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.

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

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

in order to survive in retailing. is easy and to fail is even easier.. 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. As we all know. To enter retailing. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer-an easier access to a variety of products.e. Therefore. catering to customers. the ease of entry into retail business results in fierce competition and better value for customer. .to approach the consumer. freedom of choice and higher levels of customer service.

Many players are coming up with huge investments.SCOPE OF RETAILING Retail is clearly the sector that is poised to show the highest growth in the next five years. Tesco. like the Internet. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. have helped make retailing an even more challenging and exciting field in recent years. This sector contributes 10% of India's GDP and the current growth rate is 8. as both the present players and new entrants are gearing up to explore the market. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. 1500 supermarkets and 325 departmental stores currently under construction.5%. Germany's Metro AG and many others are ready to enter the retail markets. The rising demand of branded products and increase in purchasing power have lured these companies to enter the market. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. The nature of the business and the way retailing is done are currently undergoing fundamental changes. The sector is set for a revolution. There are about 300 new malls. Global retail giants such as Wal-Mart. The Future of Retailing Advances in technology. .

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

is 8.  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. says an analysis by Ma Foi Management Consultants Ltd. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years. • The retail sector would generate employment for more than 2.5%. . Many players are coming up with huge investments. 1500 supermarkets and 325 departmental stores currently under construction. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. There are about 300 new malls.5 million people by the year 2010.9 billion in 2009 from US$394 billion in2005.

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

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

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

400.7% in 2001.5 billion. 000 crore retail markets are unorganized. 000 crore by the year 2005-an annual increase of 20%.4 sq. sales were worth Rs.800. According to a survey by AT Kearney an overwhelming proportion of the Rs. 7. Food sales constitute a high proportion of the total retail sales. ft. snack centres. only Rs.Domestic Product). In fact. There are also an unaccounted number of low cost Kiosks (tea stalls. worth approximately Rs. 000 crore segment of the market is organized. the nonfood retailing sector registered faster year-on-year growth than the food sales sector.000 crore. mt. 039. while non. the per capita retailing space is about 2 sq. which is quite low in comparison to the developed economies.. There are around 5 million retail outlets in India. . Total retail sales area in India was estimated at 328 million sq. mt. There is no integrated supply chain management outlook in the Indian traditional retail industry. barber shops) and pushcarts mobile vendors. with an average selling space of 29. However. which is expected to increase to Rs.2 billion.4189. In 2001. per outlet. The turnover from private labels by major retail chains was estimated at around Rs. the global management consultancy AT Kearney put retail trade at Rs. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. In India. 20. In 2000. The share was 62.1200 million in 2000.

228.7% 4. organized retail trade in India was worth Rs. families are experiencing growth in income but dearth of time. pan stores Others COMPOSITION 34.0%  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. 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 .0% 6. In urban India. However.3% 6.0% 17.7 billion. The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.4% 17. Women are taking up corporate jobs. especially in south India and are spreading all over India at a rapid pace. In 2001.6% 14.11.

Players that entered before the easing of restrictions on FDI in retail had to come through different modes. ready-to-eat food has been on the rise. there are periodic or temporary markets. lead to the closure of many small businesses and result in large-scale unemployment. The McKinsey report predicts that FDI will help the retail businesses to grow to US $ 460-470 billion by 2010. peeth and melas that come up at the same location at regular time intervals. Only 3. provision stores. Here. Global players in the retail segment have been entering the market for a while now. such as joint ventures where Indian . 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. At present. instant. such as haats. There has been a strong resistance to foreign direct investment (FDI) in retailing from small traders who fears that foreign companies would take away their business. government has discouraged FDI in the retail sector.6 million outlets cater to more than 700 million inhabitants of rural’s income and leading to better lifestyles rising incomes has led to an increased demand for better quality products while lack of time has led to a demand for better quality products while lack of time has led to a demand for convenience and services. Therefore. Apart from this. paan shops and ration shops are the most popular vehicles of retailing. foreign retailers can enter the retailing sector only through restricted modes. Rural India continues to be serviced by small retail outlets. The demand for frozen.

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

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

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

determining what merchandise and services to offer. liberalization and highly aware customers. such as Wal-Mart.• Selling space available is relatively fixed and returns maximum profits. Marks and Spencer. Retail formats and companies that were unknown three decades ago are now major forces in the economy. negotiating with suppliers. it will not result in profit. Therefore. If such space is occupied by merchandise that is not moving. McDonald’s. inventory management systems. a retailer is required to make a conscious effort to position himself distinctively to face the . The larger retailers have managed to set up huge supply/distribution chains. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. In the backdrop of globalization. the challenges for retail managers the world over are increasing-they must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. Sears. financing pacts and wide-scale marketing plans. training salespeople-these are just a few of the many functions that a retail manager has to perform on a perpetual basis. Retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. The world over retail business is denominated by smaller family run chain stores and regionally targeted stores but gradually more and more markets in the western world are being taken over by billion dollar multinational conglomerates. Selecting target markets.

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

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

and they handle about 59 percent of wholesale sales. These wholesalers originally developed to . About four out of five wholesaling establishments in the United States are merchant wholesalers . General merchandise wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware. 2. and automobile equipment. and cafeterias across the United States. For example. drugs. cosmetics.takes title to the plywood for some period of time before selling to its customers. Merchant wholesalers: These wholesalers own the products they sell.TYPES OF WHOLESALERS 1. plumbing supplies. It actually owns . furniture. about 3. For example. hotels. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas.000 specialized food wholesalers compete for the business of restaurants. And several wholesalers may be competing for the same customers. a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. electrical supplies.

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

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

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

and they often display them on their own wire racks. Examples of such organizations are Sunkist (citrus fruits). Rack jobbers are almost service wholesalers . For example.and then promote the brands.where there are many small producers. Inc. 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. Some also brand these improved products . and Land O' Lakes improve the quality of farm products offered to the market. hardware items. Successful producers' cooperatives emphasize sorting . Rack jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets . the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. 10. Sunmaid Raisin Growers Association. .except that they usually are paid cash for what is sold or delivered.

 They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers.  They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers.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. .

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

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. Partnership: . usually the individual who has the day-to-day responsibility for running the business. .The vast majority of small businesses start out as sole proprietorships.KINDS OF RETAILERS  On the basis of ownership- There are four basic legal forms of ownership for retailers: 1. two or more people share ownership of a single business. 2. In a partnership. Sole proprietorship: .

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

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

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

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

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

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

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

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

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

are large scale retail shops operating at lower costs. They also provide many amenities for customer's convenience such as restaurants. car parking.  Supermarkets: .etc at one place. and post and telegraph offices and so on. groceries. 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. recreation rooms. They sell goods at lower prices than the departmental stores. They sell a wide variety of consumer goods of regular use such as food items. Customers select the goods .

• 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. 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. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. But.themselves without salesman's assistance. They offer goods at lower prices as they enjoy economies of bulk buying. It is also called self-service stores.

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

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

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

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


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

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