Managing Retailing

INSTITUTE OF INFORMATION TECHNOLOGY & MANAGEMENT (IITM)

Submitted in partial fulfilment of the requirements for the award of the degree of Bachelor of Business Administration (BBA)
To Guru Gobind Singh Indraprastha University, Delhi

Guide: (Mr.Anmol Poddar )

Submitted by: (Aarushi Singh) Roll No.01521101709

Institute of Information Technology & Management, New Delhi – 110058
Batch (2008-2011)

ACKNOWLEDGEMENT

I am very grateful to my guide Mr. Anmol Poddar without whom this project would not have been possible. My guide’s provisions of proper guidelines helped me a lot. The help provided by various councils, books, and internet cannot be expressed in words.

I wish my sincere gratitude to my parents n friends who supported me in every little way they could, to complete the work.

I wish my sincere, whole-hearted thanks to all those who helped me in making this project.

Institute of Information Technology and Management Paper Title-Personality Development & Communication Skills-III (Minor Project Report) Paper Code-211 Assignment-MM: 18 Topic: Managing Retailing The topic must cover the following aspects: Meaning and Definition  Concept and scope of Retailing  Position of Retailers in modern marketing  Functions of retailers  Types of wholesalers  Services rendered by retailers  Kinds of retailers  Marketing decisions by retailers  Types of Retail Distribution Outlets  mall scale retailers S Departmental stores  Multiple shops or chain stores  Mail order house  Consumer’s cooperative store Supermarket Include relevant examples and figures in your assignment.

DEFINITION AND MEANING
Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.

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

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

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

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

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

The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. Many players are coming up with huge investments.  Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. 1500 supermarkets and 325 departmental stores currently under construction.5%. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. says an analysis by Ma Foi Management Consultants Ltd. 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. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. .5 million people by the year 2010.is 8.9 billion in 2009 from US$394 billion in2005.

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

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

owner-managed shops. act as a dissuasive factor for many players to initiate operations in the main markets. ushered in the entry big international brands opening their exclusive showrooms. The next step was the commercial plazas. There are. the scarcity of space. which became a part of the civic planning. certain bottlenecks as well. coupled with the stringent provisions of the Rent Control Act. however. the sheer size it will develop into.  RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. toilets and maintenance. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. which comprised merely shops offering a variety of goods and services clubbed together. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. independent. The opening up of the economy only fuelled this globalization. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop.RETAILING IN INDIA  ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. is grabbing attention. The inconveniences caused by lack of parking place. Retailing is India’s largest industry in terms of contribution to GDP (Gross .

worth approximately Rs. 20. 000 crore retail markets are unorganized. which is expected to increase to Rs. the per capita retailing space is about 2 sq. mt.Domestic Product).800. barber shops) and pushcarts mobile vendors. In 2001. The share was 62.7% in 2001. ft. while non. There are also an unaccounted number of low cost Kiosks (tea stalls. 400. mt.. . 7.000 crore.4 sq. There is no integrated supply chain management outlook in the Indian traditional retail industry. In India.5 billion. In 2000. 000 crore segment of the market is organized. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. which is quite low in comparison to the developed economies. 400. There are around 5 million retail outlets in India.food sales were worth Rs. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. However.2 billion. In fact. 000 crore by the year 2005-an annual increase of 20%. with an average selling space of 29. Total retail sales area in India was estimated at 328 million sq. The turnover from private labels by major retail chains was estimated at around Rs. According to a survey by AT Kearney an overwhelming proportion of the Rs. snack centres. Food sales constitute a high proportion of the total retail sales.1200 million in 2000. per outlet. only Rs. 039.4189. the global management consultancy AT Kearney put retail trade at Rs.

In 2001.4% 17. pan stores Others COMPOSITION 34. 228. However.0% 6.0%  EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. 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.7% 4.7 billion.6% 14. Women are taking up corporate jobs. families are experiencing growth in income but dearth of time. In urban India. which is adding to the .11. organized retail trade in India was worth Rs. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.0% 17.3% 6. especially in south India and are spreading all over India at a rapid pace. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco.

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

 CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns.7%. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. 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 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).partner is an export house (Total Health Care). 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. with the spending . The chief driver of growth in the retail sector has been the consumer. 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. The organized retailer should be able to. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. In interesting to note. through diversified risks and volume sales command huge concessions on prices from the manufacturers. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s.

each city developed its own identity and shopping cluster. DRIVERS OF CHANGE IN RETAILING • • • • • • • Changing demographics and industry structure Expanding computer technology Emphasis on lower costs and prices Emphasis on convenience and service Focus on products Added experimentation Continuing growth of non-store retailing . Delhi has Connaught Place. organized parking lots and other public amenities. The core and the Lower middle have increased their share in the Growth. covering an area of 21.6 million sq ft. To cater to this. Kiosks. according to a study by a fashion magazine Image.increasing at an average of 11% per annum. Karol Bagh and South Extension. At present (September 23. In India we have 96 malls. And by year end the count will shoot up to 158 malls. It will cover 34 million sq ft area. for instance in Pune there is MG Road. 2005). India will have 358 malls by 2007. Bangalore has Brigade Road and Commercial Street. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. street vendors and high-street shops for consumer durables and luxury goods. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores.

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

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

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

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

For example. Merchant wholesalers: These wholesalers own the products they sell. and cafeterias across the United States. furniture. And several wholesalers may be competing for the same customers. These wholesalers originally developed to . It actually owns . For example. About four out of five wholesaling establishments in the United States are merchant wholesalers . electrical supplies. plumbing supplies.takes title to the plywood for some period of time before selling to its customers.TYPES OF WHOLESALERS 1.000 specialized food wholesalers compete for the business of restaurants. 2. about 3. hotels. drugs. and automobile equipment. cosmetics. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler.and they handle about 59 percent of wholesale sales. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware.

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

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

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

Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . hardware items. Successful producers' cooperatives emphasize sorting . For example. and Land O' Lakes Creameries.except that they usually are paid cash for what is sold or delivered. 10. the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand.and then promote the brands. Rack jobbers are almost service wholesalers . and books and magazines) because they sell small quantities of so many different kinds of products. Sunmaid Raisin Growers Association.to improve the quality of farm products offered to the market. Examples of such organizations are Sunkist (citrus fruits). Inc. Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares. .where there are many small producers. Some also brand these improved products .and they often display them on their own wire racks.

 They communicate the needs and desires of consumers to the manufacturers.  They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers.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.

.   Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties.  They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. after sale services.  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. Thus they satisfy their demands and provide them a wide choice of goods. etc. credit facility.  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. They may also perform storage function by keeping stocks of goods.

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

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

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

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

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

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

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

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

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

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

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

they do not provide additional facilities to their customers. • Multiple Shops or chain stores:. It is also called self-service stores. But. They offer goods at lower prices as they enjoy economies of bulk buying. .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.

However.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.• Mail order houses: . it helps the consumers to get their requirements at their own place and thus saves their time and expenses. • Consumer cooperative stores: . They are incorporated as an association under the cooperative societies act. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination.are the cooperative stores which are owned and operated by the consumers themselves. The aim . But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. 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.

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

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. Bangalore and Gurgaon (delhi). It has 4 .

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

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

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