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A STUDY ON

“RETAIL STORES IN BANGALORE”

A PROJECT submitted in partial fulfillment of the requirements for the award of MBA Degree of

Bangalore University.

BY

KUMAR.N

REG.NO-06XQCM6095

Under the guidance

Of

Prof. SATHYANARAYANA

M.P.BIRLA INSTITUTE OF MANAGEMENT

ASSOCIATE BHARATIYA VIDYA BHAVAN.

BANGALORE-560001

Feb-Apr 2008



DECLARATION

I hereby declare that the research work embodied in the dissertation

entitled “RETAIL STORES IN BANGALORE” is the result of

research work carried out by me, under the guidance and supervision

of Prof. SATHYANARAYANA, M. P. Birla Institute of Management,

Bangalore. I also declare that this dissertation has not been

submitted to any University/Institution for the award of any

Degree/Diploma.

Place: Bangalore

Date: KUMAR.N



GUIDE’S CERTIFICATE

I hereby certify that this dissertation entitled “A study on

RETAIL STORES IN BANGALORE” is the result of the research

work carried out by KUMAR.N (06XQCM6095) under my

guidance and supervision.

Place: Bangalore Prof. SATHYANARAYNA

Date: (Professor MPBIM )



PRINCIPAL’S CERTIFICATE

This is to certify that Mr. KUMAR N. Registration No: 06XQCM6037

has done a research project entitled “A study on RETAIL

STORES IN BANGALORE” under the guidance of Prof.

SATHYANARAYANA, M P Birla Institute of Management,

Bangalore. This has not formed a basis for the award of any

degree/diploma of any other university / institution.

Place: Bangalore

Date: Dr. N. S. MALLAVALLI



ACKNOWLEDGEMENT

I thank all the respondents who spared their valuable time to

provide me the necessary information without which this report would

not have been possible.

I thank Prof. SATHYANARAYNA, my faculty guide for giving me

the guidance and helping me to make my project practically a feasible

one. This project would not be possible without his help.

I would like to show my sincere gratitude towards my principal,

Dr. Nagesh Malavalli of M.P BIRLA INSTITUTE OF MANAGEMENT

STUDIES, Bangalore for giving me moral support for doing this

project well.

Finally, I express my sincere gratitude to all my friends and well

wishers who helped me to do this project.

KUMAR.N



Contents

Particulars Page No.

Executive Summary

1. Introduction 3-20

• Retail in India 5-6

• Retail formats in India 7-8

• Organized Retail in India 9-17

• SWOT of the market. 18-20

2. Review of the literature 21

3. Methodology 22-26

• Purpose of the study 22

• Problem of the statement 23

• Hypothesis 23

• Limitation of the study 23

• Instrumentation technique 24

• Sampling Plan 24

• Tools used for testing of hypotheses 26

4. Presentation and analysis of data and 27-38Interpretation

5. Emerging trends & Changes 39-52

6. Findings, Recommendations & Conclusion 53-57

• Conclusion from the study

• Suggestion for further research

• Conclusion

Bibliography

Questionnaire



A Study on RETAIL STORES IN BANGALORE

1 M.P. Birla Institute of management

EXECUTIVE SUMMARY





EXECUTIVE SUMMARY

Retailing consists of all activities involved in selling goods and services to consumers for

their personal, family or household use. Retailing includes all activities involved in

selling goods or services directly to final consumers for personal, non-business use. A

retailer or retail store is any business enterprise whose sales volume comes primarily

from retailing.

In this project I have taken into consideration the various aspects of retailing in

Bangalore. In my study I considered two issues which are pertinent to retailing sector.

The first issue being the “Importance of Sales personnel in Retail Stores” which has been

tested as a hypothesis, The second issue being “Home Delivery System deciding the

success or failure of any retail store. The other issues that have been discussed in my

report are the spending pattern of people, average visits to the retail stores by the general

public for various purposes.

The sampling done here is convenience sampling. Questionnaire has been used to collect

data from the general public. The Sample size is 100. Z test has been used to carry out

the Hypothesis testing.

From the report it was observed that there has been a threshold increase in the female

factions who have visiting the retail stores. The percentage is around 65%. People have

started preferring organized retail stores. The average number of visits to the retail stores

is around 2 times a month. Average spending at retail stores is around Rs. 1000-2000

every time. Around 42% of the people have pre-determined purchases when they go retail

stores. 42% of the people who visit retail stores buy FMCG products, Cosmetics and

Health care products, 14% buy apparels which is the most organized retail in Bangalore.

Most individual who took part in the survey felt that Sales Personnel had a very

important role to play in improving the loyalty toward the Retail Store. However the

individuals also felt that home delivery system of the retail stores was not of much

importance because they could spare some time for visiting these retail stores.





CHAPTER 1

BACKGROUND OF THE STUDY





INTRODUCTION

Retailing consists of all activities involved in selling goods and services to consumers for

their personal, family or household use. It covers sales of goods ranging from

automobiles to apparel and food products and services ranging from hair cutting to air

travel and computer education. Sales of goods to intermediaries who resell to retailers or

sales to manufacturers are not considered a retail activity. Retailing can be examined

from many perspectives. A manufacturer of white goods like washing machine and

refrigerators has many options to reach out to consumers. It can sell through dealers, the

company showrooms (Sony World, Videocon Plaza) or hypermarkets (Big Bazaar).The

retail sector in India is highly fragmented with organized retail contributing to only 3% of

total retail sales.

The retail sector in developed countries was also highly fragmented at the beginning of

the last century but the emergence of large chains like Wal Mart, Sears, and Mc Donald’s

led to rapid growth of organized retail and growing consolidation of the retail industry in

the developed countries. Today, in India we see a rise in the purchasing power and

growth of a middle class which follows the western lifestyle. Hence, conditions are

conducive for the rapid growth of organized retail in India. Organized retail is growingrapidly and we see the emergence of large organized retail chains like Shoppers’ Stop,

LifeStyle and Westside. We also find retail malls mushrooming all over the country. The

opportunities in retail industry in India will increase since Indian retailing is on the

threshold of a major change. However, with the rapid growth in organized retail and

increased emphasis of manufacturers on understanding sales at the retail level, the study

of retailing has become increasingly relevant.

India’s retail market which is seen as THE GOLDMINE by global players has grabbed

attention of the most developed nations. This is no wonder to the one who knows that the

total Indian retail market is US $350bn. (16, 00,000 crore INR approx.) of which

organized retailing is only around 3 percent i.e. US $8bn (36,000 crore INR approx).

“Retailing includes all activities involved in selling goods or services directly to final





consumers for personal, non-business use. A retailer or retail store is any business

enterprise whose sales volume comes primarily from retailing.” Retail is India's largest

industry, accounting for over 10 per cent of the country's GDP and around eight per cent

of the employment. Retail industry in India is at the crossroads. It has emerged as one of

the most dynamic and fast paced industries with several players entering the market.

The whole concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India. Modern retail has entered India as

seen in sprawling shopping centers, multi-storied malls and huge complexes offer

shopping, entertainment and food all under one roof. Although the organized retailing in

India is coming up in a big way, it cannot simply ignore the competition from the

conventional stores because of various factors like reach, extending credit facility and

other intangible factors like the human touch which are provided only by the

conventional stores.

RETAIL CONCEPT

The distribution of consumer products begins with the producer and ends at the

ultimate consumer. Between the producer and the consumer there is a middleman---the

retailer, who links the producers and the ultimate consumers. Retailing is defined as a

conclusive set of activities or steps used to sell a product or a service to consumers for

their personal or family use. It is responsible for matching individual demands of the

consumer with supplies of all the manufacturers. The word ‘retail’ is derived from the

French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’. A retailer is a

person, agent, agency, company, or organization which is instrumental in reaching the

goods, merchandise, or services to the ultimate consumer. Retailers perform specific

activities such as anticipating customer’s wants, developing assortments of products,

acquiring market information, and financing. A common assumption is that retailing

involves only the sale of products in stores. However, it also includes the sale of services

like those offered at a restaurant, parlour, or by car rental agencies. The selling need not

necessarily take place through a store. Retailing encompasses selling through the mail,





the Internet, door to-door visits---any channel that could be used to approach the

consumer.

CHARACTERISTICS OF RETAILING

Retailing can be distinguished in various ways from other businesses such as

manufacturing.

Retailing differs from manufacturing in the following ways:

• There is direct end-user interaction in retailing.

• In is the only point in the value chain to provide a platform for promotions.

• Sales at the retail level are generally in smaller unit sizes.

• Location is a critical factor in retail business.

• In most retail businesses services are as important as core products.

• Chain. This occurs primarily to meet the requirements of geographical coverage

and population density.

RETAIL IN INDIA

The retail industry in India is largely unorganized and predominantly consists of

small, independent, owner-managed shops. Retailing is India’s largest industry in terms

of contribution to GDP and constitutes 13% of the GDP (Gross Domestic Product). There

are around 5 million retail outlets in India. There are also an unaccounted number of low

cost Kiosks (tea stalls, snack centres, barber shops) and pushcarts mobile vendors. Total

retail sales area in India was estimated at 328 million sq. mt. in 2001, with an average

selling space of 29.4 sq. mt. per outlet. In India, the per capita retailing space is about 2

sq. ft., which is quite low in comparison to the developed economies. In 2000, the globalmanagement consultancy AT Kearney put retail trade at Rs 400,000 crore, which is

expected to increase to Rs. 800,000 crore by the year 2005—an annual increase of 20%.

According to a survey by AT Kearney, an overwhelming proportion of the Rs 400,000

crore retail markets is unorganized. In fact, only a Rs 20,000 crore segment of the market





is organized. There is no integrated supply chain management outlook in the Indian

traditional retail industry.

Food sales constitute a high proportion of the total retail sales. The share was 62.7% in

2001, worth approximately Rs 7,039.2 billion, while non-food sales were worth Rs

4189.5billion. However, the non-food retailing sector registered faster year-on-year

growth than the food sales sector. The trend to market private labels by a specific retail

store is catching on in India as it helps to improve margins. The turnover from private

labels by major retail chains was estimated at around Rs 1200 million in 2000.

EVOLUTION OF RETAIL:

The above given diagram is the pictorial representation which depicts the evolution of the

Indian retail market formats based on their category and value proposition. And a brief

description above formats based on some of the parameters like their offerings, space

occupied etc. is also given below for better understanding.

Weekly MarketsVillage FairsMelas

Convenience Stores

Mom andPop/Kiranas

PDS OutletsKhadi StoresCooperatives

Exclusive BrandOutletsHyper/Super MarketsDepartment StoresShopping Malls

Traditional/Pervasive Reach

GovernmentSupported

Historic/RuralReach

Modern Formats/International

Source ofEntertainment

NeighborhoodStores/Convenience

Availability/ LowCosts /

Distribution

ShoppingExperience/Efficiency





RETAIL FORMATS

Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the

modern Indian shopper.

Merchandise: food grocery to clothing to spots goods to books to stationery.

Space occupied: 50000 Sq .ft. and above.

SKUs: 20000-30000.

Example: Pantaloon retail’s Big Bazaar, RPG’s Spencer’s (Giant).

Supermarket: A subdued version of a hypermarket.

Merchandise: Almost similar to that of a hypermarket but in relatively smaller

proposition.

Space occupied: 5000 Sq. ft. or more.

SKUs: Around 10000.

Example: Nilgiri’s, Apna Bazaar, Trinethra.

Convenience store: A subdued version of a supermarket.

Merchandise: Groceries are predominantly sold.

Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.Example: stores located at the corners of the streets, Reliance Retail’s Fresh and Select.

Department store: A retail establishment which specializes in selling a wide range of

products without a single prominent merchandise line and is usually a part of a retail

chain.

Merchandise: Apparel, household accessories, cosmetics, gifts etc.

Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.

Example: Landmark Group’s Lifestyle, Trent India Ltd’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and

higher volumes. Merchandise: A variety of perishable/ non perishable goods. Example:

Viswapriya Group’s Subiksha, Piramal’s TruMart.





Specialty store: It consists of a narrow product line with deep assortment.

Merchandise: Depends on the stores

Example: Bata store deals only with footwear, RPG’s Music World, Crossword.

MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in

busy market places and Metros.

Merchandise: Offers several brads across a single product category.

Kirana stores: The smallest retail formats which are the highest in number (15 million

approx.) in India.

Merchandise: Mostly food and groceries.

Space occupied: 50 sq ft and even smaller ones exist.

Malls: The largest form of organized retailing today. Located mainly in metro cities, in

proximity to urban outskirts.

Merchandise: They lend an ideal shopping experience with an amalgamation of product,

service and entertainment, all under a common roof.

Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.

Example: Pantaloon Retail’s Central, Mumbai’s Orbit.





In the below figure it shows that journey of organized retailing in India.

Organized retailing in India

Some Quick Facts

Retailing in India

• Emergence of modern retail formats

• Increased pressure on opening up FDI in retail sector

• Rapid Evolution of New-age Young Indian Consumers

• Rapidly increasing middle class

• Rising Incomes levels

• Increased Awareness Level among Consumers

• Exposure to International Brands

• Retail Space is no more a constraint for growth





The Indian Story

• 4th largest economy in the world based on PPP

• 7.5% GDP growth forecasted over 2005-2007

• Real estate sector growing at 30% per annum and one of the largest

employer – a key contributor to GDP

• Residential market is 80% of the total real estate market

• Gap between supply and demand in residential market is 41 billion sq.ft.

• Real Estate in India projected to be USD 50 billion in 2008

• Organized retail space demand of 40 million sq.ft. over next 3-4 years.

• India is ranked the 5th largest retail destination across the globe

• Consumerism – the order of the day, which is fueling the growth in both

the commercial as well as the retail sector

• Globalization of Indian Economy.

• Total Private Consumption Expenditure in India – 375 Billion USD.

• Organized Retail – 6.2 Billion USD (3%)

• Retailing – 35% of GDP

• Outlet Estimates – Over 12 Million

• Format – Only 4% larger than 500 sq.ft.

• Second Largest Employer after Agriculture

Malls in India

• A decade ago - not a single mall.

• A year ago - less than half a dozen.

• 2 years from now – 400-500 malls.





The Way Ahead

• India is amongst the least saturated of all major global markets in terms of

penetration of modern retailing formats.

• Many strong regional and national players emerging across formats and

product categories.

• Most of these players are now gearing up to expand rapidly after having

gone through their respective learning curves.

• Real Estate Developers are also moving fast through the learning curve to

provide qualitative environment for the consumers.

• The Shopping Mall formats are fast evolving.

• Partnering among Brands, retailers, franchisees, investors and malls.

• Improved Infrastructure.

Barriers

Barriers to FDI which limits entry of global players and limits exposure

to best international practices.

Lack of industry status which restricts financing and therefore the

growth and scaling is limited.

Poor Infrastructure which restricts retail growth, creates supply chain

bottlenecks and increases wastage of farm produce.

Foreign Direct Investment Policy In Retail

• Foreign Direct Investment (FDI) to the extent of 100 per cent in Cash and Carry

Wholesale formats. Franchisee arrangements are also permitted in retail trade.

• Single Brand Products: FDI upto 51 per cent is permissible in the retail trade of

single brand products subject to the following conditions.

• Products to be sold should be of a 'Single Brand' only.

• Products should be sold under the same brand internationally.

• 'Single Brand' product retailing would cover only products, which are

branded during manufacturing.





As from the above picture its clearly shown that still Indian Organized Retail is in its

Development stage and it also indicates that so many formats and so many players are

entering into these sector.

Concentration of retail activity

Of the 220mall projects in the pipeline till 2007, 125 are in the 6 metro cities (139 in the

big 8 cities) and 81 in other Tier II cities. Long-term leases are the preferred form of





retail real estate acquisition in India. Few retailers prefer a mix of owned and leased

space and some prefer own their space.

Of the new malls that became operational in 2005, about 50% of the retail space had

already been pre-leased and the same holds true for about 30% of space in malls

becoming operational in 2006.

Availability of space will usher in the next level of competition as requirements of mall

space for new players are bound to heighten the intensity of competition. Increased mall

space will also attract new Indian entrants. A clear indication of this plans of domestic

retailers like Piramyd Retail and Lifestyle to scale-up operations and raise capital through

the IPO routes.





Organized Retail space in India (mn sq ft) as on August 2006

Total retail space: 1 million sq. ft in 2002; 40 million in 2007; 60 million sq. ft in 2008.

SWOT OF THE MARKET

STRENGTH

• Organized retailing at US$ 3.31 billion, growing at 8%.

• 2nd largest contributor to GDP after agriculture at 20%.

• Pattern of consumption changing along with shopping trends.

• A Growing population will translate to move consumers.

• Consumer spending increasing at 11% annually.

• Almost 25 million sq. ft. retail space available.

• Paradigm shift in shopping experience for consumers pulling in more people.

•

Most of the entrants to organized retail come from 3 main categories, andhave ventured into retail as their business extension.

• Real Estate Developers

• 10.Corporate Houses

• 11. Manufacturers/Exporters.





WEAKNESSES

• Shortage of quality retail spaces at affordable rates.

• Government regulations on development of real estate(Urban Land Ceiling Act)

• Need to provide Value for Money-squeezing margins

• Lack of industry status.

• Retail revolution restricted to 250 million people due to monolithic urban-rural

divide.

• Footfalls not a clear indicator of sales as actual consumers lower in number.

• Lack of huge investments for expansion.

OPPORTUNITIES

• Increasing urban population-more participants in retail revolution.

• Increase in consuming middle class population.

• Social factors like dual household income has enhanced spending power.

• Spends moving towards lifestyle products and esteem enhancing products.

• Availability of old industrial lands-prime real estate locked in sick industrial units.

• Average grocery spends at 42% of monthly spends-presents a huge opportunity.

• Increase in use of credit cards.

THREATS

• Rising lease/rental costs affecting project viability

• FDI restrictions in the retail sector

• Poor monsoons and low GDP Growth could affect consumer spending drastically.

• Archaic labor laws are a hindrance to providing 24/7 shopping experience

• Personalized service offered by Mom-&-Pop stores.

• Unavailability of qualified personnel to support exponential growth in retail.

• Differentiate taxation laws hindering expansion.





STATEMENT OF THE PROBLEM

India’s retail market which is seen as THE GOLDMINE by global players has grabbed

attention of the most developed nations. This is no wonder to the one who knows that the

total Indian retail market is 16, 00,000 crore of which organized retailing is only around

3 percent 36,000 crore “Retailing includes all activities involved in selling goods or

services directly to final consumers for personal, non-business use. A retailer or retail

store is any business enterprise whose sales volume comes primarily from retailing.”

Retail is India's largest industry, accounting for over 10 per cent of the country's GDP

and around eight per cent of the employment. Retail industry in India is at the crossroads.

It has emerged as one of the most dynamic and fast paced industries with several players

entering the market.

The whole concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India. Modern retail has entered India as

seen in sprawling shopping centers, multi-storied malls and huge complexes offer

shopping, entertainment and food all under one roof. Although the organized retailing in

India is coming up in a big way, it cannot simply ignore the competition from theconventional stores because of various factors like reach, extending credit facility and

other intangible factors like the human touch which are provided only by the

conventional stores.

It is very important for any Retailer to know how the customers perceive their products,

services or the organization as a whole. It is the customer perception which influences the

products and services of the organization. If the organization makes an attempt to find

the customers perception then, it can alter its products accordingly and offer to its

customers. So understanding the customer perception is a very difficult and vital task for

the retailer.





The retailer should be dynamic and should update themselves according to the changing

needs of the customer. Coming to our study perception can give lot of inputs and scope

for improvement, lots of across all ages, income group and occupations visit the store.

Different customers have different experience and perception towards the store. In this

case we are attempting understand customer perception towards the sales personnel vital

for success of any retail store, because the sales personnel are the people who represents

our company who can do the change customer perception towards the organization.

Secondly the home delivery concept of retailing which is very essential for an

organization because it decides the willingness of the customer to shop the retail outlets

which builds greater customer loyalty, retention and long term relationship.

• Are sales personnel vital for the success of any Retail Store?

• Does Home delivery decide the success of any Retail Store?

Need for the study

Retailing offer the biggest opportunity for growth within the Indian industry. There are a

large variety of retailers operating in the retailing sector in India. This is not surprising

considering the massive size of the food market. However, traditional retailers, operating

in the unorganized form, dominate this sector. This is because of low operation costs, low

margins, proximity to customers, long opening hours, and additional services to

customers (such as home delivery). In comparison, supermarkets as part of organized

sector occupy a very little place in the food retail sales. Nevertheless, supermarket sales

have expanded at a much higher rate.

This is because a large number of high salaried Indians prefer to shop at supermarkets

due to convenience, hygiene and the attractive ambience.





OBJECTIVES OF STUDY

• To understand the customer expectation on services.

• To increase customer satisfaction towards the services.

• To forecast customer response to value added services.

• To explore the expectation of customers in services in retail sector.

SCOPE OF THE STUDY

• Retail companies will come to know what kind of services consumers prefer,

What kind of services to be upgraded, changes in the services and what all newservices to be introduced to attract the consumers.

• Companies or stores can try to study the cost analysis by making these changes.

• Services play a very important role in the retail sector so it is important to

concentrate on services not forgetting the product quality.

RESEARCH LIMITATIONS

My research investigation is beset with the following limitations:

• The study focuses on only top retail units in the organized sector and the retail

units in the unorganized sector is left out due to time and cost constraints

• The research focuses only on selected retail units in Bangalore City.





CHAPTER 2

LITERATURE REVIEW





LITERATURE REVIEW

Literature review has been undertaken to analyze various literature and research papers

available in the related field. Further research can be undertaken where sufficient study is

not done in particular field. Various sources of information have been used in this review.

This includes research books, journals etc. Abundant literature is available on

RETAILING and much research data is available on the internet.

My preliminary review of books, articles in journals, conference papers and research

abstracts indicates there is abundant data available on the Retail Industry. But not much

research investigation has gone into the impact of sales personnel and home delivery

system in retail industry. This has prompted me to undertake this research investigation.

In this regard the following book was referred Consumer Expectation and consumer

Perception – A Study on retail sector by S. MeenaKumari & K. Narshiman.

Research: In this preliminary study, we carry out field case studies of three upcoming

retail chains in India. All the three are working on identifying the possibility of switching

to Radio Frequency Identification Device (RFID) from bar code in the coming future.

Through structured and unstructured interviews and visits to some of their retail outlets inCentral and Western India, we collect information on their operations practices in the

areas related to vendor management, inventory management, layout, and Information

Technology (IT) backbone and quality management. We attempt to understand how

RFID application will impact their operations and supply chains. We also try to analyze

the cultural and organizational challenges for implementation of such technology in the

Indian context. We also identify significant adoption and implementation barriers and

find out where the three retail chains stand in this framework. Finally, we suggest

directions for future research. Source: Radio frequency identification technology in retail

outlets: Indian scenario, Samir K. Srivastava Management Development Institute,

Mehrauli Road, Sukhrali, Gurgaon 122 001, India





Research: changing gears in retailing in India: has been put together after extensive

primary and secondary research by the ET intelligence group. The ETIG retail team has

conducted detailed discussion with the key market players across the country over the

span of 3-4 months. The team visited the chief retail markets to learn firsthand the current

trends and practices that the being followed by the industry. The product also contains

surveys done in association with expertise in retail. These have involved working with

our associate in deciding the scope of the survey and designing the questions to get the

results that have been presented to you. These surveys give you an inside view on issues

as varied as sourcing and merchandising to IT in retail. The end result is a product that

gives you a mix of facts and our learning’s that combine to create powerhouse of

knowledge for the retailing industry.

Source: Economic times retailing in India ET knowledge series.2003

Research: Two field experiments were conducted in the Business Information

Technology Department of a major retail industry to analyze the impact of positive task

performance reinforces. The employees were divided into two broad groups—those

performing complex tasks and those performing relatively simpler tasks. The first

group

was further divided into two subgroups, one being reinforced with money and paid leave

and the other with feedback. Both the subgroups showed a significant improvement in

performance behavior. However, feedback had a stronger effect on task performance

even

after the reinforcement was withdrawn. The second group of employees was allowed to

choose reinforces of their liking. Two simple techniques, a casual dress code and flexible

working hours chosen by them, had a positive effect on their performance, which

continued even after 6 months into the intervention. Besides, the procedure for the second

group required no monetary or work-time loss to the employer.

Source: A Study on the Effects of Some Reinforces to Improve Performance of

Employees in a Retail Industry





Projects are done in the related field which provides lots of information related to this

sector. It also provides lots information of information about organized retailing in India.

Some of them are as follows:

• Unorganized: Vast majority of the twelve million stores are small "father and

son" outlets.

• Fragmented: Mostly small individually owned businesses, average size of outlet

equals 50 s.q. ft. Though India has the highest number of retail outlets per capita

in the world, the retail space per capita at 2 s.q. ft per person is amongst the

lowest.

• Rural bias: Nearly two thirds of the stores are located in rural areas.

Recent changes

• Experimentation with formats

• Store design

• Unorganized retailing is getting organized

Multiple drivers leading to a consumption boom:

• Favorable demographics

• Growth in income

• Increasing population of women

• Raising aspirations: Value added goods sales.





RETAIL VIABILITY

As per the CII McKinsey report, based on a GDP growth rate of 6-7% per annum, by

2010 the retail sector is expected to be US $ 300 Billion industry. Some of the major

factors hindering the growth of this sector are as follows:

• The non-industry structure and status.

• The lack of adequate infrastructure.

• FDI restrictions in this sector.

• The huge investments required in expanding their markets.

• Problems associated with working Capital funding from lending Institutions.

As more chained retailers enter, opposition grows louder in 2007

Retailing in India in 2007 continued to build on the trends seen in 2006, with new

domestic players, new outlets, international players evincing their interest to open outlets

and robust value growth. While Wal-Mart began commencement of operations in India in

a tie-up with the Bharti Group, domestic players were expanding aggressively in 2007 to

prepare for anticipated competition. While there were no major changes in legislation

pertaining to retailing during the year, the voice against conglomerates entering retailing

and opening outlets was louder than ever in 2007.





Aggressive outlet expansion witnessed in 2007

2007 was a year of aggressive expansion in the number of outlets by the leading players.

While the number of new outlets added by the top 20 retailers has been increasing each

year, in 2007, more than 10,000 new outlets were added by chained retailers under both

grocery and non-grocery fascia. Subhiksha Trading Services Pvt Ltd and Reliance Retail

Ltd were the most aggressive of the new retailers, with new outlets opened mainly in

grocery fascias. The expansion in outlets not limited to larger cities such as Mumbai and

Delhi, with retailers also expanding into the second- and third-tier cities. The scattered

independent grocers, however, remained a force to be reckoned with, accounting for

almost half of retail value sales in 2007.

Pantaloon remains market leader despite increasing competition

Pantaloon Retail India Ltd continued on its robust growth path and remained the leader of

retailing in India. Pantaloon was placed far ahead of second-placed LG Electronics India

Ltd. Subhiksha and Reliance were two players which, by opening new outlets and

expanding aggressively, made their presence felt in 2007, and emerged among the top 10

retailers in the country. With non-store retailing yet to be firmly established, direct seller

Amway India Enterprise was the only non-store retailer of note among the top 15 in Indiain 2007.

Clicks growing fast, though bricks remains the popular retail format

Store-based retail channels accounted for the bulk of retail value sales in 2007. Among

the store-based channels, the emergence of chained outlets from conglomerates in

hypermarkets, supermarkets and convenience stores meant that even though growth for

independent grocers and food specialists was in the slow single digits, overall growth for

store-based retailers was robust. Growing from a small base, Internet retailing was the

fastest growing non-store format, while direct selling and home shopping remained niche

channels. As penetration of financial cards improved, and as younger Internet-literate

Indian consumers took to shopping, retailers are waking up to the potential of Internet

retailing in the country, and going online.





Robust growth predicted for retailing over 2007-12

Retailing in India is expected to be among the fastest growing over the forecast period,

both globally and in the Asia-Pacific region. Among the store-based channels, while

hypermarkets, convenience stores and supermarkets are expected to witness the fastestgrowth, constant value sales taking place through non-store channels such as the Internet

are expected to increase more than five times. While domestic retailers such as

Pantaloon, Reliance and Subhiksha, among others, are expected to continue with their

aggressive expansion plans, international retailers are also expected in both grocery and

non-grocery fascias.

WHO’S DOING WHAT?

• Gitanjali Group to invest Rs 100 crore in Luxury Connexions and Luxury Malls

• Wills Lifestyle to increase stores to 100

• Dabur India plans tie-up with kirana store

• Mahindra & Mahindra may tie up with British grocery giant Tesco

• Godrej to launch 20 specialty boutique stores by 2010

• Spencer to open 1,000 stores by 2009

• RPG Group for Rs 1,000 crore expansions

• Subhiksha stores touch 1,000

• Future Group to open 225 Big Bazaar stores

• Bharti Retail to have supermarkets and hypermarkets; will partner with kirana

stores through franchise

• Reliance Mart in Bangalore and Gujarat; 169 Reliance Fresh stores; may buy 13

per cent stake in France’s Carrefour





LIST OF RETAILERS IN INDIA

Arvind Brands Ltd.

Avenue Super marts Pvt. Ltd. (D-Mart) Bharat Petroleum Corporation Ltd.

Classic Fashions

Damas Goldfields Jewellery Pvt. Ltd.

Ebony Retail Holdings Ltd.

G R Thanga Maligai

Gini & Jony

Globus Stores

Guardian Lifecare Ltd.

Heritage Foods (India) Ltd.

Infiniti Retail Ltd. ITC Ltd – LRBD

Kalanjali Arts & Crafts

Kewal Kiran Clothing Pvt. Ltd.

Kirtilal Kalidas & Co.

Koutons Retail India Ltd.

Lakewood Malls Pvt. Ltd. (Haiko)

Levi Strauss (India) Pvt. Ltd.

Lifestyle International Pvt. Ltd.

L N B Textiles Pvt. Ltd.

Madura Garments Major Brands (India) Pvt. Ltd.

Manipal Cure & Care Pvt. Ltd.

McDonald's India (West & South)

MnM Marketing Private Ltd. (MnM)

Nalli

NEXT Retail India Ltd.

Odyssey India Ltd.

Pantaloon Retail (India) Ltd.

Personality Ltd. (Weekender)

Piramyd Retail Ltd. Planet M

Provogue India Ltd.

Rajmal Lakhichand Jewellers Pvt. Ltd.

Raymond Ltd.

Reliance Petro Marketing Pvt. Ltd.

Reliance Webstore Ltd.





RPG Retail

Shoppers’ Stop

Subiksha Trading Services Pvt. Ltd.

TCS Textile Pvt. Ltd. (The Chennai Silks)

The Bombay Dyeing & Manufacturing Co. Ltd

The Mobile Store Titan Industries Ltd.

Trent Ltd.

Unilever India Exports Ltd.

Vishal Retail Ltd.

Vivek Ltd.

Wadhawan Food Retail Pvt Ltd

WITCO (India) Ltd.

Top Food Retailers

Food World

Food world has become India’s largest and fastest growing supermarket chain. Today, over

89 stores offer customers a variety of brands at a very reasonable price. Food World in India,

is an alliance between the RPG Group in India with Dairy Farm International of the Jardine

Matheson Group. Food World aims at establishing 100 stores all over Tamil Nadu, Andhra

Pradesh, Karnataka and Maharashtra by mid-2004 with a turnover of Rs.500 crores.

Trinethra

Trinethra is a supermarket chain that has predominant presence in the southern state of

Andhra Pradesh with 66 stores spread over 8 districts of the state. Their turnover was Rs.

78.8 Crores for the year 2002-03. This figure is expected to touch the Rs.100 crores mark by

2003-04. The Trinethra group came into being as a single store in the year 1986. They plan to

saturate their presence through out the state of Andhra Pradesh before venturing into two

more southern states of the country. The group plans to venture into the lower level regions

like smaller towns and mandals by using the franchisee-model. They are also very clear that

they would be setting up three hypermarkets in the state soon.





Apna Bazaar

Apna Bazar the Rs 140-crore consumer cooperative society with a customer base of over 12

lakh, plans to cater to an upwardly mobile urban population – a first for the 55-year-old chain

that has mostly been identified with the ‘middle class’. The plans include trimming and

training the workforce, opening new outlets and focusing on the FMCG sector. Now, the

cooperative has 80 outlets in Mumbai, Thane and the neighboring Konkan region. It has

recently opened its first shop outside the state in Goa. The revenue target for 2003-04 is Rs

150 crore. The chain plans to remain open all days of the week and this itself is expected to

fetch about Rs 10 crore a year.

Big Bazaar – Pantaloons

After Bangalore, Hyderabad and Kolkata, BIG Bazaar, a division of Pantaloon Retail

(India) Ltd has stretched its brand to Mumbai by opening three hyper markets in the city.

Offering discounts ranging from 5 per cent to 60 per cent, discount stores are still an

ascent concept in India. Big Bazaar launched its stores in Bangalore, Hyderabad and

Kolkata in 2001. Marking an investment of Rs 10 crore into this new division, Pantaloon

is expects to record the highest turnover from its Mumbai stores to the tune of almost Rs

80 crore from Mumbai alone within the first year of operations. But the turnover from its

other Big Bazaar stores in Bangalore, Hyderabad and Kolkata is Rs 50 crore this year.

Big Bazaar claims to be India's first chain of hypermarket discount stores.

Margin Free

The Kerala-based Margin Free discount stores, the `pure retail' chain with arguably the

largest presence in the country. The retail store chain is uniformly spread across the 240-

odd Margin Free franchisees in Kerala, Tamil Nadu and Karnataka. Margin Free drawsinspiration from the undying loyalty of its customers who have wholeheartedly welcomed

all its growth plans in the past. Margin Free plans to open huge hypermarkets

(50.000sq.ft each) in Ernakulam, Thiruvananthapuram and Kozhikode in the immediate

future.





Subhiksha

The Chennai-based retail food and pharmacy chain Subhiksha supermarket and

pharmacy is in expansion mode. it plans to go national and have 400 stores in the next

two years. Currently, Subhiskha has a strong presence only in Tamil Nadu and

Pondicherry with over 150 stores. The decision to expand outside Tamil Nadu, is because

the city has reached saturation and also, the purchasing power is high in larger metros.

Subhiksha stores sell household items and medicines at significant discount to normal

prices. The retail chain earned a total revenue of Rs 235 crore in 2002-03. The first

Subhiksha store was opened in Tiruvanmiyur in Chennai in March 1997. Today, the

chain has about 164 outlets in Tamil Nadu and Pondicherry. In 1997-98 Subhiksha was

making a turnover of Rs 12 crores and a profit of Rs 10 lakhs. In 2003 it has grown to Rs

224 crores turnover and Rs 3 crores profit. Major plans are on in Karnataka to open 40

stores in Bangalore in the next nine months and another seven stores in Mysore in the

same period. In all, it is intended to open at least 250 stores by 2005. The group is

looking at extending operations in Karnataka and also venturing into the Maharashtra,

Andhra Pradesh and Gujarat markets.

Nilgiris

Muthusamy Mudaliar opened a small bunk shop in Ooty. That was in 1905 and the

beginning of a long story in procurement and customer satisfaction. In 1936, the shop

moved to Bangalore with its registered office on Brigade Road, a small shop exactly

where the huge mother store is now located. The first expansion happened when

Muthusamy Mudaliar's son Chenniappan, also the chairman, established Nilgiris as a

modest store carrying Nilgiris' own products, mostly dairy and bakery. Eventually, it

evolved into a supermarket when Mr Chenniappan visited the U.S. and Europe and was

influenced by the old supermarket concept in the west. This chain has now blossomed to

cover a vast region in South India with 26 outlets and annual sales of about Rs.2300

Millions. They plan to open an additional 30 outlets in their next phase of expansion.





MTR

The MTR Group of Companies promoted by the family of MAIYAS took birth in the

year 1924 with the commencement of a Restaurant in Bangalore. Later in 1976, MTR

ventured into the business of retailing of Groceries and other household general items by

opening a Department Store. MTR first brought out a packaged, processed food product.

Subsequently, efforts were made to extend the distribution of the above products to few

other prominent Retail Stores in Bangalore, such as Nilgiris, Vijaya Bakery, Shivananda

Stores, Home Needs etc. The response was found to be very encouraging in terms of

sales of the above products. Consequently, a major step with respect to marketing was

taken by the Group in the year 1983. It was during 1983 that MTR appointed Distributors

in Bangalore, Madras, Hyderabad and Vijayawada with a view to capture business

opportunities in the said markets.

Janatha Bazars & HOPCOMS

Cooperative Departmental stores were started with Government patronage in the early

1960's at a time when shortage of basic goods was the order of the day. Poor marketing

strategies hindered their progress in the field. Total membership - 11,680 farmers, with

100 tonnes of horticultural produce being traded per day in eight districts. In 1998, each

cooperative society was made independent, sixteen of which were subsequently

federated at the state level, as members of the Karnataka Horticulture Federation.

Presence of MNC chains

Metro AG

Opened its first Indian outlet in Yeshwanthpur, Bangalore on a sprawling 6,500 square

metres area. Proposed to open one more centre in Bangalore during November 2003.

Capital expenditure for these two centres is Rs.176 crores (35 million euros). Employ 300

local people and head quarter will employ 750 local people.





EMERGING TRENDS & CHANGES

Recent changes:

Experimentation with formats: Retailing in India is still evolving and the sector is

witnessing a series of experiments across the country with new formats being tested out.

Ex. Quasi-mall, sub-urban discount stores, Cash and Carry etc.

Store design: Biggest challenge for organized retailing to create a “customer-pull”

environment that increases the amount of impulse shopping. Research shows that the

chances of senses dictating sales are upto 10-15%. Retail chains like Music World,

Baristas, Piramyd and Globus are laying major emphasis & investing heavily in storedesign.

Emergence of discount stores: They are expected to spearhead the organized retailing

revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay

Bazaar, RPGs.

Unorganized retailing is getting organized: To meet the challenges of organized

retailing such as large cineplexes, and malls, which are backed by the corporate house

such as 'Ansals' and 'PVR‘ the unorganized sector is getting organized. 25 stores in Delhi

under the banner of Provision mart are joining hands to combine monthly buying.

Bombay Bazaar and Food mart formed which are aggregations of Kiranas.





The percentage of organized retail per sector wise is very miniscule and this does not

mean that there is stagnation of growth because if we look at the following table we canclearly observe the burgeoning pace of growth happening in all the sectors of Indian

retailing.





Indian Retail- expanding the number of formats

In modern retailing, a key strategic choice is the format. Innovation in formats can

provide an edge to retailers. Organized retailers in India are trying a variety of formats,

ranging from discount stores to supermarkets to hypermarkets to specialty chains.

Emerging Trends

The Indian tradition abides by the concept of strong family bonding and therefore the

retailers need to ensure that they take into account this psychology of the Indian

consumers. The Indian consumers have accepted the mall culture but the feasibility of a

mall and making them more consumer-friendly will definitely depend upon the company

operating it. The catchments area, footfalls, anchor tenants and the right type of

entertainment options will matter a lot in the recovery of investment.





Interestingly, in India shopping at malls has become a favorite pass time for the

consumers. Thus to have a better sales figures. to make shopping more focused, players

in the retailing are developing new concepts that fulfills the needs of the Indian

consumers in one category of retail product or services. And the idea generated is of the

“Concept Malls”, which display only one product through a number of its retail outlets

within its premises in one particular area.

A concept mall not only saves time of the consumer with various brands positioned under

one roof but also reinforces competition which finally benefits the consumer. Concept

malls are expected to grow and make shopping a more pleasant experience for the

consumer. With competition building up, mall developers may have to reposition

themselves as specialty malls, local malls, regional malls or discount malls. The concept

of malls is now growing into specialized segmentation or the categories. Few of which

are:

Jewelry Mall

Jewelry shopping is a favorite shopping stop for the Indian women. Jewelry is purchased

not only for the purpose of wedding hut also on a regular basis for wearing and also with

the savings motive. Earlier Indian jewelry market was an unorganized, unbranded market

but today it is altogether a different situation. Today’s customers consider jewelryshopping as a tedious task rather than a pleasurable shopping experience. Lack of basic

facilities, parking problems moving from one showroom to another for more variety,

unhygienic conditions are some of the problems that are faced by them. Gold Souk which

is located in Gurgaon, is India’s first specialty mall. Aerens Group promotes Gold SOUL

and was first launched in October 2004, and nine more similar souks will soon he

opened across the country. The shell-shaped, four-storied mall brings the jewelers under

one roof, with an aim to encourage the Indian consumers, NRIs and foreign tourist to

spend more on jewelry. The mall has a full floor devoted to branded jewelry, Food court,

children’s play area, executive lounge, florist, beauty salon are some of the facilities

available at the state-of-the-art mall.





Wedding Mall

Wedding is considered as an auspicious occasion and is an important part of the Indian

culture. A lot of purchasing has to be done to solemnize the marriage like booking of the

place for marriage, purchasing of marriage related clothes. jewelry, furniture, electronic

items, food catering and many more other related things. Families spend a lot of time in

making all these purchases and have to look at number of places for arranging every

tiling. Oniaxe Construction Ltd., a real estate player, is setting up the first mega mall

called Wedding Mall dedicated exclusively to marriage-related shopping. The mall, has

been designed to include

spacious showroom spaces housing service providers such as caterers, pundits florists,

mehendi artists, travel agencies etc that are required for a wedding. The mall will provide

to its customers a complete shopping-cum-entertainment experience with services that are

related to pre and post marriage.

The Merlin Group is’ building a five—storey mall on Elgin Road, Kolkata, named as

“Homeland”. Homeland will have 150 retail outlets offering a range of building and

interior decor solutions under one roof: The mall offers the A to Z in homemaking.

India’s first specialty mail for interiors and exteriors is set to be a one-stop mall for

services for the real estate industry, offering various categories of products and services.

Electronic MallAs the name suggests the Electronic Mall will cater to the customer need of any kind of

electronics. Electrical and white goods less than one roof: This concept was first

conceptualized in Gurgaon with a name ‘Senior circuit City. This 5-storey mall will retail

everything from electric fittings to lighting, all kind of consumer electronics and

electrical goods. The mall will have around 500 shops and showrooms of Indian and

international electronics consumer durables, mobile phones, TVs, VCDs, DVDs. music

systems and other home appliances”





Auto Mall

Gone are the days when for a purchase of an automobile whether a two-wheeler or a four-

wheeler, consumer had to move from one dealer to another from one market to another.

To their convenience, now the Auto Malls are being set up across the country. India’s

first auto mall which will be a 10 storey building with a roof-top test drive track is being

under construction and is developed by Senior Builders. This mall will provide

everything pertaining to cars, from different makes and models, accessories and spare

parts to auto insurance and finance services, test drive facility and even registration of the

vehicle. While four floors will he kept exclusive for car displays, half of the floor will

house 10 to 15 shops dedicated to car accessories retailers. Besides, four to five banks

and car finance companies will also be housed in the mall along sidecar insurance

companies. It will also consist of a big hail for tile purpose of car launch and exhibition.

Theme-based Mall

These malls would be based on some kind of a theme like “Station 1” mall being setup in

Faridabad (Haryana.India) would be built on the concept of a classic steam engine.

Besides its engine-like shape, the feature would also let out steam and hoot at regular

intervals. The interior of the mall would have a dedicated product display area including

an innovative hydraulic lift, moving from one platform to the other. The mall would also

have frequent events, promotions and shopping festivals, which would ensure attractions

throughout the year. The interactive shopping mall would also have different segments,

namely, kid zone, shopping zone, food court and entertainment section. The kid zone is

proposed to have an indoor amusement park, cartoon theatre, toy train, play zone, etc.





Recent Trends in ORGANISED RETAIL:

Present Scenario

Retailing in India is witnessing a huge revamping exercise as can be seen in the

graph

India is rated the fifth most attractive emerging retail market: a potential

goldmine.

Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade)

makes up 3 percent or US$ 6.4 billion

As per a report by KPMG the annual growth of department stores is estimated at

24%





Ranked second in a Global Retail Development Index of 30 developing countries drawn

up by AT Kearney

Retailing in India is witness to the boom in terms of modern retailing formats, shopping

malls. etc. The future of retailing for any product across the country will definitely be in

malls where the consumer can get variety, quality and ambience. Not only this even in

the non-metro cities like Lucknow, Kanpur, Jalandhar, Amritsar, Patna. And Agra this

retailing culture through malls is spreading like any thing.

Rural Retail: Retail sector offers opportunities for exploration and investment in rural

areas, with Corporate and Entrepreneurs having made a foray in the past. India's largelyrural population has caught the eye of retailers looking for new areas of growth. ITC

launched the country's first rural mall ' Chaupal Sagar', offering a diverse product range

from FMCG to electronics appliance to automobiles, attempting to provide farmers a

one-stop destination for all of their needs. There has been yet another initiative by the

DCM Sriram Group called the ' Hariyali Bazaar', that has initially started off by providing

farm related inputs and services but plans to introduce the complete shopping basket in

due course. Other corporate bodies include Escorts and Tata Chemicals (with Tata Kisan

Sansar) setting up agri-stores to provide products/services targeted at the farmer in order

to tap the vast rural market.

For companies finding it hard to reach out customers in small villages, ITC is offering

a ready-made channel for niche advertising, micro marketing and distribution, it is just as

attractive for companies who want to provide customer service minus the cost. Even

experts in retailing are of the opinion that this is a very innovative step taken by an Indian

company and its success will set the path for the new players as in India, rural retailmarket. Also offers a huge business potential.





Technology in Retail:

Over the years as the consumer demand increased and the retailers geared up to meet

this increase, technology evolved rapidly to support this growth. The hardware and

software tools that have now become almost essential for retailing.

Information Technology has also become a key business driver in today’s world.

Retailers are also trying to reap in the benefits of the technology. Thus technology has

become a critical and competitive tool for surviving in the business. Retailers are using

software systems to manage and plan their venture, to reduce the procurement costs,

electronic ordering, electronic fund transfer, e mail communication and for many other

things. IT is poised to take a much bigger role in Retail Industry however the high

implementation cost of IT projects has restricted many Retailers to go for proper IT

solution. IT growth areas in Retail are mentioned below.

SUPPLY CHAIN MANAGEMENT

A supply chain is a network of facilities and distribution options that performs the

functions of procurement of materials, transformation of these materials into intermediate

and finished products, and the distribution of these finished products to customers.

Supply chains exist in both service and manufacturing organizations, although the

complexity of the chain may vary greatly from industry to industry and firm to firm.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing

organizations along the supply chain operated independently. These organizations have

their own objectives and these are often conflicting. Marketing's objective of high

customer service and maximum sales conflict with manufacturing and distribution goals.Many manufacturing operations are designed to maximize throughput and lower costs

with little consideration for the impact on inventory levels and distribution capabilities.

Purchasing contracts are often negotiated with very little information beyond historical

buying patterns. The result of these factors is that there is not a single, integrated plan for

the organization---there were as many plans as businesses. Clearly, there is a need for a





mechanism through which these different functions can be integrated together. Supply

chain management is a strategy through which such integration can be achieved.

Supply chain management is typically viewed to lie between fully vertically integrated

firms, where the entire material flow is owned by a single firm and those where each

channel member operates independently. Therefore coordination between the various

players in the chain is key in its effective management.

Competitive advantage in the pharmaceutical industry is driven by first class Research

and development and by optimized supply chain operations. Harmonised SCM

processes, systems and organizations will lead to reduced inventories, increased capacity

utilisation, reduced order lead time, less obsolescence and lower IT system maintenance

costs. Critical decisions can be made faster resulting in an improved customer service

level.

Supply Chain Management is all the more important to the Retail Industry because of the

intense competition, both locally as well as globally which makes the cost and quality

considerations very important. The revenue of these industries is poised to touch a figure

of $620 Billion by 2010, which is more than double the figure in the year 2000 which

necessitates implementing Supply Chain Management concepts.

Retail markets differ from markets for most other commodities, since drugs are rather

special commodities. Private drug markets typically suffer from a number of forms of

market failure. These include: (a) informational imbalances—thus, for example,

consumers are not in a position to judge the quality and efficacy of drugs, which creates

the need for a social monitoring and surveillance system; (b) monopoly and lack of

competition created by patent protection, brand loyalty and market segmentation; (c)

externalities in the form of social benefits of drug consumption. These are the reasons

why supply chain management is of utmost importance to the Retail industry so as to

develop quality products and maintain competitiveness.





Need for Supply Chain Management

• Improve operations

• Increasing levels of outsourcing

• Increasing transportation costs

• Competitive pressures

• Increasing globalization

• Increasing importance of e-commerce

• Complexity of supply chains

• Manage inventories

Benefits of Supply Chain Management

• Lower inventories

• Higher productivity

• Greater agility

• Shorter lead times

• Higher profits

• Greater customer loyalty





CHAPTER 3

RESEARCH

METHODOLOGY





METHODOLOGY:

Primary Data

Primary source will be also used to considerable extent to gather information of people’s

preference towards Hypermarket, Supermarket, Departmental stores in Bangalore. The

information provided by this source will be helpful in understanding the consumers

preferences towards Organized retail and the current status of retail market in Bangalore.

Finally, with the help of expert guide.

Secondary Data

To pursue the information on Organized retailing in Bangalore market will be collected

through secondary source. The source of data collection will be through internet, books,

journals, Industry reports and business magazines.

Sampling plan

Sampling unit : Customers of Bangalore city.

Sampling size : 100 customers

Sampling Technique The Convenience Sampling Method was considered for the study, which is based on

assumption that the respondents were randomly drawn from population. In this study, the

sample was random from the various customers present in Bangalore market.





Target Population: -

Sampling design begins by specifying the .target population, which is the selection of

elements or objects that posses the information sought by the researcher and that frame

about which inferences are to be made. The target population selected for the research

was the customers present in Bangalore market without any kind of bias.

Research instrument: -

1. Structured questionnaire.

2. Personal observation.

Contact method: -

1. Direct contact with the customer.

In this way to pursue information on retailing in Indian markets like groceries, clothing,

consumer durables, etc. will be collected through secondary sources. The source of data

collection will be through internet portals, books, journal industry reports and business

magazines. Primary sources will be also used to considerable extent to gather information

of various retail outlets operating in Bangalore.

Instrument used for testing hypothesis

The Z-test is a statistical test used in inference which determines if the difference

between a sample mean and the population mean is large enough to be statistically

significant, that is, if it is unlikely to have occurred by chance.

In order for the Z-test to be reliable, certain conditions must be met. The sample must

be a simple random sample of the population. If the sample came from a different

sampling method, a different formula must be used. It must also be known that the

population varies normally (i.e., the sampling distribution of the probabilities of possible





values fits a standard normal curve). If it is not known that the population varies

normally, it suffices to have a sufficiently large sample, generally agreed to be ≥ 30 or

40.

In actuality, knowing the true σ of a population is unrealistic except for cases such as

standardized testing in which the entire population is known. In cases where it is

impossible to measure every member of a population it is more realistic to use a t-test,

which uses the standard error obtained from the sample along with the t-distribution.

According to z test,

Z= |P-Ps|

√ PQ/nP = Probability of population

Ps= Probability of sample size

n = Sample size

Q= Degree of freedom





CHAPTER 4

DATA ANALYSIS &

INTERPRETATION





Hypothesis 1

H0: Sales personnel are vital for the success of any Retail Store.

H1: Sales personnel are not vital for the success of any Retail Store.

Test Statistics used here is Z-test

Formula

Z = | P – Ps |

_________

√ (P*Q)/N

P -> Assumed population mean = .5

Ps -> sample population

Q = 1-P = .5

N -> Total number of samples = 100

Number of Respondents who said ‘YES’: 71

Number of respondents who said ‘NO’: 29

Calculations:

N = 100

Ps Sample population = 71 / 100 = .71

P = .5

Q = 1-.5 = .5

Test statistics = Z = | P – Ps |

________

√ (P*Q)/N

Z = | .5 - .71 |

________ = .21/.05 = 4.2

√(.5*.5)/100





Tabulated value for 95% level of significance is 1.96

Calculated value = 4.2

Cal value > tabulated value,

Hence we Accept Ho

Importance of Sales Personnel

71%

29%Yes

No

Chart 1

INFERENCE:

Since calculated value is more than tabulated value we accept our null hypothesis and

reject the alternate hypothesis.

Hence we conclude there is significant role of sales personnel in the retail store.





Hypothesis 2

H0: Home delivery decides the success of any Retail Store success.

H1: Home delivery does not decide the success of any Retail Store success.

Test Statistics used here is Z-test

Formula

Z = | P – Ps |

_________

√(P*Q)/N

P -> Assumed population mean = .5

Ps -> sample population

Q = 1-P = .5

N -> Total number of samples = 100

Number of Respondents who said ‘YES’: 58

Number of respondents who said ‘NO’: 42

Calculations:

N = 100

Ps Sample population = 58 100 = .58

P = .5

Q = 1-.5 = .5

Test statistics = Z = | P – Ps |

________

√ (P*Q)/N





Z = | .5 - .58

________ = .08/.05 = 1.6

√(.5*.5)/100

Tabulated value for 95% level of significance is 1.96

Calculated value = 1.6

Cal value < tabulated value,

Hence we reject Ho

Importance of Home Delivery

58%

42%Yes

No

Chart 2

INFERENCE:

Since calculated value is less than tabulated value we reject our null hypothesis and

accept the alternate hypothesis.

Hence we conclude there is not much significance of Home delivery system of RetailStore.





CUSTOMER SURVEY ANALYSIS

GENDER WISE VISITORS TO RETAIL STORES

Male 35

Female 65

100

Table 1

Gender wise analysis

35%

65%

Male

Female

Chart 3

INFERENCE:

Around 65% of female counter parts were interested in going to retai stores while 35% of male counterparts visit the retail stores.





PREFERENCE OF SHOPPING.

Male Female Total

Organized Retail Store 25 35 60

Unorganized Retail Store 10 30 40

100

Table 2

0

50

100

Preference of Shopping

Unorganized Retail

Store

10 30

Organized Retail Store 25 35

Male Female

Chart 4

INFERENCE:

60% of people would like to prefer shopping at retail outlets and 40% shop at

unorganized retail.





PROFESSION WISE ANALYSIS

Male Female

Service 12 8

Student 6 6

Business 15 10

Housewife 0 32

Others 2 9

35 65

Table 3

0

10

20

30

40

Profession

Female 8 6 10 32 9

Male 12 6 15 0 2

Service Student Busines Housewi Others

Chart 5

INFERENCE:

32% housewives were interested in shopping at retail stores 12% were students who

visited retail stores. 20% people were in service.





AVERAGE VISIT TO RETAIL STORE

Below 2 68

2-4 times 24

Above 4 8

100

Table 4

Average visit rate

68%

24%

8%

Below 2

2-4 times

Above 4

Chart 6

INFERENCE:

8% of people visited retail stores more than 4 times, 24% people visited retail stores 2 – 4

times.





SPENDING PATTERN AT RETAIL STORES

Male Female

Below 1000 7 14

1000-2000 13 25

2000-3500 10 18

above 3500 5 8

100

Table 5

0 5 10 15 20 25 30 35 40

Below 1000

1000-2000

2000-3500

above 3500

spending pattern

Female 14 25 18 8

Male 7 13 10 5

Below 1000 1000-2000 2000-3500 above 3500

Chart 7

INFERENCE:

More than 35 % of the respondents fall in the category of spending between 1000 –

2000 rupees in mall per visit.





PURCHASING SINGLE STORE.

All Requirements From

Yes 55

No 45

100

Table 6

YesNo

S1

55

45

0

10

20

3040

50

60

Purchasing all requirements from single store

Chart 8

INFERENCE:

55% people purchased all their requirements from single store.





TYPE OF PURCHASE

Predetermined 42

Depends on offer 35

Depends on the availability of a product 23

100

Table 7

Predetermined

Depends on

offer

Depends on the

availability o

f a

product

S1

42

35

23

05

1015202530354045

Type of purchase

Chart 9

INFERENCE:

42% people had predetermined requirements.





TYPE OF PURCHASE

FMCG product 42Electronics 8

Apparels 14

Interior 12

Books & accessories 11

Healthcare & cosmetics 8

Jewelry 5

100

Table 8

Type of products purchased

42%

8%14%

12%

11%

8%5%

FMCG product Electronics Apparels

Interior Books & accessories Healthcare & cosmetics

Jewelry

INFERENCE:

42% of people were buying only FMCG products at Bangalore.





REASONS FOR SHOPPING AT THE RETAIL STORES

Location & convenience 15Wide range of merchandise 29

Low price 38

Ambience & Service 18

100

Table 10

0

10

20

30

40

Reasons for choosing Retail Store

Series1

Series1 15 29 38 18

Location & Wide range Low price Ambience &

Chart 12

INFERENCE:

These retail store provide wide range of merchandise and they also provide good

services.





TRAVELLING LONG DISTANCES TO RETAIL STORES

Never 51

Sometimes 41

Always 8

100

Table 11

51

41

8

0 10 20 30 40 50 60

Never

Sometimes

Always

Travelling long distance to Retail Store

Chart 13

INFERENCE:

51% of the people were not interested long distances to shop at retail stores.





Findings, Recommendations &

Conclusion





FINDINGS:

• Customers’ preference towards organized retail is increasing day by day.

• Ladies buy maximum food & groceries items from these organized retail stores.

• The customers who are doing Jobs buy Apparels from this organized retail stores.

• 32% of housewives are shopping at retail stores.

• These organized retail stores offering wide varieties of merchandise- this is the

most important reason for shopping at the hypermarket/supermarket or any other

formats of these types.

• Customers think that they are getting benefits from these organized retail stores

and these benefits are-Location, convenience, Wide range of merchandise, Low

price, Ambience and Services.

• Food and Groceries segment is emerging very rapidly.

• Real estate will play a major role in the development of these organized retail

stores.

• 42% of the people were buying only FMCG products in retail stores

• Some segments in this retail which were not organized earlier are organizing now

like food & groceries segment etc.

• The most organized retail segment is Apparel segment.





RECOMMENDATIONS:

• Since lifestyle of Bangalore is changing so the retail players have to concentrate

on marketing.

• As female population is also started earning money so now a days they also

playing a major role in decision making so company have to target them.

• Since the customers expectations are more from these organized retail stores so

the market players have to try to give them as maximum as possible.

• Since 60% of customers prefer shop to this organized retail only because of that

these retail stores are offering ‘Better & Wide Varieties of Products’.





CONCLUSION:

This project has helped me understand the importance and significance of Retailing in

Bangalore. It has given me exposure to the practical side of retailing and at the same time

enhanced my knowledge by applying theory learnt in class to practice Marketing.

Organized retail is changing very rapidly. The segment in the retail sector which was

not organized earlier is now organizing like food & groceries. So many players are

entering into organized retail some of them are Retail, DCM etc.

Customers also feel that they are getting benefits from these organized retail. They also

are accepting that these retail formats is improving day by day. Organized retail is

growing at the rate of 20-30% p.a. Now these retail stores are equipped with IT tools and

rural retail concept is also emerging.





Bibliography

• Indian Journal of Marketing.

• Research methodology: cooper and schinder

• Retailing Management: Levy & Wiz

• Marketing Management: Philip Kotler

• Retailing in India: The Economic Times

• www.google.com

• www.amazon.com

• www.indianbusiness.nic

• www.indianretail.co.in

• www.indianretailassociaton.com

• www.forbes.com

• Business Standard – Daily business newspaper





Annexure

Questionnaire

Gender: Male/ Female

Age:

Profession:o Serviceo Studento Businesso Housewifeo Others

1. Where Do You Prefer Shopping

o Organized Retail Storeo Unorganized Retail Store

2. How many times you visit one retail stores? (Per month)o Below 2o 2-4o above 4

3. How much you spend on food products? (Per month)o Below 1000o 1000-2000o 2000-3500o above 3500

4. Do You Purchase All Your Requirements from a particular retail store

o Yeso No

5. Your purchase decision of a particular product is

o Predeterminedo Depends on offer o Depends on the availability of a product




6. Products you prefer to buy frequently from a retail store

o FMCG producto Electronicso

Apparelso Interior o Books & accessorieso Healthcare & cosmeticso Jewelry

7. Do you think sales personnel are vital for success of retail store?

o Yes

o No

8. Do you think Home delivery system of retail outlet decides the success of retail store?

o Yes

o No

9. What are the reasons for shopping at the retail store?

o Location & convenience

o Wide range of merchandise

o Low price

o Ambience & Service

10. Would you like to travel long distance to visit a retail outlet.

o Never

study on retail stores in bangalore

Documents