Chapter - 1

Introduction to the Industry

Evolution of Retail

Retail, according to Concise Oxford English Dictionary, is “the sale of goods to the public for
use or consumption rather than for resale”. The barter system was first known retail form;
then the currency changed hands; we had the handcart vendor selling goods in the streets; of
late we have a pop & mom stores which compliment the neighbourhoods stores. The first
retailer in India includes Bata, Pantaloon, Bombay Dyeing, Spencer’s, and Nilgiris &
Higginbotham.

The current retail scenario is controlled by the likes of Shoppers’ Stop, Brand Outlets, Big
Bazaars etc.The top 4 world players include Wal-Mart, Carrefour, Tosco and Metro. The
opportunities as mentioned are aplenty with close to 15000000 sq.feet of retail space is under
construction for various malls & shopping centres across the country.

Retailing consists of the sale of goods or merchandise, from a fixed location such as a
department store or kiosk, in small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a retailer buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user. Retail establishments are often called shops or stores. Retailers are
at the end of the supply chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy.

What is retailing
 The sale of goods or commodities in small quantities directly to
consumers.
 Buy, Sell & Move

Having gone through some of the terminologies in retail and having seen a broad
outline of retail now let’s look into the 3 basic things, which govern the retail market.

Buy

Buying would involve the following activities, which would mean setting the guiding
principles for all the merchandise decisions that a retailer makes. It should reflect target
market desires, retailer’s institutional type, market place positioning, defined value chain,
supplier capabilities, costs, competitors & product trends.

Move

It can be easily said but the processes that are involved in the “move” part are complex but
simple. From the product stage through the processing stage to the packed ones the move
stage would continue. Various levels that involves in “move” part are.

The buyer shortlists the product, places the order. The vendors receives the order, process the
same, packs and send it to the distribution centre from where it reaches the store for the
customer to buy. One of the fast picking up aspects of the logistic in India is the COLD
CHAIN. More and more organizations are looking for various aspects of cold chain to ensure
that the products where temperature plays a vital role is maintained and sustained till such
time the sale happens.

The Merchandising and Category management is another important function of the retail
industry. In this we have to opt for right product, place, quantity, quality, mix, price and time.
Each of the stores would operate on certain basic business projection and all others will
follow a typical pattern. For this pattern to be arrived, the merchandise management plays a
big role. The merchandise can make or break an organization of its profitability.

When we say category management, it would amply the assortments of products the customer
sees as reasonable substitutes for each other with similar characteristics. It also covers the
process of managing merchandise in a retail business with the objective of maximizing sales
and profits of a category. The category manager is also responsible for developing assortment
plans for the entire category, buying pricing and coordinating promotion.

Sell
Finally of the Buy, Move & Sell comes the selling part of it which involves a running of a
retail stores. Operations as it is known are the crucial functions, which derive its strength
from various other faculties. The beginning of the day is done with the store being opened by
the competent person. The first activity to happen will be the housekeeping activities
followed by the staff scheduling. The morning’s meetings happen chaired by the head of the
store. The stock outs are established and the replenishments happen as the day progresses,
though it is suggested that replenishments of the stock should always happen when the
customer is not there. The head of the store usually inspects any one or all the departments of
the store, which is otherwise called the “FLOOR WALK”.

The cashier would ensure that all the cashiers have enough and correct float cash, whether the
POS role, card swap machine and pen is in place or not. In starting of the day head cashier
gives all cashiers a sum of Rs.1500 as loan. Having set everything in place, the store would
then be opened for the customers.

The department’s heads in turn would brief their team on the achievements of the previous
day and set target of the day. During this brief any incidents worth mention would also be
discussed and the promotion offers, which are current, will also be taken up. Orders will be
placed for all the stock out SKU follows up will also be done for those articles, which are
delivered during the day. Cleaning of the self and also ensuring that the stocks are kept as per
the planogram are checked. It’s just not the duties mentioned above but selling also happen
simultaneously.

At the end of day the process of concluding the activities is called the “END OF THE DAY”
activities. As the person who is in charge of closing the store goes around checking whether
the locks are in place or not; the high value merchandise counters are properly secured; check
for any person hidden in the change rooms or cloaks rooms; the cashier would ensure that all
the money that has been given as float tallies apart from the money that need to be submitted
by the respective cashiers. There will be a checklist that needs to sign off together by the
security as well as the in charge for having checked for conformity at the end of the day
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.

 It 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.
 There are a larger number of retail units compared to other members of
the value chain.

Direct Interaction with Customers

Retail businesses have a direct interaction with end-users of goods or services in the value
chain. They act as intermediaries between end-users and suppliers such as wholesalers or
manufacturers. Therefore, they are in a position to effectively communicate the response and
changing preferences of the consumers to the suppliers or sales persons of the company. This
helps the manufacturers and markets to redefine their product and change the components of
its marketing strategy accordingly. Manufacturers require a strong retail network both for
reach of the product and to obtain a powerful platform for promotions and point-of-purchase
advertising. Realizing the importance of retailing in the entire value chain, many
manufacturers have entered into retail business by setting up exclusive stores for their brands.
This has not only provided direct contact with customers, but has also acted as advertisement
for the companies and has provided the manufacturers with bargaining power with respect to
other retailers who stock their product. Retailing provides extensive sales people support for
products which are information intensive, such as in the case of consumer durables.
Lower Average Amount of Sales Transaction
The average amount of sales transaction at retail point is much less in comparison to the other
partners in the value chain. Many consumers buy products in small quantities for household
consumption. Due to lower disposable incomes, some consumer segments in India even buy
grocery items on a daily basis rather than a weekly or a monthly basis. Inventory
management becomes a challenge for retailers as a result of the many minor transactions with
a large number of customers. Hence, retailers must take care of determining average levels of
stock, order levels and keep a tight control on costs associated with each transaction in the
selling process. Credit verification, employment of personnel, value-added activities like
bagging, gift-wrapping and promotional incentives all add up to the costs. One way to resolve
this is for the retail outlets to be able to attract the maximum possible number of shoppers.

Point-of-purchase Display and Promotions

A significant relevant chunk of retail sales comes from unplanned or impulse purchases.
Studies have shown that shoppers often do not carry a fixed shopping list and pick up
merchandise based on impulsive or situational appeal. Many do not look at ads before
shopping. Since a lot of retail products are low involvement in nature, impulse purchases of
the shopper is a vital area that every retailer must tap into. Therefore, display, point-of-
purchase merchandise, store layout and catalogues become important. Impulse goods like
chocolates, snack foods and magazines can sell much more quickly if they are placed in a
high visibility and high traffic location.

FUNCTIONS IN RETAILING PROCESS

Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers
and consumers. In this context, they perform various functions like sorting, breaking bulk,
holding stock, as a channel of communication, storage, advertising and certain additional
services.
SORTING
Manufacturers usually make one or a variety of products and would like to sell their entire
inventory to a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety
of goods and services to choose from and usually buy them in small quantities. Retailers are
able to balance the demands of both sides, by collecting an assortment of goods from
different sources, buying them in sufficiently large quantities and selling them to consumers
in small units.
The above process is referred to as the sorting process. Through this process, retailers
undertake activities and perform functions that add to the value of the products and services
sold to the consumer. Supermarkets in the US offer, on and average, 15,000 different items
from 500 companies. Customers are able to choose from a wide range of designs, sizes and
brands at just one location. If each manufacturer had a separate store for its own products,
customers would have to visit several stores to complete their shopping. While all retailers
offer an assortment, they specialize in types of assortment offered and the market to which
the offering is made. Westside provides clothing and accessories, while a chain like Nilgiris
specializes in food and bakery items. Shoppers’ Stop targets the elite urban class, while
Pantaloons is targeted at the middle class.

BREAKING BULK
Breaking bulk is another function performed as part of retailing. The word retailing is derived
from the French word retailler, meaning ‘to cut a piece off’. To reduce transportation costs,
manufacturers and wholesalers typically ship large cartons of the product, which are then
tailored by the retailers into smaller quantities to meet individual consumption needs.

HOLDING STOCK
Retailers also offer the service of holding stock for the manufacturers. They maintain an
inventory that allows for instant availability of the product to the consumers. It helps to keep
prices stable and enables the manufacturer to regulate production. Consumers can keep a
small stock of products at home as they know that this can be replenished by the retailer and
can save on inventory carrying costs.
ADDITIONAL SERVICE
Retailers ease the process of change in ownership of merchandise by providing services that
make it convenient to buy and use products. Providing product guarantees, after-sales service
and dealing with consumer complaints are some of the services that add value to the actual
product at the retailers’ end. Retailers also offer credit and hire-purchase facilities to the
customers to enable them to buy a product and pay for it later. Retailers fill orders, promptly
process, deliver and install products. Sales people are also employed by retailers to answer
queries and provide additional information about the displayed products.

CHANNEL OF COMMUNICATION
Retailers also act as the channel of communication and information between the wholesalers
or suppliers and the consumers. From advertisements, salespeople and display, shoppers learn
about the characteristics and features of a product or services offered. Manufacturers, in turn,
learn of sales forecasts, delivery delays, and customer complaints. The manufacturer can then
modify defective or unsatisfactory merchandise and services.

TRANSPORT AND ADVERTISING FUNCTIONS

Small manufacturers can use retailers to provide assistance with transport, storage,
advertising and pre-payment of merchandise. This also works the other way round in case the
number of retailers is small
 CLASSIFICATIONS OF RETAIL FORMATS

First:- Store Based Retailer

Second:- Non Store Based Retailer

TRENDS IN RETAIL FORMATS

On account of liberalization, globalization and consumer preferences the retail industry is

continuously going through changes. While multinational retail chains are looking for new
markets, manufacturers are identifying, redefining, or evolving new retail formats. The
existing retail houses are also gearing up to face the emerging competition from the organized
sector and the changing outlook of the consumers. For example, consumer spending is
shifting from goods to services. Accordingly the retailers too are fast adjusting to the
changing consumer preferences.

Consumers are not only looking for the core products or functional benefits from the retailers
but also the non-functional benefits, which need to be compatible with their lifestyles. For
example, most of the traditional eating joints in India such as Haldiram, Bikaner and Sagar
Ratna have revised their product offerings and atmospherics on the lines of the multinational
chains to compete with them and to serve better, the changed expectations of the consumers.

Retailers can be classified according to their selling processes as store based retailers or non-
store retailers.
Store Based Retailers :
Store based retailers operate at fixed point-of-sale locations. Their stores are located and
designed to attract a high volume of walk-in customers. In general, store based retailers offer
a wide variety of merchandise and use mass-media advertising to attract customers. They
typically sell merchandise for personal or household consumption, but sometimes they also
serve business and institutional clients.
Store based retailers can be further classified on the basis of various parameters like:
(A) Ownership
(B) Strategy mix
(C) Service vs. Goods retail mix

Factors that influence the growth in retail:

The DINK/HINK families, working wosmen, working parents and the rising disposable
income has contributed to the growth of Retail across. The middle-income group is the fastest
growing segment in the country today. Further the electronic media is also aiding the growth
of the Retail industry.

To summarize the top 6 factors that drive the growth of the retail industry in India would be
as follows:
 The Demographics
 Lifestyles
 Needs and Desires
 Shopping Attitudes and Behaviour
 Retailers action
 Environmental Factor

These six factors clubbed with a co-coordinated logistics make the sale happen. As in any
industry there is a social commitment also to be fulfilled. These can be recapitulated as under:
 Quality products
 Competitive prices
 Wide range to choose from
 Employment opportunities that are created
  The economy would experience sea of change and
 Would mean a WIN - WIN situation to everyone.

Support Functions:
The entire operation is possible with the help of a support team. This support team consists of
the following:

Human Relation-Involves itself in recruitment, training and welfare apart from their regular
activities

Good Receiving-This department is responsible not just for the receipt of goods but also
checking for their conformity and returns goods to the suppliers as need arises.

Maintenance-The entire stores furniture and fixtures are taken care of by the maintenance
team

Accounts-the department, which receives all the cash, charge slips and other types of tenders;
keeps a tag on the local store expenditure and also monitors any deviation in the transactions.

Housekeeping- Mostly it’s an outsourced agency, which does the work. They keep the
premises clean and tidy at all levels.

Security-They are responsible for safeguarding men and material of the organization.

VM-This department maintains the displays and the signage across the stores.

CSD-Otherwise known as the customer service desk takes care of the customer complaints
and issuance of merchandise credit and taking care of the loyalty.

RETAIL TERMINOLOGIES
Alike any other industry the retail industry also has a wide range of terminologies, which are
in use on a day-to-day basis. Few samples of them would include the following:
Till - The cash point

Tender - The type of payment the customer is making

SKU - Stock keeping unit

Merchandise Credit - Credit note

Assortment - Range of products and so forth

Maximum Bay Quantity - It is the maximum quantity of each product, which can be placed
on each shelf.

Maximum Display Quantity – It is the number of SKUs, which can be directly seen by the
customer in the front side.

Retail types
There are three major types of retailing. The first is the market, a physical location where
buyers and sellers converge. Usually this is done on town squares, sidewalks or designated
streets and may involve the construction of temporary structures (market stalls). The second
form is shop or store trading. Some shops use counter-service, where goods are out of reach
of buyers, and must be obtained from the seller. This type of retail is common for small
expensive itms (e.g. jewelry) and controlled items like medicine and liquor. Self-service,
where goods may be handled and examined prior to purchase, has become more common
since the Twentieth Century. A third form of retail is virtual retail, where products are ordered
via mail, telephone or online without having been examined physically but instead in a
catalog, on television or on a website. Sometimes this kind of retailing replicates existing
retail types such as online shops or virtual marketplaces such as eBay or Amazon.

Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This involves adding a mark
up amount (or percentage) to the retailers cost. Another common technique is suggested retail
pricing. This simply involves charging the amount suggested by the manufacturer and usually
printed on the product by the manufacturer.

In Western countries, retail prices are often so-called psychological prices or odd prices: a
little less than a round number, e.g. $6.95. In Chinese societies, prices are generally either a
round number or sometimes a lucky number. This creates price points.

Often prices are fixed and displayed on signs or labels. Alternatively, there can be price
discrimination for a variety of reasons. The retailer charges higher prices to some customers
and lower prices to others. For example, a customer may have to pay more if the seller
determines that he or she is willing to. The retailer may conclude this due to the customer's
wealth, carelessness, lack of knowledge, or eagerness to buy. Price discrimination can lead to
a bargaining situation often called haggling a negotiation about the price. Economists see this
as determining how the transaction's total surplus will be divided into consumer and producer
surplus. Neither party has a clear advantage, because the threat of no sale exists, whence the
surplus vanishes for both.

Retailers who are overstocked, or need to raise cash to renew stocks may resort to "Sales",
where prices are "marked down", often by advertised percentages - "50% off" for example.”
Sales" are often held at fixed times of the year, for example January sales, or end-of-season
sales, or Blue Cross Sale.

Top Retailer Worldwide

R
Retailer Home Country
Rank
1
Wal-Mart Stores, Inc. U.S.A.
1
4
Carrefour Group France
2
3
The Kroger Co. U.S.A.
3
3
The Home Depot, Inc. U.S.A.
4
5 Metro Germany
 5
RETAIL SECTOR IN INDIA

As the corporate – the Piramals, the Tatas, the Rahejas, ITC Ltd, S.Kumar’s, RPG
Enterprises, Shopper’s Stop, Pantaloons, Reliance Retail, Vishal Mega Mart, Aditya Birla
Group, Landmark Group, True Mart race to revolutionize the retailing sector, retail as an
industry in India is coming alive.

Across the country, retail sales in real terms are predicted to rise more rapidly than consumer
expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is
8.3% per year, compared with 7.1% for consumer expenditure. Modernization of the Indian
retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores
and hyper marts. Sales from these large-format stores are to expand at growth rates ranging
from 24% to 49% per year during 2003-2008, according to a latest report by Euro monitor
International, a leading provider of global consumer-market intelligence.

A. T. Kearney Inc. places India 6th on a global retail development index. The country has the
highest per capita outlets in the world - 5.5 outlets per 1000 population. Around 7% of the
population in India is engaged in retailing, as compared to 20% in the USA.

The factors responsible for the development of the retail sector in India can be broadly
summarized as follows:

 Rising incomes and improvements in infrastructure are enlarging consumer markets

and accelerating the convergence of consumer tastes.
 Looking at income classification, the National Council of Applied Economic
Research (NCAER) classified approximately 50% of the Indian population as low
income in 1994-95; this has declined to 17.8% in 2006-07.
 Liberalization of the Indian economy which has led to the opening up of the market
for consumer goods has helped the MNC brands like Kellogg, Unilever, Nestle, etc. to
make significant inroads into the vast consumer market by offering a wide range of
choices to the Indian consumers.
 Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
The internet revolution is making the Indian consumer more accessible to the growing
influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in
creating awareness about global products for local markets. About 47% of India’s population
is under the age of 25; and this will increase to 55% by 2015.

This young population, which is technology-savvy, watch more than 50 TV satellite channels,
and display the highest propensity to spend, will immensely contribute to the growth of the
retail sector in the country. As India continues to get strongly integrated with the world
economy riding the waves of globalization, the retail sector is bound to take big leaps in the
years to come.

The Indian retail sector is estimated to have a market size of about $ 180 billion; but the
organized sector represents only 3% share of this market. Most of the organized retailing in
the country has just started recently, and has been concentrated mainly in the metro cities.

India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40%
of all consumer goods are sold through the super markets and departmental stores. A similar
phenomenon has swept through all other Asian countries. Organized retailing in India has a
huge scope because of the vast market and the growing consciousness of the consumer about
product quality and services.

A study conducted by Fitch, expects the organized retail industry to continue to grow rapidly,
especially through increased levels of penetration in larger towns and metros and also as it
begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in
development of the retail-specific properties and malls. According to the estimates available
with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for
occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20%
market share by 2010.

A McKinsey report on India says organized retailing would increase the efficiency and
productivity of entire gamut of economic activities, and would help in achieving higher GDP
growth. At 6%, the share of employment of retail in India is low, even when compared to
Brazil (14%), and Poland (12%).
RETAILING FORMATS IN INDIA
Malls: The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend
an ideal shopping experience with an amalgamation of product, service and entertainment, all
under a common roof. Examples include Shoppers Stop, Pyramid, and Pantaloon.

Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing
on specific market segments and have established themselves strongly in their sectors.
Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on
the MRP through selling in bulk reaching economies of scale or excess stock left over at the
season. The product category can range from a variety of perishable/ non perishable goods.

Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of
consumer needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc.

Hyper marts/Supermarkets: Large self service outlets, catering to varied shopper needs are
termed as Supermarkets. These are located in or near residential high streets. These stores
today contribute to 30% of all food & grocery organized retail sales. Super Markets can
further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large
supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food &
grocery and personal sales.

MAJOR PLAYERS IN RETAILING

 Future group-Big bazaar, food bazaar, pantaloons, brand factory, e zone, central mall,
furniture bazaar,etc.
 Reliance industry ltd.-reliance fresh, reliance trend, reliance footprint, reliance mart ,reliance jewels
etc.
 Tata group- croma, Westside, tanishq stores, titan stores, star India bazaar, landmark.
 Aditya Birla group-peter England people stores, more,
 Videocon group-Next, Bolld, planet M, Raymond stores.
Indian Apparel Industry- an Overview:
The apparel industry is one of India's largest foreign exchange earners, accounting for nearly
16% of the country's total exports. The 1996 Indian textile exports approximately amounted
to Rs.35,000 crores of which apparel occupied over Rs14,000 crores.

It has been estimated that India has approximately 30,000 readymade garment manufacturing
units and around three million people are working in the industry. Today not only is the
garment export business growing, enthusiasm in the minds of the foreign buyers is also at a

high. Today many leading fashion labels are being associated with Indian products. India is
increasingly being looked upon as a major supplier of high quality fashion apparels and
Indian apparels have come to be appreciated in major markets internationally. The credit for
this goes to our exporter community.

Consistent efforts towards extensive market coverage, improving technical capabilities and
putting together an attractive and wide merchandise line has paid rich dividends. But till
today, our clothing industry is dominated by sub-contractors and consists mainly of small
units of 50 to 60 machines.

India's supply base is medium quality, relatively high fashion, but small volume business.
Recent recession in Europe and the South Asian currency crisis have also contributed their
own bits to the decimating Indian exports. Though these are expected to fizzle out soon, there
is no reason for complacency on the part of Indian exporters or of the garment industry. The
industry will be soon faced with open competition shorn of quotas or tariffs.
Thus the need of the hour is to enlarge both manufacturing as well as the marketing base.
Inculcation of a spirit of innovation by way of research and development and tapping new
markets especially in South Africa, Central Africa, CIS, East European countries, Latin
America and Australia is also mandatory for export growth.

In India, clothing retail accounts for 36% of organized retail business. It is the largest Sector.
Ready-made apparel accounted for an estimated 20% of domestic clothing sales in 2005.
With growing working women wearing western wear to work, and pressed for time, market
for good readymade clothes is likely to grow. India is a film-crazy nation,and the largest
producer of films, with more than 1,000 every year. They provide entertainment and an
escape from reality for India’s masses, and set the popular fashion trend. Bollywood fashions
have become pan Indian. They affect various sectors of the market including clothing,
footwear, weddings and fashion accessories. With the advent of modern format retailers and
the growth of plastic cards, affluent urban Indian women are shopping like never before.

They spend mornings browsing in stores looking for deals or latest styles. Upper income
urban women are adopting ethnic chic. These are designer clothes that incorporate Indian
motifs, ethnic fabrics and are a fusion of western and Indian styles.In the large urban centres,
apparel retailers, like Shoppers Stop, Westside and Pantaloon have popularized their private
labels, which have attracted urban shoppers. Westside carries only its own private labels,
while for the other stores, 20-30% of their apparel turnover is from private labels. Customers
have loyalty to a store rather than any particular garment brand.

This has led to a thriving unbranded or local brand market for ready-to-wear clothes leading
to severe competition. Hence organized retailers like Lifestyle, for instance, has a loyalty
programme called `The Inner Circle', while Pantaloons offers a `Green Card' Rewards
programmes, Westside has `Club West' to Woo the customers. Customers look to design and
fit of the clothes, and use the shop’s name as a quality standard. Indian textile and clothing
industry during 2006 is estimated to be about INR1,511billion ( USD 38 billion) , which
includes apparel of men, women and kids .

Characteristics of Apparel retail sector

As apparel retail is led by fashion, a player needs to keep a close watch on fashion amongst
teenagers as they are the trend setters. Role of Bollywood in spreading fashion needs to be
understood. Seasonal variations on stocking pattern and need to clear inventory at the end of
season should be understood by apparel retailer. Typically once an item is sold from the
outlet, retailer ensures that there is no repetition of same. It gets replaced by different design,
style, colour. Importance of store layout, décor is very critical.

A browser visiting the store frequently likes to see changes in the layout otherwise he may
carry the impression that stocks are not moving out of the store. Category management
becomes very crucial function as transformation of design into production and delivery has to
be completed before fashion or fad changes in the market. This highlights the importance of
sales promotions- short term activities which induces trade or consumer to buy now rather
than in future as the value of apparel after the season, goes down substantially and inventory
carrying burden turns out to be very high.

Apparel retailer needs to understand critical role of sales promotions. Attractive promotions
induces purchase acceleration, stock piling and brand switching on the part of a consumer
which substantially reduces retailer’s financial and inventory risk and consumer’s financial
risk and psychological risk. If the customer will purchase first then only he/she can be loyal
so in order to retail the existing & attracting the new ones, company should have best CRM
strategies.

APPAREL RETAIL: - Moving Beyond Customer Expectations

The influence of fashion clearly, fashion has also played an important role in shaping apparel
consumerism. As lifestyles change, fashion in India is becoming more stratified, as in the
West. Technology, ideas and lifestyles are moving concurrently, and quickly. Companies and
brands that offered monotonous, mundane products for years have now tripled their product
ranges and new appealing shapes and forms are being launched eachSeason.

Top-notch fashion professionals came together four years ago to form the Fashion Design
Council of India. Under the aegis of the Union textile ministry and in tandem with National
Institute of Fashion Technology, FDCI now provides professional inputs for designing labels
and is now working towards developing the fashion supply chain through backward linkages
with suppliers and mills, and forward linkages with the retail and distribution network.

The boom in domestic apparel, nevertheless, tells only part of the story. India has huge
potential as a market for foreign clothing, given its large population and growing household
incomes. A few significant foreign players such as Levi Strauss, Benetton and Lactose have
been selling their branded apparel in India for a number of years. But now, just like their
Indian counterparts, global apparel brands are setting up their own apparel outlets, instead of
just selling through departmental stores. Ralph Lauren, for example, has a limited range
exhibited in generic department stores located in metro cities.

Yet it has now set up its own stand-alone stores, which showcase all the company’s brands.
Now, with the government’s proposal to let in branded retail players brands like Benetton and
Lacoste currently sell mostly through the franchise route investments in India’s apparel sector
are likely to go up substantially.

Introduction to some retail stores:

Shopper’s Stop:
Shoppers Stop is an Indian department stores promoted by the K Raheja Corp Group
(Chandru L Raheja Group), started in the year 1991 with its first store in Andheri, Mumbai
Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging Market
Retailer of the Year Award", by World Retail Congress at Barcelona, on April 10, 2008
Shopper’s stop has co-branded credit card tie-up with Citibank to provide its customers with
exclusive benefits for shopping, The Company has launched a new consumer promotion
called ‘Make Your Own Sale Day’. Shopper’s stop has a loyalty card program with the name
of first citizen card wherein Every point generated at all the levels is equivalent to Rs.1.

Westside:
Established in 1998 as a part of TATA group. Westside idea is Club West, a customer loyalty
programme launched in May 2001. The 30,000-plus members of this club get rebates at
restaurants and on holiday packages from the Taj Group of Hotels, home delivery of
alterations, and best of all, special shopping hours on the first day of any discount sales event
organized by the chain.

Lifestyle
Lifestyle International (P) Ltd is part of the Landmark Group, a Dubai – based retail chain.
With over 30 years’ experience in retailing, the Group has become one of the foremost
retailers in the Gulf.
Positioned as a trendy, youthful and vibrant brand that offers customers a wide variety of
merchandise at an exceptional value for money, Lifestyle India began operations in 1999
with its first store in Chennai. Lifestyle has a loyalty card programme Known as the ‘The
Inner Circle ' For every Rs.50 spent at any of the stores, 1 point is earned. For every 100
points earned, gift voucher of Rs.100 is received.

Comparison Between different players

Store Name Pantaloons Lifestyle Globus Shopper’s Stop Westside

Exclusive own Exclusive Tata

Multibrand Multibrand
Format Type private labeled Multibrand group
brand
Unique & high
Family store Fashion at Style & afford
Positioning quality Family Family store
afforfability
Store
Apparel Apparel Apparel & Apparel
Stylized clot
accessories for accessories for accessories for accessories for
footwear
Categories men, women & men, women & men, men, women &
accessorie
children children women children

Average
billing per Rs.1800 Rs199-199
Rs. 800 Rs. 300-999 Rs.1200
customer

Sales
promotion:
1. End of
season Yes No Yes Yes Yes

4. Special Yes (Exchange

Promotion offer ) Yes No No No
(event)
7. Promotion Price off, free Lucky draw, gift vouchers, Discounts, Cause rela
Type gifts, exchange offer discounts, discount, combo gift vouche
contests, free contest,combo discount
 contest,com
gifts
coupons
Sales, Quarterly Sales, Quarterly Sales, Quarterly Sales, Quart
8. Evaluation
profit Sales profit profit profit
of promotion

Future outlook
Apparel sector is likely to grow with growing Indian economy. Many multinational players
either have already plunged into Indian market or plan to do so in apparel sector. They will
bring many promotional practices which they have been following in developed markets
which will increase the use of sales promotion activities even further. Indian brands will have
to withstand turbulent conditions and learn to survive. If the role of such activities is
understood well it may help any player a long way to survive and grow.

Retail Touch Points

Pull preferred over Push:

A “pull” supply chain driven by actual consumer demand is preferable to a “push” supply
chain driven by manufacturer and retailer promotion. Customers who are used to literally
having the world at their fingertips, thanks to the Internet and personal electronic devices, are
no longer interested in being told what products to buy.

Using tools such as secure Web portals, insight-driven retailers propagate current consumer
demand data throughout the supply chain, enabling maximum responsiveness and agility.
This, in turn, increases customer satisfaction levels and market basket sizes, as well as
decreases the amount of unsold inventory in the supply chain and even levels of “safety
stock.”

Localized Product Assortments:

By localizing the merchandising and assortment plans at the individual store level, a store
can reap significant intangible benefits, such as improved customer satisfaction levels, as
well as tangible benefits, such as higher margins and increased basket sizes.

Space Optimization:
It allows retailers to use every square inch of selling space to its maximum profit potential.
Indian Retail - Today
India has moved from being the 10th largest economy in the world in 1990 to the 4thlargest
today in terms of Purchasing Power Parity (PPP). Average annual Gross Domestic Product
(GDP) growth has increased consistently, rising from 5.0 percent in 1985-1994 to6.2 percent
in 1995-2004 to almost 9 percent in 2005-2009.

Purchasing power of Indian urban consumer is growing and branded merchandise in

categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery,
are slowly becoming lifestyle products that are widely accepted by the urban Indian
consumer. Indian retailers will be taking advantage of this growth and aiming to grow
diversify and introduce new formats have to pay more attention to the brand building process.
The emphasis will continue to be both on retail as a brand and on retailers selling brands.
Retailers will continue to build their own stores as brands to reinforce their marketing
positioning, to communicate quality as well as value for money. Sustainable competitive
advantage will be dependent on translating core values combining products, image and
reputation into a coherent retail brand strategy.
There is very clear evidence that the Indian retail scene is on a roll. A number of large
corporate houses have already made their foray into this arena with multiple formats covering
beauty and health stores, supermarkets, self-service music stores, new age bookstores, every-
day-low-price stores, computers and peripherals stores, office equipments stores and
home/building construction stores. Today the organised players are present in every retail
category, so much so that there is a certain sense of "crowding" in certain sectors of modern
retail.

Indian Retail - Tomorrow

The ongoing and expanding penetration of modern retail will continue to be characterised by
certain key features. There would be a double pronged expansion into major urban cities and
expansion to smaller cities and towns. Sectors such as food &grocery, with far lesser modern
trade penetration currently, would see significantly greater penetration. Profitability of
players would be stable and global majors would be playing a greater role through strategic
investments and transfer of know-how. Thus penetration of organised retail in such a scenario
would grow at an aggressive pace and inline with top quartile growth of penetration
witnessed in other countries.
If modern retail were to meet its true potential, the size of the sector is estimated to reach
~US$ 260 billion by 2020 which translates approximately to a 21% percent modern retail
penetration. The current size of organised retail is currently estimated at closeto US$ 28
billion or 6-7 percent of total retail. This includes food and beverages, clothing and
accessories, electronics and appliances, furniture and furnishings, health and personal care,
food services and drinking places, sporting goods, hobby, books, music, leisure and
entertainment and other miscellaneous items. Hence macro-economic factors such as GDP
growth, private consumption growth and mix of goods and services within private
consumption will drive growth in modern retail.
Indian Retail - Challenges Ahead
Probably one of the biggest challenges in the growth story of Indian modern retail will be the
cost, availability and delivery of quality retail real estate. Rentals continue to be the highest
expense of modern retailers and are almost 4 to 5 times that of their western counterparts.
This cost continues to pose a challenge to its growth. The timely delivery of malls and stores
is a key factor in the growth and penetration of modern retail. Delays here will mean
substantial setbacks for the players in the industry.
Trained manpower shortage is a challenge facing the modern retail sector in India. Indian
retailers have difficulty in finding trained personnel and therefore incur significant costs in
training them. Attrition is another problem which all modern retailers are grappling with.
Indian modern retail has not yet got industry status. This hinders easy access to funds and
other benefits that modern retail could have got as an industry. That apart, modern retailers
are subject to multiple rules and regulations in addition to regional rules and regulations on
the basis of the store locations. In some regions regulations are imposed on the organised
retailers to restrict their expansion and to promote regional retailers. Retailers are also
required to take necessary approvals from local bodies to carry on with their business. There
is no single window for clearances, and companies have to go to different agencies to get
approvals, which is one of the
Risks and Concerns:
• Execution: We believe the key risk to our growth is execution risk. The next wave of
expansion is expected to happen over the next 36 months and the timely execution of this
expansion will be critical. The Company has a strong execution team and we believe, it has
the capability to execute varied retail formats.
• Employee retention: With the Indian economy back on a growth path, and consumption
back on track, the Company believes that employee satisfaction and retention will become
very important. The demand for experienced personnel in modern retail will only increase in
the near term and long-term. Your Company believes that this problem will persist until the
industry reaches a steady growth phase.
• Delay in store delivery: Majority of the new stores planned are in malls and any delays in
the construction of the malls will delay the company's retail expansion plan .However, the
Company has built up a robust pipeline of future stores and believes that delays will not
materially affect expansion.
• Government levies: Retail is currently not viewed as an industry in India. Hence there are
certain levies/cascading effect of taxes on the business which are proving to be a very large
burden as there are no modes for the industry to recover or pass on the selevies. The recent
levy of excise duty on readymade garments is also a cause of concern. Delay in the roll out of
the GST regime is also a matter of concern.
• Investee Companies: The company has invested in other entities and lower than expected
returns from these entities will have an impact on the cash flows and consolidated results of
the company.

Opportunities:
• Geographical reach: Your Company continues to increase its Pan-India foot print and is
expecting to launch into its next expansion phase in the next 36 months. The Company's
strategy to increase the number of departmental stores, and therefore improve city wise
penetration in new cities, increase market share in existing cities through additional new
stores in those cities, and new stores in tier II cities, remains unchanged.
• Hypercity: The Company has acquired 32% of the equity share capital of Hyper city Retail
(India) Ltd. on June 30,2010. Pursuant to the said acquisition, Hypercity Retail(India) Ltd.
has become 51% subsidiary of the Company. The hypermarket segment continues to be a
high growth segment in the country. We believe that the scope for hypermarkets in India is
immense and HyperCity will be a significant growth engine for the Company. The stores run
by HyperCity have shown very impressive performance in the year gone by.
• Format diversification and expansion: Your Company, in it's constant endeavor to capture
wallet share, has diversified into multiple formats viz, Home Stop which retail shard and soft
furnishings. Crossword for books, music and stationery, MAC. which retails high end
cosmetic products, Clinique which retails skin care products, Mother care which retails infant
and kids merchandise and airport retailing, by tying up with The Nuance Group AG of
Switzerland. The Company has also made a successful foray into internet retailing through its
e-retailing portal. The company will continue to focus and expand these formats.
• Preferred partner for foreign players: Your Company believes that by virtue ofit's presence
across all lifestyle categories in the departmental format, it's strong brand value and it's
presence in the books and music segment, it is best placed to bring in international brands
into the country, there by enriching the product bouquet for it's customers and in turn
increasing opportunities for product diversification and profit enhancement.
Threats:
• Economic slowdown: Economic slowdowns have a direct impact on consumption. Retail,
being the "last mile" in the supply/value chain, is bound to face difficulties in an environment
of economic slowdown.
• Threat of new entrants: With India continuing to be an attractive retail market, the Company
expects many new entrants into the sector, thus increasing competition.
• Competitive rivalry in the industry: There is intense rivalry among leading national retailers
for new locations and quality real estate. This will further sharpen in the coming 2 years as
the established players will focus on growth. The company believes that it has a robust
pipeline of stores for future expansion.
• Due to the sheer volume of people visiting retails outlets coupled with easy access, retail is
considered as a soft target and hence more prone to terror attacks as compared to others.

Customer Entry:
Retailers measure entry as footfalls, which is the number of people entering the stores. This is
computed through manual count in all stores during trading hours.
Conversion Ratio:
Conversion is the ratio of the number of transactions (Cash Memo) versus the total customer
entry into the stores. Tracking conversion helps the retailer understand the productivity of his
front-end store employees and the attractiveness of the merchandise and services.
Sales:
Gross Sales both at chain level and for Like-To-Like stores showed an improvement as
compared to last year. The growth was 23% in gross retail turnover of Shoppers Stop
departmental store business. The sales per sq. ft. has been computed on built-up area.

Apparel:
The Apparel contribution to total sales of the Shoppers Stop departmental store business was
58.8% in 2010-11 as compared to 59.5% in 2009-10. There has been growth in Non-Apparel
segment which has resulted in Non-Apparel sales percentage growing. This is primarily due
to customer buying life style products.
Non-Apparel:
This category includes Cosmetics, Personal Accessories, Jewellery, Leather goods. Home
Wares, Electronics, Books and Music. These lifestyle products have high aspiration value,
and as the consuming class increases, there will be a big surge in the demand for this
category. The Non-Apparel contribution to total sales of the Company was 41.2% in 2010-11.
Private Label & Private Brands:
Your Company aims to provide a differentiated and unique offering to the customer through
its own private labels as well as through exclusive private brands. The contribution of private
label is at 17.5% of sales as compared to 18.8% last year and private label sales remained
constant. Your Company has got an exclusive arrangement for departmental store business
with MUSTANG JEANS, a German Brand, for their Men's and Women's Wear. Our Austin
Reed U.K. exclusive agreement to retail men's & women's wear has posted a healthy growth.

Average Selling Price (ASP):

Average Selling Price is the Gross Retail Sales divided by the number of units sold. Tracking
ASP helps the retailer to align the offering as per the customer segment as well as improve
the productivity of the floor space.
Transaction Size (Rs):
Transaction size represents the amount spent by each customer on his buying. This is
computed by the total sales divided by the number of cash memos.

Merchandise Purchase:
Your company's ability to present on the shelves correct merchandise assortments in the right
mix, style, colour & fashion is one of its most critical success factors. A team of Buyers &
Merchandisers continuously ensure that the pricing strategy and value proposition are
completely in tune with the customers' expectations. We regularly monitor sales trends to
optimise inventory levels.
Our well-established systems and processes in Buying & Merchandising &Logistics enables
us to efficiently manage the flow of inventory to stores , provide prompt replenishments and
manage pricing.
Your Company believes in a broad distribution of risk with no high dependency on any single
supplier and has a diversified supplier base. Suppliers are selected after e valuation based on
fairly stringent parameters which ensure the quality & reliability of supply. Alternate
distribution channels for inventory have also been put in place as a contingency, should the
need arise.
Supplier Risks:
Our broadly varied offering necessitates alliances with a large number of suppliers from
various business sectors. In order to mitigate the risk involved, we enter into arrangements
with vendors in various business formats such as Outrights Buy/Sale or return. Consignment
& Concessionaire/Conducting arrangement.
Shrinkage:
Shrinkage in the retail business is defined as the loss in inventory through a combination of
shop lifting, pilferage, and errors in documentation and transaction processing that go
unnoticed. We have focus on inventory control and have set up a separate department called
profit enhancement, which not only monitors Shrinkage on a regular basis but also looks at
various factors that could lead to Shrinkage at stores and distribution centers.
Sustaining Gross Margins:
The gross margin has decreased during the year to 31.4% from 31.9% as compared to the last
year, principally on account of increases in levies and the transition in trading models. The
Company believes that going forward the increasing share of revenue from private labels,
improved sales mix with higher contribution from lifestyle products (i.e.watches, leather,
jewellery, perfumes and cosmetics), and shrinkage control has helped improve gross margins.
Vendor management as also sourcing ability has improved with scale and would accrue more
economies and higher gross margins going forward.

Co-branded Credit/Debit Card Programme with Citibank:

Your Company in association with Citibank has offered its First Citizens an option to add on
a credit card to their existing loyalty cards.
This enables First Citizens to add on a credit line to their purchases. They also have the added
advantage of being able to choose from amongst various attractive financing options, cash
back schemes, EMI schemes etc. for buying at your Company's stores. For customers who are
averse to credit, there is an option of activating a debit card. As on31 March 2011, the
number of members in the co-branded card programme was over 1,60,000.

Risk Management and Internal Control:

Effective governance consists of competent management; implementation of standard
policies and processes; maintenance of an appropriate audit programme with internal control
environment effective risk monitoring and management information systems (MIS).
The Company has an integrated approach for management of risk and has formulated the
framework for regulatory and risk management, standardising the definition of internal
controls.
It also provides a framework for risk management and regulatory compliance, which requires
risk assessments and related policies, a control-based environment and activities, information
and communication procedures, and a monitoring mechanism for the control environment.

Technology Initiatives:
In the year 2010-11, your company continued its thrust towards scaling up for growth,
increasing operational efficiency and exploring technology lead innovation to sustain the
leadership position in IT adoption in the Indian and Global retail markets. Some of the key
initiatives in this direction are:
Your company is one of the first retailers to implement Biometrics-based authentication in
stores. This gives the business the ability to control shrinkage by managing Associates better
on the shop floor. Implemented in conjunction with smart CCTVs at all stores, there is a
measurable reduction in theft and pilferage.
A large scale upgrade of the core Merchandise Management System has been undertaken in
this Financial year. This upgrade while keeping the organisation up to speed with the latest
and best in retail technology would provide several benefits including but not limited to Auto
Replenishment and Allocation, Warehouse Management, Merchandise setup. Data security
etc. Your company is also in the process of upgrading its financial accounting system to
ensure that we comply with global best practices in Accounting Processes.
Your company has automated the Balance Score Card through Oracle's People Soft
application to facilitate a fair and transparent appraisal system for all its associates .A self-
service module for Travel and Expenses has been implemented to ensure that processes are
further simplified making life easier for employees. More vendors have been brought under
the RTGS umbrella which facilitates reduced manual effort, quicker payments, and better
cash management. We continued investments in the B2B system - a collaborative system for
our vendor community which helps them plan merchandise have been further strengthened
this year.

In order to strengthen the information security, your company has been working with global
information security leaders to upgrade and enhance the security of all systems. The company
this year also implemented tools from IBM (built on Big Fix technology), a solution that
brings efficiency in detection of security vulnerability and remediation, IT compliance
reporting, security patch management and security policy enforcement on allures computing
devices.

Consumer Behavior

Introduction

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how

 The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);
 The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
 The behavior of consumers while shopping or making other marketing decisions;
 Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
 How consumer motivation and decision strategies differ between products that differ
in their level of importance or interest that they entail for the consumer; and
 How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
One "official" definition of consumer behavior is "The study of individuals, groups, or
organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society." Although it is not necessary to memorize this definition, it brings
up some useful points:

 Behavior occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the job
make decisions as to which products the firm should use).
 Consumer behavior involves the use and disposal of products as well as the study of
how they are purchased. Product use is often of great interest to the marketer, because
this may influence how a product is best positioned or how we can encourage
increased consumption. Since many environmental problems result from product
disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or
garbage piling up at landfills) this is also an area of interest.
 Consumer behavior involves services and ideas as well as tangible products.

 The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit, may
have serious repercussions for the national health and economy.

There are four main applications of consumer behavior:

 The most obvious is for marketing strategy—i.e., for making better marketing
campaigns. For example, by understanding that consumers are more receptive to food
advertising when they are hungry, we learn to schedule snack advertisements late in
the afternoon. By understanding that new products are usually initially adopted by a
few consumers and only spread later, and then only gradually, to the rest of the
population, we learn that (1) companies that introduce new products must be well
financed so that they can stay afloat until their products become a commercial success
and (2) it is important to please initial customers, since they will in turn influence
many subsequent customers’ brand choices.
 A second application is public policy. In the 1980s, Accutane, a near miracle cure for
acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken
by pregnant women. Although physicians were instructed to warn their female
patients of this, a number still became pregnant while taking the drug. To get
consumers’ attention, the Federal Drug Administration (FDA) took the step of
requiring that very graphic pictures of deformed babies be shown on the medicine
containers.
 Social marketing involves getting ideas across to consumers rather than selling
something. Marty Fishbein, a marketing professor, went on sabbatical to work for the
Centers for Disease Control trying to reduce the incidence of transmission of diseases
through illegal drug use. The best solution, obviously, would be if we could get illegal
drug users to stop. This, however, was deemed to be infeasible. It was also determined
that the practice of sharing needles was too ingrained in the drug culture to be
 stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a
campaign that encouraged the cleaning of needles in bleach before sharing them, a
goal that was believed to be more realistic.
 As a final benefit, studying consumer behavior should make us better consumers.
Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of
laundry detergent, you should pay less per ounce than if you bought two 32 ounce
bottles. In practice, however, you often pay a size premium by buying the larger
quantity. In other words, in this case, knowing this fact will sensitize you to the need
to check the unit cost labels to determine if you are really getting a bargain

CORPORATE PROFILE: THE VISHAL GROUP

What started as a humble one store enterprise in 1986 in Kolkata (erstwhile, Calcutta) is
today a conglomerate encompassing 51 showrooms in 39 cities. India’s first hyper-market has
also been opened for the Indian consumer by VISHAL. Situated in the national capital Delhi
this store boasts of the singe largest collection of goods and commodities sold under one roof
in India.

The group had a turnover of Rs. 1463.12 million for fiscal 2005, under the dynamic
leadership of Mr.Ram Chandra Aggarwal. The group had of turnover Rs 2884.43 million for
fiscal 2006 and Rs. 6026.53 million for fiscal 2007

The group’s prime focus is on retailing. The VISHAL stores offer affordable family fashion at
prices to suit every pocket. The group’s philosophy is integration and towards this end has
initiated backward integration in the field of high fashion by setting up a state of the art
manufacturing facility to support its retail endeavors.

VISHAL is one of fastest growing retailing groups in India. Its outlets cater to almost all
price ranges. The showrooms have over 70,00 products range which fulfills all your
household needs, and can be catered to under one roof. It is covering about 1282000 sq. ft. in
18 state across India. Each store gives you international quality goods and prices hard to
match. The cost benefits that is derived from the large central purchase of goods and services
is passed on to the consumer.

THE FOUNDERS

1. Mr. Ramchandra Agarwal

2. Mrs. Uma Agarwal

3. Mr. Surendra Agarwal

VISHAL Retail Ltd. has a factory in Gurgaon, Haryana. This factory has more than 700
imported machines that have a capacity to manufacturer 150000 pieces a month. The factory
occupies 80000 sq ft of covered space. The VISHAL group indirectly gives employment to
more than a 1000 people. These people work in ancillaries that supply finished goods to the
company.Our 10 warehouses cater to 51 showrooms in 39 cities. It is covering about 1282000
sq. ft. in 18 state across India.By the end of March 2007 we will expand our outlets to 61
companies owned outlets and many franchise operations.

APPARELS BRAND:

VISHAL Mega Mart is one of India’s fastest growing retail chains.. The chain currently has
32 company stores in 26 cities in India. The VISHAL brand is known for great modern style
for men, women and children. VISHAL offers high level fashion styling. Since 1986, our
name has been synonymous with quality, value and fashion integrity. We offer an
unparalleled collection of clothes for the entire family.

RAJASTHAN

VISHAL MEGAMART: 1, Ajmer Road, Nr.

Sarogi Petrol Pump & Shalimar Hotel, Opp.
Govt. Hostel, Jaipur 0-9314500235

VISHAL MEGAMART:
Crystal Court, 5, Indra Palace, Malviya
Nagar, Jaipur, Rajasthan

VISHAL MEGAMART
Vidhyadhar Nagar, Main Sikar Road,
Jaipur, Rajasthan
Figure 3.1
ORGANISATION STRUCTURE

CHIEF EXECUTIVE OFFICER

[Mr. RITESH RATHI]

RETAIL COORDINATOR (NATIONAL)

Mr. ROHIT DUREJA

ZONAL MANAGER
Mr. PREM MOHSIN

REGIONAL MANAGER

AREA MANAGER

STORE MANAGER

ASSISTANT MANAGER

PRODUCTS

A. HOME FURNISHING

1. Drawing Room Bedroom

2. Door Mat Bed Sheet

3. Carpet Pillows

4. Curtains Pillow Cover

5. Kitchen Bathroom

6. Apron Bath Mats

7. Kitchen Napkin Towel Gift Sets

B. FOOD & BEVERAGES

1. Snacks

2. Drinks

C. SPORTS & FITNESS

INDOOR GAMES OUTDOOR GAMES

1. Basket Ball Cricket Bat

2. T.T. Bat Football

3. Boxing Kit Lawn Tennis

4. Swimming Costumes Tennis Racket

5. Water Ball Tennis Ball

6. Fitness Equip.

7. Personal Gym

D. FOOTWEAR

I. BOYS GIRLS

Shoes Slippers
Sandals Sandals

II. LADIES MENS

Shoes Shoes
Slippers Slippers

E. TELEMART

1. BEETEL Communication

2. Mobile Accessories

3. Mobile Batteries

4. Mobile Charger
F. MENS

1. Upper Lower

2. Shirt Casual Jeans(MP)

3. Shirt Formal Cotton Trouser(MPC)

4. Ethnic & Sports Winter Wear

5. Night Suits Suit(WMC)

6. T-Shirts Blazer(WMB)

7. Dupatta Windcheater(WMW)

8. Sherwani Jacket

G. LADIES ACCESSORIES

1. Upper Lower

2. Kurta Pants Jeans

3. Skirt Top Capri

4. Ethnic Winter Wear

5. Nighty Jackets

6. Lancha Stawl

7. Sharara Blazer

8. Salwar Suit Track Suit

H. INFANTS

1. Garments Accessories

2. Hot Pant Bed Sheet

3. Frock Under Garments

4. Baba Suit Socks

 I. WOMEN

1. Sarees Personal Items

2. Fancy(SRF) Cap(LCA)

3. Synthetics Socks(Las)

4. Banarsi

5. Jewellery Cosmetics

6. Necklace LIp Gloss

7. Ring Nail Polish

J. KIDS BOYS

1. Lower Sets Winter Wear

2. Jeans Night Suit Suit

3. Bermudas Baba Suit Blazer

4. Dungries Jacket

5. Upper Ethnic

6. Shirt Formal Kurta- Pyjama

7. T-Shirt Sherwani

K. KIDS GIRLS

1. Lower Sets Winter Wear

2. Hot Pant Night Suit Hipster Set

3. Skirt Capri Set Blazer

4. Dungries Jacket

5. Upper Ethnic

6. Tops(GWT) Sharara

7. Frock(GFK) Lancha
L. TRAVEL ACCESSORIES

1. Luggages Portfolio Bags

2. Suitcase Shoulder Bags

3. Executive Bag

4. School Bags

5. Pouch & Cases

6. Waist Pouch

7. Vanity Cases

M. HOUSEHOLD

1. Acrylic Ware Copper Steel

2. Dinner Set Jug Cake Server

3. Home Aids Pressure Cooker Non Stick

4. Floor Wiper Cooker Handi

5. Sanitary Brush Pressure Pan Dosa Tawa

6. General Plastic Goods Electrical App. Bone China

7. Coffee Mug Chopper Soup Set

8. Bucket Microwave Oven Dessert Set

9. Glass Ware Thermo Ware Porcelain

10. Cup Tiffin Cup & Saucer

11. Lemon Set Container

N. LIFESTYLE

1. Time Zone Opticals Gifts & Novelties

2. Ladies Wrist Watch Ladies Sun Glass Flower Vase

3. Mens Wrist Watch Mens Sun Glass Key Chain

4. Mens Accessories Electric & Electronics Items Perfume/Deo

 5. Belts Battery(ABT) Spray

O. TOYS & GAMES

1. Soft Toys Dolls Cycles & Scooters

2. Musical Toys Barbie Doll Cycles

3. Non-Musical Other Dolls Scooters

4. Board Games Infant Toys Video Games

5. Wooden Blocks Teether T.V. Video Game

6. Puzzles Swing Hand Video Game

P. STATIONARY

1. School Office Paper Mart

2. Exam Board Office File Diary

3. Clay Punching Machine File

4. Party Stuff

5. Balloons

6. Ribbons
 Chapter – 2
RESEARCH METHODOLOGY
3.1 TITLE OF STUDY
“A DETAILED STUDY ON CONSUMER BEHAVIOR ”

3.2 PROJECT DURATION

During BBA

3.3 OBJECTIVE OF STUDY

 To know the customer perception towards life style store
 To know the services offered by different life style stores
 To make comparative analysis between different life style stores.
 To determine the shopping behaviour/ buying behaviour of the customer and their
satisfaction level.
 To know the customer perception or satisfaction level towards store services..
 To do the comparative analysis of different Lifestyle Stores on different dimensions.

Significance of the study:-

The study done on the above topic will give an idea of how the shopping behavour of the
customer changes and what behaviour they display while shopping. The project will be
helpful in finding out what strategy to make in order to fulfill the needs and want of customer
and create a competitive advantage in the retail market

3.4 TYPES OF RESEARCH

Descriptive vs. Analytical Research

Descriptive Research is a fact finding investigation which is aimed at describing the

characteristics of individual, situation or a group (or) describing the state of affairs as it exists
at present.

I adopt descriptive research design for my study as the research design must make enough
provision for protection against bias and must maximize reliability must focus attention on
the following:
The design in such studies must be rigid and not flexible and must focus attention on the
following.+
 Formulating the objective of the study ( what the study is about and why is it being
made?)
 Designing the methods of data collection (what techniques of gathering data will be
adopted ?)
 Selecting the sample
 Collecting the data
 Analyzing the data
 Reporting the finding

Analytical Research is primarily concerned with testing hypothesis and specifying and
interpreting relationships, by analyzing the facts or information already available.

Applied vs. Fundamental Research

Applied Research or Action Research is carried out to find solution to a real life problem
requiring an action or policy decision.

Fundamental Research which is also known as basic or pure research is undertaken for the
sake of knowledge without any intention to apply it in practice. It is undertaken out of
intellectual curiosity and is not necessarily problem-oriented.

Quantitative vs. Qualitative Research

Quantitative Research is employed for measuring the quantity or amount of a particular

phenomenon by the use of statistical analysis.

Qualitative Research is a non-quantitative type of analysis which is aimed at finding out the
quality of a particular phenomenon.

Conceptual vs. Empirical Research

Conceptual Research is generally used by philosophers and thinkers to develop new

concepts or to reinterpret existing ones.
Empirical Research is a data based research which depends on experience or observation
alone. It is aimed at coming up with conclusions without due regard for system and theory.

3.5 Sample Study and Method Of Selecting Sample

Population- all those customers who come to these stores

Sample size-100

Sampling technique- convenience sampling

Primary data – primary data was collected using a structured questionnaire.

Secondary data – secondary data was collected from the company website and brochure ,
marketing text books.

Sample Design- convenience sampling

Tools and techniques of data collection:-

 The technique used to collection the primary data was a survey. A well-structured
questionnaire was prepared and given to the respondents to be filled.
he information obtaining from the questionnaire was edited, cross tabulated and an
appropriate test was applied to get the result.

3.6 SCOPE OF STUDY

Every research is conducted to fulfil certain objectives and this objective in turn fulfill some
purpose and is of significance for one or more then one party. This research is significant for:

To the student
  This study provides the student a practical insight of various activities and functions
of the stores
 This will also be able to develop in depth knowledge of retail store.
 This study is also required for the fulfillment of the requirement for the degree of
M.B.A as per the curriculum.

3.7 LIMITATION OF STUDY

 Limited time was given for data collection.
 Some of the customers were not corporative.
 Response from the customers were different during weekdays and weekends.
 The findings were based on the information given by the customers and can be biased.
 The population was limited to only those customer who came
 Chapter-3
Facts & Findings
Facts
A retail business is defined as a company that buys products from a supplier and resells them
for a profit. A retail store can sell one item, such as cars, or carry a range of products to
which customers return, such as a convenience store. Retail business share many traits that
define their operations.

Mark-up
To earn a profit, a retail business must employ some measure of mark-up in the products it
sells. Most all products sold at a retail store were purchased for less than the marked price.
You might incur losses if you want to get rid of a line that isn't selling well or you sell one
product at a loss to bring customers to the store.

Competition
Most retailers face competition in some form. A retail business owner must know what
competition exists and how much they are charging for the same products to remain
competitive. Retailers need to find a niche and loyal customer base to outsell competitors.

Moving Inventory
If you're not moving inventory at your retail store, you're not making money. The economic
process is simple in the retail industry. Inventory comes in and inventory goes out. Inactive
inventory costs you money because you must store it, pay for it and keep your store open
even if it's not moving.

Location
Location is an important factor that most retailers contend with. You need to be in an easily
accessible place for customers to reach you. The more traffic you have, the better chance you
have of attracting business. The amount of competition nearby affects your sales. The
location you choose also affects the amount of rent you pay for the property.
Customers
Retail stores need customers to buy their products. Without a steady supply of new and return
customers, you won't succeed. A successful retail store caters to loyal customers by providing
the goods they demand. They pay attention to their needs and cultivate relationships.

Role
The retail store industry accounts for about 10 percent of the gross national product,
according to the IRS. Retail businesses play a critical role in the economic health of the
community, the region and nation.

Technology
Like most business, retail stores have been greatly affected by changes in technology. Point
of sale terminals that record and balance sales, easy access to debit and credit payment
machines and computerized inventory control have made retail stores more efficient.

Overhead
Retail stores carry overhead that must be accounted for to determine profits. The building
space and utilities all reduce profits. Keeping up with current technology, especially those
applications that customers have come to expect easily increase your overhead costs.

Staff
While most retail stores are self-service, they must provide staff to ring up the merchandise,
stock the shelves and open the doors. Retail staff ensures that customers don't walk off with
your products without paying. While many retail establishments can offer commissions and
bonuses to sales staff, most pay minimum wages to clerks and associates.

Trends
Retail is subject to trends, changing demographics and seasonal ups and downs. You can run
a beautiful store with superb customer service but if customers are not interested in your
products anymore, you could fail if you don't follow trends and meet customer demands.
Findings
The right merchandising can boost your retail sales. As the owner of a small retail
establishment, you need to constantly find creative ways to increase your sales and profits.
Incorporating unique merchandising ideas into your retail business is one of the best ways to
encourage your customers to spend more time, and more money, in your store.

Video Displays
Video displays are effective marketing and merchandising tools, especially for products that
may be unfamiliar to your customers. It is one thing to read about a product or look at the
external packaging, but actually seeing the product in action provides much more information
and incentive to buy. Place a small television set with a DVD player in the display and use
the instructional and educational videos provided by the manufacturer to demonstrate the
effectiveness of the item.

Coupon Offers
Including manufacturer's coupons on a display of snack foods, beverages and other
inexpensive items can spur impulse purchases and encourage customers to try new products.
To increase the effectiveness of this merchandising idea, position the rack of items
strategically so that customers pass right by those impulse items on their way to the register.

Create a Theme
As each holiday approaches, take the opportunity to create a compelling and interactive
theme display. Use products your retail store is already pushing as you create the display.
This can increase your sales and help you move your most profitable products as the next
holiday approaches. Creating a holiday-themed merchandising display also helps your store
avoid costly leftovers that must be sold at highly discounted prices.

Create a "Try-Me" Section

Providing free samples is a proven way to sell everything from potato chips and ice cream to
hand lotion and perfume. Create a "try me" section in your retail store--a place where
customers can try out the latest products and buy only the ones they like the most. Creating a
sample section generates excitement and buzz among your existing customers, encouraging
them to return to sample the latest products. A sample section can also build trust with new
customers, since it shows that you are willing to let browsers sample products before making
a purchase. On the back end, providing free samples can reduce costly returns, since
customers make sure the item is what they need prior to purchase.

Q-1 Have you heard the name of VISHAL MEGA MART

S. no. Particular No.of Respondent % of Respondent

1 Yes 66 66%
2 No 34 34%
Total 100%

70 66
60
50
40 34
30
20
10
0
Yes No
Responses

Interpretation: As per the survey conducted during the course of summer

training it was depicted that from the 100 respondents surveyed, 66 individuals
are aware with VISHAL retail stores. This is how a sign being shown of the
strong reputation of the VISHAL retail stores [VISHAL MEGA MARTS]
 Q-2 Have you ever visited any of the Vishal Retail store located in
S. no. Particular No.of Respondents % of
Respondent
1 Yes 39 59.09%
2 No 27 40.90%
Jaipur

Interpretation: from the 66 respondents when asked further about their visit to
VISHAL MEGA MART, 39 potential individuals said ‘Yes’ while 29 said ‘No’.
Q-3 If Yes, Which product have you tasted

S. No. Particular No.of Respondents % of Respondent

1 Namkeen 32 32%
2 Cake 38 38%
3 Snacks 30 30%

30% 32%
Namkeen

Cake

Snacks

38%
Interpretation: Furthermore, it was indicated that cake is slightly more popular
among users though namkeen and snacks are being consumed at par basis. The cake
is among the highest selling products in store.

Q-4 Which of the following products have you tried for

S.no. Particular No.of % of

Respondents Respondent
1 Casual Wears 47 47%
2 Formal Wears 27 27%
3 Party Wears 26 26%

Interpretation: When asked for the preference over wearing merchandise in

Casual, Format and Party wears, it was indicated from the 66 respondents that 47%
 prefers casual, 27% prefer formal and rest 26% favored to party wears they like to
buy from the store.

Q-5 How much satisfied are you with VISHAL Products

S.no. Particular No.of % of

Respondents Respondent
1 Very 4 4%
Satisfied
2 Satisfied 76 76%
3 Unsatisfied 20 20%

Interpretation: Also when asked about the satisfaction of the VISHAL

products, out of 66 respondents, 76% voted that they are satisfied to a level, 4%
agreed they are very satisfied with the quality and price offers, still remaining 20%
showed some kind of dissatisfaction with respect to non availability and other
measures in VISHAL products.

Q-6 Compared with other products that are available would you say
VISHAL product are…
S.no Particular No.of % of
Respondents Respondent
1 Better 23 34.84%
2 Same 30 45.45%
3 Worse 13 19.69%

st 35 30
n
e 30
d 23
n 25
o 20 13
p
s
e 15
R 10
5
0
Better Same Worse

Re sponses

Interpretation: People are very conscious about their selection of the products.
Similarly from 66 respondents, 23 individuals considered VISHAL products are
better, while 30 individuals found nothing new rather same and remaining 13 agreed
on a inferior quality and also blamed for non branded merchandise.
Q-7 What drives you in the VISHAL Retail Stores ?

S.no Particular No.of %

Respondents
1 Most Reasonable 39 44%
Pricing
2 Qualitative Products 32 35%
3 High Promotional 18 20%
Activities
 Interpretation: What drives people to VISHAL retail stores was the most
reasonable products and qualitative products as being inferred from 39 respondents
and 32 respondents. Remaining 18 respondents said the promotion measures adopted
drives them to visit VISHAL.

Q-8 Do you agree that the VISAHL Retail stores Should be situated
within reach from your home ?

S.no Particular No.of % of

Respondents Respondents
1 Yes 91 91%
2 No 9 9%

Interpretation: There is need to consider of opening of more retail stores since 91

respondents said that VISHAL MEGA MART should be within their reach and 11
were required in their business area so that they can easily purchase their necessary
items from the store..
Q-9 Which of the following stores you feel the store atmosphere and
ambience is appealing?

S.no Particular No.of % of

Respondents Respondents
1 Vishal 22 22%
2 Big 26 26%
Shoppers
3 Shoppers 14 14%
Shop
4 Trumart 18 18%
5 Spencer 20 20%

Interpretation: The following pie chart displayed above and table mentioned below
depicts the respondents views with respect to atmosphere and appealing ambience as
VISHAL (20), BIG SHOPPERS (23), SHOPPERS STOP (12), TRU MART (16) and
SPENCER (18)
Q-10 How should be the behaviour of the staff of VISHAL retail
stores

S.no. Particular No.of % of

Respondents Respondents
1 Readily and 69 77.52%
helpful
2 Descriptive 12 13.48%
3 Cann’t Say 8 8.98%

Interpretation: Behaviour of staff in VISHAL retail stores should be as follows

from respondents views: Readily and helpful (69), Descriptive (22) and Can’t Say (9)
 Chapter - 5
ANALYSIS & INTERPREATION
STRENGTHS

1. Good Brand name of VISHAL Retail Ltd.

2. The Biggest strengths of these potential retail outlets is Qualitative products and
services.

3. World Class accommodation and infrastructure

4. The most reasonable products offering prices..

5. After sales service is highly appreciable.

WEAKNESSES

1. Selected and few stores and outlets sometimes not in reached with desirable
clientele.

2. Sometimes customers hesitate to visit when the schemes and discount offers are
not in force.

3. Still preferable by upper class, upper middle class section as a majority until lower
income group be aware of the qualitative facilities that are being availing with
reasonable prices.

OPPORTUNITIES

1. To explore the vast Indian market clientele.

2. To give away the competition by minimizing production cost leading to overall

profitability in high volume sales.

THREATS

1 Leading growing retail stores like: SPENCERS, SHOPPERS STOP, BIG BAZAAR, BIG
SHOPPER and many more planning to come.

2 Since the maintenance cost consisting of franchisee fee, electricity bills and warehousing
costs it may pose a big threat if a sufficient number of clients does not reach for reaching to
minimum target of sales.
CONCLUSION:

As far as the summer training under VISHAL mega mart is concerned I came to
realize a vital importance of franchising and business development from the
perspective of what a customer is and the relevance of his satisfaction he derived on
the visit of the store and undergone a extensive study of retailing industry during the
tenure of my performance.

Why the today’s customer is preferring such eminent retail houses is that they are
large sized departmental houses with luxurious ambience winning the hearts of
customer with a first stepping in the showrooms and retail stores. These retail stores
are catering to the wide variety of highly qualitative products with distinguished
needs satisfaction and suitable to the every segment of society with the most
affordable prices.

Furthermore, In India the retail sector is the second largest employer after
agriculture, although it is highly fragmented and predominantly consists of small
independent, owner – managed shops.

There are over 12 million retail outlets in India , and organised retail trade is worth
about Rs.12,90,000 crore (September,2003). The country is witnessing a period of
boom in retail trade, mainly on account of a gradual increase in the disposable
incomes of the middle and upper-middle class households. More and more corporate
houses including large real estate companies are coming into the retail business,
directly or indirectly, in the form of mall and shopping center builders and managers.

New formats like super markets and large discount and department stores have
started influencing the traditional looks of bookstores, furnishing stores and chemist
shops.

The retail revolution, apart from bringing in sweeping, positive changes in the
quality of life in the metros and bigger towns, is also bringing in slow changes in
lifestyle in the smaller towns of India. Increase in literacy, exposure to media,
greater availability and penetration of a variety of consumer goods into the interiors
of the country, have all resulted in narrowing down the spending differences
between the consumers of larger metros and those of smaller towns. However, the
supply of quality real estate space would be instrumental in propelling the future
growth momentum of the retail sector in India. The addition of better and affordable
retail space would enable retailers to deliver more better-quality products and
services to the consumers, resulting in increase in operational efficiencies and
decline in costs for the supply chain.

India is one of the complex real estate markets in the world due to the large degree
of variation and inconsistence in the market practice and regulatory norms. A
combined effort by both central and state governments in terms of appropriate
zoning laws, transparency in ownership, and availability of loans for retail land, is
very much necessary for reducing existing bottlenecks.

Accordance of ‘industry status’ to retail outlets in India is an issue that needs to be

addressed soon. Recognition would ease financing prospects, as well as standardize
and unify taxes for the industry. An alignment of the retail sector with the tourism
sector could also promote India as a global shopping hub.

For the retail sector to achieve further growth, the spread of organised retailing has
to become a national phenomenon. According to KSA Technopak, a leading
consulting firm, the organised sector will grow to almost Rs.30, 000 crores by 2005,
representing 6% of the total retail market. The top 6 cities will account for 66% of
total organised retailing. Although many international retailers and brands still
regard India as too difficult, they would welcome the opportunity to create an
appropriate joint venture, if they felt India was changing. The growth of the
organised retail industry in the country will mean thousands of new jobs, increasing
income levels and living standards, better products, and services, a better shopping
experience, and more social activities.
SUGGESTIONS

Following are the useful suggestions being provided for strengthening of market potentiality
of retail outlets:

1. It is necessary for the retail outlets to be open in such areas that to raise their promotional
measures for the maximum knowledge to the consumers living / residing nearby their
outlets.

2. Further it is suggested that retail outlets should also go for opening of more franchisee
only if it found that sale is rising tremendously and customer reaching / arrival ratio is
rising with respect to quality being provided.

3. It is also suggested that companies should revise and alter their attractive schemes
keeping quality measures on product delivery at other hand so that customer liaisons
should be maintained for long years.

4. It is much necessary to retain an existing customer than to make new customers. For this
the company should left no stone untouched for achieving this objective.

5. Further, it is advisable for the company undergoing retail outlets to give more options in
the forms of new development and variety in products and services to be offered so that
customers may make regular visit to the outlets for their needs and wants.
 Chapter - 6
BIBLIOGRAPHY
Following sources have been referred for the completion of the project
report: -

BOOKS:

1. KOTHARI, C.R., Research Methodology & Management, 5th Edition

2. KOTLER PHILIP, Marketing Management

MAGAZINES

1. BUSINESS WORLD, Year – 2005, September edition, Retailing with VISHAL

2. INDIA TODAY, Year – 2005, October, Retail Industry of India.

WEB REFERENCES:

1. www.vishalmegamart.net

2. www.koutons.in

3. www.cottoncounty.in

4. www.thehinduonnet.com

5. www.thefinancialexpress.com