Marketing Project on Retail Marketing in India 2017
MBA Marketing Project Report on Retail Marketing in India
Executive Summary
The Indian retail industry is now starting to evolve within the line with the transformation that has swept other big economies. It witnesses wonderful increase with the changing demographics and an improvement in the nice of life of city people. The growing affluence of India’s ingesting elegance, the emergence of the brand new breed of marketers and a flood of imported merchandise within the meals and grocery space, has driven the modern retail boom inside the domestic marketplace.
The idea retail which incorporates the shopkeeper to purchaser interaction, has taken many paperwork and dimensions, from the traditional retail outlet and street neighborhood market shops to upscale multi emblem retailers, particularly shops or departmental shops. Though at this second, it’s far nonetheless premature to say that the Indian retail marketplace will replicate the achievement memories of names which include Wal-Mart shops, Sainsbury and Tesco but at least the winds are blowing inside the route of increase.
Hence, specializing in two elements of retail advertising i.E. Store Retailing and Non-save Retailing. Store Retailing as the departmental shop, which is a store or multi logo outlet, offering an array of merchandise in numerous categories underneath one roof, trying to cater to not one or however many segments of the society and Nonstore Retailing as the direct promoting, direct advertising, computerized merchandising.
Therefore, this concept of retail advertising and marketing through departmental shops, that’s arising in a huge manner in India turned into determined to be studied in element, thru an exploratory and conclusive research.
The objective being to evaluate the numerous parameters that impacts a client to visit or store at departmental shop thereby contributing to its turnover (in phrases of income and earnings) for this reason leading to its standard success.
The giant studies introduced me to conclude that departmental shops are soon rising on the pinnacle precedence lists, amongst the buying spree in Delhi, as they appear to derive tremendous delight of convenience and publicity to range under one roof, in their extraordinarily busy lives, when they don’t have time for matters.
Though some of the customers perceive departmental stores to be high priced and most effective high income class’s cup of tea, the shops make regular efforts to induce them to at least visit the store right now all through the sale duration, or cut price gives.
Most of those stores trust in creating no longer only a advertising hobby with its customers, however as a substitute want relationship constructing with him a good way to convert first time clients right into a client.
Hence this record includes me via those factors in splendid detail, helping me to recognize the idea of retail advertising through departmental shops in Delhi.
Chapter 1 : RETAILING – THE SUNRISE INDUSTRY
1.1 Introduction to the Project Report :
The word ‘retail’ means to promote or be bought at once to people. Retail is India’s largest enterprise, and arguably the one with the most effect at the populace. It is the u . S . A .’s largest source of employment after agriculture, has the private penetration to rural India, and generates more than 10percent of India’s GDP. However, retailing in India has thus far, been primarily in the hand of small disorganized marketers. It is also India’s least advanced industries. In fact, it isn’t always even taken into consideration a actual industry. The industry suffers from lack of management talent, negative get admission to to capital, damaging regulation and denial of get admission to to great practices. The Indian retail industry is best now starting to evolve consistent with the transformation that has swept different big economies. Fifty years of restricting the patron items industry, a national mindset which desired denial over indulgence, and a fractured deliver chain for agricultural merchandise have all contributed to save you the improvement of present day tenants primarily based on scale improvements and client possibilities.
India has a few 12 million stores, however lots of these act simply as subsistence providers for his or her owners and survive on a fee shape in which labor and land is thought to be free and taxes nil. Compare this with the worldwide retail enterprise, that is one of the world’s biggest organized employers, is at the reducing edge of technology, and which leverages scale and scope to provide cost-introduced services to its customers.
However, handiest these days has there been an awakening on this region, with extra prepared shops starting to make an impact. The liberalization of the purchaser goods enterprise, initiated in the mid-80s and accelerated through the 90s has begun to impact the structure and behavior of the retail enterprise. Backed by means of converting patron developments and metrics, liberalization in mindsets driven by using media, new opportunities and increasing wealth, retailing in India, provides a good sized possibility for a diffusion of agencies – real property, shop design & operations, visual merchandising logistics and communications, B2C carrier companies, and FMCG groups who can add to their offers by means of partnering this revolution.
The Indian Retailing Industry stands poised to take off into the 21st century. It is one of the quickest growing sectors within the state that caters to the sector’s 2d largest patron market. Retail increase is unabating. India has 5 million shops with a business quantity of $180 million developing at 5 to 7 in keeping with cent a 12 months. The center class drives retailing anywhere inside the international and this phase ought to have affordable income. The next driver is availability of variety of items, merchandise and brands. The third one is “experience of recognition”.
In other developing economies, this change has already begun. In a lot of those countries, organized retail already has a forty percentage proportion of the market, as compared to India’s modern-day tiers of two percent. As India is going through this modification, new groups with income of 1billion – 2 billion US $ might be created in grocery and of 250million – 500million US $ in apparel. Smaller however nevertheless exciting possibilities will be created in other sectors like books, electronics, and music. This transformation can even impact the supply chain in agriculture, the tax collections from alternate and the way human beings save.
In the last 10 years, all Southeast Asian countries like Indonesia, Malaysia, Taiwan and Korea have gone thru similar stages. China, with a in keeping with capita profits of $650-700 in line with annum, goes through the same segment what India is also going through now. Europe went thru this section of retail revolution approximately forty-50 years in the past. It is thought that when a rustic’s consistent with capita income reaches the extent of $1,200 consistent with annum, prepared retailing starts offevolved to takeover. Though India has a in line with capital income of $ four hundred, on the idea of buying strength parity (PPP) it has already hit the $1200 stage. This does fortify the notion that probable, the right time for prepared retailing to click on in India has come.
This document aims at supplying an insight into the rising traits in the industry and the boundaries to alternate and a attitude on what this enterprise ought to end up, the usage of the worldwide enterprise because the backdrop.
1.2 Overview of the Global Retail Industry
Retail: global biggest industry
Retail, with general sales of $ 6.6 trillion, is the sector’s largest private enterprise in advance of monetary industries $ five.1 trillion. It is likewise domestic to a number of the arena’s largest organisations. Over 50 of the Fortune 500 agencies, and round 25 of the Asian top 500 corporations, are retailers. The enterprise money owed for over 8 percent of the GDP in western economies.
Retail: Largest personal enterprise in the global economic system
A Study with the aid of Mc Kinsey states that prepared retail bills for simply around 2 percent (out of which modern retail formats account for 7 percent of change) currently is ready to grow at exponential exceeding 35 percent. Fitch estimates the contemporary percentage of prepared retail to grow from 2percent currently to round 15 to 20 percentage by way of 2010.
Table 1:
Retail Consumption areas
US $ billion
Existing Companies in the organized zone
Food Retailing
a hundred thirty
Food Bazaar (Pantaloon) Food World Subhishka.
Clothing & Apparel
12
Pantaloon Westside, Shoppers Stop
Jewelry, Watches
7
Tanishq, Titan, Gold Bazaar (Pantaloon)
Home Furnishing
five
Home Store, Arcus (Pantaloon)
Foot put on
1.7
Bata, Woodland
Beauty Care
three.6
VLCC, Health & Glow
Source: economic time’s industry record
Traditionally, most stores have had very localized operations. This localized nature of the industry is converting as outlets face low prices of increase and threatened profitability at domestic. New geographies will help them maintain pinnacle-line boom in addition to permit worldwide sourcing. Profits in retail have steadily been rising and have generated 18 percent shareholder returns among 1994 and 1999. Significantly, retail is likewise one of the international’s biggest employers, accounting as an instance 16 percent of the US personnel, Poland 12 percent, China 8percent, India 10 percentage and Brazil 6percent. Factors inclusive of scale in sourcing, vending, operational effectiveness and ambience have driven the spread of prepared retail.
Grocery, electronics are examples of categories that compete on the electricity of better pricing, which in turn is pushed by means of advanced sourcing and merchandising and fee-efficient operations. Wal-Mart, Home Depot and Kingfisher are benchmark outlets in these fields.
In apparel, home furniture and fixtures, the benefit is driven via the marketers’ ability to offer higher products in a comfortable atmosphere at low-cost charges. In these instances sourcing capability needs to be sponsored by sturdy layout capability and store control. IKEA and GAP are right examples of this model of retailing.
Over the last few many years, retail formats have modified greatly. The basic branch stores and co-operatives of the early 20th Century have given way to mass merchandisers, hypermarkets, warehouse golf equipment, category killers, discounters and convenience shops. Each of those codecs has been driven by marketer’s want to offer relevant, different and economic propositions to an evolving purchaser base.
Global retailers have also reached a position of power that enables their emblem to be leveraged across a extensive variety of services. Many of them have increased their providing, through the years to consist of fuel retail, vehicle retail, comfort services and personal economic offerings. This has positioned them in a function wherein they are now not handiest starting to seize boom from geographical growth, but also are getting into massive new areas of business.
The current evolution of the Internet has helped similarly increase the scope of operations of large retailers. Further, a huge number of shops are pursuing modern aggregation and supply chain-streamlining initiatives the usage of B2B era.
Chapter 2 : THE RETAIL MARKETING REVOLUTION
By 2010, the listing of India’s pinnacle 10 shops could have as a minimum five Indian corporate. Retail Marketing will undergo a wonderful change in India this millennium. It will alternate India’s towns, its humans, and its families. The Indian purchaser is reportedly the most important spender in Singapore and London. It is, consequently, unusual that there have, thus far, been few efforts to provide the product inside the proper type of surroundings in India. Indeed, the proper buying revel in does set off Indian purchasers to spend more. This is obvious from the stories of retail-shops like Shoppers’ Stop, Music World, Food World, Crosswords, The Home Store, Ebony, Bigjo’s, Saboos, Standard, Vijay Store and Janaki Das & Sons, Westside and so on.
However, the development of prepared retail is depending on the efforts of numerous groups and institutions. The first amongst those is the government. In a rustic as massive as India and with as many states as ours, it’s miles vital that the Central authorities and all nation governments deliver in Value Added Taxation or a unified taxation device to make sure that the tax-regimes are the identical throughout the u . S ..
The laws governing retail real property have to additionally be looked into, so that it’s far feasible to develop retail-estate beyond the town-limits.
Apart from presenting enjoyment and retail possibilities, this could also decongest the city center and facilitate the improvement of suburbs. The applicable rules ought to also be amended to allow retail-shops to function 7 days a week, 12 hours an afternoon. Given the hours most city customers hold at work, and keeping in thoughts the boom within the range of nuclear families, this may, indeed, make experience. This will even assist people revel in their evenings, out at department stores.
The second group, whose participation is critical in making retail a growth-quarter on this millennium, incorporates developers. Most homes are developed with out considering the quit user; accordingly, we every now and then locate excessive-ceilinged offices and low-ceilinged retail stores. Often, the consumer’s convenience isn’t always taken into consideration while the property is constructed.
Another region of issue is the manner wherein builders sell their area. The only consideration is the charge, now not the usage sample or the character of the product this is to be sold. In contrast, across the world, mall-control is handled as a specialized subject of retail management. This is what we ought to consciousness on on this millennium.
The third constituency that has a position to play in the fortunes of prepared retail this century is the schooling-zone. Retail is a people-intensive enterprise, and there is a big opportunity for retail institutes in India.
For producers, retailing will gift an appealing opportunity. Organized retail lets in them to expose their merchandise to a massive quantity of customers in an environment conducive to buying. Already, numerous transnational retail giants have hooked up their presence in India; others, substantially Chinese outlets, have visited India and studied the Indian marketplace. There’s loads at stake here: then again early within the 21st Century, India is too big a marketplace to be neglected through transnational retail giants.
From the producing organisation’s attitude, the point of interest must be on generating top merchandise, and forging relationships with prepared retail. Manufacturers want to attract a plan of manufacturing high-quality merchandise and tie in with retailers. Indeed, the start of organized retail will even engender the introduction of private labels and store-manufacturers. Thus, if a manufacturing company lacks the resources to construct a logo, it could supply to a retail-chain that has the sources to create a emblem of its personal.
A glimpse of the closing 2 many years of the preceding century proves illuminating. Large-format retailing commenced with shops like Vivek’s and Nalli’s in Chennai and Kidskemp in Bangalore, and, at any other level, with producer-retail brands like Bata, Bombay Dyeing, and Titan. The final decade of the millennium witnessed the emergence of life-style brands and the plastic subculture. Liberalization and increasing focus of the sector around us created the Indian yuppie, who aspired to personal the whole lot we noticed on TV, or in shops at some stage in jaunts abroad. New life-style brands provided traditional retail-shops an opportunity to convert themselves into special stores, franchised or in any other case. And even as those traits had been taking location, the Indian consumer have become greater mature. Customer-expectancies zoomed
Thus, at the beginning of the New Millennium, retailers must deal with a purchaser who’s extraordinarily demanding. Not just in phrases of the product-first-rate, however also in phrases of carrier, and the entire purchasing experience. Today, the typical patron who stores in a retail outlet compares the time spent on the check-out counter with that at an efficient petrol station, and the smile of the counter-character to that redecorating the face of a Jet Airways’ team member. To deal with the brand new customer, manufacturers have to focus on product best and emblem building. And outlets, in turn, must attention on the great of the purchasing enjoy.
Internationally, retailing is a massive commercial enterprise; you discover at least one retailer amongst the top 10 agencies in every united states. In the US, it is Wal-Mart with a turnover in excess of $ 120 billion. In the UK, it’s far Marks and Spencer’s with near £ 10 billion; and, in Germany, it’s miles Karstadt with a turnover in excess of dm 10 billion.
Table 2:
Top 10 Retailers Worldwide
Rank
Retailer
No of shops owned
Sales in US$ Millions
1
Wall-Mart Stores Inc. (USA)
4178
$a hundred and eighty,787
2
Carrefour Group (France)
8130
$sixty one,047
3
The Kroger Co. (USA)
3445
$49,000
4
The Home Depot, Inc. (USA)
1134
$45,738
five
Royal Ahold (Netherlands)
7150
$45,729
6
Metro AG (Germany)
2169
$44,189
7
Kmart Corporation (USA)
2105
$37,028
8
Sears, Roebuck and Co. (USA)
2231
$36,823
nine
Albertson’s, Inc. (USA)
2512
$36,726
10
Target Corporation (USA)
1307
$36,362
Source: economic times enterprise document
Studies with the aid of consulting corporations like A.T. Kearney, KSA Technopak, and McKinsey & Co. In India have indicated a large potential for retailing in the us of a. Drawn by means of the magic wide variety of Rs 1, 60, 000 crore this is anticipated to be the dimensions of the retail industry with the aid of the quit of the primary decade of this millennium, several companies from the prepared region have additionally jumped into the fray.
In this millennium, like within the final, customers will want to spend time with their circle of relatives and pals. They may also like to go to shops on weekends where everything might be available under one roof. India will benefit from those developments due to expanded intake through retailing and the corresponding boom in employment created by using retailing.
2.1 Retail Marketing
Retail Marketing includes all of the activities involved in promoting items or services at once to final consumes for personal, non-commercial enterprise use. Any organization promoting to final customers — whether a producer, wholesaler, or store – is doing retailing. It does not be counted how the products or offerings are bought (through Person, Mail, Telephone, Vending Machine, or Internet) or wherein they’re offered (in a shop, on the road, or inside the client’s domestic).
There are many approaches to understanding and defining retail advertising; maximum emphasize retail advertising as the commercial enterprise interest of promoting items or offerings to the final consumer, but what we emphasised upon is described as follows:
“Any business that directs its advertising efforts towards pleasing the very last patron primarily based upon the organization of selling items and offerings as a method of distribution”
The idea assumed inside this definition is pretty crucial. The final customer inside the distribution chain is a key concept right here as outlets are on the cease of the chain and are involved in an immediate interface with the patron.
A store or retail store is any commercial enterprise agency, whose sales quantity comes ordinarily from retailing. Retail businesses show off notable variety and new bureaucracy preserve emerging. There are save retailers, non-save retailers, and retail groups. Consumers nowadays can shop for items and offerings in a wide kind of stores. The nice-regarded form of retailer is the branch save. Japanese branch stores together with Takashimaya and Mitsukoshi appeal to millions of consumers every year. These stores characteristic artwork galleries, cooking training, and kids’s playgrounds.
A retailer is on the give up of the distributive channel. He provides goods and carrier to the closing clients. This he does via his small organisation, with the help of a few employees. In an character retail store there isn’t always a great deal scope for company except in the sense that the shopkeeper has to organize and apportion his time and assets. The want for organization turns into vital as soon as he hires humans and enters into partnership or takes the assist of participants of his family in strolling his save. A store offers in an collection of goods to cater to the needs of consumers. His goal is to make maximum income out of his company. With that result in view he has to pursue a coverage to achieve his objective. This coverage is called retailing mix. A retailing blend is the bundle of products and services that save offers to the customers on the market. It is the mixture of all efforts deliberate through the retailer and embodies the adjustment of the retail keep to the marketplace environment. Retailing blend, a verbal exchange blend and a distribution blend. The maximum pleasure to the customers is completed by using a right combination of all 3.
The success of the retail shops, therefore, depends on customers’ reaction to the retailing blend which affects the profits of the shop, its quantity of turnover, its percentage of the market, its photograph and status and in the end its survival.
There are 3 principal phases within the life of a retailing group. These are: –
Innovation (Entry)
Trading Up
Vulnerability.
In the access degree, a brand new retailer enters with new charge attraction, restricting product services, Sparton Stores & Limited offerings. Its monopoly electricity over the others is its charge benefit, which means that it offers products at low expenses in order to get a aggressive part over its competition.
In the buying and selling up degree, the store starts increasing. It expands in terms of product supplying, higher offerings, and improved interiors. With a majority of these, it starts charging a bit better prices.
In the vulnerability level, there may be an opening in the market leaving a few area for the brand new players to are available in. This is due to increase inside the expenses via the retailer.
I actually have already explained the three levels in existence of a retail organization. Normally those stages are there in the existence of a retail group. But most of these might not be always there in every retail group. For example, any retail group targeting the upper elegance may also begin itself with a big variety & excessive rate.
This brings to broadly pick out and categorize the sorts of retail advertising, that are described as follows:
1. Store Retailing
2. Non store Retailing
2.2 Types OF Retail Marketing
Store Retailing
Store retailing offers customers to buy goods and services in a huge sort of shops and it additionally help the Consumers to get all of the needed goods and offerings from one keep only. The unique kinds of save retailing are given underneath:
Specialty Stores
These stores awareness on entertainment tastes of different people. They have a narrow product line with deep assortment which include apparel stores, carrying goods shops, furniture shops, florists and bookstores. These shops are usually luxurious and fulfill the wishes of decided on purchasers who have liking or choice for one of a kind things.
Departmental Store
These stores are generally built in big area and hold type of goods under one shed. It is generally divided into one of a kind sections like garb, kids section, domestic fixtures, electronic home equipment and different family items. In a departmental store a consumer should buy kind of items under one shed.
Supermarket
These shops are particularly large, low cost, low margin, excessive quantity, self service operations designed to serve overall desires for food, laundry and household protection products. Supermarkets earn an working profit of simplest 1 percentage on income and 10percent on internet really worth.
Convenience Stores
These are incredibly small shops positioned close to residential region, open for lengthy hours seven days per week, and carrying a restrained line of excessive turnover convenience merchandise at slightly higher charges than departmental shops. Many such stores additionally have delivered takeout sandwiches, espresso and pastries.
Off – Price Retailer
These shops sell goods at low rate with lower margins & higher volumes. These stores sell items with deteriorated fine. The defects are normally minor. This goal on the people belonging to the decrease profits group, although a few have a set of imported items aimed to target the more youthful generation. The organization owned showroom selling the seconds merchandise is an ordinary example of off – charge store.
Discount Store
These stores sell preferred products at lower charges by way of accepting lower margins and promoting better volumes. The use of occasional reductions or specials does not make a reduction save. A real bargain shop frequently sells its products at lower costs, supplying broadly speaking national manufacturers, no longer inferior goods.
In recent years, many cut price retailers have “traded up”. They have stepped forward decor, brought new lines and offerings, and opened suburban branches—all of which has caused better prices and fees and as a few department stores have cut their charges to compete with discounters.
Not best that, bargain stores have moved past widespread products into strong point products shops, which include discount carrying goods stores, electronics stores, and bookstores.
Catalog Showroom
Catalog showrooms usually sell a huge choice of excessive-markup, rapid-moving, brand-call items at discount fees. These include rings, electricity gear, cameras, bags small appliances, toys, and carrying items. Catalog showrooms make their money through reducing charges and margins to provide low expenses with a purpose to appeal to a higher quantity of sales. Catalog showrooms had been struggling in current years to maintain their percentage of the retail marketplace.
RETAIL SCENE IN INDIA
India has some on occasion been known as a nation of shopkeepers. This epithet has its roots within the huge number of retail organisations within the united states of america totaling 12 million, approximately seventy eight percent of these are small family owned companies using simplest household labour. Even amongst retail corporations that lease workers the majority of them rent less than 3 employees .India’s retail zone appears backwards now not most effective by way of requirements of industrialized nations however also in assessment to numerous different emerging markets in Asia and some place else. There are best 14 organizations that run departmental shops and mere with hypermarket operations. While the number of corporations working supermarkets is better ( 425 in 2004 ) maximum of these had simplest 1 outlet, the wide variety of agencies with grocery store chains changed into less than 10.
2.3 Major Formats of Retailing
Major formats of In-Store Retailing had been listed in Table given underneath:
Table 3:
Format
Description
The Value Proposition
Branded Stores
Exclusive showrooms either owned or franchised out via a producer.
Complete range available for a given logo, Certified product first-rate.
Specialty Stores
Focus on a selected consumer want; carry most of the manufacturers available.
Greater choice to the purchaser, comparison between manufacturers feasible
Department Stores
Large shops having a extensive form of merchandise, prepared into one of a kind departments, inclusive of apparel, house wares, furnishings, appliances, toys, and so on.
One stop keep catering to varied purchaser desires.
Supermarkets
Extremely big self-offerings retail outlets.
One stop keep catering to varied purchaser desires.
Discount Stores
Stores offering discounts on the retail rate thru promoting excessive volumes and reaping the economies of scale.
Low charges.
Hyper-mart
Larger than a Supermarket, occasionally with a warehouse appearance, normally located in quieter elements of the town
Low costs, tremendous preference available consisting of offerings as cafeterias.
Convenience Stores
Small self-service formats located in crowded city areas.
Convenient region and prolonged operating hours.
Shopping Malls
An enclosure having special formats of in-save stores, all beneath one roof.
Variety of stores available near each other.
Source: India info line
Non-save Retailing
It is some other kind of retail advertising and marketing. Different styles of non-save retailing are given under:
Direct Selling
Direct selling which started centuries in the past with itinerant peddlers has burgeoned right into a $9 billion industry, with over 600 agencies selling door to door, workplace to office, or at domestic sales events. A version of direct promoting is known as multilevel advertising, wherein companies consisting of Amway recruit impartial businesspeople who act as distributors for their products, who in flip recruit and sell to sub vendors, who in the end recruit others to sell their products, normally in client houses.
Direct Marketing
Direct advertising has its roots in mail-order marketing but today includes attaining humans in different ways than touring their houses or offices, together with telemarketing, tv direct response advertising and marketing, and digital shopping.
Automatic Vending
Automatic vending has been carried out to a good sized style of products, together with impulse items with excessive comfort price (cigarettes, tender drinks, sweet, newspaper, hot beverages) and other merchandise (hosiery, cosmetics, food snacks, warm soups and meals, paperbacks, record albums, movie, T-shirts, coverage guidelines, or even fishing worms).
2.Four Organized Retail Formats in India
Each of the retail stars has identified and settled right into a viable and sustainable enterprise version of its own.
Shoppers’ Stop – Department store layout
Westside – Emulated the Marks & Spencer model of 100 in step with cent personal label, superb cost for money merchandise for the entire circle of relatives
Giant and Big Bazaar – Hypermarket/cash & bring save
Food World and Nilgiris – Supermarket layout
Pantaloons and The Home Store – Specialty retailing
Tanishq has very efficiently pioneered a totally high pleasant organized retail enterprise in fine jewelry.
Structure of the retailing industry in keeping with possession styles:
An unaffiliated or independent retailer
A chain store or corporate retail chain
A franchise device
A Leased Department (LD)
Vertical Marketing System (VMS)
Consumer Co-operatives
A new entrant inside the retail surroundings is the ‘discounter’ format. It is also is referred to as coins and-deliver or hypermarket. These formats typically paintings on bulk shopping for and bulk selling. Shopping experience in terms of atmosphere or the service isn’t the mainstay here. RPG organization has installation the first ‘discounter’ in Hyderabad called the Giant. Now Pantaloon is following healthy.
Two categories of clients visit those shops.
1. The small retailer. For example, a purchaser of Giant could be a dhabawala who desires to buy safe to eat oil in bulk.
2. The everyday client who spends on big volumes (big p.C. Sizes) because of a charge gain per unit.
Retailing in India is still evolving and the world is witnessing a sequence of experiments throughout the us of a with new codecs being examined out; the antique ones tweaked round or simply discarded. Some of these are listed in Table below.
Table 4:
Retailer
Current Format
New Formats
Shoppers’ Stop
Department Store
Quasi-mall
Ebony
Department Store
Quasi-mall, smaller shops, adding meals retail
Crossword
Large bookstall
Corner shops
Pyramid
Department Store
Quasi-mall, food retail
Pantaloon
Own brand keep
Hypermarket
Subhishka
Supermarket
Considering transferring to self service
Vitan
Supermarket
Suburban discount store
Foodworld
Food grocery store
Hypermarket, Foodworld specific
Glob us
Department Store
Small fashion shops
Bombay Bazaar
Super marketplace
Aggregation of Kiranas
Efoodmart
Food fantastic marketplace
Aggregation of Kiranas
Metro
Departmental save
Cash and bring
S Kumar’s
Departmental save
Discount shop
Source: India information line
Retailers also are attempting out smaller versions in their shops in an attempt to attain a most wide variety of purchasers. Crossword bookstores are experimenting with Crossword Corner, to growth reach and enterprise from their shops. FoodWorld is experimenting with a format of 1-fourth the everyday length referred to as FoodWorld Express.
2.5 Trends in Retail Marketing
At this point, I can summarize the primary development retailers and producers need to do not forget as they plan their aggressive strategies.
In India the tendencies are especially in three sectors. These sectors are:
Trends in retail advertising
1. New retail paperwork and combos usually emerge. Bank branches and ATM counters have opened in supermarkets. Gas stations include meals stores that make more income than the gasoline operation. Bookstores characteristic coffee stores.
Even vintage retail forms are reappearing: In 1992 Shawna and Randy Heniger introduced peddler’s carts within the Mall of America. Today 3-fourths of the country’s predominant shops have carts selling the whole lot from informal put on to condoms. Successful carts common $ 30,000 to $ forty,000 a month in income and might without difficulty top $ 70,000 in December. With a mean start-up cost of simplest $three,000, push carts help budding marketers test their retailing desires without a primary cash funding. They offer a manner for shops to usher in greater mom-and-pop stores, showcase seasonal products, and prospect for permanent tenants.
2. New retail paperwork are going through a shorter existence span. They are rapidly copied and quickly lose their novelty.
Three. The electronic age has considerably improved the boom of non shop retailing, customers acquire sales offers in the mail and over television, computer systems, and telephones, to which they could at once respond through calling a toll-unfastened wide variety or via pc.
4. Competition today is increasingly intertype, or among special kinds of keep stores. Discount stores, catalog showrooms, and branch shops all compete for the identical purchasers. The opposition among chain superstores and smaller independently owned shops has become particularly heated. Because of their bulk buying power, chains get extra favorable terms than independents, and the chains’ massive square pictures permits them to install cafes and toilets. In many locations, the appearance of a superstore has compelled nearby independents out of business. In the e-book selling commercial enterprise, the arrival of a Barnes & Noble superstore or Borders Books and Music commonly puts smaller bookstores out of commercial enterprise. Yet the news isn’t all terrible for smaller businesses. Many small unbiased stores thrive by way of knowing their customers higher and offering them with extra non-public provider.
5. Today’s shops are transferring toward one in all poles, working both as mass merchandisers or as uniqueness shops. Superpower shops are emerging. Through their superior statistics structures and shopping for strength, those giant shops are able to offer strong charge financial savings. These stores are using state-of-the-art marketing statistics and logistical structures to supply excellent service and giant volumes of product at appealing prices to loads of customers. In the procedure, they’re crowding out smaller producers, who come to be dependent on one huge store and are therefore extremely prone, and smaller outlets, who truly do not have the finances of the shopping for energy to compete. Many stores are even telling the most effective manufacturers what to make; a way to price and sell; whilst and a way to ship; or even how to reorganize and improve manufacturing and management. Manufacturers have little desire: They stand to lose 10 to 30 percentage of the marketplace if they do not want.
6. Marketing channels are more and more turning into professionally managed and programmed. Retail agencies are increasingly designing and launching new shop codecs centered to one-of-a-kind way of life companies. They are not sticking to one layout, which includes branch stores, but are moving into a combination of retail formats.
7. Technology is becoming critical as a aggressive device. Retailers are using computers to supply better forecasts, manage stock expenses, order electronically from suppliers, ship e mail between shops, or even promote to customers inside shops. They are adopting checkout scanning structures, digital budget switch, and progressed merchandise-handling structures.
8. Retailers with precise codecs and strong logo positioning are increasingly entering into other countries. McDonald’s, The Limited, Gap, and Toys “R” Us have turn out to be globally outstanding due to their extraordinary advertising prowess. Many greater Indian stores are actively pursuing foreign places markets to reinforce income.
9. There has been a marked upward thrust in establishments that provide an area for people to congregate, including coffeehouses, tea shops, juice bars, bookshops, and brew pubs. Denver’s two Tattered Covered bookstores host extra than 250 activities yearly, from folks dancing to women’s conferences. Brew pubs such as New York’s Zip City Brewing and Seattle’s Trolley man Pub offer tasting and a place to pass the time. The Discovery Zone, a chain of youngsters’s play areas, gives indoor spaces wherein kids can cross wild without breaking whatever and confused-out parents can change memories. There also are the now-ubiquitous coffeehouses and coffee bars, such as Starbucks, whose numbers have grown from 2,500 in 1989 to a forecasted 13,000 through 2001. And Barnes & Noble became a as soon as-staid book place enterprise right into a amusing-filled village inexperienced.
Chapter 3 : RETAIL MARKETING IN INDIA
Retail marketing is the maximum crucial a part of the complete logistics chain in a commercial enterprise specifically in patron related merchandise. Without proper retailing the businesses can not do their commercial enterprise. Retailing is the procedure of selling items in small portions to the general public and isn’t always supposed for resale. Retail is derived from the French phrase store, which means to reduce a chunk off or to interrupt bulk.
There are numerous approaches of making items to be had to consumers like:
Company to distributor to wholesaler to retailer to purchaser
Company to shop clerk to consumer
Company to consumers (online/ cellphone/ catalog ordering)
These three are most of the most common approaches of creating the goods available to consumers. But in India the three layered machine of distributor, wholesaler and retailer, bureaucracy the backbone of the the front-give up logistics of most of the patron-proper corporations.
In this gadget the organisation running on all India basis appoints hundreds of vendors throughout the united states of america that substances to diverse shops and wholesalers. Wholesalers in turn can either without delay sell inside the marketplace or can deliver to outlets. The modern retailing gadget commonplace throughout the u . S . A . Is enormously fragmented and unorganized. Anyone with some cash and some real property can open a small shop and become a retailer catering to the locality wherein he opens the shop.
There are some of reasons behind this fragmented retail marketplace. Some of the most important motives being:
Poverty and lower literacy degrees.
Low consistent with capita profits.
Savings targeted and much less indulgence mindset.
Poor infrastructure facilities like roads and so forth.
Restrictions on intra-state proper movement.
High taxes.
No exposure to media.
High import obligations on imported items.
FDI in retailing is not allowed.
Retailing isn’t considered as a enterprise or industry through the authorities.
Hitherto not one of the enterprise faculties in India were presenting specialised guides on retailing.
Expensive deliver chain.
Besides this there may be different motives too, which led to stifling of increase of prepared section of retailing area and which alternatively caused incredibly fragmented market.
Today in India we’ve got extra than 12 million stores and most of then are circle of relatives run and regionally owned. There are very few nationally present retail shops. In India the technique of purchasing and promoting at these unorganized shops, is distinctly characterised by way of bargaining and negotiations. But slowly with increasing have an impact on of media and urbanization the marketplace is transferring closer to organized phase. Seeing the large market size of retail enterprise in the united states and the current stage of prepared phase, many players have jumped into the fray and plenty of are looking ahead to the proper opportunity to enter it.
Three.1 Retailing in Nineties
On account of the liberalization force within the Nineteen Nineties, numerous structural and demographic changes which can be taking region are supporting the enterprise to grow. The GDP has grown by means of 6.6percent inside the closing decade resulting in expanded earnings tiers and higher purchasing energy for the populace. Increasing literacy ranges, growing range of running ladies, increasing urbanization, higher international travel with the aid of Indian populace and growing media penetration has raised aspiration ranges of the populace, ensuing in call for for higher purchasing revel in and larger type of goods. India has close to 54percent of populace underneath the age of 25, which interprets into higher possibilities for extended consumption tiers inside the future. Finally, interest prices have also declined in the past few years similarly propelling the intake demand.
These factors were the key drivers for the retail wave inside the united states. Notable a few of the early entrants had been gamers like Shoppers Stop, Pantaloon, Ebony, Foodworld, Subhiksha, and so on. Initially, the increase in prepared retail became very gradual and focused mainly in metros, with south India holding its floor as the pioneer in prepared retail growth, due to the low price of real property. Due to the high investments required inside the early tiers and the fact that actual estate changed into the key identifying issue for success of stores, real property developers have been the essential gamers inside the enterprise (see Table).
Table 5:
Sponsors
Group
Retail Business
Rajan Raheja – Real Estate Developer
Globus – Chain of departmental shops
K, Raheja – Real Estate Developer
Shopper’s Stop – Chain of departmental stores
Hiranandani – Real Estate Developer
Haiko grocery store, Loft shoe stores and Hakone mall.
Tata – Diversified Business House
Westside – chain of branch stores
DS Group – Real Estate Developer
Ebony – chain of branch shops
RPG – Diversified Business House
Foodworld supermarkets, Giant hypermarkets, Health & Glow splendor and fitness shops.
DLF – Real Estate Developer
DLF malls
ITC – Diversified Business House
Wills Sport – Chain of apparel saved.
Source: Fitch
In the early Nineteen Nineties, as the gamers have been decrease down on the mastering curve many faltered in their fashions, and boom of the enterprise remained sluggish. The 2d half of 1990s noticed numerous players making losses and exiting from the business. The worst years for the industry were 2000 and 2001, as the stock market downturn, which reduced client confidence and spending, had a direct impact on the overall performance of the industry. The industry recovered starting 2002. It now seems the efforts and getting to know’s of the gamers within the final decade are beginning to repay; the organized retail industry has mounted company roots and is beginning to develop.
3.2 Present Retail Scenario In India
Retail professionals discover Indian enterprise promising
Retail sales to touch Rs. 30,000 crore through 2005
Mall Mania: The developing mall culture in India
Emergence of region-specific codecs
Emergence of bargain codecs
Entry of international gamers
Retail professionals discover Indian enterprise promising
The retail motion in India has acquired the critical mass that is required for rapid acceleration in phrases of enterprise growth as well as geographical unfold. The Indian retail enterprise can now not be called nascent.
The unfold of notable shops to the northern cities consisting of Delhi, Chandigarh, Jaipur and Kolkata is proof of the fact that organized retailing in India has emerged from its southern bastion.
The retailing boom is being driven by means of improved expectancies as well as converting shopping behavior of the city Indian customer. With the growing wide variety of nuclear households, running women, extra paintings pressure and increased commuting time, customers are searching out convenience. And, comfort is described as having the whole lot underneath one roof, longer hours and multiplicity of desire.
On the supply side, the modern-day inefficient supply chain in India, especially for food objects has led a few gamers to consolidate their operations to take benefit of economies of scale and healthy client expectations in terms of shipping in addition to area. So, we have a situation where each call for and supply side dynamics are fuelling the growth of prepared retailing in India, although upgrades in the deliver chain are yet to fully fit with purchaser expectancies.
The destiny growth need not always come best from the large metros, where there already exists a great retail network. The reality that huge Indian retail chains are moving into places like Indore or Chandigarh is an important indicator of future increase. For the Rs. 5000-crore organized retail industry it’s miles, perhaps, time to faucet the relatively smaller cities. The share of prepared sector in general retail sales will grow from one in step with cent now to six per cent through 2005.While projections can be slippery, difficult statistics factor to exciting growth in advance for this area.
According to KSA, organized retailing is focusing on handiest SEC-A towns, India’s 23 biggest towns. That is wherein a large portion of the usa’s urban populace exists. Today eighty two according to cent of organized retailing comes from the pinnacle six cities and 12 in step with cent from the following 4. KSA says the top 10 cities offer 94 according to cent of organized retail income in India.
By 2005, KSA tasks the top six towns will account for sixty six consistent with cent of total prepared retailing and the next 4 for 20 in line with cent. The pinnacle 10 towns will account for 86 in keeping with cent of organized retail income. There will be variations in increase patterns in exclusive segments. The second 1/2 of the top 10 cities will provide large boom for meals and groceries, at the same time as the top six could nonetheless be the growth facilities for consumer durables, believes KSA.
The unfold of organized retailing is not going to be a national phenomenon but. This appears to be the case to date. South India, especially Chennai, Hyderabad and Bangalore, have visible the emergence of chain shops or large layout stores. While garment shops have been round for someday, different segments like meals and groceries, patron durables or even books and tune have witnessed the emergence of prepared players in big towns in South India. The lack of skilled manpower or as an alternative the terrific scope the world has to offer employment is every other trouble.
Mall Mania: The Developing Mall Culture in India
Modern department stores made their entry into India in the late 1990s, with the status quo of Crossroads in Mumbai and Ansals Plaza in Delhi. By early 2001, several mall initiatives were introduced. According to marketplace estimates, close to 12 million sq. Toes. Of mall space is being developed throughout numerous towns inside the united states of america, of which 10 million sq. Feet. Is predicted to be operational with the aid of give up of 2003 (see Table below). With this, rentals for retail homes have proven a marked decline, which has added down the ruin-even levels of the retail initiatives. Moreover, retailers could now have get right of entry to to retail-unique properties, so that you can increase their efficiencies.
Table 6:
Mall Development in India
Mall
Location
Rate / Sq. Toes.
Crossroads
Tardeo, Mumbai
225-250
Ansals
South Ex, Delhi
175-two hundred
Nirmal Lifestyle
Mulund, Mumbai
seventy five-ninety
Runweals Mall
Mulund, Mumbai
seventy five-90
Karnavat Mall
Thane, Mumbai
65-85
Raheja Mind space
Malad, Mumbai
60-80
Jog’s Mall
Andheri, Mumbai
fifty five-seventy five
Cable Corporation
Borevali, Mumbai
55-seventy five
Ansals
East Delhi
seventy five
Sahara
Gurgaon
50-70
MGF Malls – Metroplitian & Plaza
Gurgaon
sixty five-85*
DLF
Gurgaon
sixty five-85
Shipra
Noida
eighty-one hundred eighty
Forum
KolKotta
one hundred
City Center
KolKotta
55
Rave three
Kanpur
45-fifty five
Inox
Baroda
seventy five
Forum
Bangalore
70-ninety
Spencers Plaza Phase III
Chennai
70
Indore, Nasik and Jaipur Malls
45-55
Hyatt, Mumbai & Leela,
one hundred seventy five-three hundred
Phoenix Malls
Lower Parel, Mumbai
one hundred-125
*common for the metropolitian is Rs. 60 in keeping with sq. Toes..
Source: Chesterten Meghraj. Industry Reports
Till some time back, there have been best few global fashion shopping department shops in India –Spencer in Chennai, Crossroads in Mumbai, Ansals Plaza in New Delhi and Sriram’s Arcade in Kolkata. By the end of 2004, that number jumped to many.
It seems like a virtual stampede, essential gamers with a cumulative funding of Rs 375 crore are set to exchange cityscapes across India. In the following 365 days, close to 40 lakh square feet of retail space could be developed. In 3 years, this will upward push to 70-lakh sq.Ft.
As the retail enterprise evolves, clients need more variety earlier than making their buy choice. A have a look at on client outlook suggests that over 80 percent of purchasers need a extensive range of merchandise to hand while shopping. This means that humans are ultimately equipped for multi-choice complexes.
Many vintage-time corporates are seriously considering using their idle property. It makes feel for landowners to broaden it and preserve the returns instead of promote it outright or even rent it, particularly while there’s possibility right here. It is possibly the pleasant way to use an idle actual property asset.
The limited kitty of brands has yet some other sizeable knock on effect on the typical size of Indian malls. In america and South-East Asia, shops are as big as 50 lakh squaretoes. Spencer is by means of some distance the biggest mall in India – it occupies 7 lakh squaretoes or even this is dwarfed via Asia’s largest mall, the four-million sq.Ft mega mall in Malaysia. Even the 26 department stores which can be being planned are in all likelihood to measure among 50,000 squaretoes and a pair of lakh sq.Feet. The Indian mall can’t offer too many picks in terms of brands. So, developing a totally large mall can in no way be sustainable.
There’s a flip side even though -malls at the same time as small as 80,000 sq.Feet, like Shopper’s City in Kolkata or the Esplanade Mall at Kochi, can be sustained.
Emergence of Region-Specific Formats
For the primary time in 10 years, the enterprise is witnessing the improvement of place-unique formats. With prepared retail penetrating into B elegance towns, shops have commenced differentiating inside the sizes and formats of stores. For example, in departmental store format, at the same time as most A elegance towns and metros have larger shops of fifty,000 plus sq. Toes. Sizes, stores in B elegance cities have stabilized in the 25,000-35,000 sq. Feet. Range. Most gamers have started out running these two formats across various cities, which has helped them to standardize the products presenting throughout the chain.
Emergence of Discount Formats
Larger discount codecs, popularly known as hypermarkets, are actually emerging as predominant competitors to each unorganized and organized shops. Penetration of prepared retail into the decrease strata of earnings corporations and patron demand for increased fee-for-money has stepped forward the potentialities of those codecs. These formats span across the whole range of merchandise categories. Big Bazaar, promoted by Pantaloon and Giant, promoted by means of the RPG Group, are examples of this format.
Entry of International Players
A huge quantity of worldwide retailers have evinced hobby in India, no matter the absence of favorable authorities policy for foreign players (see Table under). A variety of the predominant manufacturers have entered the country thru licensing agreements with Indian gamers to capitalize on the opportunities available within the quarter.
Table 7:
International gamers
International Players
Retail Ventures In India
Landmarc Group, Dubai
Lifestyle Chain of Departmental Stores
Metro, Germany
Hypermarket
Shoprite, South Africa
Supermarket, Hypermarket
Nanz, Germany
Supermarket
Marks & Spencer, UK
Apparel Retailer
Mango, Spain
Apparel Retailer
McDonalds, USA
Food Retailer
Dominos USA
Food Retailer
Tricon Restaurant, USA
Food Retailer
Source: Industry Reports
Chapter four : INFORMATION TECHNOLOGY IN RETAIL
Over the years because the consumer demand accelerated and the stores ready to meet this increase, era advanced unexpectedly to support this increase. The hardware and software tools that have now turn out to be almost essential for retailing may be divided into three wide categories:
Customer interfacing structures
Bar coding and scanners
Point of sale systems use scanners and bar coding to become aware of an item, use pre-saved facts to calculate the price and generate the entire invoice for a customer. Tunnel Scanning is a brand new idea in which the patron pushes the full buying cart thru an electronic gate to the point of sale. In a depend of seconds, the items within the cart are hit with laser beams and scanned. All that the patron has to do is to pay for the goods.
Payment
Payment via credit cards has become pretty vast and this enables a fast and clean charge technique. Electronic cheque conversion, a latest improvement on this region, tactics a cheque electronically by means of transmitting transaction records to the retailer and patron’s financial institution. Rather than manually process a cheque, the store voids it and hands it lower back to the purchaser in conjunction with a receipt, having digitally captured and stored and photograph of the cheque, which makes the method very speedy.
Internet
Internet is likewise hastily evolving as a consumer interface, doing away with the need of a customer bodily journeying the shop.
Operation aid systems
ERP System
Various ERP companies have advanced retail-unique structures which help in integrating all the features from warehousing to distribution, back and front office keep structures and merchandising. An included supply chain enables the retailer in retaining his stocks, getting his elements on time, preventing inventory-outs and hence reducing his costs, even as servicing the client better.
CRM Systems
The rise of loyalty applications, mail order and the Internet has furnished retailers with real access to purchaser data. Data warehousing & mining technologies offers outlets the equipment they need to make feel of their patron facts and apply it to commercial enterprise. This, along side the numerous available CRM (Customer Relationship Management) Systems, permits the shops to observe the acquisition behavior of clients in detail and develop the cost of character customers to their companies.
Advanced Planning and Scheduling Systems
APS structures can provide improved manage throughout the supply chain, all the way from raw material suppliers right through to the retail shelf. These APS packages supplement existing (however regularly restricted) ERP applications. They enable consolidation of activities such as long time budgeting, monthly forecasting, weekly manufacturing unit scheduling and each day distribution scheduling into one average planning procedure the usage of a unmarried set of facts.
Leading manufactures, distributors and outlets and considering APS programs along with those from i2, Manugistics, Bann, Mercial incs and Sterling-Douglas.
Strategic selection help structures
Store Site Location
Demographics and buying patterns of citizens of a place may be used to compare numerous feasible sites for beginning new stores. Today, software packages are helping shops not simplest of their locational decisions however in decisions concerning keep sizing and ground-spaces as nicely.
Visual Merchandising
The decision on how to region & stack gadgets in a store is no extra taken at the gut sense of the shop manager. A large variety of visible merchandising tools are to be had to him to assess the effect of his stacking options. The SPACEMAN Store Suit from AC Nielsen and Modacad are example of merchandise assisting in modeling a retail save layout.
Chapter five : FOREIGN TOUCH IN INDIAN RETAIL
The leader of Marks & Spencer has been making journeys to India over the past yr. Global investment financial institution Warburg Pincus is looking ahead to the Indian authorities’s clearance to pick up a 25.1 in line with cent stake, worth $thirteen million, in Shoppers Stop.
Dairy Farm International and Jardine Matheson are present here, through tie-united stateswith the RPG Group. Fast food predominant McDonalds have already made a dent inside the marketplace and in Indian palates.
The Dubai-based totally Landmark group is making its presence felt in Chennai thru its Lifestyle mega save of over 30,000 sq.Feet. Landmark is owned by means of Mukesh Jagtiani, a non-resident Indian. Lifestyle International Private Limited, formed in India lately, is a completely-owned subsidiary of the Mauritius-based Lifestyle International which, in turn, is fully-owned through the Landmark group. In India, in keeping with Lifestyle International’s advertising and marketing supervisor, Roshan Mathew, the target is to “have 12 to 16 stores by means of 2005.” These stores will promote all life-style merchandise, barring fixtures, under one roof.
Immediate plans include commencing a 46,000 squareft keep in Hyderabad, which Mathew terms “The Millennium Store”. The Hyderabad store could have extra sections for books and song, not like the Chennai shop. Besides, as quickly as Lifestyle receives a keenly awaited Foreign Investment Promotion Board clearance for a Rs one hundred crore funding, it will create shops in Bangalore, Pune, Mumbai, Delhi and Ahmedabad.
The Hong Kong-based Dairy Farm International, a one hundred twenty five yr old retail fundamental with around 1,three hundred stores across 9 countries, lately converted its technical tie-up (when you consider that 1996) with the RPG organization’s Spencer & Company for Foodworld right into a 49:fifty one joint project. The new undertaking is called Foodworld Supermarkets Limited. DFI additionally has a 50:50 joint assignment with the Indian group in RPG Guardian. DFI is the retail arm of Jardine Matheson.
In Western markets, a acquainted sight is the McDonalds golden arch. In India too McDonalds has maintained its particular promoting proposition — providing the same exceptional of food and the identical atmosphere as everywhere within the international. Its raw material requirements are definitely out-sourced. But what it has looked after is global elegance exceptional in all its uncooked cloth sourcing, with specifications ensured strictly. The chain has been clever sufficient to tailor its products to the Indian surroundings, including fare for the big range of vegetarians who love fast meals, and avoiding certain pork and red meat in deference to social sensitivities. In a marketplace area where Kentucky Fried Chicken failed to make an impact, McDonalds seems to be finding its location slowly however honestly.
Project Description :
Category : MBA Project Report
Title : Project Report on Retail Marketing in India
Pages : 100
