Managing Retailing


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

Guide: (Mr.Anmol Poddar )

Submitted by: (Aarushi Singh) Roll No.01521101709

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


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.

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.

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

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

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

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

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

There are about 300 new malls. Most predictions say that the sector might reach to US$ 400-600 billion by the year 8. says an analysis by Ma Foi Management Consultants Ltd.9 billion in 2009 from US$394 billion in2005.5 million people by the year 2010. 1500 supermarkets and 325 departmental stores currently under construction. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. . The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010.  Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. 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.5%. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. • The retail sector would generate employment for more than 2.

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

Titan Industries.. Shoppers Stop. Liberty shoes Ltd. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. Music World Entertainment Ltd.. EU & Japan constitute 80% of world retail sales. Ltd. Indian Consumerism: The Indian consumer behaviour is rapidly changing with a shift in new generation’s preference towards luxury commodities... Wal-Mart Stores. Carrefour. · Biggest player in India is Pantaloon Retail India Limited. Tesco. Subhiksha. Germany’s Metro AG and many others are ready to enter the retail markets. Boots Group. Globus Stores Pvt. Trent and the new entrants penetrating the market soon will include Reliance Retail Ltd. A glimpse of the International Retail: · One of the world’s largest industries exceeding US$ 9 trillion · 47 global fortune companies & 25 of Asia’s top 200 companies are retailers · Dominated by developed countries · US. Tesco. Leading Indian Retailers: Bata India Ltd. Pantaloon Retail India Ltd.. Global retail giants such as Wal-Mart. Food Bazaar. Big Bazaar. . Crossword. Ebony Retail Holdings Ltd. etc.

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

which is quite low in comparison to the developed economies. 000 crore retail markets are unorganized. worth approximately Rs. The turnover from private labels by major retail chains was estimated at around Rs. 000 crore by the year 2005-an annual increase of 20%.800. 000 crore segment of the market is organized. the per capita retailing space is about 2 sq. Total retail sales area in India was estimated at 328 million sq. In India.7% in 2001. 20. Food sales constitute a high proportion of the total retail sales. which is expected to increase to Rs.4 sq. 7.000 crore. According to a survey by AT Kearney an overwhelming proportion of the Rs.5 billion. mt. However.. with an average selling space of 29. while non. only Rs.4189. 400. barber shops) and pushcarts mobile vendors. In 2001.2 sales were worth Rs. per outlet. 400. 039. In fact. . In 2000.1200 million in 2000. There are also an unaccounted number of low cost Kiosks (tea stalls. snack centres. There are around 5 million retail outlets in India. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. mt. ft. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. the global management consultancy AT Kearney put retail trade at Rs.Domestic Product). There is no integrated supply chain management outlook in the Indian traditional retail industry. The share was 62.

7% 4.7 billion. Women are taking up corporate jobs. families are experiencing growth in income but dearth of time. In 2001. space and rentals are providing to be the biggest constraints to the development of large formats in metropolitan cities since retailers are aiming at prime locations.0% 6.0%  EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.4% 17. 228. In urban India. especially in south India and are spreading all over India at a rapid pace.3% 6. organized retail trade in India was worth Rs. However. which is adding to the . pan stores Others COMPOSITION 34.6% 14.0% 17.11.

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

In interesting to note. franchising/local manufacturing/sourcing from small-scale sector (McDonald’s.7%. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. that the Urban Population although just 25% of the total. The 12 million retail outlets in India are the highest in the world.partner is an export house (Total Health Care).  CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. with the spending . through diversified risks and volume sales command huge concessions on prices from the manufacturers. The chief driver of growth in the retail sector has been the consumer. He should then be in a position to allow a trickle down of this advantage to consumers out of his saved costs. is an astounding 250 million in size is growing at healthy rate of 7% per annum. 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. cash and carry operations (Giant) and licensing (Marks & Spencer’s). Pizza Hut). The main condition for organised retailing is that the retailer should be able to manage and influence the supply chain variables in a commercially viable and sustainable manner. The organized retailer should be able to.

each city developed its own identity and shopping cluster. 2005). for instance in Pune there is MG Road. covering an area of 21. Delhi has Connaught Place.6 million sq ft. Kiosks. Bangalore has Brigade Road and Commercial Street. India will have 358 malls by 2007. And by year end the count will shoot up to 158 malls. 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 . street vendors and high-street shops for consumer durables and luxury goods. Karol Bagh and South Extension. At present (September 23. It will cover 34 million sq ft area. The core and the Lower middle have increased their share in the Growth. In India we have 96 malls. organized parking lots and other public amenities. The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores. To cater to this. according to a study by a fashion magazine Image. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have ACs.increasing at an average of 11% per annum.

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

determining what merchandise and services to offer. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. Therefore. financing pacts and wide-scale marketing plans. McDonald’s. Retail formats and companies that were unknown three decades ago are now major forces in the economy. 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. such as Wal-Mart. inventory management systems. The world over retail business is denominated by smaller family run chain stores and regionally targeted stores but gradually more and more markets in the western world are being taken over by billion dollar multinational conglomerates. If such space is occupied by merchandise that is not moving. The larger retailers have managed to set up huge supply/distribution chains.• Selling space available is relatively fixed and returns maximum profits. Marks and Spencer. In the backdrop of globalization. it will not result in profit. a retailer is required to make a conscious effort to position himself distinctively to face the . liberalization and highly aware customers. Sears. 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. negotiating with suppliers. Selecting target markets.

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

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

and automobile equipment.and they handle about 59 percent of wholesale sales. For example. And several wholesalers may be competing for the same customers. These wholesalers originally developed to . and cafeterias across the United States. cosmetics.TYPES OF WHOLESALERS 1. plumbing supplies. General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. furniture. 2. about 3.000 specialized food wholesalers compete for the business of restaurants. For example. It actually owns . Merchant wholesalers: These wholesalers own the products they sell. hotels. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas.takes title to the plywood for some period of time before selling to its customers. electrical supplies. About four out of five wholesaling establishments in the United States are merchant wholesalers . drugs. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler.

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

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

the United Kingdom. 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. and general merchandise lines. Germany.don't have a local wholesaler. Canada.especially those in smaller towns . Inmac uses a catalog to sell a complete line of 3. Truck wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. Mail-order wholesalers. Producers' cooperatives. the Netherlands. 9. jewellery. Sweden.and deliver an order within hours. and France.with the "profits" going to the cooperative's customer-members. Cooperatives develop in agricultural markets .truck wholesalers may provide almost the same functions as full-service wholesalers. These wholesalers operate in the hardware. Inmac's catalogs are printed in six languages and distributed to business customers in the United States. For example. every day .7.000 different computer accessories and supplies. sporting goods. potato chips. These wholesalers operate almost as fullservice wholesalers . Some truck wholesalers operate 24 hours a day. and salad dressings . Many of these customers . A 7-Eleven store that runs out of potato chips on a busy Friday night doesn't want to be out of stock all weekend! 8. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. By handling perishable products in general demand . candy.tobacco.

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

 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.

 They also provide other services to the consumers such as free home delivery. etc. . after sale services.  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. They may also perform storage function by keeping stocks of goods. credit facility.  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 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.

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. two or more people share ownership of a single business. Partnership: . Sole proprietorship: . In a partnership.KINDS OF RETAILERS  On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. These firms are owned by one person.A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale.

It acts like a general partnership.A joint venture is not well defined in the law. 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. 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. and the duration of the LLC is usually determined when the organization papers are filed. Operational structure defines the key strategic decision of retail entity. Joint venture: .The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. joint ventures may be taxed like association of persons.  Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. 4.The total number of retailers in India is estimated to be over 5 million in 2003. An independent retailer owns one retail unit. Independent retail unit: . About 78% of these are small family businesses utilizing only household labour. The owners are members. Limited liability Company (public and private): . sometimes at maximum marginal rates. . Unless incorporated or established as a firm as evidenced by a deed.3.

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

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

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

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

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

cheap jacks.are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises. The hawkers and pedlars. They save time and efforts of customers in buying articles of ordinary use. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. .The two prevalent forms of small scale retailing in India are:• Itinerants or Mobile traders: . market traders and street sellers fall under this category. They change their place of business according to their convenience and sales prospects. They do not have any particular line of business and carry very little stock of those goods.

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

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

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

But. It is also called self-service stores. . • Multiple Shops or chain stores:.are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations.themselves without salesman's assistance. They offer goods at lower prices as they enjoy economies of bulk buying. 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. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers.

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

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

It has 4 .RELEVANT EXAMPLE • Big Bazaar: the Indian wall-mart (organised retailer) Pantaloon retail (India) limited is today organised as one of the pioneers in the business of organised retailing in the country with a turnover of Rs 400 crores. Bangalore and Gurgaon (delhi). The company is headquartered in Mumbai with zonal offices at Kolkata.

It has been one of the pioneers in organized retailing in India. Hyderabad. Kanpur.kinds of stores: 14 pantaloon family stores. which targets the large and growing upper-middle and middle class of Indian society. which forms the large chunk of Indian population. Mumbai. Ahmadabad. John Miller and Bare. 6 food bazaar stores with over 6. Bangalore. Chennai. Kishore Biyani. The brands include Pantaloon. This segment is very price conscious and always looks out for value for money. 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. and Delhi. Bagpur.5 lakh sq. Pune. Pantaloon retail India limited is the flagship company of the pantaloon group promoted bt Mr. focussing on ‘value for money’ segment. Pantaloon has come up with an excellent revenue model. 7 big bazaar discount hypermarkets.ft retail space across Kolkata. . Pantaloon successfully launched its discount store chain.


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

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