Marketing Management Retailing sector of India (Segmentation & Consumer Behaviour)

Submitted By: Limje Hitendra J(31) Mansuri Suhel (34)

YEAR-2012
Submitted To: Mr. Jaydip Chaudhary

DEPARTMENT OF BUSINESS AND INDUSTRIAL MANAGEMENT VEER NARMAD SOUTH GUJARAT UNIVERSITY SURAT

Sr.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Retail Industry in India India

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History of retailing
Retail concept is old in India. Worlds first departmental store started in Rome. Todays kirana stores are based on Manusmriti & Kautilyas arthshastra. Haats, Melas, Mandis & door to door salesmen are traditional Indian retail. Vishal Mega Mart is a retail sector, which is providing good quality of products in very reasonable price than its competitors. Retailing and wholeselling consist of many organizations designed to bring goods and services from the point of production to the point of use. Retailing includes all the activities involved in selling goods or services directly to final consumers for their personal, non-business use. Retailers can be classified in terms of store retailers, non-store retailing, and retail organizations. Store retailers include many types, such as specialty stores, department stores, supermarkets, convenience stores, superstores, combination stores, hypermarkets, discount stores, warehouse stores, and catalog showrooms. These store forms have had different longevities and are at different stages of the retail life cycle. Depending on the wheel-of-retailing, some will go out of existence because they cannot compete on a Quality, service, or price basis. Non-store retailing is growing more rapidly than store retailing. It includes direct selling (door-to-door, party selling), direct marketing, automatic vending, and buying services. Much of retailing is in the hands of large retail organizations such as corporate chains, voluntary chain and retailer cooperatives, consumer cooperatives, franchise organizations, and merchandising conglomerates. More retail chains are now sponsoring diversified retailing lines and forms instead of sticking to one form such as the department store. Retailers, like manufacturers, must prepare marketing plans that include decisions on target markets, product assortment and services, store atmosphere, pricing, promotion, and place. Retailers are showing strong signs of improving their professional management and their productivity, in the face of such trends as shortening retail life cycles, new retail forms, increasing intertype competition, and polarity of retailing, new retail technologies, and many others. Wholesaling includes all the activities involved in selling goods or services to those who are buying for the purpose of resale or for business use. Wholesalers help manufacturers deliver their products efficiently to the many retailers and industrial users across the nation. Wholesalers perform many functions, including selling and promoting, buying and assortment-building, bulkbreaking, warehousing, transporting, financing, risk bearing, supplying market information, and providing management services and counseling. Wholesalers fall into four groups. Merchant wholesalers take possession of the goods and include full-service wholesalers (wholesale merchants, industrial distributors) and limited-service wholesalers (cash-and- carry wholesalers, truck wholesalers, drop shippers, rack jobbers, producers' cooperatives, and mail-order wholesalers). Agents and brokers do not take possession of the goods but are paid a commission for facilitating buying and selling. Manufacturers' and retailers' branches and offices are wholesaling operations conducted by non-wholesalers to bypass the wholesalers. Miscellaneous wholesalers include agricultural assemblers, petroleum bulk plants and terminals, and auction companies.

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Wholesalers, too, must make decisions on their target market, product assortment and Services, pricing, promotion, and place. Wholesalers who fail to carry adequate assortments and inventory and provide satisfactory service are likely to be bypassed by manufacturers. Progressive wholesalers, on the other hand, are adapting marketing concepts and streamlining their costs of doing business. Current scenario India rank first in terms of emerging market potential in retail sector. Current retail market is US $ 215 billion. Growth rate of retail sector in India is 8-10% per annum. Near about 12 million retail outlets are spread across India. FDI in retail sector increases from US $ 3.1 billion in 2003 to over US $7.6 billion in 2009. Types of retailers Retailers are broadly classified into 3 categories Food Retailers. General Merchandise Retailers. Service Retailers.

Retail Industry in India

Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and around eight per cent of the employment. Retail sector is one of India's fastest growing sectors with a 5 per cent compounded annual growth rate. India's huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in India could be worth US$ 175-200 billion by 2016. The organized retail industry in India had not evolved till the early 1990s. Until then, the industry was dominated by the un-organized sector. It was a sellers market, with a limited number of brands, and little choice available to customers. Lack of trained manpower, tax laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business giants such as Reliance, Bharti, Birla and others are now entering into retail sector. A number of factors are driving India's retail market. These include: increase in the young working population, hefty pay-packets, nuclear families in urban areas, increasing working-women population, increase in disposable income and customer aspiration, increase in expenditure for luxury items, and low share of organized retailing. India's retail boom is manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer shopping, entertainment and food all under one roof.

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But there is a flip side to the boom in the retail sector. It is feared that the entry of global business giants into organized retail would make redundant the neighbourhood kiryana stores resulting in dislocation in traditional economic structure. Also, the growth path for organized retail in India is not hurdle free. The taxation system still favours small retail business. With the intrinsic complexities of retailing such as rapid price changes, constant threat of product obsolescence and low margins there is always a threat that the venture may turn out to be a loss making one. A perfect business model for retail is still in evolutionary stage. Procurement is very vital cog in the retail wheel. The retailer has to fight issues like fragmented sourcing, unpredictable availability, unsorted food provisions and daily fluctuating prices as against consumer expectations of round-the-year steady prices, sorted and cleaned food and fresh stock at all times. Trained human resource for retail is another big challenge. The talent base is limited and with the entry of big giants there is a cat fight among them to retain this talent. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. All the companies have laid out ambitious expansion plans for themselves and they may be hampered due lack of requisite skilled manpower. But retail offers tremendous for the growth of Indian economy. If all the above challenges are tackled prudently there is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth. Retail formats in India Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories. Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. Departmental stores: are general retail merchandisers offering quality products and services. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. Shopping malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof. E-trailers: are retailers providing online buying and selling of products and services. Discount stores: these are factory outlets that give discount on the MRP. Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO's. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

Challenges facing Indian retail industry

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The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower Low retail management skill

1.3 Retailing marketing mix in brief The elements of the marketing mix encompass the facts in the table below. The table depicts consumer service as the crux of the whole activity. Retail marketing mix: the 7Ps Product Merchandise, Range, Quality Level, Brand Name, Service Line, Warranty, After Sale Services Price Value, Cost, Discounts, Allowances, Commissions, Payment Terms, Gross Margins, Profit, Business Expenses Place Location, Supply Channel, Convenience, Channel Relationships, Logistics, Transport, Warehousing Promotion Advertising, Personal Selling, Sales Promotion, Publicity, Public Relation People Personal Training, Commitment, Incentives, Appearance, Inter Personal Behavior, Attitudes, Relationship Marketing Physical Evidence Environment, Furnishing, Color, Noise Level, Facilitating Goods Process Policies, Procedures, Mechanization, Employee Discretion, Flow Of Activities (Adapted from Retail marketing management, David Gilbert) The retail marketing mix has to be combined across its different parts so that each aspects of the mix reinforce and reflects the other part of the mix. This will create a synergy effect where the whole becomes greater than some of the parts. The combined mix has to be positioned so as to create a clear proposition for the customer. Reference: http://seminarprojects.com/Thread-growth-of-retailing-industry-inindia#ixzz3hx9O2knC What is retailing? The word "Retail" originates from a French-Italian word. Retailer - someone who cuts off or sheds a small piece from something. Retailing is the set of activities that markets products or services to final consumers for their own personal or household use. It does this by organizing their availability on a relatively large scale and supplying them to customers on a relatively small scale. Retailer is a Person or Agent or Agency or Company or Organization who
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is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate consumer. Reference: http://seminarprojects.com/Thread-growth-of-retailing-industry-inindia#ixzz3hx9FC3ER
Products available in Big bazaar Apparel and Accessories for Men, Women and Children. Baby Accessories. Cosmetics Crockery Dress Materials Suiting & Shirting Electrical Accessories Electronics Footwear Toys Home Textiles Home Needs Household Appliances Household Plastics Hardware Home Decor Luggage Linens Sarees Stationery Utensils & Utilities Product layout Chart Ground floor Fruits and Vegetables Golden Items Ready to eat Ready to cook Sweets and Farson Spices Beverage Confectionaries Tea and Coffee Personal Cars Plastics Utensils Crockeries Appliances

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First floor Second floor Third floor

Purpose behind visiting big bazaar Shopping Outing Both Big Bazaar is a chain of shopping malls in India currently with 29 outlets, owned by the Pantaloon Group. It works on it the economy model as Wal-Mart and has had considerable success in many Indian cities and small towns. Cities where stores are located Agra Ahmedabad Allahabad Ambala Asansol Bangalore Bhubaneswar Chennai Coimbatore Palakkad Kolkata Delhi Durgapur Ghaziabad Gurgaon Hyderabad Indore Lucknow Kanpur Mangalore Mumbai Nagpur Nasik Panipat Pune Rajkot Surat Thane Thiruvananthapuram Vishakhapatnam

Big Bazaar is not just another hypermarket. It caters to every need of customers family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. The following factors influence the consumers purchase decision Offer Service Quality Effective advertisement

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