CHAPTER 1

INTRODUCTION
&
OBJECTIVES

INTRODUCTION
The Indian retail industry is now beginning to evolve in the line with the
transformation that has swept other large economies. There is a change a foot in
Indian retail too, the liberalization of the consumer goods industry initiated in the
mid-80s and accelerated through the 90s has begun to impact the structure and
conduct of the retail industry.

The Indian retail landscape is evolved from the brick-and-mortar model to adopt
technology for connecting with consumers. The aim is to achieve a complete seamless
customer experience. The Indian retail sector accounts for over 20% of the countrys
gross domestic product (GDP) and contributes 8% to total employment. The
cumulative foreign direct investment (FDI) inflows in single-brand retail trading,
during April 2000 to June 2011, stood at 69.26 million USD. The current estimated
value of the Indian retail sector is about 500 billion USD and is pegged to reach 1.3
trillion USD by 2020.
India is the 5th largest retail market in the world. The country ranks fourth among the
surveyed 30 countries in terms of global retail development. The current market size
of Indian retail industry is about US$ 500 billion (Source: IBEF) and is expected to
grow at the rate of 15-20% p.a. The retail industry is expected to increase to US$ 750850 billion by 2015 (according to a report by Deloitte). Retailing has played a major
role the world over in increasing productivity across a wide range of consumer goods
and services. In the developed countries, the organized retail industry accounts for
almost 80% of the total retail trade. In contrast, in India organized retail trade
accounts for merely 8-10% of the total retail trade. This highlights a lot of scope for
further penetration of organized retail in India.
The sector can be broadly divided into two segments: Value retailing, which is
typically a low margin-high volume business (primarily food and groceries) and
Lifestyle retailing, a high margin-low volume business (apparel, footwear, etc.). The
sector is further divided into various categories, depending on the types of products
offered. Food dominates market consumption with 60% share followed by fashion.
The relatively low contribution of other categories indicates opportunity for organized
2

retail growth in these segments, especially with India being one of the world's
youngest markets.
Transition from traditional retail to organized retail is taking place due to changing
consumer expectations, growing middle class, higher disposable income, preference
for luxury goods, and change in the demographic mix, etc. The convenience of
shopping with multiplicity of choice under one roof (Shop-in-Shop), and the increase
of mall culture etc. are factors appreciated by the new generation. These factors are
expected to drive organized retail growth in India over the long run.
The concept retail, which includes the shopkeeper to customer interaction, has taken
many forms and dimensions, from the traditional retail outlet and street local market
shops to upscale multi brand outlets, especially stores or departmental stores.
Hence, focusing on two aspects of retail marketing i.e. Store Retailing and Nonstore
Retailing. Store Retailing as the departmental store, which is a store or multi brand
outlet, offering an array of products in various categories under one roof, trying to
cater to not one or two but many segments of the society and Nonstore Retailing as
the direct selling, direct marketing, automatic vending.
Therefore, this concept of retail marketing through organised retail stores, which is
coming up in a big way in India was decided to be studied in detail.
The objective being to assess the various parameters that influences a buyer to shop at
organised retail food and grocery store thereby contributing to its turnover (in terms
of sales and profits) hence leading to its overall success.
The extensive research brought me to conclude that departmental stores are soon
emerging on the top priority lists, amongst the shopping spree in Bangalore, as they
seem to derive immense pleasure as shopping is considered as a experience now
rather than a task and exposure to variety under one roof, in their extremely busy
lives, when they dont have time for things.
The organised retail food and grocery stores make constant efforts to induce
customers to visit the store by discount offers.
Most of these stores believe in creating not just a marketing activity with its
customers, but rather favour relationship building with him so as to convert first time
3

customers into a client. They provide better parking facilities to customers and the
facility to examine the product. They also offer a wide range of payment options to
customers.
Hence this document entails me through these aspects in great detail, helping me to
understand the concept of retail marketing through departmental stores in Bangalore.

1.1 PROBLEM STATEMENT

IDENTIFICATION OF PROBLEM
Retailing is the final stage of distribution process in which the retailer, as an
intermediary, collects an assortment of goods and services from various sources and
offers them to the customer. After 50 years of unorganized retailing and fragmented
kirana stores, the Indian retail industry has finally begun to move towards
modernization, systematization and consolidation. Today, modernization is the catch
phrase and the key to understanding retail in the next decade. The total retail trade in
India is estimated at about $300 billion out of which organized business accounts for
only $9 billion.
Organized retail is new format for Indian consumers and it is having only 3% share of
retailing in India. We see tremendous increase in organized retail stores now but the
big question is that would these organised retail stores succeed. What are the factors
that will make them succeed if at all or the factors that could result in their failure? It
is very hard for organised retail store to attract customer from the kirana stores which
are decades of old compared to new organised retail store.
With the help of my study I would try to predict the success of organised retail in
India if at all which is dominated by Kirana shops. Would the organised retail store be
able to attract customers also in future and succeed?
Retail business is linked to consumption patterns of the consumers and hence
dependent not only upon likes and dislikes and changing preferences regarding goods
and services but also on availability of disposable income in their hands. Thus, the
growth of the sector is linked to discretionary income in the hands of the people,
which is linked to economic growth.

Here is an attempt to simplify the analysis of a retailing company.

4

Growth in Indian retail industry has been driven by the country's economic
fundamentals over the past few years. Increasing number of nuclear families, easy
financing options, increase in the population of working women, emerging
opportunities in the service sector and rising disposable incomes during the past few
years have been the key growth drivers of the organised retail sector in India.
Consumers are now showing a growing preference for organised retail, which has
resulted in increased penetration.

In case of retailing business revenue is a factor of sales of per square feet and total
area under operation during the period under consideration. Since retailing is a
business of volumes, analysis of revenues on per square feet basis provides better
insight into top line growth - indicting whether the growth achieved is owing to more
sales on the same footage or is the result of increased reach across geography.

1.2 RESEARCH OBJECTIVE

To investigate the factors that help in selection of retail format.
The consumers when they select a given store whether it is Organised Retail Store
or Kirana Store is based on various factors. These factors include availability of
discounts, accessibility, parking facilities, level of service provided, hours of
opening, mode of payment accepted, variety of merchandise available, freshness
5

of products, if merchandise is given on credit or not and facility to examine the

product.
To study the impact of emerging trends of retailing on shopping behaviour.
Our grandparents used to go to mandi to purchase merchandise. The next generation
moved on to the neighbourhood kirana stores, and couldnt do without delivery at
the doorstep. Todays shoppers have big spacious hypermarkets to shop in or if thats
too far away, now, they have neighbourhood convenience stores like Subhiksha.
To investigate how Indian organised retail has been customised according
shopping behaviour of Indian consumer.
The organised retail outlets in India are different from the European and American
organised retail in a number of ways. This change was brought about because the
taste of Indian customer is different.

1.3 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve a research problem. It
studies the various steps that are generally adopted by a researcher in studying the
research problem together with the logic behind them.
In the process of conducting such an important study, the researcher has
followed the following methodology to collect the necessary data and analyse and to
draw useful inference.

DESIGN OF THE STUDY

The research design adopted for the purpose of this study is Descriptive. The
purpose of choosing descriptive design is to achieve new insights into the
phenomenon of stress. Adopting descriptive study aims at evolving new insights and
ideas to formulate a complete and comprehensive picture of stress affecting the
efficiency of executives.

TOOLS OF DATA COLLECTION

The tools used for the purpose of collecting data for the study from the
respondents. The purpose of choosing questionnaire as a tool for data collection is that
the questionnaire is an important instrument in normative-survey research used to
gather information from widely scattered sources. It is a device securing answers to
questions by using a form, which the respondents fill by him. This method is followed
because:

Low cost

Free from bias of the interviewer

Rating is done based on the respondents own thinking

Enough time is available for filling the questionnaire

COMPONENTS OF THE TOOL

The questionnaire is intended to find out the level of customer satisfaction towards
the online shopping. The data collection also finds the factors of influence towards the
customer satisfaction. The questions are framed keeping the following parameters,
1. Time
2. Price
3. Brand name
4. Technology
5. Security
6. Easy to use

SOURCES OF DATA
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This refers to the source or sources to be tapped for relevant information that
fulfils the objectives of the data. There are two sources of data:

PRIMARY DATA
Primary data is the data gathered by the researcher directly from the
respondents through questionnaire as the tool for the fulfilment of the study.

SECONDARY DATA
Secondary data is the data gathered by the researcher from the experts in the
field and from other documentary sources such as magazines, journals and published
documents.

SAMPLING STRATEGY
The sampling method adopted by the researcher for this study is Random
Sampling. The object of choosing Random Sampling is to enable the researcher to
choose the items of universe that are most suitable and convenient for the study.

ANALYSIS AND INTERPRETATION

The data collected was analyzed and interpreted using Pie Chart

1.4 LIMITATIONS
It is a brief conducted during short span of time. In order to know the depth
one requires a lot of information, money and involvement of manpower. As is
the case with every research effort, this study also leaves a lot of room for
further improvements. The major Limitations of this study are given below.
8

 Due to non- corporate nature of some of the organizations, project could not
be undertaken at the external level.
Biases in the responses cannot be rules out as the questionnaire were only
filled by the managers and workers of the sample taken.

Sudden changes in the programme of some of the participants at the time of

interviews led to the problem in getting data.

CHAPTER 2

LITREATURE REVIEW

10

LITERATURE REVIEW
According to Philip Kotler: Retailing includes all the activities involved in selling
goods or services to the final consumers for personal, non-business use. A retailer or
retail store is any business enterprise whose sale volume comes primarily from
retailing.
Any organization selling to final consumers whether it is a manufacturer, wholesaler
or retailer is doing retailing. It does not matter how the goods or services are sold (by
person, mail, telephone, vending machine or internet or where they are sold- in a
store, on the street or in the consumers home.)
The word retail is derived from the French word retaillier, which means to cut off a
piece or to break bulk. A retailer may be defined, as a dealer or trader who sells
goods in small quantities or one who repeats or relates.
Retailing thus may be understood as the final step in the distribution of merchandise,
for consumption by the end consumers. Put simply, any firm that sells products to the
final consumer is performing the function of retailing. It thus consists of all activities
involved in the marketing of goods and services directly to the consumers for their
personal, family or household use.
Retailing consists of the sale of goods/merchandise for personal or household
consumption either from a fixed location such as a department store or kiosk, or away
from a fixed location and related subordinated services. In commerce, a retailer buys
goods or products in large quantities from manufacturers or importers, either directly
or through a wholesaler, and then sells individual items or small quantities to the
general public or end user customers, usually in a shop, also called store. Retailers are
at the end of the supply chain. Marketers see retailing as part of their overall
distribution strategy.
Shops may be on residential streets, or in shopping streets with little or no houses, or
in a shopping centre. Shopping streets may or may not be for pedestrians only.
Sometimes a shopping street has a partial or full roof to protect customers from
precipitation.

11

Shopping is buying things, sometimes as a recreational activity. Cheap versions of the

latter are window shopping (just looking, not buying) and browsing.
Retail is the final stage of any economic activity. By virtue of this fact, retail occupies
an important place in the world economy. In an attempt to understand the scope of the
term retail, various definitions of the term have been examined.
It is necessary to understand that in the complex world of trade today, retail would
include not only goods but also services, which may be provided to the end consumer.
In an age where the customer is the king and marketers are focusing on customer
delight, retail may be redefined as the first point of customer contact.
There are three major types of retailing. The first is counter service, now rare except
for selected items. The second, and more widely used method of retail, is self-service.
Quickly increasing in importance are online shops, the third type, where products and
services can be ordered for physical delivery, downloading or virtual delivery.
Even though most retailing is done through self-service, many shops offer counter
service items, e.g. controlled items like medicine and liquor, and small expensive
items.
A large shop is called a superstore. A shop with many different kinds of articles is
called a department store.
Many shops are part of a chain: a number of similar shops with the same name selling
the same products in different locations. The shops may be owned by one company, or
there may be a franchising company that has franchising agreements with the shop
owners.

2.1 OVERVIEW
ORGANISED RETAIL STORE
A department store is a retail establishment, which specializes in selling a wide
range of products without a single predominant merchandise line. Department stores
usually sell products including apparel, furniture, appliances, and additionally select
other lines of products such as paint, hardware, toiletries, cosmetics, photographic
12

equipment, jewellery, toys, and sporting goods. Certain department stores are further
classified as discount department stores. Discount department stores commonly have
central customer checkout areas, generally in the front area of the store. Department
stores are usually part of a retail chain of many stores situated around a country or
several countries
Format

Description

Category

Offer a narrow variety with a very deep assortment of the

Specialist

merchandise. Merchandise may be sold at price lower than that

Killer
Convenience

Usually located near residential areas & open long hours. Offers an
assorted mix of products including milk, break and eggs

Department

Large store selling several product lines, with each operating as a

Store

department. Product mix is largely non-food, like apparel,

accessories, books, music, footwear, etc. level of service is very
high.

Factory Outlets

Stores which sell branded merchandise at discount. Levels of service

are low. Typically, these are franchise outlets located away from the
main markets.

Hypermarket

Large self service stores selling a mix of products. these stores offer
large depth in the product mix which includes Food non food items
like apparel, CD's, DVD's footwear, etc. The low price for the
products is a key attraction for the customer.

Single

Price Offer an assorted mix of branded and unbranded merchandise, to

Stores

appeal to the budget conscious customer.

Specialty

Focus on brand or a particular category. They offer a narrow product

Stores

line but good depth. Level of service is high.

Supermarket

These stores offer food, laundry and household maintenance

products. they are self service, low cost, low margin and high
volume operators.

STORE RETAILING

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Store retailing provides consumers to shop for goods and services in a wide variety of
stores and it also helps the Consumers to get all the needed goods and services from
one shop only. The different types of store retailing are given below:
Specialty Stores: These stores focus on leisure tastes of different individuals. They
have a narrow product line with deep assortment such as apparel stores, sporting
goods stores, furniture stores, florists and bookstores. These stores are usually
expensive and satisfy the needs of selected consumers who have liking or preference
for exclusive things.
Departmental Store: These stores are usually build in large area and keep variety of
goods under one shed. It is usually divided into different sections like clothing, kids
section, home furnishings, electronic appliances and other household goods. In a
departmental store a consumer can buy variety of goods under one shed.
Supermarket: These stores are relatively large, low cost, low margin, high volume,
self service operations designed to serve total needs for food, laundry
and household maintenance products.

Convenience Stores: These are relatively small stores located near residential
area, open for long hours seven days a week, and carrying a
limited line of high turnover convenience products at slightly
higher prices than departmental stores. Many such stores also
have added takeout sandwiches, coffee and pastries.
Off - Price Retailer: These stores sell goods at low price with lower margins &
higher volumes. These stores sell goods with deteriorated quality. The defects are
normally minor. This target at the persons belonging to the lower income group,
though some have a collection of imported goods aimed to target the younger
generation. The company owned showroom selling the seconds products is a typical
example of off - price retailer.

Discount Store: These stores sell standard merchandise at lower prices by accepting
lower margins and selling higher volumes. The use of occasional discounts or specials
14

does not make a discount store. A true discount store regularly sells its merchandise at
lower prices, offering mostly national brands, not inferior goods.
In recent years, many discount retailers have traded up. They have improved decor,
added new lines and services, and opened suburban branchesall of which has led to
higher costs and prices. And as some department stores have cut their prices to
compete with discounters.
Not only that, discount stores have moved beyond general merchandise into specialty
merchandise stores, such as discount sporting goods stores, electronics stores, and
bookstores.
Catalog Showroom: Catalog showrooms generally sell a broad selection of highmark-up, fast-moving, brand-name goods at discount prices. These include jewellery,
power tools, cameras, luggage small appliances, toys, and sporting goods. Catalog
showrooms make their money by cutting costs and margins to provide low prices that
will attract a higher volume of sales. Catalog showrooms have been struggling in
recent years to hold their share of the retail market.

NONSTORE RETAILING
Different types of non-store retailing are given below:
Direct Selling: Direct selling which started centuries ago with itinerant peddlers has
burgeoned into a $9 billion industry, with over 600 companies selling door to door,
office to office, or at home sales parties. A variant of direct selling is called multilevel
marketing, whereby companies such as Amway recruit independent businesspeople
who act as distributors for their products, who in turn recruit and sell to sub
distributors, who eventually recruit others to sell their products, usually in customer
homes.
Direct Marketing: Direct marketing has its roots in mail-order marketing but today
includes reaching people in other ways than visiting their homes or offices, including
telemarketing, television direct response marketing, and electronic shopping.

15

Automatic Vending: Automatic vending has been applied to a considerable variety of

merchandise, including impulse goods with high convenience value (cigarettes, soft
drinks, candy).

Kirana Stores
These stores are the small, friendly neighbourhood stores, which have been offering
customized services to their customers.
The product range varies from store to store due to the constraint of space, but all of
them stocked the well-known brands, which had greater demand among customers.
-

All of them have a higher percentage of regular customers than walk-in

customers. The regular customers are from the nearby areas. New customers are
usually generated through word-of-mouth.

The owners decide on which brands to stock according to the preferences of their
customers and estimated the amount of goods to stock according to their periodic
sales figures.

Most of Kirana store desire to expand their stores if given the opportunity to do
so; however, they lack finance and space to expand.

Their regular customers chose to visit their store due to owner-customer

relationship as the primary reasons for their customers' loyalty.

These stores usually provide free home delivery to their customers and had a
credit period ranging from 15 to 30 days.

2.2 ORGANIZATION STRUCTURE FOR SMALL STORES /

SINGLE STORES / INDEPENDENT RETAILERS OR KIRAN
STORE
Small independent retailers are by far, the largest number of retailers existing in our
country today. Examples include the neighbourhood Kirana Store, the shoes store,
boutique, furniture and hardware stores, which exists all around us. In small
independent retail stores, one person is typically the owner or manager and is
16

responsible for most of the aspects of the retail operation. A few salespersons and
family members usually assist him. These retail outlets are owner managed
businesses, where the owner or the family member provides hands-on management of
the store. The structure of a typical small retail store is illustrated in Figure, given
below:
owner / Manager
Responsibilities
Buying, Promotion,
Sales, HR, Operational
Control & General
Management

External advisors

Back Office Staff

Sales Staff

Responsibilities

Responsibilities

Lawyers, Chartered
Accounts, Bankers,
Etc.
Accounting & Record
keeping, Data Entry,
Inventory control,

customer Service,

Purchase Orders, Time

Selling, Stock Control,

Keeping & Payroll,

Display &

Facilities Management

Housekeeping

All independent retailers however, do not need to be small. The size can range from
medium to large. According to the size, the number of persons employed may be more
and the duties and responsibilities may be delegated. The retailers would need outside
help in the form of advisors like lawyers and chartered accountants, who would take
care of the specialized functions that the retailer needs.
The back office staff would take care of functions like accounting, data entry, raising
purchase orders, time keeping and payroll. The sales staff would handle specific
responsibilities of selling, customer service and other routine duties like displaying

17

the merchandise and housekeeping. The owner manager would largely decide on the
advertising and sales promotions, the hiring of staff and the buying of merchandise.

RETAIL PRICING
The pricing technique used by most retailers is cost-plus pricing. This involves adding
a mark-up amount (or percentage) to the retailers 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.
In Western countries, retail prices are often so-called psychological prices or odd
prices: a little less than a round number, e.g. $6.95. In Chinese societies, prices are
generally either a round number or sometimes a lucky number. This creates price
points.
Often prices are fixed and displayed on signs or labels.

Chain stores (also called retail chains) are a range of retail outlets, which
share a brand and central management, usually with standardized business methods
and practices. They are a type of business chain. Such stores may be branches owned
by one company or franchises owned by local individuals or firms and operated under
contract with the parent corporation. Features common to all chains are centralized
marketing and purchasing, which often result in economies of scale, meaning lower
costs and presumably higher profits.
These characteristics also apply to chain restaurants and some service-oriented chain
businesses. Some argue that the standardized products which result from such
centralization are culturally detrimental; for example, chain music stores are frowned
upon by some for stocking works of more popular music if they exclude less well
known, usually independent artists. Critics of chains allege that they are economically
damaging to communities because they extract capital that otherwise would
recirculate in the local economy with independently owned businesses.

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The displacement of independent businesses by chains has generated controversy in

many nations and has sparked increased collaboration among independent businesses
and communities to prevent chain proliferation

VISUAL MERCHANDISING
Visual Merchandising (VM) is the art of presentation, which puts the merchandise in
focus. It educates the customers, creates desire and finally augments the selling
process.
VM helps in:

Educating the customers about the product/service in an effective and creative

way.

Establishing a creative medium to present merchandise in 3D environment,

thereby enabling long lasting impact and recall value.

Setting the company apart in an exclusive position.

Establishing linkage between fashion, product design and marketing by

keeping the product in prime focus.

Combining the creative, technical and operational aspects of a product and the
business.

Drawing the attention of the customer to enable him to take purchase decision
within shortest possible time, and thus augmenting the selling process.

Visual merchandising is all about persuasion through presentation, which puts the
merchandise in focus and in perspective too. It educates customers, creates desire and
finally augments the selling process. As seasons change, the merchandise collections
too change in a retail store. When such changes take place the store too undergoes a
transformation in terms of its visual presentation, appealing to the aesthetic faculties
of consumers.

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Frequent changes encourages your customer visiting his normal section to wander
about to discover additional novelties.
Highlight merchandise to sell it
Introduce and explain new products
Give ideas on how to use it
Encourage the customer to enter and shop
Create ambiance and thus a positive image of the store
Display concepts can be based on:
o Visual merchandising seasons
o Special occasions or holidays
o Color
o Trends in activities
o Themes
o Events in Community
There are many locations within a store where displays can be set up:
Front Windows
Small platform at the entrance
End Caps
Display or product cases (for particular types of merchandise
such as jewelry)
Behind the check-out counter

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STORE LAYOUT
"Sharp showroom display is always money well spent."
In developing an effective store design, a most critical element is how the store is
organized for a logical unfolding or discovery of merchandise by the browser. Is your
store easy to shop?
There are several approaches to retail store organization and merchandise display. The
first and most common are to display similar merchandise all in the same area. You
might, however, want to consider as an alternate presentation method, Lifestyle
Merchandising. This is a more thematic interpretation of cross merchandising,
presenting products in this manner can also increase the perceived value of items that
normally would seem unconnected with any other merchandise. Finally, you may find
that a combination of the two merchandising styles may best be suited to your market
area or target customer. Creating room settings in highly visible focal areas of your
store and positioning commodity products in convenient locations make it easy for the
customer to stock up and help you achieve the best of both methods of display.
Store Atmospherics
Store atmospherics include the exteriors and interiors of the store and the manner in
which they are designed to create the ambience for a fashion boutique or a store.
Exteriors: A store's exterior look is often referred to as the architecture, and
comprises aspects such as building materials, architectural style and detail, colours
and textures. Harrods in London has a unique architectural facade, thus creating a
distinct identity for itself.
Signage: The store signage is a vital element of the storefront, attracting the
customer's attention.
Interiors or Store Layout: Fashion retailers often lay out the store in a free flow
format with a great deal of aisle space to enable the free movement of customers
within the store and also to create a more specific atmosphere and image. Such a
21

layout creates an image in the shopper's mind, because of the -functional qualities and
psychological appeal. Layout is just one part of store image, other factors being
colour, music (aural), scent (olfactory), types of promotion used, service and store
cleanliness

SPACE PLANNING
Planning a store is how to allocate scarce resources, Space. The retailer must create a
store layout, which shows the location of all the merchandise departments and the
placement of circulation aisles to allow customers to move through the store. The
merchandise presentation must be exciting to catch and hold the customers attention,
be easy to understand, and encourage shoppers to browse, evaluate and buy.
Therefore, the presentation of the merchandise is a critical factor in the sales power of
a store and significant on the store image.
With Space Planning, Retailers can boost their return on inventory investment by
quickly analyzing inventory data to keep the right amount of product on-hand and
reduce inventory costs and can gain the ability to measure return on selling space in
every store and in every location, and calculate suggested square footage based on
item/class/department performance, to configure the stores in the most profitable
manner.
The selling area is the area used for the presenting the merchandise.
The Non-selling area is the area occupied by the: Circulation space
The aisles
Staircase
Lifts
Facilities
The back area
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The back area generally comprises space for staff facilities, space for the back
office personnel and the merchandise storage space.
The areas mix in a typical department store is- Selling area about 60%, Circulation
area is 15% and the back area 25%.
Area Mix

25%

Selling
Circulation
60%

15%

Back Area

For Store Design or planning, Retailer has to keep his eye on different designs
that make the ambience of the store and facilitate customers mood and convert
them into buying merchandise.
Storefront Design
Interior Design
Lighting Design
Sounds and Smells: Total Sensory Marketing.
Planning Fixtures and Merchandise Presentation
Fixturing is the furniture that holds and displays the majority of the merchandise. The
style of fixture should reflect the store's image. Change and rotate the fixtures within
the store to add variety and excitement to the shopping experience. Usually, the
retailers should change their interior and window displays according to the return
pattern of their typical customer within a given period of time. For example, if a
customer shops from the store twice a month, make a small change twice a month and
23

a dramatic change once a month. A small change can consist of switching key
merchandise in a window or interior display. A dramatic change can consist of moving
fixtures within the store or redesigning the front display window.

ON-SHELF MERCHANDISING
On-Shelf Merchandising is the display of merchandise on counters, racks, shelves,
and fixtures throughout the store.
Methods of Merchandise Presentation:
Shelving
Hanging
Pegging
Folding
Stacking
Dumping

2.3 CRITICAL ISSUES IN RETAIL STORE

The retail industry in India is in a phase of transition and hence is likely to face a
whole new set of challenges. For one, generating large, free cash in flows for
expansion is not easy. Retail margins are already wafer-inn, compared to those in
other markets like the Middle East.
Retailers in India also face certain challenges in terms of the real estate, legal,
workforce-related and certain other issues. They have an impact on the costs and
efficiency of operations of the retail business.

Real Estate

24

Location is considered to be a key component of the retail strategy of the any store. It
also guides the direction and success of retailing industry in general. Indian retail
units have to struggle on account of the shortage of real estate for new projects and
even retail space in central business districts is out of reach for retailers due to price
and high demand. Some of the new retail projects initiated by private houses are
suffering on account of lack of cooperation form the local bodies in respect of
security, hard infrastructure (power, roads), and public transportation facilities. In
such conditions, retailers are ending up with incompatible retail property at high price.
Poor state of retail estate in India can be attributed to the following factors.

Stamp duties on transfer of property are very high and inconsistent throughout
India. Stamp duties are taxed payable of every conceivable documented
transaction. It is a form of revenue for a state, which is why it varies form state to
state.

The Urban Land Ceiling Act and Rent Control Acts were repealed just a few years
back, but it has distorted property markets in urban centres, leading to
exceptionally high property prices, particularly of retail property in central
business districts.

The presence of pro-tenancy laws makes it difficult to remove a tenant or tenants.

The problem is multiplied by tedious and long drawn procedures to clear titles of
ownership.

Land use conversion is time consuming and complex, particularly in case of new
shopping centres, which are coming up on out of town agricultural land.

Huge costs are involved in terms of time and money in legal processes for
property disputes.

City urban planning projects smaller commercial plots and this, together with rigid
building and uncertain zoning laws, hinders the procurement of retail property.

Non-residents are not allowed to own property except if they are of Indian origin.
Foreign-owned Indian companies can own property for business purposes.

25

Foreign investment in real estate business is prohibited except for integrated

township development, wherein 100% FDI is allowed with prior government
approval.

Work Force
The traditional independent retailers that practice child labour have come under
stringent provisions of the law forbidding child labour. Therefore, dependence on
adult and experienced workforce will definitely increase their cost of operations. On
the other hand, the organized retailers are facing multiple challenges on this front,
such as limited supply of trained workforce and labour laws hindering operations in
accordance with their business requirements. The labour laws that protect store
workers are not flexible enough to support the organized formats of retailing.
Some local government bodies, after a series of request, recently extended permission
to shopping centres to operate up to 9.30 p.m. on all days including national holiday.
For example, the New Delhi government provided such permission to Ansal Plaza.
But extended working hours stand contrary to existing labour laws. One of them is
that workforce can only be employed for a specified number of hours and, therefore,
to operate stores for a longer interval of time the retails have to depend on multiple
shift duties. Being subject to seasons demand cycle (festive and end of year), these
stores prefer to have part-time arrangement, which is not permissible under the
existing laws. The increases of stores cost of operation
It is fact that the retailing industry is in its starting phase in our country. The benefits
of organized retailing will only be felt once an equitable scale is achieved. This, to a
large extent, depends on the store size, bills per customer per year, average bill size,
and the revenue earned per sq. ft. But, besides resources and bottom-line, a variety of
other aspect need to be in place for tasting success. The need for qualified and trained
manpower is of utmost importance.
In order to survive in todays tough retail climate, companies must continually
innovate ways to create stronger, more direct links with their customers. At the same
time, retailers must focus on the most demanding customers who want customization,
value, and service.
26

New store design must assault the consumers sense of sight, sound, taste, touch, and
smell- preferably all at the same time. In the environment merchandising and
especially displays are more important than ever as being on top-to-of-mind will keep
the brand growing.
According to a McKinsey report, if appropriate reforms are carried out, this sector is
capable of creating eight million jobs in the next two years, and it can also provide job
opportunities for people transitioning from agriculture. On the FDI (foreign direct
investment) front, although a number of retail players have been advocating FDI in
retail one should not expect the investments to pour into this sector in India. The FDI
policy needs to be framed in such a way that it attract foreign players to invest in
India. FDI will bring in not only the much needed capital to fuel growth but also
sophisticated systems and know how and will shorten the learning curve.
In fact, the challenges of urban and rural retailing will keep marketers, busy for much
of this millennium.
The retail industry in India is high unorganized and predominantly consists of small,
independent, owner-managed shops. Retailing is Indias largest industry, accounting
for 13% of the GDP (gross domestic product). There are around 5 million retail
outlets in India. Food sales constitute a high proportion of total retail sales.
There are three aspects of boom in retail in India. (a) The emergence of newer,
specialized, and bigger retail formats in urban India with greater focus on
experiential aspects of shopping. This has been promoted by a more demanding
consumer, higher disposable incomes, entry of foreign brands in the Indian markets,
and entry of Indian business houses in the retail sector. (b) Deeper and wider
penetration of retail network in rural India promoted by greater recognition of the
potential of rural markets especially in the FMCG and consumer durables sector. (c)
Redesigning the retail mix by the traditional retailers as a sign of greater maturity of
the sector and also the rub-off effect of the development in the organized sector.
The traditional retail formats refer to retail formats that have long been part of the
retail landscape of India. They include formats like kirana and independent stores that
are typical of the unorganized retail sector and also the most administratively

27

organized form of Indian retailing co-operatives and government controlled retail

institutions.
Formats that emerged or became popular in the 1990s are classified as modern retail
formats. In terms of professional management and efficiency of integration with the
value chain, these formats are classified as part of the organized retail sector in India.
They generally include franchised outlets and company owned stores.

2.4 RETAIL TRENDS IN PAST FEW YEARS (2012 and

2013)
The total concept and idea of shopping has undergone a vast drawing change in terms
of format and consumer buying behaviour, ushering in a revolution in shopping in
India. Modern retailing has entered into India as is observed in the form of sprawling
shopping centres, multi-storied malls and the huge complexes that offer shopping,
entertainment and food all under one roof.
The Indian retail industry has experienced growth of 10.6% between 2010 and 2012
and is expected to increase to USD 750-850 billion by 2015. The industry has long
way to go as there is a huge opportunity in streamlining the sector. Indian retail sector
is gradually inching its way towards becoming the next boom industry.

28

Food and Grocery is the largest category within the retail sector with 60 % followed
by Apparel and Mobile segment.

Organized & Unorganized Retail sector in India

Currently India constitutes only 8% of organized retail and remaining 92% is left
unorganized, which may grow much faster than traditional retail. It is expected to gain
a higher share in the growing pie of the retail market in India. Various estimates put
the share of organized retail as 20% by 2020.
The growth pattern in organized retailing and in the consumption made by the Indian
population may follow a rising graph helping the newer businessmen to enter the
India Retail Industry.
The country's traditional retail industry is expected to grow at an average annual rate
of 5% over the next year, while the organized retail is estimated to register a growth
rate of around 25% during this period.
29

Within the organized retail sector, Apparel is the largest segment. Food and Grocery
and Mobile and telecom are the other major contributors to this segment.
According to 2012 Global Retail Development Index India has secured 5th rank in
market.
India remains a high-potential market with accelerated retail growth of 15 to 20
percent expected over the next five years. Growth is supported by strong
macroeconomic conditions, including a 6 to 7 percent rise in GDP, higher disposable
incomes, and rapid urbanization. Yet, while the overall retail market contributes to 14
percent of India's GDP, organized retail penetration remains low, at 5 to 6 percent,
indicating room for growth.
Indias large and aspiring middle class of 75 million households or 300 million
individuals want products that are value-driven. The countrys 500 million people
under the age of 25 have access to more money that has additionally resulted in
independence, aspirations and a demand for products.
Companies such as Gap, IKEA, and Abercrombie & Fitch are stepping up inquiries to
enter the market, while others are seeking local partners. Hypermarkets and
supermarkets continue to dominate, but cash-and-carry is growing fast, with
significant expansion from Bharti Wal-Mart, Metro Group, Carrefour etc.
30

After a challenging FY12, the retail sector recorded increase in sales volumes on y-oy basis in FY13. It also pared some losses through efficient cost and supply
management. Despite best efforts, operating margin of the retailers failed to improve
during FY13, primarily due to increase in input cost. Also, high interest rates and
scarcity of funds proved to be a major constraint to the growth of the sector.
During FY13, the Indian government provided some impetus to the sector by
announcing Foreign Direct Investment (FDI) in retail. It allowed 100% FDI in single
brands and 51% in multi-brand. However, it continues to face strong opposition from
farmers, kirana shop owners and SMEs (small to medium enterprises) as entry of
foreign players will increase competition and may impact their businesses. The
government has now left the decision to the respective states to decide if and when
they would like to allow FDI in the sector.

Retail industry has been on a growth trajectory over the past few years. The industry
is expected to be worth US$ 1.3 billion by 2020. Of this, organized retail is expected
to grow at a rate of 25% p.a. A significant new trend emerging in retail sector is the
increase in sales during discount seasons. It has been observed over the past few
months, that sales numbers in discount seasons are significantly higher than at other
times. This is prompting retailers to start discounts earlier and have longer than usual
sale season.
Another crucial structural change is expected to come in the form of implementation
of FDI in multi-brand retail. The industry players are strongly in favour of entry of
foreign retailers into the country. This will help them in funding their operations and
expansion plans. The expertise brought in by the foreign retailers will also improve
the way the Indian retailers operate. It is expected to bring in more efficiency in the
supply chain functions of retailers. However, fear of loss of business for kirana salas
is still a cause of concern and is posing hurdles in FDI implementation across
country. Ironically, it has been more than a year since the government opened the
door for FDI in multi-brand retail. But no international retailer has shown interest in
coming to India yet. Hurdles such as requirement of clearance from individual states,
31

mandate of 30% local outsourcing of materials from micro and small enterprises are
keeping the investors away from India.
The current market size of Indian retail industry is about US$ 500 billion (Source:
IBEF) and is expected to grow at the rate of 15-20% p.a. The retail industry is
expected to increase to US$ 750-850 billion by 2015 (according to a report by
Deloitte). Retailing has played a major role the world over in increasing productivity
across a wide range of consumer goods and services. In the developed countries, the
organized retail industry accounts for almost 80% of the total retail trade. In contrast,
in India organized retail trade accounts for merely 8-10% of the total retail trade. This
highlights a lot of scope for further penetration of organized retail in India.

Foreign foot print in Indian Retail market

In India the vast middle class and its almost untapped retail industry are the key
attractive forces for global retail giants wanting to enter into newer markets
Foreign entrants in the Indian segment are as follows:
Germany-based Metro Cash & Carry opened six wholesale centers in the country.
Walmart with Bharti Retail, owner of Easy day stores.
British retailer Tesco Plc (TESCO) signed an agreement with Trent Ltd (Trent),
the retail arm of Tata Group to set up cash-and-carry stores.
Carrefour opened its first cash-and carry store in New Delhi.

EXPECTED FUTURE TRENDS

FDI in specialty stores: Multi-brand organized retail in specialty stores such as
Consumer Electronics, Footwear, Furniture and Furnishing etc. are expected to
expand and mature in the next few years. However the policy condition on sourcing
will continue to be a major bottleneck for FDI in many of these segments
Dominance of unorganized retail: Flexible credit options and convenient shopping
locations may help traditional retail to continue its dominance in retail sector.

32

Growth in small cities and towns: Stiff competition and saturation of urban markets
is expected to drive domestic retail players to tap the potential in small cities

33

CHAPTER-3

INTRODUCTION TO
THE STUDY

34

SCOPE
The scope for the research was not very big. The area or say the premise of the
research was Bangalore.

RESEARCH DESIGN
A research design is purely and simply the framework or plan for a study that guides
the collection and analysis of data. The survey research was used in this project,
because consumers feedback was necessary for obtaining the data.

SAMPLING DESIGN
Simple Random Sampling- A sampling process where each element in the target
population has an equal chance or probability of inclusion in the sample is known as
simple random sampling. In this case simple random sampling was done because a
huge number of responses had to be covered.

DATA SOURCES
Primary data was collected by the help or a questionnaire. In this survey 100
respondent were interviewed.

RESEARCH INSTRUMENT
For doing the survey research, structured questionnaire with closed-ended questions
was used.

MODE OF SURVEY

35

The mode of survey was personal interview with the respondents during the filling
up of the questionnaires.

SAMPLE SIZE
A sample size of 100 respondents is used for the study.

SAMPLING UNITS
Customers (visiting both organized retail and Kirana stores.)

PLACE OF STUDY
Bangalore.

SHOPPING BEHAVIOR OF CONSUMER FOR ORGANISED

RETAIL AND UNORGANISED RETAIL
HOW INDIAN CONSUMERS ARE DIFFERENT AND THEIR IMPLICATION
ON ORGANISED RETAIL FORMATS
When Mr.Kishore Biyani Managing director of Pantaloon India ltd started with his
retail business he copied the same store model as that of the American and European
type. But when the organized retail store were not a success than Mr. Biyani realized
that Indian customer is different from the west and so made changes to the retail
formats keeping in mind the Indian taste.
Biyani often spends Sundays hanging about unobtrusively and watching shoppers at
his company's 200 clothing stores in 32 Indian cities. The home-grown retailer's
obsession for observing the average Indian consumer has led to his retail success.
Mr. Biyani observed that the Indian customer preferred narrow lanes whereas the
American and European consumers preferred wider lanes. This was due to the fact
that Indians were habitual of shopping in Kirana Stores which were having narrow
lanes so they preferred same in organised retail store.
36

Wide lanes preferred by foreign

Narrow lanes preferred by consumer

Indian consumers
Mr. Biyani also observed that Indian consumers do not like to examine orderly placed
merchandise. He has the fear of spoiling the orderliness of the store if he examines the
merchandise opens from the packet (say a t-shirt) and then not buys it. So he
introduced some disorderliness into the store whereas American and European
consumer prefer well orderly stores.

INDIAN CONSUMER WANT FOREIGN CONSUMER DO

SOME DISORDERLINESS NOT TOLERATE DIORDERLINESS
Mr. Biyani observed that Indian customer will spend more time if the lanes are in
zigzag fashion or obstruction was there in the lanes. The revenue of Big Bazaar grew
by 30% by implementing the following changes. Whereas American and European
consumers want obstruction free lanes.

37

A shelf just few meters behind the

No obstruction in lanes in

Lady causing obstruction in the lane. America and Europe.

Mr. Biyani said that Indian customers enjoy shopping in a noisy environment and
purchase more merchandise when in noisy environment. Thats why no one tells u to
talk slowly or not to make noise while in organized retail chain in India. Whereas the
American and European consumers prefer silent environment for shopping and
retailers focus on making the environment inside the retail store silent.

INDIAN CONSUMER LIKES A NOISY

FOREIGN CONSUMER

ENVIRONMENT FOR SHOPPING

PREFER QUIET
38

Mr. Biyani observed that an Indian shopper does not travel more than 6 or 7 km for
shopping on an average due to poor transport condition in India. This implies that
more number of retail stores have to be opened in a given area compared to American
and European consumers who are ready to travel for long distances.

Poor transport facilities in India will mean that retail chains will have to open more
shop in a given area in compared to America or Europe where the consumer is ready
to travel.

39

RELATIONSHIP BETWEEN SHOPPING UTILITY AND

STORE PERFORMANCE

Increased
Trip
Fixed
Benefits

Variable
Benefits

Store
Choice

Perceived Shopping
Utility

Fixed
Costs

More
Purchase

Variable
Costs
Loyalty

40

FIXED UTILITY:
A) Fixed Benefits
Habitual shopping experience (familiarity, loyalty)
Store layout
Service quality (parking, friendliness of employee)
Assortment of Products (breadth and depth)

B) Fixed Cost
Store location (distance and time to reach the store)

Variable Utility:
A) Variable Benefits
- Store specific price discount
- Habitual category purchase experience (category specific store loyalty due to price,
familiarity, and assortment).

B) Variable Cost
- expected price of items on the shopping list.
41

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

42

FINDINGS OF THE SURVEY

PROFILE OF THE RESPONDENTS
1) AGE

AGE

PERCENTAGE
18-25

15

26-33

20

33-40

12

40-47

29

47-54

15

ABOVE

54

15

15

20
29

18-25

26-33

12

33-40

40-47

47-54

Above 54

Interpretation: Maximum respondents (29%) were between 40-47 years. Only 9%

percent of the respondents were above 54 years which was the least percentage.
43

2. GENDER
GENDER

PERCENTAGE

MALE

42

FEMALE

58

42%

58%

MALE

FEMALE

Interpretation: Maximum respondents (58%) were female and (42%) were male
respondents.

44

3. AVERAGE MONTHLY INCOME

AVERAGE

PERCENTAGE

BELOW 10,000

28

10,000-20,000

58

ABOVE 20,000

14

14%

28%

58%
BELOW 10,000

10,000-20,000

ABOVE 20,000

Interpretation: Maximum respondents (58%) had average monthly income between

Rs. 10,000 to 20,000 followed by (28%) below rs.10, 000

45

Shopping behaviour
REGULARITY OF SHOPPING

REGULARITY

PERCENTAGE

ORGANISED

18

RETAIL STORE
KIRANA STORE

82

18%

82%

ORGANISED RETAIL STORE

KIRANA STORE

Interpretation: Maximum respondents (82%) were regular visitors to Kirana Store in

comparison with only 18% regular visitors to organised retail store.

46

VISITS PER MONTH FOR FOOD AND GROCERY IN ORGANISED RETAIL

STORE

VISITS PER MONTH IN

ORGANISED

PERCENTAGE

RETAIL

STORE
1-4

43

5-8

28

9-12

12

13-16

17-20

43

12

28

1 to 4

5 to 8

9 to 12

13 to 16

17 to 20

Interpretation: Maximum respondents (43%) visited the organised retail store 1-4
times in a month followed by (28%) visited organised retail store 5-8 times in a
month. Least consumers (8%) visited the store 17 to 20 times in a month.
47

VISITS PER MONTH FOR FOOD AND GROCERY IN KIRANA STORE

VISITS PER
MONTH

PERCENTAGE

IN

KIRANA
STORE
1-4

5-8

10

9-12

23

13-16

43

17-20

16

16

10

23
43

1 to 4

5 to 8

9 to 12

13 to 16

17 to 20

Interpretation: Maximum respondents (43%) visited the Kirana Store 13-16 times in
a month followed by (23%) visited Kirana Store 9-12 times in a month. Least
consumers (8%) visited the store 1 to 4 times in a month.
48

AVERAGE PURCHASE PER VISIT (Rs) IN ORGANISED RETAIL STORE

AVERAGE

PERCENTAGE

PURCHASE PER
VISIT IN
ORGANISED
RETAIL STORE
>100

100-400

27

400-700

39

700-1000

22

1000<

10

10

2
27

22

39

>100

100-400

700-900

1000<

400-700

Interpretation: Maximum respondents average purchase per visit in organised retail

store (39%) was between Rs. 400-700 followed by (27%) in Rs 100-400 range. Least
respondents (2%) average purchase per visit was below rs.100.

49

AVERAGE PURCHASE PER VISIT (Rs) IN KIRANA STORE

AVERAGE

PERCENTAGE

PURCHASE
PER VISIT IN
KIRANA
STORE
>100

58

100-400

21

400-700

11

700-1000

1000<

11

58

21

>100

100-400

700-900

1000<

400-700

Interpretation: Maximum respondents average purchase per visit in Kirana store

(58%) was below Rs. 100 followed by (21%) in Rs 100-400 range. Least respondents
(2%) average purchase per visit was above Rs. 1000.
50

BETTER DISCOUNT ON FOODS AND GROCERIES:

BETTER

PERCENTAGE

ORGANISED

98

RETAIL
STORE
KIRANA

STORE

2%

98%

ORGANISED
RETAIL STORE
KIRANA STORE

Interpretation: Maximum respondents (98%) believed that organised retail store

provide better discount on food on groceries whereas only 2% respondents believed
that Kirana Stores provide better discount on food and groceries.

51

SHOPPING ALONE
SHOPPING ALONE

YES

NO

ORGANISED RETAIL STORE

98

KIRANA STORE

83

17

ORGANISED RETAIL STORE

2%

KIRANA STORE

17%

83%

98%

Y ES

NO

YES

NO

Interpretation: Maximum respondents (83%) shopped alone in Kirana store whereas

only 2% respondents shopped alone in Organised Retail store.

52

MORE VARIETY IN FOOD AND GROCERIES

MORE

PERCENTAGE

ORGANISED

84

RETAIL
STORE
KIRANA

16

STORE

16%

84%
ORGANISED RETAIL STORE
KIRANA STORE

Interpretation: Maximum respondents (84%) said that they find more variety in an
organised retail store whereas only (16%) said that they find more variety in a Kirana
Store in food and grocery.

MORE EASILY ACCESSIBLE FOR FOOD AND GROCERY

53

EASE OF

PERCENTAGE
A
C
C
E
S
S
I
B
I
L
I
T
Y

ORGANISED

11

RETAIL STORE
KIRANA STORE

89

11%

89%
ORGANISED RETAIL STORE
KIRANA STORE

54

Interpretation: Maximum respondents (89%) said Kirana Store were easily

accessible to them whereas only (11%) respondents said organised retail store are
more easily accessible to them for food and grocery.

55

OPEN FOR LONGER HOURS

OPEN FOR LONGER

HOURS

PERCENTAGE

ORGANISED RETAIL

STORE
KIRANA STORE

99

1%

99%

ORGANISED RETAIL STORE

KIRANA STORE

Interpretation: Maximum respondents (99%) said Kirana Store were open were open
for longer hours whereas only (1%) of respondents said Organised Retail Store is
open for longer hours.

56

FACILITY TO EXAMINE THE FOOD AND GROCERY

FACILITY TO EXAMINE FOOD AND GROCERY

YES

NO

ORGANISED RETAIL STORE

100

98

KIRANA STORE

ORGANISED RETAIL STORE

0%

2%

100%

YES

KIRANA STORE

98%

NO

YES

NO

Interpretation: All respondents (100%) said there was facilities to examine food and
grocery whereas only (2%) respondents said that Kirana store have facility to examine
food and grocery.
FOOD AND GROCERIES MORE FRESH
57

FOOD AND

PERCENTAGE
G
R
O
C
E
R
I
E
S
M
O
R
E
F
R
E
S
H

ORGANISED

78

RETAIL STORE
KIRANA

22

STORE

58

22%

78%

ORGANISED RETAIL STORE

KIRANA STORE

Interpretation: Maximum respondents (78%) said Organised Retail Store has more
fresh food and groceries whereas 22% of the respondents said that Kirana Store has
more fresh food and groceries

BEHAVIOUR OF SALES PERSONNEL

BEHAVIOUR OF

EXREMELY

SALES

BAD

BAD

GOOD

GOOD

PERSONNEL
ORGANISED

ETREMELY

12

79

85

RETAIL STORE
KIRANA STORE

59

ORGANISED RETAIL STORE

5%

4%

KIRANA STORE

1%

7%

12%

7%

85%

79%

EXTREMELY BAD

BAD

GOOD

ETREMELY GOOD

EXTREMELY BAD

BAD

GOOD

EXTREMELY GOOD

Interpretation: Maximum respondents (85%) said Kirana Store has good behaviour
of sales personnel whereas 79% said that organised retail store has good behaviour of
sales personnel.
GOOD PARKING FACILITIES
GOOD PARKING FACILITIES

YES

NO

ORGANISED RETAIL STORE

72

28

KIRANA STORE

42

58

ORGANISED RETAIL STORE

60

KIRANA STORE

28%
42%

58%
72%

YES

NO

YES

NO

Interpretation: Maximum respondents (72%) said Organised Retail Store has good
parking facilities whereas 22% of the respondents said that Kirana Store has good
parking facilities.

MODE OF TRANSACTION

MODE OF TRANSACTION

CREDIT CARD

CASH

MEMBERSHIP CARD

ORGANISED RETAIL STORE

23

35

42

KIRANA STORE

100

ORGANISED RETAIL STORE

61

KIRANA STORE

0%
23%
42%

35%

100%

CREDIT CARD
CREDIT CARD

CASH

CASH

MEMBERSHIP CARD

MEMBERSHIP CARD

Interpretation: All respondents (100%) said mode of transaction was cash in Kirana
Store whereas only 35% paid through cash in organised retail store as other modes of
transaction were available.

62

BUY FOOD AND GROCERY NOW AND PAY LATER

BUY NOW AND PAY LATER

YES

NO

ORGANISED RETAIL STORE

100

KIRANA STORE

92

ORGANISED RETAIL STORE

KIRANA STORE

8%

0%

100%

92%

YES
YES

NO

NO

Interpretation: Maximum respondents (92%) said they can purchase food and
grocery on credit in Kirana Store whereas no respondent said that they can purchase
food and grocery on credit.

63

LOYALTY
LOYALTY

ALWAYS

ORGANISED

SOMETIMES

OFTE

SELDO

NEVER

12

12

15

33

28

86

RETAIL STORE
KIRANA STORE

ORGANISED RETAIL STORE

KIRANA STORE

7%

12%

28%

2%2% 3%

12%

15%
86%

33%

ALWAYS

SOMETIMES

SELDOM

NEVER

OFTEN

ALWAYS

SOMETIMES

SELDOM

NEVER

OFTEN

Interpretation: Maximum respondents (86%) said they were loyal to a particular

Kirana Store whereas only 12% respondent said that they were loyal to a particular
organised retail store.

64

CHAPTER 5

SUMMARY OF FINDINGS

65

ANALYSIS OF DATA COLLECTED

PREPOSITION: 1
CUSTOMER WOULD NOT LIKE TO TRAVEL WHEN DECIDING THE
STORE
ORGANISED RETAIL STORE
Only 11% of the respondents said that organised retail stores are more easily
accessible in compared to Kirana stores. {Q#7}
Only 18% of the respondents visited organised retail stores regularly. {Q#1}
Maximum respondents (48%) visited the organised retail store 1-4 times in a month.
{Q#1}
KIRANA STORE
Majority of the respondents 89% said that Kirana stores are more easily accessible.
{Q#7}
Majority of the respondents 82% visited the visited Kirana stores regularly. {Q#1}
Maximum respondents (43%) visited the Kirana Store 13-16 times in a month. {Q#2}
Since accessibility and the frequency of visits in case of both organised retail store
(11, 18) and Kirana store (89, 82) are almost proportional so therefore our preposition
is correct that the customers do not to travel when deciding on the store. So Kirana
stores being closer to most of the respondents so there fore they are visited most often
in compared to organised retail store.
PREPOSITION: 2
THE PRICE OF THE MERCHANDISE AND MODES OF PAYMENT ARE
IMPORTANT IN DECIDING THE PURCHASE AMOUNT IN A STORE.

66

ORGANISED RETAIL STORE

Majority of the respondents 98% said that they get better discounts at organised retail
stores. {Q#4}
The modes of payment available at organised retail store are cash, credit card and
membership card. The membership card (42%) was used by most of the respondents
to pay for the merchandise. {Q#13}
The average purchase of the respondents per visit was between rupees 400-700 for
most of the respondents (39%) in the organised retail store. {Q#3}
KIRANA STORE
Only 2% of the respondent said that they get better discounts at Kirana stores. {Q#4}
The only mode of payment available at Kirana store is cash. {Q#13}
The average purchase of the respondents per visit was below rupees 100 for most of
the respondents (58%) in the Kirana store. {Q#3}
Since merchandise is available cheaper in organised retail store according to
respondents due to discounts and they can choose not to pay in cash which is
inconvenient to carry in large amount the average purchase in retail store per visit is
many times compared to a Kirana store.
PREPOSITION: 3
KIRANA STORE HAS BETTER RELATIONSHIP WITH CONSUMER IN
COMPARED TO ORGANISED RETAIL STORE.
ORGANISED RETAIL STORE
Only 12% of the respondents were loyal to a particular organised retail store. {Q#15}
No delayed payment (0%) was allowed in organised food and grocery retail store.
{Q#14}

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The service provided by sales personnel was found to be very bad by 4% of the
respondents at organised retail store. {Q#11}
KIRANA STORE
Majority respondents 86% was loyal to a particular Kirana store. {Q#15}
Majority of the respondents (92%) said that they can buy merchandise now and make
payment latter. {Q#14}
The service provided by sales personnel was found to be very bad by 1% of the
respondents at organised retail store. {Q#11}
Since the owner and staff knew the consumer a relationship was developed between
the consumer and the Kirana store. The relationship resulted in loyalty, better service
by sales personal at Kirana store and delayed payment was allowed by owner to the
customer as he knew him well.
PREPOSITION: 4
WITH ORGANISED RETAIL STORE SHOPPING IS AN EXPERIENCE RATHER
THAN A TASK.
ORGANISED RETAIL STORE
Majority of the respondents (84%) said that they find more variety of food and
grocery in organised retail store. {Q#6}
All the respondents (100%) said that they get facility to examine the product due to
self service. {Q#9}
Majority of the respondents (72%) said they found good parking facilities outside
organised retail store. {Q#12}
Only 2% of the respondents went for shopping alone in organised retail store. {Q#5}

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KIRANA STORE
Only 16% respondents said that they find more variety in a Kirana store. {Q#6}
Only 2% of the respondents said that they get facility to examine the product. {Q#9}
Only 42% of respondents said that they found good parking facilities outside Kirana
store. {Q#12}.
Majority 83% of the respondents went for shopping alone in a Kirana store. {Q#5}
The majority of shopping done with friends or relatives, ability to examine the food
and grocery due to self service, backed with good parking facilities and more variety
has made shopping an experience rather than task in organised retail stores.
PREPOSITION: 5
CUSTOMER SPENDS MORE MONEY IN ORGANISED RETAIL STORE THAN
KIRANA STORE IN A MONTH.
ORGANISED RETAIL STORE
Money spent by customer in a month in organised retail store=
2.5*43+6.5*28+10.5*12+14.5*9+8.5*8=694/100=6.94
50*2+250*27+550*39+850*22+1600*10=63000/100=630
6.94*630=rs 4372.2
KIRANA STORE
Money spent by customer in a month in Kirana store=
2.5*8+6.5*10+10.5*23+14.5*43+8.5*16=1246/100=12.46
50*58=250*21+550*11+850*8+1200*2=20900/100=209
12.46*209=2604.14

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So a consumer is spending Rs 1768 more in organised store in comparison with

Kirana stores in a month.

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CHAPTER 6

CONCLUSION

71

6.1 CONCLUSION
Based on primary data
Yes, organised retail will succeed in India as it has various factors that outperform
Kirana stores.
Both the formats that are organised food and grocery store as well as Kirana store will
co-exist because both of them have certain factors which favour one more than the
other.
The factors which favour organised retail store more in comparison to Kirana store
for food and grocery are
More amount of money is spent per visit in organised retail store in
comparison to Kirana store on food and groceries
More discounts or bargains are available at organised retail store in
comparison to Kirana store on food and groceries
Shopping is an experience not a task in organised retail store.
You get more variety or assortment at organised retail store in comparison to
Kirana store
There is facility to examine the product in case of organised retail store which
is not available in Kirana store.
Food and groceries are fresher in organised retail store due to quick turnover.
You get better parking facilities in case of organised retail store.
There are more mode of transaction that include credit card, cash and
membership card compared to just cash in case of Kirana store.
The factors which favour Kirana store more in comparison to food and grocery are
More frequency of visit in comparison to organised retail store
Kirana store are more easily accessible and are there for convenient to
shop for a few items required immediately in compared to organised retail
store.
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 Kirana store are open for longer hours in compared to organised retail
store.
Better personal service provided in comparison of organised retail store.
Since the buyer is known to the owner a delayed payment of 15-30 days is
usually allowed in case of Kirana store whereas you have to pay
instantaneously in case of organised retail store.
There is greater loyalty shown to a particular Kirana Store in comparison
with organised retail store.

Based on Secondary data

SWOT Analysis of food and grocery in organized retail stores
Strengths
Prime location
Large floor space allowing for better visual merchandising
Large area also allows to stock a large variety of products under one roof
Financial backing by the strong Group
Experienced and competent management
Highly trained and motivated sales force
Brand equity
Large scale operations in various cities throughout the country allows them to
reap the benefits of economies of scale
Weaknesses
Large scale of operations sometimes acts as a barrier to personalized customer
relations

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 Large scale operations lead to reduced flexibility by increasing the amount of

overheads and a huge commitment in terms of fixed costs
A large organization structure leads to delayed decisions. Results in delayed
decisions in adapting to changing market trends
Opportunities
.These stores are expected to show exponential growth in the next few years. They
have less competition among themselves due to small numbers.
Increasing penetration of the internet into Indian homes has provided organised
food and grocery shops to break the geographical barriers and to increase their
customer base. The entry into online retailing, would, in fact, expand the product
categories available to the consumer. The choices open to the consumer would not
be restricted to those available in at the store
Threats
Increased competition in the form of international retail chains that are making a
beeline towards the highly potential Indian markets.

6.2 SUGGESTIONS
(a)Need to maintain good relationship among customers to increase the profit
and as well as the customer loyalty.
(b)Need to be flexible in terms of timing to increase foot fall.
(c)Need to adopt marketing condition to sustain competition.
(d)Entry into online retailing may expand the product categories available to
the consumer. The choices open to the consumer would not be restricted to
those available in at the store

74

REFERENCES &
BIBLIOGRAPHY

75

REFERENCES & BIBLIOGRAPHY

BOOKS

Retailing Management, Levy Weitz

Marketing Management; Kotler (Philip)

It happened in India, Kishore Biyani

NEWSPAPER
Mint
Hindustan Times
WEBSITES
www.google.com
www.businessworld.com
www.retailbiz.com
MAGAZINE
Business India: The Magazine of the Corporate World.

76

APPENDIX

77

APPENDIX
QUESTIONNAIRE FOR CUSTOMER SURVEY
Personal details
a. Name: _________________________________________________
b. Age:
18.25

26-33

33-40

40-47

47-54

Above 55

c. Gender:
Male

Female
d. Average monthly income:
Below 10,000

10,000-20,000

Above 20,000

1. Where do you shop regularly for food and grocery?

Organized Retail Store

78

Kirana Store

2. How many times in a month for food and grocery do you visit the
1-4

5-8

9- 12

13-16

17-20

Organized Retail Store

___

___

___

___

___

Kirana Store:

___

___

___

___

___

3. What is the average purchase for food and grocery in each visit (in Rs.)?
>100

100-400

400-700

700-1000

1000<

Organized Retail Store

___

___

___

___

___

Kirana Store:

___

___

___

___

___

4. Where do feel you get a better discount on food and groceries?

Organized Retail Store

Kirana Store

5. Do you shop alone?

Organized Retail Store

YES

NO

Kirana Store

YES

NO

6. Where do you find more variety in food and groceries?

Organized Retail Store

79

Kirana Store

7. Which are more easily accessible for food and grocery?

Organized Retail Store

Kirana Store

8. Which of the formats are opened for longer hours?

Organized Retail Store

Kirana Store

9. Is there facility to examine the food and groceries?

Organized Retail Store

YES

Kirana Store

NO

NO

YES

10. Where do you think the food and groceries are more fresh?
Organized Retail Store

Kirana Store

11. Behaviour of sales personnel

Extremely

Bad

Good

Extremely

Good

Bad

Organized Retail Store

Kirana Store

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12. Where do you find good parking facilities?

Organized Retail Store

YES

Kirana Store

YES

NO

NO

Cash

Membership

13. Mode of Transaction for payment

Credit card

Card
Organized Retail Store

Kirana Store

14. Can you buy food and grocery now and pay latter?
Organized Retail Store

YES

NO

Kirana Store

YES

NO

15. Are youloyal to same store.

Organized Retail Store
Always

Kirana Store

Sometimes

Often

Seldom

81

Never

82