2-Retail Formats in India

transcript

Retail Formats In India

Jitendra Kumar Dixit

Types of Retail Formats in India

1.Traditional Kirana Stores (Mom-and-pop Stores )

2.General Stores

3.Convince stores

4.Grocessory Stores

5.Departmental Stores

6. Kiosks

04/07/23 JITENDRA KUMAR DIXIT 2

Store Based

Merchandise Based

Retail Formats

Non-store Based

Ownership Based1.Independent Retailer2.Chain Store3.Franchising4.Leased Departments5.Vertical Marketing System6.Consumer Co-operatives

General Merchandise1.Discount Stores2.Specialty Stores3.Factory Outlet Stores4.Hyper Markets5.Departmental Stores6.Membership Club

Food1.Convenience Store2.Conventional Super Market3.Food Based Super Stores4.Combination Stores

Traditional1.Direct Marketing2.Vending Machines3.Catalogue Marketing4.Tele -Marketing5.TV Home Shopping

Non-traditional

1.Electronic Shopping2.Video Kiosk3.Airport Retailing

Format Type Variety Assortment

Pricing Policy

Service Size(sq.ft.)

Location

Hyper Stores Broad Very Low to Deep

Low 100-300

Specialty Stores

Narrow Deep High High 4-12 Malls

Department Stores

Broad Broad Average to High

Average to high

100-200 Malls

Discount Stores

Average Average Low Low 20-30 Companies outlets & malls

Factory Outlet Narrow Very Deep Low low 50-120 Stand alone stripe centre

Membership Club

Average Limited Low low Vary from club to club

Members store/institutional areas

Ownership Forms

IndependentChainArchies

BigBazar

Lifestyle Store

McDonalds Mobile Store

Pizza Hut

Café Coffee Day

Leased departmentVertical marketing systema) Independent Firms VMS

b) Partially integrated VMS

c) Fully integrated VMS

Franchise(French word means honesty or freedom)

Aptech Domino’s Pizza Koutons Sagar Ratna Vishal Mega Mart McDonalds

Types Of Franchising-

a) Product or a trademark Franchising

b) Business Format Franchising

c) Area Development Franchising System

Competitive State of Independents

Advantages Flexibility in formats,

locations, and strategy Control over investment costs

and personnel functions, strategies

Personal image Consistency and independence Strong entrepreneurial

leadership

Disadvantages Lack of bargaining power Lack of economies of

scale Labor intensive

operations Over-dependence on

owner Limited long-run

planning

Store-based Retail Mix

Convenience store –Modern kirana stores(area ranging from 2000-3000 sq.ft.)

Positive Aspecta. Quick Shopping

b. Less checkout time

c. Self service level

d. Long shopping hours

Negative Aspects-a. Limited product ranges

b. High pricing

c. Small stores

Supermarket/Super- stores –(area ranges from 20,000 to 50,000 sq.ft)

Features-Location : Near/Edge of town

Size : Large

Product Range : Vast range, deep & broad

Pricing policy: Low pricing

Selling theme: Every Day Low Pricing(ELDP)

Target Market: Mass

Atmosphere: Busy & well organized

Service Level: Self services

Combination store/Super-centers- A super centers is a combination of super market and a discount retail store. Super centers usually have a average size of about 1,50,000 sq.ft and allot 30-40% of their retail space to grocery items and remaining to discounted general merchandise.

Discount stores-a) Limited line discount storesb) Full line discount storesc) Off-price stores

Specialty storeFactory outletFlea market

Hyper Market-Selling area: >50,000 sq.ft

Cash counters: 20-60

Number of items sold: thousand to lakhs

Number of employees: Hundred to thousands

Covered area: up to 60%

Pricing policy: Special (discounted)

Discount:4-405

Central theme: Is se sasta kahi nahi

Service level: Self services

Payment mode: Cash/credit/debit cards

Owner ship structure: Corporate chain

Competitive State of Store based Retail Mix

Advantages

Bargaining power Cost efficiencies Efficiency from

computerization, sharing warehouse and other functions

Defined management philosophy

Considerable efforts in long-run planning

Disadvantages

Limited flexibility Higher investment costs Complex managerial

control

Nonstore-based Retail Mix (Non-traditional Retailing)

Direct Response Marketinga. Catalogue/ Mail order Retailing

b. Television Shopping

c. Electronic Shopping/Electronic Retailing

Direct sellingWorld Wide WebVending machine

Video Kioska. Digital Menu board

b. Digital Order Station

c. Financial services Kiosk

d. Internet Print Station

e. Internet Kiosk

f. Movie tickets

g. POS-related

h. Vending Kiosk

Few Indian Retailers Next retail India Ltd RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s

Super, Daily & Fresh Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion

Station, Brand Factory, E-Zone etc. The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark,

Titan Industries with World of Titans showrooms, Tanishq outlets, Chroma. Lifestyle International-Lifestyle, Home Centre, Max, Fun City and

International Franchise brand stores. Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom

discount chain. Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out Reliance Retail-Formats: Reliance Fresh Reliance ADAG Retail-Format: Reliance World Aditya Birla Group - more Outlets 04/07/23 JITENDRA KUMAR DIXIT 15

Convenience Store Strategy Mix

Location:Neighborhood

Merchandise:Medium width and low depth of assortment; average quality

Prices:Average to

Above average

Atmosphere andServices:Average

Promotion:Moderate

Conventional Supermarket Strategy Mix

Location:Neighborhood

Merchandise:Extensive width

and depth of assortment; average quality; manufacturer,

private, and generic brands

Prices:Competitive

Promotion:Heavy use of

newspapers, flyers, and coupons

Combination Store Strategy Mix

Location:Community shopping center

or isolated site

Merchandise:Full assortment plus health

and beauty aids and general merchandise

Prices:Competitive

Promotion:Heavy use of

newspapers, flyers

Specialty Store Strategy Mix

Location:Business district or

shopping center

Merchandise:Very narrow width and

extensive depth of assortment; average to

good quality

Prices:Competitive to Above average

Atmosphere andServices:

Average to excellent

Promotion:Heavy use of displaysExtensive sales force

Traditional Department Store Strategy Mix

Location:Business district, shopping

center or isolated store

Merchandise:Extensive width and

depth of assortment; average to

good quality

Prices:Average to

Above average

Atmosphere andServices:

Good to excellent

Promotion:Heavy ad and catalog

use; direct mail; personal selling

Full-line Discount Store Strategy Mix

depth of assortment; average to

good quality

Prices:Competitive

Atmosphere/ Services:Slightly below

average to average

Promotion:Heavy on newspapers;price-oriented; selling

Variety Store Strategy Mix

Merchandise:Good width and some depth of

assortment; below-average

to average quality

Prices:Average

Atmosphere/ Services:Below average

Promotion:Use of newspapers

Off-Price Chain Strategy Mix

Merchandise:Moderate width and

poor depth of assortment;

average to good quality;low continuity

Prices:Low

Atmosphere/ Services:Below average

Promotion:Use of newspapers;

brands not advertised;limited selling

Flea Market Strategy Mix

Location:Isolated store

poor depth of assortment;

low continuity; variable quality

Prices:Very Low

Atmosphere/ Services:Very low

Promotion:Limited

Store-Based Strategy Mix

A strategy mix is the firm’s particular combination of:store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods

The Wheel of Retailing

Retail Life Cycle

Retail institutions pass through identifiable life stagesintroductiongrowthmaturitydecline

Identifying and Understanding Consumers

What Makes Retail Shoppers Tick

Demographicsconsumer data that is objective, quantifiable, easily identifiable,

measurable

Lifestylesways in which consumers and families live and spend

time and spend money

Understanding Consumer Lifestyles: Social Factors

Lifestyle

CultureReference

Groups

Social Class

FamilyLife

Time Utilization

HouseholdLife

Understanding Consumer Lifestyles: Psychological Factors

Lifestyle

Personality Attitudes

PerceivedRisk

PurchaseImportance

ClassConsciousness

The Consumer Decision Process

Stimulus Problem Awareness

Information Search

Evaluation of Alternatives

Post-PurchasePurchase

Demographics Life Style

A-The Decision Process

B-Factors affecting the process

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Solid arrow connect all the elements in the decision process & show the impact of demographics & life-style up on the process.

The Impact of Perceived Risk on Consumers

Marketing Strategy

Types of Impulse Shopping

Completely unplannedPartially unplannedUnplanned substitution

Reasons for Leaving an Apparel Store Without Buying

Cannot find an appealing styleCannot find the right sizeNothing fitsNo sales help is availableCannot get in and out of the store easilyPrices are too highIn-store experience is stressfulCannot find a good value

Institutional Change in Retailing

Wheel of Retailing Accordian Theory Dialectic Process Natural Selection Retail Life Cycle

Wheel of Retailing

Retail Accordian Theory

Broad-based outlets with wide assortment ↓

More specialized with narrow assortment ↓

Back to wide assortment

Dialectic Process Retailers mutually adapt in the face of competition from

“opposites” When challenged by a competitor with a differential advantage, the established retailer will adopt strategies and tactics in the direction of that advantage (making the innovator less attractive)

Department Stores•High Margin•Low turnover•High Price•Full Service•Downturn location

Discount Stores•Low Margin•High Turnover•Low Price•Low rent Location•Self Service

Discount Department Store•Average Margin•Average Turn-over•Moderate Price•Limited Services•Sub urban locations

Thesis

Anti-Thesis

Synthesis

Dialectic Process

Natural Selection and Adaptive Behavior-

Environmental need for a certain kind of retailing institution → it will evolve

Need ceases to exist → the institution will tend to disappear

Institutions that most effectively adapt toenvironmental changes are most likely to survive

Retail Life Cycle

Introduction Growth/ Accelerated Development Maturity Remodel stores Lower costs MIS – technology Every day low prices Reevaluate mgt. practices and service Figure out how they can deliver value Decline

2-Retail Formats in India

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