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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. where retailing is the last one. . and necessitates employing several tools of logistics management for a complete end user satisfaction. and on-line stores.com.is getting to know the final user on behalf of the producer. is "Retail Management"(RM). RM . It is not limited to quantities. Service providers. discount stores like Wal-Mart and K-Mart. and creating an environment so compelling that he looks nowhere else. through a series of stages. like Burdines and Macy's. Therefore. like dentists. like Amazon. RM . is also retailers. bringing about operational efficiency at this last stage.is an art. What is retailing? Retailing involves selling products and services to consumers for their personal or family use. Department stores.is a process of facilitation.The process of bringing the ultimate user to the main producer. and specialty stores like The Gap. Zales Jewellers are all examples of retail stores. but limited to the exact requirement of the ultimate user. hotels and hair salons.
Manufacturer Wholesalers Retailers Consumer A retailer is a person. merchandise. agency. or organisation which is instrumental in reaching the goods. the internet. or by a car rental agencies. and financing. developing assortments of products. door-to-door visit s—any channel that could be used . meaning ‘to cut a piece off’ or ‘to break bulk’.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. The selling need not necessarily take place through a store. acquiring market information. who links the producers and the ultimate consumers. Retailing encompasses selling through the mail. or services to the ultimate consumer. company. parlour. agent. Retailers perform specific activities such as anticipating customer’s wants. However. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. it also includes the sale of services like those offered at a restaurant. Between the producer and the consumer there is a middleman-the retailer. A common assumption is that retailing involves only the sale of products in stores. The word ‘retail’ is derived from the French work retailer.
Therefore.to approach the consumer. As we all know. is easy and to fail is even easier. the ease of entry into retail business results in fierce competition and better value for customer. catering to customers. freedom of choice and higher levels of customer service.e. in order to survive in retailing. 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. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. To enter retailing. .. a firm do a satisfactory job in its primary role i.
The Future of Retailing Advances in technology. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. This sector contributes 10% of India's GDP and the current growth rate is 8. have helped make retailing an even more challenging and exciting field in recent years. 1500 supermarkets and 325 departmental stores currently under construction. The nature of the business and the way retailing is done are currently undergoing fundamental changes. The sector is set for a revolution. as both the present players and new entrants are gearing up to explore the market. Global retail giants such as Wal-Mart. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. Many players are coming up with huge investments. There are about 300 new malls. .5%. Germany's Metro AG and many others are ready to enter the retail markets. Tesco. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. like the Internet. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010.
like hair styling. In addition. On-line retailers. in many cases the experience of visiting the retailer is an important part of the purchase. This sector contributes 10% of India’s GDP and the current growth rate . like Amazon. retailing in some form will always be necessary. as both the present players and new entrants are gearing up to explore the market. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back.However. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. For example. and perhaps most importantly. touch and try them before they buy. But even with products. consumers often want to see. will need to have face-to-face interaction with the consumer. the country has identified new scope for retail sector development. bring together assortments of products for consumers to buy in the same way that bricks-and-mortar retailers do. traditional retailers with physical stores will continue to be necessary. Of course. Or. With new boom in the retail industry.com. Also. they may want products immediately and won't want to wait for them to be shipped. 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. The sector is set for a revolution. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. retailers who offer personal services.
Many players are coming up with huge investments.5%.is 8.9 billion in 2009 from US$394 billion in2005. Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% 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.5 million people by the year 2010. • The retail sector would generate employment for more than 2. . The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. There are about 300 new malls. 1500 supermarkets and 325 departmental stores currently under construction. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. says an analysis by Ma Foi Management Consultants Ltd.
Technology would be upgraded in terms of logistics. production. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. Employment would increase and skills & manpower will develop. and distribution channels. Exports would increase due to greater sourcing of major players. • • Better lifestyle as better products would be introduced.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. • • Investment in whole supply chain would increase. • • A strong retailing sector would promote tourism. . Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. • • The markets of the sector would flourish and develop.
Carrefour. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. etc. Wal-Mart Stores. Liberty shoes Ltd. Crossword. Boots Group. Big Bazaar.. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. Ltd. Music World Entertainment Ltd. Pantaloon Retail India Ltd. Titan Industries. Globus Stores Pvt.. Shoppers Stop. Global retail giants such as Wal-Mart. Subhiksha. Leading Indian Retailers: Bata India Ltd.. · Biggest player in India is Pantaloon Retail India Limited. 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. Tesco.. Food Bazaar. . Ebony Retail Holdings Ltd. EU & Japan constitute 80% of world retail sales.. Tesco. Germany’s Metro AG and many others are ready to enter the retail markets.
toilets and maintenance. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. the scarcity of space. owner-managed shops. which became a part of the civic planning. The next step was the commercial plazas. certain bottlenecks as well. is grabbing attention. coupled with the stringent provisions of the Rent Control Act. 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. Retailing is India’s largest industry in terms of contribution to GDP (Gross . act as a dissuasive factor for many players to initiate operations in the main markets. which comprised merely shops offering a variety of goods and services clubbed together. The inconveniences caused by lack of parking place. the sheer size it will develop into. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. The opening up of the economy only fuelled this globalization. however. RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. There are. independent.
with an average selling space of 29.7% in 2001. . which is quite low in comparison to the developed economies. 039. In India. the per capita retailing space is about 2 sq. per outlet. only Rs. 7. snack centres. However. worth approximately Rs.1200 million in 2000. 000 crore by the year 2005-an annual increase of 20%. Total retail sales area in India was estimated at 328 million sq. while non. In 2000. mt. In fact.. barber shops) and pushcarts mobile vendors. In 2001.Domestic Product). ft. According to a survey by AT Kearney an overwhelming proportion of the Rs. Food sales constitute a high proportion of the total retail sales. There is no integrated supply chain management outlook in the Indian traditional retail industry. The turnover from private labels by major retail chains was estimated at around Rs. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. There are around 5 million retail outlets in India. The share was 62.2 billion. 000 crore segment of the market is organized. which is expected to increase to Rs.5 billion. 20. the global management consultancy AT Kearney put retail trade at Rs. There are also an unaccounted number of low cost Kiosks (tea stalls. 400. 000 crore retail markets are unorganized.800. the nonfood retailing sector registered faster year-on-year growth than the food sales sector.food sales were worth Rs.4189. 400.4 sq.000 crore. mt.
organized retail trade in India was worth Rs. space and rentals are providing to be the biggest constraints to the development of large formats in metropolitan cities since retailers are aiming at prime locations. families are experiencing growth in income but dearth of time.4% 17. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.0% 17.0% EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market.11. especially in south India and are spreading all over India at a rapid pace. However. Women are taking up corporate jobs.7 billion.3% 6. 228. which is adding to the .7% 4. In urban India. pan stores Others COMPOSITION 34. In 2001. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco.6% 14.0% 6.
there are periodic or temporary markets. peeth and melas that come up at the same location at regular time intervals. Only 3.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. such as joint ventures where Indian . lead to the closure of many small businesses and result in large-scale unemployment. Apart from this. Rural India continues to be serviced by small retail outlets. ready-to-eat food has been on the rise. The demand for frozen. There is also a strong trend in favour of one-stop shops like supermarkets and department stores. Here.6 million outlets cater to more than 700 million inhabitants of rural India. instant. foreign retailers can enter the retailing sector only through restricted modes. At present. Global players in the retail segment have been entering the market for a while now. paan shops and ration shops are the most popular vehicles of retailing. especially in the metropolitan and large cities in India. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. such as haats. 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. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. provision stores. government has discouraged FDI in the retail sector. Therefore.
The organized retailer should be able to. Retail in India’s largest industry after Agriculture with around 20% of the economically active population engaged in it and generation 10% of India’s GDP. is an astounding 250 million in size is growing at healthy rate of 7% per annum.7%. 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. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. Pizza Hut).partner is an export house (Total Health Care). through diversified risks and volume sales command huge concessions on prices from the manufacturers. The 12 million retail outlets in India are the highest in the world. with the spending . It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. cash and carry operations (Giant) and licensing (Marks & Spencer’s). He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. 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. that the Urban Population although just 25% of the total. The chief driver of growth in the retail sector has been the consumer. In interesting to note.
increasing at an average of 11% per annum. 2005). according to a study by a fashion magazine Image. each city developed its own identity and shopping cluster. Karol Bagh and South Extension. Delhi has Connaught Place. In India we have 96 malls. for instance in Pune there is MG Road. covering an area of 21.6 million sq ft. Bangalore has Brigade Road and Commercial Street. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. And by year end the count will shoot up to 158 malls. Kiosks. street vendors and high-street shops for consumer durables and luxury goods. India will have 358 malls by 2007. The core and the Lower middle have increased their share in the Growth. organized parking lots and other public amenities. It will cover 34 million sq ft area. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. At present (September 23. 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 . To cater to this.
In today’s competitive environment retailers have redefined their role in general. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. A product manager of household appliances claimed. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. The role of retailers in the present competitive environment has gained attention from manufacturers because external parties such as market intermediaries and supplying partners are becoming increasingly powerful. Retailers undertake risk in selection of goods to be sold given the following major concerns: . and in the value chain in particular. governed by their individual sales philosophy. This is especially true in the case or new products. they have a strong say in the success of the product or service launched by a business firm.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy. As a result. Retailers want of optimize sales within the limited shelf space. brand image. first within the company. and market profile in order to ensure a competitive edge. then to retailer and finally to the user of the product. ‘Marketers have to sell a new product several times.
In the backdrop of globalization. a retailer is required to make a conscious effort to position himself distinctively to face the . McDonald’s. such as Wal-Mart. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. liberalization and highly aware customers. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. 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. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. determining what merchandise and services to offer. negotiating with suppliers. financing pacts and wide-scale marketing plans. inventory management systems. Selecting target markets. Sears. Retail formats and companies that were unknown three decades ago are now major forces in the economy. it will not result in profit. Marks and Spencer. If such space is occupied by merchandise that is not moving. The larger retailers have managed to set up huge supply/distribution chains. Therefore.• Selling space available is relatively fixed and returns maximum profits. 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.
Provides two-way information . It would be very costly and time consuming for you to locate. retailers make it possible for products to be sold. retailers are a vital part of the business world. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. He thus performs two functions like buying of goods and assembling of goods.competition. a sweater or a bar of soap. . business to be done. • • In brief they provide us with following functions: Provides personal services to all.The retailer buys a variety of products from the wholesaler or a number of wholesalers. consequently. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. and. This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. Similarly. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. By bringing multitudes of manufacturers and consumers together at a single point.
• • Create demand by window display etc. He bears the risks in connection with Physical Spoilage of goods and fall in price. deterioration in the quality and spoilage of goods.• Facilitate standardisation and grading . . • Undertake physical movement and storage of goods . • • Assembles goods from various sources. theft.He develops personal contact with the consumers and gives them goods on credit.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.He resorts to standardization and grading of goods in such a way that these are accepted by the customers. • Extend credit facility . Stock goods for ready supply to buyers.The retailer performs storing function by stocking the goods for a consumer.
These wholesalers originally developed to . drugs. And several wholesalers may be competing for the same customers. Merchant wholesalers: These wholesalers own the products they sell. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. For example. For example. 2.000 specialized food wholesalers compete for the business of restaurants. About four out of five wholesaling establishments in the United States are merchant wholesalers . and automobile equipment. hotels.and they handle about 59 percent of wholesale sales. and cafeterias across the United States. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. cosmetics. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. plumbing supplies. electrical supplies.takes title to the plywood for some period of time before selling to its customers.TYPES OF WHOLESALERS 1. about 3. furniture. It actually owns .
Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. or certain types of industrial tools or supplies. and travel books. . basic reference books. For example. For example. Now. they serve hardware stores.the general stores.serve the early retailers . popular paperbacks. they cover a wide geographic area and offer more specialized service. cookbooks. In consumer products. Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . 4.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. electric appliance shops. and small department stores.and limited-line stores. 3. Specialty wholesalers often know a great deal about the final target markets in their channel. with their broad line of convenience and shopping products. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. they might carry only food. In business products. The company offers hardcover best sellers. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. they serve the single. wearing apparel. drugstores.
6. . Drop-shippers: These wholesalers own (take title to) the products they sell . retailers. or deliver them. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers . their operating costs are lower. Then the producer ships the order directly to the customers.or just refuse to grant credit to a small business that may have trouble paying its bills. stock. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. such as small auto repair shops.5.except that the customer must pay cash.and pass these orders on to producers.but they do not actually handle. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging. are too small to be served profitably by a service wholesaler. These wholesalers are mainly involved in selling. And using cash-and-carry outlets may enable the small retailer to stay in business. or other business users . Some retailers. They get orders from wholesalers. Because drop-shippers do not have to handle the products. So service wholesalers set a minimum charge . The wholesaler can operate at lower cost because the retailers take over many wholesaling functions.
Cooperatives develop in agricultural markets . Sweden. and France. the Netherlands.truck wholesalers may provide almost the same functions as full-service wholesalers. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. the United Kingdom. and salad dressings . Many of these customers . jewellery. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks.especially those in smaller towns . candy. and general merchandise lines.with the "profits" going to the cooperative's customer-members.and deliver an order within hours. Inmac uses a catalog to sell a complete line of 3.tobacco.7. For example. These wholesalers operate almost as fullservice wholesalers . 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! 8.000 different computer accessories and supplies. potato chips. 9. every day . 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. Some truck wholesalers operate 24 hours a day. By handling perishable products in general demand . Producers' cooperatives. Canada. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. Mail-order wholesalers. These wholesalers operate in the hardware.don't have a local wholesaler. sporting goods.
where there are many small producers. Inc. hardware items. Successful producers' cooperatives emphasize sorting . For example.to improve the quality of farm products offered to the market.and they often display them on their own wire racks. Rack jobbers are almost service wholesalers . and books and magazines) because they sell small quantities of so many different kinds of products. Some also brand these improved products .and then promote the brands. 10. Examples of such organizations are Sunkist (citrus fruits). Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares. Sunmaid Raisin Growers Association. and Land O' Lakes Creameries.except that they usually are paid cash for what is sold or delivered. Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . . the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand.
They communicate the needs and desires of consumers to the manufacturers.SERVICES RENDERED BY RETAILERS Services provided by the retailers to the wholesalers and manufacturers: They provide selling outlets to wholesalers and manufacturers. They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers. . They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers.
credit facility. They keep the consumers informed about the changing trends in the market about the different varieties of products. Thus they satisfy their demands and provide them a wide choice of goods. They also provide other services to the consumers such as free home delivery. Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. They may also perform storage function by keeping stocks of goods. etc. 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. . after sale services.
usually the individual who has the day-to-day responsibility for running the business. In a partnership.KINDS OF RETAILERS On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. Partnership: . 2. two or more people share ownership of a single business.A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale.The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person. . Sole proprietorship: .
and the duration of the LLC is usually determined when the organization papers are filed. It acts like a general partnership. whether to hire employees and manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by the local entrepreneurs. sometimes at maximum marginal rates. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. Independent retail unit: . 4. The owners are members. Retail firms can be classified into five heads on the basis of their respective operational structures: 1.3.The total number of retailers in India is estimated to be over 5 million in 2003. Limited liability Company (public and private): . Unless incorporated or established as a firm as evidenced by a deed. . Operational structure defines the key strategic decision of retail entity. but is clearly for a limited period of time or a single project.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states.A joint venture is not well defined in the law. An independent retailer owns one retail unit. Joint venture: . About 78% of these are small family businesses utilizing only household labour. joint ventures may be taxed like association of persons.
It refers to department in a retail store that are rented to an outside party. in discount stores. In this context the detailed example of Kendriya Bhandar in India. 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: . Usually this is done in case of department and specially stores and also at times. 3. 5. or a service sponsor) and a retail franchisee. a wholesaler. Leased Department or Shop – in – Shop: .2. Retail Chain: . Franchising: . it usually engages in some level of centralized (or coordinated) purchasing and decision making.A chain retailer operates multiple outlets (store units) under common ownership. .Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer. 4.Co-operative outlets are generally owned and managed by co-operative societies.
. and also compete against each other for the same customers. a retailer locates his store in a place where a group o retail outlets. low rent.In this case. Retailers in a Business. Classification of retailers on the basis of location 1. which attracts the customers staying close by. and better visibility from the road.associated Locations:. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location.Retailers located at a connected to other retailers depend entirely on their site which is not sore’s drawing power and on the various promotional tools to attract customers. offering a variety of merchandise. Retailers in a free-standing location: . For example the Haldiram’s outlet on the Delhi-Jaipur highway and the McDonald’s outlet on Delhi Ludhiana highway. work together to attract customers to their retail area. 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. 2. easy parking and lower property costs. This type of location has several advantages including no competition.
Govindappan naicleen street for grocery. Lately. Bunder treet for stationary products. In India. Airport Retailing: . For example. Poo Kadia for food and vegetables. and Internet presentations credit cards that buyers can make purchases on credit. service. it suffices was to offer people the convenience of location. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. better than the competitor. special or unique assortment good. 4. Retailers in Specialized Markets: . retailers are looking for new marketing strategies to attract and retain customers.For quite some time. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. particularly traditional independent retailers or chain stores. most of the cities have specialized markets famous for a particular product category.Besides the above location-based classification. in Chennai. Godown Street is famous for clothes. Now everything is different. At . Usman Street for jewellery.3. Previously. T Nagar for ready-made garments. we also have in India-retailers who prefer specialized markets. MARKETING DECISIONS BY RETAILERS Today.
where there is always space on the Parking. the manufacturers sell their products wherever possible.many stores you will find quite the same range . low-income? Do buyers diversity. to reduce its dependence on marks on a national scale. rebuild their stores. especially if the amount provided in this service is reduced. Example. department stores. started a real war. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. Others are increasingly satisfied with the sale. because bank cards now accepted almost universally. One of the most important and most responsible decisions that have to take a retailer associated with the target market. convenience? Yet will identify and describe the target . Many stores cut its own set of services and shops reduced prices. Many of them have historically located in the centre of cities. faced with competition from specialized and trading at a discount store. on the contrary. medium. upgrade their facilities. Supermarkets more money spent on activities sales promotion.trying to reach maximum volume of sales. and higher income families. People are not going to pay for the same or similar mark more. Superstores compete with supermarkets. opening their offices in the suburbs. experimenting with trading by mail and tele marketing. trying to regain former popularity. depth of assortment. increased their number. and so have to open offices with a large range and variety of goods. moving to “small” private brands. What customer oriented shop: high. Not they need a credit card of a shop.
. lack of professionalism and low purchasing power. Many companies do not have a specific target market. they are not satisfying either one of them. small-scale retailing is a very common. It incurs low operating costs and is usually owned and operated by a proprietor.market. simple and flexible way of distributing the products to the final consumers. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. They generally hold small stocks of the products of regular use. Such retailers are very large in number but account for a small portion of the total retail business. means and content of advertising.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. But. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . store environment. Some retailers target market determined fairly accurately. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. the retailer will not make informed decisions on assortment. the price level. This form of retailing faces the problems of small capital. Trying meeting the needs of a large number of different segments.
The hawkers and pedlars.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: .are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises. . They change their place of business according to their convenience and sales prospects. cheap jacks. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. market traders and street sellers fall under this category. They save time and efforts of customers in buying articles of ordinary use. They do not have any particular line of business and carry very little stock of those goods.
(iii) general stores or variety stores: . etc.They are set up in residential areas or busy markets. clothes. grocery shops. They mainly include: .are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. butter. For example.• Fixed Shop Retailers: .are the small shops on the roadside. They provide services like goods on credit and home delivery to their customers. etc. chemist shops. (ii) dealers of second hand goods: . They are generally located in shopping centres.are engaged in purchase and sale of used goods like books.are the shops which deal in all types of general consumer goods of regular use like bread. (iv) speciality shops: . sweets shop. . bus stops. etc. They sell a limited variety of products of regular use like stationery. street-crossing. readymade garments shop. etc. paper and pencils. grocery.(i) street stalls: . etc.are the shops which deal in only one or two special types of goods.
etc. They have a fixed line of business in which they have invested huge capital.are large scale retail establishments comprising of a number of departments in the same building. publicity. All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product. Such retailers are not very large in number. This form of retailing involves high operating costs and lacks personal contact with the customers. sales promotion. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising.are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. The various forms of large scale retailers are:- • Departmental stores: . Large-scale Retailers: . They offer a .
wide choice of products to the customers under one roof.are large scale retail shops operating at lower costs. groceries. recreation rooms. They sell goods at lower prices than the departmental stores. and post and telegraph offices and so on. Customers select the goods . They also provide many amenities for customer's convenience such as restaurants.etc at one place. car parking. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers. Supermarkets: . They sell a wide variety of consumer goods of regular use such as food items.
.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 do not provide additional facilities to their customers. They offer goods at lower prices as they enjoy economies of bulk buying. • Multiple Shops or chain stores:.themselves without salesman's assistance. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. It is also called self-service stores. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers.
However. 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 aim . • Consumer cooperative stores: . The post office is their main channel of distribution.• Mail order houses: . it helps the consumers to get their requirements at their own place and thus saves their time and expenses.are the cooperative stores which are owned and operated by the consumers themselves. They are incorporated as an association under the cooperative societies act. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express.
• Automatic vending machines: . etc. . buyers receive a specified quantity of the product from the machine. 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. For example.is a new and complementary form of retailing operated by inserting coins or tokens into the machine by the buyers. These are used to sell prepacked and low cost products of mass consumptions like beverages. tickets. In return.of such cooperative stores is to render service to its members and not to maximise profits.
It has 4 . The company is headquartered in Mumbai with zonal offices at Kolkata. Bangalore and Gurgaon (delhi).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.
which forms the large chunk of Indian population. which targets the large and growing upper-middle and middle class of Indian society. 7 big bazaar discount hypermarkets. Pune.5 lakh sq. 6 food bazaar stores with over 6. Pantaloon successfully launched its discount store chain. This segment is very price conscious and always looks out for value for money. It has been one of the pioneers in organized retailing in India. Ahmadabad. Mumbai. Kishore Biyani. and Delhi. Chennai. John Miller and Bare. The brands include Pantaloon. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr. Bangalore. Pantaloon plans to target the upper middle and the middle class segment. Big Bazaar has strong own brand names in its portfolio across product categories.ft retail space across Kolkata. Pantaloon has come up with an excellent revenue model. Hyderabad.kinds of stores: 14 pantaloon family stores. focussing on ‘value for money’ segment. . Bagpur. Kanpur.
google.com www.BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.msn.com .