The document provides an overview of the retail industry. It discusses the evolution and history of retail, the major retail store formats, demand and supply drivers, key metrics like same store sales and inventory turnover, the top 10 retailers globally which are mostly American companies, and the retail industry and major players in India. It also covers retail pricing strategies, how products are transferred to consumers, challenges facing the Indian retail industry, and the foreign direct investment policy regarding retail in India which currently only allows 100% FDI in wholesale cash and carry and 51% in single brand retail.

1. MARKETING MANAGEMENT
CIA 3
GROUP 1
ANIK DASGUPTA
ANUBHAV JINDAL
ASHHISH GANGULY
DHRUV GARG
KUNAL MAKANA
PULLURI JAYANTH

2. RETAIL INDUSTRY

3.  EVOLUTION & HISTORY
 DEMAND & SUPPLY DRIVERS
 MAJOR RETAILING STORES
 KEY RATIOS & TERMS
 RETAIL PRICING
 TRANSFER MECHANISM
 TOP 10 RETAILERS
 RETAIL INDUSTRY IN INDIA
 FDI POLICY OF RETAIL IN INDIA

4.  The retail industry is responsible for the distribution of
finished products to the public.
 This sector comprises of general retailers, departmental
stores, specialty stores and discount stores.
 The retail industry emerged in the US in the eighteenth
century.
 Specialty stores were developed only in those areas that had
a population of above 5,000.
 Supermarkets flourished in the US and Canada with the
growth of suburbs after World War II.
 The activities of the retail industry can be broadly classified
into- 1. Personal goods store retailing and 2. Non-store
retailing.
 Personal goods store retailing can be classified into Hard
Goods(electronics, furniture) and Soft Goods(Apparel
retailing). Non-store retailing can be food retailing and
automotive services.

5.  The major demand drivers of the retail
industry are:
1. Interest
2. Population
3. Employment
4. Personal income
5. Individual debt
 The supply drivers include:
1. Competitors
2. Size
3. Cost of the factors of production

6.  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 merchandise at affordable and cut-rate prices. Normally retailers sell
less fashion-oriented brands.
 Supermarkets - sell mostly food products.
 Variety stores - these offer extremely low-cost goods, with limited
selection.
 Specialty stores: A typical speciality 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 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.

7.  General store: a rural store that supplies the main needs for the local
community.
 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. They may adopt a Hi-Lo or an EDLP strategy
for pricing. The hypermarkets can be anywhere between 20,000 and
40,000 square feet (3,700 m2). Example: SPAR hypermarket.
 Malls: has a range of retail shops at a single outlet. They endow with
products, food and entertainment under a roof.
 Vending Machines: This is an automated piece of equipment wherein
customers can drop in the money in machine and acquire the products.

8. KEY RATIOS AND TERMS
 Same Store Sales: Used when analyzing individual retailers. It
compares sales in stores that have been open for a year or
more. This allows investors to compare what proportion of new
sales has come from sales growth compared to the opening of
new stores. It is also known as comps.
 Sales per Square Foot: Sales
Square Footage
 Inventory Turnover: This ratio shows how many times the
inventory of a firm is sold and replaced over a specific period.
Generally calculated as: Sales
Inventory
 Consumer Confidence Index: The Consumer Confidence Index
(CCI) is put out by the Consumer Confidence Board around the
middle of each month. The Consumer Confidence Survey is
based on a sample of 5,000 U.S. households and is considered
to be one of the most accurate indicators of confidence.
Increasing confidence means more spending and borrowing for
consumers.

9. RETAIL PRICING
 Cost Plus Pricing- This involves adding a mark up amount
(or percentage) to the retailer's cost.
 Suggested Retail Pricing- This simply involves charging the
amount suggested by the manufacturer and usually printed
on the product by the manufacturer.
 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 who the customer is.
 Another example would be the practice of discounting for
youths, students, or senior citizens.

10. 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. jewellery) and
controlled items like medicine and liquor. It was common
before the 1900s in the United States and is more
common in certain countries like India.
• Delivery- where goods are shipped directly to
consumer's homes or workplaces.
• 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.

11. TOP 10 RETAILERS
These are the top 10 retailers of the world:
1. WAL-MART(U.S.A)
2. CARREFOUR(FRANCE)
3. KROGER(U.S.A)
4. METRO AG(GERMANY)
5. HOME DEPOT(U.S.A)
6. MCKESSON CORP(U.S.A)
7. ITM ENTERPRISES(FRANCE)
8. SEARS(U.S.A)
9. KMART CORPORATION(U.S.A)
10. TARGET CORPORATION(U.S.A)

13. • Brief description: Offers a full time supermarket and a limited
assortment of general merchandise with operations in three
business segments: Wal-Mart U.S., International and Sam’s Club.
• Operational Format: Cash & Carry/Warehouse Club, Discount
Department
Store, Hypermarket/Supercenter/Superstore, supermarket and
online retail.
• Financials
Revenue: $417 billion USD, year-over-year change: 0.95%
Operating profit: $24.8 billion USD, year-over-year change: 5.1%
Net income: $14.8 billion USD, year-over-year change: 7.0%
• Expected capital expenditure (2011): $3.9 billion USD
• Geographic coverage (2010): US- 75%; Rest of the world- 25%
• Future plans: Expects to add more than 600 stores during fiscal
year 2011.

15. • Brief description: Offers a range of food and non-food products. Carrefour
SA's supermarket chains include, among others, Champion and Norte
brands, which primarily offer food, clothing and household goods.
• Operational Format: Cash & Carry/Warehouse
Club, Convenience/Forecourt Store, Discount
Store, hypermarket, Supercenter/Superstore, Supermarket and online retail
store.
• Financials
Revenue: $122 billion USD, year-over-year change: (1.14%)
Operating profit: $2.4 billion USD, year-over-year change: (39.0%)
Net income: $650 million USD, year-over-year change: (74.2%)
• Expected capital expenditure (2010): NA
• Geographic coverage (2009):France: 45%; Europe(except France): 33%;
Latin America: 14%; Asia: 8%
• Future plans: In India, it is expected to set up 150 hypermarkets while in
the global level it is planning to setup 50 supermarkets under the Carrefour
Market banner and 30 convenience stores under the Carrefour express
banner.

17. • Brief description: Distributes pharmaceutical
products, medical surgical supplies, healthcare and beauty
products and develops software to facilitate health enterprise.
Also offers analytic, care management and patient solutions
for payers.
• Operational Format: Drugs/medical-surgical equipment
distribution.
• Financials
Revenue: $109 billion USD, year-over-year change: 1.94%
Operating profit: $2 billion USD, year-over-year change:
17.7%
Net income: $1.3 billion USD, year-over-year change: 53.5%
• Expected capital expenditure (2011): $81 million USD
• Geographic coverage (2010): US: 91%; Rest of the world: 9%
• Future plans: Planning to expand through acquisitions.

18. RETAIL INDUSTRY IN INDIA
 The retail industry in India is of late often
being hailed as one of the sunrise sectors in
the economy.
 AT Kearney, the well-known international
management consultancy, recently identified
India as the ‘second most attractive retail
destination’ globally from among thirty
emergent markets.
 The retail industry had a share of 22% in the
GDP of the country in 2010.
 The retail industry in the country is growing
at a great pace and is expected to reach US
1.3 trillion dollars.

19. MAJOR RETAILERS IN INDIA
 Pantaloon: It is one of the biggest
retailers in India with more than
450 stores across the country.
Headquartered in Mumbai, it has
more than 5 million sq. ft retail
space located across the country.
It's growing at an enviable pace
and is expected to reach 30 million
sq. ft by the year 2010. In
2001, Pantaloon launched
country's first hypermarket ‘Big
Bazaar’.
 Tata Group: This is another major
player in Indian retail industry

20.  RPG Group: RPG Group is one of the
earlier entrants in the Indian retail
market, when it came into food &
grocery retailing in 1996 with its
retail Food world stores. Later it
also opened the pharmacy and
Beauty care outlets ‘health & glow’.
 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 ` 90,000 crores by 2010.
 AV Birla Group: AV Birla Group has a

21. CHALLENGES FACED BY THE
INDIAN RETAIL INDUSTRY
Challenges facing Indian retail industry are:
 The tax structure in India favours small retail
business
 Lack of adequate infrastructure facilities
 High cost of real estate
 Dissimilarity in consumer groups
 Restrictions in Foreign Direct Investment
 Shortage of retail study options
 Shortage of trained manpower

22. FDI WITH REGARD TO RETAILING IN INDIA
The specific guidelines for FDI with regard to the
conduct of trading activities in India are:
a) FDI up to 100% for cash and carry wholesale
trading and export trading allowed under the
automatic route.
b) FDI up to 51 % with prior Government
approval for retail trade of „Single Brand‟
products.
c) FDI is not permitted in Multi Brand Retailing
in India.

23. ENTRY OPTIONS FOR FOREIGN PLAYERS
1. Franchise Agreements : It is an easiest track to come in the
Indian market. In franchising and commission agents‟
services, FDI (unless otherwise prohibited) is allowed with the
approval of the Reserve Bank of India (RBI) under the Foreign
Exchange Management Act. This is a most usual mode for
entrance of quick food bondage opposite a world. Apart from
quick food bondage identical to Pizza Hut, players such as
Lactose, Mango, Nike as good as Marks as good as
Spencer, have entered Indian marketplace by this route.
2. Cash And Carry Wholesale Trading : 100% FDI is allowed
in wholesale trading which involves building of a large
distribution infrastructure to assist local manufacturers. The
wholesaler deals only with smaller retailers and not
Consumers. Metro AG of Germany was the first significant
global player to enter India through this route.
3. Strategic Licensing Agreements : Some foreign brands give
exclusive licenses and distribution rights to Indian companies.
Through these rights, Indian companies can either sell it
through their own stores, or enter into shop-in-shop
arrangements or distribute the brands to franchisees.

24. 4. Manufacturing and Wholly Owned Subsidiaries: The foreign brands
such as Nike, Reebok, Adidas, etc. that have wholly-owned subsidiaries
in manufacturing are treated as Indian companies and
are, therefore, allowed to do retail. These companies have been
authorized to sell products to Indian consumers by franchising, internal
distributors, existent Indian retailers, own outlets, etc. For instance, Nike
entered through an exclusive licensing agreement with Sierra
Enterprises but now has a wholly owned subsidiary, Nike India Private
Limited.
5. FDI in Single Brand Retail: The Government has not categorically
defined the meaning of “Single Brand” anywhere neither in any of its
circulars nor any notifications. In single-brand retail, FDI up to 51 per
cent is allowed, subject to Foreign Investment Promotion Board (FIPB)
approval and subject to the conditions mentioned in Press Note 3 that
(a) only single brand products would be sold (i.e., retail of goods of
multi-brand even if produced by the same manufacturer would not be
allowed), (b) products should be sold under the same brand
internationally, (c) single-brand product retail would only cover products
which are branded during manufacturing and (d) any addition to product
categories to be sold under “single-brand” would require fresh approval
from the government.

25. THANK YOU!!!!!!!!