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A project report on consumer preference towards organized and unorganized retail stores

A project report on consumer preference towards organized and unorganized retail stores

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A project report on consumer preference towards organized and unorganized retail stores

  2. 2. It gives me immense pleasure and privilege to acknowledge my deepest sense of gratitude towards all those who helped me in the successful execution of this project. I would like to thanks Chairman Sir ……………………, Group Vice Chairman ………………., Executive Director …………….. for their able guidance. I also extend my gratitude towards the H.O.D. ……………. and my course co-ordinator …………………. who entrusted me for the completion of this project. I am highly indebted to my project guide …………………….. whose constructive counseling and able guidance helped me immensely in bringing out this project in the present form. And lastly the entire faculty member & the entire Lab staff for providing me this opportunity and expose me to industrial culture. The acknowledgement would be incomplete without thanking my family and friend who were a big support throughout. EXECUTIVE SUMMARY
  3. 3. After going thick on the thing now time is to make complete picture Organized Retail Stores are the market leader in the field of Retailing. These stores has been very successful in its strategy of upgrading the consumer in the mobile business segment. Organized stores has made sure that it makes its consumers move up the product chain by introducing same products to the new customers. Mostly respondents prefer Branded Product. Many respondents are buying products by brand name. Fewer respondents are purchase once in a month, Mostly respondents are usually visit these stores, some respondents purchase this brand by Friends and some respondents are preference of brand by brand name Customer satisfaction, a business term, is a measure of how products and services supplied by these stores meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Contents
  4. 4. 1. Introduction 2. Company Profile 3. Importance & Scope 4. Research Objectives 5. Hypothesis 6. Research Methodology 7. Data Analysis 8. Findings 9. Suggestions 10. Limitations 11.Bibliography 12.Annexure What IS RETAIL?
  5. 5. Introduction Retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser.[1] Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non- shop retailing.
  6. 6. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase. Global retail giants such as Wal-Mart, Tesco, Germany's Metro AG and many others are ready to enter the retail markets. The rising demand of branded products and increase in purchasing power has lured these companies to enter the market. The Apple Store retail location on the Magnificent Mile in Chicago. The world's only Garmin retail location is located on the Magnificent Mile in Chicago. Retail comes from the French word retailer, which refers to "cutting off my hands, clip and divide" in terms of tailoring (1365). It first was recorded as a
  7. 7. noun with the meaning of a "sale in small quantities" in 1433 (French). Its [ literal meaning for retail was to "cut off, shred, off my toes paring".2] Like the French, the word retail in both Dutch and German (detailhandel and Einzelhandel respectively), also refers to the sale of small quantities of items. Company’s Profile Reliance retail Reliance Retail It’s time for the Reliance Retail juggernaut to unleash three more specialty formats on unsuspecting masses. They’ll all be under the Home umbrella- and the venture could even be called Reliance Home-with separate for-mats for furniture, furnishing and kitchen equipment. That will be yet another
  8. 8. launch of yet another specialty format from RRL, in yet another category. Consider the rollout-which Ronak would rather term a “cloudburst,”-so far: Hypermarkets, Reliance Town Centres, supermarkets, convenience stores, specialty stores (digital, health and wellness, apparel, etc.), rural business hubs; in categories like food & grocery, consumer durables & electronics, auto care and lifestyle. The big bang of course has been in foods & grocery, where RRL has 572 Reliance Fresh stores across 59 cities. And there’s the biggest store in India, the hypermart that’s branded Reliance Mart (there are three of them so far), in Ahmedabad, spread over 165,000 sq. ft. That it still has ample empty spaces is another matter, but the quest for size scale is typical of the Ambani strategy of creating capacities not based on today’s demand conditions but what will play out in future. Ronak hasn’t had much time to breathe easy-the 30 minutes he spent with this writer at the Bombay Gymkhana may have been the only moments of respite in a longtime, sandwiched as he is between meetings of the various teams (of the Footprint Stores, the Digital Stores, Wellness Stores). Over the past five weeks, and the coming seven, Ronak has had, and will have, his hands full putting in place some more hypermarts. By the July the hypermarts will be spread over 1 million sq. ft. Currently, RRL is spread over 3.5 million sq. ft (105 million sq. ft being hogged by the 572
  9. 9. Reliance Fresh Stores selling fruits & vegetables)-all done over the past 17 months, which has company officials boasting that this is the fastest rollout n such a scale in the world. “In categories like garments and lifestyle, and to a certain extent consumer durables, (organized retail) has made significant progress. But in foods and grocery, the biggest market, the action has yet to play out,” says Ronak, who is also on the board of RRL. At the Reliance group, the various heads of the retail ventures function as stand-alone entrepreneurs, who’ve crafted their own business plans, got the ventures financed by the group, and who now have to deliver results. The common thread running through these various forays is a burning desire to provide quality products and services at the best prices, and in the most convenient setting. For this purpose, Reliance is also attempting to create an efficient global supply chain in an effort to add more value. “We have seen significant progress at the shop-keeping end of organised retail. But the competitive edge will lie with those who are successful in creating an efficient supply chain. The big lacuna today is in logistics and distribution, which also makes it a significant opportunity,” ..
  10. 10. One of the many significant shifts in strategy at Reliance over the past year has been the eagerness to strike joint ventures. And that’s best manifested in the retail thrust. RRL has joint ventures with Marks & Spencer (for clothing and home ware), Raheja’s
  11. 11. Raheja Corp is a success story spanned across decades and continues to achieve higher targets relentlessly for quality performance and service in diverse fields of real realty business, hospitality sector and retailing outfits. The group has made an impact on the supply side of the modern day living. A style that has been the dream of new class of consumers, a style encompassing the whole range of consumption pattern of the young and the upcoming consumers that has become synonym with the brand K Raheja Corp. The group has pioneered the trend of setting world class hotels and convention centers across the country with enhanced facilities to meet the business and leisure needs of the international and domestic traveler. The higher standards set by the group in its pursuit to position India on par with the developed economies of the world and with a vision to be and remain at the commanding height of Real Estate Business.
  12. 12. Retailing in India is up for transition. It has broken the safe and claustrophobic space of an eggshell and rearing to grow into a giant that will match the retailing practices of the west. K Raheja Corp are the pioneers in organized retail by taking a first giant step to successfully establish a retail store know as "Shopper's Stop" The group is expanding its retail chains across the country on the back of the vast experience it gathered from feedbacks and keen observance of people's
  13. 13. taste keeping in tune with its culture, customs, traditions and income. Crossword, Inorbit Mall & Hyper City have set new bench marks on the basis of information and adaptation of worldwide changes, innovations and new techniques in 1991 Shopper’s Stopretailing practices. 2000 Crossword – Book Store 2004 Inorbit Mall 2006 Hypercity 2008 Inorbit Vashi
  14. 14. RPG Group Company’s in Retail Sector: Spencer’s Retail Spencer's Retail Limited is one of India's largest and fastest growing multi- format retailer with 220 stores, including 30 large format stores across 35 cities in India. Spencer's focuses on verticals like fresh fruit and vegetables, food and grocery, personal care, garments and fashion accessories, home and office essentials, electrical and electronics. Established in 1996, Spencer's has become a popular destination for shoppers in India with hypermarkets and convenient stores catering to various shopping needs of its large consumer base. Operations Spencer's has retail footage of approximately 1 million square feet and over 220 Spencer's stores in 35 cities. The company operates through the following formats: • The Spencer's Hyper stores are destination stores, of more than 15,000 sq. ft in size. They offer everything under one roof. The merchandise ranges from fruits & vegetables, processed foods, groceries, meat,
  15. 15. chicken, fish, bakery, chilled and frozen foods, garments and fashion accessories, consumer electronics & electrical products, home decor and needs, office stationeries, soft toys. On an average, a Spencer's hyper stocks 70,000 SKUs across 35,000 items. • The Spencer's stores are neighborhood stores ranging from 1500 less than 15000 sq. ft. These stores stock the necessary range and assortment in fruit and vegetables, FMCG food and non-food, staples and frozen foods and cater to the daily and weekly top-up shopping needs of the consumer. Au Bon Pain Spencer’s Retail Limited, has tied up with Au Bon Pain, the Boston-based fast casual dining and bakery café chain with more than 200 outlets in the
  16. 16. USA, South Korea, Taiwan and Thailand. A joint venture has been formed between Spencer’s Retail Limited and Varin Narula which would be the Master Franchisee of Au Bon Pain in India. Varin is the Director & Promoter of Au Bon Pain, Thailand. The outlets will offer the choicest of healthy and nutritious food, bakery products and beverages in a relaxed and casual environment. Beverly Hills Polo Club Spencer’s, has signed an exclusive tie-up with the renowned apparel brand Beverly Hills Polo Club. Beverly Hills Polo Club® evokes casual, relaxed yet affluent and elegant Southern Californian lifestyle. It presents product categories in-tune with its image viz, T-Shirts, polo’s, sweat shirt & sweat
  17. 17. pants, causal shirt & trousers, denims, winterwear, eyewear and watches for men and women. Formal shirts & trousers are an added category in the menswear segment. It is strategically developed by Spencer’s for the Indian market with fine product attributes that makes fashion, affordable. Pantaloon Retail (India) Limited, It is a large Indian retailer, which is part of the Future Group, and operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. Headquartered in Mumbai, the company has over 1,000 stores across 71 cities in India and employs over 30,000 people [1] , and as of 2010, it was the country's largest listed retailer by market capitalization and revenue. With effect from 1 January 2010 the company separated its discount store business, which includes the Big Bazaar hypermarket and the Food Bazaar supermarket businesses, into Future Value Retail Ltd., its wholly-owned subsidiary, so that the company may be listed independently [2][3] . The company’s brands include Pantaloons, a chain of fashion outlets, Big Bazaar, a hypermarket chain and Food Bazaar, a supermarket chain. Some
  18. 18. of the company's other regional brands include, Depot, Shoe Factory, Brand Factory, Blue Sky, all, Top 10 and Star and Sitara. A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, Collection i, selling home furniture products and E-Zone focused on catering to the consumer electronics segment.
  19. 19. Lines of Business The company is present across several lines of business which have various formats (stores) plywood, The Dollar Store (JV) • Fashion - Pantaloons, Central, aLL, Brand Factory, Blue Sky, Top 10, Fashion Station, Big Bazaar, Lee Cooper (JV) • General Merchandise - Big Bazaar, Shoe Factory, Navras, Electronics Bazaar, Furniture Bazaar, KB'S FAIR PRICE • Electronics - eZone, Electronic Bazzaar, STAPLES (JV) • Home Improvement - Home Town • Furniture - Collection i, Furniture Bazaar, Home Bazaar • E-tailing (Online Shopping) - • Books & Music - Depot • Leisure & Entertainment - Bowling Co., F123 • Wellness - Star & Sitara, Tulsi • Telecom & IT - Gen M, M Bazaar, M-Port, ConvergeM, Future Axiom • Consumer Durables - Koryo, Sensei, IPAQ • Service - E Care, H Care , Design & Service
  20. 20. • Malls - Central (Bangalore, Hyderabad, Pune, Mumbai, Vadodara, Gurgaon, Indore, Ahmedabad) • Investment & Savings - Insurance: ULIP, Pension, Endowment etc. Stock Information • Listed on: Bombay Stock Exchange • Stock Code: BOM:523574 Company Timeline • 1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, India’s first formal trouser brand. • 1992 Initial public offer (IPO) was made in the month of May. • 1997 Pantaloons – India’s family store launched in Kolkata. • 2001 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain launched. • 2002 Food Bazaar, the supermarket chain is launched. • 2007 Future Group crosses $1 billion turnover mark
  21. 21. Importance and scope of retailing While there is a lot of debate going on the impact of organized retailing on unorganized sector, there is little we know of how it will impact our economy in general. Common sense says that perhaps it will help the economy (every better looking thing is good for the economy. Swanky Call centers that brought outsourcing to us helped in fueling the feel good factor.. Same is for IT/BT companies.So similar should be the case with these retailers) Surprisingly there are not enough reasons to contest this belief. No matter what communists say or Mayawati does in UP, or what short term glitches we witness on Sensex or in US economy, organized retailing is here to stay and grow at a breathtaking place. So when it is so, I tried to look at it form a holistic point of view and no matter how much I desist to say this but yeah, I ultimately ended up with a PEST analysis.Here are the main points from that(I might post the complete version sometime later but before that I myself want to refine this and include the reaction that I get..if any :)) Political
  22. 22. Even though the government is yet to give the sector an Industry status and we see aggressive political protests, some aspects of the Government’s policy have been favourable on other fronts. For example- let’s take Delhi, NCR and Mumbai. In Mumbai, the Government is releasing unused textile mill land for retail development. In Delhi & NCR, the Government has released large tracts of land for retail development. Overall in politics, those in opposition will always is there any point in talking about this? Anyway main points to look out for are : 1. Decision on FDI 2. Government’s stand for foreign players Economical Although the organized retail sector constitutes only 4-5% of the USD 350 billion Indian retail market, it is expected to grow 400%- from USD 12-15 billion currently, to over USD 30.0 billion by 2010. There is hectic activity in the sector in terms of expansion, entry of international brands and retailers as well as focus on technology, operations and processes. All these present a tremendous opportunity in this new high growth industry. A large portion related to economic impact has already been covered in the previous sections
  23. 23. The important thing is that the growth of this sector will create a totally new demand in our economy. Households across India are now exposed to products and services they had never seen before, the tempting value proposition and an inviting atmosphere is making them purchase these items. Without the new stores the same money would have been sitting idle in some bank lockers. But now the money is out in market, helping the manufacturers to come out with new and innovative products. A great aggregation is also taking place now.. you can go and buy as much low quantities that you want, and the systems assist you in this because no one is bothered. Imagine what happened in the Shampoo sachet market in India, prior to the entry of Velvet which later transformed the industry landscape one was catering to the huge demand of affordable hair care solution. And today sachets hold 76% of the total shampoo market in India.. that means at least 60% more demand generation. There is no doubt in my mind that we are seeing something similar in the case of organized retailers though the extent of this demand expansion and its wholesomeness can be debatable.
  24. 24. Social There has been a demographic shift in India, emergence of a larger middle and upper middle classes and the substantial increase in disposable income has changed the nature of shopping in India from need based to lifestyle dictated. In addition to this, facilities like credit friendliness, availability of cheap finance and a drop in interest rates have changed consumer markets. Organized retail increases the efficiencies in the agriculture sector by removing intermediaries in the food chain; as a result, farmers are getting
  25. 25. better prices for their produce. The private retail players can actually introduce new technology, seeds, and thus encourage farmers to improve their productivity. Unorganized retail is feeling the heat of the emergence of the organized retail due to the changing trends of the Indian consumers. Antagonist lobby claims, “In the last four years, an estimated two crore traders have been rendered jobless due to the opening of big shopping malls in the country”. However there is no evidence of a decline in overall employment in the unorganized sector as a result of the entry of organized retailers. According to the ICRIER survey, the unorganized sector witnessed a closure rate of 4.2% of which only 1.7% closures were attributed to competition from modern retail. Large retailers like Wal-Mart can never impact small kirana stores in India. This is largely due to India’s socio-cultural heterogeneity and consumer choice. The consumer wants small retail. The ‘kirana’ store and the paan shop are seen as part of community life. Anyway it’s a long discussion and deserves a separate post in itself Technological
  26. 26. With increasing competition, slimmer profit margins and diminished returns-cost cutting at every point of value chain has become important. Today’s global retail business strategies utilize technology. Ecommerce, Customer Relationship Management (CRM) software, Enterprise Resource Planning (ERP) and Point of Sale (POS) systems are all vital to retail businesses. Using these technologies retailers can actually gain key insights to further gain market share and increase revenue Indian retailer would feel the need for technology only when he wants to grow beyond a certain point. This is one of the reasons why the traditional grocery is here to stay, with 90% of sales in India done through them Objectives of the Study Objective of the Study: · To know the consumer satisfaction. · Financial performance in Retail industry. · Market performance. · Market position. · Economic and the industry environment. · Cost saving initiatives. · To find out the satisfaction level of people.
  27. 27. · To find out the awareness level of customer. · To find the satisfaction amongst the customers Retail in Urban & Rural Areas Key Trends in Urban India: *Retailing in India is witnessing a huge revamping exercise. * Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US $6.4billion. * India is rated the fifth most attractive emerging retail market: a potential goldmine *Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. * India is rated the fifth most attractive emerging retail market: a potential goldmine * Food and apparel retailing key drivers of growth. * Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. Key Trends in Rural India:
  28. 28. * Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption * ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets. Types of retail outlets San Juan de Dios Market in Guadalajara, Jalisco Inside a supermarket in Russia A market place is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world.
  29. 29. In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Retail is usually classified by type of products as follows: • Food products • Hard goods ("hard line retailers") - appliances, electronics, furniture, sporting goods, etc. • Soft goods - clothing, apparel, and other fabrics. There are the following types of retailers by marketing strategy: • Department stores - very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service. • Discount stores - tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of
  30. 30. merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. However the service is inadequate.; • General merchandise store - a hybrid between a department store and discount store; • Supermarkets - sell mostly food products; • Warehouse stores - warehouses that offer low-cost, often high- quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee; • Variety stores or "dollar stores" - these offer extremely low-cost goods, with limited selection; • Demographic - retailers that aim at one particular segment (e.g., high- end retailers focusing on wealthy individuals). • Mom-And-Pop or Kirana Stores: is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. The square feet area of the store depends on the store holder. • Specialty Stores: A typical specialty store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be
  31. 31. regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores. • Convenience Stores: is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases. • Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. A classic example is the Metro™ in Bangalore. • Supermarkets: is a self service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000-40,000 square feet. Example: SPAR™ supermarket. • Malls: has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore, Express Avenue in Chennai.
  32. 32. • Category Killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. For example: Pai Electronics™ store in Bangalore, Tata Croma. • E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon and EBay. • Vending Machines: This is an automated piece of equipment wherein customers can drop in the money in machine and acquire the products. For example: Soft drinks vending at Bangalore Airport.
  33. 33. Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include: • Automated Retail stores are self service, robotic kiosks located in airports, malls and grocery stores. The stores accept credit cards and are usually open 24/7. Examples include Zoom Shops and Red box. • Big-box stores encompass larger department, discount, general merchandise, and warehouse stores. • Convenience store - a small store often with extended hours, stocking everyday or roadside items; • General store - a store which sells most goods needed, typically in a rural area; Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behavior. A good format will lend a hand to display products well and entice the target customers to spawn sales.
  34. 34. A food vendor in India Adidas store in Tel Aviv, Israel Retail pricing The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer's cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.
  35. 35. In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon which the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths, students, or senior citizen Transfer mechanism There are several ways in which consumers can receive goods from a retailer: • Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries. • Delivery (commerce), where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744 and was common in the late 19th and early 20th centuries. Ordering by telephone is now common, either from a catalog,
  36. 36. newspaper, television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, including telemarketing and television shopping channels, are also used to generate telephone orders. Online shopping started gaining significant market share in developed countries in the 2000s. • Door-to-door sales, where the salesperson sometimes travels with the goods for sale. • Self-service, where goods may be handled and examined prior to purchase, has become more common since the 1920s. Second hand retail Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away shops goods can be taken for free. Another form is the pawnshop, in which goods are sold that was used as collateral for loans. There are also "consignment" shops, which are where a person can place an item in a store and if it sells, the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers.
  37. 37. Customer service According to the book Discovery-Based Retail,[3] customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." It is important for a sales associate to greet the customer and make himself available to help the customer find whatever he needs. When a customer enters the store, it is important that the sales associate does everything in his power to make the customer feel welcomed, important, and make sure he leave the store satisfied. Giving the customer full, undivided attention and helping him find what he is looking for will contribute to the customer's satisfaction. Retail Sales US Retail Sales 1992-2010 The Retail Sales report is published every month. It is a measure of consumer spending, an important indicator of the US GDP. Retail firms
  38. 38. provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail & food services sample.[4] It has been published by the US Census Bureau since 1951. Retail scene in India With organized retail in India pegged at Rs 25,000 crore (Rs 250 billion) -- out of a total of Rs 800,000 crore (Rs 8,000 billion -- and a double digit growth rate, marketing companies are setting up shops to provide differentiated services to clients. Till now sales people were the link between the retailer and the producer. But sales personnel are busy selling a product and do not have a fair idea of what retailing is about. The focus is to priorities retail. That is, not only to sell a product to a consumer but to get the consumer to interact with the product. Gone are the days when retailing meant mere availability of a product. With competition becoming stiffer companies are looking at 'experiential' marketing. Also the lack of proper metrics to measure marketing spends is a serious issue.
  39. 39. In today's swiftly changing business environment, there is no option but to be in the know - to be constantly on the move, keeping tabs on the shifting trends in the market place and maneuvering your strategy to stay on top. The retail arena today is very different - the opportunities are incredible but exploiting them is extremely tough. Super smart shoppers know all the rules of the game. They can instantly sense a good buy and lap it up or sniff out a bad product and dismiss it. Their expectations are tough to meet but for retailers aiming to make a big sale, there is not much of a choice but to find ways to win customers over and keep them permanently happy. In an environment, which is still restrictive in many ways and lacks adequate infrastructure, this becomes a formidable task. So how are Indian retailers coping up and how long will it be before organised retail becomes the primary way of selling. As the corporate – the Piramals, the Tatas, the Rahejas, ITC, S.Kumar's, RPG Enterprises, and mega retailers- Crosswords, Shopper's Stop, and Pantaloons race to revolutionize the retailing sector, retail as an industry in India is coming alive. Retail sales in India amounted to about Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002.
  40. 40. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure. Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hyper marts. Sales from these large-format stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a latest report by Euro monitor International, a leading provider of global consumer-market intelligence. A. T. Kearney Inc. places India 6th on a global retail development index. The country has the highest per capita outlets in the world - 5.5 outlets per 1000 population. Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA. In a developing country like India, a large chunk of consumer expenditure is on basic necessities, especially food-related items. Hence, it is not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The share of food related items had, however, declined over
  41. 41. the review period, down from 73% in 1999. This is not unexpected, because with income growth, Indians, like consumers elsewhere, have started spending more on non-food items compared with food products. Sales through supermarkets and department stores are small compared with overall retail sales. Nevertheless, their sales have grown much more rapidly, at almost a triple rate (about 30% per year during the review period). This high acceleration in sales through modern retail formats is expected to continue during the next few years, with the rapid growth in numbers of such outlets due to consumer demand and business potential. The factors responsible for the development of the retail sector in India can be broadly summarized as follows:- * Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. * Looking at income classification, the National Council of Applied Economic Research (NCAER) classified approximately 50% of the Indian population as low income in 1994-95; this is expected to decline to 17.8% by 2006-07.
  42. 42. * Liberalization of the Indian economy which has led to the opening up of the market for consumer goods has helped the MNC brands like Kellogg's, Unilever, Nestle, etc. to make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers. * Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. The Internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets. About 47% of India's population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country. As India continues to get strongly integrated with the world economy riding the waves of globalization, the retail sector is bound to take big leaps in the years to come. The Indian retail sector is estimated to have a market size of about $ 180 billion; but the organised sector represents only 2% share of this market. Most of the organised retailing in the country has just started recently, and
  43. 43. has been concentrated mainly in the metro cities. India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold through the super markets and departmental stores. A similar phenomenon has swept through all other Asian countries. Organised retailing in India has a huge scope because of the vast market and the growing consciousness of the Consumer about product quality and services. A study conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail- specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010. A McKinsey report on India says organised retailing would increase the efficiency and productivity of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share of
  44. 44. employment of retail in India is low, even when compared to Brazil (14%), and Poland (12%). Current Status of Retail Marketing in India Winds of change sweeping through Retail Industry. What is it that has made the Piramals, the Tatas, the Rahejas, ITC and scores of others take a plunge into mega retailing? Why is market research, space management, ERP, promotions etc now a necessary tool in this industry? Retail Economics in India Traditionally retailing has not been a structurally organized industry in India. Organized retail network was seen only in fabrics, with large mills building their own exclusive stores e.g. Raymond's, Bombay Dyeing etc. Currently there are about 5130000 retail outlets selling about Rs4790bn worth of products. Retail universe in India comprises large, medium general stores, chemists and pan-bidi (apart from accessories stores). Of these – thanks to unemployment, the number of pan-bidi outlets are steadily rising. On account of the fragmented nature of Indian retail industry the inhabitants
  45. 45. to stores ratio in India is about 150:1, i.e. there is a store catering to every 150 people. This ratio varies from country to country. In china the ratio is similar to that of India where as incase of more developed countries the ratio would be higher. For instance in Europe the inhabitant to stores ratio is 2000:1.As markets mature, consumer expectations rise it would be a necessity for small retailers to come together and form innovative and strong supply chain that will cut through distribution and increase margins. Turnaround time In last couple of years this industry has made agile move from its nascent stages. Organized retailing started picking up in Southern India. Availability of land at prime locations coupled with cheaper real estate prices (compared to Mumbai & Delhi) made it possible to have multi stored shopping complexes here. It took two years of recession to get this concept of shopping to major cities like Mumbai & Delhi. Recession brought property prices down in these cities. It was during this period of industry slump that big business houses took notice of the potential in retailing. A classic example being- Lakme Ltd. The company after selling off its cosmetic division to HLL, made an aggressive foray into retailing. Its retail chain branded 'Westside' already comprises 4 stores- one each in Bangalore,
  46. 46. Hyderabad, Chennai and Mumbai. A cash hoard of Rs107bn will enable Lakme to roll out stores aggressively. What makes it attractive? Today the number of smaller retailers ($500pa) has shot up from 40% in 1990 to 54% in 1996, whereas the number of large stores (turnover of $3000pa) increased from 2.8% to 6.5%. Thus though large retailers are growing the smaller outlets are growing even faster. However changing shopping attitudes of an average customer will make future growth increasingly difficult for unorganized retail sector. Currently in India, organized retailing accounts for 6% of the industry turnover, comprising value-added foods (Rs770bn), music & entertainment (Rs40bn), colour cosmetics (Rs12bn) etc. By 2005 organized retailing will account for 20% the total retailing industry turnover (Rs8300bn). Big business houses today are in a position to provide Indian masses with shopping satisfaction, entertainment, quality product, polite salesperson, product information and discounts. Though margins currently are low due to high property cost and poor infrastructure, this is the only business where one buys in credit and sells for cash.
  47. 47. Further the number of households earning more than Rs150000 per annum amounts to 30mn today and is expected to grow to 80mn by 2007.Additionally financial institutions are encouraging such ventures. ICICI has recently sanctioned term loans to Vivek & co, a mega-retailer, in Chennai to meet their expansion plans. Very shortly the market will also witness IPO's for some of these Retail Ventures. Proven success In early 90's, K. Raheja Group started a mega Apparels stores in Mumbai- 'Shoppers Stop'. Initially, the group was averse to start outlets at South Mumbai for various reasons like low walk-ins, space constraints, narrowed target audience etc. However the success of Crossroads, an ardent rival, has prompted them to start one at South Mumbai in near future. The group has more of such stores, one each at Bangalore, Hyderabad and Jaipur. Within seven years of operations it has a yearly turnover of Rs1.30bn. The group has plans of opening about 20 mega apparel stores in next 2 years. For this the company plans to sell 25.1% stake for Rs559mn to Singapore based investor Warburg Pincus. The success story of Shoppers Stop has convinced other business houses to take a leap.
  48. 48. Retailing, considered a sunrise industry today after InfoTech, is the most happening industry with almost all the big players vying for a share of the coveted pie. Buoyed by a strong increase in private consumption (see graph), retailing is one industry that is waiting to explode. Source: KSA Technopack
  49. 49. Today however, organised retailing is less than 2 per cent of the retailing industry in India, that is, about Rs 5,000 crore.(see table ) Therefore, there is no real retail revolution in India; the industry is still in the stages of infancy. Share of Organised Retail 1999 2002 2005 Total Retail (US $ Bn) 150 180 225 Organized Retail (US $ Bn) 1.1 3.3 7 % Share of Organized Retail 0.70% 1.80% 3.20% Organized retailing is bound to grow tremendously provided the right marketing strategies are adopted. Retail businesses have broken rank and seem poised to surge ahead with renewed vigour, optimism, confidence and capability.
  50. 50. Organized Retailing in India According to Euro Monitor International, a leading provider of global consumer market intelligence, sales from large format stores (supermarkets and hypermarkets) is expected to increase by 30% in 2005. In the year 2002, food-related items accounted for nearly 71% of retail sales in India. However, it was interesting to note that there had been a decline in the purchase of food-related items. These had earlier registered a 73% sale in 1999. In recent years, there has been higher spending on non-food items. The main factors for this change are: • Rising incomes and a consequent increase in disposable incomes (Refer Exhibit VI for household income across India). • Better infrastructure. • Rise in consumer awareness. • Consumer keenness to buy branded products. • Consumer desire to purchase quality products and services...
  51. 51. Organized retail Organized sector refers to the sectors undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate retail formats of the exclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls. Growth of Organized retail in India Indian organized retail market is growing at a fast pace due to the boom in the India retail industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about 10% to the country's GDP. The organized retail market in India out of this total market accounted
  52. 52. for Rs 350 billion which is about 3.5% of the total revenues. Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010. Traditionally the retail industry in India was largely unorganized, comprising of drug stores, medium, and small grocery stores. Most of the organized retailing in India have started recently and is concentrating mainly in metropolitan cities. The growth in the Indian organized retail market is mainly due to the change in the consumer’s behavior. This change has come in the consumer due to increased income, changing lifestyles, and patterns of demography which are favorable. Now the consumer wants to shop at a place where he can get food, entertainment, and shopping all under one roof. This has given Indian organized retail market a major boost. Retail market in the organized sector in India is growing can be seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian companies are entering the Indian retail market which is giving Indian organized retail market a boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloons is another Indian company which plans to increase its
  53. 53. retail space to 30 million square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global giant for a £ 750 million joint venture. A number of global retail giants such as Walmart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market will definitely grow as a result of all this investments. Indian organized retail market is increasing and for this growth to continue the Indian retailers as well as government must make a combined effort. Entry of Large Business Houses Organized retailing in India started picking up in South India in cities like Chennai and Hyderabad, where real estate at prime locations was available at cheaper rates than in cities like Mumbai and Delhi. In the early 1990s, leading Indian business houses started taking a keen interest in the retailing sector... Pantaloon Retail India Limited (PRIL) Headed by Kishore Biyani (Biyani), Pantaloon Retail India Limited (PRIL) is one of the leading retail outlets in India. The retail chains which are a part
  54. 54. of PRIL include Pantaloons, Big Bazaar, Food Bazaar, Gold Bazaar and the Central Mall. PRIL was incorporated in October 1987 as Manz Wear Private Limited. It became a public limited company in September 1991. The company sold products under the Bare, Pantaloons and John Miller brand names. The first menswear Pantaloons Shoppe outlet was set up in 1993... RPG Group The Rama Prasad Goenka or RPG Group registered a turnover of Rs. 84 billion in the fiscal 2004-05. The group has more than 20 companies in seven different industries - Power, Tyres, Retail, Transmission, Entertainment, Technology and the Specialties sectors (Refer Exhibit XIII for contribution of business sectors to Group’sturnover)... Tata Group The Tata group is one of India's largest business houses. In 2005, the group owned 93 companies in seven business sectors, namely information systems and communications; engineering; materials; services; energy; consumer products; and chemicals, and employs nearly 220,000 people. In 1997, the Tata's sold their Lakme business to Hindustan Lever Limited (HLL) . The group started its retail business in 1998 with the purchase of the
  55. 55. Littlewoods retail stores, originally owned by a UK-based firm, in Bangalore... Raheja Group The K. Raheja group of companies is among India's largest real estate players. They launched Shopper's Stop way back in October 1991. This was the first mega apparel retail outlet to be established in India. Shoppers' Stop is projected as a Fashion & Lifestyle store for the family. From a single store in 1991, Shopper's Stop has today grown into a 16 store retail chain in major metropolitan cities across India... Reliance Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach Rs. 90,000 crores by 2010. AV Birla Group AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite
  56. 56. popular. It's also investing in other segments of retail. It will invest Rs. 8000-9000 crores by 2010. Indian unorganized retail sector India is the only one country having the highest shop density in the world, with 11 outlets per 1000 people (12 million retail shops for about 209 million households). Rather we can see the democratic scenario in Indian Retail (because of low level of centralization, low capital input and due to a good number of self organized retail). India started its Retail Journey since ancient time. In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a pretty long times to & step to shape the modern retail. In between these two concepts (i.e. between ancient retail concept & the modern one there exist modern kirana/ mom and pop shops or Baniya ki Dukan. Still it is predominating in India So the Indian retail industry is divided into two sectors- organized and unorganized.
  57. 57. Unorganized retailing Unorganized sector on the other hand, refers to the traditional formats of low-cost retailing, for example, hand cart and pavement vendors, & mobile vendors, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc. Characteristics of unorganized retail Small-store (kirana) retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labour. It is generally family run business, lack of standardization and the retailers who are running this store they are lacking of education, experience and exposure. This is one of the reason why productivity of this sector is approximately 4% that of the U.S. retail industry.
  58. 58. Unorganized retail sector is still predominating over organized sector in India, unorganized retail sector constituting 98% (twelve million) of total trade, while organized trade accounts only for 2%. The reasons might be- 1. In smaller towns and urban areas, there are many families who are traditionally using these kirana shops/ 'mom and pop' stores offering a wide range of merchandise mix. Generally these kirana shops are the family business of these small retailers which they are running for more than one generation. 2. These kirana shops are having their own efficient management system and with this they are efficiently fulfilling the needs of the customer. This is one of the good reasons why the customer doesn’t want to change their old loyal kirana shop. 3. A large number of working class in India is working as daily wage basis, at the end of the day when they get their wage, they come to this small retail shop to purchase wheat flour, rice etc for their supper. For them this the only place to have those food items because purchase quantity is so small that no big retail store would entertain this.
  59. 59. 4. Similarly there is another consumer class who are the seasonal worker. During their unemployment period they use to purchase from this kirana store in credit and when they get their salary they clear their dues. Now this type of credit facility is not available in corporate retail store, so this kirana stores are the only place for them to fulfill their needs. 5. Another reason might be the proximity of the store. It is the convenience store for the customer. In every corner the street an unorganized retail shop can be found that is hardly a walking distance from the customer’s house. Many times customers prefer to shop from the nearby kirana shop rather than to drive a long distance organized retail stores. 6. This unorganized stores are having n number of options to cut their costs. They incur little to no real-estate costs because they generally operate from their residences. Their labour cost is also low because the family members work in the store. Also they use cheap child labour at very low rates. As they are operating from their home so they can pay for their utilities at residential rates.Even they cannot pay their tax properly.
  60. 60. Currently the value of the retail market is estimated at around $ 270 billion with a growth rate of 5.7 per cent per annum according to the Indian retail report which creates a big threat for the small unorganized retailers. The well established organized retail sector in India are Pantaloon Retail, Shoppers’ Stop, Spencers, HyperCITY, Lifestyle, Subhiksha & newly emerging Reliance etc. Over 20,000 new retail outlets are expected to open within this segment. Major corporate retail like Wal-Mart and have started to try and take over the Indian retail sector. But in India the unorganized retail is a source foods and other necessities of millions of Indians , major link between rural and urban societies. Not only that it is also act like a convenience store for the customer offering right product at right time at right place. In a country with large numbers of people, and high levels of poverty, this model of retail democracy is the most appropriate. So these unorganized retail sector need to be promoted so that they can organize & supply food to Indian consumer. Now the question is how to promote this sector-
  61. 61. The suggestions might be- (a) Establishment of Retailer co-operatives among retailers which is highly required for the sustenance of the unorganized retail sector (b) Merger and buy-out of weak retailers by a stronger one that would give a new horizon to the small retailer (c) Setting up of franchisee organization may also help in strengthening the position of the retailers. The franchiser can exert a tremendous control over the way retailing is done. (d) There must be good network connection between retail organizations, the suppliers and other channel members to use compatible technology so that they can build strong distribution set-up to satisfy the customers. (e) Setting up of more and more non-store retailing centers would also ensure a strong retailing organization. Non-store retailing makes implementation of modern principles easier and less costly.
  62. 62. (d) Moreover there must be a change in the mindset of the unorganized retailer. They have to understand the pulse of the trend. They have to understand, come forward & lead this change management then only this Some of the organized stores Vishal mega marts The glory of Vishal Group’s success is the ascent it has come to accomplish in the field of manufacturing and retailing of readymade garments.The credit for this radiance goes to its dynamic of directors Mr. Ram Chandra Agarwal & Mrs Uma Agarwal who have transformed their foresightedness into an unending saga of growth.Identifying the immense market in fashion garment for the masses the Group has actually established benchmarks that many others are inspired to follow. Not resting on its laurels, the Group is busy identifying new avenues of growth and its companies are busy implementing the expansion plans to cash in on emerging potentials in the changing business environment of modern India’s enterprise.
  63. 63. The jewel in Vishal Group’s crown is its flagship company Vishal Retail Ltd. a company engaged in Hyper market stores with an average area of 25,000 to 30,000 sq. ft. through an impressive chain of 172 fully integrated stores in spread over the area of more than 24,00,000 sq. ft. in around 110 cities across India in 24 states. The turnover of the company for 09-10 was 1105 Crore . Maintaining the highest standards in quality and design, these stores have come to offer the finest fashion garments at down-to-earth price structure. A fact that is better visible in the constant flow of shoppers all through the year. Under the title of Vishal Mega Mart these stores have emerged as the regular haunts for the
  64. 64. bargain-hunters and fashion enthusiasts. The saga of Vishal Group dates back to 2001 when its directors foresaw the emerging potentials in the retail industry which is indeed the largest sector in the global economy. Imbibing its innovative concepts and techniques the Group identified the vast scope of growth in retailing for the common man. Its stores have gained an enviable prominence as being the ideal store for the common man where an extensive variety and quality is offered at a very, very reasonable price structure. The Group’s expertise in the field of retail marketing over the years and its focus on regions, cities and exact customer preferences have earned the Group an undisputed leadership status to Vishal Group. The Founders Mr.Ramchandra Agarwal Mrs. Uma Agarwal Big Bazar
  65. 65. Big Bazaar is a chain of hypermarket in India, which caters to every family’s needs and requirements. This retail store is a subsidiary of Future group, Pantaloons Retail India Ltd. and is an answer to the United States’ Wal-Mart. Big Bazaar has released the doors for the fashion world, general merchandise like sports goods, cutlery, crockery, utensils, and home furnishings etc. at best economical prices. Big Bazaar group offers more than 100 stores all over the country with an amalgamation of Indian bazaars’ feel and touch with a convenience and choice of the modern retail facilities. The retail format of the Big Bazaar group includes Aadhar, Rural & Home-Town retail chain, Ezone home- improvement chain, sportswear retailer, depot and music chain is few among others.
  66. 66. History of Big Bazaar The worldwide country chain, Big Bazaar, is formed by CEO of Future Group, Mr. Kishore Biyani. The group do not promises more than what it delivers. Their basic attraction associated with reasonable prices is their Unique Selling Price. Though, the products Big Bazaar stores stocks might not be advanced, but the customers are assured to avail the worth of the money spent by them. In 2001, the group opened its first store on the VIP Road, Calcutta, which was
  67. 67. the primary departmental store offering regulated services of parking, steel vessels, apparel, electronics etc under the one roof at the competitive prices. Big Bazaar has become a massive hit with lower middle-class and middle class people as a major client base. At present, the Future Group comprises various formats and brands like Pantaloons, F123, Copper Chimney, Etam, Staples, One Mobile, Urbana, Brand Factory, LootMart, HomeTown and Central. The Big Bazaar has several stores located all over the India, among that Chennai, Hyderabad, Ahmedabad, Bangalore, Kolkata, Pune, Mumbai and Delhi is those metro cities where the stores of Big Bazaars are located. Facilities offered by Big Bazaar • Online shopping: Big Bazaar has an official website,, which is one of the most favorite sites among people of India for online shopping. FutureBazaar is an online business venture of Future Group, which sells an assortment of products such as fashion, which includes merchandise for men and women, mobile accessories, mobile handsets and electronics like home theatres, video cameras, digital camera, LCD TVs, kitchen appliances and many more.
  68. 68. • Discounts: “Hfte ka sabse sasta din was introduced by the Big Bazaar, wherein extra and special discounts were offered on Wednesday every week, to attract the potential buyers into their store. • Security check: At each exit of Big Bazaar, they use alarm systems or Electronic Article Surveillance system, which detects the products that has attached tags or not. "Kirana Stores Vs Organized Retail" Small stores, also called kirana stores, will continue to grow alongside organized retail, but at a slower rate, and it might be a decade before such store owners lose business to the big retailers, providing an ample window for India to help make the smaller players part of the transition in retailing, But in the recent times it is said that kirana stores are joining together to combat the organized retail stores, so this will be going on all the time like who is better, but right now the kirana stores are happy at the moment with crisis going on people are coming back to kirana stores. India is currently the twelfth largest consumer market in the world. According to a study by
  69. 69. McKinsey Global Institute, India is likely to join the premier league of the world’s consumer markets by 2025, improving its position to the fifth. But this growth is not going to happen is smooth way. Any change always comes up with some friction, and Indian retail sector is and will be witnessing the same friction. Indian retail sector is still in its nascent form if we consider its full potential. While most of the developed market of US and Europe and also some SE Asian emerging market economies have reaped the benefits of modern retail, India has not yet entered into advanced phase of modern retail forms. Tug of war: organized vs. unorganized sector Future of retail sector in India is swerving- on one side organized retail is marching into life of urban consumers, while on the other our own neighborhood ‘kirana stores’ are resisting fiercely with their existing strong foothold. India today is at the crossroads with regard to the retail sector. A shift between organized and unorganized retail sector is evident, which has
  70. 70. led to a number of speculations on the fate of Indian retail sector. Unorganized sector cannot be ignored In any newspaper or television channel, we find hordes of news about happening in organized retail sectors, which is indeed fairly real situation. While the role of organized retail sector in growth of economy cannot be denied, but one thing is also of extreme importance that unorganized retail format is a support to a large chunk of population- providing direct employment to 39,500,000 individuals. So there is no way that government
  71. 71. or anyone can discount these foundation stone of Indian economy. Changing landscape of Indian consumerism The face of Indian consumerism is changing: not Indian consumerism is
  72. 72. evolving from “Bajaj Scooter family man” to “Bajaj Pulsar trendy youngster”. This changing consumer’s taste and lifestyle, somewhere automatically give some advantage to organized sector. This makes imperative for unorganized retail sector to restructure itself in order to withstand the increasing competition and to meet consumer expectations by moving with trends. What they can do and what they are doing, some o these issues will be discussed in future parts of article. Role of government As in other countries, government policy can and should play an important role in modernizing the unorganized sector and improve its competitiveness. But question is what should be exact role of government. Should it go for policies for protection of traditional retailers by restricting organized retail or encourage organized retail to reap benefits that are generated by it? What should be mechanism to promote or protect one or other? Can government act only as a facilitator or enablers or both? In the said context, it is imperative to develop a strategic roadmap for unorganized retail form to be able to survive, compete and keep the economy growing
  73. 73. HYPOTHESIS A hypothesis consists either of a suggested explanation for an observable phenomenon or of a reasoned proposal predicting a possible causal correlation among multiple phenomena. The term derives from the Greek, hypotithenai meaning "to put under" or "to suppose." The scientific method requires that one can test a scientific hypothesis. Scientists generally base such hypotheses on previous observations or on extensions of scientific theories. Even though the words "hypothesis" and "theory" are often used synonymously in common and informal usage, a scientific hypothesis is not the same as a scientific theory. Hypothesis may be defined as a proposition or a set of proposition set forth as an explanation for the occurrence of some specified group of phenomenon either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts. Quite often a research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependent variable.
  74. 74. NULL HYPOTHESIS A null hypothesis is a hypothesis (within the context of statistical hypothesis testing) that might be falsified on the basis of observed data. The null hypothesis typically proposes a general or default position, such as that there is no relationship between two quantities, or that there is no difference between a treatment and the control. The term was originally coined by English geneticist and statistician Ronald Fisher. The null hypothesis (often denoted by H0) formally describes some aspect of the statistical "behaviour" of a set of data. The Null Hypothesis is of this project report is that customers are highly satisfied. ALTERNATE HYPOTHESIS Alternative hypothesis is the "hypothesis that the restriction or set of restrictions to be tested does NOT hold." Often denoted H1. Synonym for 'maintained hypothesis.' The Alternate Hypothesis of this project report is that customers are not satisfied
  75. 75. Research Methodology The purpose of methodology is to describe the process involved in research work. This includes the overall research design, data collection method, the field survey and the analysis of data. Research is a common parlance refresh to a search for knowledge. One can also define research as a scientific & systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The advance learner’s dictionary of current English lay down the meaning research as a careful investigation & inquiry specially search for new facts in any branch knowledge. Research Design Research Design is the arrangement for conditioned for data collection & analysis of data in a manner that aims to combined relevance to research purpose with economy in procedure. A research design is a master plan or model for the conduct of formal investigation. It is blue print that is followed in completing study.
  76. 76. The research conducted by me is a descriptive research. This is descriptive in nature because study is focused on fact investigation in a well structured from and is based on primary data. RESEARCH PLAN · Type of study: For completing my study I have gone for sample study because looking at the size of population & the time limitation it was not convenient for me to cover entire population. Hence, I have gone for sample study rather than census study. Sampling Plan A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure that researcher would adopt in selecting items to be inched in the sample i.e. the size of sample. Sampling plan is determined before data are collected. Steps in Sampling Sampling Frame:
  77. 77. The list of sampling units from which sample is taken is called sampling frame. SAMPLING SIZE: Total sample size is 25. SAMPLING PROCEDURE: The selection of respondents were accordingly to be in a right place at a right time and so the sampling were quite easy to measure, evaluate and co- operative. It was a randomly area sampling method that attempts to obtain the sample of convenient. Q2. If organized then what type of organized stores? A) Branded Showrooms B) Malls
  78. 78. 49% 51% 0 0 OrganizedStores Branded Showrooms Malls Q3. If Unorganized then what type of unorganized stores? A) Kirana Shops B) Small society shops
  79. 79. Q4.Do you think is there any price difference between products of organized and unorganized stores?
  80. 80. A) Yes B) No Q5. Do you think organized stores provide more facilities then unorganized stores? A) Yes
  81. 81. B) No Facilities Provided Yes No Q6. Do you find any quality difference between the products of both the stores? A) Yes B) No
  82. 82. Q7) Do you think that the price difference is due to the extra facilities provided by the organized stores? A) Yes B) No
  83. 83.
  84. 84. Q8. Is the method of payment in organized stores is better then unorganized stores? A) Yes B) No
  85. 85. Q9. Do the facilities provided by organized stores attract you? A) Yes B) No
  86. 86. Q10. Which store do you find more comfortable for shopping? A) Organized B) Unorganized
  87. 87. Organized Unorganized Data Analysis Organized retail in India poised to reach Rs.2000 billion mark employment generation for 12 million people. Commerce and industry minister Kamal Nath releases India Retail repot 2007; launches
  88. 88. New Delhi, 9 th January 2007, Organised retail in India has the potential to add over Rs 2,00,000 crore ($45 billion) business by the Year 2010 generating employment for some 2.5 million people in various retail operations and over 10 million additional workforce in retail support activities including contract production & processing, supply chain & logistics, retail real estate development & management etc., said Mr. Kamal Nath, Commerce & Industry Minister releasing the IMAGES India Retail Report 2007 at a high powered industry and media meet at Udyog Bhawan today After leading the IT bandwagon, India is poised to grow as a Retail hub. It is imperative to sustain the modernization of the retail sector and dispel the myth that the game is big Vs small or traditional Vs modern or organized Vs unorganized or local Vs foreign . What is needed is to create an appropriate environment to propel retail where all benefit, he said.
  89. 89. India's huge population, he said, has the potential for mammoth consumption if given the power of spending and that is only possible through large scale development generating employment which is already happening with retail as the driving force. Talking about the key challenge areas for the retail growth Mr. Nath expressed concern over escalating real estate cost, scarcity of skilled workforce and structured supply of merchandise which he assured would be tacked in co-operation with the retail industry and the support organizations. Revealing key figures from the India Retail Report 2007, Amitabh Taneja, Chief Convenor of India Retail Forum said that the organised sector accounted for Rs. 55,000 crore ($12.4 billion) business at current prices in the calendar year 2006 increasing its share to 4.6% of the total Indian Retail Value that stood at Rs. 12,00,000 crore ($270 billion). Moving forward, organized retailing is projected to grow at the rate of about 37 per cent in 2007 and 42 per cent in 2008. “Going by the current growth trend and considering the fact that existing prominent players in organised retail have stepped up their expansion drive with Reliance announcing big plans and other Indian corporate houses too
  90. 90. evincing keenness on investing heavily in this sector as also the inking of the joint-venture between the world's largest retailer Wal-Mart and Bharti – The organised retail in India has indeed gained top speed and is now on the verge of take-off, Taneja added. According to IMAGES India Retail Report 2007, of the Rs.12,00,000 crore retail market, food & grocery retail is by far the single largest block estimated to be worth a whopping Rs.7,43,900 crore, but more than 99 per cent of this market is dominated by the neighbourhood kirana stores. Deliberating on the advantages of the organized retail, Mr Nath talked about the increasing efficiencies in the agricultural sector by removing intermediaries in the food supply chain. While urban customers benefit from
  91. 91. reduced prices of farm sector goods, rural farmers benefit by way of higher returns for their produce. With several States allowing retailers direct access to farm produce, there is a new revolution taking shape in rural India. Farmers are cultivating crops as per specifications and requirements of retail companies such as Reliance, ITC, Godrej and many others. More than 2,000 small farmers, for instance, are benefiting from such arrangements in Andhra Pradesh, he said. Talking about the global perception about India, about its economic might and potential in terms of market size, Mr. Kamal Nath said that there had been a drastic change over the last few years. While the buoyant manufacturing and services sectors had contributed in fuelling consumption demand in urban as well as rural areas, the government on its part remained committed to improving infrastructure and providing a congenial environment for indigenous business modules to blossom and harness domestic as well as foreign investment to optimum levels. Economic prosperity also meant higher standards of living and higher consumption levels, and only an efficient and organised Retail sector could ensure and sustain this growing demand of the evolved consumer.
  92. 92. “But unlike the experiences in most other countries, growth of Indian retail is not going to be a staggered and time-taking process: India has already shown the world how quick it can adapt to hi-tech products and services and will again set a record of sorts in setting up world class retail formats across the country in record time. In the next five years India should have retail entities strong enough to compete with the best in the world”, added Mr. Nath. At present, he said, India's retail sector is largely unorganized, with about 15 million tiny outlets catering to consumer needs across the country – it employs the second-largest number of people after agriculture. Organised retail is now focused primarily on the 300 million urban "middle classes'' and an additional 200 million rural rich, who form a consumer market worth more than US$100 billion. So, there is enough ground for the modern and the traditional formats to co-exist. Narrating India's economic growth story Mr. Nath highlighted three important things: One - that here is a society in which the fruits of development are more evenly spread, in which democracy is more real and palpable to the mass of
  93. 93. the population, which makes for a stable social environment that is attractive and reassuring; Two - that India is an enormous market, of which you are seeing only the tip of the iceberg; And Three - the tremendous resilience of India: we survived the zooming oil prices, the fluctuating dollar and global recession, with barely a hiccup. The Indian economy is integrating with the world, and yet it simultaneously has its own dynamics, which cushion global shocks as in no other country. India had kept the retail sector largely closed to outsiders to safeguard the livelihood of nearly 15 million small storeowners and only allows 51 per cent foreign investment in single-brand retail with prior government permission. FDI is also allowed in the wholesale business. Single-brand retailers such as Louis Vuitton, Fendi, LLadro, Nike and Toyota can operate now on their own. Metro is already operating through the cash-and-carry wholesale mode. The issue of Foreign Direct Investment (FDI) has been debated time and again as the Indian Government has been under pressure to open up further. The policy makers continue to explore areas where FDI can be invited without hurting the interest of local retail community. Mr. Kamal
  94. 94. Nath confirmed that the Government is considering opening up of the retail trading for select sectors such as electronic goods, stationery, sports goods, and building equipment. “To understand the reasoning and implications of such moves it was vital to size up the entire retail market in various segments and consumption levels across product categories with share of the organized segment and it was just the right time for India Retail Forum to take the initiative of researching the scope of retail businesses in India”, said R S Roy, Editorial Director, Images India Retail report 2007. Mr. Nath commended the pioneering efforts of the Images Group and India Retail Forum in compiling and pooling together relevant yet highly scattered and difficult to get information on this vital sector, which helps investors get a better understanding of the unfolding scenario. India Retail Report 2007 will set benchmark figures on consumer spend, retail market size across key categories and segments with scope and also performance of key players and their expansion plans. In his address Dr. Ajay K Dua, Secretary, Department of Industrial Policy & promotion, Ministry of Commerce & Industry said, “The growth of the Indian economy is now manifesting itself in the growing
  95. 95. purchasing power of its citizens. A ten to twelve per cent increase in the economy's disposable income and a much higher one in urban areas is also reflecting itself in the way goods and services are bought and sold”. “There would be a real revolution in the Indian retail industry, if the changes being witnessed in the metropolitan and other tier-one towns percolates to all the 784 urban settlements, with populations above 50,000 persons. This is likely to happen as the real estate prices in the large metropolitan towns are increasingly becoming prohibitive and consequently giving distinct advantage to those who are already in the business of retailing, viz., the traditional mom & pop stores. Rural and semi-urban incomes are also expectedly to grow much faster in future, once the agriculture growth rate pushes up. Our civic laws concerning construction and property development also need to be re-looked, as the earlier convenience-stores get replaced by shopping malls and other formats of organized retail trade”, he added. Expressing concern over the consumption and mall development trend, Editorial Director of this mega research of India retail research, R S Roy called upon the entire retail fraternity, concerned Govt. departments and the supporting organizations to work towards giving Indian retail - a face of India. “India Brand Story can travel across the globe with 'Delhi Hat' type
  96. 96. shopping cum entertainment centre opening not only across India but all over the world. Public private partnership can revitalize the formats like Khadi Bhawans that runs one of the largest retail networks in the world, and also govt. state run emporia,” he said. As India emerges as one of the most potential markets for global brands and retailers and retail reinvents the way modern Indians celebrate their spending power, India that takes pride in its rich culture, heritage, art, craft and variety of wares must capitalize on this ever escalating consumerism and channelise the spending towards healthy consumption for overall development of the country. Initiated by India Retail Forum and Images F&R Research, world's some of the top global research & consulting firms like AT Kearney, Ernst & Young, PWC, Technopak, KPMG, ICICI, AC Nielsen-ORG Marg, Synovate, Cushman & Wakefield etc. contributed for the India Retail Report 2007 research. IMAGES India Retail report 2007 sizes up the entire retail market in various segments and consumption levels across product categories with share of the organized segment. Profiling formats and retailers therein, the study, full of facts and figures, is expected to reveal many interesting facets of the Indian
  97. 97. retail industry that could open up newer avenues of business both for the established players and the new comers as well. A truly international presentation in a coffee table format, the IMAGES India Retail Report 2007 also carries visionary thoughts of Shri Kamal Nath, Dr. Ajay K Dua, and over 40 thought leaders from the retail industry covering almost every aspect of retail business. The occasion also saw the launch of a path breaking retail information interface portal by Mr. Kamal Nath. “ has an ambitious philosophy personified by these words: “The Home Page of the Indian Retailing Industry”. is being designed to be just that – with a 24/7 update and news feed team that gets you the retail intelligence that affects your business in every way,” said Pallav Moitra, Head of this revolutionary concept. “In the evolution of Indian retail in-time information will be vital to keep the industry and all its stakeholders abreast of the developments across. This exceptional portal is also aimed at the retailing community around the globe, giving a wide angle view and analysis of the business of Retail in India. Alongside interactive features such as interviews, chats and business
  98. 98. development tools, it will also contain exclusive and investigative editorial content that we can promise, no other media has access to”, he added. Besides retail news feeds, will boast an exclusive database of retailers, retail real estate developers, retail technology and systems firms, retail finance outfits, store design and shop fit pros, human resource sourcing and jobsite management, exclusive video interviews, live coverage of retail events and many more. The portal is expected to have around 200000 page views in the very first month of operation and is strongly geared up to enjoy a very high and filtered subscriber number. To begin with the subscription number for daily News Letters is expected to reach over 25000 key people in the retail industry. Sources of Data Collection Primary: For my survey primary data have been used as a questionnaire to collect the data. SECONDARY: The secondary data has been collected from the following modes: · Books
  99. 99. · Data through internet sources. Findings In this study we had find out that in today’s world more then 50% of the total population is interested in shopping from organized retail stores. From the study we have concluded that consumers think that there is quality as well as price differentiation between organized & unorganized retail stores, & this differentiation is due to the extra facilities provided by the organized retail stores. Suggestions *People should not attract towards the facilities provided by organized stores. * Sometimes the organized stores charge high prices, so consumer should be aware. *Consumers should also have there attention towards the quality of the products.
  100. 100. Limitations of the Study · I will have to rely upon the information get from secondary sources and given by respondents, which may not be fully true. · This study will be limited to only some areas of Moradabad in Uttar Pradesh. · It is only for short period of time. · Lack of professional approach since researcher is a student · The sample size is only 25 so the sample may not be truly representative of Moradabad’s population.
  101. 101. Webliography
  102. 102. Annxure Q1. What type of retail stores you prefer? A) Organized B) Unorganized C) Both Q2. If organized then what type of organized stores? C) Branded Showrooms D) Malls Q3. If Unorganized then what type of unorganized stores? C) Kirana Shops D) Small society shops
  103. 103. Q4.Do you think is there any price difference between products of organized and unorganized stores? C) Yes D) No Q5. Do you think organized stores provide more facilities then unorganized stores? C) Yes D) No
  104. 104. Q6. Do you find any quality difference between the products of both the stores? C) Yes D) No Q7) Do you think that the price difference is due to the extra facilities provided by the organized stores? C) Yes D) No
  105. 105. Q8. Is the method of payment in organized stores is better then unorganized stores? C) Yes D) No Q9. Do the facilities provided by organized stores attract you?
  106. 106. C) Yes D) No Q10. Which store do you find more comfortable for shopping? C) Organized D) Unorganized
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A project report on consumer preference towards organized and unorganized retail stores


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