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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.
. RM . is also retailers. where retailing is the last one.The process of bringing the ultimate user to the main producer.is an art. like dentists. like Amazon. RM. bringing about operational efficiency at this last stage. What is retailing? Retailing involves selling products and services to consumers for their personal or family use.is a process of facilitation. and creating an environment so compelling that he looks nowhere else. is "Retail Management"(RM). It is not limited to quantities. hotels and hair salons.is getting to know the final user on behalf of the producer. RM . Department stores. Zales Jewellers are all examples of retail stores. and specialty stores like The Gap. discount stores like Wal-Mart and K-Mart. through a series of stages. like Burdines and Macy's. and on-line stores. Service providers. and necessitates employing several tools of logistics management for a complete end user satisfaction. Therefore. but limited to the exact requirement of the ultimate user.com.
merchandise. company. However. meaning ‘to cut a piece off’ or ‘to break bulk’. the internet. or by a car rental agencies. Retailers perform specific activities such as anticipating customer’s wants. agency. parlour. Between the producer and the consumer there is a middleman-the retailer. agent. who links the producers and the ultimate consumers. or organisation which is instrumental in reaching the goods. The selling need not necessarily take place through a store. and financing.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. Manufacturer Wholesalers Retailers Consumer A retailer is a person. it also includes the sale of services like those offered at a restaurant. acquiring market information. developing assortments of products. door-to-door visit s—any channel that could be used . 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. or services to the ultimate consumer. Retailing encompasses selling through the mail. The word ‘retail’ is derived from the French work retailer. A common assumption is that retailing involves only the sale of products in stores.
freedom of choice and higher levels of customer service. is easy and to fail is even easier. To enter retailing.e.. As we all know. Therefore. . Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. 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. catering to customers. the ease of entry into retail business results in fierce competition and better value for customer.to approach the consumer. a firm do a satisfactory job in its primary role i. in order to survive in retailing.
Global retail giants such as Wal-Mart. Many players are coming up with huge investments. Germany's Metro AG and many others are ready to enter the retail markets. 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. The Future of Retailing Advances in technology. . The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010.5%. There are about 300 new malls. The sector is set for a revolution. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. like the Internet. This sector contributes 10% of India's GDP and the current growth rate is 8. have helped make retailing an even more challenging and exciting field in recent years.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. Tesco. 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. 1500 supermarkets and 325 departmental stores currently under construction.
traditional retailers with physical stores will continue to be necessary. This sector contributes 10% of India’s GDP and the current growth rate . Of course. The sector is set for a revolution. retailers who offer personal services. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back. Retail is clearly the sector that is poised to show the highest growth in the next five years. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. touch and try them before they buy. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. In addition. as both the present players and new entrants are gearing up to explore the market. like hair styling. Also. and perhaps most importantly. 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. retailing in some form will always be necessary. the country has identified new scope for retail sector development. For example. But even with products. On-line retailers. they may want products immediately and won't want to wait for them to be shipped.However. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. 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.com. Or. With new boom in the retail industry. like Amazon.
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. 1500 supermarkets and 325 departmental stores currently under construction. Many players are coming up with huge investments.9 billion in 2009 from US$394 billion in2005. says an analysis by Ma Foi Management Consultants Ltd. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. . due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. • 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$608. • The retail sector would generate employment for more than 2. There are about 300 new malls. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010.5%.is 8.
. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. • • Better lifestyle as better products would be introduced. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. Technology would be upgraded in terms of logistics. • • The markets of the sector would flourish and develop. and distribution channels. • • Investment in whole supply chain would increase. production.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. • • A strong retailing sector would promote tourism. Employment would increase and skills & manpower will develop. Exports would increase due to greater sourcing of major players.
Global retail giants such as Wal-Mart. Tesco.. Subhiksha. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities. Food Bazaar. Carrefour. Titan Industries. Globus Stores Pvt. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. Germany’s Metro AG and many others are ready to enter the retail markets.. Ltd.. Pantaloon Retail India Ltd. Liberty shoes Ltd.. Shoppers Stop. Ebony Retail Holdings Ltd. Tesco. Boots Group. Big Bazaar. Leading Indian Retailers: Bata India Ltd. etc. Crossword. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. Wal-Mart Stores.. EU & Japan constitute 80% of world retail sales. Music World Entertainment Ltd. . A glimpse of the International Retail: · One of the world’s largest industries exceeding US$ 9 trillion · 47 global fortune companies & 25 of Asia’s top 200 companies are retailers · Dominated by developed countries · US. · Biggest player in India is Pantaloon Retail India Limited.
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. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. act as a dissuasive factor for many players to initiate operations in the main markets. Retailing is India’s largest industry in terms of contribution to GDP (Gross . certain bottlenecks as well. which became a part of the civic planning. independent. which comprised merely shops offering a variety of goods and services clubbed together. The inconveniences caused by lack of parking place. There are.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. toilets and maintenance. is grabbing attention. however. coupled with the stringent provisions of the Rent Control Act. owner-managed shops. the scarcity of space. The next step was the commercial plazas. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. the sheer size it will develop into. The opening up of the economy only fuelled this globalization. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt.
400. The share was 62. worth approximately Rs. with an average selling space of 29.1200 million in 2000.4189. mt.. the per capita retailing space is about 2 sq. In India.2 billion.4 sq.5 billion. mt. 039. snack centres. while non. 000 crore retail markets are unorganized. . There are around 5 million retail outlets in India. 400.000 crore. There is no integrated supply chain management outlook in the Indian traditional retail industry. the global management consultancy AT Kearney put retail trade at Rs. Total retail sales area in India was estimated at 328 million sq. 000 crore segment of the market is organized.food sales were worth Rs. per outlet. barber shops) and pushcarts mobile vendors. According to a survey by AT Kearney an overwhelming proportion of the Rs. 000 crore by the year 2005-an annual increase of 20%. In fact. There are also an unaccounted number of low cost Kiosks (tea stalls. only Rs.7% in 2001.800.Domestic Product). Food sales constitute a high proportion of the total retail sales. 7. ft. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. In 2000. which is quite low in comparison to the developed economies. However. which is expected to increase to Rs. In 2001. 20. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. The turnover from private labels by major retail chains was estimated at around Rs.
Women are taking up corporate jobs.7% 4.4% 17.7 billion. organized retail trade in India was worth Rs. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. which is adding to the .6% 14. However. In urban India.3% 6. In 2001. 228. especially in south India and are spreading all over India at a rapid pace. pan stores Others COMPOSITION 34.0% 17. 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% 6.0% 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.11. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.
such as haats. Rural India continues to be serviced by small retail outlets. there are periodic or temporary markets. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. especially in the metropolitan and large cities in India. 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. instant. peeth and melas that come up at the same location at regular time intervals. foreign retailers can enter the retailing sector only through restricted modes.6 million outlets cater to more than 700 million inhabitants of rural India. such as joint ventures where Indian . provision stores. 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. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. lead to the closure of many small businesses and result in large-scale unemployment. Therefore. Global players in the retail segment have been entering the market for a while now. Here. The demand for frozen. government has discouraged FDI in the retail sector. ready-to-eat food has been on the rise. At present. Apart from this. Only 3. paan shops and ration shops are the most popular vehicles of retailing.
The chief driver of growth in the retail sector has been the consumer. 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. The 12 million retail outlets in India are the highest in the world. The organized retailer should be able to. In interesting to note. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. is an astounding 250 million in size is growing at healthy rate of 7% per annum. that the Urban Population although just 25% of the total. through diversified risks and volume sales command huge concessions on prices from the manufacturers. cash and carry operations (Giant) and licensing (Marks & Spencer’s). CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns.7%.partner is an export house (Total Health Care). The main condition for organised retailing is that the retailer should be able to manage and influence the supply chain variables in a commercially viable and sustainable manner. Pizza Hut). 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.
according to a study by a fashion magazine Image. At present (September 23. organized parking lots and other public amenities. Karol Bagh and South Extension. India will have 358 malls by 2007. covering an area of 21.increasing at an average of 11% per annum. 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 . In India we have 96 malls. 2005). The core and the Lower middle have increased their share in the Growth. And by year end the count will shoot up to 158 malls.6 million sq ft. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. street vendors and high-street shops for consumer durables and luxury goods. It will cover 34 million sq ft area. Kiosks. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. Delhi has Connaught Place. each city developed its own identity and shopping cluster. To cater to this. Bangalore has Brigade Road and Commercial Street. for instance in Pune there is MG Road.
’ 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. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. and market profile in order to ensure a competitive edge. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. they have a strong say in the success of the product or service launched by a business firm. Retailers want of optimize sales within the limited shelf space. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. and in the value chain in particular. 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. first within the company. 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. This is especially true in the case or new products. governed by their individual sales philosophy.In today’s competitive environment retailers have redefined their role in general. ‘Marketers have to sell a new product several times. A product manager of household appliances claimed. brand image.
If such space is occupied by merchandise that is not moving. inventory management systems. negotiating with suppliers. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. 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. it will not result in profit. financing pacts and wide-scale marketing plans. In the backdrop of globalization. a retailer is required to make a conscious effort to position himself distinctively to face the . The larger retailers have managed to set up huge supply/distribution chains. Therefore. such as Wal-Mart. McDonald’s. Selecting target markets. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. Marks and Spencer. 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. Sears. liberalization and highly aware customers. determining what merchandise and services to offer.• Selling space available is relatively fixed and returns maximum profits. Retail formats and companies that were unknown three decades ago are now major forces in the economy.
By bringing multitudes of manufacturers and consumers together at a single point. a sweater or a bar of soap.The retailer buys a variety of products from the wholesaler or a number of wholesalers. Similarly. He thus performs two functions like buying of goods and assembling of goods.competition. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. retailers are a vital part of the business world. and. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. Provides two-way information . This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. . consequently. retailers make it possible for products to be sold. 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. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. business to be done.
He develops personal contact with the consumers and gives them goods on credit. • • Create demand by window display etc. • Undertake physical movement and storage of goods .The retailer performs storing function by stocking the goods for a consumer. Stock goods for ready supply to buyers. • Extend credit facility . He bears the risks in connection with Physical Spoilage of goods and fall in price.He resorts to standardization and grading of goods in such a way that these are accepted by the customers. theft. . • • Assembles goods from various sources. deterioration in the quality and spoilage of goods.He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer. Besides he bears risks on account of fire.• Facilitate standardisation and grading .
plumbing supplies. furniture. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. Merchant wholesalers: These wholesalers own the products they sell. And several wholesalers may be competing for the same customers. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler.takes title to the plywood for some period of time before selling to its customers.TYPES OF WHOLESALERS 1. drugs.and they handle about 59 percent of wholesale sales. 2. and cafeterias across the United States. These wholesalers originally developed to . General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. It actually owns . and automobile equipment. About four out of five wholesaling establishments in the United States are merchant wholesalers . For example. cosmetics. electrical supplies. For example. hotels.000 specialized food wholesalers compete for the business of restaurants. about 3.
the general stores.and offer more information and service than other service wholesalers. Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers. Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store. and travel books. For example. cookbooks. they might carry only food.and limited-line stores. they serve the single. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. wearing apparel. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. they cover a wide geographic area and offer more specialized service. 4. .serve the early retailers . The company offers hardcover best sellers. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . popular paperbacks. they serve hardware stores. Now. or certain types of industrial tools or supplies. electric appliance shops. with their broad line of convenience and shopping products. For example. Specialty wholesalers often know a great deal about the final target markets in their channel. 3. In business products. drugstores. In consumer products. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. and small department stores. basic reference books.
their operating costs are lower. Then the producer ships the order directly to the customers. or other business users . Some retailers. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions.or just refuse to grant credit to a small business that may have trouble paying its bills.and pass these orders on to producers. So service wholesalers set a minimum charge . These wholesalers are mainly involved in selling. are too small to be served profitably by a service wholesaler. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. Drop-shippers: These wholesalers own (take title to) the products they sell .but they do not actually handle. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers .5. Because drop-shippers do not have to handle the products. They get orders from wholesalers. or deliver them. And using cash-and-carry outlets may enable the small retailer to stay in business. 6. . such as small auto repair shops.except that the customer must pay cash. stock. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. retailers.
Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry.don't have a local wholesaler. Germany. For example. every day . Canada. These wholesalers operate almost as fullservice wholesalers . candy.with the "profits" going to the cooperative's customer-members.especially those in smaller towns . the Netherlands.and deliver an order within hours. and France. Some truck wholesalers operate 24 hours a day. 9. Many of these customers . potato chips. Cooperatives develop in agricultural markets . Inmac's catalogs are printed in six languages and distributed to business customers in the United States.7. 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. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. By handling perishable products in general demand . 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. These wholesalers operate in the hardware.tobacco.000 different computer accessories and supplies. jewellery. sporting goods. and salad dressings .truck wholesalers may provide almost the same functions as full-service wholesalers. Sweden. Producers' cooperatives. and general merchandise lines. the United Kingdom. Inmac uses a catalog to sell a complete line of 3. Mail-order wholesalers.
and Land O' Lakes Creameries. . the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. Inc. and books and magazines) because they sell small quantities of so many different kinds of products.except that they usually are paid cash for what is sold or delivered. Sunmaid Raisin Growers Association. Rack jobbers are almost service wholesalers . Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares. Some also brand these improved products .and then promote the brands. hardware items. Examples of such organizations are Sunkist (citrus fruits). Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets .and they often display them on their own wire racks. Successful producers' cooperatives emphasize sorting . For example.to improve the quality of farm products offered to the market. 10.where there are many small producers.
. They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers. They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers. They 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.
Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. They even act as an advisor and guide to the consumers by bringing new products to their notice and educating them about its diverse uses. They may also perform storage function by keeping stocks of goods. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. They also provide other services to the consumers such as free home delivery. They keep the consumers informed about the changing trends in the market about the different varieties of products. after sale services. . Thus they satisfy their demands and provide them a wide choice of goods. credit facility. etc.
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.KINDS OF RETAILERS On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. Partnership: .The vast majority of small businesses start out as sole proprietorships. Sole proprietorship: . 2. two or more people share ownership of a single business. . usually the individual who has the day-to-day responsibility for running the business. In a partnership.
Independent retail unit: . but is clearly for a limited period of time or a single project. 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. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. An independent retailer owns one retail unit. 4.The total number of retailers in India is estimated to be over 5 million in 2003. sometimes at maximum marginal rates. Limited liability Company (public and private): . Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure.3. . Unless incorporated or established as a firm as evidenced by a deed. About 78% of these are small family businesses utilizing only household labour. The owners are members. Operational structure defines the key strategic decision of retail entity.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. It acts like a general partnership.A joint venture is not well defined in the law. joint ventures may be taxed like association of persons. Joint venture: . and the duration of the LLC is usually determined when the organization papers are filed.
4.A chain retailer operates multiple outlets (store units) under common ownership. In this context the detailed example of Kendriya Bhandar in India. Leased Department or Shop – in – Shop: . it usually engages in some level of centralized (or coordinated) purchasing and decision making. .Co-operative outlets are generally owned and managed by co-operative societies.It refers to department in a retail store that are rented to an outside party. Franchising: . Retail Chain: . Usually this is done in case of department and specially stores and also at times. a wholesaler. or a service sponsor) and a retail franchisee. in discount stores. 5.2.Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer. 3. which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business. Co-operative Outlets: .
and better visibility from the road. For example the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi Ludhiana highway. 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. This type of location has several advantages including no competition. offering a variety of merchandise. low rent. 2. easy parking and lower property costs. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location. Retailers in a Business.In this case.associated Locations:. a retailer locates his store in a place where a group o retail outlets.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. Classification of retailers on the basis of location 1. work together to attract customers to their retail area. which attracts the customers staying close by. . and also compete against each other for the same customers.
Retailers in Specialized Markets: . and Internet presentations credit cards that buyers can make purchases on credit. Godown Street is famous for clothes. At . we also have in India-retailers who prefer specialized markets. 4. Airport Retailing: . Poo Kadia for food and vegetables. Previously.3. it suffices was to offer people the convenience of location. Govindappan naicleen street for grocery. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. For example.Besides the above location-based classification. T Nagar for ready-made garments. particularly traditional independent retailers or chain stores. special or unique assortment good. service. Lately. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. Bunder treet for stationary products. better than the competitor.For quite some time. most of the cities have specialized markets famous for a particular product category. Usman Street for jewellery. In India. Now everything is different. in Chennai. MARKETING DECISIONS BY RETAILERS Today. retailers are looking for new marketing strategies to attract and retain customers.
to reduce its dependence on marks on a national scale. experimenting with trading by mail and tele marketing. Others are increasingly satisfied with the sale. Many of them have historically located in the centre of cities. Superstores compete with supermarkets. Many stores cut its own set of services and shops reduced prices. department stores. and so have to open offices with a large range and variety of goods. convenience? Yet will identify and describe the target . low-income? Do buyers diversity. the manufacturers sell their products wherever possible. Supermarkets more money spent on activities sales promotion. medium.trying to reach maximum volume of sales. People are not going to pay for the same or similar mark more. faced with competition from specialized and trading at a discount store. and higher income families. opening their offices in the suburbs. rebuild their stores. where there is always space on the Parking. upgrade their facilities. trying to regain former popularity. started a real war. Example. on the contrary. Not they need a credit card of a shop. increased their number. because bank cards now accepted almost universally. depth of assortment. What customer oriented shop: high.many stores you will find quite the same range . especially if the amount provided in this service is reduced. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. moving to “small” private brands. One of the most important and most responsible decisions that have to take a retailer associated with the target market.
store environment. the retailer will not make informed decisions on assortment. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. they are not satisfying either one of them. This form of retailing faces the problems of small capital. small-scale retailing is a very common. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . Trying meeting the needs of a large number of different segments. means and content of advertising. But.market. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. the price level. Many companies do not have a specific target market. Such retailers are very large in number but account for a small portion of the total retail business. They generally hold small stocks of the products of regular use. Some retailers target market determined fairly accurately. lack of professionalism and low purchasing power. simple and flexible way of distributing the products to the final consumers.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. . It incurs low operating costs and is usually owned and operated by a proprietor.
They do not have any particular line of business and carry very little stock of those goods. . They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. market traders and street sellers fall under this category. The hawkers and pedlars.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . They save time and efforts of customers in buying articles of ordinary use. cheap jacks.are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises. They change their place of business according to their convenience and sales prospects.
etc. etc. (iii) general stores or variety stores: . paper and pencils. etc. street-crossing.are the shops which deal in only one or two special types of goods. They are generally located in shopping centres.are the small shops on the roadside. (ii) dealers of second hand goods: . bus stops.are engaged in purchase and sale of used goods like books. etc. clothes.• Fixed Shop Retailers: . grocery.(i) street stalls: . They mainly include: . They provide services like goods on credit and home delivery to their customers.are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. butter. (iv) speciality shops: . For example. etc. grocery shops. sweets shop. They sell a limited variety of products of regular use like stationery.are the shops which deal in all types of general consumer goods of regular use like bread. . chemist shops. readymade garments shop.They are set up in residential areas or busy markets.
Large-scale Retailers: . This form of retailing involves high operating costs and lacks personal contact with the customers. They offer a . Such retailers are not very large in number. etc.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. The various forms of large scale retailers are:- • Departmental stores: . sales promotion.are large scale retail establishments comprising of a number of departments in the same building. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising. publicity. All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product.
car parking.wide choice of products to the customers under one roof.are large scale retail shops operating at lower costs. Supermarkets: . and post and telegraph offices and so on. Customers select the goods . groceries. recreation rooms. They sell goods at lower prices than the departmental stores. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers. They also provide many amenities for customer's convenience such as restaurants. They sell a wide variety of consumer goods of regular use such as food items.etc at one place.
themselves without salesman's assistance. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. .are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. But. They offer goods at lower prices as they enjoy economies of bulk buying. • Multiple Shops or chain stores:. It is also called self-service stores. they do not provide additional facilities to their customers.
are the cooperative stores which are owned and operated by the consumers themselves.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. The aim . They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.• Mail order houses: . But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. it helps the consumers to get their requirements at their own place and thus saves their time and expenses. They are incorporated as an association under the cooperative societies act. The post office is their main channel of distribution. • Consumer cooperative stores: . However. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination.
These are used to sell prepacked and low cost products of mass consumptions like beverages. In return. . 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. etc. tickets. buyers receive a specified quantity of the product from the machine. • Automatic vending machines: . For example.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.
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. The company is headquartered in Mumbai with zonal offices at Kolkata. It has 4 . Bangalore and Gurgaon (delhi).
Kanpur. which targets the large and growing upper-middle and middle class of Indian society. Hyderabad. Pantaloon plans to target the upper middle and the middle class segment. 7 big bazaar discount hypermarkets. . which forms the large chunk of Indian population. Pantaloon successfully launched its discount store chain. It has been one of the pioneers in organized retailing in India. and Delhi. Mumbai. Kishore Biyani. Bagpur. Ahmadabad. Pune. Big Bazaar has strong own brand names in its portfolio across product categories. John Miller and Bare.kinds of stores: 14 pantaloon family stores. focussing on ‘value for money’ segment.ft retail space across Kolkata. 6 food bazaar stores with over 6. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr. This segment is very price conscious and always looks out for value for money. Bangalore. Chennai. Pantaloon has come up with an excellent revenue model. The brands include Pantaloon.5 lakh sq.
google.com .com www.BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.msn.
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