final retail report

8/8/2019 Final RETAIL Report

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A study on more (retail)

Retail Management Page 2

EXECUTIVE SUMMARY

Indian Retail is one of the fastest growing sectors contributing approximately 40% to the Gross

Domestic product and annual turnover of 18, 00,000 Rs. Retailing is present in India from so

many years but in the unorganized form. The emergence of organized retail has given a new

dimension to the economy and to the customers. Because of the dynamics in the retail

environment the sector has become more active and attractive.

The conventional (unorganized) retailers secured the interest and loyalty of the

customers by offering the products at convenient places, better services than competitors and

also on credit basis. But the scenario is completely changed and the organized retail sector is

growing at a faster rate because of their superior information systems, logistical system, buying

power and better customer relationship managements systems.

Because of the above factors the giant retailers are providing more value propositions to

customers and succeeded in having a edge over the traditional retailers.


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Objectives of the Study

1. To make a comparative study of the different players in the Indian retail.

2. To understand the consumer buying behavior for organized retailing

3. To know the various types of visual merchandises and how it influences the buyer

4. To evaluate the factors that influence for the selection of location of a retail outlet.

5. To understand the role of training and HRM for the sales force.

Scope of the study

The study will help us in understanding the various concepts of the retail marketing. The

project will also give an opportunity to understand the concepts related to sales management

and customer relationship management.

Methodology

Methodology adopted for the study is by visiting various retail outlets across Hubli-

Dharwad region and meeting the various sales persons of the retail outlets. The study is also

carried out by the observation method (observing customers while buying) and also through

other secondary sources.

Time period of the study 2 months


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Learnings and outcomes

y If the number of footfalls has to be more the location of the store plays very important

role.

y Retail store at saptapur is well situated.

y P roper merchandising helps in up selling and cross selling.

y S tore layout also contributes to increase in footfalls and hence revenues.

y A dvertisement and communication is limited only to saptapur but it has to be re looked

y 30% of the total customers are issued with club more card a loyalty program.


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ABOUT THE INDUSTRY

The Indian retail industry is the fifth largest in the world. Comprising of organized and

unorganized sectors, India retail industry is one of the fastest growing industries in India,

especially over the last few years. Though initially, the retail industry in India was mostly

unorganized, however with the change of tastes and preferences of the consumers, the industry is

getting more popular these days and getting organized as well. With growing market demand, the

industry is expected to grow at a pace of 45% annually. The India retail industry is expected to

grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010

The retail industry is an ever growing and changing sector that cater to the dynamic needs

to the consumers by providing merchandise at outlets from where they can be purchased by the

latter. The retail industry is focused on the sale of goods or merchandise from a specific locationfor direct consumption by the purchaser. North A merica is the home of most of the worlds

largest retailers, since the U. S . dominates the global retailing industry. Not only is the retail

industry responsible for two-thirds of the U. S .s GD P , U. S . retail companies have also

established a presence on every continent. The largest retail giants globally are Wal-Mart (U SA ),

Metro A G (Germany), Carrefour (France) and Tesco (UK). The industry employs a staggering

number of people, and given its rapid proliferation, this number is always on the rise. The

backbone of the sector are the operations and supply chain management jobs but there are

various other options as well, from sales executives and store managers to merchandise planners

and buyers.

In todays dynamic and shaky business world, the retail industry is constantly upgrading

itself. With an endless array of customer choices, fierce competitors, pervasive use of the

internet, and a complex global economy, retailers need to focus on finding ways to sustain and

grow their businesses. Traditional growth models that focused on rolling out more stores and

adding more product lines, no longer enjoy the return on investment they once did. S uccessfulretailers are those who are able to adapt and change to the environment and develop new ways of

serving The retail industry in India is hailed as a sunrise sector, and is estimated to double in

value from U S$ 354 billion in 2010 to $6 40 billion by 2015. In fact, India has topped A T

Kearney's annual Global Retail Development Index (GRDI) for the third year in a row as the

most attractive market for retail investment. customers, respecting the dynamics of current trends


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and adapting accordingly. The key growth areas include the urban, luxury segment on one end

of the spectrum and serving the rural sector on the other. In addition, government policy

encouraging FDI in the segment has resulted in a plethora of international retailers keen on

entering the market; A merican retail giant Wal-Mart has tied-up with Bharti Enterprises and

global coffee giant S tarbucks' has tied up with PV R Limited.

GROWTH OF INDIAN RETAIL SECTOR

A ccording to the 8th A nnual Global Retail Development Index (GRDI) of A T Kearney,

India retail industry is the most promising emerging market for investment. In 2007, the retail

trade in India had a share of 8-10% in the GD P (Gross Domestic P roduct) of the country. In

2009, it rose to 12%. It is also expected to reach 22% by 2010.

A ccording to a report by Northbride Capita, the India retail industry is expected to

grow to U S$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total

market share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of

the total retail market.


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RETAIL FORMATS IN INDIA

Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of

categories.

y Mom-and-pop stores : they are family owned business catering to small sections; they are

individually handled retail outlets and have a personal touch.

y Departmental stores : are general retail merchandisers offering quality products and

services.

y Convenience stores : are located in residential areas with slightly higher prices goods due

to the convenience offered.y 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.

y E-trailers : are retailers providing online buying and selling of products and services.

y Discount stores : these are factory outlets that give discount on the MR P .

y Vending : it is a relatively new entry, in the retail sector. Here beverages, snacks and other

small items can be bought via vending machine.

y 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.

y Specialty stores : are retail chains dealing in specific categories and provide deep

assortment. Mumbai's Crossword Book S tore and R P G's Music World are a couple of

examples.


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Major Retailers in India

Pantaloon :

P antaloon is one of the biggest retailers in India with more than 450 stores across the country.

Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the

country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year

2010. In 2001, P antaloon launched country's first hypermarket Big Bazaar. It has the following

retail segments:

y Food & Grocery: Big Bazaar, Food Bazaar

y Home S olutions: Hometown, Furniture Bazaar, Collection-i

y Consumer Electronics: e-zone

y S hoes: S hoe Factory

y Books, Music & Gifts: Depot

y Health & Beauty Care: S tar, S itara

y E-tailing: Futurebazaar.com

y Entertainment: Bowling Co.

TataGroup Tata group is another major player in Indian retail industry with its subsidiary Trent, which

operates Westside and S tar India Bazaar. Established in 1998, it also acquired the largest book

and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across

the country.

RPGGroup

R P G Group is one of the earlier entrants in the Indian retail market, when it came into food &

grocery retailing in 199 6 with its retail Foodworld stores. Later it also opened the pharmacy and

Beauty care outlets Health and Glow

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh


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stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to

reach Rs. 90,000 crores by 2010.

AVBirlaGroup

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis P hillipe,A llen S olly, V an Heusen, P eter England are quite popular. It's also investing in other segments

of retail. It will invest Rs. 8000-9000 crores by 2010.


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Company Background.

The Groups foray into the retail sector began in December 200 6 when it acquired Trinethra, the

chain of stores based in south India. May 2007 saw A ditya Birla Retail Limited ( A BRL) launch

their own brand of stores called 'More.'

A BRLs vision is to consistently provide the Indian consumer complete and differentiated

shopping experiences and be amongst Indias top retailers while delivering superior returns to

all stakeholders.

With a vision is to be among the leading retail players in India, Aditya Birla Retail

launched its first supermarket, more. for you in May, 2007. S ince its launch, the more. for you

has an aggressive roll out, reaching a total count of over 640 stores across India today

more. for you is your neighborhood supermarket which takes care of your everyday household

needs and more. S pread across a wide range of products of food and non food items, ranging

from basic necessities such as, fruits and vegetables, staples, personal care, home care, household

care products, general merchandise, and dairy products, more. for you provide a one stop

solution for your grocery shopping needs. A lso in store are essentials such as, innerwear, kids

essentials, and a pharmacy, bakery and a mobile store. With a range of over 4,000 products, we

are able to fulfill your daily shopping needs all under one roof, at a convenient location close toyou.

The more. for you promises a world class shopping experience, with a modern store

layout, easy to shop with friendly staff at hand to provide assistance, electronic billing facilities

and a colorful ambience. A t more. for you we offer branded food and grocery products sourced

from the leading brands from all over India, along with private label brands from our own

portfolio - available in a broad selection for you, always giving you the best possible value for

your money. Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, a US D 28

billion Corporation. The Company ventured into food and grocery retail sector in 2007 with the

acquisition of a south based supermarket chain. S ubsequently Aditya Birla Retail Ltd.

expanded its presence across the country under the brand "more." with 2 formats Supermarket

and Hypermarket . Supermarket more. for you - Conveniently located in neighborhoods, more.

supermarkets cater to the daily, weekly and monthly shopping needs of consumers. The product


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offerings include a wide range of fresh fruits & vegetables, groceries, personal care, home care,

general merchandise & a basic range of apparels. Currently, there are over 600 more.

S upermarkets across the country. Hypermarket more. MEG AS TORE - is a one-stop shopping

destination for the entire family. Besides a large range of products across fruits & vegetables,

groceries, FMCG products, more. MEG AS TORE also has a strong emphasis on general

merchandise,apparels.

Till end- S eptember 2009, the company had set up 640 supermarkets and five hypermarkets. A ll

the supermarkets are branded More. and the hypermarkets are branded More Megastore. The

company has around 11,000 employees and has a pan-India presence. More. supermarkets are

neighbourhood stores with the core proposition of offering value, convenience and trust to the

customers and averaging 2,500 sq ft area. The hypermarkets are self-service superstores offering

value and range in food and non-food products and services at a single location. Hypermarketsare located in large catchment areas and encourage mass consumption with discount prices and

substantial depth of assortment with an average store size of 55,000 sq ft shopping area.

In May 2009 A ditya Birla Retail introduced a value proposition for its supermarkets and

encapsulated it into a promise of giving its customers Hamesha Extra which has resonated with

the consumer. Hamesha Extra is the core essence of More. It means customers will always feel

that they have got something extra while shopping at More.

Within a short span of less than three years, More. has more than 1. 6 million members as part of

its loyalty programme. More. has also launched a huge range of private labels in food and

grocery, staples and apparel which have already obtained a significant share of category as well

as salience with the consumer .

A ditya Birla Retail was presented the Retail Best Employer of the Year award at the Reid and

Taylor A wards for Retail Excellence, by the global jury of the A sia Retail Congress 2009.

A ditya Birla Retail was also recognised for impactful retail and visual merchandising at the same

forum. The company bagged the Most A dmired Retailer of the Year A ward in the S mart

S trategy category at the prestigious Images Retail A wards 2009, during the India Retail Forum at

Mumbai.


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RETAIL MIX

Retail marketing mix is the term used to describe the various elements and methods

required to formulate and execute retail marketing strategy. Retail managers must determine the

optimum mix of retailing activities and co-ordinate the elements of the mix. The aim of such

coordination is for each store to have a distinct retail image in consumers mind. The mix may

vary greatly according to the type of market the retailer is in, and the type of product/services.

Many elements may make up a firms retail marketing mix, the essential elements may

include S tore location, merchandise assortments, S tore ambience, customer service, price,

Communication with customers, P ersonal selling, S tore image, S tore design, S ales incentives,

P eople, P rocess, P hysical evidence, etc

S tore Location

MORE located in neighborhoods with an attractive and consistent range of

products. S upermarkets cater to the daily, weekly and monthly shopping needs of

consumers. The product offerings include a wide range of fresh fruits & vegetables,

groceries, personal care, home care, general merchandise & a basic range of apparels.

Currently, there are over 600 more. S upermarkets across the country.

Merchandise A ssortments

MORE also has a range of products from its own stable available across value,

premium and select ranges. The products have been quality-checked and are available in

attractive packaging at competitive prices. To avail additional benefits, at no extra

charge, customers can also enroll for the membership program Clubmore. It offers a wide

range of product categories including fruits and vegetables, staples, personal care, home

care, household general merchandise, poultry, dairy products, a pharmacy and a well-

stocked bakery

P ricing

The pricing technique used by most retailers is cost-plus pricing. This involves

adding a markup amount (or percentage) to the retailer's cost. A nother 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. P rices are fixed and


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displayed on signs or labels. A lternatively, when prices are not clearly displayed, there

can be price discrimination, where the sale price is dependent upon which the customer

is.

S tore Design & Display

MORE for you promises a world class shopping experience, with a modern store

layout, easy to shop with friendly staff at hand to provide assistance, electronic billing

facilities and a colorful ambience. A t MORE. for you we offer branded food and grocery

products sourced from the leading brands from all over India, along with private label

brands from our own portfolio - available in a broad selection for you, always giving you

the best possible value for your money. One way to do is to hire a merchandising

solutions company to design custom store displays that will attract more customers in a

certain demographic. S tore Image

MORE promises a world-class pleasurable shopping experience to Indian

consumers in their very own neighborhood. more. quality, more. V ariety more.

Convenience and more. V alue are the four delivery cornerstones of the more. Chain of

supermarket stores.

more.quality Every product at more.goes through a thorough quality check process ensuring

100 percent more satisfaction.

more.variety

A part from a large range of national brands, shoppers will also find a section

called the Best of India, which is an assortment of unique products sourced from across

India. The wide range of fresh fruits and vegetables along with private label offerings

under brand names V alue, S elect and P remium ensure that more. V ariety is a promise

delivered across the store.

more.convenience

Convenient locations within easy reach of consumers and a neat, cheerful and


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friendly layout, enough isle space, signage that speaks the consumer's language aiding in

identifying what she has come to shop for easily, all go a long way in ensuring more.

Convenience.

more.value

more. P romises best in market pricing. Linking up directly with farmers to source

fresh fruits, vegetables and staples ensure great quality as well as great price. A dd to this,

the membership program Clubmore, which provides convenience, customized shopping

solutions and savings, and the more. value promise becomes all the more evident.

Customer service

Customer service is the "sum of acts and elements that allow consumers to receive

what they need or desire from your retail establishment." It is important for a sales

associate to greet the customer and make himself available to help the customer find

whatever he needs. When a customer enters the store, it is important that the sales

associate does everything in his power to make the customer feel welcomed, important,

and make sure he leave the store satisfied. Giving the customer full, undivided attention

and helping him find what he is looking for will contribute to the customer's satisfaction.


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RETAIL LOCATION MERCHANDISE ASSORTMENT

Choosing a product for your retail store to sell may very well be the most difficult

decision you will need to make when starting a retail business. The choices are limitless and the

task may be overwhelming at first. Not only should there be a demand for your products, but it

must be profitable and something you enjoy selling. Before you commit to a product or product

line, consider the following factors while deciding what products to sell.

Marketability

Let's face it, it won't matter what products you sell if your customers aren't buying.

Before considering what product to sell, determine what market you want to sell to. Once you

know what kind of customer you want, then you'll be able to determine their needs. If your

products only appeal greatly to some people, it may not be enough to sustain a business. Your

product selection doesn't have to appeal to all of the population but it should be something you

can convince a large percentage of shoppers they need.

Profit Margin

S elling big ticket items is generally more profitable, but can require more credibility to

sell. When you look at the price of the product, don't forget to calculate direct and indirect costs

(like overhead) of selling your goods. If you think you can sell 50 widgets a day for $1.00 each

and the widget cost you $ .50 each, it may look like you have a profit of $25 per day. But when

you learn your overhead expenses average $20 per day, you may find your profit isn't sufficient

even though sales are good. The best selling products won't ever earn any real money if

your margin is too small.

Consumable

Choose a product with recurring sales value. A consumable item that needs to be

replaced on a regular basis is one way a retailer can establish long term sales. By establishing a

customer base with recurring products, customers will continue to come back to you to buy more


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as they use up the products. A dditionally, satisfied customers are more open to recommendations

for related products.

What's Popular?

When it comes to selecting products to sell based on what's popular, timing is

extremely important. New trends and products can be a great boost to your business but you'll

need to be at the beginning of the product life cycle in order to be successful. Learning to pick a

hot product b efore it becomes hot is a valuable skill that comes from knowing your market.

Competition

Competition is healthy and there are ways other than volume and price a smaller

store can compete with larger retailers. On the other hand, the more unique the product, the less

chance of competition.

Private Label

One way to guarantee having a truly unique product line is to make the item yourself.

A nother way is to partner with a small business that makes a product you would enjoy selling.

A lso consider private label products which will allow you to brand an item made by another

person.

Quality

When deciding which products to sell in your store, ask yourself the following

question. Is this product something I would give my dearest friend? If not, you may want to keep

looking. P roduct quality is extremely important when your reputation is on the line.

Diversity

Keep your product offering simple in the beginning. If your product line is narrow

and focused, then your marketing efforts can be just as tightly focused, which will bring you the


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best results for your marketing dollars. A s your business grows, so can your product line as long

as you keep new products compatible with the type of business, your location and your market.

PRICING STRATAGIES

Retail Pricing Strategies

There are many outside influences that affect profitability and a retailer's bottom line. S etting the

right price is a crucial step toward achieving that profit. Retailers are in business to make a

profit, but figuring out what and how to price products may not come easily.

Before we can determine which retail pricing strategy to use in setting the right price, we mustknow the costs associated with the products. Two key elements in factoring product cost is the

cost of goods and the amount of operating expense.

The cost of goods includes the amount paid for the product, plus any shipping or handling

expenses. The cost of operating the business, or operating expense, includes overhead, payroll,

marketing and office supplies.

Regardless of the pricing strategy used, the retail price of the products should more than cover the cost of obtaining the goods plus the expenses related to operating the business. A retailer

simply cannot succeed in business if they continue to sell their products below cost.

Retail Pricing Strategies

Now that we understand what our products actually cost, we should look at how our competition

is pricing their products. Retailers will also need to examine their channels of distribution and

research what the market is willing to pay.

Many pricing strategies exist and each is used based on particular a set of circumstances. Here

are a few of the more popular pricing strategies to consider:

Mark-up Pricing


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Markup on cost can be calculated by adding a pre-set (often industry standard) profit margin, or

percentage, to the cost of the merchandise.

Markup on retail is determined by dividing the dollar markup by retail.

Be sure to keep the initial mark-up high enough to cover price reductions, discounts, shrinkage

and other anticipated expenses, and still achieve a satisfactory profit. Retailers with a varied

product selection can use different mark-ups on each product line.

Vendor Pricing

Manufacturer suggested retail price (MSRP) is a common strategy used by the smaller retail

shops to avoid price wars and still maintain a decent profit.S

ome suppliers have minimumadvertised prices but also suggest the retail pricing. By pricing products with the suggested retail

prices supplied by the vendor, the retailer is out of the decision-making process. A nother issue

with using pre-set prices is that it doesn't allow a retailer to have an advantage over the

competition.

Competitive Pricing

Consumers have many choices and are generally willing to shop around to receive the best price.Retailers considering a competitive pricing strategy will need to provide outstanding customer

service to stand above the competition.

Pricing below competition simply means pricing products lower than the competitor's price.

This strategy works well if the retailer negotiates the best prices, reduces costs and develops a

marketing strategy to focus on price specials.

Prestige pricing, or pricing above competition , may be considered when location, exclusivityor unique customer service can justify higher prices. Retailers that stock high-quality

merchandise that isn't available at any other location may be quite successful in pricing their

products above competitors.

Psychological Pricing


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Psychological pricing is used when prices are set to a certain level where the consumer

perceives the price to be fair. The most common method is odd-pricing using figures that end in

5, 7 or 9. It is believed that consumers tend to round down a price of $9.95 to $9, rather than $10.

Other Pricing Strategies

Keystone pricing is not used as often as it once was. Doubling the cost paid for merchandise

was once the rule of pricing products, but very few products these days allow a retailer to

keystone the product price.

Multiple pricing is a method which involves selling more than one product for one price, such

as three items for $1.00. Not only is this strategy great for markdowns or sales events, but

retailers have noticed consumers tend to purchase in larger amounts where the multiple pricingstrategy is used.

Discount pricing and price reductions are a natural part of retailing. Discounting can include

coupons, rebates, seasonal prices and other promotional markdowns.

Merchandise priced below cost is referred to as loss leaders. A lthough retailers make no profit on

these discounted items, the hope is consumers will purchase other products at higher margins

during their visit to the store.

A s you develop the best pricing model for your retail business, understand the ideal pricing

strategy will depend on more than costs. It also depends on good pricing practices.

It is difficult to say which component of pricing is more important than another. Just keep in

mind, the right product price is the price the consumer is willing to pay, while providing a profit

to the retailer.

Independent retail business owners often worry when a large chain store comes to town. The

threat of having to compete with large retailers keeps many would-be entrepreneurs from even

opening a shop. Unfortunately, those fears are well-founded. S tudies show people purchase a

higher percentage of their merchandise from the mass merchandisers and consequently a lower

percentage from local merchants.


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It may be daunting but despite the emergence of these multi-million dollar businesses, many

small retailers continue to thrive (and profit) in a highly competitive marketplace. The key to

survival is to offer the products and services that your competition does not. S trategies must be

implemented to overcome the lower prices and wider selection that large retailers provide. Here

are some tips to better position your retail business for competing with the big box stores.

Don't Panic

Occasionally, we can be our own worst enemy. Talk of a big competitor coming to your

community is not a reason to immediately consider relocating or closing your business. First,

recognize that you may need to make a positive change in the way you do business. Then, assess

whether or not you have the desire to make those changes.

Do the Research

S eek advice from your trade association or consider hiring an industry consultant to conduct a

formal study of what customers value most and what they value least about your business.

Understand your store's competitive edge. Don't be afraid to shop your competition. One way to

be educated about the way your competition does business is by experiencing their customer

service first hand. If possible, talk to their customers. Find out what their shoppers like or dislike

about the chain store.

Dare to Be Different

Mass merchandisers generally have a little of everything, whereas smaller specialty stores can

focus on a narrow but lucrative niche. This can establish your store as the place to go when

buying these items. If your market niche is very small, consider keeping a few products and

services that appeal to a wider range of customers, but have exceptional product depth.


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Focus on what makes your business unique. Emphasize the originality of your inventory as

compared to the items offered by the chain store. Customers are intrigued by the unusual and are

often attracted to the idea of getting something special from an independently owned business.

S maller retail businesses also have the luxury of creating a comfortable, cozy atmosphere within

their store. This gives your store a personality which is often lacking at the big stores.

The Power of Pricing

Be open to a little haggling where price is concerned. More price negotiating goes on in your

"Mom and P op" stores than in the big box stores. Bargain shoppers know the independent

retailer has the power to negotiate a sale and these customers are more inclined to shop where

they feel they set their own prices. Remember, it is all about the customer's perception.

Using loss leaders as a marketing tool can also help gain new customers and increase return

visits. Implemented correctly, loss leaders have been proven to be a profitable pricing strategy.

Personal Attention

Treat each customer as your best customer. A s a small store owner, you can concentrate on small

details. S uperb customer service is the biggest intangible asset to the independent business.

P eople like to shop where they feel comfortable and where they feel the owner truly cares about

their wants and needs. It is the least expensive change to make in order to take on the larger

chain stores.

Staffing Your Store- In order to keep your employees from defecting to the competition, you

should treat them fairly. Motivate your staff and pay attention to their needs. Help your staff

become proficient in their respective departments and make sure they are readily available to

meet your customers' needs. If your employees can provide this, your customers will have an

extra incentive to continue doing business with you.

These tips for competing with big box stores can help level the playing field. However, don't be

misled into thinking exceptional customer service or unique products will win out over lower

prices every time. A s our customers' shopping choices change, so should our thinking. To


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succeed, we must lead or keep pace with the change. With or without new retail competition, this

kind of planning is something small retailers should be doing anyway.

THE RETAIL COMMUNICATION MIX

Communication Mix is the range of approaches and expressions of a marketing idea developed

with the hope that it be effective in conveying the ideas to the diverse population of people who

receive it.

It is designed to achieve a variety of objectives for the retailer, such as building a brand image of

the retailer in the customer's mind, increasing sales and store traffic, providing information about

the retailers location and offering, and announcing special activities.

Retailers communicate with customers through various means. These elements in the

communication mix must be coordinated so customers have a clear, distinct image of the retailer

and not to be confused by conflicting information.

Many retailers use rules of thumb to determine the size of the promotion budget. Marginal

analysis, the most appropriate method for determining how much must be spent to accomplish

the retailer's objectives, should be used to determine whether the level of spending maximizes he

profits that could be generated by the communication mix.


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The main elements that make up the promotions/communications mix are:


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y PAID IMPERSONAL COMMUNICATION

Advertising

It is an Effective medium for creating awareness and interest. Low control over response.

Television

Cinema

Radio

Directories

P ackaging

Hoardings/ P osters

Magazines

Catalogues

Brochures

Internet

Sales Promotion

Effective medium for creating awareness, interest and credibility.

Little control.

P ublicity can be highly credible if it is well thought - out and it is extremely cheap. A feature in a

paper, magazine sometimes seem more credible to readers than ads BUT it is restricted by

editorial decisions by the media source used

Money-off coupons

Free gift S amples


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Store Atmosphere

The combination of the stores physical characteristics (architecture, layout, signs and displays,colors, lighting, temperature, sounds, smells) together create an image in the customers mind.

Retailers Community Building Websites

It offer opportunities for customers with similar interests to learn about products and services

that support their hobbies and share information with others

y PAID PERSONAL COMMUNICATION

Personal selling

In this salespeople satisfy needs through face to face exchange of information. Effective

medium for influencing all stages of the decision making process, especially the decision to buy.

High level of control.

Good for small businesses with local markets complex products and services.

Direct Mail

Mailshots

E-mail

CD-ROM S

Email

Retailers inform customers of new merchandise, receipt of order or when order has been shipped

M-Commerce (mobile commerce)


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y UNPAID IMPERSONAL COMMUNICATION

Publicity

It is communication through significant unpaid presentations about the retailer, usually a news

story, in impersonal media.

Effective medium for creating awareness, interest and credibility.Little control.

P ublicity can be highly credible if it is well thought - out and it is extremely cheap. A feature in a

paper, magazine sometimes seem more credible to readers than ads BUT it is restricted by

editorial decisions by the media source used

UNPAID PERSONAL COMMUNICATION

Word of Mouth

Effective medium for creating interest and desire for your product or service and it is extremely

cheap. Give excellent service and produce good quality pay attention to packaging give

customers something to pass onto friends such as business cards give customers incentive to

bring new customers e.g. special discounts become part of local community activities team up

with other local businesses and pass customers between you to get people to tell others about

you, you must:

P ersonal S elling

P resentations

Meetings

TelemarketingTrade fairs


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Communication is an integral part of the retailers marketing strategy. P rimarily,

communication is used to inform the customers about the retailer, the merchandise and the

services. It also serves as a tool for building the store image. Retail communication has moved

on from the time when the retailer alone communicated with the consumers. Today, consumers

can communicate or reach the organizations. Examples of this include toll free numbers, which

retailers provide for customer complaints and queries. A nother example is the section called

Contact Us on the websites of many companies.

It is believed that every brand contact delivers an impression that can strengthen or

weaken the customer view of the company. The retailer can use various platforms / channels for

communication. The most common tools are:

1) A dvertising

2) S ales P romotion

3) P ublic Relations

4) P ersonal S elling

5) Direct Marketing

The tools are illustrated in Figure below

Retail Communication Mix >> S ales promotion>> A dvertising >> Direct marketing>> P ersonal

S elling >> P ublic Relations

Let us now examine each of these tools in detail:

Advertising It can be defined as any paid form of non-personal presentation and

communication through mass media. It is popularly believed that one of the main aims of

advertising is to sell to a wide mix of consumers and also to induce repeat purchases. However, a

retailer may use advertising to achieve any of the following objectives:

1) Creating awareness about a product or store

2) Communicate information in order to create a specific image in the customers mind in terms

of the store merchandise price quality benefits etc.


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3) Create a desire to want a product.

4) To communicate the stores policy on various issues.

5) Help to identify the store with nationally advertised brands.

6 ) Help in repositioning the store in the mind of the consumer.

7) To increase sales of specific categories or to generate short term cash flow by way of a sale,

bargain days, midnight madness etc.

8) Help reinforce the retailers corporate identity.

The retailers for advertising may use any one or a combination of the following mediums:

1)P ress advertisements

2) Posters and leaflets, brochures booklets

3) Point of purchase displays

4) A dvertising can also be done through mediums like radio, television, outdoor hoardings and

the internet.

Determining the A dvertising / P romotional budget

While there is no definite formula for determining the advertising or the overall promotion

budget the following are the main methods that may be employed to determine the advertising

budget.

The percentage of S ales method:

This is perhaps the most commonly used method for determining the budget. Here, the

budget is a fixed percentage of sales. The biggest advantage of this method is that it is simple to

apply and it allows he retailer to set an affordable limit on promotional activity. This method

however, takes little consideration of the market conditions of any special advertising needs.

The Competitive P arity Method


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Here the budget is based on the estimated amount spent by the competition. There is risk

that it could be based on wrong information and again there is little consideration for market

conditions or growth opportunities.

The research approach or the Task and objective Method

The budget is determines on the basis of a study of the best forms of advertising media

and the costs of each. The retailer formulates advertising goals and then defines the tasks

necessary to accomplish these goals. Next, the management determines the cost for each task and

adds up the total to arrive at the required budget. Here, he advertising expenses are linked to the

retailers objectives and the effectiveness of some forms of advertising can be measured and

compared to costs.

The incremental Method

The budget is simply based on the previous expenditure. What can be afforded? The

budget allocated for advertising or for promotion is based on the basis of the money that can be

allocated by the retailer for this purpose. While determining which method s to be adopted, a

retailer needs to take into consideration the market that the firm is operating in , its current

market position and how important advertising is in that market.

STORE LAYOUT

STRAIGHT FLOOR PLAN DIAGONAL STORE DESIGN

The straight floor plan is an excellent storelayout for most any type of retail store. Itmakes use of the walls and fixtures to createsmall spaces within the retail store. Thestraight floor plan is one of the mosteconomical store designs

The diagonal floor plan is a good storelayout for self-service types of retailstores. It offers excellent visibility for cashiers and customers. The diagonalfloor plan invites movement and trafficflow to the retail store.


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.

ANGULAR FLOOR PLAN MIXED FLOOR PLAN

retail store.

FOLLOWING I S THE schematic representation of the retail outlet which is opposite to busstand S aptapur, Dharwad

The angular floor plan is best used for high-end specialty stores. The curves and anglesof fixtures and walls makes for a moreexpensive store design. However, the softangles create better traffic flow throughoutthe retail store.

The mixed floor plan incorporates thestraight, diagonal and angular floor

plans to create the most functionalstore design. The layout moves traffictowards the walls and back of thestore.


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BILLING COUNTER STORE ROOM

PERISHABE GOODS MEDICINES

OTHER GROCERY ITEMS

STORE MANAGERS ROOM ENTRANCE

AND EXIT

About the outlet visited

y V isited Dharwad ( S aptapur)y S tarted a branch in 2007 in Dharwady Number of employees 13y A rea of floor ( in meters) 20 x 40y S ingle floor system- (section specification)y Working hours 9am to 10 pmy Total number of outlets in Dharwad city 2y ( S aptapur and vidyagiri)y A verage footfall per day 150 to 200


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performance and helps to realize what kind of staff are required in order to form the skills

which they needed. Retailers need to employ the right number of staff in order to make the

workforce more efficiency. Too many employees will increase costs, and too few will not able

to carry out of its work. Therefore, retailers have to analyze both current human resources

within the retailing organizations, and future plans or strategies of the organization and the

effect on human resource. Meanwhile, because of the special human resource environment in

the retail industry, the effects of the labor market factors have to be considered for their human

resources planning. Due to the development of Information Technology, companies may not be

able to find the employees who have the skills they required. In addition, internal staffing

factors such as labor turnover, sickness or accident rates also have to be considered. However,

planning has to be thought out carefully, and updated when other factors have changed. Take

boots as an example, they evaluate the local market trend and qualification of local population,etc and seek to the staff that need to form the skills they lack. This process takes time to

operate. However, it is less expensive than the recruitment and selection process. Meanwhile, it

will be helpful to find the employees who already have the skills that the retailers require.

Recruitment & Selection

Recruitment is the process of identifying the need for a new employee, defining the job and the

appropriate person for it, attracting a number of suitable candidates, then selecting the one best

suited to the job. When a company is looking for new employees, they tend to use different

channels in order to find the most suitable personnel. The channels could be educational

institution, T V /magazine advertising, agency or any other channels which is the best way to

find the right personnel. For example, in a retail company, when they are looking for an entry

level sales personnel, they tend to reply on educational institutions, advertisements and

employee recommendations. Moreover, when a retail company is looking for middle-

management positions, they are likely to use employment agencies, competitors,

advertisements and current employees. The recruitment process can be very costly. It takes a

great deal of time to set up an effective recruitment process. Therefore, the company has to

carry this job out in a systematic way.


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The next job is to select new employees from among those the company has recruited. The

main objective in the selection process is to match the character of potential employees with the

requirements of the jobs to be filled. The process of selection includes job analysis and

description, the application blank, interviewing, testing, references and a physical examination.

These processes should be followed in an integrated manner. However, the selection process

can be very costly because the company has to pay for the postage of sending out application

forms to candidates and they may also have to pay for the travel expenses for candidates'

journey to interview.

TYPE OF CUSTOMER SERVICE

In the retail industry, it seems as though we are constantly faced with the issue of

trying to find new customers. Most of us are obsessed with making sure our advertising,

displays, and pricing all scream out to attract new customers. This focus on pursuing new

customers is certainly prudent and necessary, but, at the same time, it can wind up hurting us.

Therefore, our focus really should be on the 20 percent of our clients who currently are our best

customers.

In retail, this idea of focusing on the best current customers should be seen as an on-going opportunity. To better understand the rationale behind this theory and to face the challenge

of building customer loyalty, we need to break down shoppers into five main types:

Loyal Customers

Naturally, we need to be communicating with these customers on a regular basis by

telephone, mail, email, etc. These people are the ones who can and should influence our buying

and merchandising decisions. Nothing will make a Loyal Customer feel better than solicitingtheir input and showing them how much you value it. In my mind, you can never do enough for

them. Many times, the more you do for them, the more they will recommend you to others.

Discount Customers


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This category helps ensure your inventory is turning over and, as a result, it is a key

contributor to cash flow. This same group, however, can often wind up costing you money

because they are more inclined to return product.

Impulse Customers

Clearly, this is the segment of our clientele that we all like to serve. There is nothing

more exciting than assisting an Impulse shopper and having them respond favorably to our

recommendations. We want to target our displays towards this group because they will provide

us with a significant amount of customer insight and knowledge.

Need-Based Customers

It is important to remember that Need-Based Customers can easily be lost to Internet

sales or a different retailer. To overcome this threat, positive personal interaction is required,

usually from one of your top salespeople. If they are treated to a level of service not available

from the Web or another retail location, there is a very strong chance of making them Loyal

Customers. For this reason, Need-Based Customers offer the greatest long-term potential,

surpassing even the Impulse segment.

Wandering Customers

For many stores, this is the largest segment in terms of traffic, while, at the same

time, they make up the smallest percentage of sales. There is not a whole lot you can do about

this group because the number of Wanderers you have is driven more by your store location than

anything else.

Keeping in mind, however, that although they may not represent a large percentage

of your immediate sales, they are a real voice for you in the community. Many Wanderers shop

merely for the interaction and experience it provides them. S hopping is no different to them than

it is for another person to go to the gym on a regular basis. S ince they are merely looking for

interaction, they are also very likely to communicate to others the experience they had in the


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store. Therefore, although Wandering Customers cannot be ignored, the time spent with them

needs to be minimized.

Becoming a Club more. member is easy

To join the Club more. program, just walk into any of our stores, and register with us by filling

out a simple enrollment form.You will be provided with a temporary card, with which you can

start earning points from Day 1 of shopping! On achieving certain targeted spends, you will be

eligible to redeem your collective points .

Each time you visit more. outlet, please remember to carry your Club more. card and present it

prior to billing in order to continue earning points.

Benefits

y Life time free membershipy S hop for Rs100 earn 10 points

y P oints valid for 2 years

y S tart earning points from day 1 of shopping

y S pecial offers and promotional activities only for Club more. members


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Recently our private label brands received the coveted " The Most Admired PrivateLabel " Golden S poon award at the Food Forum India.

We offer a wide range of assortment of over 4000 products, ranging from fresh food to beverages, grocery to household care products. Our range covers everything, from day-to-dayessentials to traditional favorites, from delicious treats, to healthy alternativesTo ensure the freshest supply of fruits and vegetables for you, we have built direct linkages withthe farmers for daily supplies of farm fresh produce.Our stores are built with a modern and comfortable ambience, air conditioned and with speedyautomated cashiering to help you shop better. We also have friendly in-store policies onexchange and returns that help you shop with ease and comfort.

Challenges facing Indian retail industry

y The tax structure in India favors small retail business

y Lack of adequate infrastructure facilities

y High cost of real estate

y Dissimilarity in consumer groups

y Restrictions in Foreign Direct Investment

y S hortage of retail study options

y S hortage of trained manpower

y Low retail management skill

The Future

The retail industry in India is currently growing at a great pace and is expected to go up to U S$

833 billion by the year 2013. It is further expected to reach U S$ 1.3 trillion by the year 2018 at a

CA GR of 10%. A s the country has got a high growth rates, the consumer spending has also gone

up and is also expected to go up further in the future. In the last four year, the consumer spending

in India climbed up to 75%. A s a result, the India retail industry is expected to grow further in

the future days. By the year 2013, the organized sector is also expected to grow at a C A GR of

40%.


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References

y RETAILING MANGEMENT by Levy and Weitz. Tata McGraw-Hill, 5 th Edition.

Retail Management, Barry Berman- PHI, 9/E, 2005

y Retail Marketing Management, David Gilbert- Pearson Education 1/e, 1999

RETAIL BIZ, Magazine .

y www.more.com y www.google/moreworldindia.com

final retail report

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