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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.
Zales Jewellers are all examples of retail stores.The process of bringing the ultimate user to the main producer. where retailing is the last one.is an art. like Burdines and Macy's. hotels and hair salons.is getting to know the final user on behalf of the producer. is "Retail Management"(RM). and creating an environment so compelling that he looks nowhere else. Service providers. is also retailers. like dentists. It is not limited to quantities. Therefore. and necessitates employing several tools of logistics management for a complete end user satisfaction. like Amazon. Department stores. . but limited to the exact requirement of the ultimate user.is a process of facilitation. RM . bringing about operational efficiency at this last stage. discount stores like Wal-Mart and K-Mart.com. RM . through a series of stages. What is retailing? Retailing involves selling products and services to consumers for their personal or family use. RM. and on-line stores. and specialty stores like The Gap.
meaning ‘to cut a piece off’ or ‘to break bulk’. agent. developing assortments of products. 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. The word ‘retail’ is derived from the French work retailer. Retailing encompasses selling through the mail. company. the internet. agency.CONCEPT OF RETAILING The distribution of consumer products begins with the producer and ends at the ultimate consumer. merchandise. or organisation which is instrumental in reaching the goods. The selling need not necessarily take place through a store. or by a car rental agencies. Retailers perform specific activities such as anticipating customer’s wants. and financing. door-to-door visit s—any channel that could be used . Between the producer and the consumer there is a middleman-the retailer. who links the producers and the ultimate consumers. it also includes the sale of services like those offered at a restaurant. acquiring market information. Manufacturer Wholesalers Retailers Consumer A retailer is a person. A common assumption is that retailing involves only the sale of products in stores. However. or services to the ultimate consumer. parlour.
a firm do a satisfactory job in its primary role i. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. freedom of choice and higher levels of customer service. catering to customers. in order to survive in retailing.. As we all know. 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. Therefore.to approach the consumer.e. is easy and to fail is even easier. To enter retailing. .
SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. 1500 supermarkets and 325 departmental stores currently under construction. The sector is set for a revolution. The Future of Retailing Advances in technology. like the Internet. Global retail giants such as Wal-Mart. The nature of the business and the way retailing is done are currently undergoing fundamental changes. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. . Many players are coming up with huge investments. as both the present players and new entrants are gearing up to explore the market.5%. Germany's Metro AG and many others are ready to enter the retail markets. There are about 300 new malls. This sector contributes 10% of India's GDP and the current growth rate is 8. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. have helped make retailing an even more challenging and exciting field in recent years. Tesco.
In addition. This sector contributes 10% of India’s GDP and the current growth rate . But even with products. Retail is clearly the sector that is poised to show the highest growth in the next five years. consumers often want to see.However. retailers who offer personal services. as both the present players and new entrants are gearing up to explore the market. Also. retailing in some form will always be necessary. the country has identified new scope for retail sector development. like Amazon. will need to have face-to-face interaction with the consumer.com. With new boom in the retail industry. The already revolutionizing urbanization and growing demand for finished products has necessitated development of new space for retail outlets. On-line retailers. and perhaps most importantly. 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. the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers. touch and try them before they buy. Of course. The sector is set for a revolution. like hair styling. they may want products immediately and won't want to wait for them to be shipped. in many cases the experience of visiting the retailer is an important part of the purchase. Everything that the retailer can do to make the shopping experience pleasurable and fun can help ensure that customers come back. Or. For example.
• The retail sector would generate employment for more than 2. says an analysis by Ma Foi Management Consultants Ltd. 1500 supermarkets and 325 departmental stores currently under construction. 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.5 million people by the year 2010. There are about 300 new malls. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years.is 8. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey.5%. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608.9 billion in 2009 from US$394 billion in2005. .
Employment would increase and skills & manpower will develop. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. • • A strong retailing sector would promote tourism. • • The markets of the sector would flourish and develop. Technology would be upgraded in terms of logistics. and distribution channels. production. Exports would increase due to greater sourcing of major players.Benefits of FDI in Retail Sector: • Higher competition would lead to higher quality in products and services. • In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. • • Better lifestyle as better products would be introduced. . • • Investment in whole supply chain would increase.
Music World Entertainment Ltd. Ebony Retail Holdings Ltd. Crossword. Wal-Mart Stores. Tesco. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities.. Globus Stores Pvt. Shoppers Stop.. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. Germany’s Metro AG and many others are ready to enter the retail markets.. . Carrefour. Food Bazaar. Pantaloon Retail India Ltd. Titan Industries. Global retail giants such as Wal-Mart. A glimpse of the International Retail: · One of the world’s largest industries exceeding US$ 9 trillion · 47 global fortune companies & 25 of Asia’s top 200 companies are retailers · Dominated by developed countries · US. Liberty shoes Ltd. Big Bazaar. · Biggest player in India is Pantaloon Retail India Limited. Boots Group. Leading Indian Retailers: Bata India Ltd... Subhiksha. Tesco. EU & Japan constitute 80% of world retail sales. Ltd. etc. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market.
Retailing is India’s largest industry in terms of contribution to GDP (Gross . The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. toilets and maintenance. RETAILING IN INDIA The retail industry in India is largely unorganized and predominately consists of small. certain bottlenecks as well. however. the scarcity of space. coupled with the stringent provisions of the Rent Control Act. ushered in the entry big international brands opening their exclusive showrooms. the sheer size it will develop into.RETAILING IN INDIA ORIGIN IN INDIA Although retailing does not enjoy the status of an industry. There are. which comprised merely shops offering a variety of goods and services clubbed together. is grabbing attention. independent. which became a part of the civic planning. The opening up of the economy only fuelled this globalization. The next step was the commercial plazas. This also explains why the Raheja’s forayed into their retail venture-Shoppers’ Stop. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores. The inconveniences caused by lack of parking place. owner-managed shops. act as a dissuasive factor for many players to initiate operations in the main markets.
. 7. 000 crore retail markets are unorganized.2 billion. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. 400. which is expected to increase to Rs.1200 million in 2000. only Rs. The share was 62. per outlet. barber shops) and pushcarts mobile vendors. with an average selling space of 29.Domestic Product).4 sq. snack centres. There are also an unaccounted number of low cost Kiosks (tea stalls. In India.5 billion. 400. Total retail sales area in India was estimated at 328 million sq. In 2001. the global management consultancy AT Kearney put retail trade at Rs. Food sales constitute a high proportion of the total retail sales. 000 crore segment of the market is organized. 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. However. In 2000. .4189. worth approximately Rs. the per capita retailing space is about 2 sq. ft. According to a survey by AT Kearney an overwhelming proportion of the Rs. 039. while non. 20.000 crore. mt. There are around 5 million retail outlets in India.800. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. 000 crore by the year 2005-an annual increase of 20%.food sales were worth Rs. mt. which is quite low in comparison to the developed economies. In fact.7% in 2001.
4% 17. In urban India.3% 6. especially in south India and are spreading all over India at a rapid pace.0% EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market.7% 4. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco.7 billion.11. However. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities. In 2001.0% 17.6% 14.0% 6. Women are taking up corporate jobs. 228. families are experiencing growth in income but dearth of time. 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. which is adding to the . pan stores Others COMPOSITION 34. organized retail trade in India was worth Rs.
government has discouraged FDI in the retail sector.family’s income and leading to better lifestyles rising incomes has led to an increased demand for better quality products while lack of time has led to a demand for better quality products while lack of time has led to a demand for convenience and services. instant. such as joint ventures where Indian . Global players in the retail segment have been entering the market for a while now. such as haats. Only 3. Here. Rural India continues to be serviced by small retail outlets. At present. Players that entered before the easing of restrictions on FDI in retail had to come through different modes. Apart from this. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. Therefore. paan shops and ration shops are the most popular vehicles of retailing. there are periodic or temporary markets.6 million outlets cater to more than 700 million inhabitants of rural India. There has been a strong resistance to foreign direct investment (FDI) in retailing from small traders who fears that foreign companies would take away their business. lead to the closure of many small businesses and result in large-scale unemployment. There is also a strong trend in favour of one-stop shops like supermarkets and department stores. especially in the metropolitan and large cities in India. foreign retailers can enter the retailing sector only through restricted modes. The demand for frozen. peeth and melas that come up at the same location at regular time intervals. ready-to-eat food has been on the rise. provision stores.
It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. that the Urban Population although just 25% of the total. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. The main condition for organised retailing is that the retailer should be able to manage and influence the supply chain variables in a commercially viable and sustainable manner. The 12 million retail outlets in India are the highest in the world. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs.partner is an export house (Total Health Care). Pizza Hut). franchising/local manufacturing/sourcing from small-scale sector (McDonald’s. The organized retailer should be able to. is an astounding 250 million in size is growing at healthy rate of 7% per annum.7%. In interesting to note. The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. 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. The chief driver of growth in the retail sector has been the consumer. cash and carry operations (Giant) and licensing (Marks & Spencer’s). with the spending . through diversified risks and volume sales command huge concessions on prices from the manufacturers.
At present (September 23. for instance in Pune there is MG Road. each city developed its own identity and shopping cluster. To cater to this.increasing at an average of 11% per annum. according to a study by a fashion magazine Image.6 million sq ft. street vendors and high-street shops for consumer durables and luxury goods. covering an area of 21. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. It will cover 34 million sq ft area. Karol Bagh and South Extension. In India we have 96 malls. Delhi has Connaught Place. 2005). India will have 358 malls by 2007. And by year end the count will shoot up to 158 malls. organized parking lots and other public amenities. The core and the Lower middle have increased their share in the Growth. 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 . Kiosks. Bangalore has Brigade Road and Commercial Street.
‘Marketers have to sell a new product several times. 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.’ It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy. governed by their individual sales philosophy. As a result.In today’s competitive environment retailers have redefined their role in general. This is especially true in the case or new products. A product manager of household appliances claimed. brand image. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. Retailers undertake risk in selection of goods to be sold given the following major concerns: . and in the value chain in particular. first within the company. Retailers want of optimize sales within the limited shelf space. then to retailer and finally to the user of the product. 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. they have a strong say in the success of the product or service launched by a business firm. and market profile in order to ensure a competitive edge.
If such space is occupied by merchandise that is not moving. the challenges for retail managers the world over are increasing-they must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. Marks and Spencer. inventory management systems. The larger retailers have managed to set up huge supply/distribution chains. it will not result in profit. Sears. Retail formats and companies that were unknown three decades ago are now major forces in the economy. financing pacts and wide-scale marketing plans. determining what merchandise and services to offer. McDonald’s. negotiating with suppliers. In the backdrop of globalization. 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. Selecting target markets.• Selling space available is relatively fixed and returns maximum profits. such as Wal-Mart. a retailer is required to make a conscious effort to position himself distinctively to face the . Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. Therefore. liberalization and highly aware customers.
Retailers add value to products by making it easier for manufactures to sell and consumers to buy.The retailer buys a variety of products from the wholesaler or a number of wholesalers. By bringing multitudes of manufacturers and consumers together at a single point. This is determined to a great extent by the retail mix strategy followed by accompany to sell its products. contact and make a purchase from the manufacturer every time you wanted to buy a candy bar. • • In brief they provide us with following functions: Provides personal services to all. retailers make it possible for products to be sold.competition. Provides two-way information . retailers are a vital part of the business world. He thus performs two functions like buying of goods and assembling of goods. a sweater or a bar of soap. it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. consequently. It would be very costly and time consuming for you to locate. and. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers. Similarly. . business to be done.
deterioration in the quality and spoilage of goods. theft. • Extend credit facility . .He resorts to standardization and grading of goods in such a way that these are accepted by the customers. He bears the risks in connection with Physical Spoilage of goods and fall in price.He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer.He develops personal contact with the consumers and gives them goods on credit. Stock goods for ready supply to buyers.The retailer performs storing function by stocking the goods for a consumer. • Undertake physical movement and storage of goods . Besides he bears risks on account of fire. • • Create demand by window display etc.• Facilitate standardisation and grading . • • Assembles goods from various sources.
plumbing supplies. 2. electrical supplies. 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. about 3. cosmetics. It actually owns . These wholesalers originally developed to . hotels. For example.takes title to the plywood for some period of time before selling to its customers. and cafeterias across the United States. About four out of five wholesaling establishments in the United States are merchant wholesalers .000 specialized food wholesalers compete for the business of restaurants. drugs.TYPES OF WHOLESALERS 1.and they handle about 59 percent of wholesale sales. And several wholesalers may be competing for the same customers. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. For example. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. furniture. and automobile equipment.
electric appliance shops. and travel books. drugstores. with their broad line of convenience and shopping products. Specialty wholesalers often know a great deal about the final target markets in their channel. they cover a wide geographic area and offer more specialized service.the general stores. and small department stores. Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store. they might carry only food. 3.serve the early retailers . Specialty wholesalers: These are service wholesalers who carry a very narrow range of products . A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. basic reference books. Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. For example. Single-line (or general-line) wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. Or a specialty wholesaler might carry only automotive items and sell exclusively to mass-merchandisers. they serve the single. they serve hardware stores. or certain types of industrial tools or supplies. wearing apparel. cookbooks. The company offers hardcover best sellers. . For example.and offer more information and service than other service wholesalers. 4.and limited-line stores. In business products. In consumer products. Now. popular paperbacks.
or other business users . The wholesaler can operate at lower cost because the retailers take over many wholesaling functions.or just refuse to grant credit to a small business that may have trouble paying its bills. 6. are too small to be served profitably by a service wholesaler. Drop-shippers: These wholesalers own (take title to) the products they sell . . such as small auto repair shops. These cashand-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions. These wholesalers are mainly involved in selling. They get orders from wholesalers. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging.5. Then the producer ships the order directly to the customers. or deliver them. Cash-and-carry wholesalers: These wholesalers operate like service wholesalers .except that the customer must pay cash. stock. So service wholesalers set a minimum charge . Because drop-shippers do not have to handle the products. retailers.and pass these orders on to producers. Or the wholesaler may set up a cashand-carry department to supply the small retailer for cash on the counter. Some retailers. their operating costs are lower. And using cash-and-carry outlets may enable the small retailer to stay in business.but they do not actually handle.
potato chips. Germany. and France.especially those in smaller towns . Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. These wholesalers operate almost as fullservice wholesalers .tobacco. Producers' cooperatives. Canada. A 7-Eleven store that runs out of potato chips on a busy Friday night doesn't want to be out of stock all weekend! 8. 9. These wholesalers operate in the hardware.don't have a local wholesaler.with the "profits" going to the cooperative's customer-members. Some truck wholesalers operate 24 hours a day. Many of these customers . Inmac uses a catalog to sell a complete line of 3.000 different computer accessories and supplies. every day . Cooperatives develop in agricultural markets . 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. the Netherlands.truck wholesalers may provide almost the same functions as full-service wholesalers. Sweden.7. sporting goods.and deliver an order within hours. By handling perishable products in general demand . For example. candy. jewellery. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. and general merchandise lines. the United Kingdom. and salad dressings . Mail-order wholesalers. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry.
to improve the quality of farm products offered to the market.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 . Successful producers' cooperatives emphasize sorting . . the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. For example. hardware items. Examples of such organizations are Sunkist (citrus fruits). and Land O' Lakes Creameries. Some also brand these improved products . Rack jobbers are almost service wholesalers .and then promote the brands. 10. Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares. and books and magazines) because they sell small quantities of so many different kinds of products. Inc. Sunmaid Raisin Growers Association.and they often display them on their own wire racks.where there are many small producers.
They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers. .SERVICES RENDERED BY RETAILERS Services provided by the retailers to the wholesalers and manufacturers: They provide selling outlets to wholesalers and manufacturers. 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.
etc. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. Services provided by the retailers to the consumers:They anticipate the needs of consumers and accordingly assemble goods of different varieties. Thus they satisfy their demands and provide them a wide choice of goods. . credit facility. after sale services. 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. They even act as an advisor and guide to the consumers by bringing new products to their notice and educating them about its diverse uses. They also provide other services to the consumers such as free home delivery.
Partnership: .A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. In a partnership. These firms are owned by one person. . two or more people share ownership of a single business. Sole proprietorship: .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. 2. usually the individual who has the day-to-day responsibility for running the business.
but is clearly for a limited period of time or a single project. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. Independent retail unit: . Operational structure defines the key strategic decision of retail entity. It acts like a general partnership.3. Joint venture: . About 78% of these are small family businesses utilizing only household labour. Unless incorporated or established as a firm as evidenced by a deed. The owners are members.The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. 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. 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 total number of retailers in India is estimated to be over 5 million in 2003. .A joint venture is not well defined in the law. 4. Limited liability Company (public and private): . joint ventures may be taxed like association of persons. An independent retailer owns one retail unit. and the duration of the LLC is usually determined when the organization papers are filed.
4.A chain retailer operates multiple outlets (store units) under common ownership. 5. .2. Co-operative Outlets: . Leased Department or Shop – in – Shop: . Franchising: . In this context the detailed example of Kendriya Bhandar in India. or a service sponsor) and a retail franchisee. in discount stores. 3. Retail Chain: . Usually this is done in case of department and specially stores and also at times.Co-operative outlets are generally owned and managed by co-operative societies. which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business. a wholesaler.Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer.It refers to department in a retail store that are rented to an outside party. it usually engages in some level of centralized (or coordinated) purchasing and decision making.
which attracts the customers staying close by. work together to attract customers to their retail area. Classification of retailers on the basis of location 1. 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. offering a variety of merchandise.Retailers located at a connected to other retailers depend entirely on their site which is not sore’s drawing power and on the various promotional tools to attract customers. Classification of Retailers on the basis or Retail Location Retailers have also been classified according to their store location. and better visibility from the road. 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 in a Business. and also compete against each other for the same customers. low rent. easy parking and lower property costs. a retailer locates his store in a place where a group o retail outlets.In this case. This type of location has several advantages including no competition. . 2.associated Locations:.
Now everything is different. particularly traditional independent retailers or chain stores. special or unique assortment good. in Chennai.3. Poo Kadia for food and vegetables. For example. In India. better than the competitor. 4.For quite some time. Govindappan naicleen street for grocery. MARKETING DECISIONS BY RETAILERS Today. At . T Nagar for ready-made garments. Airport Retailing: . it suffices was to offer people the convenience of location. Usman Street for jewellery. service. most of the cities have specialized markets famous for a particular product category. retailers are looking for new marketing strategies to attract and retain customers. Lately. serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space. we also have in India-retailers who prefer specialized markets. Godown Street is famous for clothes. Previously. duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Retailers in Specialized Markets: . Bunder treet for stationary products.Besides the above location-based classification. and Internet presentations credit cards that buyers can make purchases on credit.
Supermarkets more money spent on activities sales promotion. Superstores compete with supermarkets. experimenting with trading by mail and tele marketing. opening their offices in the suburbs. low-income? Do buyers diversity. trying to regain former popularity. because bank cards now accepted almost universally. upgrade their facilities. People are not going to pay for the same or similar mark more. and so have to open offices with a large range and variety of goods. the manufacturers sell their products wherever possible.many stores you will find quite the same range . to reduce its dependence on marks on a national scale. department stores. and higher income families. on the contrary. medium. faced with competition from specialized and trading at a discount store. Others are increasingly satisfied with the sale. Not they need a credit card of a shop. where there is always space on the Parking. Many of them have historically located in the centre of cities. convenience? Yet will identify and describe the target . started a real war. What customer oriented shop: high. especially if the amount provided in this service is reduced. increased their number. moving to “small” private brands. All this leads to the fact that many retailers trade today are rethinking their marketing strategies.trying to reach maximum volume of sales. Many stores cut its own set of services and shops reduced prices. depth of assortment. rebuild their stores. Example. One of the most important and most responsible decisions that have to take a retailer associated with the target market.
This form of retailing faces the problems of small capital. they are not satisfying either one of them. Retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers. 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. TYPES OF RETAIL DISTRIBUTION OUTLETS Small-scale retailers: . means and content of advertising. the retailer will not make informed decisions on assortment.are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. They generally hold small stocks of the products of regular use. But. simple and flexible way of distributing the products to the final consumers.market. lack of professionalism and low purchasing power. Such retailers are very large in number but account for a small portion of the total retail business. It incurs low operating costs and is usually owned and operated by a proprietor. small-scale retailing is a very common. . the price level. store environment. Trying meeting the needs of a large number of different segments. Many companies do not have a specific target market.
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 do not have any particular line of business and carry very little stock of those goods. The hawkers and pedlars.The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . They change their place of business according to their convenience and sales prospects. They save time and efforts of customers in buying articles of ordinary use. . market traders and street sellers fall under this category. cheap jacks. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers.
(i) street stalls: . grocery shops.are the shops which deal in all types of general consumer goods of regular use like bread.are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. (iv) speciality shops: . etc.They are set up in residential areas or busy markets. They provide services like goods on credit and home delivery to their customers. sweets shop. (iii) general stores or variety stores: . bus stops.are the shops which deal in only one or two special types of goods.are engaged in purchase and sale of used goods like books. etc. butter. They mainly include: . etc. . For example. They are generally located in shopping centres.• Fixed Shop Retailers: . etc. clothes.are the small shops on the roadside. (ii) dealers of second hand goods: . readymade garments shop. etc. chemist shops. grocery. paper and pencils. street-crossing. They sell a limited variety of products of regular use like stationery.
are large scale retail establishments comprising of a number of departments in the same building. This form of retailing involves high operating costs and lacks personal contact with the customers. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising. sales promotion. All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product.are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. They have a fixed line of business in which they have invested huge capital. Large-scale Retailers: . etc. They offer a . Such retailers are not very large in number. publicity. The various forms of large scale retailers are:- • Departmental stores: .
etc at one place. and post and telegraph offices and so on. They sell a wide variety of consumer goods of regular use such as food items. Customers select the goods . Such stores are generally located in central places of big cities so that they can be easily accessible to the customers. Supermarkets: .wide choice of products to the customers under one roof. recreation rooms.are large scale retail shops operating at lower costs. groceries. They also provide many amenities for customer's convenience such as restaurants. car parking. They sell goods at lower prices than the departmental stores.
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.themselves without salesman's assistance. • Multiple Shops or chain stores:. But.are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. . they do not provide additional facilities to their customers. They offer goods at lower prices as they enjoy economies of bulk buying.
But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. They are incorporated as an association under the cooperative societies act.are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express.• Mail order houses: . The aim . They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. 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. The post office is their main channel of distribution. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination. • Consumer cooperative stores: . Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts. However.
of such cooperative stores is to render service to its members and not to maximise profits. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. In return. For example. etc. mother dairy sells milk through such vending machines. These are used to sell prepacked and low cost products of mass consumptions like beverages.is a new and complementary form of retailing operated by inserting coins or tokens into the machine by the buyers. • Automatic vending machines: . tickets. . buyers receive a specified quantity of the product from the machine.
It has 4 . The company is headquartered in Mumbai with zonal offices at Kolkata.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. Bangalore and Gurgaon (delhi).
which forms the large chunk of Indian population. Chennai. Kanpur. Hyderabad. Bagpur.kinds of stores: 14 pantaloon family stores. which targets the large and growing upper-middle and middle class of Indian society. Mumbai. focussing on ‘value for money’ segment. Big Bazaar has strong own brand names in its portfolio across product categories. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr.5 lakh sq. John Miller and Bare. Bangalore. 6 food bazaar stores with over 6. . Pune. and Delhi. It has been one of the pioneers in organized retailing in India. Pantaloon has come up with an excellent revenue model. The brands include Pantaloon. Ahmadabad. Pantaloon successfully launched its discount store chain. 7 big bazaar discount hypermarkets.ft retail space across Kolkata. Kishore Biyani. Pantaloon plans to target the upper middle and the middle class segment. This segment is very price conscious and always looks out for value for money.
msn.google.com www.BIBLIOGRAPHY BOOKS: Retailing Management by Swapna Pradhan Retailing Managemnet by Barton A Weitz SITES: www.com .
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