approximately Rs. 20..1200 million in 2000. with an average selling space of 29.000 crore. 039. There are around 5 million retail outlets in India. mt. In India. the nonfood retailing sector registered faster year-on-year growth than the food sales sector.4 sq. However. In fact. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. The share was 62.
pan stores Others COMPOSITION 34.4% 17.6% 14.11. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. especially in south India and are spreading all over India at a rapid pace. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities. organized retail trade in India was worth Rs.7% 4. which is adding to the . 228.0% EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. families are experiencing growth in income but dearth of time.3% 6. In 2001. In urban India. Women are taking up corporate jobs.7 billion.0% 6. 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.0% 17. However.
Apart from this. The demand for frozen. Only 3. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. lead to the closure of many small businesses and result in large-scale unemployment. There is also a strong trend in favour of one-stop shops like supermarkets and department stores. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. especially in the metropolitan and large cities in India. Rural India continues to be serviced by small retail outlets.6 million outlets cater to more than 700 million inhabitants of rural India. Here. provision stores. At present. there are periodic or temporary markets. Therefore. such as haats. foreign retailers can enter the retailing sector only through restricted modes. instant. such as joint ventures where Indian . Global players in the retail segment have been entering the market for a while now. paan shops and ration shops are the most popular vehicles of retailing. peeth and melas that come up at the same location at regular time intervals. ready-to-eat food has been on the rise. There has been a strong resistance to foreign direct investment (FDI) in retailing from small traders who fears that foreign companies would take away their business. government has discouraged FDI in the retail sector.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.
is an astounding 250 million in size is growing at healthy rate of 7% per annum. In interesting to note. 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. through diversified risks and volume sales command huge concessions on prices from the manufacturers. 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.partner is an export house (Total Health Care). The 12 million retail outlets in India are the highest in the world. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. that the Urban Population although just 25% of the total. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. with the spending . 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). 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. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s.7%.
It will cover 34 million sq ft area. street vendors and high-street shops for consumer durables and luxury goods. for instance in Pune there is MG Road. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs.6 million sq ft. 2005). At present (September 23. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. To cater to this. organized parking lots and other public amenities. Delhi has Connaught Place. India will have 358 malls by 2007. covering an area of 21. DRIVERS OF CHANGE IN RETAILING • • • • • • • Changing demographics and industry structure Expanding computer technology Emphasis on lower costs and prices Emphasis on convenience and service Focus on products Added experimentation Continuing growth of non-store retailing . And by year end the count will shoot up to 158 malls. Karol Bagh and South Extension.increasing at an average of 11% per annum. The core and the Lower middle have increased their share in the Growth. according to a study by a fashion magazine Image. In India we have 96 malls. Kiosks. Bangalore has Brigade Road and Commercial Street. each city developed its own identity and shopping cluster.
they have a strong say in the success of the product or service launched by a business firm. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. 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. then to retailer and finally to the user of the product. Retailers want of optimize sales within the limited shelf space. This is especially true in the case or new products.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy. and market profile in order to ensure a competitive edge. brand image. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries.In today’s competitive environment retailers have redefined their role in general. and in the value chain in particular. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. As a result. Retailers undertake risk in selection of goods to be sold given the following major concerns: . first within the company. ‘Marketers have to sell a new product several times. governed by their individual sales philosophy. A product manager of household appliances claimed.
negotiating with suppliers. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology.• Selling space available is relatively fixed and returns maximum profits. liberalization and highly aware customers. Retail formats and companies that were unknown three decades ago are now major forces in the economy. financing pacts and wide-scale marketing plans. Selecting target markets. inventory management systems. such as Wal-Mart. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. In the backdrop of globalization. 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. Marks and Spencer. 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. If such space is occupied by merchandise that is not moving. it will not result in profit. McDonald’s. Sears. The larger retailers have managed to set up huge supply/distribution chains. a retailer is required to make a conscious effort to position himself distinctively to face the . Therefore. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. determining what merchandise and services to offer.
This is determined to a great extent by the retail mix strategy followed by accompany to sell its products.competition. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. • • In brief they provide us with following functions: Provides personal services to all. It would be very costly and time consuming for you to locate. By bringing multitudes of manufacturers and consumers together at a single point. retailers are a vital part of the business world. consequently. and. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. a sweater or a bar of soap. . Similarly.The retailer buys a variety of products from the wholesaler or a number of wholesalers. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. Provides two-way information . He thus performs two functions like buying of goods and assembling of goods. retailers make it possible for products to be sold. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. business to be done.
He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer. He bears the risks in connection with Physical Spoilage of goods and fall in price. Besides he bears risks on account of fire. • • Create demand by window display etc. • Undertake physical movement and storage of goods . 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. deterioration in the quality and spoilage of goods. • • Assembles goods from various sources.The retailer performs storing function by stocking the goods for a consumer. theft.• Facilitate standardisation and grading . • Extend credit facility . .He develops personal contact with the consumers and gives them goods on credit.
For example. electrical supplies. drugs. About four out of five wholesaling establishments in the United States are merchant wholesalers . a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. For example.TYPES OF WHOLESALERS 1. hotels.takes title to the plywood for some period of time before selling to its customers. 2. It actually owns . And several wholesalers may be competing for the same customers. Merchant wholesalers: These wholesalers own the products they sell. and automobile equipment. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. furniture. These wholesalers originally developed to . about 3. plumbing supplies. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. cosmetics. and cafeterias across the United States.000 specialized food wholesalers compete for the business of restaurants.and they handle about 59 percent of wholesale sales.
they might carry only food. or certain types of industrial tools or supplies. For example. they serve hardware stores. Specialty wholesalers often know a great deal about the final target markets in their channel. popular paperbacks. In business products. electric appliance shops. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . and small department stores. For example. they cover a wide geographic area and offer more specialized service. drugstores.the general stores. 4. and travel books. Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store. wearing apparel.serve the early retailers . Now. 3. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. basic reference books. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. they serve the single. In consumer products. . Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers.and limited-line stores. cookbooks. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. with their broad line of convenience and shopping products. The company offers hardcover best sellers.and offer more information and service than other service wholesalers.
are too small to be served profitably by a service wholesaler.and pass these orders on to producers. These wholesalers are mainly involved in selling. . So service wholesalers set a minimum charge . retailers.or just refuse to grant credit to a small business that may have trouble paying its bills. Then the producer ships the order directly to the customers. Because drop-shippers do not have to handle the products. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. or deliver them. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions. Drop-shippers: These wholesalers own (take title to) the products they sell .but they do not actually handle. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. such as small auto repair shops. 6. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers . or other business users . And using cash-and-carry outlets may enable the small retailer to stay in business. their operating costs are lower.except that the customer must pay cash. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. stock. Some retailers.5. They get orders from wholesalers.
the United Kingdom.especially those in smaller towns . By handling perishable products in general demand .7. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. and general merchandise lines.000 different computer accessories and supplies.truck wholesalers may provide almost the same functions as full-service wholesalers. These wholesalers operate almost as fullservice wholesalers . 9. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. 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. potato chips.don't have a local wholesaler. jewellery. Producers' cooperatives.and deliver an order within hours. and salad dressings . Mail-order wholesalers. and France. For example.tobacco. Canada. sporting goods. Germany. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. Sweden. candy. Inmac uses a catalog to sell a complete line of 3. Some truck wholesalers operate 24 hours a day. Cooperatives develop in agricultural markets .with the "profits" going to the cooperative's customer-members. These wholesalers operate in the hardware. Many of these customers . 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. every day . the Netherlands.
Inc.and then promote the brands. and Land O' Lakes Creameries.to improve the quality of farm products offered to the market. Some also brand these improved products . .where there are many small producers. Successful producers' cooperatives emphasize sorting . Rack jobbers are almost service wholesalers . Examples of such organizations are Sunkist (citrus fruits). the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares. Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . For example. and books and magazines) because they sell small quantities of so many different kinds of products. 10. Sunmaid Raisin Growers Association. hardware items.and they often display them on their own wire racks.except that they usually are paid cash for what is sold or delivered.
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. .
after sale services. They may also perform storage function by keeping stocks of goods. . Thus they satisfy their demands and provide them a wide choice of goods. 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. credit facility. They also provide other services to the consumers such as free home delivery. Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. etc. They keep the consumers informed about the changing trends in the market about the different varieties of products.
The vast majority of small businesses start out as sole proprietorships. 2. two or more people share ownership of a single business. .A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. These firms are owned by one person. In a partnership. Sole proprietorship: .KINDS OF RETAILERS On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. Partnership: . usually the individual who has the day-to-day responsibility for running the business.
Retail firms can be classified into five heads on the basis of their respective operational structures: 1. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. Operational structure defines the key strategic decision of retail entity. An independent retailer owns one retail unit.A joint venture is not well defined in the law. but is clearly for a limited period of time or a single project. . Independent retail unit: . joint ventures may be taxed like association of persons. and the duration of the LLC is usually determined when the organization papers are filed. The owners are members. Limited liability Company (public and private): .The total number of retailers in India is estimated to be over 5 million in 2003.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. Unless incorporated or established as a firm as evidenced by a deed. sometimes at maximum marginal rates.3. Joint venture: . 4. It acts like a general partnership. 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. About 78% of these are small family businesses utilizing only household labour.
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: .A chain retailer operates multiple outlets (store units) under common ownership. Co-operative Outlets: . In this context the detailed example of Kendriya Bhandar in India. 5.Co-operative outlets are generally owned and managed by co-operative societies. 4. in discount stores. Leased Department or Shop – in – Shop: . . which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business. 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. or a service sponsor) and a retail franchisee.2. 3. a wholesaler. Retail Chain: .
Retailers in a free-standing location: .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. 2. 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. easy parking and lower property costs. a retailer locates his store in a place where a group o retail outlets. . 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. offering a variety of merchandise. work together to attract customers to their retail area.associated Locations:.In this case. low rent. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location. Retailers in a Business. This type of location has several advantages including no competition. and also compete against each other for the same customers. and better visibility from the road. Classification of retailers on the basis of location 1.
Poo Kadia for food and vegetables.3. better than the competitor. Lately. Bunder treet for stationary products. Govindappan naicleen street for grocery. most of the cities have specialized markets famous for a particular product category. Now everything is different.Besides the above location-based classification. retailers are looking for new marketing strategies to attract and retain customers. Godown Street is famous for clothes. 4.For quite some time. particularly traditional independent retailers or chain stores. For example. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. In India. MARKETING DECISIONS BY RETAILERS Today. and Internet presentations credit cards that buyers can make purchases on credit. we also have in India-retailers who prefer specialized markets. in Chennai. T Nagar for ready-made garments. Retailers in Specialized Markets: . Previously. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Usman Street for jewellery. special or unique assortment good. it suffices was to offer people the convenience of location. Airport Retailing: . service. At .
rebuild their stores. because bank cards now accepted almost universally.trying to reach maximum volume of sales. opening their offices in the suburbs. What customer oriented shop: high. depth of assortment. on the contrary. and so have to open offices with a large range and variety of goods. experimenting with trading by mail and tele marketing. increased their number. Not they need a credit card of a shop. faced with competition from specialized and trading at a discount store. the manufacturers sell their products wherever possible. Many stores cut its own set of services and shops reduced prices. to reduce its dependence on marks on a national scale. started a real war.many stores you will find quite the same range . One of the most important and most responsible decisions that have to take a retailer associated with the target market. medium. People are not going to pay for the same or similar mark more. moving to “small” private brands. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. Many of them have historically located in the centre of cities. where there is always space on the Parking. especially if the amount provided in this service is reduced. low-income? Do buyers diversity. convenience? Yet will identify and describe the target . Supermarkets more money spent on activities sales promotion. Superstores compete with supermarkets. upgrade their facilities. Others are increasingly satisfied with the sale. trying to regain former popularity. Example. and higher income families. department stores.
means and content of advertising. they are not satisfying either one of them. the price level.market. . lack of professionalism and low purchasing power.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. the retailer will not make informed decisions on assortment. Many companies do not have a specific target market. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. This form of retailing faces the problems of small capital. small-scale retailing is a very common. But. store environment. It incurs low operating costs and is usually owned and operated by a proprietor. Trying meeting the needs of a large number of different segments. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. simple and flexible way of distributing the products to the final consumers. Such retailers are very large in number but account for a small portion of the total retail business. Some retailers target market determined fairly accurately. They generally hold small stocks of the products of regular use.
. cheap jacks. market traders and street sellers fall under this category.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . They change their place of business according to their convenience and sales prospects. They save time and efforts of customers in buying articles of ordinary use.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 hawkers and pedlars. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. They do not have any particular line of business and carry very little stock of those goods.
etc. bus stops. clothes.are the shops which deal in only one or two special types of goods.are the shops which deal in all types of general consumer goods of regular use like bread.They are set up in residential areas or busy markets. They provide services like goods on credit and home delivery to their customers. paper and pencils. butter. (ii) dealers of second hand goods: . For example. etc. They sell a limited variety of products of regular use like stationery.(i) street stalls: .• Fixed Shop Retailers: . grocery.are the small shops on the roadside.are engaged in purchase and sale of used goods like books. etc. They mainly include: . sweets shop. etc. readymade garments shop. (iii) general stores or variety stores: . (iv) speciality shops: .are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. . etc. street-crossing. grocery shops. chemist shops. They are generally located in shopping centres.
sales promotion. The various forms of large scale retailers are:- • Departmental stores: . etc. Such retailers are not very large in number. 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. 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. They offer a . 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: . But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising. publicity.
are large scale retail shops operating at lower costs. They sell a wide variety of consumer goods of regular use such as food items. 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. car parking. groceries.etc at one place. Supermarkets: . recreation rooms. and post and telegraph offices and so on.wide choice of products to the customers under one roof. They sell goods at lower prices than the departmental stores. Customers select the goods .
They offer goods at lower prices as they enjoy economies of bulk buying. • Multiple Shops or chain stores:. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers.themselves without salesman's assistance. But.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. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. they do not provide additional facilities to their customers. .
Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. it helps the consumers to get their requirements at their own place and thus saves their time and expenses. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination. 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. The aim .are the cooperative stores which are owned and operated by the consumers themselves. But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. They are incorporated as an association under the cooperative societies act. • Consumer cooperative stores: .• Mail order houses: . However.
In return. . These are used to sell prepacked and low cost products of mass consumptions like beverages. For example. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. tickets. 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. etc.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. • 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.
Bagpur. Ahmadabad. The brands include Pantaloon. Hyderabad. focussing on ‘value for money’ segment.kinds of stores: 14 pantaloon family stores. which forms the large chunk of Indian population. Kishore Biyani. Pantaloon has come up with an excellent revenue model. Mumbai. John Miller and Bare.5 lakh sq. Chennai. Pantaloon successfully launched its discount store chain. Pune. This segment is very price conscious and always looks out for value for money. 7 big bazaar discount hypermarkets. which targets the large and growing upper-middle and middle class of Indian society.ft retail space across Kolkata. Kanpur. Big Bazaar has strong own brand names in its portfolio across product categories. and Delhi. Pantaloon plans to target the upper middle and the middle class segment. 6 food bazaar stores with over 6. It has been one of the pioneers in organized retailing in India. . Bangalore. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr.
google.com www.BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.msn.com .
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