A research study on

“Developing a Marketing strategy

framework for large scale Retailing in
India”

A Dissertation submitted in partial fulfillment of the

requirement for the award of MBA Degree of Bangalore
University.

Submitted By
Mr. INAYATULLAH

MBA FOURTH SEMESTER

Register No. 05XQCM6031

(This research topic has been conceptualized by me under the

guidance of Prof. SHINU ABHI, MPBIM, and Bangalore)

MP BIRLA INSTITUTE OF MANAGEMENT

(Associate Bharatiya Vidya Bhavan)
43, Race Course Road
BANGALORE 560001

MPBIM 1
 STUDENT DECLARATION

I hereby declare that this Research Project entitled “Developing a

Marketing strategy framework for large scale Retailing in India” has been
undertaken and completed by me under the valuable guidance of Prof. Shinu Abhi,
M.P.B.I.M, in partial fulfillment of Degree of MBA program is my original work and no
part of the work has been submitted for any degree, diploma, fellowship or other similar
title or prizes for any institution previously.

Date:
Place: Bangalore (Inayatullah)

MPBIM 2
 ACKNOWLEDGEMENT

“Blessed are those who give without remembering and blessed are those who take without
forgetting”.
-Bernard Meltzer
I would like to express my profound gratitude to Prof. Shinu Abhi, Professor,
M.P.Birla Institute of Management whose guidance was significant in the successful
completion of the project. I wish to thank our Dr. Nagesh Malavalli, Principal,
M.P.Birla Institute of Management for providing the means and encouragement.
Last but certainly not the least, my family and friends who tolerated me and
cooperated when I was not so very best.

Date:
Place: Bangalore (Inayatullah)

MPBIM 3
MPBIM 4
 PRINCIPAL’S CERTIFICATE

This is to certify that this report is the result of Research Project

“Developing a Marketing strategy framework for large scale Retailing in

India” undergone by Mr. Inayatullah bearing the register number 05XQCM6031 under
the guidance and supervision of Prof. Shinu Abhi. This has not formed a basis for the
award of any Degree/ Diploma of any University.

Date: Dr Nagesh. Malavalli

Place: Bangalore (Principal)

MPBIM 5
 GUIDE’S CERTIFICATE

This is to certify that this report is the result of Research Project “Developing a

Marketing strategy framework for large scale Retailing in India” undergone by

Mr.Inayatullah, bearing the register number 05XQCM6031 under the guidance and
supervision of Prof. Shinu Abhi. This has not formed a basis for the award of any Degree/
Diploma of any University.

Date: Prof. Shinu Abhi

Place: Bangalore (Guide)

MPBIM 6
 CHAPTER SCHEME

1. CHAPTER I
Research Extract 02

2. CHAPTER II
Prologue 04
Statement of problem 07
Objective 07

3. CHAPTER III
Review of the study 08
Marketing in retail sector 12
Industry profile 21
Emerging Retailing Forms in India 24
Current Retail Scenario in Bangalore 30
Overall Strategic Framework 32

4. CHAPTER IV
Methodology 35

5. CHAPTER V
Analysis & interpretation 37

6. CHAPTER VI
Finding & Recommendation 51

7. CHAPTER VII
Annexure 54

MPBIM 7
 Research Extract

Retailing like rest of the world retailing is one of the largest industries in India with
sales amounting to about $350 billion, but organized retail is estimated at only US$ 8
billion. It is country’s largest source of employment after agriculture, has deepest
penetration into rural India and accounts to about 10-11 % of’ India’s GDP and around 8%
of the employment. Retailing is one of the least evolved industries in India, it is not even
considered as industry, although we have successful retailing models from the developed
world due to early retail revolution there, but considering Indian market’s own unique
culture, characteristics, tastes, preferences and expectations. It is required to develop its
own model to match Indian consumer’s requirement. The industry suffers from lack of
management talent, poor access to capital, unfavorable regulation and denial of access to
best practices.

This study aims at studying the present marketing strategies of large retail players
in India and developing a comprehensive marketing strategy framework to suit the Indian
retail market in the emerging competitive environment. Indian retail market is witnessing
change in the consumer environment, lifestyle trends, economic environment, and
technological and legal environment, which has been a good sign fur potential in retail
industry.
Statement of the Problem
Developing a Marketing Strategy framework for large scale retailing in India.

The study focus on

Studying Retail scenario in India
Current retail market scenario in India.
Challenges of retailing in India
Doing empirical study of marketing strategies in Bangalore market
Developing framework for retail marketing
Sampling procedure: -
Non probability Quota sampling used where prescribed number of respondent in
each of several categories will be examined. Sampling size of 30 retail managers
from Apparel & Grocery sector in Bangalore.
Primary sources will be also used to considerable extent to gather information of
various retail outlets operating in Bangalore.
Learning from the empirics
After doing the apparel retail industry analysis in detail with the help of
primary as well as secondary analysis, the most important retail marketing mix
element for apparel retail industry was found to he Location and Branding.
Location was perceived to be the most important factor because of the following
reasons.

MPBIM 8
 Each retail store has distinct retail image in consumer’s mind, which emerges from
its combination of the various elements of the retail mix. The retail mix elements are
1. Price which includes markups, markdowns, price lining and discounting
The framework has to cater to Price-Quality of Shopping Experience Mapping price
band, Pricing Strategy and Indirect methods of price competition

2. Promotion which includes advertising, publicity, public relations und characteristic

of potential customer
The framework looks into selection of right advertising media, its influence of
communication and competitor’s promotion

3. People which includes customer service, personal selling and information

The framework stresses on methods to uncover customer problems, rapidly
develop/ re-launch market driven solutions and creating a customer valued process

4. Product which includes breadth and depth

The decision has to cater to the number of private vs national brand, licensing,
product life cycle, merchandise assortment positioning, merchandise gap strategy and
image fit analysis.

5. Place, which includes location and shopping hours

This decision has to analyze traffic flow & Accessibility, retail structure, site
characteristic and let and cost factors

6. Presentations which includes layout, atmosphere, store appearance

The framework decision should cater to decisions regarding look, feel and aroma
extending outside the store, safety of environment and reputation as community player
After the primary research of interviewing retail stores manager in the apparel sector one
more element is added to the retail mix i.e. branding

7. Branding includes single brand, multi-brand and private label brand

The decision framework should look into brand leverage, defining target segment and
advertising, & marketing efforts.

The strategic framework is different for new store and a well established store. The
framework has been discussed in detail in the report. Overall strategic framework for retail
store is also proposed in the report.

MPBIM 9
Chapter II
Prologue

The Indian retail industry is beginning to evolve in line with the transformation that
has swept other large economies. Fifty years of restriction on the consumer goods industry
and a fractured supply chain of agricultural products have all contributed to prevent the
development of modem formats based on scale advantages and Consumer preferences.
India is having the highest per capita density of retail outlets with around 12 million
outlets’ currently present which are mostly unorganized. The total retail trade in India is
estimated at about $240 billion, out of which organized business accounts for only $3
billion. The organized retail industry is poised to grow at 35 per cent per annum in the next
five years. This is in exact contradiction of the organized global retail industry. In many of
the developed countries organized retail already has about 40% share of the market
compared to India’s current level of only 3%.

Honk Kong 44
Malaysia 190
Argentina 324
US 905 retail outlet
Brazil 1071
Mexico 1179
India 12000

0 2000 4000 6000 8000 10000 12000 14000

retail outlet

Retail with total sales of $6.6 trillion is the world’s largest private industry in the
world economy ahead of’ financial industries ($ 5.1 trillion) and engineering with $3.2
trillion

electronic
energy
chemical
industry packaged goods sales in trilion

engineering
financial services
retail

0 1 2 3 4 5 6 7

Sales per year in trillion dollars across various industries

Retailing like rest of the world retailing is one of the largest industries in India with
sales amounting to about $350 billion. It is country’s largest source of employment after

MPBIM 10
agriculture, has deepest penetration into rural India and accounts to about 10-11% of
India’s GDP.
As seen from above figures organized retailing is one of the least evolved industries
in India, it is no even considered as industry. Over the last few years there have been
number of attempts to build retail businesses. Entrants have included large business houses,
foreign retailers through joint ventures, new entrepreneurs and government bodies. Yet
there is no significant retail business in India today

Segment wise Retail and organized retail sale:

Retail Organized % Share

Segment Sale Rs Retail Sale in Org.
cr Rs cr Retail
Apparel 80,000 10,900 39
Jewelry 43,500 850 3
Watches 2,800 1,110 4
Footwear 10,000 2,500 9
Health & Beauty Care 2,500 150 1
Services
Health & Beauty Products 30,000 550 2
(Including Pharma)
Consumer Durables 32,000 2,500 9
Mobile Handsets & 13,000 840 3
Accessories
Furniture & furnishings 33,000 2,200 8
Food & Grocery 6,15,000 2,950 11
Catering Services (F&B) 35,000 2,000 7
Books, Music & Gifts 8,200 800 3
Entertainment 25,000 650 2
9,30,000 28,000 100

MPBIM 11
 , 2%
, 3%
, 7%
, 11%
, 8%
segment

, 3%
, 9%
, 2%
, 1%
, 9%
, 4%
, 3%
, 39%
% share in org sector

Although we have successful retailing models from the developed world due to
early retail revolution there, but considering Indian market’s own unique culture,
characteristics, tastes, preferences and expectations, it is required to develop its own model
to match Indian consumer’s requirement. The industry suffers from lack of management
talent, poor access to capital, unfavorable regulation and denial of access to best practices.
It is the need of the hour for the Indian retail market to build customer traffic and
hold their loyalty in the environment of competition from international players, which are
better funded and the unorganized retail sector, which holds 98% of the market. This study
aims at studying the present marketing strategies of large retail players in India and
developing a comprehensive marketing strategy framework to suit the Indian market in the
emerging competitive environment.

MPBIM 12
 Statement of the Problem

Developing a Marketing Strategy framework for large scale

retailing in India.

Objective of the study

This study aims at studying the present marketing strategies for large retail
player in India and developing a comprehensive marketing strategy framework to
suit the Indian market in the emerging competitive environment. Indian retail
market witnessing change in the consumer environment, lifestyle trends economic
environment and technological and legal environment, which has been a good sign
for potential in retail industry.

¾ Studying Retail scenario in India

1. Current retail market scenario in India
2. Comparison of Indian retail scenario with other countries.
3. Factors responsible for development of retail industry in India.
4. Challenges of retailing in India.
5. Hurdles of retailing in India.

¾ Studying Retail Marketing and retail process

1. Definition of retail marketing, classification of retailing.
2. Contribution of retail marketing.
3. Brief description of the process involved in starting a retail outlet.
4. Managing and developing strong value chain.

¾ Doing empirical study of marketing strategies in Bangalore market

¾ Developing framework for retail marketing.

MPBIM 13
 Chapter III
Review of the study

Basics of Retailing

What is Retailing?
Retailing does not contain a single definition because of its customer orientation
and sensitivity to environmental pressures. The definition advanced 1950’s suggested that
retailing is “selling goods in small quantities to households”. A great deal of progress has
taken since then and with the dynamics of the environment, philosophic and institutional
parameters, retailing is defined from three points of view

The discipline of retailing: As a social science discipline, retailing is the study of the
interaction of consumers and their social institutions as they conduct transactions (that is
exchange of goods, services, ideas) in the market place (broadly defined).

The science of retailing: Retailing as a science is the attempt to organize our knowledge
about retailing through observation, study and experimentation and to use this information
in broadening our base of knowledge.

The managerial point of view: Retailing is an attempt to manage transactions at the point
of ultimate consumption for the benefit of the organization and society

Classification of Retailing

Retailing is extremely diverse. Although all retail stores share the common focus of
selling to ultimate customers, retail stores have different formats, sizes, policies and
marketing strategies. This has led to various classification schemes to categorize retail
stores. They are:

Classification of Retailing

1. Service versus
product retailing
Furniture, home furnishing and furniture, home
equipment dealers furnishing and Household
appliances, radios and
TV
equipment dealers stores
Other stores

MPBIM 14
 Building materials hardware Building material stores
garden supplies and mobile home Hardware Stores
dealers Other stores

Apparel and accessories stores Men’s and boys clothing

and furnishings
Women’s clothing
Specialty stores Furriers
Shoe stores
Other apparel and
accessories store

Food stores Grocery stores Other

food stores

Gasoline service stations

General merchandise stores Department stores

Variety stores
Other general
merchandise stores

Liquor stores

3. by Method of Regular store

consumer contact Mail order By catalog selling
By advertising in regular
media
By membership club
plans

House hold contact By house to house

canvassing
By regular delivery route
service
By party plan selling

Vending machine

MPBIM 15
 4. By type of location Urban Central business district
Secondary business
district
String street location
Neighborhood location
Controlled (planned)
shopping center
Public market stalls

Small city Downtown neighborhood

Rural stores
5. by type of service Full service
rendered Limited service (cash and carry)
self-Service
6. By legal form of proprietorship
organization partnership
Corporation
special types
7. By management Undifferentiated
org or operational Departmentalized
technique
8. By margin and
turnover
9. By type of Single unit independent store
ownership
Multi unit retail organization
Manufacturer owned retail outlets
consumer Co operatives
Farmer owned establishment
Company owned stores
Government operated stores
Public utility Co stores

10. By size of Estb By number of employees

By annual sales volume

11. By degree of Nonintegrated

integration integrated with wholesaling
function
Integrated with manufacturing

MPBIM 16
 Six Global Formats of Retailing

The major formats of retailing currently being employed are

Formats Characteristic Example

Supermarket 30%of the grocery market. 4000-20000 Tesco, Safeway

square feet in size, strong focus on food
and personal care

Hypermarket 40000 square feet plus, out of the town Super centers - Wal-Mart
store that stocks grocery (typically 50% of
sales and space), apparel, electronics and
consumables

Warehouse Club Targets large institutional buyers and Sam’s Club

household looking to buy large quantities.
captures 10%of the grocery market
Discounters Stripped supermarkets, offering a basic
range of grocery products at great
discounts

Convenience 400-2000 square feet, self service format,

stores account for the 10%of the grocery market
Moms and Pops This traditional format, next-door stores

MPBIM 17
 Marketing in retail sector
Retailing Mix
The “Retailing Mix” ref to the combination of’ marketing activities by which the
retail managers must determine the Optimum mix of activities and co ordinate the elements
of the mix. While many elements max’ make up firm’s retail mix, the basic ones are as
Shown in the lit1ure below
.
Price
Markup
Markdown
Discounting

Promotion People
Advertising Customer service
Publicity Personal selling
Public relation Retail Information
Marketing
Mix

Place Product
Location Breadth
Hours Depth

Presentations
Layout
Atmosphere

Each retail store has distinct retail image in consumer’s mind, which emerges from its
combination of the various elements of the retail mix. The retail mix must he very carefully
planned so that it creates the desired image. Each element of the mix must be consistent
with the others or the image will be confused. Retailers can control the retail mix elements
and these elements are the weapons for fighting the competitive war. Now we will see the
various dimensions of retailing mix in depth.

¾ Price
In the retailing context the effects of price changes are more immediate and direct and the
appeals based on price are the easiest to communicate to prospective buyers. However
competitors can easily react to appeals based on price than those based on product benefits

MPBIM 18
and imagery. Nevertheless price is considered to be the most significant among the
decisions of the marketing mix for the branded product. The retail price plan should start
from explicitly defined objectives which are often reflected in the strategic profit model of
the retailing organization. The absence of a distinct pricing policy often reflects a lack of
strategic focus and a lack of understanding the cost drivers. Strategically the price and the
quality of the shopping experience highly correlated

Framework for retail pricing

Price-Quality of shopping experience

If we try to map Price and Quality of shopping experience at least 3 distinct
competitive clusters emerge in the context of price and the quality of the shopping
experience as a part of the value platform of different retailers.
Most of retail stores have pricing guidelines which are often based on industry
practice like the single-price policy, Negotiated flexible pricing, Price-lining, Leader
pricing and so on.
Price zone compatibility is a concept used in the context of price and merchandising
strategy designed to improve the price line consistency across merchandise classifications.
Such a strategy helps to increase sales per square foot since customers can satisfy more of
their needs in one store.

What is the Price Band?

MPBIM 19
 Price band is the degree of price latitude retailers have relative to competitors in
setting prices. The price band is usually wider when the price visibility for the product is
relatively low as in the case of infrequently purchased items. The price band is likely to be
quite narrow for heavily advertised national brand items.

Role of pricing in competitive strategy

Price cart he assigned one of four roles in a marketing strategy. The retail
management can follow a high active, a high passive, a low active or a low passive
strategy. Activeness or passiveness in pricing as an element of strategy means how
aggressively price is featured in advertising, personal selling and other promotional
methods.

High active strategy

Is used in the marketing plan to establish a high quality or prestige image in the
minds of the consumers when they have no basis other than price for evaluating quality.
Also price gets prominently featured in the marketing plan.

Low-Active strategy
In this the firms offer acceptable quality products at low prices and aggressively
promote the low prices. This basically appeals to the price-conscious consumers. This
strategy is effective for companies with low costs that face little threat of competitors
undercutting their prices. Low active strategy players typically carry only the fast moving
items.

High-Passive strategy
In this strategy the firms seta price above the competition, but use non price factors
to persuade customers to buy the product or service. Emphasis is likely to be on quality or
performance instead of price. High prices however do not necessarily mean higher profits
since ego-driven prices can also mean ego-sized overhead.

Low-Passive strategy

Firms with lower quality offerings than the competition do not emphasize price in
their strategy to make customers less likely to equate quality with price. Firms offering
generic products follow a low-passive pricing strategy. Virtually no funds are spent on
marketing programs; the low prices are the appealing feature of the offering. Other outlets
following a low-passive strategy include those selling perused clothing or other low quality
“thrift” shops.
It is found most of the times that retailers arc often hesitant to openly use price as a
competitive weapon. They arc more prone to use indirect methods of price competition that
are not as likely to they followed by competitors. Some of the indirect price strategies used
by retailers are Scrambled Merchandising and in which the retailers try to expand their
merchandising mix to take the advantage of higher markups and Multiplex Distribution
which is majority used in major appliance retailing. The other indirect methods of’ price
strategies used by the retailers are Variations in the Service mix, variation in the brand mix,
Price discounts etc.

MPBIM 20
 ¾ Product

The basic aim of the Product or Merchandising strategy is to serve the customer in a
‘better’ way than any comparable retailing organization in its market segments. The five
rights’ of successful merchandising are to ensure that the customer is offered the right
merchandise, at right place, at right price, at right time and in the right quantities.
Some of the strategies used by the retailers for merchandising management arc Private
Label versus National brand strategy, Licensing and so on. The various strategic issues in
Merchandise / Product management are Product life cycle, Merchandise assortment
positioning. Merchandise gap strategy and Image lit analysis.

¾ People
The major objective of the People / Services in retail marketing mix is to
• Uncover customer Problems
• Rapidly develop/Re launch market driven solutions
• Create a customer Valued Process
The customer-valued process can be best depicted by the service process map. This
will demonstrate the service delivery process from customer’s point of view and define
customer’s involvement. Identify critical area where service delivery may break down so
contingency and recovery plans can he deployed.
We will start by identifying and sequencing all interactions between customer and
frontline company employees. These interactions will involve direct contact between the
customer and retail store. Then we will map the physical operations of the services that are
invisible to customers the interactions between frontline company employees and support
employees. Finally employee interaction with the company assets required to support the
process such as important equipment, vehicles and information databases will be depicted.

People innovation
For the People aspect of retailing proactive intervention by employees with
customers is the need to create the individualized shopping experience. It requires that
management provide the right leadership, create appropriate work environment, and
provide support, skills, tools and reward that propel employees to be proactive with the
customers.
There are four Principles that must he adhered to in order to maximize the people
innovation impact.
1. Put people back into the equation as the core part of creating uniqueness in the delivery
of service
Here the employee’s should be allowed to leverage their own intellect and have
degree of discretion and personal judgment when interacting with the customers. Using
intelligently technology should support or enable efforts of the people.
2. Create a system that allows people to rapidly create tailored solutions for specific
customers

MPBIM 21
3. Give people the skills that will enable them to provide the customers with the individual
experience
Skill building is an integrated orchestration of setting plans for the employees to
gain the necessary expertise, providing mentoring and quality leadership and motivating
employees to take action through awards and incentives.
4. Pursue integrated target customer relationships where individuals from the provider and
customer have ongoing personal relationship

¾ Presentations

Consumer responds to more than a tangible product or service. Thus retailers cannot
neglect the psychological effects of their outlets on consumer purchasing behavior. These
effects are called silent language of communication. Thus following factors have to be
looked at fir the presentation

• Store Appearance

The Store Appearance consists of

Store equipments: This broadly includes the entire physical object in store such as
counters, elevators, escalators, signs and area dividers
Interior lighting: It comprises of lights used to provide emphasis. Flexible lighting that is
combination of skylight, fluorescent tights and incandescent lights has to he thus needs to
be expertly planned.
Counters and display cases: Depending upon the culture to be nurtured in the outlet the
display cases and counters have to he planned.
• Look, Feel and aroma extending outside the store: In outlets it is wise to display a
limited number of items from each floor on the main floor perhaps in window displays to
attract the attention of the customer. This encourages shoppers seek more complete
selection available elsewhere in the outlet. In doing so they are likely to pass an extensive
array of other merchandise increasing the likelihood of some type of unplanned purchase.
• Safety of environment
The safety of the environment removes the safety concerns, which usually are in the mind
of the customer. This creates worry free environment thus enhancing the shopping
experience. The following safety concern needs to be addressed in an outlet

Fire safety: This is done as per the safety norms laid down by the government for that type
of outlet
Theft of personal belongings: Good security and vigilance with the use of technology takes
care of this issue.
Emergency power: This is needed to avoid any displeasure due to interruption by power cut
during shopping.

• Reputation as community player

The increasing competition has lead to various dimension of differentiation of stores. The
reputation of store as community player has great emotional appeal to the customers. The

MPBIM 22
customers thus interpret it as indirect way of social service through the fraction of their
spent going towards these services via the retailer.
Thus presentation is not prohibitively expensive. The advantage of developing unique
identity of the outlet outweighs the possible extra effort and additional expenses. This is a
combination of selling and non-selling attributes enhances the customer satisfaction and
hence brings in crowd and customer loyalty.

¾ Place

The various issues that Place entails are

• Traffic Flow and Accessibility
Since retail outlets serve customers who travel from various distances, ease of access to
outlets is a critical determinant of their success. Accessibility ultimately determines the
number of customers the site can attract, depending on several factors such as quality of
road surrounding the site, the ease of entry and exit from the site and physical and
psychological barriers to travel in that area.
An important component of site evaluation is a quantitative enumeration of level and
composition of traffic flow around the site. In general higher level of traffic flow increases
sales potential. A large volume of truck traffic not only does not generate sales it may also
deter shoppers because of congestion. The evaluation of pedestrian traffic has to be
matched with the target market of the outlet to be located.
Since the traffic data vary significantly during the day between weekdays and
weekends, care must be taken that the traffic count must compare the data for the different
days of the week and different parts of the day to accurately depict total traffic flow. These
figures can he augmented by interviews of randomly selecting the subset of people passing
h the store.

• Retail Structure

Many retail sites are part of same shopping cluster. Therefore in evaluating a potential
site one must study the number and composition of stores in the immediate area to assure
store compatibility. The compatibility of’ the adjacent stores depend upon level of affinity
between two types of outlet. For example a paint store, a lumberyard and a hardware store
have strong affinity for each other. Since consumer may have to visit all three in the same
visit. The locating next to each other them of multipurpose shopping. This benefits all three
types of stores since increased traffic increases sales of all of them.
Some stores have strong affinity for competing outlets. Examples of such stores arc
automobiles, furniture. These outlets tend to cluster in same area to facilitate comparison-
shopping and to maintain close links with the competitors. To gain competitive advantage
each store in cluster tries to differentiate its merchandise, price or service levels.
However when planning to enter in a place having same type of stores careful
evaluation of the future potential and the competitors has to be done.

MPBIM 23
 • Site Characteristic
The physical characteristics of the site determine the type of structure that can be built
there, the visibility for the potential customers and the ease with which they can enter and
exit.
Although the visibility of the stores in Small Street or in places far from major roadway
can be remedied by constructing large, clearly visible signs, there is always potential for
losing a significant amount of business. The position of site is also another important
consideration. Generally a corner site at the intersection of the two roads is better than one
in the middle of the block. These corner sites also provide greater opportunity for the
window display.

The availability of the parking space has also become the important physical
characteristics of the site. Stores usually handle this by providing free parking facility but
much effort is needed by the municipal authorities for making available the parking space.

• Legal and cost Factors

The attractiveness of the site has to he compared with its cost. This cost varies with
construction of terms of occupancy in variety of ways. Hence expert knowledge and past
experience must be used to analyze the benefits of the different terms of occupancy and
compare them to the cost.
The sites can be occupied by owing or leasing. The general trend is leasing, which has
various forms. One of them is fixed annual or monthly rent, other is sale and lease back
arrangement where retailer develops the site and sells it to real estate, which in turn leases
this site back to retailer.

¾ Promotion

Merchandizing sales depend not only on its physical qualities but also on advertising
and promotion. Hence promotion must grow out of firm’s total merchandizing process. If
outlets promotional efforts are not in harmony with decisions on pricing and other elements
a confusing and distorted image of’ outlet will result. A proper communication can only be
developed in the context of’ the firm’s objectives and of its marketing strategies. The
advertising should seek to tap the buying motivation of the specific market groups to which
promotion is directed.
The promotion objectives are
1) Additional buyers - Imaginative in store point of sale promotions may expand
sales by attracting new buyers for the product
2) Reminder promotions - Such effort are utilized in getting customers to stock
large amount of products prior to seasonal increases in sales, anticipated product
shortages and anticipated price increases
3) Market expansion

4) Consumer Conversion - These are the campaigns launched to get the consumers
to switch brands or stores usually these are the price wars.

MPBIM 24
 5) Image Development -This helps in identification of the store towards a particular
market niche and consistently promoting it.
6) Market Positioning
To reposition the store in the minds of customers so as to broaden the consumer base

Factors that affect the promotion are

• The Characteristic of potential customer like Demographics (age, income. location
e Predispositions (awareness, attitudes, habits).
• The media used for the promotion like Newspapers, Magazines. Television, Radio,
Outdoor advertising, Direct Advertising, Catalogs
• Influence of Communication which depends upon Group Influences and Cultural
influences

Factors that have major impact on the media selection are

• Audience involvement with the program
• The ability to provide a specialized audience with group identification
• The ability to offer the advertiser a monopoly over communication on the subject
• The quality of the advertising reproduction
• The time of message delivery
• The available budget and the cost of various media
• Competitive promotional campaign

Determining promotional objectives

Establishing overall promotional budget

Selecting the promotional mix

Implementing the promotional mix

Reviewing & revising the promotional plan

Promotional Strategy — “A continuous Process”

MPBIM 25
Influence of 6 Ps of Marketing on Retail Marketing. (Strategy in the Indian context)
Price
For the Indian consumer price is the most important issue which the retailers need
to address critically. It has been observed that the effects of price chances are more
immediate and direct and the appeals based on price are the easiest to communicate to
prospective buyers. However competitors can easily react to appeals based on price than
those based on product benefits and imagery. Nevertheless price is considered to be the
most significant among the decisions of the marketing mix for the branded product.

Product
The basic aim of the Product or Merchandising strategy is to serve the customer in a
better’ way than any comparable retailing organization in its market segments. The five
rights’ of successful merchandising are to ensure that the customer is offered the right
merchandise, at right place, at right price, at right time and in the right quantities. The
peculiar characteristic shown by the Indian consumer is his habit of comparing the products
of various brands and then arriving at the purchasing decision. This makes the retailer to
store appropriate kinds of merchandise in the retail store.

People
Today’s Indian customer is looking for “personalized attention” in this world of
mass merchandising and mass marketing. This is where the personnel at the retail store
plays a special role in making the customer feel that he is the most important customer to
them. The basic quality that these store personnel is to have empathy with the customer,
understand his problems and deliver the services and solutions to his problem in a better
way.
Presentations
Consumer responds to more than a tangible product or service. Thus retailers
cannot neglect the psychological effects of their outlets on consumer purchasing behavior.
These effects are called silent language of communication. Let it be any customer in the
world the quality of the retail store is usually associated with the way the retail store is
“presented” to him and the Indian customer is no exception to it. This makes the retailer to
“present’’ his store to the Customer in a better way.

Place
The basic reason for the sustainability of mom-n-pop store in India is the easy of
accessibility they provide as they are located very much near to the customers. This makes
the location an important factor which the retailer needs to look into to give ease of
accessibility and convenience to the customers and eat away the market share of mom-n-
pop store.
Promotion
Just as price is the most important factor for Indian consumer so is the promotion.
The promotional schemes not only include the advertising schemes but also the discount
schemes for which the Indian customer pays the most attention. This makers the retail store
to keep on developing continuous promotional schemes to motivate the customers for
buying.

MPBIM 26
 Industry profile

Large Scale Retail Scenario in India

™ Few years back

The major reasons l retail as one of the least evolved industries m especially the
organized retail sector were

1. Too Many Small players

The sector had been plagued by the inefficiencies of the smaller players. This in
turn resulted in the lack of an industry status, thereby affecting the financing prospects f the
industry, In contrast, players in other Asian markets such as Malaysia. Singapore or even in
the United Arab Emirates have access to bank financing, thereby enhancing the growth
opportunities.

2. Distorted Tax Structure

India had a differential tax system. This resulted in inability of even large players to
expand on a national basis. Furthermore, with retailing coming under the purview of the
respective state governments. Procuring permission at each and every state level created
unnecessary hurdle in the industry.

3. Real Estate Problem

With location being one of the prime success criteria, acquiring the right location is
a must for every retailer. Unfortunately, retailers didn’t get the optimal location at all
centers in India due to high price factor. In other cases, despite the acquisition of the right
property, co-operative landowners were a rarity in the country. With such shortage for the
basic raw material for the industry, prices had been on the increase (despite occasional
declines) all the time. Furthermore, there seem to be no cooperation between the mall
owners and the tenants in the country. This phenomenon has been a major factor in
spurring retail growth in the developed markets

™ Current Scenario in India

In recent times we have witnessed phenomenal growth in the Indian retailing sector.
Factors such as scale in sourcing, merchandising, operational effectiveness and ambience
have driven the spread of organized retailing. The various other factors that are responsible
for the growth of the organized retailing sector in India are

9 CONSUMER ENVIRONMENT

1. The Trickle Effect

Basic product categories such as tooth paste, soaps etc has traditionally been the largest
market in the country. With the rural consumer too beginning to enjoy the fruits of
liberalization, rural market has become a key consumer of durable goods too (around 35%

MPBIM 27
of’ overall demand). This in turn has resulted in the manufacturing and retailing sector
starling to pay greater attention to this virgin market.

2. The changing Indian Family

Smaller families
Metropolitan life has lead to shrinking space, more independence and privacy for the
modern generation. This has resulted in the nuclearization of Indian families.
Working women
One of the most important social changes of the recent years is the growth in the number of
workingwomen. With more women entering the labor force, the average time spent by the
Indian woman in the kitchen has declined over the years and the disposable income of the
dual-career household has increased. As a result of this, two wage families are inclined to
spend more and are less likely to delay purchases.

9 LIFE STYLE TRENDS

1. Poverty of time
The increasing number of the workingwomen outside the home has given rise to time
compressed consumers. This poverty of time is stimulating the growth of time saving
devices such as microwave ovens, food processors and prepared food. It is also increasing
the growth of convenience stores, fast food outlets and direct marketing. To help customer
do their grocery shopping in less time, a number of supermarket chains now accept orders
by phone and then deliver the order to customer’s home free of cost or for a nominal
charge.

2. Shopping for value

The biggest base of’ the middle class in the total population in India with cash constrains
and aspiration for more has lead to the lifestyle of’ value for money.

3. Blending of traditional male and female roles,

In the past husband and wives had separate and clearly defined purchase domain in India,
but now this trend has changed to joint decision of both towards majority of purchasing.
This is due to increase in number of the working women. This has increased their
purchasing power and hence more influence in the traditional male dominated purchasing
decisions

4. Liking for natural product

Due to fear of’ chemical usage and ayurveda tradition, large base of’ Indian customer
prefer products with natural ingredients. Hence Indian retailing comprises of a separate
section of ayurvedic or herbal products.

9 ECONOMIC ENVIRONMENT

Due to liberalization the middle and high-income segments in the domestic populace grew
at over 10.0% per annum over the last decade. At the same time, the lower income group
has declined in size. While growth has been more predominant in the urban areas, the

MPBIM 28
effect has trickled down to the rural areas too. Consequently, demand for consumer goods
has been on the increase

9 TECHNOLOGICAL ENVIRONMENT - New form of retailing

With the penetration of the cable television in India Home shopping through cable
television is the new form of retailing emerging in India. In this type of shopping the
retailer displays its products with the help of show, which is viewed by the cable television
subscriber. The customer can then identify the product of his need and make a telephone
call to the retailer for buying it. This form of retailing has inconvenience on the customer
side to wait and watch for the product he intends to buy.

9 LEGAL ENVIRONMENT
Pre-reform Post-reform

• Small scale sector restriction • Small scale sector restriction

• No FDI
• Dividend balancing norms
• Licensing for capacity
• Punitive tax
• Most consumer goods import
banned, with over 150% duty
as personal import
lifted from many areas
• 51% FDI in single brand retail
cleared
• Dividend balancing waived
• Licensing requirement waived
• Taxes lowered significantly
• Most consumer goods moved to
OGL

• Barriers to FDI: FDI is not permitted in pure retailing at present, but can franchise as
well as enter into technological alliances
• Unavailability/high costs of real estates: The rent laws are pro tenant. There is
restrictive zoning legislation. Government land is not available. There is lack of ownership
titles and complex sub letting arrangements
• Complex taxation system: There is different sales tax across the states. The octroi is
multi point. There is evasion of sales tax by smaller stores
• Multiple legislations: The labor laws are stringent governing hours of work, minimum
wages, payment of PF. Multiple licenses/ clearance are required from different agencies.

MPBIM 29
 Emerging Retailing Forms in India

™ Indian Apparel Retail Market

The apparel sector in India has changed dramatically in the recent past with the growth
of large multi-branded apparel outlets like life Style, Shoppers Stop, etc. and a
proliferations of manufacturer brand-led chains like Planet Fashion by Madura garments,
Mega Mart by Arvind Mills, Wills Sport by ITC and so on. India’s $25 billion clothing
market is India’s second-largest opportunity for organized retailers.
Apparel is one of the most advanced yet fragmented retail sectors globally. At Rs.
87,000 crore the Indian textiles and clothing market is huge, however only 22% of the
market is apparel and only 20% is branded as can he seen From the graph below.

Indian Textile Market

shirting, 12% suiting, 10%

apparel
others, 17%
sarees
shirting
suiting
sarees, 31%
apparel, 22% others

Market segments such as men’s ready-to-wear and sports clothing has begun to
evolve in recent times and look potentially very profitable. Men’s clothing currently
accounts for 70% of all the branded apparel sales of around Rs. 4000 crore compared to
22% of children’s wear and 8% of women’s wear. This trend is expected to continue with
about growth of about 30% per year for men’s branded apparel segment and 10% each for
children’s and women’s branded apparel segment. Branded apparel makes up about 3% of
women’s clothing market and around 13% of their apparel market.
The total kids wear market including organized and unorganized market is
estimated at around Rs. 6000 crore. The organized sector constitutes of about 10-12% of
this market leaving the balance to the unorganized market and small—scale regional local
brands. The market is subdivided into infant wear (0 to 2 years) and kids wear (2- 12
years). Now a day with the rise of specialty stores like Kids Kemp, a more assertive target
segment purchases are becoming more frequent. However price-sensitivity remains large
because of consumer perception that price is proportional to the size of the garment.
Branded ready-to-wear garments account for about 40% of all men’s apparel
segment. The major factors, which contributed to its growth in the recent past, are entry of
MNC brands in India after liberalization. Forward integration of Indian textile
manufacturers and the expansion of apparel exporters into the local market.
The entry of textile companies into branded ready-mades like Madura garment
(Allen Solly, Van Heusen. Louis Philippe and Peter England), Arvind Mills (Ruggers.

MPBIM 30
Newport, Excalibur and Ruf & Tuf), the .JK Group (Raymond’s), Color Plus, Indus
League (Indigo Nation. Scullers), Acme Clothing (Provogue) and TNG have been the main
drivers of market growth in the men’s apparel segment in the recent past
Women’s clothing brands are virtually non-existent. Provogue and Allen Solly have
recently entered in this segment in the casual wear segment. Brands if any in the more
lucrative salwar-kameez market belong to small, unorganized players, designers of haute
couture and store labels as Fab India, Soma. Stop and Pyramid.
In the kid’s segment the major national brands are Weekender Kids, Benetton 012,
Planet Kids, Oshkosh B’Gosh, Zerotondo and Balloons.
Currently in India specialty apparel retail stores are showing decent growth in
comparison to other types of apparel retail stores like department stores, upscale multi-
brand outlets, street markets and traditional outlets as can be seen fro the graph below.

Market Share of various types of Retail Outlets in the Apparel Segment

department 0
5
types of retail outlet

speciality 3
9
1 1995
multi-brand 7 2007
street market 15
25

traditional outlet 81
70

0 10 20 30 40 50 60 70 80 90

The franchising route adopted by MNCs helped to have fast and low investment
expansion, and it’s also helped to get way around the real estate issues which are very
prominent in India.
Over the last five years with the proliferation of brands and the growth in incomes
large-scale multi branded outlets and department stores have begun to emerge. Some of the
retailers have begun to develop a private label brand to supplement their range and improve
their margins.
In the Indian women’s ethnic sector which is largely unorganized, stores like Nalli
and Radha’s in sarees and Fab Indian and Anokhi in salwar-kameez are attempting to build
national chains.
It is expected that the department stores and multi-brand outlets are likely to
develop into a significant format in the Indian market over the next decade. However for
these formats to become truly successful they will need to improve their merchandising,
sales densities and scale of operations.

™ Indian Electrical / Electronic Goods Retail Market

The Indian electronics market has shown significant growth in the last decade. This growth
is largely driven by the rise in Indian incomes and increasing consumer willingness to
spend more on home, entertainment and convenience.
The global electrical and electronics market place is characterized by variety of
formats, differentiated by range arid pricing. Nearly 80% of the market is controlled by

MPBIM 31
chains and the key format is category killer of the superstores. In India electrical and
electronics market is growing rapidly with a turnover of Rs. 20,000 crore which includes
Rs. 8000 crore from domestic appliances sales, Rs. 7000 crore from audio/video equipment
and Rs. 5000 crore from white goods as shown in the graph below.

8000
8000
7000
7000
6000
5000 5000
5000
4000 3500 1995
3000
3000
2007
2000
1000
0
white goods audio/video domestic
appliences

The main drivers of growth are increased incomes, changing lifestyles due to
media, nuclear families, and increase in number of brands, increased financing options, and
improved technology and so on.
The retail market for electronics remains largely fragmented and nearly 80% of the
business is controlled by traditional dealers who own multi-branded outlets that primarily
sell low-end audio systems, some domestic appliances and a limited TV range. Organized
departmental stores have a very negligible share of this market.
However the recent product proliferation has started to put pressure on small
players in the market as their limited shelf-space is preventing them form carrying the full
range of products. In this environment very few retailers running a large full range chain of
stores have flourished like Vivek, Vasanth and Vijay Sales.
With the ongoing liberalization, imports is expected to further accelerate range
proliferation and rise in margins which will enhance the potential for creating large format
electrical and electronics stores that can compete with small stores on the basis of range
and price of the products offered.

™ Indian Grocery Retail Market

Grocery Constitutes over 50% of the Indian retail market and has an annual turnover of
$80 billion. There are estimated to be $6.5 million grocery outlets in the country in various
shapes and sizes. Almost all of’ these are unorganized and fragmented. The organized
sector represents mere 2% of the total grocery market in India and this is concentrated in
urban locality. The pressures from the consumer demand and range proliferation arc
impacting the grocery in urban India today.

MPBIM 32
% Share of various formats in Grocery Segment in India
Graph below

supermarket 2%
cooperatives 4%
kiosk 7%
% shares
street market 18%
street vendors 21%
traditional outlets 48%

0% 10% 20% 30% 40% 50% 60%

% share

In the past there have been sporadic efforts by the government and the co-operative
sector to develop modern formats. These include discount dry grocery shops like Super
Bazaar in Delhi and Shakhari Bhandar in Mumbai.
Numbers of traditional kirana stores are expanding to become super kiranas. New
forms of stores are expanding to include customer walk through space and allow self
service shopping with touch and feel. Food world is the best example for this where
product categories include staples, fresh fruits, vegetables, dairy, bakery, frozen products,
processed foods, beverages, household cleaning products and general merchandise. The
other example includes Subhiksha in Chennai.
In parallel with this evolution, a number of specialist chains are beginning to
emerge, especially in fresh products and personal care. Notable successes have been dairy
booth like Mother Dairy and Vegetable store chain like Safal.

™ Indian Niche Retail Market

There are number of niche retail segments emerging in India. The few emerging of them
are books, music, liquor and drugstore.

Books
The total market for the books is estimated to be Rs. 3000 crores and is growing by
11-12% per annum. Most of these books are produced locally with imports accounting for
only 4% of the market. Regional language books constitute 51% of the book market. Hindi
28% and English only 21%. A major part of this market is estimated to be educational
books, and this is expected to be one the fastest growing segments.

MPBIM 33
Retail in book segment

hindi, 28%
others
others, 51% english
hindi

english, 21%

Distribution in India is mostly through independent retailers who number over

500,000. Over the last three years focus retailer chains are beginning to emerge. The top
three chains are Landmark, Crossword, and Higginbotham’s and they account for meager
Rs 85 crores of sales i.e. 2% of the market.
To build a large business in books retailing, the retailers will need to target mass-
market i.e. regional language and educational books

Music

The Indian music market is estimated to be Rs 2000 crores of which 40% is pirated.
Low priced cassettes dominate the market. Cassettes sell about 34O million units per
annum compared to 14 million CD’s. Nearly 96% of all music sold in India is local. With
sales to the tune of’ 60% film music dominates the market as a result the industry is
inextricably linked with that of film industry.

The retai1int of music in India is very fragmented with retail chains accounting for
approximately 5% of sales (Rs 90 crores). Music World and Planet M are the two major
players in the retail chains. The music industry is quite amenable to modern retailing as the
business relies on walk ins and impulse purchases. The ability to differentiate oneself on
the quality of the retailing experience generated through good merchandising, listen and
buy features and live shows make this sector one of the most attractive for the organized
retailers. One more emerging trend in music retailing is as add-on category in supermarkets
like Shoppers Stop. As it evolves in India grocery retailers might become important
distribution channels for music.

Liquor

The Indian liquor market is estimated to be 370 million cases a year. Country liquor or the
unorganized sectors constitute the bulk of liquor produced in India with 67% of the
volumes. The organized liquor segment is divided into beer (15 %), whisky (11%) and
other spirits. Wine is nearly non-existent. In value terms the organized liquor market is
sized at Rs. 1600 crores.
The liquor trade in India is highly regulated, with each state having its own policies
regarding production, distribution and taxation. The retail trade is still licensed and in

MPBIM 34
certain states completely restricted to the government or government appointed dealers. In
these circumstances it is extremely difficult to create a retail chain of liquor store or even
include liquor as category within a large grocery store. So the grocers could attempt on
selective basis to gel license fir some of their stores to check the proposition.

Drugstores

In India drug market is highly underdeveloped. While prescription drugs are large
market ($ 4 plus billion. the market for OTC and personal care products has not evolved to
a level where a distinction proposition can be evolved. Operating as a retailer in the
prescription market alone is not very attractive due to significant regulatory restrictions and
high level of unionized behavior of existing trade. While experiments in this area has
begun by ‘Health and Glow and ‘Subhiksha’.

Wal-Mart’s Personality Characteristic.

exciting 53

fun 67

caring 80

respected 86 personality characterstic

trustworthy 88

Friendly 93

0 20 40 60 80 100

The important step in the brand-building process is assuring a brand’s proximity to

consumers. The culmination of this trend, of course, is electronic commerce over the World
Wide Web. Big-box retailers in particular increasingly face the challenges of multi-channel
management and the need to provide a consistent brand statement across each channel. The
ultimate mix of channels remains to be seen.

MPBIM 35
Current Retail Scenario in Bangalore
In retailing currently more than around Rs. 2,500 crore of investment is being put
in all over India. Various industrial houses such as the RPG and Piramal groups are looking
at the retail sector as a high-growth area while other industrial houses are getting ready for
action too. In Bangalore the investment in the organized retailing sector has begun and the
large-format supermarkets are coming up. RPG group has started organized retailing in
Bangalore and Chennai via Food World, Health & Glow and Music World. Times Group’s
has also opened music chains under the banner of Planet M in Bangalore. They toy
specialist had opened Kemp Fort. India’s largest single store (300000 sq-ft) on the outskirts
of Bangalore.
Madura Garment, the marketer of’ Van Heusen, Louis Philippe and Allen Solly
clothes, has over 110 showrooms for these high brands and another 79 for its mid priced
brands. Peter England and Element all over India. Besides, it has started new chains under
Planet Fashion and Trouser Town in Bangalore. Almost a third of the firm’s turnover now
comes from direct retail. Along the lines of Madura Garments, Arvind Mills have started
Mega Mart and ITC has started Wills Sport in the garments sector.
Currently two mega stores have opened in Bangalore on the line of Cross Road in Mumbai
viz Life Style and Shoppers Stop. Shoppers’ Stop’s sales were set to cross the
Rs 200-crore mark in the year 2006-07 “The Indian consumer is adapting faster than the
retailer can adapt right now.”
India’s most successful retailer in consumer durables market segment is Chennai
based Vivek’s, which has been around for 35 years. It recorded a turnover of Rs 106.8
crore in 1999-2000, and having acquired another chain Jainson’s in late 1999 and crossed
Rs 200 crore mark in the year 2000-01. In all, the group now has 36 outlets in Tamil Nadu
and Karnataka. For TVs, fridges and the like, its dominance of Chennai is near absolute.
It is expected that this trend will follow in near future with more number of large
scale retail stores opening in Bangalore
As the organized retail sector in India is catching up and many players have entered
in this sector the competition is catching up in this sector. Now these players are required
to differentiate themselves from others by developing and following a framework of
marketing strategy to increase their customer base and improve their bottom lines. The
most important issue which these players need to address is the “6 Ps of Marketing”
which are Place, Price, Promotion, Product, People and Presentation.
Keeping this thing in mind this project aims at “Developing a Marketing Strategy
Framework for Large Scale Retailing in India “.

MPBIM 36
Retail Mindset & Indian Consumer

The big retailers are still looked at with suspicion by the average Indian consumer.
The mindset of average Indian is to shop from ‘kirana’ stores for their daily requirements.
The question that arises is that, how are the big retailers going to convince the consumer to
shop for his daily requirement. This retail mindset drives the crowd away from super stores
and malls. The retailer today is not interested in talking about the manufacturer’s brand. It
just wants to sell what the consumer wants. It therefore becomes important for retailer to
change this mindset to bring more customer traffic to the store, and to increase total
revenue per checkout station. The suspicion prevalent in the Indian consumers’ mind needs
to be broken by delivering value and developing trust.
The store will no longer be just a point of distribution. The store today is an active
medium unto itself. Retailers are focusing on branding these needs to be conveyed to the
manufacturer also.
Retailers are beginning to put category branding above all those nationally branded
products that sit under that banner. They want to separate and differentiate themselves from
their competition. They’re doing the same thing with events. If a manufacturer brings a
retailer an event today, they better not bring them something everybody else has. They had
better bring them something that’s going to be theirs alone, that they can own.
The retail mindset today is about destination - retailers are thinking about their
store, their chain -- they want to be a destination for shoppers. And they want to do it by
differentiation. This is critical for them because they have had so many problems with
category killers. They have to have a clearly defined differentiation strategy.
To assist this change of mindset the retailer today sees the store as a collaborative
marketing medium. Collaborative marketing simply means retailers and manufacturers
working together to understand, anticipate and satisfy consumer needs.
To make collaborative marketing work, manufacturers have to stop presenting and start
listening. They have to understand the retailer’s business and their strategies and how they
can assist .They have to be flexible too. They have to be prepared to adjust to suit the
retailer’s need, and provide business-building ideas that are based on consumer and
shopper insights. Manufacturers also have to have people who really understand the retail
business. They need to work in the retail operation for six weeks and find out how the
system works. Continuity is also critical. If the manufacturer expects to build a long- term
collaborative process they need to have consistency in terms of the people they have
working with the retailers, building customer knowledge and know-how.
Thus in building of the marketing strategy to cater to retail mindset integrated
strategic planning will be critical, innovative, proprietary store/category/brand building
ideas will he critical.

MPBIM 37
Overall Strategic Framework

The various market segments that can be targeted by the retailers are either mass
market or market segment or multiple segments. The various strategies that the retailer
needs to follow for new brand and existing brand are as shown in the table below
depending upon the target market they select. The new brand should generally start
targeting a particular market segment then it should upgrade itself to target multiple
segments and then ultimately it should target the mass market. Existing brand should start
with targeting multiple segments and the eventually move to targeting the mass market.
The various strategies that the retailer needs to follow while targeting these different
segments arc as shown in the table below.

Strategic Target Market Selected

Implications Mass Market Market Segment Multiple Segments
Retailer’s Near a large Near a small or Near a large
Location population base medium population population base
base
Goods & Wide assortment Deep assortment of Distinct goods and
Services Mix of medium high quality items services aimed at
quality items each market segment
Promotion Direct mail. Different media
Efforts Mass advertising subscription and messages for
each segment
Price High, medium and
Orientation ‘Popular prices” High or low low - depending on
market segment

Strategy Directed at a Directed at a Several specific

large specific, limited strategies aimed at
homogeneous group of customers different groups of
group of consumers
consumers

MPBIM 38
Strategic Retail Marketing Mix Framework

- Price quality of shopping

Price experience mapping
Markup - Price band
Markdown - pricing strategy
Price lining
-indirect method of price
Discounting
competition

- Characteristic of potential
Promotion customer
Advertising - Advertising media
Publicity - Influence of communication
Public relation
- Competitor promotion

- Uncover customer problems

- Rapidly develop/relaunch
People
market driven solution
Customer service
Personal selling - Create a customer valued
Information process Retailing
Mix

Private Vs national brand

strategy
Product
- Licensing
Breadth
Depth - Product life cycle
- Merchandised assortment
positioning
- Merchandised gap strategy

Place
Location - Traffic flow & accessibility
Hours - Retail structure
- Site characteristic
- Legal and cost factors

- Store appearance
Presentation - Look, feel and aroma extending
Layout outside the store
Atmosphere - Safety of environment
- Reputation as community
player

MPBIM 39
Various pricing issues

Retail Objective
Sales
Profits
Return on investment
Early recovery of cash

Broad price policy

Selection of target segment
Choice of retail image
Composition of retail mix
Selection of price policy

Pricing issues
Price strategy These needs to be
Demand Addressed on a
Cost
Competitive
continuous basis
Integrated

Implementation of price
strategy
Customary & variable pricing
One price & flexible pricing
Odd pricing
Multiple unit pricings
Price lining

Price adjustment
Markdowns
Additional markups
Employee discounts

MPBIM 40
 Chapter IV

Methodology

Secondary Data
To pursue the information on retailing in Indian market like groceries and
clothing will be collected through secondary source. The source of data
collection will be through internet, books, journals, Industry reports and business
magazines.

Primary Data
Primary source will be also used to considerable extent to gather
information of various retail outlets operating in Bangalore. The information
provided by this source will be helpful in understanding the approaches taken by
various players and the current status of retail market in Bangalore. Finally, with
the help of expert guide and with marketing fundamentals we will study and
develop marketing strategy framework for large scale retailing in India.

Sampling plan
¾ Sampling unit: -
Retail managers and customers of Bangalore city.

¾ Sampling size: -
30 retail managers from Apparel & Grocery sector in Bangalore.

¾ Sampling procedure: -
Non probability Quota sampling with apparel and groceries retail
outlets with respondent in each of these categories will be examined. The
advantage of this technique is that it is both economical and reasonably reliable.

¾ Research instrument: -
1. Interview techniques will be used to collect data from retail managers.
2. Structured questionnaire.
3. Personal observation.

¾ Contact method: -
1. Email.
2. Direct contact with the customer.
3. Telephone.

In this way to pursue information on retailing in Indian markets like groceries,

clothing, consumer durables, etc. will be collected through secondary sources. The source

MPBIM 41
of data collection will be through internet portals, books, jourr1a industry reports and
business magazines.
Primary sources will be also used to considerable extent to gather information of
various retail outlets operating in Bangalore. The information provided by these sources
will be helpful to us in understanding the approaches taken by various players and the
current status of retail market in Bangalore. Finally with the help of expert Guide and with
marketing fundamentals we will study and develop marketing strategy framework for large
scale retailing in India.

MPBIM 42
 Chapter V
Analysis & interpretation

Segmentation

Respondents
Geographic Demographic
Basis
apparel grocery Psychographic Behavioral
Geographic 4 9 10
Demographic 10 5 8
Psychographic 1 1
6
Behavioral 0 0
4
15 15
2
0
apparel grocery

Inference: - Segmentation for apparel sector mostly based on demographic some go for
geographic where as in grocery segmentation largely based on geographic segmentation.
This would infer that nearly 70% of the respondents in apparel believe that segmentation is
based on demographic where as geographic in case of grocery.

Demographic Segmentation

Respondents 18-25 25-35 35 & above

Parameter
apparel grocery 7
6
18-25 4 3
5
25-35 7 5 4
35 & above 4 7 3
2
15 15 1
0
apparel grocery

Inference: - Apparel sector looks mostly between the age group of 25-35, where as in
grocery they looks age group between 25 and above. This would infer that nearly 70% of
the respondents in both sectors feel the target mostly on age group of 25 and above.

MPBIM 43
 10k-25k 25k- 35k 35k & above

Respondents 7
Income
6
5
apparel grocery
4
10k-25k 4 3 3
25k- 35k 7 5 2
1
35k & above 4 7
0
15 15 apparel grocery

Inference: - Apparel sector looks mostly between the age group of 25k-35k, where as in
grocery they looks age group between 25k and above. This would infer that nearly 70% of
the respondents in both sectors feel the target mostly on income group more than 25k.

Pattern of target market selection

Respondents
Parameter 8
appare grocer
l y 6
Single segment concentration 7 0
Selection specialization 3 3 4
Product specialization 3 5 2
Market specialization 2 0 0
Full market coverage 0 7 apparel
15 15
Single segment concentration
Selection specialization
Product specialization
Market specialization
Full market coverage

Inference: - Apparel sector largely concentrate on single segment where as grocery sector
cover full market as far as pattern of target market selection is concern. This would infer
that nearly 50% of the respondents in apparel sectors look for single market selection
where as grocery sector look for full market coverage.

MPBIM 44
Pricing
Cost plus pricing Demand based pricing
Respondents Rate of return Competitor indexing
Types
apparel grocery
12
Cost plus pricing 11 8 10
Demand based pricing 4 4 8
6
Rate of return 0 0 4
2
Competitor indexing 0 3
0
15 15 apparel grocery

Inference: - Respondent from both sectors in favor of cost plus pricing model. This would
infer that nearly 70% of the respondents in both sectors feel that they follow cost plus
pricing.

Sales promotion tools

Respondents
Tools Samples Coupons Cash refund offer Premium/gifts
apparel grocery
Samples 0 5
6
Coupons 6 6
Cash refund offer 4 0 4

Premium/gifts 5 4 2
15 15 0
apparel grocery

Inference: - Sales promotion like coupons & premium/gifts are mostly used in apparel
sector where as in samples & coupons were largely used in grocery sector.

Types of advertising
Respondents
15
Types
appar grocery 10
el
Product advertising 10 12 5
Markdown event advertising 3 2
0
Institutional advertising 1 0 apparel grocery
Co-operative advertising 1 1
Product advertising
15 15
Markdown event advertising
Institutional advertising
Co-operative advertising

MPBIM 45
Marketing mix: - The objective here is how retail manager rank different marketing
mix and different parameter in each marketing mix element.

Product

Range Quality Brand name Service line

Scale appa grocer appa groc appare groc appa grocer

rel y rel ery l ery rel y

5 3 7 8 7 9 5 6 7
4 4 4 4 6 4 4 5 4
3 5 2 2 3 2 3 2 3
2 2 2 1 0 0 2 2 1
1 1 0 0 0 0 1 0 0
No of res- 15 15 15 15 15 15 15 15
pondent
Cum 51 61 64 68 67 55 60 62
Point
Average 3.4 4.07 4.27 4.53 4.47 3.67 4 4.13

5
4.53 4.47
4.27
4 4.07 4 4.13
3.67
3.4
3
apparel
2 grocery

0
range quality brand service
I
nference: - In grocery sector Product range got more weightage compared to the apparel
sector. As far as quality is concern both apparel & grocery scored equal weight. In case of
brand name apparel sectors feels that there should be good brand name for their product,
both sectors have par with each other as far as service is concern.

MPBIM 46
Price

Level Qlty/price Differentiation Discount

Scale appa grocer appa groc appare groc appa grocer

rel y rel ery l ery rel y

5 5 7 5 6 8 2 6 7
4 3 4 6 6 3 4 5 5
3 3 2 2 3 3 4 4 3
2 2 1 2 0 1 3 0 0
1 2 1 0 0 0 2 0 0
No of res- 15 15 15 15 15 15 15 15
pondent
Cum 52 60 59 63 63 50 62 64
Point
Average 3.46 4 3.93 4.2 4.2 3.33 4.13 4.26

4.5
4
4.2 4.2 4.134.26
4 3.93
3.5 3.46 3.33
3
2.5
apparel
2
grocery
1.5
1
0.5
0
level qlty/price diffn discount

Inference: - Price level in grocery sector has dominated over apparel sector, incase of price
differentiation apparel sector is dominated over grocery sector, and quality/price &
discount has earn equal point in both sector.

MPBIM 47
Place

Location Accessibility Distn channel Distn coverage

Scale appare groc appa groc appare groc appa grocery

l ery rel ery l ery rel

5 8 7 5 8 8 8 6 7
4 5 5 6 5 4 5 5 6
3 2 2 2 2 2 2 3 2
2 0 1 2 0 1 0 1 0
1 0 0 0 0 0 0 0 0
No of res- 15 15 15 15 15 15 15 15
pondent
Cum 66 63 59 66 64 66 61 65
Point
Average 4.4 4.2 3.93 4.4 4.27 4.4 4.07 4.33

4.4
4.3
4.2
4.1
4 apparel
3.9 grocery
3.8
3.7
3.6
location accessibilty dist channel dist coverage

Inference: - Location & accessibility is important for apparel sector as compared to the
grocery sector, distribution channel and coverage in grocery have dominated over apparel
sector.

MPBIM 48
Promotion

Advertising personal sales publicity public

scale selling promotion relation
appa grocer appa groc appare groc appa groc Appa grocer
rel y rel ery l ery rel ery rel y

5 7 4 2 7 3 8 6 7 5 6
4 3 5 3 5 4 6 5 7 4 5
3 3 3 4 2 5 1 4 1 3 3
2 2 3 3 1 2 0 0 0 3 1
1 0 0 3 0 1 0 0 0 0 0
No of res- 15 15 15 15 15 15 15 15 15 15
pondent
Cum 60 55 43 63 64 67 62 66 56 61
Point
Average 4 3.67 2.87 4.2 4.27 4.47 4.13 4.4 3.73 4.07

4.5 4.47 4.4

4.2 4.27 4.13 4.07
4 4
3.67 3.73
3.5
3 2.87
2.5
2 apparel
1.5 grocery
1
0.5
0
ad p selling s publicity p relation
promotion

Inference: - Advertising is more in apparel sector compare to the grocery sector where as
in case of personal selling most of the respondent were in favor of for grocery where as
sale promotion, publicity and public relation respondent feels that they are equally
important in both sector.

MPBIM 49
Physical evidence

Furnishing color layout noise level

scale appa grocer appa groc appare groc appa grocer
rel y rel ery l ery rel y

5 9 5 8 4 5 7 4 7
4 6 5 6 4 4 3 3 5
3 0 4 1 4 3 4 3 2
2 0 1 0 2 3 1 4 1
1 0 0 0 1 0 0 1 0
No of res- 15 15 15 15 15 15 15 15
pondent
Cum 69 59 67 50 60 61 50 63
Point
Average 4.6 3.93 4.47 3.33 4 4.07 3.33 4.2

5
4.6 4.47
4.2
4 3.93 4 4.07
3.33 3.33
3
apparel
2 grocery

0
furnishing color layout noise level

Inference: - Respondent from apparel sector gives important for both store furnishing and
color, but in case of layout respondent from both the sector given equal point.

MPBIM 50
Process

Policies procedures mechanization customer

scale involvement
appa grocer appa groc appare groc appa grocer
rel y rel ery l ery rel y

5 5 7 5 6 8 2 6 7
4 3 4 6 6 3 4 5 5
3 3 2 2 3 3 4 4 3
2 2 1 2 0 1 3 0 0
1 2 1 0 0 0 2 0 0
No of res- 15 15 15 15 15 15 15 15
pondent
Cum 52 60 59 63 63 50 62 64
Point
Average 3.46 4 3.93 4.2 4.2 3.33 4.13 4.26

5
4 3.93
4.2 4.2 4.13 4.26
4
3.46 3.33
3

0
policies procedure m'zation cust invlment

apparel grocery

Inference: - Respondent from grocery sector has given more important to policies,
procedure, customer involvement is concern but in case of mechanization respondent from
apparel sector has given more important compare to the grocery sector.

MPBIM 51
The objective here is to know, how the manager rate stores look, infrastructure.

Rating on store ambience

Respondents Excellent Very Good Good Average Poor

apparel grocery 6

Excellent 6 3 5
4
Very Good 5 4
3
Good 4 5 2
Average 0 2 1
Poor 0 0 0
apparel grocery
15 15

Inference: Most of the respondents of apparel totally agree with the store ambience. The
atmosphere or mood created by the environment in the store make convenient for the
customer. This would infer that nearly 70% of the respondents in both sectors in favor of
store ambience.

Rating on Displays

Respondents Excellent Very Good Good Average Poor

7
apparel grocery
6
Excellent 7 5 5
Very Good 5 5 4
Good 3 3 3
2
Average 0 2 1
Poor 0 0 0
apparel grocery
15 15

Inference: Most of the respondents of apparel totally agree with the proper display help the
customer while shopping their needs. This would infer that nearly 80% of the respondents
feel that there should be proper display in the store.

MPBIM 52
Rating on Space design
Respondents Excellent Very Good Good Average Poor

apparel grocery 8
Excellent 7 3 7
6
Very Good 4 4 5
4
Good 3 5 3
2
Average 1 2 1
Poor 0 1 0
apparel grocery
15 15

Inference: Most of the respondents of apparel totally agree with the space design in store.
This would infer that nearly 70% of the respondents agree that space design has effect on
customer mind.

Rating on Colors

Respondents Excellent Very Good Good Average Poor

apparel grocery 7
Excellent 7 5 6
5
Very Good 5 5
4
Good 3 3 3
2
Average 0 2
1
Poor 0 0 0
apperal grocery
15 15

Inference: Most of the respondents of apparel feel that color combination has great impact
on the customer mind. This would infer that nearly 85% of the respondents in both the
sectors in favor of store colors.

Rating on Lighting

MPBIM 53
 Respondents 8
7
apparel grocery 6 Excellent
Excellent 7 5
5 Very Good
Very Good 5 3 4 Good
Good 3 3 Average
3
Poor
Average 0 3 2
Poor 0 1 1
15 15 0
apparel grocery

Inference: Most of the respondents of apparel totally agree that there should be proper
lighting in the store to attract the customer.

Do you agree that different stores that cater to different customers need to be
different in their internal design?

6
Respondents Totally agree
5

apparel grocery 4 Somewhat

Totally agree agree
6 1
3 Neither agree
Somewhat agree 5 1 nor disagree
Neither agree nor disagree 3 4 2 Somewhat
disagree
Somewhat disagree 1 5 1 Totally
Totally disagree 0 4 disagree
0
15 15 apparel grocery

Inference: Most of the respondents of apparel totally agree with the different internal
design. This would infer that nearly 85% of the respondents in apparel sectors in favor of
different internal design.

MPBIM 54
Do you agree that the window display should be changed weekly or fortnightly to
ensure fresh display?
8
Respondents 7 Totally agree

6
Somewhat
apparel grocery
5 agree
Totally agree 8 2
4 Neither agree
Somewhat agree 5 4 nor disagree
3
Somewhat
Neither agree nor disagree 2 6 2 disagree
Somewhat disagree 0 2 1 Totally
disagree
Totally disagree 0 1 0
apparel grocery
15 15

Inference: Most of the respondents feel that the display should be changed
Weekly/fortnightly to avoid monotony to regular customers. This would infer that nearly
85% of the respondents in apparel sectors in favor of store display change.

Do you agree that the visual merchandising help retailers to communicate retail
brand message so that the customers can make better informed choices?
7
Respondents 6 Totally agree

5 Som ew hat
apparel grocery
4 agree
Totally agree 7 3
Neither agree
Somewhat agree 5 4 3
nor disagree
Neither agree nor disagree 2 Som ew hat
2 4
disagree
Somewhat disagree 1
1 2 Totally
Totally disagree 0 disagree
0 2 apparel grocery
15 15

Inference: Most of the respondents of apparel sector agree that visual merchandising help
to communicate retail brand message. This would infer that nearly 80% of the respondents
from apparel sectors in favor of that the visual merchandising help retailer to communicate
retail brand message so that the customer can make better informed choice.

MPBIM 55
Do you agree that the retailers should avoid too many floors because shoppers would
be tired?

6
Respondents Totally agree
5

apparel grocery 4 Som ew hat

agree
Totally agree 4 6
3 Neither agree
Somewhat agree 3 4 nor disagree
2
Neither agree nor disagree 1 2 Som ew hat
1 disagree
Somewhat disagree 4 2 Totally
Totally disagree 3 1 0 disagree
apparel grocery
15 15

Inference: Most of the respondents of grocery feel that too many floors should be avoided.
This would infer that nearly 70% of the respondents in grocery sectors agree that too many
floors should be avoided.

MPBIM 56
 Chapter VI

FINDINGS AND RECOMMENDATIONS

• Segmentation for apparel sector mostly based on demographic and for grocery
geographic segmentation.
• Apparel sector looks mostly between the age group of 25-35, where as in grocery
they looks age group between 25 and above.
• Apparel sector largely concentrate on single segment market where as grocery
sector cover full market
• Pricing in both the sector largely depend on cost plus
• Sales promotion tools like coupons & premium/gifts are mostly used in apparel
sector where as samples & coupons in grocery.
• The marketing mix like product, price, place, promotion, physical evidence and
process were differs in different parameter in apparel and grocery sector.
• Apparel sector gives important to store look. They give important to store display,
internal design, color and store environment.
• Learning from the empirics
After doing the apparel retail industry analysis in detail with the help of primary as
well as secondary analysis, the most important retail marketing mix element for
apparel retail industry was found to he Location and Branding. Location was
perceived to be the most important factor because of the following reasons.
• The traffic flow of the customer largely depends on the location of the store.
• Strategic location gives, ease of access to the customers
• Strategic location also gives ease of brand presence and increase opportunity for
brand display.

• Space planning is a well-established method of ensuring that core retail offerings

are planned for, and implemented to maximise store sales. In a highly competitive
demand-focused environment the accuracy, compliance and performance of space
planning is critical to the success of any retailer.
• The ambience of the store is a very important element as it influences consumers in
purchase decision. A customer is highly influenced by the look and feel of the store.
The minute he/she walks in, an image of the store is formed. This image is
extremely important to the retailer if he wants to bag a new customer. Hence the
ambience is to be given utmost importance. A retailer needs to hire a good interior
decorator and if possible use ergonomics while designing a store.

MPBIM 57
Recommendation
• Segmentation for apparel sector mostly based on demographic but there is ample
opportunity for apparel sector to target on geographic segment.

• Market segmentation divides large, heterogeneous customer groups into smaller,

more manageable segments that can be targeted more efficiently. After
segmentation, each of the segments can be evaluated and attractive segments
targeted. A customer value proposition for the segment can then be developed.
Retailers should also be aware that customers, who may look alike, don’t
necessarily act alike, and therefore it is critical to consider segmentation by
customer needs and attitudes as well as by customer characteristic.

• Apparel sector largely concentrate on single segment market they should go for
product specialization and full market coverage.

• Apparel sector gives important to store look but the grocery sector have to give
equal importance to store look, design etc.

• Pricing is the spearhead of marketing strategy.

It is one of the first things a customer spots and can therefore easily become the
one factor that clarifies or confuses the customers’ perception of brand positioning.
Research indicates that pricing has the largest impact on retailer profitability when
compared to the results of traditional cost cutting. A retailer’s brand is of
unparalleled importance both for customers and suppliers. Indeed much of a
retailer’s market value may be attributable to its brand equity. Retailers need to
guarantee that the business is a professional, efficient organisation that manages
their products and processes appropriately.

• One of the key trends to transform many areas of retail is the proliferation of
communication and distribution channels. Although some channels have been over-
hyped, they have established themselves as part of the retail experience.

• Developing leadership capability

My description of personal leadership – it starts with the hard work of strategy,
culture and communications. It includes measurement, accountability, visibility and
active participation in all aspects of the enterprise.

• Visual merchandising will lead to impulse purchase of the product. Visual

merchandising is used to attract shoppers to view the product more closely.
Effective visual merchandising is essential to attract shoppers enticing them to
make a purchase. Effective visual merchandising should also be supported by good
sales staff to close deals with shoppers.

MPBIM 58
 • Visual Merchandising enhances the pleasure of shopping experience. Store
windows can be used effectively to entice people on the streets to walk into the
store. Promotions, props and decorative items are huge attractions with regard to
visual merchandising. Unfortunately, stores use these tools only during festivals and
anniversaries.

CONCLUSION
This project has helped me understand the importance and significance of
developing marketing strategy framework in retailing and its impact on consumer buying
behavior. It has given me exposure to the practical side of retailing and at the same time
enhanced my knowledge by applying theory learnt in class to practice Marketing when
used effectively is no doubt, a powerful tool to entice customers in making a purchase
decision. Retailers can attract more customers and increase sales by proper use of
marketing strategy.

MPBIM 59
 Chapter VII

Annexure
Success Stories

Bombay Store
On December 14th. 1905 the idea of Bombay Swadeshi Cooperative Stores
Company was conceived by eminent personalities like Bal Gangadhar Tilak, Dadahhai
Naoroji & other stalwarts like Sir Jamshedji Tata. The first Bomhay Swadeshi
Cooperative Store was opened by Mr. Dadabhai Naoroji on December I 7. 1906, Mr.
Manmohandas Ramji was its Managing Director then.
After its inception the store immediately gained prominence as a reliable place for
Indian handloom cottons, woolens, silks, furnishings, linen & handicrafts. In the early days
there were 12 such stores in India and all of them were located on the famous M.G. Roads
in different cities but eventually the company wound oil its stores in most the cities and
focused its attention on Mumbai and Pune. Currently Bomhay Store is located in three
cities; two of its stores are in Mumbai and one each in Pune and Bangalore.

As in the present era of globalization, the Swadeshi movement has little

significance in December 1995 the company decided to re-brand the name of its retail
operations and the stores are today popularly known as the Bomhay Store. Bombay Stores
has brought the best designers from around the world in its team to translate traditional
skills into present day functional ideas and an international quality certification is done to
benchmark for all its merchandise. The Bomhay Store has been in forefront to give the
world a taste of contemporary Indian styling. All the products are perceived as ‘cultural
ambassadors’ and they pass rigid quality tests before being exported.
Currently the store is positioned as a “Contemporary lifestyle store” and a showcase of
Indian culture & heritage made available under a single roof to Indians, NRIs &
Foreigners, all across the country.
The International Trade Division of The Bombay Store has maintained a ready
database of manufacturers and their ability to source and consolidate all types of
handicrafts from different states of India is giving them cutting edge over everybody else in
the market. The Bombay Store exports its products to stores/distributors in Canada, Dubai,
Switzerland, New Zealand, USA, Chile, & UK.

The Institutional Sales Division of’ Bombay Stores has been operational from the
past 30 years catering to the requirements of multinationals like Hindustan Lever Ltd,
Siemens, Dr. Beck. Corporate like Travel Corporation of India. Camlin. Fulford.
Advertising Agencies like Trikaya Grey. Hindustan Thomson Associates. Synchronicity,
airlines like British Airways. Air India. Indian Airlines. Publications houses like Times of’
India. Indian Express. Zee Premiere. Banks like Reserve Rank of India. Rank of Baroda to
name a few. The division supplies mostly gifts & promotional items and it also takes up
contracts for designing & stitching uniforms

MPBIM 60
 The product range offered by Bombay Stores consists of all the categories of
Cosmetic & Health Care, Food products, Leisure & Entertainment. Home Accessories &
Artifacts, Home Furnishings, Fashion Accessories, Ready to wear and so on.

The Bombay Store in Bangalore was set up with an investment of Rs2.10 crore n
October 2000 and is unique from its other branches in Mumbai and Pune for the extensive
store space it occupies. The decision on merchandise depends on several factors they are
like of the target segment, the availability of variety, and the seasonality of the product, the
available shelf’ space. The current trend and the inventory support from the main Office. In
case of Bangalore customers more stress is on breadth of the product rather than the depth.
Bombay stores believe in formulating “genuine” promotional schemes for its customers.
These promotional schemes range from gift vouchers, which can be used in any of the four
outlets in country. The other schemes are small gifts with the purchase and bundling of
product pricing. However a conscious decision is take not to offer price discounts taking
into account the store positioning as premium niche store.
Bombay Stores has also associated itself either in the form of products or donations
with various NGOs likes MOBILE CRECHES in its attempt to contribute to the Indian
society.

Future plans of Bombay Store include setting up The Bombay Store in major
metros of India like Delhi, Hyderabad, Calcutta, Madras, Bangalore & cities which are
strong tourist destinations like Lucknow, Agra & Goa as well as explore opportunities at
the busy airports of India. After achieve a stronghold in India, the company had planned to
venture into international shores by opening the shop either independently or as a
franchisee operation.

In the recent times Madura Garment’s Planet Fashion is proving to be extremely

popular with customers, providing as it does a superior quality retail experience wherein all
leading brands of Madura Garments are available under a single roof and this is being
appropriately being conveyed through its positioning strategies that conveys “One stop
shopping for all premium brands’.

MPBIM 61
Excerpts from interview
Mr. Rajan, Store Person, Louis Philippe Bangalore

What according to you are the most important factor/factors while opening an
apparel retail store?
The most important factor mat needs to be considered while opening an apparel retail store
is the Location issues. The retailer needs to carefully select the location for its tore to have
greater visibility and ease of access to the customers.
Other issues which need to address is the Presentation i.e. how well you can display your
merchandise to your customers. This is very important to create positive first impression of
the apparel store and give quality-shopping experience to its customers. Another important
issue is the brand selection. A well-established brand makes it easy for attracting customers
to the retail store. Therefore the new apparel store needs to carefully select its brands.

What are the other important issues that need to be addressed while managing an
apparel retail store?
The most important issue here is the merchandise selection and the inventory management.
The retailer must always make sure that there is enough product and merchandise
availability in the store.
Various promotional schemes are always important to create awareness and attract
customers to the retail store. The retail store should also use various media vehicle for
pulling the customers to its store.
Another important issue is providing the customers the “Value for Money”
considering the Price sensitive mindset of the Indian customer.

How much is the pricing issue important?

Although pricing plays a major role considering the price sensitive Indian customer, the
customer base it is targeting is not very much price sensitive but at the same time is looking
for Value for Money”. Louis Philippe makes sure that its customers are getting the value
for money for all the purchases they are having with them.

How a small Store like Louis Philippe does takes care of the competition from giant
stores like Shoppers Stop and Life Style?
Louis Philippe tries to differentiate its store from its competitors by giving better customer
service like providing “personal touch” to its customers by having higher degree of
personal involvement that the big retail stores like Shoppers Stop and Life Style usually
lack.

What is the expected future scenario of apparel retailing in India?

The Indian apparel retailing is moving to organized retail stores, some of them are single
branded outlets while some are multi branded outlets. The future holds good for apparel
retail industry but much more depends on giving better services to the customer and the
buzz word i.e. giving them the value for money.

MPBIM 62
 QUESTIONNAIRE

I am a student of M P Birla Institute of Management, pursuing MBA Program. As a

part of the MBA curriculum, I have taken up a research project on Developing marketing
strategy framework for large scale retailing in India. In this connection, I need some
information.
Below is the questionnaire. Kindly give your responses to the questions in the
Questionnaire. I sincerely assure your responses will be kept strictly confidential and shall
only be used for academic purpose. I shall greatly appreciate your cooperation in
completing my research project.

Mr. Inayatullah

1. Segmentation is based on?

Geographic Segmentation [ ]
Demographic Segmentation [ ]
Psychographic Segmentation [ ]
Behavioral Segmentation [ ]

2. Demographic Segmentation?

Age 18-25 [ ]
25-35 [ ]
35 & above [ ]

Income 10k-25k [ ]
25k-35k [ ]
35k & above [ ]

Gender Male [ ]
Female [ ]

3. Psychographic Segmentation?

Lifestyle [ ]
Personality [ ]
Values [ ]
Occasions [ ]
Loyalty status [ ]

MPBIM 63
4. Pattern of target market selection?

Single segment concentration [ ]

Selection specialization [ ]
Product specialization [ ]
Market specialization [ ]
Full market coverage [ ]
5. Different positioning strategy?

Benefit positioning [ ]
Competitor positioning [ ]
Product category positioning [ ]
Quality/price positioning [ ]
User positioning [ ]

6. Pricing?

Cost plus pricing [ ]

Demand based pricing [ ]
Rate of return [ ]
Competitor indexing [ ]

7. Demand oriented pricing?

Discrimination pricing [ ]
Skimming pricing [ ]
Competitive pricing [ ]
Market penetration [ ]

8. Sales promotion tools?

Samples [ ]
Coupons [ ]
Cash refund offer [ ]
Premium/gifts [ ]

9. Types of advertising?

Product advertising [ ]
Markdown event advertising [ ]
Institutional advertising [ ]
Co-operative advertising [ ]

MPBIM 64
10. Marketing mix? How would you rank the following for marketing mix?
Product
Range [ ] Quality [ ] Brand name [ ] Service line [ ]
Price
Level [ ] quality/price [ ] differentiation [ ] discount [ ]
Place
Location [ ] accessibility [ ] distribution channel [ ] distribution coverage [ ]
Promotion
Advertising [ ] personal selling [ ] sales promotion [ ] publicity [
] public relation [ ]
People
Personnel [ ] behavior [ ] degree of involvement [ ]
customer/customer contact [ ]
Physical evidence
Furnishing [ ] color [ ] layout [ ] noise level [ ]
Process
Policies [ ] procedures [ ] mechanization [ ] customer involvement [ ]

11. How would you rate the store on the following aspects?

Excellent Very Good Good Average Poor

Ambience
Store planning & design
Store windows
Flooring
Displays
Space design
Fixture & hardware
Props and decorative
Colors
Lighting

12. Do you agree that different stores that cater to different customers need to be
different in their internal design?

Totally agree [ ]
Somewhat agree [ ]
Neither agrees nor disagrees [ ]
Totally disagree [ ]
Somewhat disagree [ ]

13. Do you agree that the visual merchandising help retailers to communicate retail
brand message so that the customers can make better informed choices?

MPBIM 65
 Totally agree [ ]
Somewhat agree [ ]
Neither agrees nor disagrees [ ]
Totally disagree [ ]
Somewhat disagree [ ]

14. Do you agree that the window display should be changed weekly or fortnightly to
ensure fresh display?

Totally agree [ ]
Somewhat agree [ ]
Neither agrees nor disagrees [ ]
Totally disagree [ ]
Somewhat disagree [ ]

15. Do you agree that the retailers should avoid too many floors because shoppers
would be tired?

Totally agree [ ]
Somewhat agree [ ]
Neither agrees nor disagrees [ ]
Somewhat disagree [ ]
Somewhat disagree [ ]

MPBIM 66
Bibliography
Books and journals

Journal of Retailing
Journal of Advertising and Marketing
Journal of Marketing Science
Journal of the Academy of Marketing Science
Journal of Super Market Business
International Journal of Research in Marketing
Formulating Retail Location Strategy in changing Environment by Abijit Ghosh & Samuel
Craig, in Journal of Marketing
McKinsey Quarterly Report
Retail Magazine by Abijit Ghosh
Market Leadership Strategic

Websites

www.google.com
www.businessworldindia.com
www.advantage-india.com
www.rediff.com
www.businesstoday.com
www.retailyatra.com
www.wikepedia.com

MPBIM 67