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Managing Retailing: Acknowledgement
Managing Retailing: Acknowledgement
ACKNOWLEDGEMENT
Functions of retailers
Types of wholesalers
Kinds of retailers
Departmental stores
Supermarket
household use.
delivery.
establishments are often called shops or stores. Retailers are at the end
The term "retailer" is also applied where a service provider services the
electric power.
The process of bringing the ultimate user to the main producer, through
"Retail Management"(RM).
facilitation.
What is retailing?
discount stores like Wal-Mart and K-Mart, and specialty stores like
The Gap, Zales Jewellers are all examples of retail stores. Service
providers, like dentists, hotels and hair salons, and on-line stores, like
CONCEPT OF RETAILING
ends at the ultimate consumer. Between the producer and the consumer
their personal or family use. The word ‘retail’ is derived from the
French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’.
mail, the internet, door-to-door visit s—any channel that could be used
of our day today lives that it is often taken for granted. Why has
As we all know, the ease of entry into retail business results in fierce
SCOPE OF RETAILING
Retail is clearly the sector that is poised to show the highest growth in
the next five years. The sector is set for a revolution, as both the
present players and new entrants are gearing up to explore the market.
This sector contributes 10% of India's GDP and the current growth rate
mom-and-pop shops and kirana stores fear losing their business. Most
predictions say that the sector might reach to US$ 400-600 billion by
and many others are ready to enter the retail markets. The rising
But even with products, consumers often want to see, touch and try
them before they buy. Or, they may want products immediately and
won't want to wait for them to be shipped. Also, and perhaps most
make the shopping experience pleasurable and fun can help ensure that
With new boom in the retail industry, the country has identified new
Retail is clearly the sector that is poised to show the highest growth in
the next five years. The sector is set for a revolution, as both the
present players and new entrants are gearing up to explore the market.
This sector contributes 10% of India’s GDP and the current growth rate
2010. There are about 300 new malls, 1500 supermarkets and 325
mom-and-pop shops and kirana stores fear losing their business. Most
predictions say that the sector might reach to US$ 400-600 billion by
billion in2005.
A KPMG report says that the organized retail would grow at a higher
The retail sector would generate employment for more than 2.5 million
Consultants Ltd.
services.
Better lifestyle as better products would be introduced.
distribution channels.
Economies of scale would help lower consumer prices and increase the
Indian Consumerism:
retailers
and many others are ready to enter the retail markets. The rising
Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd.,
Food Bazaar, Globus Stores Pvt. Ltd., Liberty shoes Ltd., Music World
Subhiksha, Titan Industries, Trent and the new entrants penetrating the
RETAILING IN INDIA
ORIGIN IN INDIA
Although retailing does not enjoy the status of an industry, the sheer
India dates back to ancient times when the melas and mandis made
their presence felt. The changing socio economic patterns coupled with
stores, which became a part of the civic planning. The next step was
markets. This also explains why the Raheja’s forayed into their retail
venture-Shoppers’ Stop.
RETAILING 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
crore retail markets are unorganized. In fact, only Rs. 20, 000 crore
while non- food sales were worth Rs.4189.5 billion. 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
Grocers 34.7%
Chemist 6.3%
Others 17.0%
retail market. In 2001, organized retail trade in India was worth Rs.11,
228.7 billion. The modern retail formats are showing robust growth as
several retail chains have established a base in metropolitan cities,
especially in south India and are spreading all over India at a rapid
family’s income and leading to better lifestyles rising incomes has led
has led to a demand for better quality products while lack of time has
The demand for frozen, instant, ready-to-eat food has been on the rise,
department stores.
million outlets cater to more than 700 million inhabitants of rural India.
Here, provision stores, paan shops and ration shops are the most
temporary markets, such as haats, peeth and melas that come up at the
The McKinsey report predicts that FDI will help the retail businesses to
traders who fears that foreign companies would take away their
business, lead to the closure of many small businesses and result in
FDI in the retail sector. At present, foreign retailers can enter the
retail segment have been entering the market for a while now. Players
Hut); cash and carry operations (Giant) and licensing (Marks &
Spencer’s).
The main condition for organised retailing is that the retailer should be
should be able to, through diversified risks and volume sales command
CURRENT SCENARIO
living in villages and small towns. It is only natural that the agricultural
length and breadth of the country. The 12 million retail outlets in India
are the highest in the world. In interesting to note, that the Urban
growth in the retail sector has been the consumer, with the spending
increasing at an average of 11% per annum. The core and the Lower
The Indian consumer’s shopping needs are and traditionally have been
for consumer durables and luxury goods. To cater to this, each city
developed its own identity and shopping cluster, for instance in Pune
Street, Delhi has Connaught Place, Karol Bagh and South Extension.
have broken off their love of traditional stand-alone shops that have
by year end the count will shoot up to 158 malls. It will cover 34
million sq ft area.
Focus on products
Added experimentation
gatekeepers who decide on which new products should find their way
to the shelves of their stores. As a result, they have a strong say in the
sell a new product several times, first within the company, then to
products through retail formats that are compatible with their business
new products.
The increasing numbers of product categories followed by multiple
sales within the limited shelf space, governed by their individual sales
and companies that were unknown three decades ago are now major
the world over are increasing-they must take decisions ranging from
are just a few of the many functions that a retail manager has to
chain stores and regionally targeted stores but gradually more and more
markets in the western world are being taken over by billion dollar
FUNCTIONS OF RETAILERS
would be very costly and time consuming for you to locate, contact and
make a purchase from the manufacturer every time you wanted to buy
and grading of goods in such a way that these are accepted by the
customers.
TYPES OF WHOLESALERS
sell. For example, a wholesale lumber yard that buys plywood from
serve the early retailers - the general stores. Now, with their broad line
business products, they cover a wide geographic area and offer more
specialized service.
4. Specialty wholesalers: These are service wholesalers who carry a
very narrow range of products - and offer more information and service
Specialty wholesalers often know a great deal about the final target
service wholesalers - except that the customer must pay cash. Some
retailers, such as small auto repair shops, are too small to be served
may have trouble paying its bills. Or the wholesaler may set up a cash-
counter. The wholesaler can operate at lower cost because the retailers
they sell - but they do not actually handle, stock, or deliver them.
possibly damaging.
order within hours. A 7-Eleven store that runs out of potato chips on a
wholesaler.
farm products offered to the market. Some also brand these improved
products - and then promote the brands. For example, the California
Almond Growers Exchange has captured most of the retail market with
sold through grocery stores and supermarkets - and they often display
them on their own wire racks. Most grocers don't want to bother with
hardware items, and books and magazines) because they sell small
almost service wholesalers - except that they usually are paid cash for
manufacturers:-
manufacturers.
They may also arrange for transportation of goods from the
They sort out goods supplied by the wholesalers and keep them in
new products to their notice and educating them about its diverse uses.
They keep the consumers informed about the changing trends in the
They also provide other services to the consumers such as free home
the individual who has the day-to-day responsibility for running the
business.
business.
3. Joint venture: - A joint venture is not well defined in the law. Unless
members, and the duration of the LLC is usually determined when the
Retail firms can be classified into five heads on the basis of their
a retail store that are rented to an outside party. Usually this is done in
stores.
Retailers can locate their stores in an isolated place and attract the
close by.
competition, low rent, and better visibility from the road, easy parking
and lower property costs. For example the Haldiram’s outlet on the
highway.
retail area, and also compete against each other for the same customers.
famous for clothes, Bunder treet for stationary products, Usman Street
naicleen street for grocery, Poo Kadia for food and vegetables.
4. Airport Retailing: - For quite some time, duty-free shops and
space.
Today, retailers are looking for new marketing strategies to attract and
many stores you will find quite the same range - trying to reach
wherever possible. Many stores cut its own set of services and shops
reduced prices, on the contrary, increased their number. People are not
going to pay for the same or similar mark more, especially if the
amount provided in this service is reduced. Not they need a credit card
All this leads to the fact that many retailers trade today are rethinking
income families. Others are increasingly satisfied with the sale; rebuild
national scale.
One of the most important and most responsible decisions that have to
fairly accurately.
use. Such retailers are very large in number but account for a small
final consumers. It incurs low operating costs and is usually owned and
scale retailers have a direct and personal contact with their customers.
business and carry very little stock of those goods. They save time and
and pedlars; cheap jacks; market traders and street sellers fall under
this category.
stalls: - are the small shops on the roadside, street-crossing, bus stops,
(iii) general stores or variety stores: - are the shops which deal in all
types of general consumer goods of regular use like bread, butter, paper
They provide services like goods on credit and home delivery to their
customers; (iv) speciality shops: - are the shops which deal in only one
invested huge capital. Such retailers are not very large in number. This
form of retailing involves high operating costs and lacks personal
wide choice of products to the customers under one roof. They also
offices and so on. Such stores are generally located in central places of
They sell a wide variety of consumer goods of regular use such as food
items, groceries,etc at one place. They sell goods at lower prices than
similar range of products and sell the same standardised products at the
same terms and conditions. The goods dealt are generally meant for
everyday use and are readily acceptable to all kinds of customers. They
which receive their orders by mail and deliver the goods by parcel or
their own place and thus saves their time and expenses.
Consumer cooperative stores: - are the cooperative stores
which are owned and operated by the consumers themselves. They are
and wholesalers and sell them to its members at lower prices. The aim
maximise profits.
product from the machine. These are used to sell prepacked and low
RELEVANT EXAMPLE
Big Bazaar: the Indian wall-mart (organised retailer)
hypermarkets, 6 food bazaar stores with over 6.5 lakh sq.ft retail space
group promoted bt Mr. Kishore Biyani. It has been one of the pioneers
‘value for money’ segment. Pantaloon plans to target the upper middle
and the middle class segment, which forms the large chunk of Indian
population. This segment is very price conscious and always looks out
the large and growing upper-middle and middle class of Indian society.
Big Bazaar has strong own brand names in its portfolio across product
BOOKS:
SITES:
www.google.com
www.msn.com