Managing Retailing

INSTITUTE OF INFORMATION TECHNOLOGY & MANAGEMENT (IITM)

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

Guide: (Mr.Anmol Poddar )

Submitted by: (Aarushi Singh) Roll No.01521101709

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

ACKNOWLEDGEMENT

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

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

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

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

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

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

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

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

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

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

Many players are coming up with huge investments.5 million people by the year 2010.9 billion in 2009 from US$394 billion in2005.5%. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. says an analysis by Ma Foi Management Consultants Ltd.is 8. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. . There are about 300 new malls. The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608. • The retail sector would generate employment for more than 2. 1500 supermarkets and 325 departmental stores currently under construction.  Estimates and Predictions: • The industry is estimated to be more than US$ 400 billion by a study of McKinsey. • A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years.

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

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

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

There is no integrated supply chain management outlook in the Indian traditional retail industry. with an average selling space of 29.5 billion. the nonfood retailing sector registered faster year-on-year growth than the food sales sector. worth approximately Rs.2 billion. 400. Food sales constitute a high proportion of the total retail sales. the per capita retailing space is about 2 sq. 20. There are also an unaccounted number of low cost Kiosks (tea stalls.1200 million in 2000. barber shops) and pushcarts mobile vendors. In India. while non. 400. 7.food sales were worth Rs. The turnover from private labels by major retail chains was estimated at around Rs. . The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins..7% in 2001.Domestic Product). In 2000. snack centres. According to a survey by AT Kearney an overwhelming proportion of the Rs. However. which is expected to increase to Rs. ft.4189. 000 crore retail markets are unorganized. In 2001. 000 crore segment of the market is organized.4 sq. mt. 039. 000 crore by the year 2005-an annual increase of 20%. per outlet.800. In fact. There are around 5 million retail outlets in India. The share was 62.000 crore. the global management consultancy AT Kearney put retail trade at Rs. which is quite low in comparison to the developed economies. Total retail sales area in India was estimated at 328 million sq. only Rs. mt.

6% 14.7 billion. especially in south India and are spreading all over India at a rapid pace. which is adding to the . The modern retail formats are showing robust growth as several retail chains have established a base in metropolitan cities.0% 6.4% 17. pan stores Others COMPOSITION 34.0% 17.11. 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. COMPOSITION OF URBAN OUTLETS RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco. Women are taking up corporate jobs. organized retail trade in India was worth Rs.0%  EMERGENCE OF ORGANISED RETAILING Organized retailing in India represents a small fraction of the total retail market. In 2001. In urban India. However. families are experiencing growth in income but dearth of time. 228.7% 4.3% 6.

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

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

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

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

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

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

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

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

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

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

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

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

.  They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers.SERVICES RENDERED BY RETAILERS  Services provided by the retailers to the wholesalers and manufacturers: They provide selling outlets to wholesalers and manufacturers.  They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers.  They communicate the needs and desires of consumers to the manufacturers.

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

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

About 78% of these are small family businesses utilizing only household labour. Limited liability Company (public and private): . Unless incorporated or established as a firm as evidenced by a deed.3. Operational structure defines the key strategic decision of retail entity. and the duration of the LLC is usually determined when the organization papers are filed. joint ventures may be taxed like association of persons. 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. The owners are members. 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. 4.A joint venture is not well defined in the law. sometimes at maximum marginal rates. but is clearly for a limited period of time or a single project. Joint venture: . . An independent retailer owns one retail unit.  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.The total number of retailers in India is estimated to be over 5 million in 2003.

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

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

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

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

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

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

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

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

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

They offer goods at lower prices as they enjoy economies of bulk buying. • Multiple Shops or chain stores:. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers. they do not provide additional facilities to their customers. It is also called self-service stores. But. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions.are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. .themselves without salesman's assistance.

• Consumer cooperative stores: .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.are the cooperative stores which are owned and operated by the consumers themselves. They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. it helps the consumers to get their requirements at their own place and thus saves their time and expenses. The aim . The post office is their main channel of distribution. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts.• Mail order houses: . They are incorporated as an association under the cooperative societies act. However. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination.

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

It has 4 . The company is headquartered in Mumbai with zonal offices at Kolkata. 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.

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

.

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

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.