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DISSERTATION REPORT

ON
“ FACTORS THAT INDUCE SUCCESS OF RETAIL OUTLET
(SPECIAL EMPHASIS ON LOCATION)”

SUBMITTED FOR THE PARTIAL FULFILLMENT


FOR THE AWARD
OF
POST GRADUATE DIPLOMA IN MANAGEMENT (2009-2010)

FROM
I.T.S – INSTITUTE OF MANAGEMENT, KNOWLEDGE PARK-III

GREATER NOIDA

SUBMITTED BY

AMIT SINGH YADAV

UNDER THE GUIDANCE OF

FACULTY MENTOR

PROF.NEHA ZAIDI

I.T.S-INSTITUTE OF MANAGEMENT

1
CERTIFICATE BY FACULTY MENTOR

This is to certify that the Research Report entitled ““FACTORS THAT


INDUCE SUCCESS OF RETAIL OUTLET(SPECIAL EMPHASIS ON LOCATION)”
being submitted by ” AMIT SINGH YADAV” in fulfillment of the requirement of
I.T.S-IM GREATER NOIDA is a record of an independent work done by him
under my guidance and supervision.

To the best of my knowledge and believe the project:

A. Embodies the work of candidate himself.

B. Has duly been completed.

C. Fulfills the requirements of the rules and regulations relating to the final
live project of the institute.

D. Is up-to the standard both in respect of contents and languages for being
reffered to the examiner.

Prof.Neha Zaidi

2
Faculty Mentor

DECLARATION

I, AMIT SINGH YADAV from I.T.S-INSTITUTE OF


MANAGEMENT,GREATER NOIDA hereby declare that this dissertation
entitled “FACTORS THAT INDUCE SUCCESS OF RETAIL OUTLET(SPECIAL EMPHASIS ON
LOCATION)” is a result of original research work done by me.

All the data and information mentioned in this project have been collected through
primary data and secondary data. Based upon the concept of business objective of
the project in mind, the recommendations have been made.
The recommendations are made, keeping all the costs, expenses and technical
barriers as constant.

AMIT SINGH YADAV

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ACKNOWLEDGEMENT

The DISSERTATION Program undertaken by me at “FACTORS THAT

)”, Gurgaon
INDUCE SUCCESS OF RETAIL OUTLET(SPECIAL EMPHASIS ON LOCATION

was an extremely rewarding experience for me both in term of skill


acquired and work attitudes imbibed for future endeavors.
I express my gratitude to addidas, for giving me the opportunity of being
associated with them and learning the intricacies of organization culture
on a real time basis.
I am grateful to my faculty guide Prof.Neha Zaidi for the guidance and
gratitude from the conception of the project.
I also like to thank the director and dean of my institution Dr.P.Nayak
and Prof. Vikash Singh respectively. Last but not least I would like to
thank my family and friends who have been directly or indirectly
associated with me in the project for their valuable inputs, patience and
support.
THANKS TO ALL.

AMIT SINGH YADAV

4
TABLE OF CONTENT

Page no.
Acknowledgments 3
Abstract 6
1. Chapter-1 (Introduction) 5
1.1 Need of study 8
1.2 Scope of study 9
1.3 Objective 10
1.4 Research methodology 11
2. Chapter-2 (Company profile) 16
2.1 Product line 20
2.2 Sponsorship 22
2.3 Corporate information 23
2.4 Slogan 23
2.5 adidas originals 24
2.6 Product technology 25
2.7 Management hierarchy 27
2.8 Retail excellence 28
2.9 Training 32
2.10 Operation 33
3. Chapter-3 (Analytic framework/ model used) 35
3.1 Market analysis 41
3.2 Location strategy 46

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3.3 Site specific analysis 50
4. Chapter-4 Analysis of research work 65
5. Chapter-5 Conclusion 75

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EXECUTIVE SUMMARY
The performance of the retail outlets depends upon many factors such as:

• Location of the outlet

• Inventory keeping,

• Visual merchandise,

• POP materials circulation, window displays and

• Employee interaction with the customers and so on so forth

Of all these factors, first and most important factor is Location of retail outlet. Location is

the major determinant factor for success and future of any retail outlet.

The present study basically aims at two things;

a) Assess the feasibility of establishing new stores in Bangalore city.

b) Improving atmospherics or ambience of already existing Adidas retail stores

This study includes analysis of retail hygiene, visual merchandising and overall retail

atmospheric factors that plays a significant role in retail industry to attract customer inside the

store. These factors also affect the sales of the retail outlets. Hence this study also includes

analysis of both internal as well as external factors that affects the sales of retail outlets. In order

to improve the store ambience and sales of particular store several needful inputs taken from

managements.

Adidas company is having many types of outlets (retailing channels) i.e. retail stores,

distributors, MBO’s, EBO’s, Key accounts, shop in shops, factory outlets etc. Out of these an

assignment is given to study the adidas retail stores and analysis of factors that induce success of

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NEED OF STUDY
The choice of a store location has a profound effect on the entire business life of a retail

operation. A bad choice may all but guarantee failure, a good choice, and success. This report

takes up site selection criteria, such as retail compatibility and zoning, that the small store

owner-manager must consider after making basic economic, demographic, and traffic analyses.

It offers questions the retailer must ask (and find answers to) before making the all important

choice of store location. The first step in choosing a retail business location takes place in your

head. Before you do anything else, define your type of business in the broadest terms and

determine your long term objective. Write them down. This exercise will help you greatly later

in choosing a retail location. In picking a store site, many store owners believe that it's enough to

learn about the demographics ("people information" like age, income, family size, etc.) of the

population, about the kind of competition they will be facing, and about traffic patterns in the

area they are considering. Beyond a doubt, these factors are basic to all retail location analysis.

Once you have spotted a tentative location using these factors; however, you have only done half

the job. Before you make a commitment to moving in and setting up, you must carefully check

several more aspects of the location to help insure your satisfaction with —and, most

importantly, your success at—the site you've chosen.

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OBJECTIVE OF PROJECT

1. To formulate the location strategy and site selection for new retail

outlet

2. The factors you need to know about selecting a retail location.

3. The location factors that influence location of retail stores.

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RESEARCH METHODOLOGY

Research Design and Information Needs

Most science have their own specific scientific methods, which are supported by methodologies

(i.e. rationale that support the methods validity)

The social science is methodological diver’s using qualitative, quantitative, and mix method

approaches. Qualitative method includes the case study, phenomenology, grounded theory, and

ethnography, among others. Quantitative method include hypothesis testing, power analysis, met

analysis, observational studies, re sampling, random controlled trials, regression analysis,

multilevel modeling and high dimensional analysis among others.

Type of research:

The nature of the study was exploratory, descriptive and analytical. The study aims at

finding the factors that induce success of retail outlet and factors should be considered to

select location for retail outlet. Review of related literature on location strategy for retail

outlet and interaction with various retailers e at different market location have given an

idea about the attributes to be considered for the analytical study of store location.

The views of existing retailers can provide valuable insights to retail location in developing

appropriate location for new retail outlet. The study insights include understanding the factors

that are conducive to the success of existing retail outlet of Adidas. And it also analyses factors

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that should be considered before finalizing the location for new retail outlet.

As research design applicable to exploratory studies are different from objective firmly in mind

while designing the research.

Which searching for hypothesis, exploratory design are appropriate; when hypothesis have been

established are to be listed, conclusive design are needed. It should be noted however, that the

research process tends to become circular over a period of time. Exploratory may define

hypothesis, which are then tested by conclusive research; but a byproduct of conclusive research

may be a suggestion for a new opportunity or a new difficulty.

Other characteristics of exploratory research are flexibility and ingenuity, which characterize the

investigation. As we proceed with the investigating it must be on the alert to recognize new

ideas, as it can swing the research in the new direction until they have exhausted it or have found

a better idea. Thus they may be constantly changing the focus of invest as new possibilities come

to attention.

It should be added here that formal design in the research is the key factor.

Study of secondary source of information

The reason for selecting this mode of research for this type is that it’s a probably quickest and

most economical way for research to find possible hypothesis and to take the advantage of the

work of other and utilize their earlier effort. Most large company that have maintained marketing

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research programs over a number of years accumulated significant libraries of research

organizations furnishing data

Data source

Source of information for the purpose of this project study, primary and secondary data was

collected and observation study was made

Primary data – data original, collected from investigation are known as primary data. The

primary data in this study was collected from the retailers for this purpose questionnaire was

framed.

Secondary data- secondary data means data that are already available i.e. they refer to the data

which have already been collected and analyzed by someone else. When the researcher utilizes

secondary data, then he has to look in to various sources from where he can obtain them.

Secondary data either be published or unpublished .usually published data are available in

various publication of the central, state, and local bodies. In technical and trade journals, books,

magazines, newspaper, reports and publications of various associations connected with business

and industry, banks, stock exchange etc.

Procedure

The research to be conducted to achieve the objectives of both exploratory and descriptive in

nature and involved responses collected through secondary data.

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Sample size: 80

The sample size includes retailers of the various location in Bangalore which covers malls/hyper

market and high street market to analyze the factors that are important in order to finalize

location for retail outlet.

Types of data:

Data Collection from Primary Sources (Population, Sample & Sampling


Technique)

Secondary: website, annual report of companies, magazines, and CMIE data base etc.

As it is secondary research, all the data is selected after rigorous analysis of article from

newspaper, magazines and internet.

All the collected is done by marketing analyst across the world and is compiled in this project to

understand this term “study of factors that induce the success of retail store” more effectively.

Questionnaire Development and Pretesting

The study being descriptive in nature it is dependent on primary data, to a large extent.

The primary data for the study is generated through personal canvassing of a schedule. A

draft schedule is pre-tested by canvassing it to selected respondents in the Bangalore city.

This is done to ensure the effectiveness of schedule as the single most important tool for

collection of data. The revised schedule is canvassed to two types of respondents. A

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direct structured questionnaire containing hypothesis was administered to retailers to

understand the factors that contribute to finalize the location for retail outlet.

Limitations of the project

1. The project is limited to the market of Bangalore; the conclusions drawn may not be

applicable to entire state of Karnataka or the whole country.

2. Since being proprietary to the organization, the information contained in the project is

limited to the extent of access given to the student.

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COMPANY PROFILE
Adidas AG is a German sports apparel manufacturer and part of the Adidas Group, which

consists of Reebok Sportswear Company, Taylor Made-adidas Golf Company, and Rockport.

Besides sports footwear, the company also produces other products such as bags, shirts, and

other sports and clothing related goods. The company is the largest sportswear manufacturer in

Europe and the second biggest sportswear manufacturer in the world, to its US rival Nike.

The company's clothing and shoe designs typically feature three parallel bars, and the same motif

is incorporated into Adidas's current official logo.

A brief history

1920-Adolf Dassler made his first training shoe in Hezogenauraah, Germany.

1928-Shoes made by Adolf Dassler were worn in Olympics games for the first time.

1948-The company adidas is formed. The name “adidas” was derived from Adolf’s nickname

“adi”, and first three letter of Dassler “das” (adi+das=adidas)

1972-The “Trefoil” logo was launched

1973-Adolf Dassler passed away.

1993-New company logo was introduced “sports performance”

After a period of trouble following the death of Adolf Dassler's son Horst Dassler in 1987, the

company was bought in 1989 by French industrialist Bernard Tapie. Tapie decided to move

production offshore to Asia. He also hired Madonna for promotion. He sent Walter Head, from

Christchurch, New Zealand, a shoe sales representative, to Germany and met Adolf Dassler's

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descendants (Amelia Randall Dassler and Bella Beck Dassler) and was sent back with a few

items to promote the company there.

1994-Combined with FIFAYouth Group, SOS Children's Villages became the main beneficiary.

1997-Adidas AG acquired the Salomon Group who specialized in ski wear, and its official

corporate name was changed to Adidas-Salomon AG because with this acquisition Adidas also

acquired the Taylormade Golf Company and Maxfli which allowed them to compete with Nike

Golf.

1998-Adidas sued the NCAA over their rules limiting the size and number of commercial logos

on team uniforms and apparel. Adidas withdrew the suit, and the two groups established

guidelines as to what three-stripe designs would be considered uses of the Adidas trademark.

2005- Adidas told the public that they sold their partner company Salomon Group for €485m to

Amer Sports of Finland.

2005-Adidas declared its intention to buy British rival Reebok for $3.8 billion (US). This

takeover was completed with partnership in January 2006 and meant that the company will have

business sales closer to those of Nike in North America. The acquisition of Reebok will also

allow Adidas to compete with Nike worldwide as the number two athletic shoemaker in the

world.

Adidas has corporate headquarters in Germany, and many other business locations around the

world such as Hong Kong, Toronto, Taiwan, England, Japan, Australia and Spain. Mainly sold

in the U.S., Adidas makes lots of assets from these countries and is expanding to more oversea

countries.

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COMPANY MISSION STATEMENT

Company’s mission – “To be the leading sports brand in the world”. The adidas group strives

to be the global in the sporting goods industry with sport brands built on a passion for sports and

a sporting lifestyle.

Vision- our passion for sports makes the world a better place.

Brand attitude- “impossible is nothing”

Brand values

• Authentic

• Passionate

• Inspirational

• Innovative

• Honest

• Committed

PRODUCT LINE

FOOTWEAR 45% contribution in total business

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APPARELS 40% contribution in total business

ACCESSORIES 15 % contribution in total business

Adidas is manufacturing footwear, apparels and accessories for different sports categories. These

sports categories are mentioned below:-

1. Running: Adidas currently manufactures several running shoes, including the adiStar

Control 5, the adiStar Ride (the replacement for the adiStar Cushion 6), the Supernova

Sequence (the replacement for the Supernova Control 10), and the Supernova Cushion 7

(which will soon be replaced by the Supernova Glide), among others. In addition, their

performance apparel is widely used by runners. Adidas also uses kangaroo leather to

make their more expensive shoes

2. Training

3. Tennis: Adidas has sponsored tennis players and recently introduced a new line of

tennis racquets. While the Feather is made for the "regular player", and the Response for

the "club player", Adidas targets the "tournament player" with the 12.2 oz Barricade tour

model. Adidas sponsors the following professional players: Marat Safin, Dinara Safina,

Ana Ivanović, Novak Djokovic, Gilles Simon, Marcos Baghdatis and doubles team Bob

and Mike Bryan. Adidas tennis apparel contains the ClimaCool technology found in

other athletic jerseys and shoes

4. Football: One of the main focuses of Adidas is football kit and associated equipment.

Adidas also provides apparel and equipment for all teams in Major League Soccer.

Adidas remain a major company in the supply of team kits for international football

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teams. Current examples include France, Germany, Greece, Romania, Argentina, Spain,

Mexico, Japan, Nigeria and Israel.

5. Cricket: In 2008, Adidas made their first big move into the cricket market, sponsoring

English batting star Kevin Petersen & Ian Bell. Their products are now available, notably

the Pellara and Libro ranges.

6. Golf: In 1997, Adidas purchased Tailor-made, and made it a subsidiary. The image

and focus of Taylor Made was redirected shortly after the acquisition to take over the

driver market. The company succeeded in achieving this goal in late 2005 when it

officially became the No. 1 driver in golf. On 14 October 2008, Adidas, through its

subsidiary Tailor-made, acquired Ashworth (clothing).

7. Basketball

8. Adventures

9. Swim

10. Lifestyle

Lacrosse: In 2007, Adidas announced the future production of lacrosse equipment, and

will sponsor the Adidas National Lacrosse Classic in July 2008 for the top 600 high

school underclassmen lacrosse players in the United States.

Out of these 12 categories running and training are most business generating

categories.

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Sponsorship:

Adidas are the main sponsor and kit supplier of the highly successful New Zealand national

rugby team, the All Blacks. Adidas also are the kit supplier to the Argentina national rugby team

Los Pumas, to Stade Francais and Munster.

Adidas are the main sponsors and kit sponsors of the successful Australian Cricket Team and the

England Cricket Team. They are also the main sponsors of the Indian Star Cricketers Sachin

Tendulkar and Virender Sehwag. Adidas are the main sponsors of Australian Domestic Cricket

Competitions - Pura Cup, KFC Twenty20 Big Bash, and Ford Ranger One Day Cup. They are

sponsors of the Indian Premier League Teams Delhi Daredevils and Mumbai Indians.

Adidas also sponsors the Gold Coast Titans and St George Illawarra Dragons rugby league clubs

in the Australian National Rugby League (NRL) competition.

Adidas is the longstanding kit provider to the Germany national football team, a sponsorship that

began in 1954 and is contracted to continue until at least 2018.

Adidas are very active at sponsoring top football clubs such as IFK Göteborg, A.C. Milan,

Olympique de Marseille, Ajax Amsterdam, Bayern Munich, FC Schalke 04, Benfica, Chelsea

F.C., Liverpool F.C., Newcastle United F.C., Galatasaray SK, Fenerbahçe SK, UANL Tigres,

Real Madrid, Club Atletico River Plate, SE Palmeiras, Club de Fútbol Universidad de Chile, and

the Colombian football teams Club Deportivo Los Millonarios, Deportivo Cali and Atletico

Nacional.

Adidas and Major League Soccer announced a 10-year sponsorship agreement in November

2004 to make Adidas the official athletic sponsor and licensed product supplier for the league,

and to work together to create a developmental league for MLS.

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Adidas also sponsors events such as The London Marathon.

Adidas has also been marketing in Nascar, sponsoring big name drivers like Dale Earnhardt Jr.

and Tony Stewart.

. Corporate information

Current executive board

• CEO Adidas-group : Herbert Hainer

• Finance Adidas-group : Robin J. Stalker

• CEO Adidas brand : Erich Stamminger

• Global Operations Adidas-group : Glenn S. Bennett

• MD adidas india marketing pvt. Ltd. : Andrias Gallner

PRODUCT TECHNOLOGIES

FOOTWEAR TECHNOLOGIES:-

TECHNOLOGY ONE LINERS LOCATED MATERIAL USED


adiPRENE Absorb body impacts and gives max HEEL VISCOUS RUBBER-

cushioning EVA COMPOUND


adiPRENE+ Gives better toe’s off TOE HIGHLY ELASTIC

RUBBER- EVA

COMPOUND
TORSION Provides stability and mid foot support MIDFOOT T.P.U.-THERMO

POLY URETHANE
TRAXION Provides superior grip on loose and OUTSOLE CARBON RUBBER

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(Run, Adven.) uneven surface
(Soccer) Provides grip in all directions with OUTSOLE TPU,NYLON,PEBAX

min. pressure on foot


adiWEAR Highly durable material used on the OUTSOLE RESISTANT

out sole for better durability. CARBON RUBBER


adiTUFF Highly durable material in upper UPPER TOE RESISTANT

Prevent toe injuries & increase LEATHER

durability of the shoe.


a3STRUCTURE Cushioning for long period of time MID SOLE T.P.U.

good for heavy weight people.


QUICK STRIKE Make shoe light weight & flexible OUTSOLE T.P.U.
FORMOTION Better ground adaption LATERAL

HEEL
PROMODERATOR Keeps foot stable, prevents excess MID FOOT T.P.U.-THERMO

tilting inwards which is harmful POLY URETHANE


GEOFIT 3D molded lining provides best fit HEEL MOULDED FOAM

from every first wearing COLLAR


adidas Drainage Quick water drainage from shoe, MID SOLE EVA-ETHYL VINYL

System keeping foot dry and comfortable AND OUT ACETATE

SOLE
Push Through Stability and protection against sharp MID FOOT T.P.U.-THERMO

Protection Plate surface under foot POLY URETHANE

APPARELS TECHNOLOGIES:-

TECHNOLOGY ONE LINER LOCATED


Clima COOL (VENTILATION) keep your High heat zones

body cool and dry


Clima LITE (EVAPORATION) keeps your High sweat zones

body dry

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Clima WARM (INSULATION) keeps you All

warm in cold condition


Clima PROOF (PROTECTION) keeps body All

dry & warm in cold


FORMOTION 3D cuts, stretchable fabrics Flexible zones

RETAIL EXCELLENCE PROGRAM

OBJECTIVE: - To have an excellence and standardization among all adidas store across.

The retail key performance indicators are as follows:

1. Financial key performance indicators

2. Operational key performance indicators

3. Mystery shopping programme

1. Financial key performance indicators

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Target vs. achieved (store and individual both) avg. transaction value (ATV), item transaction

value (ITV/IPT), Average item price (AIP) Conversion.

Average transaction value (ATV)

ATV is: total value of bills

No. of bills

How to increase ATV:

Up selling (buying at a higher price point)

• Understand customer needs

• First get agreement of the sale of the key item

• Make a recommendation

• Recommend obvious complementary items

• Make a recommendation

• Recommend obvious complementary items

TRAINING:

HOW TO TRAIN A NEW SALES STAFF:

• Whenever a new sales staff is recruited the following is to be observed:

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• The new staff should be given a brief on the brand, the company and the products.

• The new staff should works as a stock boy spending at least 3 days in the stock room so

that he familiarizes with the entire product in the store.

• The new staff should be taught :-

1. Folding apparel and packing it in the poly bag.

2. He should understand the stocking pattern/arrangement if the stock room

• Once he is familiar with the names of the entire product, the sporting category etc. the

sales staff should be taught on skills of customer handling, adidas history and adidas

technologies.

OPERATION

OPERATION ACCORDING TO REGION WISE:

1. SOUTH

2. WEST

3. EAST

4. DELHI

5. REST-NCR

SOUTH REGION OPERATION TERRITORY:

1. KARNATKA

2. ANDHRA PRADESH

3. TAMIL NADU

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4. KERLA

Description of analytic framework/ model used

A. STEPS TO BE TAKEN TO IMPROVE THE ENVIRONMENT OF RETAIL

OUTLETS:

Though marketing authorities have written volumes on customer psychology and researchers

have spent their lives analyzing buying decisions, we are still searching for selling strategies that

will always deliver. The unpredictability of sales makes our task a continual challenge.

Motivating customers to visit the store and making them buy are two different things and require

different strategies. Research has revealed that 60% of customers make buying decisions while

they are in the store. This revelation clearly signifies the value of ambience, design, and

display in the retail store that direct customers to make purchasing decisions.

A few simple ideas can revitalize a store's displays. Apart from proper utilization of space, a

strategic mix of colors, layout, and balance can help retail professionals create an enticing

ambience for their customer.

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Here are some tips that can help retail professionals not only attract customers but also convert

their interest into purchasing decisions:

STOCK ANALYSIS: This includes complete analysis of stock in hand, stock maintains, aging

of stocks and availability of fast moving category of product.

STORE ANALYSIS: This includes complete analysis of store about hygienic factors, visual

merchandising product placing according to current marketing POP.

Select the focal point of the store. A store lacking a focal point will confuse visitors. Unless

you determine what visitors should notice in your store and design accordingly, people will

meander aimlessly and fail to decide on products.

Plan the layout. Rather than displaying products haphazardly, visualize some layouts, sketch

some potential designs, and try out one or two before settling on the shape of your display plan.

Create symmetry. Good stores balance colors, spacing, and heights and weights of products.

Logical grouping of products will result in convenience for customers.

Keep the design simple. Trying to do too much takes away from a store's design. The goal is to

keep the layout easy to follow and attractive to customers. Simple rows and shelves at eye level

are always the best way to display merchandise.

Man power (store staff).

Loud Music: Playing music in a retail store can help create a certain atmosphere for our

shoppers. Music that is too loud, inappropriate or of poor quality can run a positive shopping

experience.

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Burned-out or Poor Lighting: Replace any burned out light bulbs as soon as possible. Make

sure all customer areas of the store have ample lighting and take into consideration shoppers

with aging or less than perfect eyesight. Your store should be well illuminated for all customers.

Offensive Odors: Certain odors are understandable and may even appeal to the customer's sense

of smell. Use neutralizers to combat any offensive odors.

Disorganized Checkout Counters: This particular area where a customer’s financial transaction

is taking place should not show any signs of disorganization. Like messy dressing rooms, a

disorganized checkout counter can lead to theft. Keep those register areas neat and tidy.

HIDDEN FACTORS: Analysis of factors which are not apparent in nature but affects the

business activity of retail outlets: for example; customer awareness about store, location of store

etc.

In addition to considering these primary factors, retail store professionals should strive to

innovate and change their displays periodically. Learning has great value in store management,

and there is no harm in acquiring ideas from competitors. Effective monitoring and analysis of

your store's layout can be highly beneficial.

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B. To formulate the location strategy and site selection for new retail outlet

Descriptive work

Retail revolution is a strategic marketing firm with expertise in and passion for place based

marketing- helping dynamic retailers get the best result from their location. Our site selection

service includes:

• Market analysis:

Complete overview of the demographic environments of your business, including trade

area analysis and customer targeting.

• Location strategy:

Using the information gathered in the market analysis, a comprehensive location strategy

will be developed including key spatial factors square footage ratio calculations and ideal

site description.

• Site specific analysis:

Once the location strategy has been determined and shared with the commercial retailers,

Retail Revolution will conduct on site investigation of proposed outlet, exploring things

like signage site lines, pedestrian and auto traffic counts, access and how the site fits the

retail environment.

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The majority of retail locations fail, but that’s because the majority do not ever take the time to

methodically and thoughtfully explore the relationship between their product, location and

customers.

Choosing a retail location

The choice of a store location has a profound effect on the entire business life of a retail

operation. A bad choice may all but guarantee failure, a good choice, and success.

This publication takes up site selection criteria, such as retail compatibility and zoning, that the

small store owner-manager must consider after making basic economic, demographic, and traffic

analyses. It offers questions the retailer must ask (and find answers to) before making the all

important choice of store location.

The first step in choosing a retail business location takes place in your head. Before you do

anything else, define your type of business in the broadest terms and determine your long term

objective. Write them down. This exercise will help you greatly later in choosing a retail

location.

In picking a store site, many store owners believe that it's enough to learn about the

demographics ("people information" like age, income, family size, etc.) of the population, about

the kind of competition they will be facing, and about traffic patterns in the area they are

considering. Beyond a doubt, these factors are basic to all retail location analysis.

Once you have spotted a tentative location using these factors, however, you have only done half

the job. Before you make a commitment to moving in and setting up, you must carefully check

30
several more aspects of the location to help insure your satisfaction with —and, most

importantly, your success at—the site you've chosen.

Location strategy and site selection for new retail outlets

Marketing analysis

Before a successful location strategy can be developed a full assessment of the market conditions

must be carried out. We accomplish this by analyzing three sets of information;

1. Strategic context:

This is determined through 1-2 in person meeting with the client, as well as continual

communication over the course of the project. This process gives us direction by

determining:

• Vision/mission of the retailer

• SWOT analysis

1. Environmental/ situational context

This analysis is done through external secondary research and provides an overview of

larger forces that will affect your business, including

• Legal/regulatory issue

• Economical political social issue

• Cultural– specific trends

1. Market research:

The most important step: determining the nature of industry, customer and competition.

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This includes

i. Selecting a Target Market

a. Market segmentation

b. Target market

a. Market Segmentation

Market segmentation is dividing of a heterogeneous consumer population into smaller,

more homogenous groups on demographic, economic, psychographic, and behavioral

characteristics.

The basic market preference patterns are:

1. Homogenous

Preferences where consumers have roughly the same preferences

2. Diffused

Preferences where consumers are scattered throughout the market by their

preferences

3. Clustered

Preferences where consumers are found in distinct preference groups

• Market segment should be measurable.

• Market should be accessible.

• Market should be substantial enough to be profitable.

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Degrees of Segmentation

If Segmentation is considered as a process with two polar points from zero to complete, four

distinct segmentation approaches are identifiable

• Zero àMass Marketing - Considers all people as a bunch

• Segment Marketing - Identifies people as different groups

• Niche Marketing - Serves selectively one or very few groups of people

• Complete àRelationship Marketing - Focuses on individuals or very small groups

Degree of segmentation of adidas:

Segment marketing: adidas group serves identified people as a different group.

For example:

Sports - adidas sports performance

Life style – adidas originals

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Basis of Segmentation

There is no one way of Segmenting the Market. A Marketer may look for one or

more variable

• Geographic

• Demographic

• Psychographic

• Behavioral

Basis of segmentation for adidas

1. Demographic Segmentation

2. Psychographic Segmentation

1. Demographic Segmentation

 Age basis and Lifestyle: adidas make product for kids and adult people.

 Gender: different type of footwear, apparels and accessories for men and women

category.

 Income: different range product for customer according to income level. For example;

high end products and low end products.

 Occupation: Needs vary based on occupation.

34
adidas mainly known as sports brands. Further in sports, there are different sports

categories. adidas make different sports merchandising according to requirement of that

particular sports. Like football, basketball, etc.

Psychographic Segmentation:

Demographic Segmentations provide a physical view of the markets, the true

dynamics of purchase can be assessed & marketing offer can be designed only on

basis of Psychographics of people.

• Social Class

• Life-style

• Personality

Social class:

Society consists of a structure, which represents a hierarchy of classes or grades of people. Caste

is one of the divisions of class system in India along with wealth. However, presently social class

is determined by a combination of factors like education, occupation, income, wealth and others.

Social class segment of adidas:

1.Upper-Upper

2.Lower-Upper

3.Upper-Middle

4.Lower – Middle

35
a. Target market

Segmentation is the process of identifying and establishing alternative market segments

Next Step, Targeting involves evaluating the various segments and selecting how many

and which ones to target or Target market is the group of customers that the retailer is

seeking to serve.

• The location strategy of other thrift stores, Where they are, what population do

they serve how big are their sales.

Once the market place is understood, a detailed and precise location strategy is possible.

Location strategy:

This is when though decision must be made.

• Where do we want the store?

• How big will it be?

• And most importantly: is this a viable project?

Using the data from the marketing as well as further consultation with the client, the location

strategy outlines:

36
.

1. Type of business

Well before hitting the street to look for a location, take a hard look at the type of business you

will be operating. For example: what is your product mix? Your product mix will have an impact

on such things as the amount of SQFT and storage space required at the location. How much

retail, office, and storage or workroom space do you need?

2. Demographic:

Another critical component of retail location selection understands your target market, both in

terms of your target shopper and the geographic area surrounding your proposed location. If you

are choosing a city or state to locate your retail store, research the area thoroughly before making

a final decision. Read local papers and speak to other small businesses in the area. Obtain

location demographics from the local library, chamber of commerce or the Census Bureau. Any

of these sources should have information on the area's population, income and age. You know

who your customers are, so make sure you find a location where your customers live, work and

shop.

3. Retail compatibility:

37
Make sure that you have thorough knowledge of competitors in a proposed location, good and

bad.

How important is retail compatibility?

For a small retail store in its first year of operation, with limited funds for advertising and

promoting, retail compatibility can be the most important factor in the survival of the store.

Will you be located next to businesses that will generate traffic for your store? Or will you be

located near businesses that may clash with yours?

For example, if you offer "shoppers" (items such as men's and women's clothing, major

appliances, or expensive jewelry), the best location is near other stores carrying shoppers goods.

Conversely, locating your shoppers goods store in a "convenience goods" area or centre is not

recommended. Convenience goods stores include, supermarkets, hardware stores, bakeries,

package stores, and drug stores.

Take a look at shopping centres in your area. Invariably, you'll find a clothing centre, shoppers

goods and convenience goods outlets may now be found co-existing easily under the same roof.

In this situation, it is still important to be located in a section of the shopping complex that is

conducive to what you're selling. For example, a pet store should not be located immediately

adjacent to a restaurant, dress shop, or salon. You would want to locate a gift shop near places

like department stores, theaters, restaurants -- in short, any place where lines of patrons may

form, giving potential customers several minutes to look in the gift shop's display windows.

This required analysis of these factors:

I. Number and types of stores in area

38
II. Analysis of “key” players in general area

III. Competitiveness of other merchants

IV. Number and location of direct competitors in area

V. Bad competitors are those that will have a negative effect on your business. Some examples

might include retail store that might be selling the exact same product at a discount or stores that

attract the opposite target audience as your retail operation. a high end fashion boutique may not

be successful next door

VI. Good competitors are retail stores that compliment your business by drawing a similar target

audience to your store’s surrounding area.

4. Accessibility, Visibility and Traffic

It’s also important to know how vehicles and pedestrians patterns might affect business at a

proposed location. Don't confuse a lot of traffic for a lot of customers. Retailers want to be

located where there are many shoppers but only if that shopper meets the definition of their

target market. Small retail stores may benefit from the traffic of nearby larger stores.

I. Access to the store by traffic moving in both directions

II. Number of cars passing the store location

III. Number of pedestrian walking by the location

IV. Which side is the parking side in that particular market?

V. When considering visibility, look at the location from the customer's view point. Can the

store be seen from the main flow of traffic? Will your sign be easily seen? In many cases, the

better visibility your retail store has, the less advertising needed. A specialty retail store located

39
six miles out of town in a free standing building will need more marketing than a shopping store

located in a mall.

5. Merchant association

An often overlooked factor when considering a location is the presence and strength of local

merchant association.

6. City BY-Law, Zoning and Planning:

Understanding all the rules and plans your municipality has laid is very important when it comes

to selecting a location- your retail store’s long term success could depend on it. Before signing a

lease, be sure you understand all the rules, policies and procedures related to your retail store

location. Contact the local city hall and zoning commission for information on regulations

regarding signage. Ask about any restrictions that may affect your retail operation and any future

planning that could change traffic, such as highway construction.

Some points to consider are:

I. By laws- what are some of the laws that might have an effect of your retail operation? For

example, can you use the space in front of your store for promotions?

II. Planning – are there any major development plans that could impact your retail operation?

Is there any major road construction planned close to your store?

7. Location costs

Beside the base rent, consider all cost involved when choosing a retail location. For example:

I. Terms of lease/rent agreement

II. Basic rent payments

III. Length of lease

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IV. Local taxes

V. Operations and maintenance cost

VI. Restrictive clauses in lease

VIII. Voluntary regulations by local merchants

IX. If the location is remote how much additional marketing will it take for customer to find

you?

X. Will the retailer be responsible for property taxes?

8. Special consideration:

I. Is restroom for staff and customer available?

II. Is there adequate fire and police protection for the area?

III. Quality of life: recreational opportunities, culture, low crime, and clean environment attract

People simply because it’s a nice place to be.

VI. Distance of parking areas

VII. Visibility of site from street

VIII. History of the site

X. Size and shape of lot

XI. Condition of existing building

XII. Ease of entrance and exit for traffic

Location of Store-Based Retailers

• Store-Based Retailers operate from a fixed store location that requires customers to travel

to the store to view and select merchandise or service.

41
• Non-store-Based Retailers intercept customers at home, at work, or at a place other than a

store where they might be susceptible to purchasing.

Shopping center:

Shopping centers are distinctly different from other locations that are downtown, high street and

local business strips. The shopping center business building is preplanned as a merchandising

unit for interplay among tenants. Its site is deliberating selected by the developer for easy access

to pull customer from a trade area. It has onsite parking as a common feature of layout. The

amount of parking space is directly related to the retail area. Customer like the shopping center

convenience, they drive in, park and walk to their destination in relative safety and speed. Some

shopping centers also provide weather protection and most provide an atmosphere created for

shopping comfort. For the customer, the shopping center has great appeal.

For the merchant making a decision whether or not to locate in a shopping center, these “plus”

Characteristics must be related to the limitations placed upon you as tenant. In a shopping center

tenant is a part of merchant team. As, you must pay your prorate share of the budget for the team

effort. You must keep store hours, light your windows, and Place your signs within established

rules.

What your chances?

Whether or not a small retailer can get into a particular shopping center depends on the market

and management. A small shopping center may need only one children shoe store, for example,

42
while a regional center may expect enough business for several. The management aspect is

simple to state: developers and owners of shopping centers look for successful retailers.

In finding tenants whose line of goods will meet the needs of the desired market, the developer

owner first sign on a prestige merchant as the lead tenant? Then the developer selects other type

of stores that will complement each other. In this way, a “tenant mix” offers a varied array of

merchandise. Thus, the center’s competitive strength is bolstered against other centers as well as

supplying the market areas needs.

To finance a center, the developer needs major leases from companies with strong credit ratings.

The developers own lenders favor tenant roster that include the triple – A ratings of national

chains. However, local merchants with good business record and proven/ understanding of the

local markets have a good chance of being considered by shopping centers developers. But even

so, a small independent retailer can sometimes play “hard to get”

What can the centers do for you?

Suppose that the owner- developer of a shopping center asks you to be a tenant. In considering

the offer, you would need to make sure of what you can do in the center. What rules will there be

on your operation? In exchange for the rules, what will the center do for you? Even more

important, you must consider:

The trade area:

• The location of your competition

43
• The location of your space in the center

These factors help you to determine how much business you can except to do in the center.

The center location:

In order to examine the center location look for the answer to questions such as these:

• Would the center offers the best sales volume potential for your kind of

merchandising?

• Can you benefit enough from the center’s access to market? If so, can you

produce the appeal that will make the center’s customer come to your store?

To help answer these questions, you need to check out:

• The trade area and its growth prospects

• The general income level in the trade area

• The number of households

• Demographic analysis of population in that area

Shopping Center Advantages over a CBD

 Heavy traffic resulting from the wide range of product offerings.

 Cooperative planning and sharing of common resources.

 Availability of parking.

 Lower crime rate.

44
 Clean, neat environment.

Shopping Center Disadvantages

 Inflexible store hours (open during mall hours only).

 High rents.

 Restrictions as to what merchandise the retailer may sell.

 Inflexible operations and required membership in the center’s merchant organization.

 Possibility of too much competition and the fact that much of the traffic is not interested

in a particular product offering.

 Dominance of the smaller stores by the anchor tenants.

Advantages of Freestanding Retailing

• Lack of direct competition.

• Generally lower rents.

• Freedom in operations and hours.

• Facilities that can be adapted to individual needs.

• Inexpensive parking.

Limitations of Freestanding Retailing

• Lack of drawing power from complementary stores.

45
• Difficulties in attracting customers for the initial visit.

• Higher advertising and promotional costs.

• Operating costs that cannot be shared with others.

• Stores that may have to be built rather than rented.

• Zoning laws that may restrict some activities.

Local factors

We have equipped the local factors that influence the location and expansion of firms into six

categories. In this section, we organize the location factors described in this appendix into the six

local factors.

1. Building space

Land:

Firms need’s land for building and associated uses, and the built space itself.

Location, cost and quality of space matter to all firms, but needs vary widely by industry.

2. Workforce

Labor, for most firms’ labor is the largest operating cost, and the single most important factor to

most firms deciding where to locate is the cost and quality of local labor force.

3. Access to market

46
Company accesses their market by moving people and goods via transportation system.

Excellent transportation system can overcome physical distance to markets.

Telecommunication system is also important.

Local infrastructure, cities must have modern and efficient infrastructure, including road,

bridges, airport and cargo facilities and telecommunications

4. Business environment

Regulation:

Permitting procedure and environmental regulation have an impact on the monetary cost of

doing business and on the amount of time it takes to bring a product to market.

5. Taxes:

Tax rates for business and individual as well as unemployment insurance and worker

compensation costs; affect the cost of doing business in given location.

Business formation and acceleration

6. Industry cluster:

New firms tend to locate in areas where there is already a concentration of firms like their own.

Innovative capacity:

Economic has shown that a business culture promoting innovation, creativity, flexibility and

adaptability leads to economic growth.

7. Quality of life

47
Analysis

FACTOR ANALYSIS
Factor Analysis is primarily used for data reduction or structure detection.

• The purpose of data reduction is to remove redundant (highly correlated) variables from

the data file, perhaps replacing the entire data file with a smaller number of uncorrelated

variables.

• Factor analysis is used in this project because there are various factors on the basis of that

retailer finalize their retail location. But aim was to find out what are the primary factors

that should be taken into consideration first.

• There are some factors like retail compatibility that creates dilemma for retailers like

whether select the location near to direct competitor or not. So this factor analysis will

help them to figure out that is this right decision for their business or not.

48
Scree Plot

2.0

1.5
lu
nE
ig
a
v
e

1.0

0.5

1 2 3 4 5 6 7 8 9 10 11
Component Number
49
The screen plot helps you to determine the optimal number of components. The eigenvalue of each

component in the initial solution is plotted.

Component 1 Component 2 Component 3 Component 4 Component 5

Brand(.845) City plan(.758) Competitor help Parking(.868) Malls and hyper


(.913) market(.861)

Demographic(.717)

BRAND VALUE MARKET ANALYSIS RETAIL PARKING MALLS AND


COMPATIBILITY HYPER
MARKET

Situational factor:

Competitor helps (.913)

City plan (.758)

Demographic (.717)

Site factors:

Parking (.868)

Malls and hyper market (.861)

50
Other factors:

Brand (.845)

Online shopping VS store Retailing

Hypothesis:

• Online Shopping Will Replace Retailing

This graph clearly indicates that 65% people are strongly

disagreeing.

High street market VS Malls/ Hyper market

Hypothesis:

51
• Malls and hypermarkets are more potential site compare to high street market for retail

shop.

Malls and hyper market is better site for retail location as 35%

people are strongly agreed.

Hypothesis:

• Size and rental of the location are the first consideration

52
Size and rental are th e first consideration

feedback

50%
40%
30%
20%
10% feedback
0%
stronglydisagree feedback
disagree neutral agree
strongly
agree

Hypothesis:

• In picking store site demographic factors of population plays an


important role (like: age, like age, income, family size, etc.)

53
D em ograph ic factors for retail location

feedback

60%
50%
40%
30%
feedback
20%
10%
0%
strongly disagree neutral agree strongly
disagree agree

Hypothesis:

54
• Accessibility, Visibility and Traffic are the factor should be taken into
consideration

Accessibility, Visibility and Traffic

Series 1

40%
30%
20%
10%
Series 1
0%
stronglydisagree Series 1
disagree neutral agree
strongly
agree

Hypothesis:

55
• Retail space you are planning to take should have enough Parking
place

Hypothesis:

• Close Competitor presence in your prospective location can actually


help your retail shop.

56
feedback

50%
40%
30%
20%
10% feedback
0%
stronglydisagree feedback
disagree neutral agree
strongly
agree

CONCLUSION and RCOMMENDATION

57
There are various situational and site factors that should be taken into consideration before

finalizing the location for retail outlet like:

• Type of business and brand value

• Visit the place 3 to 5 times at different type

• Size and rental of the location

• Demographic factors in that location

• Accessibility, Visibility and Traffic

• Retail space should have enough Parking place

• Retail compatibility

• Before buying a retail property, it is important to meet previous tenants of that particular
property

• Research on city plan

• Fire and police protection

• Malls and hypermarkets /high street market location

58
From all these factors there are some prime factor which are the most

considered by retailers:

• The research study shows that while selecting retail location retailers gives

more preference to situation factors (like retail compatibility, demographic

factors etc.) over site factors.

• Complete market analysis is important part before selecting a location for

retail outlet. This includes:

i. Demographic factor analysis: this includes availability of target

segment in location.

ii. City plan analysis: These include analysis of traffic flow, presence of

other market and accessibility to the location.

• The research suggest that most of the retailer preferred the business location

where their similar category business retail outlet are present because

presence of close competitor in the same location helps the business as it

brings the same segment of customer pool.

59
• Availability of parking place is the important factor, so before finalizing the

location so site analysis and look for enough parking place that is required

for business activity.

• In malls and hyper market different type of shop are available under one

roof which is more convenient for customer for shopping as it’s save time

and energy. Malls and hyper markets are always full of customers. This is

the reason most of the retailers believe that malls and hyper markets are the

better location than high street market. So for new store opening retailers

give preference to mall and hyper market over high street and other market.

• Survey suggested that though location is first priority for success of retail

outlet but brand also play significant role in success of retail store. Because

sometimes its happens retailer is not able to get desired location but brand

value attract customer.

The challenges:

• Opening a new retail location is not easy. Whether its your 1st, 5th, or 50th retail outlet.

Independent retailers often do not have to consider the very basic needs of an outlet, such

as;

60
• The sore must be situated at a location which optimizes exposure to target consumer and

is accessible on foot, by car or by transit.

• The sore must generate enough revenue per square feet to cover the cost of rent,

insurance, any applicable parking fees any applicable sprinkler, any applicable taxes any

heating, ventilating and air conditioning (HVAC) cost, any common area maintenance

cost and wages of employees.

• In addition to cover cost, it is necessary for the store to turn a profit within a reasonable

amount of time in order to make the venture worthwhile and to justify the tremendous

investment made by the owner and business partners. A thorough marketing analysis and

solid location strategy will position your new outlet for success, financially/ logically as

well as in relation to competitors.

• Three important factors determine a retailer’s success

Location, location, location

Appendix

FACTOR ANALYSIS
Factor Analysis is primarily used for data reduction or structure detection.

• The purpose of data reduction is to remove redundant (highly correlated) variables from

the data file, perhaps replacing the entire data file with a smaller number of uncorrelated

variables.

• The purpose of structure detection is to examine the underlying (or latent) relationships

between the variables.

61
• The Factor Analysis procedure has several extraction methods for constructing a solution.

For Data Reduction. The principal components method of extraction begins by finding a

linear combination of variables (a component) that accounts for as much variation in the

original variables as possible. It then finds another component that accounts for as much

of the remaining variation as possible and is uncorrelated with the previous component,

continuing in this way until there are as many components as original variables. Usually,

a few components will account for most of the variation, and these components can be

used to replace the original variables. This method is most often used to reduce the

number of variables in the data file.

62
NAME: AGE Stron Disagr Neutr Agre Stron
gly ee al e gly
STORE LOCATION
Disag Agree
Hypothesis ree

• It is important to visit the place for at


least five to six times at different times
before purchasing
• Size and rental of the location are the
first consideration
• In picking store site demographic
factors of population plays an
important role (like: age, like age,
income, family size, etc.)
• Accessibility, Visibility and Traffic are
the factor should be taken into
consideration
• Retail space you are planning to take
should have enough Parking place
• Close Competitor presence in your
prospective location can actually help
your retail shop.
• Close Competitor presence in your
prospective location can actually hurt
your retail shop.
• Before buying a retail property, it is
important to meet previous tenants of
that particular property
• Retail location is the responsiveness of
the landlord to the individual
merchant's needs
• Researching on the city plan would be
an additional advantage for you.
• Fire and police protection should be
taken into consideration while
selecting property for retail shop.

• Brand value plays important role than


the location
• Small Stores Can't Compete With
Chain Stores
63
Thanks for giving us your precious time
REFERENCE
Internet:
• Adidas Official websites

• Adidas Group websites

• Adidas Originals website

• References from the world wide web:

1. The Prehistory of Adidas and Puma; Spiegel

2. ^ Adidas told its three stripes don't constitute a trademark at The Guardian

3. ^ http://www.adidas.com/campaigns/women/content/stella/stella.asp?
strCountry_Adidascom=com

4. ^ Stella McCartney Biography at Internet Movie Database

5. ^ http://aolsvc.news.aol.com/business/article.adp?id=20050803092509990002

6. ^ http://www.savethekangaroo.com/international/australia/adidasflyer.pdf

7. ^ tennis-warehouse.com/

8. ^ adidas.com/us/tennis/

9. ^ http://www.tradingmarkets.com/.site/news/Stock%20News/1942911/

10. ^ http://www.adidasnationallacrosseclassic.com

11.www.barista.co.in

12.www.rbk.com

13.www.fernspetals.com

14.http://www.mumbaipropertyexcahnge.com

15.www.retailindustry.about.com

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16.www.dmsretail.com

Journals:
• Internal references from M/s adidas India Pvt. Ltd

• Adidas Deadstock Shoes & Clothing

• Adidas Skateboarding Subpublic Profile

• Business today edition dated nov 6 2008

• Business world- the marketing whitebook,2008

• Press source like economic times, business world

• KSA technopack studies

Books:

Marketing management by Philip Kotler

Websites:

1. Google.com
2. Prowess database (CMIE)

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