Pgdbm Report

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PROJECT REPORT

ON

GROWTH OF RETAIL SECTOR IN INDIA AND

COSUMER PERCEPTION AN INSIGHT

Project Report Submitted Towards Partial Fulfillment Of

Post Graduate Diploma in business Management

Submitted To:- Submitted by:-

Ms.Sonali Saxena Shubhankar Roy

Lecturer,NSB 4 SEM. P.G.D.B.M

Roll no.

GJU08AA234

BATCH-(2008-2010)

N.S.B SCHOOL OF BUSINESS

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CERTIFICATE

This is to certify that Mr.Shubhankar Roy Enrolment No. GJU08AA234 has proceeded

under by supervision his Research project Report on GOWTH OF INDIAN RETAIL

SECTOR & CONSUMER PERCEPTION AN INSIGHT in the Specialization area

Marketing.

The work embodied in this report is original and is of the Standard expected of an

P.G.D.B.M Student and has been submitted in part or full to this or any other university

for the award of any degree or diploma. He has completed all requirements of guidelines

for research Project Report and the work is fit for evaluation.

Signature Faculty Guide

Place:New Delhi (SONALI SAXENA)

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DECLARATION

I hereby declare that the project report entitled GOWTH OF INDIAN RETAIL

SECTOR & CONSUMER PERCEPTION AN INSIGHT under the guidance of

Ms.SONALI SAXENA (lecturer of Marketing) submitted in partial fulfillment of the

requirement of the degree of POST GARDUATE DIPLOMA IN BUSINESS

MANAGEMENT to NSB original work and the same has not been submitted for the

award of any other degree/diploma/fellowship or similar titles or prizes.

SHUBHANKAR ROY

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ACKNOWLEDGEMENT

For any task to be successful, hard work & dedication is must, if it is backed up by

blessing along with unhindered support & guidance. It will reach the ultimate goal

without loosing task.

The training will be incomplete without acknowledge giving my sincere, gratitude to all

persons who have helped me in the preparation of this dissertation.

We are too glad to give our special thanks to our project guide for providing us an

opportunity to carryout project on GOWTH OF INDIAN RETAIL SECTOR &

CONSUMER PERCEPTION AN INSIGHT. and also for their help and tips

whenever needed. Without his co-operation it was impossible to reach up to this stage.

I expresss my gratefulness to my faculty MS. SONALI SAXENA (Faculty). I am highly

thankful to them for their support.

I bestow my unbounced gratitude and deepest sense of respect and love to my venerated

father for the tremendous help in strengthening my will and boosting my moral, which is

beyond the level of acknowledgement.

SHUBHANKAR ROY

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TABLE OF CONTENT

1. INTRODUCTION 6

2. TECHNOLOGY USED IN RETAIL 10

3. PROMOTIONAL MEASURES IN RETAIL 17

4. BRANDED FMCG 24

5. CRITICAL REVIEW OF LITERATURE 31

6. CHALLENGES BEFORE RETAIL SECTOR IN INDIA 44

7. OBJECTIVES 48

8. RESEARCH METHODOLOGY 49

9. FINDING & ANALYSIS 55

10. RECOMMENDATION 60

11. CONCLUSION 67

13. BIBLIOGRAPHY 70

14 REFERENCES 71

15. APPENDIX 72

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INTRODUCTION

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Traditionally, the retailing sector in India has been characterized by the presence of a

large number of small, unorganized retailers, popularly referred to as mom-and-pop

shops or kirana stores. The unorganized sector still dominates the retail sector, with the

organised sector accounting for only 3%. Retailing is one of the few sectors where

foreign direct investment (FDI) is not allowed. But India is emerging as an attractive

destination for FDI in retailing, evoking considerable protest from trading associations

and other stakeholders. The government announced a partial opening of the sector by

announcing 51% FDI in single-brand retailing last week. Closer Look at some of the

issues related to FDI in retailing.

Was the retailing sector never opened to FDI?

Prior to 1997, there were no regulations restricting the entry of foreign players. Nanz and

Spencers are two major companies who were granted permission to sell products directly

to customers. In 1997, it was decided that FDI would not be allowed for mere trading as

it would lead to the outflow of foreign exchange, drive out the unorganized retailers from

business and increase unemployment.

Do other countries allow FDI in retailing?

India is one of the few countries where FDI is not allowed in retailing. Almost all major

developed and developing countries have allowed it. Some have imposed restrictions

such as minimum capital requirements, sourcing conditions, investment in supply chain,

etc, while others have opened the sector in a phased manner to allow domestic retailers to

adjust to the changes.

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Will opening the sector result in loss of jobs?

Its an aspect thats been greatly debated. Theres a view that modern trade will unleash

opportunities such as non-agricultural employment and better quality of living for the

existing agricultural society. Others say that by reducing the number of intermediaries,

middlemen etc, organised retailing will lead to some job displacement. But this, they

insist, will be compensated for by creation of jobs in allied sectors such as the food

processing industries. Currently, the retail industry is the second largest employer, after

agriculture, and it is estimated that the sector has the potential to create eight million jobs.

Will FDI in retail adversely impact kirana stores?

At present, mom-and-pop stores cater to 97% of the total market. They have unique

advantages, like indigenous processes, skills in retaining customers, proximity,

convenience and services. However, global retailers investing in new markets have not

hampered local retailers. In China, Carrefour, the largest foreign retailer, has 68

hypermarkets and Wal-Mart 47. Despite this, domestic competitors hold more than 90%

of the market.

In India, of the 12 million retail outlets, only about 3.5 million are in urban areas, where

organised retail is likely to be restricted to. So only about 3% (about one lakh) of the

outlets in the midmarket range would be potentially affected.

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Has FDI restriction acted as an entry barrier?

Not really. Many foreign players have entered the Indian market through different routes.

But the restriction has resulted in an uncertain regulatory environment and prevented

business expansion of both domestic organised retailers and foreign retailers.

What are the other routes of entry?

Foreign players can enter the Indian trading sector through routes like manufacturing and

local sourcing; franchising; test- marketing; wholesale cash-and-carry; distribution and

through special permission. Franchising is the most preferred mode through which

foreign players have entered the Indian market. Fast-food chains like Pizza Hut,

McDonalds and brands such as Lacoste, Mango, Nike etc, have entered the Indian

market through this route.

Similarly, companies such as Swarovski and Hugo Boss have set up distribution offices

in India and these offices supply products, which the company imports to local Indian

retailers. In the case of test-marketing, FIPB allows foreign companies to test-market

products for a two-year period. Direct selling companies like Amway and Oriflame

entered the Indian market through this route.

What is single-brand retailing?

While the finer guidelines as to what constitutes single-brand retailing are yet to come,

its likely that under this route, retailers would deal with a single brand catering to a

select clientele. Though such a classification does not exist anywhere in the world, in

India such a decision was taken as a first step towards opening up the sector and also to

probably allay the apprehensions of those who have been opposing FDI in reta

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TECHNOLOGY USED IN RETAIL

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Over the years as the consumer demand increased and the retailers geared up to meet this

increase, technology evolved rapidly to support this growth. The hardware and software

tools that have now become almost essential for retailing can be into 3 broad categories.

Customer Interfacing Systems

Bar Coding and Scanners

Point of sale systems use scanners and bar coding to identify an item, use pre-

stored data to calculate the cost and generate the total bill for a client. Tunnel

Scanning is a new concept where the consumer pushes the full shopping cart

through an electronic gate to the point of sale. In a matter of seconds, the items in

the cart are hit with laser beams and scanned. All that the consumer has to do is to

pay for the goods.

Payment

Payment through credit cards has become quite widespread and this enables a fast

and easy payment process. Electronic cheque conversion, a recent development in

this area, processes a cheque electronically by transmitting transaction

information to the retailer and consumer's bank. Rather than manually process a

cheque, the retailer voids it and hands it back to the consumer along with a

receipt, having digitally captured and stored the image of the cheque, which

makes the process very fast.

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Internet

Internet is also rapidly evolving as a customer interface, removing the need of a

consumer physically visiting the store.

Operation Support Systems

ERP System

Various ERP vendors have developed retail-specific systems which help in

integrating all the functions from warehousing to distribution, front and back

office store systems and merchandising. An integrated supply chain helps the

retailer in maintaining his stocks, getting his supplies on time, preventing stock-

outs and thus reducing his costs, while servicing the customer better.

CRM Systems

The rise of loyalty programs, mail order and the Internet has provided retailers

with real access to consumer data. Data warehousing & mining technologies

offers retailers the tools they need to make sense of their consumer data and apply

it to business. This, along with the various available CRM (Customer

Relationship Management) Systems, allows the retailers to study the purchase

behavior of consumers in detail and grow the value of individual consumers to

their businesses.

Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way

from raw material suppliers right through to the retail shelf. These APS packages

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complement existing (but often limited) ERP packages. They enable consolidation

of activities such as long term budgeting, monthly forecasting, weekly factory

scheduling and daily distribution scheduling into one overall planning process

using a single set of data.

Leading manufactures, distributors and retailers and considering APS packages

such as those from i2, Manugistics, Bann, MerciaLincs and Stirling-Douglas.

Strategic Decision Support Systems

Store Site Location

Demographics and buying patterns of residents of an area can be used to compare

various possible sites for opening new stores. Today, software packages are

helping retailers not only in their locational decisions but in decisions regarding

store sizing and floor-spaces as well.

Visual Merchandising

The decision on how to place & stack items in a store is no more taken on the gut

feel of the store manager. A larger number of visual merchandising tools are

available to him to evaluate the impact of his stacking options. The SPACEMAN

Store Suit from AC Neilsen and ModaCAD are example of products helping in

modeling a retail store design.

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Investment Potential

Despite the huge presence of the unorganized sector, the Indian retail industry is

attractive for international players. It is favoured over China's among the developing

countries due to a slew of laws in the communist country at various levels. Though the

market hasn't seen big time players of the developed nations yet, the fact that Indian per

capita retail space is among the lowest, is expected to provoke people to look at retail as a

potential business arena. The growth of integrated shopping malls, retail chains and

multi-brand outlets is evidence of consumer behaviour being favorable to the growing

organized segment of the business. Space, ambience and convenience are beginning to

play an important role in drawing customers.

With the Indian per capita income on the rise and the distribution of consumption

expenditure expected to remain fairly stable, the current segments of food and apparel is

likely to remain attractive. Up gradation of traditional grocery stores to present quality

food products in ways and methods adopted in North America and Europe can help in

communicating value and attracting customers.

Though the Indian retail industry is still a "protected industry" from the stand

point of foreign direct investment (FDI), the government is expected to provide some

flexibility on this front. Though FDI can help generate employment in this sector, it is

likely to pose stiff competition for existing small businesses. Unlike the country's FDI

investment objective of technology transfer and export promotion of the 1980s, today's

infusion of capital - specifically in the retail segment -- can bring to the table issues on

size of investment, actual inflows and domestic company take-overs. Given the

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constraints, FDI should be viewed as a developmental resource that can help in

restructuring the industry. It should be aimed at filling up the resource and technology

gaps in the retail segment.

While the differing tax and licensing systems across states could raise some issues

when organized retailers expand nationally, this could well protect the interests of

regional retailers. But the key to success is to build a fairly extensive network of stores

across the country to enable e-commerce transactions. This in the emerging scenario

would help retailers to target a wider audience and maximize returns. Strength in physical

distribution will remain the backbone of any retail arrangement; however, ongoing

investment in bandwidth, development of internet facilities, and increasing awareness of

IT among the literate and educated population is expected to create a large base of

shoppers.

The minimal contribution of the organized sector is a profitable direction for potential

investors. The movement of more and more people up the income brackets also indicates

a good market potential. Labour cost differential, the removal of investment restrictions

and the rationalization of the tax structure can bring about best practices and the latest

offerings to the Indian retail industry. Growth opportunities for the organized sector can

be propelled through land reforms as well as uniformity in tax structure, which reduces

the cost advantage of the unorganized sector. These measures, if rightly implemented,

would provide a competitive environment for the Indian retail industry. Some of the facts

about investment

Potential for Investment: The total estimated Investment Opportunity in the retail

sector is around US$ 5-6 Billion in the Next five years.

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Location: with modern retail formats having made their foray into the top cities

namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai,

Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over

the next 5 years.

Sectors with High Growth Potential: Certain segments that promise a high

growth are

Food and Grocery (91 per cent)

Clothing (55 per cent)

Furniture and Fixtures (27 per cent)

Pharmacy (27 per cent)

Durables, Footwear & Leather, Watch & Jewellery (18 per cent).

Fastest Growing Formats: Some of the formats that offer good growth potential

are:

Speciality and Super Market (45 per cent)

Hyper Market (36 per cent)

Discount stores (27 per cent)

Department Stores (18 per cent)

Convenience Stores and E-R Retailing (9 per cent)

Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain

and Logistics.

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Cheap Consumer Credit

PROMOTIONAL MEASURES IN

RETAIL SECTOR AND ITS EFFECTS

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As competition heats up in Indian retail, major retailers are attracting more customers

through quirky "event packages"/attractions or price promotions. Customers are

encouraged to celebrate a special occasion with a celebrity as well as to spend money in

the stores. It comprises specifications for a marketing operation that is limited in time and

that is meant to draw increased attention to the enterprise (the retail outlet or the retail

chain) in its sales market or the influencing trading area. As a rule, it has a sales-

promoting effect.

Setting objectives

the launch of promotional activity for a store requires creative handling of one of the

above ways of handling retail promotions. The most important factor to be considered for

retail promotion is the objective for promotion. If Food World advertises that it has got

the IR 8/20 rice at one of the lowest prices in the town, the objective is to use the

destination category of the retail grocery store to attract greater store traffic. Promotions

that increase footfalls and therefore improve store traffic may result in a competing

stores loyal customers to visit and even try non-promoted merchandise. At the same time

it would increase store inter-visit time for the regular loyal store customers. Retail

promotion objectives can be store specific or product specific but the intended result is

something that has to be explicitly borne in mind while formulating a promotion plan.

There is a need to review the same after the promotion.

Shopper reaction

The consumer perspective of retail promotion is also crucial in formulating promotions.

Purchase event feedback is one of the crucial elements of the understanding of retail

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promotion. This concept means monitoring if the promotion enhances or detracts

consumers from future brand purchase probabilities compared to non-promotion. In order

to understand this concept, one should look at a key theory in psychology as applied to

consumer behavior, the self-perception theory. Self-perception theory as attributed to the

deal prone consumer, results in questioning by the consumer - 'Did I buy the product

because of brand preference/ promotion?' The answer to this question by a majority of the

consumers of your store determines the nature of promotion to be undertaken by the

store.

If for example Shoppers Stop has through its customer relationship management

software a clear idea of the nature of customers especially on deal prone-ness, it can

decide what to emphasize in its promotion. The decision to be taken is whether it is

the store/brand or the promotion/deal that would act as the primary reinforcement.

The nature of promotion needs to adapt according to the understanding of consumer

behaviour. In this effort, we would also be able to clearly track brand loyal as well as

store loyal consumers behavioral effects of the consumer, when a promotion is on are

reflected in the nature of buying and therefore implications for the retail outlet.

Category purchase timing, brand choice, and purchase quantity are the three major

dimensions that one has to track in order to see the effect of sales promotion.

Category purchase timing refers to the decision by the consumer to alter the regular

purchase cycle for the product. If Atta is bought once in a fortnight, does she buy Atta

earlier because of promotion? Brand choice refers to the decision on being brand

loyal inspite of a promotion on a comparable competitive substitute brand. Would a

consumer change from Captain Cook to Tata salt because of promotion? Purchase

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quantity is a very important variable to monitor as it is directly related to the nature of

consumption. This common effect of a promotion on a product or a brand is reflected

in stockpiling. For example, buying a five-liter edible oil jar cheaper and storing the

same for longer future use.

Lets take the example of a specialty coffee outlet selling different brands of coffee. If

we decompose the effect of sales promotion we may look, at lets say, contribution of

the three dimensions in the following manner - brand switching (84 percent),

purchase acceleration (14 percent), and stockpiling (2 percent). This decomposition

may be used to compare the effectiveness of alternative promotional offerings and to

determine the most suitable and effective promotion. Putting together the facts that

sales promotions generate dramatic immediate sales increases and that brand

switching accounts for a large percentage of this increase, we can conclude that sales

promotions are strongly associated with brand switching. If promotion increases a

brand's sales by 100 units, how many units come from other brands and how many

units are due to category expansion, i.e. shifts in the timing and/or amounts of

purchase?

If three-fourths of the sales effect were due to other brands, retailers might conclude

that promotional activities provide little benefit. That is, unless promoted items

provide higher margins, the vast majority of the effect would simply be a reallocation

of expenditures by households across items within a category. Manufacturers/national

brand marketers might conclude that most of the effect increases competition between

brands and would not support promotions. Therefore, stockpiling and/or consumption

increases appear to be the dominant sources to look for sales effects due to temporary

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price cuts. Cannibalization of future sales through stockpiling is an important

consideration in the assessment of the effectiveness of sales promotions. In some

product categories like beverages (E.g. soft drinks) a substantial component of the

primary demand increase may represent enhanced consumption. One may drink more

of Coke/Pepsi because of a price cut. But in other categories (like house cleaning

liquids), households are unlikely to accelerate consumption. In these cases the effect

of sales promotion may just result in changed inventory management by households.

Price/brand promotion

It has been proved by extensive research in the West that price promotions are

detrimental whereas non-price promotions are neutral/positive. Price promotion of

national brands erodes the loyalty of the national brands & therefore helps the private

labels/ store labels to gain market share. While looking at it from store's viewpoint,

the chain of causation could be - Price promotion would lead to loss of national brand

loyalty, which would trigger greater trade allowances and therefore increase in store

profit. However, the question of store image and loyalty are important. Discount

stores like Margin Free shop could afford to continuously involve in price promotion

whereas others cannot. Reaction from competitors is another aspect that should be

guarded against.

The conflict of promotion of store brands compared to the national brands would

become a matter of concern in the future in India. Many retailers see the benefits of

developing store loyalty as it can easily extend to store brands. There are very few

store brands in India competing with large brands. However, for store brands, studies

in the US have found that non-price promotions have a more favorable long term

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effect on store profit compared to price promotion.

IT IN Promotions

Several IT companies in the west has comprehensive solutions that increase

productivity and sales from promotions. They allow supply chain participants to

communicate more effectively throughout the various stages in the design,

implementation and evaluation of retail promotions. This has been triggered by

the significance of retail promotion. It is estimated that 60% of all retail activities

are based around promotions and up to 40% of these promotions fail to meet

expectations. It is estimated that the industry is losing Euro80 billion a year in

retail promotions alone in Europe. Inefficiencies in available management

information, monitoring and auditing of promotions result in:

time losses i.e. communication delays between suppliers and retailers

communication errors in planning and execution among the various departments

real costs at the end of the promotion i.e. the lack of clear cost identification

lack of evaluation & management information

A 'live' access through an internet enabled retail promotion software and

communication between all those involved in the promotion cycle can greatly

enhance efficiency of the promotion while dealing with a large number of formats

& stores. In a large retail chain, a number of individuals like the brand/category

manager, promotions specialist and the individual store manager are involved. A

good understanding of the systems and an efficient IT backbone would eliminate

the inefficiencies involved in the planning, implementation, and evaluation of

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promotions. It can reduce the number of communications between the brand

sponsor, retailer, and supplier involved in any single promotion - traditionally by

telephone, fax, or e-mail - by 30 percent. In addition, it can dramatically reduce

current industry booking costs by as much as 60 percent through efficient

document generation and promotion auditing.

Thus, retail promotion in practice is akin to sales promotion by marketers.

However, by the very nature of business, retailers need to create excitement

around outlets in order sustain. Therefore, retail promotion has both short term as

well as long term implications. A good mix of promotions to serve both the

objectives and a continuous effort to test promotions through control stores &

monitor store profitability will help in sustaining any retail organization. Sales,

traffic and profit need to be compared as measures with base line sales/traffic in

control stores in order to study the effects on brand share, chain share, market

share.

These would be measures that would provide the feedback on the right

promotions to continue with in the future.

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THE BRANDED FMCG: BOTH

CONSUMERS AND RETAILERS

CHOICE

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One of the first tasks that any retailer does before starting shop is deciding on the

product mix at the store. This is not a one-time process and is refined over a period of

time based on the point-of-sales data, market research and by observing trends in

consumer behavior. To make this task simpler for the food & grocery retailers, on the

top 100 FMCG brands in the country and published. The survey relies on data

provided by AC Nielsen Retail Audit for the twelve months ended August 2004

except for cigarettes and carbonated soft drinks, where the figures based on market

intelligence

The popular cigarette brands i.e.( Gold flakes, Wills Navy Cut), three soft drinks i.e.

(Pepsi, Thums up, Coco Cola), two biscuit brands i.e.(Britannia, Parle), two detergents

i.e.(Nirma, Wheel) and one oral care brand i.e. (Colgate) make up the top 10 FMCG

brands in India. The top 10 brands between them tote up Rs 15,230 crore (US $ 3.2

billion) and account for no less than 37 per cent of the sales of the top 100 FMCG brands

in this survey, which total Rs 39,144 crore. If the Indian market for FMCGs is estimated

at Rs 90,000 crore, then these ten brands contribute nearly 14 per cent of sales and the top

100 brands contribute about half of the total sales.

Of the 10 brands, seven brands are owned by MNCs, three by Indian companies. That's

not all; there are some other interesting trends: 62 of the top 100 brands as studied by AC

Nielsen are owned by MNCs, the balance by Indian companies. By value, MNC brands

hold 70 per cent of total top 100 sales or Rs 27,470 corer (US $5.8 billion). Fifteen

companies own these 62 brands, and not surprisingly, 27 of these are owned by one

company - Hindustan Lever.

The number three brand is Pepsi at Rs 1,740 core. At number four comes Thums Up,

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ahead of Coca-Cola, its parent's flagship brand. Britannia takes the fifth place, with its

slew of products, aggressive advertising and its `health' platform for biscuits. Colgate is

at number six, followed by Nirma (7), Coca-Cola (8) and Parle (9). These are figures the

soft drink and cigarette companies have always shied away from revealing.

For the first time, Brand Equity presents estimates - after talking to reliable industry

experts and senior officials of the companies concerned - that gives you a sense of the

annual sales of soft drinks in India. Brand Pepsi at Number 3 (Rs 1,740 corer) includes

the Rs 94-crore new variant Pepsi A-Ha. Thums Up at fourth position (Rs 1,350 corer)

and Coca-Cola at eight (Rs 1,030 corer) dominate the list, as expected. Mirinda ranks 20

(Rs 540 crore), Limca is at 18 (Rs 600 crore), followed by Fanta at 30 (Rs 400 crore), 7-

Up at 53 (Rs 210 crore) and Maaza at 84 (Rs 127 crore).

It's interesting that the Indian brands Thums Up and Limca, which have been familiar to

consumers for many years, rank in the top 100 right next to their MNC owners. The

Indian soft drink market seems to be operating along global lines, with the entry of MNC

players causing heightened market activity, advertising, sponsorships, and mergers along

with buy-outs of local suppliers. Figures for PepsiCos brands are based on consumer

spend and a weighted mean retail price, while Coca-Cola India's brands are ranked on

gross revenue excluding sales tax. The extent of HLL's dominance of the Indian FMCG

market is also clear. The 27 HLL brands are worth Rs 9,243 crore and account for 25 per

cent of the top 100 brand sales. But HLL has just one brand in the Top 10: Wheel with

sales of Rs 814 crore, though a further 17 brands do make the top 50. Nirma dominates in

its own way. Ranked seventh amongst India's largest brands, with sales of Rs 1,182 crore

(US $240 million), its position is testimony to Karsanbhai Patel's strategy of value for

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money. The company today claims Nirma's user base exceeds 400 million people, a

number even a global leaders would envy. Nirma has another of its brands in the top 100:

Nima, ranked 23, with sales of Rs 459 corer. The consolidated Tata brands - Tata Tea and

Tata Salt - rank at number 14 with sales of Rs 646 chore, which includes the tea and salt

brands.

Category movers

Personal care, cigarettes and soft drinks are the three biggest categories in FMCG.

Between them, they account for 35 of the top 100 brands. In value terms, these 35 brands

rake in 50% (Rs 19,707 corer) of the total sales of Rs 39,144 corer of the top 100 FMCG

brands. The personal care category has the largest number of brands - 21 - in it. Heavy

weights such as Lux, Lifebuoy, Fair and Lovely, Vicks, Ponds all clubbed in it. There are

11 HLL brands in the 21, aggregating

Rs 3,799crore - or 54% of the personal care category. Cigarettes account for 17% of the

top 100 FMCG sales and just below personal care. ITC alone accounts for 60% volume

market share and 70% by value of all filter cigarettes in India. ITC's two brands - Wills

Navy Cut (including Classic) and Gold Flake alone account for Rs 5,500crore of sales -

that's 83% of all sales of the five brands estimated.

The soft drinks' segment is dominated by MNCs. The 9 brands analyzed based on data

from reliable industry sources accounted for Rs 6,247crore in 2002. Thums Up, the brand

that Coke tried to kill in its young days in India, in fact is estimated at Rs 1,350crore,

bigger than Coca-Cola itself in India. In fact, Thums Up and Limca, two key brands that

Coke acquired from Parle, now account for no less than Rs 1,950crore in sales for Coke.

The Coca Cola Company in India accounts for Rs 3,757crore of sales of soft drinks,

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while PepsiCo with three brands has sales of Rs 2,490crore.

In the related field of beverages, Rs 2,034crore of sales are delivered by the 11 brands

studied. Two bottled water brands make it big in the top 100. Coke's Kinley, at Rs 350

crore, and Parle's stalwart Bisleri at Rs 110 crore.

The foods category in FMCG has been attracting lots of attention recently, with a slew of

launches by HLL, ITC, Godrej and others. This category has 18 major brands in it,

aggregating Rs 4,637crore. Most companies have had mixed results, with the market for

salt hotting up in competition between Tata Chemicals and HLL; atta between HLL,

Godrej Pillsbury and Cargill. Dabur and Zandu battle it out in the health foods segment,

while Nestle and Amul slug it out in the powders segment. This category has also seen

innovations like softies in ice creams, chapattis by HLL, ready to eat rice by HLL and

Pizzas by both GCMMF and Godrej Pillsbury. This category seems set to see faster

development as the personal care category stagnates in growth. MNCs dominate this

category- 10 brands worth Rs 2,365crore. But the Indians have a few power brands in this

category too. Amul, which is India's largest foods company at Rs 2,500 crore, makes it

presence felt here with all its products. Parle and Britannia, ranked highly on the top 100

FMCG brands, dominate the biscuits category. These have launched a series of products

at various price points. Britania has been quite aggressive in its promotions, tying up for

Lagaan in 2001/02 and Cricket competitions.

Oral care, dominated by Colgate and HLL brands, has had a tough time. Colgate's sales

are more than the other four in the category put together. This category has led the trend

into herbal toothpastes with Colgate and HLL both getting into it. Brands like Vicco have

been in it for some time, and are expected to gain from any expansion of this category.

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Freebies - 100 grams free with 150 grams of toothpaste- have been a feature of this

category.

Godrej and Reckitt are two players in the household care category with their mosquito

repellents. Goodknight, from Godrej is worth above Rs 217 crore followed by Reckitt's

Mortein at Rs 149 crore. In the shampoos category, HLL's Clinic and Sunsilk make it to

the top 100, although P&G's Head and Shoulders and Pantene have been making inroads

into their markets. Clinic is nearly double the size of Sunsilk. In the shaving systems

category, Supermax from Vidyut Metallics is faced with the strong Gillette, though

significant price gaps exist between the two. Gillette makes it at no 98 in the list. This

category has famous brands like 7 O'clock, Topaz, Gillette Sensor, Excel and Wilman, to

name a few.

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CRITICAL REVIEW OF THE

LITERATURE

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RETAIL SECTOR: AN INTRODUCTION

SIZE

India is one of the ten largest retail markets in the world

Retail sales were $206 billion in 2007, over 28% of GDP

Organised Retail constitutes only 4.5% of total retail sales - about $6.4 billion

p.a.

However organised retail has been growing at over 24% p.a in the last 5 years

STRUCTURE

The Indian Retail sector is highly fragmented: mostly owner-run Mom and Pop outlets

Over 12 million retail outlets

Average outlet size < 500 sq.ft

There are a few medium sized Indian retail chains like Pantaloon, Shoppers Stop,

Foodworld (RPG Group) and Westside (Tata Group) - all growing rapidly

Mainly in the apparel and food & grocery segments

Dairy Farm, Metro, Shoprite and Marks & Spencer are the only major international retail

chains in India: Each has a marginal presence through either franchisee or wholesale

formats

POLICY

100% FDI is allowed in Cash and Carry Wholesale formats. Franchisee arrangements are

also permitted in retail trade.

FDI upto 51% is permissible in the retail trade of single brand products

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Top Players in the Retail Industry

Players Revenues Space Format

Pantaloon Retail 150 1,000,000 F&G, Specialty

RPG Retail 135 590,000 F&G, Specialty

Shoppers Stop 100 740,000 Specialty RetailLifestyle International 53 325,000 Specialty Retail

Viveks Ltd. 46 150,000 Consumer Durables

Trent (Tata) 38 270,000 F&G, Specialty

Note: Revenues in ($ million), Space: Sq. ft.

OUTLOOK

The overall retail market is expected to grow three-fold in the next 10 years from $206

billion today to about $660 billion by 2015

India is expected to be among the top 5 retail markets in the world in 10 years

Organised retail is expected to grow rapidly to reach $100 billion by 2015

Likely to account for 12-15% of total retail sales by 2015

POTENTIAL

The migration of population to higher income segments with increasing per capita

incomes.

An increase in urbanization.

Changing consumer attitudes especially the increasing use of credit cards.

The growth of the population in the 20 to 49 years age band.

There is retail opportunity in most product categories and for all types of formats.

Food and Grocery: The largest category; largely unorganized today.

Home Improvement and Consumer Durables: Over 20% p.a. CAGR estimated in the next

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10 years.

Apparel and Eating Out: 13% p.a. CAGR projected over 10 years.

Opportunities for investment in supply chain infrastructure: Cold chain and logistics.

India also has significant potential to emerge as a sourcing base for a wide variety of

goods for international retail companies.

Many international retailers including Wal-Mart, GAP, JC Penney etc. are already

procuring from India.

Analysts expects the Indian retail growth process to take a decade since there is a large

population of one billion that needs to be slowly reached and this population is spread

across six hundred thousand villages. The large urban population of India is about three

hundred million and spread across about a couple of hundred large cities and smaller

towns. Organized retail is expected to home in on this proportion first in the next five to

ten years. At present most of the large retail activity and brand building is focused on

about twenty Indian cities, each of which has a population of one million.

Indian retail will slowly expand from the small dots that it represents across the Indian

map and become large spots and areas over the next several years.

Indian government regulations are going through a long and meandering debate on

whether or not India should allow foreign retail chains to come in and if yes, then how

they need to be regulated and controlled. Most see retail as a bastion that will fully

liberalize and globalize India and threaten large employment that is presently provided by

the small unorganized retail network that is present all across Indian districts including

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the small towns and villages. The new organized format will mean a lot of change for the

network, the consumers and the product vendors and this is being analyzed and

considered carefully by the government. The government knows that opening up the

retail sector will create a lot of changes in cultural and employment patterns as well as

sound the death knell for several hundreds of thousands of small and tiny enterprises that

are involved in retailing and manufacturing of products for local markets.

This large change is however unlikely to be possible to stem in the long run. India will

slowly open up and moderate the change but the new retailing experience that has already

been sampled with great success is expected to expand slowly but surely till it covers the

entire geography of the country.

India map looks at retail as a large area of interest for its Indian and international

audience. India opens this section with a detailed analysis of the retail sector. We plan a

large directory for the retail sector and also plan to bring in expert commentary and

analysis that will help demystify Indian retail and help provide clarity and substance for

our readership.

RETAIL VALUE PROPOSITIONS:

The value proposition that retail offers to a consumer is easy availability of the desired

product in the desired size at the desired time.

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RETAILING IN INDIA KEY POINTS:

Total Consumer Spend in the Year 06-07 - INR 9800 billion (USD 375 billion)

growing over 5.5% annually

Retail sales - 58% at INR 280 billion (USD 205 billion)

Organised Retail - Only 4% but growing at 8.5%

Organised retail to cross INR 1000 billion mark by 2010.

TRENDS AFFECTING INDIAN RETAIL INDUSTRY:

Changing age profile & Disintegration of joint family: India is believed to

have an average age of 24 years for its population as against 36 years for the USA

and 30 years for China. A younger population tends to have higher aspirations and

spends more as it enters the earning phase.

Growing disposable income: More Indian households are getting added to the

consuming class with the growth in income levels. Also, with declining interest

rates, the aversion of domestic consumers to taking loans is also fast disappearing.

Globalization: Growing media penetration is leading to a convergence of

aspirations of various classes of consumers, bridging the rural-urban divide. The

modern consumer cannot be satisfied by any product or service that is lesser in

quality than the best offered in any other place on the globe.

Till 1980s, India knew only kirana stores. Things started to change slowly after that, with

companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim opening their

company owned outlets. Later on, Titan, maker of premium watches, successfully created

an organized retailing concept in India by establishing a series of elegant showrooms.

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ORGANIZED RETAILING:

Only 4 per cent of the retail trade in India belonged to organised retail. It covered items

such as apparel, grocery, music, electronics, automobiles and financial services. This is

inconsequential compared to 20 per cent in China, 40 per cent in Thailand and 80 per

cent in the United States. The emergence of organised retail in India is, moreover, so far

restricted to the top 15 cities. The strength of organised retailing lies in the ability to

source directly from the manufacturers due to increased bargaining power achieved

through large-scale operation. Organised retail chains can get bulk discounts on large

purchases and reduce cost by eliminating middlemen and by reducing the supply chain.

However, the potential benefits of lower prices are not evident in the early stages because

modern retailing tends to concentrate on the upper segment of the market where

consumers are willing to pay higher prices for convenience and a superior shopping

environment.

Organised retailing is often run on the principle of franchising. The franchiser allows a

local businessman, a franchisee, to set up a retail outlet using its name and methods as a

joint venture on a 50:50 paid up capital basis. The franchiser also provides training,

equipment, quality control and national advertising. In exchange, it receives fees and a

share of profits. Organised retailing, moreover, has multiple formats like discounters,

hypermarkets, convenience stores, and small outlets and warehouse clubs. The special

advantages of organised retailing are:

Enhancing quality through skilled processing, grading and delivery of goods.

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Lower price through better expertise in managing back-end activities such as

sourcing and inventory management as well as the ability to strengthen the front-

end functions of merchandising, promotions and customer services.

Creating a level playing field for small and medium enterprises vis--vis the large

manufacturers.

Higher productivity per worker and better job opportunities.

Five Reasons why Indian Organized Retail is at the brink of Revolution:

Scalable and Profitable Retail Models are well established for most of the

categories.

Rapid Evolution of New-age Young Indian Consumers

Retail Space is no more a constraint for growth

Partnering among Brands, retailers, franchisees, investors and malls

India is on the radar of Global Retailers Suppliers.

RETAIL FORMAT:

Broadly, the organized retail sector can be divided into 2 segments:

In-store Retailers: Operate through fixed point of sale outlets located and

designed to attract a high volume of walk-in customers. Also referred to as

brick-and mortar format.

Non-store Retailers: Reach out to the customers at their homes or offices

through direct selling, tale marketing and e-commerce.

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Major formats of In-store retailers have been listed in Table below: -

FORMAT DESCRIPTION VALUE PROPOSITION

Branded Stores Exclusive showrooms either

owned or franchised out by

a manufacturer.

Complete range available

for a given brand, Certified

product quality

Specialty Stores (Multi-

Brand)

Focus on a specific

consumer need, carry most

of the brands available

Greater choice to the

consumer, comparison

between brands possible.

Department Stores Large stores having a wide

variety of products,

organized into different

departments, such as

clothing, house wares, toys,

etc.

One stop shop catering to

varied consumer needs

service as differentiator.

Supermarkets Extremely large self-

services retail outlets.

One stop shop catering to

varied consumer needs.Discount Stores Stores offering discounts on

the retail price through

selling high volumes and

reaping the economies of

scale.

Low prices

Hyper-mart Larger than a Supermarket,

sometimes with a

warehouse appearance,

generally located in quieter

parts of city

Low prices, vast choice

available including services

as cafeterias.

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Convenience Stores Small self-service formats

located in crowded urban

areas.

Convenient location and

extended operating hours.

Shopping Malls An enclosure having

different formats of in-store

retailers all under one roof

Variety of shops available

close to each other.

Of the Top-200 Global Retailers, 21% of retailers fall in the specialty stores category,

followed by 18% in supermarket, 12% in department and 9% each in hypermarket and

discount stores.

RETAIL FORMATS IN INDIA:

Indian retail formats can be classified into two distinct categories:

(1) Traditional

(2) Modern

Traditional Formats include: -

Kiranas: Traditional Mom and Pop Stores

Street Markets

Kiosks

Exclusive / Multiple Brand Outlets

Modern Formats include: -

Supermarkets such as Food world

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Hypermarkets such as Big Bazaar, Giant, Shop rite, Star

Company Owned / Operated such as Bata, Sony

Department stores such as Shoppers stop, Lifestyle, Pantaloons, Pyramids, Trent

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WHOLESALE TRADING:

Is another area, which has potential for rapid growth? German giant Metro AG and South

African Shop rite Holdings have already made headway in this segment by setting up

stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively.

These new-format cash-and-carry stores attract large volumes from a sizeable number of

retailers who do not have to maintain relationships with multiple suppliers for all their

needs.

Present Scenario of Retail Sector in India

Retailing today is not only about selling at the shop, but also about surveying the market,

offering choice and experience to consumers, competitive prices and retaining consumers as

well. The Indian retail industry is no more nascent today. There has been a significant change

in retail trading over the years, from small kiranawalas in the vicinity to big super markets; a

transition is happening from the traditional retail sector to organized retailing. The

unorganized sector still holds a dominant position in this industry. The organized segment

holds just about 1.2% of the current US$ 245 billion retail market, which is expected to reach

about US $ 385 billion by the middle of this decade.

With consumers looking at convenience with multiplicity of choice under one roof and

expectations evolving over time, consumer demand is truly the driving force for organized

retailing in the country. Food and beverages form the main chunk of the retail market. They

are followed by apparel and footwear. The Indian textile industry, the backbone of the

apparel segment, has a large share of the Indian economy, accounting for over 20% of

industrial production as well as providing direct and indirect employment to around 65

million people.

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Despite the retail store density in India with regard to population being the largest, it is

estimated that over 90% of the stores are less than 500 sq. ft in size. Industry estimates put

the number of retail outlets at 12 million. This is clearly indicative of small-shop ownership

crowding the unorganized segment of retailing. While this fragmented market structure does

pose significant challenges for organized retailing, potential does exist if modern information

and supply chain management systems are deployed to support the development of

convenience shops that match customer expectations.

POTENTIAL FOR ALL FORMATS TO THRIVE:

Most of the global powerhouses in the retailing sector such as Wal-Mart, Carrefour, and

Tesco etc have adopted multi-format and multi-product strategies in order to customize

their product offering for distinct target segments. Similar trends are likely to be

exhibited in India as all formats present prospects for growth.

Further, with the emergence of larger store formats like superstores and hypermarkets in

countries like UK, France, Germany, Spain since the 1980s and Eastern Europe more

recently, traditional food retailers have been able to stock more extensive non-food

ranges. In fact, Tesco, UK's leading grocer, has become the number one apparel retailer

in the Czech Republic and also a major player in Hungary apart from being one of the

fastest growing clothing retailers in the UK. Together with its rival, Wal-Mart-owned

ASDA, Tesco is one of the food sector's most successful exponents of clothing in Europe.

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CHALLENGES BEFORE RETAIL

SECTOR IN INDIA

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Government restrictions on FDI: Organised retailing in India is yet to get an industry

Status. The consequence is quite obvious. 100% Foreign Direct Investment (FDI) is not

permitted in retailing in India. Ownership of retail chains is allowed only to the extent of

49%. The Food World chain is one such venture, with an ownership pattern of 51:49

between RPG and Dairy Farm International, Hong Kong. Foreign players can enter the

wholesale sector, in the cash and carry format. The Metro chain has recently entered the

country as a cash and carry outlet. A branch has been opened in Bangalore and a second

would be opened very soon in the same city. The fear that the small-scale retailers will be

displaced is delaying the FDI approvals. On the other hand, without the FDI sector is

deprived of access to foreign technologies that is imperative for faster growth. The

Government has allowed FDI in direct marketing, but has reservations about extending it

to the retail sector Retailing is a technology- Retailing is a technology- intensive

industry. Under the liberalized regime of the WTO the Protected nature of an industry

may do more harm than good. In the short-run the Government may succeed in protecting

the domestic industry, but in the long run we would be loosing too many opportunities

and technological innovations. This, in addition would also block any attempt by the

domestic industry to become competitive internationally.

Lack of a uniform tax: The country requires a uniform tax system for the organized

retailing. The lack of this stands as an obstruction to the setting up of a truly national

chain. The present chains, in spite of claiming to be national chains are restricted to

certain regions of the country. Players are confined to state barriers. Since retailing

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is essentially a business of supplying commodities to locations far from production units,

a differential tax system in different states is surely turning to be a hindrance to faster

development of this Industry. A central tax system becomes more imperative in a country

like India where, the regional disparity in production of commodities is high.

Lack of adequate infrastructure: Players are forced to set up their own infrastructure,

As there are few independent logistics solution providers. Entrepreneurs to invest in

infrastructure development for different stages of the supply chain are also limited.

Dominance of the unorganized Sector: The Unorganized has dominance over the

organized sector in India, especially because of the low investment needs. In India

Organized retailing is only 2% of total retailing of worth US$ 180 billion. This is playing

at multiple levels For instance, the reason for low number of discount stores in India is

effect of the dominance of the unorganized sector The manufacturers have high

bargaining power in the pricing of products as a result of this small scale of operation of

retailers. The lobbying by the unorganized sector is also the main reason for the

Government of Indias restrictions on 100% FDI in retailing in the country.

Low operational size: The number of retail outlets in India is more than number of

outlets in most of the other countries; small size retail outlets dominate the Indian scene.

96% of outlets are lesser than 500 sq ft. The retail chains of India are also smaller than

those in the developed countries. For instance, the superstore food chain, Food World is

having only 52 outlets whereas Carrefour Promotes has 8800 stores in 26 countries. The

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volume of sales in Indian retailing is very low, which is only $180 billion. Even the

largest players have a turn over of only US $ 140 million, which is very small by the

global standards. India with second largest population in the World and a fast growing

economy has huge untapped potential of organized retailing, which is not given its due

weight age by the government.

Labour employment problems: Organized retailing is a 24 X 7 active business.

However, this is much restricted currently in India because of ladour rules and

regulations. The sector is unable to employ retail staff on contract basis. This makes it

difficult to efficiently manage employee schedules especially for 365-day operations. The

industry has to take special clearance for extended working hours and even seven days

working from the Labour department. However, in the recent budget government has

relaxed norms on employment of contract labour, which is expected to benefit the

industry.

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OBJECTIVE OF THE RESEARCH:

The objective of the study is to understand the retail industry of India as a whole and see

the industry in the perspective of emerging Indian Economy. Moreover the study aims at

understanding the opportunities for various firms in this fast growing sector of India and

we also examine that what are the perception of consumers regarded to this Industry.

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RESEARCH METHODOLOGY

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A research process consists of stages or steps that guide the project from its conception

through the final analysis, recommendations and ultimate actions. The research process

provides a systematic, planned approach to the research project and ensures that all

aspects of the research project are consistent with each other.

Research studies evolve through a series of steps, each representing the answer to a key

question.

INTRODUCTION

This chapter aims to understand the research methodology establishing a framework of

evaluation and revaluation of primary and secondary research. The techniques and

concepts used during primary research in order to arrive at findings, which are also dealt

with and lead to a logical deduction towards the analysis and results.

RESEARCH DESIGN

I propose to first conduct a intensive secondary research to understand the full impact and

implication of the retail industry, to review and critique the industry norms and reports,

on which certain issues shall be selected, which I feel remain unanswered or liable to

change, this shall be further taken up in the next stage of exploratory research. This stage

shall help me to restrict and select only the important question and issue, which inhabit

growth and segmentation in the industry.

The various tasks that I have undertaken in the research design process are:

Defining the information need.

Design the exploratory, descriptive and causal research.

Follow each step one by one and conclude the research.

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RESEARCH PROCESS

The research process has four distinct yet interrelated steps for research analysis

It has a logical and hierarchical ordering:

Determination of information research problem.

Development of appropriate research design.

Execution of research design.

Communication of results.

Each step is viewed as a separate process that includes a combination of task, step and

specific procedure. The steps undertake are logical, objective, systematic, reliable, valid,

impersonal and ongoing.

EXPLORATORY RESEARCH

The data I used for exploratory research was

Primary Data

Secondary data

PRIMARY DATA

New data gathered to help solve the problem at hand. As compared to secondary data

which is previously gathered data. An example is information gathered by a

questionnaire. Qualitative or quantitative data that are newly collected in the course of

research, Consists of original information that comes from people and includes

information gathered from surveys, focus groups, independent observations and test

results. Data gathered by the researcher in the act of conducting research. This is

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contrasted to secondary data which entails the use of data gathered by someone other than

the researcher information that is obtained directly from first-hand sources by means of

surveys, observation or experimentation.

Primary data is basically collected by getting questionnaire filled by the

respondents.

SECONDARY DATA

Information that already exists somewhere, having been collected for another purpose.

Sources include census reports, trade publications, and subscription services. Data that

have already been collected and published for another research project (other than the one

at hand). There are two types of secondary data: internal and external secondary data.

Information compiled inside or outside the organization for some purpose other than the

current investigation. Data that have already been collected for some purpose other than

the current study. Researching information which has already been published. Market

information compiled for purposes other than the current research effort; it can be

internal data, such as existing sales-tracking information, or it can be research conducted

by someone else, such as a market research company or the U.S. government. Published,

already available data that comes from pre-existing sets of information, like medical

records, vital statistics, prior research studies and archival data.

DATA COLLECTION

Data collection took place with the help of filling of questionnaires. The questionnaire

method has come to the more widely used and economical means of data collection. The

common factor in all varieties of the questionnaire method is this reliance on verbal

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responses to questions, written or oral. I found it essential to make sure the questionnaire

was easy to read and understand to all spectrums of people in the sample. It was also

important as researcher to respect the samples time and energy hence the questionnaire

was designed in such a way, that its administration would not exceed 4-5 mins. These

questionnaires were personally administered. The first hand information was collected by

making the people fill the questionnaires. The primary data collected by directly

interacting with the people. The respondents were contacted at shopping malls, markets,

places that were near to showrooms of the consumer durable products etc. The data was

collected by interacting with 108 respondents who filled the questionnaires and gave me

the required necessary information. The respondents consisted of house wives, students,

business men, professionals etc. the required information was collected by directly

interacting with these respondents.

DETERMINATION THE SAMPLE PLAN AND SAMPLE SIZE

TARGET POPULATION

It is a description of the characteristics of that group of people from whom a course is

intended. It attempts to describe them as they are rather than as the describer would like

them to be. Also called the audience the audience to be served by our project includes

key demographic information (i.e.; age, sex etc.).The specific population intended as

beneficiaries of a program. This will be either all or a subset of potential users, such as

adolescents, women, rural residents, or the residents of a particular geographic area.

Topic areas: Governance, Accountability and Evaluation, Operations Management and

Leadership. A population to be reached through some action or intervention; may refer to

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groups with specific demographic or geographic characteristics. The group of people you

are trying to reach with a particular strategy or activity. The target population is the

population I want to make conclusions about. In an ideal situation, the sampling frames to

matches the target population. A specific resource set that is the object or target of

investigation. The audience defined in age, background, ability, and preferences, among

other things, for which a given course of instruction is intended.

I have selected the sample trough Simple random Sampling

SAMPLE SIZE

I have targeted 100 people in the age group above 18 years for the purpose of the

research. The sample size is influenced by the target population. The target population

represents Delhi. The people were from different professional backgrounds.

SAMPLING TECHNIQUE

Simple random sampling technique has been used to select the sample. In this sampling

technique we select the respondents randomly.

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FINDINGS & ANALYSIS

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ANALYSIS OF CONSUMER PERCEPTION

1. Do you prefer to purchase from retail organization.

Interpretation: As we have seen from the above column chart that the 65 percent of

respondents say yes and only 35 percent say no, because they belongs to

lower income category and can not afford.

2. How many retail organization you know of your city?

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Interpretation: As we have seen from the above pie chart that the 10 percent of

respondents can name only one retail organization name 25 percent can

name 2 to three name 50 percent can name 3 to 4 name and rest can

name more four name.

4. How many time you usually go for purchase?


respondents never go for purchase because they can not afford.40

percent usually go 2 times in a month for purchase, 30 percent usually

go 4 times for purchase and 20 percent go more than four times in a

month for purchase.

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5. Do you make plan before your purchasing from retail shop.

Interpretation: As we have seen from the above pie chart that the 60 percent say yes i.e.

they make plan for their purchase and rest of them purchase at randomly.

6. Are you satisfied with your purchasing every time?

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respondents are satisfies with their purchasing and rest of them means 35

percent are not satisfy.

7. What characteristics attract you to purchase?

[i. Five star environment ii. Product line iii. Customer support iv. Convenience]


respondents only attracted by Ist, 22% are attracted by Ist & IInd option, 28% are

attracted by Ist, IInd & IIIrd option and rest of them are attracted by all feature of retail.

8. Will you suggest other person to purchase from retail organization?

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Interpretation: As we have seen from the above pie chart that the 22 percent of people

will never suggest other person to purchase from retail shop because of their bed

experience but 78% of person will suggest other person to purchase from retail shop

because they are extremely satisfied.

10. Retails shops is which type of place for purchasing? According to your perception.

66

Interpretation: As we have seen from the above pie chart 60% of people percept that the

retails are best place for purchasing 35% percept that it is good place and

5% can not say anything.

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RECOMMENDATION

FDI IN RETAIL: EVOLVING AN INDIA-SPECIFIC MODEL

Opinions on FDI were divided at the IFF symposium. The Government of India would

be wise not to open the doors to foreign retail too wide as it is better to develop India's

own modern retail model than give away the businesses to global retailers like Wal-Mart

and Tesco. selective approach in allowing FDI, which could be directed towards:

Mall Development

Shopping Centre development and management

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Luxury retailing

Lifestyle brand retailing

Lifestyle products and brands manufactured in India

REVITALISING A BRAND:

Retail brands, big and small, face ups and downs in their performance graph, which more

a relative term is depending heavily on the performance of the competitors. And with

modern day markets getting innovative to the fore, retailers have to constantly devise

strategies to revitalize their brand so as to regain their market share. Anna Pretty,

Wedgwood, UK, described one such success turnaround, the challenges faced by

Wedgwood (a store established in 1758 in UK) and the solutions it devised to survive the

competition.

From product, layout, store interiors, packaging to communication and greetings,

everything at Wedgwood was re-designed to create an interest in the modern consumer

who has much wider options when it comes to shopping, Anna said. First of all it was

considered necessary to effect changes in the retail and design aspect. A new image was

imparted to the store, followed by re-introducing of the core merchandise with special

focus on quantities and packaging. Then new products and categories were introduced

with the aim of presenting a whole range a complete lifestyle offer so as to revive interest

of the today's generation. All this was not easy task for this store with 250 years of

history.

Then we felt the need to create a feeling for the customer to make him or her walk in to

Wedgwood store and want to stay there, Anna Pretty said. The emphasis was clearly to

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offer old wine in a new glass and at the same time introducing new product categories

like non-ceramics, jeweler and showpieces like picture frames and greetings. Materials

were the same but had a new style, she said. The same company, with same values had a

new focus. The focus being: Everything must say Wedgwood.

GAINING A COMPETITIVE EDGE:

It's the people who build brands, not blind advertising; and to be successful, it's

absolutely necessary to create the buzz amongst the high profile customers, echoed the

success mantra from International marketer of the Year Bob Pritchard, CEO, Mkt. Force

One, Inc., USA. Bob, who carries with him 30 years of marketing experience and an

unmatched oratory skill, started his inspiring IFF Fashion-Retail Conclave presentation

on Positioning and Brand Equity-How to Gain a Competitive Edge with the compliment

that India is a country of fantastic opportunity and tremendous promise.

While outright discarding the significance of traditional factors like Customer

satisfaction, High Quality sales and Store Loyalty, Bob said it is the Vision, Commitment

and Enthusiasm of retailers and marketers that actually drives businesses. He said, 95

percent of the factors such as product, price, customer and brand awareness fail; 92

percent of the customers find like products interchangeable; and 62 percent of the

satisfied customers never repurchase from the same store.

What really counts in today's world is Equity, which stands for:

Emotional experience

Perception

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Service Experience

Media Experience

Feedback from friends

On-line experience

Perception of one's corporate citizenship

While spelling out some of the unique fundamental factors that help achieve Brand

Equity, modern-day retailers ought to focus on:

Creating emotional experience

Selling emotional benefits

Effective communications

Collecting knowledge of the customers

Differentiating from the market

Positioning statement

Added value and service, and

Thinking out of the box

PLANNING MALLS THE CORRECT WAY: Malls being the modern-era retail

destinations, a good part of the IFF seminar was devoted to detailed presentation and

discussion on various facets of mall planning and management. Amit Bagaria, Chairman,

Asipac Project Consulting Services, one of the leading mall planners in India, presented

an in-depth knowledge on how mall developers need to work on their projects so as to

uphold the best international standards.

The foremost task was to have a detailed business plan, based on the company's targets

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and constraints, Amit Bagaria said. This would include Tenancy mix, Support services,

Required infrastructure, Estimated project cost, and Estimation of revenue and operating

expenditure.

The second stage was that of Design conforming to the Plan as Design always ought to

come only after everything is planned in advance, taking care of the projected average

and peak footfalls (PAPF) and Average duration of visit (ADOV), said Bagaria.

Keeping in mind the above a mall planner has to think of the number and types of

parking, vertical circulation, washroom facilities, food court sizes, R&R reas, etc.

The developer also needs to look at the critical factors, which are generally overlooked,

like Selecting the best mall planner and architects and Coordination between the involved

role players like planners, structural engineers, leisure consultants etc, he emphasized.

Bagaria spoke at length about the differences between the Indian and International

Architectural Processes, about what all goes in to the Conceptual, Schematic and

Functional design stages and about what all expertise is required for On-site construction

management. His conclusion was that the prevalent process in India is more time

consuming than the international model, which considerably reduces the construction

time, thereby making it more viable.

SECRETS TO SUCCESSFUL MALL OPERATIONS:

Experience and expertise flowed as Walter Kleinschmit, Principal R2E (Retail & Real

Estate) Consultants and former general manager, Kingdom Centre (Riyadh, Saudi

Arabia) presented his 10 Rules To Obtain Sustainable Returns from Malls. It is

challenging to get customers and it is so very easy to lose them, after so much energy

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spent that situation needs to be avoided, Walter said and added, Development and

Operation, both processes take place throughout life of project.

The major factors affecting the success graph of malls, the doctrines that work to keep the

money flowing, were listed as follows:

1. Planning: Understanding the mission, converting it to objectives that are met through

tactical decisions, and working with the given limitations;

2. Branding: The brand conveys the value proposition, which is the differentiating

factor, occupying a distinct position in the mind of the client/ consumer;

3. Marketing: Facilitates generating footfalls and increasing the conversion rate;

4. Promotion: Concentrates on increasing footfalls or conversion rates, often a short term

response to tenant requirement;

5. Leasing & Lease Renewals: Location being the most important aspect of any Mall,

this factor requires a lot of careful understanding;

6. Maintenance: The main stress was laid on the following trivial looking aspects like: -

Baby Changing Station - Level Sidewalk - Garbage Removal - Clean Walls etc;

7. Security: A Sense of Well Being, No Hassles (Little Risk, Great Place to take your

family), - Not to scare away those who pay your salary;

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8. Hospitality: A frame of mind of the management and a guiding principle behind

Maintenance and Security that add value to customers, like - Concierge Service, - Valet

parking, - Courteously Shopping Bags (Means of Good Advertising), - Informative

Directory (can generate revenue), etc;

9. Keeping Proper records: Records Keeping the records straight are effective both in

terms of store operation and customer service; and

10.Better Service: Do it again and again, but better.

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CONCLUSION

The Indian retail sector is witnessing tremendous growth with the changing

demographics and an increase in the quality of life of urban people. At this moment, it is

still premature to say that the Indian retail market will replicate the success stories of

names such as Walt-Mart Stores, Sainsbury and Tesco but at least the winds are blowing

in the direction of growth.

Retailing in India is gradually inching its way toward becoming the next boom industry.

The whole concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India. Modern retail has entered India as

seen in sprawling shopping centres, multi-storeyed malls and huge complexes offer

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shopping, entertainment and food all under one roof. The Indian retailing sector is at an

inflexion point where the growth of organized retailing and growth in the consumption by

the Indian population is going to take a higher growth trajectory. A large young working

population with median age of 24 years, nuclear families in urban areas, along with

increasing workingwomen population and emerging opportunities in the services sector

are going to be the key growth drivers of the organized retail sector in India.

The Indian consumer is dressing up, eating, spending, like never before. And helping him

look good, ready to eat, leather products are the hugely successful brands. Quick to adapt

to current trends and the latest in fashion and completely in sync with customers' wants,

these highly versatile brands have given a bold new shape to whether the ready-to-wear

apparel industry, leather industry, Gems and Jewellery Industry Indian consumer is

showing an increasing fascination for branded wear, ornaments, leather products. The

reasons are clear - one, the increased disposable income of Indian households and two,

the fast paced changes in the leather, apparel, food industries. Today's customers are

fussier than ever before - they are more aware of current trends, are totally in sync with

the latest in fashion and demand the best products as well as service at an affordable

price.

To encase this growing and changed demand of Indian consumers, many garment

manufacturing companies are opening up their retail outlets. Companies like Raymond,

Levis, Pantaloon, Ebony, John Player, Lifestyle, Shoppers Stop, TCNS Clothing, Spykar,

Pizza Hut, Mc Donald, DTC Diamond, Tanishq( A TATA product)etc. already have their

retail stores at various part of the country.

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As the sector is growing many foreign companies are eying to enter into the retail market

and especially in the apparel sector. It was difficult for them to directly enter into Indian

retail sector earlier, but now as the FDI in the sector has been allowed up to 51% it has

opened up the sector for the foreign companies to set up their business.

Perception of the consumer towards the retails also goods. They are ready to adopt the

Mall Culture and they are also ready to change according to that culture. Retailers also

use so many promotional tools to attract the consumers.

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BIBLIOGRAPHY

PRIMARY DATA

QUESTIONAIRE

NEWSPAPER & MAGAZINES:

The Economic Times

The Financial Express

Business Standard

Books

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REFERENCES

http//:www.ficci.com

www.economictimes.com

www.eretailbiz.com

www.fashion2fasion.com

www.pantaloon.com

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APPENDIX

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QUESTIONNARE;-

1. Do you prefer to purchase from retail organization.

Yes No

2. How many retail organization you know of your city?

a. Less than 2

b. 2 to 3

c. 3 to 4

d. more than 4

3. Write the name according to preference of retail shop.

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---------------------------------------

---------------------------------------

---------------------------------------

---------------------------------------

4. How many time you usually go for purchase?

A. Less then two times or never

B. Two times in a month

C. Four times in a month

D. More then four times

5. Do you make plan before your purchasing from retail shop.

Yes No

6. Are you satisfied with your purchasing every time?

Yes No

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7. What characteristics attract you to purchase?

[i. Good environment ii. Product line iii. Customer support iv. Convenience]

A only 1.

B 1 & 2.

C 1, 2 & 3.

D All

8. Will you suggest other person to purchase from retail organization?

Yes No

9. Write some points of your satisfaction and dissatisfaction.

Reason for satisfaction:

_________________________

_________________________

_________________________

Reason for dissatisfaction:

__________________________

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__________________________

__________________________

10. Retails shops is which type of place for purchasing? According to your perception.

Best good can not say

Thanks

Name: _________________________ Age: __________

Sex: ______ Ph._________________

Address________________________________________________

___________________________________________________

Date post:	06-Apr-2018
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