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Prepared by : 1.Anjali.Chourasia.(308) 2.Kavish.Mishra.(323) 3.Ritu.Sharma.(343)
Introduction to Retail: what is Retail, The functions of retail, retailing in India. The evolution of retail in India, retail Change in India
The word retail has its origin in French word retaillier and
means “to cut a piece’’ or “to break bulk’.
“Retailing is the sale of goods and services to the
ultimate consumer for personal, family or household use.”
According to Kotler: “Retailing includes all the
activities involved in selling goods or services to the final consumers for personal, non business use”
selling different or similar merchandise 4 . Retailing is responsible for matching final consumer demand with supplies of different marketers. The Indian retail is dotted by traditionally market place called bazaars or haats comprises of numerous small and large shops. Retailing is high intensity competition industry. The reasons for its popularity lie in its ability to provide easier access to variety of products. freedom of choice and many services to consumers. Retailing may be understood as the final step in the distribution of merchandise for consumption by the end consumers.
5 2. 1. With the passage of time. Their operations and facilities increase and become more expensive.“’Wheel of Retailing” A better known theory of retailing “wheel of retailing” proposed by Maclcomb McNair says. and status. New retailers often enter the market place with low prices. margins. The low prices are usually the result of some innovative cost-cutting procedures and soon attract competitors. . these businesses strive to broaden their customer base and increase sales.
They may move to better up market locations. supermarkets. low status emerge and these competitors too follow the same evolutionary process. start carrying higher quality products or add services and ultimately emerge as a high cost price service retailer. 5. and mass merchandise went through this cycles. 6 .3. By this time newer competitors as low price. The wheel keeps on turning and department stories. 4. low margin.
From an economic standpoint.Functions of a retaillier From the customer point of view. This comes four different perspectives 7 . at the required place and time. the retailer serves him by providing the goods that he needs in the required assortment. the role of a retailer is to provide real added value or utility to the customer.
1. 8 . The retailer does not supply raw material. preferable shopping hours. Form: First is utility regarding the form of a product that is acceptable to the customer. The retailer performs the function of sorting the goods and providing us with an assortment of product in various categories. Time: He cerates Time utility by keeping the store open when the consumers prefer to shop. 2. but rather offers finished goods and services in a form that the customers want.
Retailers are able to balance the demands of both sides. Final consumers.5. buying them in sufficiently large quantities and selling them to consumers in small units 6. Apart from these functions retailer also performs like: 5. • by collecting an assortment of goods from different sources. he creates place utility. 9 . Ownership: Finally. in contrast prefer a large variety of goods and services to choose from and usually buy them in small units. ownership utility is created. Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Place: By being available at a convenient location. when the product is sold.
It helps to keep prices stable and enables the manufacture to regulate production.5. storage. 6. 7. advertising. manufacturer and wholesalers typically ship large cartons of the products.payment of merchandise. Promotional support: small manufacturers can use retailers to provide assistance with transport. which are then tailored by the retailers into smaller quantities to meet individual consumption needs Holding stock: Retailers maintain an inventory that allows for instant availability of the product to the consumers. 10 . Breaking Bulk: to reduce transportation costs. and pre.
Major type of retail stores There is no universally accepted method of classifying retailer. Various schemes have been proposed to categories retailers based on Number of outlets Margin vs. Because of overlap of classification criteria. 11 . some stores may qualify as under two different categories. turnover Location Size.
household maintenance items. laundry requirement. apna bazaar shakari bhandar etc. with considerable depth. General merchandise retailer: general merchandise retailer carry a variety of product lines. discount stores and department stores. such as complete line of food products . o 12 . Some major types of these stores include supermarkets and hypermarkets .1. Super market: A supermarket is a large self service retail store that carries a wide variety of consumer products under one roof . In India cooperative have managed some supermarkets for quite sometime like super bazaar in Delhi.
Discount store: these stores are self service. In India almost all retail stores offer discounts. or store brand toi build image Self service stores to minimize operational costs Preferred store location are low rent areas. earn lower margins and push for high sales turnover. Like best known discount store is Wal-Mart. subhiksha o 13 . national. The characteristics of true discount stores include Selling products at discounted price Carry standard international . standard general merchandise retailers regularly offering brand name and private brand items at low price.
offering a broad verity and depth of product lines. furnishing and other household goods. pantaloons. shoppers’ stop. Globus. department store only for kids is Kids Kemp.o Department store: a department store is larger retail store organized into several departments. Like Pantaloons. 14 . appliances. lifestyles. The product mix may include food products. clothing. Fashion related department stores in India are Ebony.
Raymond's. Van Heusen.2. sporting goods. Garuda mall (Bangalore) Sahara plaza Gurgaon Spenser Plaza Chennai 15 . music systems. Ansal plaza (Delhi). There are 96 operational malls in India and expected to grow 158 by this current year. 3. Titan watches. apparel. Like. computers. Tanishq. The emphasis is on a limited number of complimentary products and high level of customer service Specialty store often sell shopping goods such as Jewelry. Shopping Malls: shopping malls typically deal with several bases and product categories and provide a large variety of merchandise abs service. Specialty Stores: specialty stores carry a narrow product mix with depth of assortment within the line.
Food world. Retail chains: a retail chain operates multiple retail outlets under common ownership in different cities and towns. To some extent the purchasing function and decision making are coordinated or centralized. McDonald's retail petrol outlets. Etc.4. 16 . Like Westside. Globus.
The Marketing – Retail Equation Manufacturer Manufacturer Manufacturer Wholesaler Retailer Retailer Feedback Consumer Consumer Consumer 17 .
Retailing in India. among the top 30 emerging markets in the world. Retail is the new buzzword in India. retail in India has evolved to support the unique needs of country. given its size and complexity 18 . It is believed that India has the potential to deliver the fastest growth over the next 50 years. While barter would be considered to be oldest form of retail trade. The global Retail development Index has ranked India first. since independence .
recreation facilities and large car parking space – was inaugurated as lately as in 1999 in Mumbai. This is 2 % of the total estimated retail trade. Indian Retail trade increased from Rs. Contributes about 10 – 11 % of the GDP The estimated size of the organized retail industry in India is Rs. 16. (this mall is called "Crossroads").000 crores. 2200 billion in 2000 to Rs 3300 billion by the year 2005 India's first true shopping mall – complete with food courts. 19 . Second largest sector after Agriculture.
The PDS (Public Distribution System) would easily as the single largest retail chain existing in the country. the evolution of the PDS of Grains in India has its origin in the “rationing system” introduced by the British during world war II 20 . They still continue to be present in most parts of the country and form an essential part of life and trade in Various areas.The Evolution of Retail in India Retail in India has evolved to support the unique needs of our country. given its size and complexity Haats. Mandis and Melas have always been a part of the Indian landscape.
There was rapid increase in the ration shops ( being increasingly called the Fair Price Shop or FPSs) The Canteen Stores Department and the Post Offices in India are also among the largest network of outlets in the country reaching population across the country. the system was abolished post war but however attaining independence India was forced to reintroduce it in 1950.The system was started in 1939 in Bombay and subsequently extended to other cities and towns. 21 .
000 Post offices: 160.000 KVIC: 7.400 (source business world marketing White book 2005) 22 . India's Largest retail Chains: 1. 4. 2.000 CSD Stores:3. The Khadi & Village industries (KVIC) was also set up post independence. The cooperative movement was again championed by the government. 3. PDS: 463.
In the past decade. One of the pioneers in this field was Raymond’s which set up stores to retail fabric.s. The first attempts at organized retailing were noticed in the textiles sector. the Indian marketplace has transformed dramatically. However from the 1950.s to the 80. investment in various industries was limited due to low purchasing power in the hands of the consumer and the government’s policies favoring the small scale sector. 23 .
which set up Vimal showrooms and Garden Silk Mills. 24 .Raymond’s distribution network today comprises 20.000 retailers and over 256 exclusive showrooms in over 120 cities of the country Other textile manufacturing who set up their own retail chains wee Reliance. which set up Garden Vareli showrooms.
Emerging Established Formats formats Exclusive retail outlets Kirana shops Hypermarket Convenience/ Internal retail department stores Malls / Specialty Malls PDS/ Multiplexes fair price shops Fast food outlets Pan/ Beedi shops Service galleries 25 .The Evolution of retail in India Traditional Formats Itinerant Salesman Haats Melas Mandis etc.
Same BSNL also sold its 50% connection in small towns . Changing Income Profiles: Steady economic growth fuelled 2. Diminishing difference between Rural and urban India: Rural India accounts for over 75% of India population and this in itself offers a tremendous opportunity for generating volume driven growth. Tax benefit. The average middle class family's disposable income rose by more than 20% between 1999-2003. the increase in disposable income in India. In year 2002-03 LIC sold 50% of its policies in rural India.Drivers of Retail change in India major drivers : 1. 26 .
taking advantages of employment opportunity in the booming service sector these young Indians are redefining service and consumption patterns Changes in Consumption patterns: 27 .3. o 4. Occupational changes and expansion of media have caused a significant change in the way the consumer lives and spends his money. The changes in income brought about changes in the aspirations and the spending patterns of the consumers. the buying basket of the consumer changed The emergence of a young Earning India : Nearly 70% of the Indian population is below the age of 34.
Books & Music: Other emerging sectors 5. Food & food Services: 3. Footwear retail 7. textiles and fashion Accessories: 2. 28 . Jewellery retail 6.Prominent sector in Indian retail Clothing. Consumer Durables: 4. Time Wear Retail 8. Fuel Retail/ petro retail 1.
Lack of Adequate infrastructure. The high costs of real estate. Multiple and complex taxation system.Challenges to retail Development in India Retail not being recognized as an industry in India. 29 .
Durables Books & Music 16.800 4.650 450 37.787 1.216 7.Size of the organized retail market (Rs Cr) 2001-02 2007 CAGR (%) (compound Annual growth rate) TOTAL Food Clothing Cons.473 10.426 18 33 16 18 26 30 .950 1.000 1.423 3.
Share of organized & unorganized retail with comparison source: Ernst &Young. 2006 PAKISTAN 1 INDIA 3 CHINA INDONESIA BRAZIL THAILAND MALASIA TAIWAN USA 0% 20% 99 97 20 30 36 40 55 81 85 40% 80 70 64 60 45 19 15 60% 80% 100% ORGANISED UNORGANISED 31 . The Great Indian Retail Story.
3 India China US 180-394 360 3800 Organized Sector share (%) 2-3 20 80 32 .6-16 Shops (million) 12 2. Trade ($ bn) Retail Trade. US and China Employment (%) 7 12 12.7 15.India.
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