CHAPTER - 1

1. INTRODUCTION AND DESIGN OF THE STUDY

The retail business has become one of the most self motivated growing sectors in recent
times and always integral part of social and economic development. It contributes to the
development by the individual requirements of the population with the producers and suppliers
of goods. Retail Industry in India in the second largest employer after agriculture. It contributes
to 15% of gross Domestic product and 8% of the employment .The Indian retail market is
estimated to exceed us 750 billion by 2015 and one of the top five retail markets in the world by
economic value.
Retail business is divided into organized and unorganized retailing .organized retailing
refers to trade activities undertaken by the licensed retailers those who are registered for sales
tax,incometax etc.These include the corporate backed hypermarket, supermarket and also the
privately owned large retail business .unorganized retailing ,on the other hand ,refers to it
consists of unauthorized small shop and

traditional format of low cost retailing . For example

conventional kirana shop. General stores, corner shops among various other small retail outlets.
India is the country having the most unorganized retail market. Currently India
constitutes only 8% of unorganized retail and remaining 92% is left unorganized retail. India is
developing country as the same time main problems of our country un employment so
unorganized retail can be considered as an entrepreneur. Indian country is unemployment very
high, there are thousands of individual in cities and towns in every part of the world who are
self-employed and are running micro-enterprises as entrepreneurs of the unorganized retail.
Unorganized retailer is highly very important in the distribution system providing useful services
to the community especially the lower middle class and the poor. There are certain commodities

direct relationships to consumer which are food, grocery shop. Clothing, footwear shops
furnishing, appliances and services shop and general shops.
1.2 STATEMENT OF THE PROBLEM
Unorganized retailers play a vital role of the economic development of a country and also
distributing good and services .They consist largely of independent, self employed retailer in
developing countries. They contributes nearly 20% of the population unorganized retailer
involving operating small retailer business in India and also they are unregistered and unrecorded
in official register in our country.
Retail business is competitive environment and with it the cost of business is going up
every unorganized retailer not understands financial performance of business by monitoring and
measuring the results of business regularly. The problems facing unorganized retailer more than
99% retailers function in less than 500 square feet of shopping space and providing goods and
services at relatively low prices to lower income. It is involvement family member are directly
and indirectly and unorganized retailer do not have purchase of products a high volume whole
sale level, no screen ing technology and lack of knowledge.
The Indian unorganized retail is presently facing the emergence of organized retailers
gaining profitability ,corporate government ,huge investment account maintenance and new
technology at the same time Indian government recently liberation rules and regulation foreign
investment in retailing in and consumer behavior in India . This change has come in the
consumer due to various factors such as increased income ,changing life styles , A large
segment of young population ,growing literacy a rapidly increasing middle class, growing
urbanization and increasing media penetration etc. This research to focused only unorganized

retailer challenges of marketing , challenges of government policy , challenges of finance

,challenges with social and economical policy and impact of organized retailer.
1.3 IMPORTANCE OF STUDY
Unorganized

retail business

to supportive for our society because community

demanding with a lot of activities ,coming and going all directions and of retailer contribution
every likely sort of merchandise activities are undertaken by unorganized retail trade of fruits
and vegetables, sandals , glasses, bags, belts, shoes, furniture electronic goods, newspapers,
and all kinds of food and drink. It is process surrounding area sales volume of business have
significant competitive strengths that include good will, credit sales, bargaining, and ability to
sell loose items convenient timings and home delivery.
The study is significance considering the new and emerging trends in the field of
retailing. The unorganized retail business specially has acquired a great significance in terms
of contribution to economy generation of employment as well as expansion of marketing
activity .This study to establish the potentials of southern district for the growth of retailing
with the focus on consumer preferences and behavior further since these cities are dominated
by traditional retailers the study also attempt to establish the potentials and prospects and
challenges of unorganized retail business.
1.4 OBJECTIVES OF THE STUDY
The objective of the study is to analyze performance of unorganized retail business of find out
opinions of challenges and challenges and prospects of on the marketing practices of selected
stores specifically; the study is designed with the following objectives.

 To identify demographic profile of unorganized retail business Tirunelveli district

To identify the challenges of unorganized sector retailers in terms of finance, marketing
personal, social and competition.
To find out the impact organized and foreign direct investment on unorganized retailing.
To find out role of government in strengthening the unorganized retail sector.
To offer suggestions for the effective implementation of the program me.

1.5 SCOPE OF THE STUDY

The geographical coverage of this study is limited to the Tirunelveli district .The factor
governing the selection of the study area as follows: The unorganized retail trade sector is
large in tirunelveli district than in small and medium towns in tirunelveli , while unemployment
is high , there are a large number of unorganized retail traders in the tirunelveli districts who
are self- employed and are number of unorganized and are running micro trading units on
the road side . We often ignore these unorganized traders though
regularly. As such the present study area would provide

we use their services

a better scope for undertaking a

study of this nature which may help in understanding better the role of unorganized retailer.
1.6 RESEARCH METHODOLOGY
This study was carried out using both secondary and primary data sources. The secondary
data was drawn from various books, journal articles, report, and newspapers and so on. For
primary data collection, a non- probabilistic sample of 500 unorganized retail outlets, including
general and grocery store , durable stores , consumable store and food vegetable and fruits was
taken, The interviews were held in their locations in from Tirunelveli corporation.

1.6.1 DATA COLLECTION

The primary data was collected by using questionnaires. There were 44 questions. A five
point scale was used such as Highly Dissatisfied, Dissatisfied, Neutral, Satisfied, Highly satisfied
and strongly Agree, Neutral, Dissatisfied, Dissatisfied.
1.7 SAMPLING DESIGN
The present study is based on both primary and secondary data realating to Unorganized
retail business in Tirunelveli Corporation.

The researcher collected the primary data from

visiting from unorganized retail business Tirunelveli corporation , 150 respondents. A well
structured questionnaire was adopted to collect the primary data.
1.8 GEOGRAPHICAL AREA
Tirunelveli District is located on the southern part of Tamilnadu. Tirunelveli is the
headquarters of the district. A unique feature of this district is that it consists of all five
geographical traditions of Tamil Literature. Kurunji (mountains) Mullai(forest) Marudham(paddy
fields ) Neithal(coastal) and Palai(desert).
The district is surrounded by Virudhunagar district in the north, Western Ghats in the
west, Kanniyakumari district in the south and Thoothukudi District in the east. The district
covers and area of 6.823 sq.K.m. It lies between 8.50 and 9.30 of the northern latitude and 77.50
and 78.25 of eastern longitude. It has a perennial river Tamirabarani and various other small
seasonal rivers. This district is blessed with beautiful waterfalls and cascades. Its diverse features
include sandy soil and fertile alluvium, a variety of flora, fauna and protected wild life. To add its
beauty it has inland and mountainous forests.

The district is bound by tirunelveli district on the North and the east. The south eastern
boundary is the glug of manner on the south and the Indian ocean and the Arabian sea. On the
west and North West it is bound by Kerala.
1.9 STATISTICAL TOOLS
The role of statistics in research is to function as tool in designing research, analyzing its
data and drawing conclusions there form. Most research studies result in a large volume of raw
data which must be suitably reduced so that the same can be read easily and can be used for
further analysis. Clearly the science of statistics cannot be ignored by any research worker
,even

though

he may not have

occasion to use

statistical methods in all

details and

ramifications.
1.9.1 PERCENTAGE
Percentage is often used in data presentation for they simplify numbers, reducing all of
them from 0 to 100.. Through the use of percentage the data in the standard form with based
equal to 100 which fact facilities relative comparison. Use of large percentage should be
avoided , percentage can never exceed 100 and two or more percentage must not be averaged
unless each is weighted by the group size from which it has been derived.
Percentages are useful chiefly for the purpose of aiding comparison. A per cent is the
number of hundred part .d
Percentage=b1/b0*100
1.9.2 GARRETT RANKING
To find out the most significant factor which influences the respondents, Garrets ranking
technique was used. As per this method , respondents have been asked to assign the rank for all

factors and the outcomes of such ranking has been converted into score value with the help
of the following formula.
Percent position=100(Rij -0.5
..
Nj

Where
Rji= Rank given for the variable for the respondent for each factor , the scores of each
individual are added and then total value of scores and mean value is considered to be most
important factor.
1.9.3 FACTOR ANALYSIS
Factor analysis is a statistical tool that is used to determine the extent to which a group of
measures share common variance . factor analysis is used to analyze large numbers of
dependent variables to detect certain aspects of the independent variables affecting those
dependent variables without directly analyzing the independent variables

to enables an

analyst to reduce the number of elements to be studied and to observe how they are
interlinked .Factor analysis techniques are used in constructing factor models . The researcher
has used statistical package for social science (SPSS.9) for calculating factor analysis.
1.10 LIMITATION OF THE STUDY
The study takes into account only the unorganized retail business in Tirunelveli district.
Therefore, the present study has certain limitations. They are,

Non-availability of proper secondary data and records were a great obstacle in this

study.
The result of the primary data duly depended upon the trust worthiness of the

respondents.
The scope of the study is limited to only Tirunelveli district.
Inadequate time was the major constraint during the whole project.

1.11 CHAPTER DESIGN

The total thesis is divided in to seven chapters. The chapter wise plan along with the
brief description is as follows:
Chapter 1- Introduction and design of the study : The introductory chapter describes
briefly statement of problems , importance of the study , hypothesis, objectives of the study ,
scope of the study , Research methodology , and scheme of presentation.
Chapter2- Review of Literature and earlier studies .A detailed review of literature is
carried out at the various stages of the study .Various reports , journals, articles, text books
has been reviewed re grading the evolution of retailing , retailing strategies , challenges and
prospects of retailing , theories of retail change , changing Indian retail scenario, buying
behavior of Indian retail customer and impact of organized and FDI in to threat on
unorganized retail business.
Chapter 3- concept view of Indian retail business. The chapter examines , introduction
retail sector , meaning and definitions of retail sector, Evaluation of retail , classification of
retail global trend retail and Indian retail scenario and challenges of unorganized retail
business in India and impact of organized and FDI in unorganized retail business and Indian
retail sector and the growth of the sector in the last few years . It also looks into the advantages
to India .The major

trends

of retail in India along with the key drivers are explained in this

chapter.

Chapter4- Profile of the study area: This chapter finds out Tirunelveli district its history,
nature, of business, employment, population, etc.
Chapter 5- Demographic profile of the respondents: This chapter analyses the socioeconomic profile of the respondents personal profile of unorganized retailer.
Chapter 6- Challenges of unorganized retail business: This chapter elaborates the results
of the study followed by discussion of the result. The chapter evaluates unorganized retail
business with respect to five challenges dealing with various product categories , facilities
available in the outlet , various services offered by the retailer , how the retailer deals with the
market trends and the competition to face the impact of unorganized retailer.
Chapter 7- Summary and suggestions: This is the final chapter which starts with the
summary of the study .It also reports the major findings of the study. Few suggestions are
included for the unorganized retailer to face the competition from the organized retailer. Finally
the chapter ends with conclusions of the study and the scope for further research.