Nancy Final

8/3/2019 Nancy Final

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ACKNOWLEGMENT

I am extremely grateful and remain indebted to our guide Ms.Neha Bhatia for being a source of

inspiration and for her constant support in the Design, Implementation and Evaluation of the

project. I am thankful to her for the constant constructive criticism and invaluable suggestions,

which benefited me a lot while developing the project on A study of Retail Industry prospects in

India. She has been a constant source of inspiration and motivation for hard work. She has been

very co-operative throughout this project work. Through this column, it would be my utmost

pleasure to express my warm thanks to her for the encouragement, co-operation and consent

without which I mightnt be able to accomplish this project.

Name: Nancy Verma

Enroll. No: 03624401910


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CERTIFICATE

I, Ms Nancy verma, Roll No.03624401910 certify that the Minor Project Report (Paper Code-213) entitled A Study of retail industry prospect in India is completed by me by collecting thematerial from the referenced sources. The matter embodied in this has not been submitted earlier

for the award of any degree or diploma to the best of my knowledge and belief.

Signature of the Student:

Date:

Certified that the Minor Project Report (Paper Code 213) entitled A Study of retail industryprospect in India done by Ms Nancy verma, Roll No.03624401910 is completed under myguidance.

Signature of the Guide

Name of the Guide:Ms. Neha Bhatia

Designation:

Date:

CountersignedDirector/Project Coordinator


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A study of Retail Industry prospects in India


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Index

TABLE OF CONTENT PAGE NUMBER

INTRODUCTION 6-12

OBJECTIVE OF STUDY 13-14

RESEARCH METHODOLOGY 15-17

ANALYSIS OF STUDY 18-44

CONCLUSION 45-47

SUGGESTION/RECOMMENDATION 48-49

REFERENCES 50-51

ANNEXURE 52-53


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INTRODUCTION


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India is without doubt a 'growth' economy and many consider it an attractive country to invest in,particularly in its rapidly growing and changing retail market. However, Foreign Direct

Investment (FDI) is restricted in the retail sector, and despite many years of debate, theregulations are still only changing very slowly and there are still lots of uncertainties.

AT Kearney (2009), the well-established international management consultancy, in their AnnualGlobal Retail Index, ranked India as No. 1 out of 30 of the top emerging markets, and has donefor some years. Foreign Investors are watching India, ready for a piece of the action in the retailmarket, but there are still plenty of uncertainties, restrictions and potential socio-economic risks.

This division of the retail sector, which has a very heavy weighting towards, unorganized, is justone of the issues contributing to the sensitive debate on FDI in India at the moment.The Indian Retail industry is divided into the organized and the unorganized sector. The

unorganized sector mainly includes the local Kirana store and the mom and pop stores. Theorganized sector includes the big companies like the RPG, Pantaloons and the foreign playerslike adidas, Reebok, McDonalds and Pizza hut. Most of the Indian Retail industry ischaracterized by an unorganized market but the growth of the organized sector in the past fewyears has been incredible. Noting that organized retail market is growing at the rate of 40%,Northbridge Capital said that faster growth rate would be maintained in the next three years,especially with the entry of major global players and Indian corporate houses. The organizedretail in India has been divided into various categories like Jewellery and Watches, Catering andservices, Furniture & furnishing, Footwear, Consumer durables, food & grocery, Clothing &Textile, Mobile handsets, Books, music & gifts etc. The market share categorization is:Although there are abundant factors that drives retailing in India but the challenges for the

retailers are also numerous.

Key issues and challenges

Economic slowdown With economic slowdown hitting most of the economies, theorganized retail sector in India is also witnessing a hold back. Most of the major retailgiants have either postponed their ideas of expansion and are afraid of undertaking anynew big projects. Although most of the companies have already taken an initiative tomake their way in the rural market and others are also planning to do the same but due tothe economic turmoil, this effort seems to have taken a back seat.

The Retail EnvironmentThe foreign retailers who considered India as a gold mine, tilla few years back, have now started rethinking about their plans for entering the market.The ever increasing terrorist activities have added on to the economic slowdown. First ofall, the government regulations on the foreign entry in retail (51 % in single brandretailing and 100 % in cash and carry format) along with the economic slowdowns andterrorist activities has forced most of the companies to reconsider about their plans ofentering Indian retail industry.


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Disorganized supply chain networkAlong with economic slowdown, a disorganizedsupply chain is also standing in the way of organized players to tap the rural markets andexpand their operations. An efficient supply chain network enables the company toreduce the cost as well as manage the demand of its customer. Without an efficientsupply chain, it becomes almost impossible for these companies to provide better product

assortments across the country effectively with minimum cost. Therefore, an underdeveloped supply chain network has also been hindering the scaling of the retailoperations since a long time.

Technology hurdles - .An effective IT system is very crucial for the success of thesupply chain which supports the retailing operations but as compared to the developedcountries, India is incompetent in installing and managing an effective IT systemespecially in the rural areas which has been a trouble for the Indian Retailers since a longtime.

Lack of utilities Most of the metro cities are equipped with all the facilities andrequirements of the modern businesses but the inadequate utilities like transport system,power, telecommunication, water, internet facilities etc. in the other part of the countrieshas also pushed the retailers one step back in sustaining the retail operations in awidespread geographical location. Although relevant steps have been taken over the pastfew years to make these facilities available in all parts of the country but this endeavorneeds an acceleration to match the growth of the zooming industry.

Location planningLocation is considered as one of the most important ingredients for

the success of a retail business. But because of the fluctuating cost of the real estate in thecountry, a higher stamp duty as compared to the other countries and the zoning laws, adilemma has been created over the land use for the commercial purposes. The Retailersare finding it very difficult to first of all select a location which is found to be the mostappropriate for their operations and then to cope up with the fluctuating costs of land andpaying a high stamp duty which adds on to their investment and reduces their margin.

Unproductive human resource The retail industry has been creating a lot ofemployment and a major chunk of the population has been engaged in the retail industry

but looking at the tough working conditions in retail i.e. long working hours, noweekends and festival holidays, it becomes very difficult to hire people who can create abottleneck for the success. In the aura of optimizing the cost, the companies are alsoneglecting the training needs of the newly hired people which is also a major factor forreducing the efficiency of the human resource.


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Traditional and modern retailing: the India story

Traditional retailing continues to be the backbone of the Indian retail industry, withTraditional/unorganized retailing contributing to over 95 per cent of total retail revenues. Thequintessential mom-and-pop retailing outlets or the corner-store formats constitute a major part

of Indian retail store formats. Over 12 million small and medium retail outlets exist in India, thehighest in any country. More than 80 percent of these are run as small family businesses.Prevalence of traditional retailing is highly pronounced in small towns and cities with primarypresence of neighborhood kirana stores, push-cart vendors, melasand mandis. Organizedformats are only in the initial stages of adoption in these regions. Leading retail players in the industryare beginning to explore these markets and the rural consumers are slowly beginning to embracethe newer organized retail formats. Modern/Organized retailing is growing at an aggressive pacein urban India, fuelled by bourgeoning economic activity. Organized retail revenues are expectedto increase from an estimated US$ 12.9 billion per annum in 2005-06 to more than US$ 43billion by 2009-10. The sector is predicted to grow by 400 per cent, in value terms, by 2007-08.A large number of domestic and international players are setting up base and expanding their

business with newer organized retail formats and intense competition driving innovation informats.

Retail sector in India is primarily categorized by the type of products retailed, as opposed to thedifferent retail formats in operation. The Food and Beverages vertical accounts for the largestshare of revenues at 74 per cent of the total retail market. This category has the highest consumerdemand across all income levels and various retail formats. The Indian consumer behavior ofpreferring proximity to retail formats is highly pronounced in this sector, with food, grocery andallied products largely sourced from the local stores or push-cart vendors. Apparels andconsumer durables are the fastest growing verticals in the retail sector. Mobile phone as aproduct category has witnessed the highest growth in consumer demand amongst allretail product offerings, with increasing penetration of telecommunications in towns andvillages. The Telecommunications sector has been adding on an average 5 million new usersevery month. The other product categories are gaining traction predominantly in the urban areasand emerging cities, with increasing average income and spending power of young urban India


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Organized retail in India

Organized retail clocked revenues of US$ 12,927 million, compared to total retail sales estimatedat US$ 311,731million in 2005-06. The apparel industry contributed to the largest share of the

organized retail pie, with revenues of US$ 4,756million, owing to the rapidly rising number ofmalls and introduction of several domestic and international apparel brands in the country. TheFood and Beverages segment recorded the highest growth over 2004-05, with the proliferationsof supermarkets, hypermarkets and the entry of major players like Reliance Fresh (promoted byReliance Retail Ltd). This segment is poised to gain traction, with several new players planningtheir entry and the existing players expanding their business in this segment at a rapid pace. TheHome Decor segment followed suit growing at 18 per cent, with a boom in the real estate andhousing sector. Penetration of organized retail was at 4.15 per cent in 2005-06, an increase fromthe 3 per cent estimated for2004-05, and is projected to increase to 9.52 per cent in2009-10, withrevenues from organized retail expected to touch US$ 43,829 million in 2009-10.Footwearsegment recorded the highest penetration 32.84 per cent, primarily due to the presence of well-

established players like Bata, Liberty and Paragon. These players have been in the market forover three decades, have good brand recall and a well established distribution networkpenetrating both rural and urban areas


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Outlook

Retail sector revenues is pegged to reach US$ 460.6 billion by 2010-11, with the organized retail

sector projected to grow to US$ 43.8 billion in the said year. It is envisaged that modern retailwill adapt and absorb some of the traditional formats in the course of its expansion. Unorganizedretail formats are expected to converge and combine in formats such as mushrooming villagemalls and rural retailing ventures. With the rural retail revenues forming the largest share of totalretail revenues, increasing number of players are in the ray to explore opportunities in the ruralareas. The rural retail revenues are estimated to increase by 60 per cent by2012, with larger shareof increase in demand for consumer and household products .Retail giants are set to embracenewer and innovative formats, by giving modern retail a traditional look in line with consumerneeds and expectations. Pilot test concepts are already being rolled out by players like IndianTobacco Company (ITC) and DCM Shri ram Consolidated Ltd. (DSCL) with their ruralinitiatives of Choupal Saagar and Hariyali Kisan Bazaar, and are exploring options to increase

their customer outreach. Established players like Unilever, Dabur and Godrej have strengthenedtheir distribution channels and are increasing their penetration to leverage the higher consumerdemand in these markets. Reliance Retail Ltd, a wholly owned subsidiary of Reliance IndustriesLtd, is set-to embark on the establishment of 1,600-odd rural retail hubs by 2010, with the aim tomake these hubs the nodal institutions for retailing activity, ushering in a new era of organized-rural retail. With modest store formats being pursued to attract the average rural customer, asopposed to the plush and vibrant formats adopted for the urban retailing, rural retailing is set-toprovide a new dimension to the Indian retail scenario


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Objective of the study


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RESEARCH OBJECTIVES

To study the tastes, preferences, and buying behavior of consumers :-

To analyze buying behavior of customer.

To recommend strategies to retailers to increase sales.

The main objectives of this study are:

SWOT analysis of the Indian retail industry

Comparative study with the competitors


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RESEARCH

METHODOLOGY


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Research comprise defining and redefining problems, formulating hypothesis or suggestedsolutions; collecting, organizing and evaluating data; making deductions and reachingconclusions; and at last carefully testing the conclusions to determine whether they fit theformulating Hypothesis. In short, the search for Knowledge through Objective and Systematicmethod of finding solutions to a problem is Research.

RESEARCH DESIGNTYPE OF RESEARCH:-

Descriptive research Descriptive research includes Surveys and fact-finding enquiries ofdifferent kinds. The main characteristic of this method is that the researcher has no control overthe variables; he can only report what has happened or what is happening.

DATA SOURCES

There are two types of data. Source of primary data for the present study is collected throughquestionnaire and answered by consumers of Nike shoes. The secondary data is collected from

journals, books and through Internet search.

PRIMARY DATA

The data that is collected first hand by someone specifically for the purpose of facilitating thestudy is known as primary data. So in this research the data is collected from respondentsthrough questionnaire.

SECONDARY DATA

For the company information I had used secondary data like brochures, web site of the companyetc.The Method used by me is Survey Method as the research done is Descriptive Research.RESEARCH INSTRUMENTS Selected instrument for Data Collection for Survey isQuestionnaire.

QUESTIONNAIRE DESIGN FORMULATION

Under this method, list of questions pertaining to the survey are prepared for marketing staffof consumers of Nike shoes. Questionnaire has structured type questions as well as unstructuredtype questions.

Structured objective type questions are prepared for the respondents with fixed responsecategories. Some of the questions are of multiple-choice type. The questions have more than onealternative.


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Questionnaire: - A questionnaire consists of a set of questions presented to respondent for theiranswers.

It can be Closed Ended or Open Ended Open Ended.

Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret andTabulate.

Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.


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ANALYSIS OF STUDY


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Advantages in India

Against the backdrop of an accelerating modern retail revolution, India offers to be an attractivedestination for global corporations and leading retailers seeking emerging markets overseas.India presents a significant market, with its young population just beginning to embrace

significant lifestyle changes.

Rapid economic growth

The fast and furious pace of growth of the Indian economy is the driving force for Indianconsumerism; with the Indian consumers confident about their earnings and areSpending a large portion of their high disposable incomes.

Projections by analysts suggest that India has the potential to be labeled the fastest-growingeconomy and outpace the developed economies by 2050. Analysts predict India to sustain anaverage GDP growth rate of 5 per cent till the mid of this century, with India projected tooutpace the other developed economy markets by 2050. The average annual growth rate for

1994-2004was pegged at 6.1 per cent, second only to China. The more recent growth rates ofover 9 per cent posted for India, promise a continued robust growth story. Private consumptionAccounted for 62 per cent of Indias GDP in2004-05, comparable to most of the leadingeconomies around the world


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The young India

Against the backdrop of an ageing world, India possesses the advantage of having alargely young population. 35 percent of Indias population is under 14 years of age and more

than 60 per cent of the population is estimated to constitute the working age group (15-60) till2050. Two-thirds of Indian population is under 35, with the median age of 23 years, as opposedto the world median age of 33. India is home to 20per cent of the global population under 25years of age. This trend is projected to continue for the next decade, with the share set to reachits maximum in 2010. The large proportion of the working-age population translates toa lucrativeconsumer base vis--vis other economies of the world, placing India on the radar as one of themost promising retail destinations of the world


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Potential Untapped MARKET

India ranks first, ahead of Russia, in terms of emerging market potential and is deemedPriority 1 market for international retail. Organized retail penetration is on the rise andovers an attractive proposition for entry of new players as well as scope for expansion

for existing players

India is home to a large base of consumers with annual incomes ranging from US$ 1,000 US$4,700, comprising of over 75 million households. A steadily rising percentage of rich and superrich population and impressive disposable incomes offers a spectrum of opportunities, spanningfrom rural retailing to luxury retailing. The impressive retail space availability and growing trendof consumerism in the emerging cities and small towns add to the market attractiveness.Pantaloon Retail India Limited, one ofIndias retail giants captures a mere 0.3 per cent of totalmarket; compared to Tesco Plc, which captures 14.3per cent ofEnglands market and Wal-Martwhich captures 20 per cent ofUSAs market; giving an insight into the large untapped marketpotential

Abundant availability of skilled labor

India has a vast resource base of talent and skilled labour.over 37,000,000 students were enrolledin about 150,000pre-college institutes and over 11,700,000 in 14,000 higher educationinstitutions in 2005-06 .with English being the language for business in India, the language skillsof the Indian workforce score higher than that of emerging economies. Retail management is asought after education stream amongst students, with over15 premier institutes offeringspecialized courses in retail management.


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Post graduate institutes offering specifies courses in retail management

Birla institute of management technology, New Delhi Ebony retail academy, New Delhi

Foreign trade development centre centre for retail management, Delhi & Jaipur Global retail school, multiple centers across India Indian school of business, Hyderabad Indian institute of jewelry, Mumbai Indian institute of retail, New Delhi Indian retail school, New Delhi Institute of management studies, Mumbai Institute of technology and management, Mumbai International institute of retail management, New Delhi K j Somalia institute of management studies & research, Mumbai Mudra institute of communications, Ahmadabad

National institute of fashion technology (nift), New Delhi

Low cost of operations

The most attractive component of Indias value proposition is its cost attractiveness. Existingplayers are increasingly turning to Tier II and Tier III cities for retail establishments and formanpower sourcing. These cities offer significant cost advantage in the form of availability oflow-cost skilled human resources. With well-educated small town graduates turning to the urbancities for employment, these graduates are ideal candidates for sales and marketing executiveroles in modern organized retail format


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Policy and Regulatory Environment

The Government is progressively undertaking reforms and liberalizing the retail sector; therebyattracting significant foreign investments. The regulatory and supervisory policies are being

reshaped and reoriented to meet the new challenges and opportunities in this sector. To facilitateeasier flow of Foreign Direct Investments(FDI) inflow, instead of having to seek ForeignInvestment Promotion Board (FIPB) approval, FDI up to 100 per cents allowed under theautomatic route for cash and carry wholesale trading and export trading.FDI up to 51 per cent isallowed, with prior Government approval for retail trade in Single Brand products with theobjective of attracting investment, technology and global best practices and catering tothe demand for such branded goods in India. This implies that foreign companies can now sellgoods sold globally under a single brand, such as inthe case of Reebok, Nokia and Adidas.However, retailing of multiple brands, even if the goods are produced by the same manufacturer,is presently not allowed. Relaxation of FDI restrictions are being vigorously pursued by thebusiness and trade coalitions and are expected to fall in place over the next 3-5 years.

The most common channels for entry of foreign retailers are the strategic license agreements,franchising, distribution, manufacturing, joint ventures and cash and carry wholesale trading

Strategic license agreements

This route involves the foreign company entering into licensing agreement with adomestic retailer or partnering with Indian promoter owned companies in the MiddleEast(UAE) or South East Asian countries (Singapore, Malaysia, Thailand, Indonesia).

F r a n c h i s i n g

This is a widely taken entry route, with many international brands setting up shop via thisprovision. The franchising routes operable in India are:

Unit franchisee: Franchisee is granted rights to operate a single business unit

Multiple franchisees: Individual unit franchises are given to multiple outlets, a route primarilyused by domestic brands

Master franchisee: Rights are granted for an entire territory to the master franchisee and themaster franchisee can in turn grant unit and multiple franchisees in that territory

Regional franchisee: This route is similar to that of the master franchisee, but applicable on alarger scale the master and regional franchisee routes are the most preferred and the oft-adoptedroutes of entry into India by the international retailers.


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Cash-and-carry wholesale trading

100 per cent FDI is allowed in wholesale trading which involves building a large distributioninfrastructure to assistlocal retailers and manufacturers.

JOINT ventures

International forms can enter into agreements with domestic players, and set up base in India.The share of the multinational is restricted to 49 per cent in this route.

Manufacturing

International retailers can set-up manufacturing units for their products in India. Entry throughthis route entails the company the rights to retail the products in India through individual

retailing outlets.

DistributionAn international company can set up distribution offices in India and supply products to the localretailers. Franchisee outlets can also be set up in this route. The labor laws in India are under thescanner for higher liberalization, with the Government permitting exibilities in the rules inemerging retail hubs like Bangalore and Hyderabad. Instituted laws like restriction on workinghours, mandatory closure of the store once a week are being modified to suit the modern retailingdemands and necessities, without adversely impacting the labour benefits. Efforts are also beingundertaken by the Government to remove impediments being posed by licensing and clearancemechanisms in India; with the aim of introducing single-window clearance mechanism. Thiswould reducethe entry and establishment timelines for new players in the market and facilitates


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easy procedures in issuance of necessary approvals. The Government is expected to take acalibrated approach in land and rent reforms to improve the real-estate regulatory environmentand facilitate easy access to retail space for international investors. The Government is releasinglarge tracts of unused land for retail development in the Mumbai and NCR regions. This is soonto be followed by other state governments, with the Governments benefiting from the access to

impressive revenues from land.

Sales and tax collection from retail developments. Solutions to problems related to the leaserentals and pro-tenancy laws, which significantly deter international investors, are being pursuedby the Government, with initiatives like Special Economic Zones (SEZs), allotment ofGovernment controlled land etc.Value Added Tax (VAT) has been introduced and implementedin most states and territories, and many industry verticals to resolve the multiple taxation issueand maintain uniform prices across regions. The Agricultural Produce Marketing CommitteeAct(APMC), which curtails direct sourcing of agriculture produce (grocery, food grains) isproposed to be amended soon, with a Draft Model Act being legislated by the government. Thenew act promotes direct marketing to corporate investors, setting up of farmers/consumers

market and contract farming. Contract farming is already being pursued in certain states withplayers like Reliance and Pepsi Co. forging alliances with local farmers for direct procurement ofraw materials. The Government is encouraging the contract farming practice, as it benefits boththe farmers and the corporate retailers, with the former gaining access to better prices and thelatter to a steady supply source. The Government is currently considering modernizing anddeveloping eight strategically located Mandis with cold storage, sorting and grading facilitiesmade available as a part of the infrastructure services.


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Key Trends and Drivers

Maturing metros

National Capital Region (Ncr)

NCR comprises of National Capital Territory (NCT), Faridabad and Gurgaon of Haryana andNoida and Ghaziabad of Uttar Pradesh. NCR contributed to US$ 16,342 million of retailrevenues in 2005-06, and is projected to open doors to markets worth US$ 19,522 million by2010-11. Delhi, the fashion capital of India and home to the highest number of rich and super-rich households, contributes US$ 12,683million to the retail revenues. The total number ofhouseholds in Delhi stood at2.8 million in 2005-06, with more than 7,000 households belongingto the rich and super-rich category, with incomes higher than US$ 243,902 per annum. This isthe highest for any city across the country.

Mumbai

A potpourri of consumers, this city contributes to US$ 10,195million of total retail revenue. Thehub of Indian cinema and home to diverse income categories; the middle class and therich account for 47 per cent and 30 per cent of retail revenues of the city. Each category ofpopulation has a significant share in the retail pie, with the city offering opportunities for aspectrum of retail formats, from value segment to the lifestyle segment. Mumbai is home to alarge percentage of the rich and super-rich households, with businessmen, politicians andbollywood personalities, having their base in the city. This city is projected to offer a retailpotential of US$ 14,927 million by 2010-11. The regions of NCR and Mumbai dominate theorganisedretail scenario in India. The combined contribution of these metros is estimated toreach 40 per cent by 2007-08. These cities which are also referred to as the Maturing Metros, have beenprojected to achieve worlds 2nd and 3rd largest city status by 2015 and have the highest numberof malls and modern retail format stores in operation and many more in the pipeline. Most pan-India retailers have multiple retail outlets present in these cities. These cities also act as launchpads for the new entrants. Lastly, these maturing metros are the hub of the luxury-retailing inIndia.

Metros on the growth Path

Metros of Bangalore, Hyderabad, Chennai and Kolkata are growing at an exceptional rate, withthe retail buzz in these cities becoming more pronounced by the day. These cities contributed toUS$ 15,511 million worth retail revenues in 2005-06, projected to touch US$ 25,610 million by2010-11.With the growth in the IT/its sector and other sunrise sectors like biotechnology,hospitality etc. Concentrated in these cities, the metros have experienced exponential growthover the past few years, and are expected to demonstrate robust economic performance in thecoming years. Bangalore and Hyderabad have low penetration of underprivileged households,with the consuming middleclass forming the largest share of population. Luxury retailing has


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found entry and tremendous response in these markets, with increasing number of rich andsuperrich households in these cities. The middle class households contribute to almost half theretail activity in these metros, with lifestyle formats beginning to mushroom. These cities areexpected to witness a radical transition in the migration of households belonging to the lowerincome strata to the higher income category, owing to the success of the technology sector and

other sunrise sectors such as biotechnology and hospitality industries. These cities haveconsiderable latent demand for branded products and offer suitable opportunities for a variety ofretail offerings. Most of the retail sector giants have a footprint in these cities, with aggressivefuture plans for expansion.

Metros-in-the-making

The emerging cities of Ahmadabad, Pune, Kanpur, Nagpur, Surat, Ludhiana, Coimbatore,Chandigarh, Lucknow, Kochi,Jaipur, , Indore, Vijayawada, Trivandrum, Bhopal, Nasik andMadurai contribute to US$ 15,619 million worth total retail activity. Organized retail penetrationis lower than in any of the metros, with traditional retail ruling the market across these

geographies. These cities are less saturated than the metros, but have greater spending power.Middle class and lower middleclass form majority of the households, with more than half thepopulation falling in this category. The combined retail potential of these cities is expected toincrease toUS$ 23,563 million. Underprivileged population is expected to decrease by more than30 per cent in cities of Pune and Ahmadabad by 2010-11, with the other smaller cities alsofollowing a similar trend. Pune and Ahmadabad are the fastest growing cities with thrivingindustry activity. Investors from the IT/ITeS sector and the other emerging sectors are eyeingthese cities for expansion. These two cities contributed to US$ 3,854 million worth retailrevenues in 2005-06, projected to increase to US$ 5,976 million by 2010-11. Pune has witnessedan explosive increase in the mall space availability in the recent years, with the organized retailpenetration substantially increasing. The cities, along with the other potential cities as listedbelow, are set to take centre stage as the future retailing hotspots, with significant improvementin their infrastructure and purchasing power.


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The Malls Phenomenon

From the setting up ofIndias first mall in 1999, there has-been a steady proliferation of malls, atrend specially pronounced in the urban cities. Total number of malls was estimated at 200 for2005-06, projected to increase to 600by 2010-11.

With increasing number of malls, there is increasing retailing space availability for players, withmalls further providing incentives like lower rentals for anchor tenants and greater consumerexposure. The activity in the retail sector is further being supported by the allowance of FDI inreal estate by the Government

The total mall space across seven cities (NCR, Mumbai, Bangalore, Kolkata Hyderabad, Puneand Chennai), was spread over 40 million square feet in 2006-07. Mall spaceis projected toincrease to over 60 million square feet in2007-08


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With impressive ratio of transactions to customer footfalls ratio (conversion ratio) across malls,the market trend promises a positive outlook for the future. Mall development activity is beingpursued aggressively across all the metros and the high-growth cities, with significantinvestments in the pipeline. The evolving cosmopolitan population with rising aspirations andgrowing incomes across the country is the driving force increasing domestic and international

investments.

Changing Face OF Indian Consumerism

Favorable demographics, combined with increasing disposable incomes, are progressivelychanging the face of Indian consumerism. With the economy opening new vistas of employmentand with employers offering attractive compensation packages and perks, the pool ofIndian skilled professionals are boasting of higher disposable incomes. From frugal spendingto frenzied shopping, Indias swelling middle class is redefining lifestyle patterns with adoption

of western values and growing brand consciousness. The average household disposable incomehas doubled since1985, with analysts predicting a similar trend for the next two decades. Thethriving services sector growth has handed young India a bulging wallet and a penchant forluxury products. The new found freedom to shop at plush malls and stores for expensive gadgetslike mobile phones and laptops has fuelled the growth of organized retail in India. The Indianconsumer is gradually moving from the local kirana shopping to Mall Hopping. With a number ofdomestic and international brands available in stores in metros and smaller cities and with a widerange of product offerings from food and grocery to furniture and fixtures, the Indian consumeris fast embracing modern retail

With the countrys income pyramid changing dramatically, there has been a definite shift fromthe saving tendency to the spending attitude. Increased consumer exposure to the latesttrends and brands driven by the mass media is contributing to the soaring retail revenues. Therehas been a marked increase in the number of new entrants in the retail sector with playerrevenues increasing across all the retail segments.Higher disposable incomes

Disposable incomes are on the rise with the economy providing new avenues of employment inIT/its and other sunrise sectors like biotechnology. The increase of per capita income has beenmore pronounced in the metros and the emerging cities, with a progressive growth in thestandard ofliving with employers offering attractive compensation packages and perquisites tothe pool of skilled Indian professionals.


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Delhi, the seat of Indian Government and the centre of thriving economic activity has thehighest per capita income, mirroring the higher standard of living.

Urban Indias disposable incomes are ricocheting with favorable and conducive economy andemployment trends

Increasing urbanization

Indias urban population is estimated at 286 million, constituting 27.8 per cent of the totalpopulation of 1,029million as on 2001. The urban population is projected to increase to 468million, constituting 33.4 per cent of the total projected population of 1,400 million by 2010.With over 34 cities having a population of over 1 million, this number is projected to growrapidly. Urban population has grown over five times over the past five decades, with Indiasurban population being second largest in the world, in numerical terms, next only to China

Delhi is the most urbanized city in India, with about 93per cent of the population concentrated inurban areas. Class I cities (cities with population greater than 1, 00,000) have an averageconcentration of 73.7 per cent urban population, with the share increasing rapidly. An increase inthe number of young employed executives and the increasing population of workingwomen isstimulating growth of modern retailing in urban areas.


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Easy Availability OF Credit

Higher penetration and availability of credit facilities and increasing credit card and debit card

subscriptions have further fuelled the growth of retail sector. Most of the banks and financialinstitutions have increased their range and amount of retail credit and loans service offering theaverage exposure of banks to retail loans was at 25.5 percent of total loans in 2005-06

increased subscription of credit cards in the last 3-4 years indicates a definitive change in theconsumer habits of the Indian population. The number of credit cards issued was at 16.6 millionin 2005-06, growing at a compound annual growth rate of 28 per cent in the last 6 years. Thenumber of debit cards have increased manifold and touched 53.7million by 2005-06. Thegrowing acceptance of plastic money across small and medium sized stores and retail outlets hasstimulated the rapid growth in issuance of credit cards


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Increasing investment activity

International retail giants are increasingly choosing India as the target market, with most of theglobal retail power-houses exploring entry options into the countrys retail market

Wal-Mart has entered into a 50:50 Joint Venture and Franchisee agreement with Bharti RetailLtd. and plans to set up its first cash-n-carry outlet by 2007-08. It is anticipated that theStarbucks Pepsi Co. joint venture would provide Indian market access to the worlds largestcoffee chain. Carrefour, Frances retail major is set to analyze its entry route to Indian retailsector

Increasing technology adoption

With modern retail store formats growing players are increasingly deploying advancedInformation Technology tools for managing their supply chain, warehousing and logisticsrequirements. Retail sector constituted 8 per cent of the IT export revenues in 2005-06. Apartfrom the industry giants, the small scale retailers are also embracing IT solutions to optimisetheir operational efficiencies. Big league IT forms like IBM India, Oracle and SAP aredeveloping solutions for smaller retailers requirements


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Key players

Pantaloon retail (India) limited

Pantaloon Retail, a Future Group venture started its operations with Pantaloon Shoppe in 1993and has since emerged the retailing giant of India with over 5 million square feet of retail spacespread over 450 stores across40 cities in India. Pantaloon Retail operates in over twenty diversestore formats, with a spectrum of offerings ranging from food and grocery to carpentry services.It operates some of the immensely popular retail outlets of India, including the Central chain ofmalls, Big Bazaar and Brand Factory. The aggressive expansion rate, combined with the aim of

capturing both the value segment and the lifestyle segment of the market has resulted inPantaloons capturing large part of the organized retail pie. The company clocked revenues worthUS$ 869 million in 2006-07, an 84 per cent increase over 2005-06. The operating income stoodat US$ 43.9 million, 5 per cent of total revenues. It employed over 13,000 people in 2005-06 inits various retail activities. The attrition rate stood at 8.36 per cent as against a sector average of20-25 per cent, attracting and


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retaining skilled workforce through various management and academic initiatives. The companyoffers post-graduate programme in Retail Management in association with premier institutesacross the country

The unique selling proposition of Pantaloon Retail is the dual approach to tap both the Valuesegment and Lifestyle and Luxury segment consumers, by establishing retail formats in eachsegment like Big Bazaar, Fashion Station etc. aimed at value retailing while Central, Pantaloonscaptures the lifestyle segment consumer.

Shoppers STOP limited

Shoppers Stop, established in 1991 with its flagship store-Shoppers Stop by the K. RahejaGroup, has now expanded to over 100 retail outlets spread across 1.1 million square feet of built-up area, spanning a spectrum of retailing verticals and formats. The group offers formats in thelifestyle and luxury segment, with the growing affluent middle class population as their target

consumer base. The company clocked revenues of US$ 202 million in 2006-07, a 30 per centincrease from revenues of US$ 155 million in 2005-06. The operating income stood at US $ 16.7million for 2006-07, 8 per cent of total revenues. Private labels account for more than 21 per centof their retail revenues, with Shoppers Stop clocking impressive total number of transactions tocustomer footfalls ratio (conversion ratio) of 27 per cent. The form employed 3,157customercare associates in 2006-07


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Strategic partnerships with international retailing players like Mother care Plc of Britain andLeisure & Allied Industries of Australia, are aiding Shoppers Stop in catering to the nichemarkets. Aggressive expansion plans are being developed for formats like Time zone, a leisureand entertainment format venture and Brio the coffee bar located strategically in their Crosswordbookstores. The Company signed the Memorandum of Understanding and Shareholders

Agreement with the Nuance Group AG of Switzerland. The50:50 joint venture has beenincorporated as the Nuance Group (India) Pvt. Ltd. for undertaking the operation andmanagement of retail shops & food and beverage outlets in the duty free zones of Indian airports.Shoppers Stop and Hyper city Retail (India) Ltd. have jointly entered into an agreement withHome Retail Group Plc, United Kingdom, to develop the format of catalogue retailing in Indiaunder an exclusive franchise. The form has forayed into the entertainment industry by acquiring45 percent stake in Time zone Entertainment Private Ltd. which has 5 outlets spread across35,606 square feet at Mumbai,Ahmedabad, Kolkata and Hyderabad

Other key players

Tata Trent Ltd.

Established retail in 1996 Revenues: US$ 182 million Retail sector activity: Food & grocery, Beauty products, Specialty- music Current store formats: Convenience stores, supermarkets, hypermarkets Current outlets: 279 outlets Future plan: by 2009 set-up 2000 stores in India Principal fascia: Spencers, Music World

Landmark group

Present in India since 1999Retail sector activity: Apparel, Home dcor & Furnishing Current store formats: Departmentstores, Hypermarkets Current outlets: Lifestyle-10 outlets, Max Retail-4 outlets Future plan: Presence in mini metros and Tier-II cities


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Principal fascia: Lifestyle, Home Centre, Max Retail

KEY OPPORTUNITY

Opportunities across Geographies

Maturing Metros

Delhi and Mumbai offer an attractive market for luxury and lifestyle retailing with these citiesbeing home to the highest number of households belonging to the affluent category(with incomegreater than US$ 24,000 per annum). Retail revenues contributed by the affluent categoryaccounted for over 30 per cent of total revenues in 2005-06. The number of affluent householdsis expected to double by2010-11, projected to trigger high growth in the luxury retailingsegment. The luxury-retail segment is presently concentrated in the five-star hotels and is slowly

drifting into the specialty malls and one-stop outlets. With the steady rise predicted in thepercentage of middle class households and their adorability, the scope for the neighborhoodmalls and hypermarkets will be pronounced in the residential suburbs. However, the lack ofspace and the strict bringing down of law on illegal constructions will reinforce the migrationtowards organized retailing.

Metros on the growth lane

The growing disposable incomes, the consuming class and the increasing standard of livingacross these cities translate to opportunities across all the retailing formats and verticals. Themushrooming lifestyle formats in these cities is stimulated by the increasing exposure of

consumer base to international brands and willingness to spend for quality. These cities mostoften also serve as the test beds for any innovative store formats.

Metros-in-the-makingMany metro retailers are expected to open outlets in these cities to benefit from the First-Mover advantage, and gain a foothold in these cities. These cities provide ample opportunities,especially for the food and grocery formats, with lower lease rentals and high availability ofretail space, access to farms and agricultural produce. Consuming class accounts for over 60 percent of the total households, offering potential in the food and grocery, consumer goods andapparel verticals.


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The FIRST-mover advantage

More than 72 per cent ofIndias population resides in small towns and rural areas withAgri-produce retailing forming the largest share of total retail pie in these regions, offeringimmense potential for the food and grocery vertical with customer preference tuned towards

value retailing. Players like Reliance Retail, Aditya Birla Nuvo Groups Trinethra Supermarketetc. have aggressive plans to tap opportunities in these emerging cities in suitable formats.Players who have already established their presence in the top metros of the nation are alreadyplanning their establishments in these emerging cities and regions to gainthe first-mover advantage over other entrants.

Innovative Formats

Formats like Wedding Malls, which are unheard of in the far west are found to be verysuccessful in the Indian market. The Wedding Malls for instance, stock the complete range ofwedding product offerings from apparel to jewellery. The retail industry players are successfully

blending knowledge from the experiences of the global retail industry with the uniquerequirements and preferences of the Indian consumer. Such customization to the latent needsof the Indian consumer has brought about a great deal of innovation in the product offerings aswell the retail formats in which they are being sold. Khadi & Village Industries Commission isset to roll out a string of swanky Khadi Plazas, which would showcase the traditionalhandloom textiles in a completely new form. Over 7,000 existing outlets are to be beefed up tocater tothe changing tastes of the young Indian consumer and thereby provide a boost to thepresently stagnant sales of the khadi textiles. The latest addition to the list of diverse retailformats are the Village Malls, with the air price shops being revamped to cater to largerneeds of local populations. The Government of Gujarat has spearheaded one such initiative with512 Villagemalls launched in the state with further plans for 508 such malls.

Emergence OF India AS The Retail sourcing Hub

Riding on the back of a strong manufacturing industry, India is fast emerging as an importantglobal sourcing hub for top international brands India has had a continued presence in the globalscenario as one of the leading exporters of apparels and textiles. The expiry of the Multi FiberArrangement has further widened the global markets for apparel. Many international brands haveidentified India as one of the important supply centre for procurement of textiles andapparels.Wal-Marts sourcing operations was estimated at US$ 1billion, Tescos around

US$ 100 million and Marks & Spencer around US$ 145 million from India for the year 2005-06.Unilever sources major portion of their fast moving consumer goods from its wholly ownedIndian subsidiary, Hindustan Unilever Limited. Adidas, Next and Calvin Klein are expected tofollow suit, with Adidas opening its first office in Bangalore.


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Online retailing

The Click-to-buy phenomenon is fast catching up in India, with increase in numberof broadband and dial-up internet connections, limited personal time for shopping, increased use

of plastic money and large base of young population that spends a considerable time online. Thestated factors are facilitating rapid growth of online shopping with the industry players scaling upto meet the consumer requirements. Most retailers are developing and maintaining their ownonline sale portals for easy consumer access, facilitating online purchase of merchandise. TataIndicoms i-choose.in and G&Bs godrejlifespace.com are good examples of this trend. Playerslike Rediff.com, eBay. In, Indiatimes.com were some of the early entrants in the Indian onlineretail space, clocking impressive revenues through online transactions. Some of the more recentplayers to enter this niche market include Pantaloons Retail India Ltd., throughitsFuturebazaar.com venture. Many smaller retail portals are also thriving on the internet,meeting the niche Indian consumer requirements such as ethnic apparel, handicrafts andjewellery. Demand for these portals, which has been primarily driven by then on-resident

Indians, is gaining popularity on the Indian soil as well, with the young urban Indian consumersincreasing exposure to the virtual world of internet. With value-added services like cash-on-delivery to facilitate online transactions by consumers without credit/debit card, unique biddingschemes etc, e-commerce is fast gaining acceptance in India

Rural Retailing

Rural retailing constitutes more than 95 per cent of total retail revenues, with more than 70 percent of Indias population concentrated in the rural areas. Rural hypermarkets are growing at ablistering pace meeting the unique requirements of the rural consumer. The range of servicesprovided by the rural retailers extends from creating a platform to buy and sell farm produce, tobanking services, to restaurants etc.One of the key players in the rural retail segment is ITC withits Choupal Saagar initiative. ITC has 14 outlets in operation presently and plans to increase thenumber to700 over the next 7-10 years. ITCs Choupal Saagar retails products and also acts as aprocurement hub for ITCse-choupals where farmers are offered better rates for their agricultureproduce, compared with the prevalent market rates for the same. Other examples of players andtheir services in the rural retail segment are DSCLs Hariyali Kisan Bazaar and Indian OilCorporations Kisan Seva Kendra.DSCLs Hariyali Kisan Bazaar has over 70 outlets presentlyand the company proposes to operate a total of 200 outlets over the next 12 months. The outletsprovide a spectrum of offerings including agronomist-consultations, agri-inputs, and financialservices, apart from the conventional retailing services .Indian Oil Corporations Kisan SevaKendra offering extend over fuel, agri-produce, fast moving consumer goods and other valueadded services. The company has a network of over 1400 outlets presently. Reliance Retail andPantaloon Retail India Ltd. are expected to undertake more ventures to capture the vast untappedpotential in the rural retail segment.


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The Resplendent Luxury MARKET

Affluent households in India account for just about 4.5per cent of the national population.However, the affluent households segment contributes to more than 22 per cent of the total retailsales, translating to US$ 62,340 million of retail revenues. The number of affluent households isestimated to increase by 8.5 per cent by 2010-11. The contribution of affluent households toretail revenues is also estimated to increase to 33 per cent by the said year. Thereby in 2010-11,

affluent households are expected to generate retail revenues worth US$ 152,000 million. Theluxury retail segment is hence a substantial opportunity for retail industry players. Manyinternational investors are actively pursuing an entry route into India for opportunities in theluxury segment. Delhi and Mumbai are the prime contributors to the luxury retail revenues andhave the highest density of luxury brand outlets in the country. However, currently the locationof these outlets is primarily limited to five-star hotel mall spaces, with limited footfalls andconsumer exposure. Industry players have aggressive expansion plans in the pipeline, withinvestor confidence reinforced by the booming sales in the luxury segment. The two Louis


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Vuitton stores in Mumbai and Delhi averaged monthly sales of US$13 million in 2005-06. HugoBoss is expanding to other metros in the country, encouraged by 30 per cent increase in its Indiasales in the past year.

International luxury retailing brands in India

BVLGARI UBL GUCCI Cerruti Swarovski Omega Mont Blanc Hugo Boss

Vacheron Constantin

SA Dior Vertu harman kardon Florsheim John Balliano Versace Rado Louis Vuitton Dolce & Gabbana Denon Do Daks Donna Karan


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RESULT OF SURVEY ON CRM IN RETAIL MANAGEMENT

(BIG BAZAAR)

CUSTOMER SURVEY

1. Are you satisfied with the services provided by Big-Bazaar?

YES NO CANT SAY

Result:

5520

0

5

10

15

20

25

YES NO CAN'T SAY

Series1


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From the above table it is clear that customers are satisfied with the services of Big Bazaar

because out of 30 customers 20 has given the positive answer in favor of Big Bazaar.

2. How do you find the Shopper Assistants behavior?

HELPING NOT HELPING RUDE

02468

101214161820

Series1

18 7 5


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Result:

From the above table it is clear that customer are satisfied with the attitude of the shoppers .Out of 30

customer all 18 customer are satisfied.

3. How would you rate the Shopper Assistants behavioron the scale of five?

5 4 3 3 2 2 1 1

10 14 05 1 00


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Result:

Out of 30 customer,11customer have given the 5 marks

to shopper . Assistant behavior while 14 has given 4 marks&5 has given 3 marks

0 5 10 15 20

1

2

3

4

5

Series1

Series2


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4. Do you find the Layout of Food-Bazaar helpful in Shopping Experience?

YES NO CANT SAY

20

8

2

0 10 20 30

yes

no

can't say

Series1

20 8 2


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Result:

Out of 30 customers ,18 have told that they like the layout of Big Bazaar while 8 told that they do not

like very much.

5. What do you like most about Big-Bazaar ?

CREDIT FACILITY TRANSPORTATION FACILITY

DELIVERY SERVICES

7 5

18


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Result:

Out of 30 Customer, 18 customers like delivery services of Big Bazaar while 7

customers like the credit facility&5 customers like transportation facilities. So it is

clear that customer wants delivery services most.

75

18

0

5

10

15

20

Cr.Facility Tr.Facility Dl.facility

Series1


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6. How often do Big-Bazaar services exceed your expectations? (Customer

Delightness)

ALWAYS SOMETIMES NEVER

Result:

18

930

5

10

15

20

Series1

18 9

3


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Out of 30 Customers ,18 customers said that Big Bazaar always provide better

services &it exceed their expectation.

7. Do you think that Big-Bazaar follow the ethical Mktg. Practices like right

pricing, right quality and right quantity?

YES NO CANT SAY

25

500

5

10

15

20

25

30

Yes No Can'tsay

Series1

25 5 0


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Result:

Out of 30 customer,25 customers have told that BigBazaar following the ethical

marketing practices.

8. What comes first when you think about FoodBazaar?

PRICE QUALITY2010


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Result:

PRICE67%

QUALITY33%


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Customer said that when they think about Big Bazaar they think about price. out

of 30 customer 20 customer have told this while 10 customer said that they think

about quality.

9. How would you rate themesetting display of Food-Bazaar in comparison to

other?

EXCELLENT GOOD SO-SO BAD

WORST

9

18

30 0

0

5

10

15

20

9 18 3

0

0


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Result:

Out of 30 customers, 9 customers said that Food Bazaar theme is excellent while

18 customers said that it is good &3 customers said that it is ok.

RETAILOR SURVEY

10. What is the most important criteria of selection for their Store Assistant and

Store Manager?

1 5 4


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Pleasing Personality Good Communication Team Work

Commitment toward Customer needs

Result:

Out of 20 retailers,10 has given importance to the store manager who have the

quality of identifying customer need, while others have given importance on work

& good communication skills.

0

0

0

0

1

5

4

10

0 5 10 15

1

2

3

4

5

6

7

8

9

10


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11. Do you display all the entire stock on the rack or some amount is kept for contingence? (Inventory

availability)

Applicable to all product Applicable to some product

Only to FMCG

8

14 4

2


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Result:

Out of 20 retailer ,14 have told that they show all the product to customer, while

4 have told that show some product to the customer.

0

0

0

14

4

2

1

2

3

4

5

6

7


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12. How do you decide ofpoint of purchase counter?

Brand Price Customer preference Product visibility

0

0

0

0

2

2

12

4

0 5 10 15

1

2

3

4

5

6

2 2 12 4


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Result :

Out of 20 Retailer, 12 has said they use the customer preference for point of

purchase counter while other said that they use brand &product visibility.

13.What is the preference order for promotional activity to create customer awareness?

Newspaper Radio jingle Advertising Banner

0

2

4

6

8

10

12

10 5 1 4


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Result :

Out of 20 retailer ,10 has told that they use Newspaper as their main tool for

promotional .

14. How would you analyse the customer satisfaction?

Number of repeat purchase Loyalties benefit Customer database7 3 10


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Result :

20 Out of Retailer,10 retailer said that they get the customer satisfaction bycustomer database while other have said that they use data of number of repeat

purchase.

0

0

0

7

3

10

0 5 10 15

1

2

3

4

5

6


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15. What is your method of analyzing customer satisfaction?

Feedback No. of repeat purchase interaction of manager

With customer

12 5 3

0 5 10 15

1

2

3

4

5

6

7


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Result :

Out of 20retailer, 12 have told that analyzing the customer satisfaction through

the feedback of customer.

MODERN RETAIL- SWOT ANALYSIS


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SWOT analysis is a tool for analyzing modern retailing. In this analysis, a study can bemade regarding thestrength, weaknesses, opportunities and threats of retail industry.

STRENGTH OF MODERN RETAIL

The benefits of larger organized retail segments are several. The consumers get a better product atcheaper price. So consumers get value for their money.

Employment opportunities both direct and indirect have been increased. Farmers getbetter prices for their products though improvement of value added food chain

A large young working population with median age of 24 years, nuclear families in urban areas, alongwith increasing working women population and emerging opportunities in the service sector are goingto be the key growth drivers of the organized retail sector in India.

It has also contributed to large scale investments in the real estate sector with major national and globalplayers investing in devolving the infrastructure and construction of the retailing business.

The trends that are driving the growth of the retail sector in India are low share of organized retailingand falling real estate prices.

Increase in disposable income and customer aspirations are important factors.

Increase in expenditure for luxury items is also vital.

The governments of states like Delhi and National Capital Region (NCR) are very upbeat aboutpermitting the use of land for commercial development thus increase the availability of land for retailspace.

The growth of sachet revolution emerges for reaching to the bottom of the pyramid.

The annual growth of departmental stores is estimated at 24%.

The size of Indian organized retail industry reached at Rs.1,30,000 crore in 2006.


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Ranked second in Global Retail Development Index of 30 developing countries drawn upby AT Kearney.

WEAKNESS OF MODERN RETAIL

The rapid development of retail sector is the sharp improvement in the availability of retail space. Butthe current rally in property prices, retail real estate rentals have increased remarkably, which mayrender a few retailing business houses unavailable.

Retail companies have to pay high rentals which are blockage in the turn of profits. Small size outletsare also one of the weaknesses in the Indian retailing. 96% of the outlets are lesser than 500 sq.ft.

The retail chains are also smaller than those in the developed countries for instance, the superstorefood chain, food world is having only 52outlets where as Carrefour promotes has 8800 stores in 26

countries. The volume of sales in Indian retailing is also very low.

India has largest population in the world and a fast growing economy

OPPORTUNITIES OF MODERN RETAIL

Global retail giants take India as key market .It is rated fifth most attractive retail market.The organized retail sector is expected to grow stronger than GDP growth in the next fiveyears driven by changing lifestyles, increase in income and favorable demographicoutline. Food and apparel retailing are key drivers of growth.

Rural retailing is still unexploited Indian market.

It can become one of the largest industries in terms of numbers of employees andestablishments.

Indian retail industry has come forth as one of the most dynamic and fast pacedindustry

with several players entering the market.

THREATS OF MODERN RETAIL


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One of the greatest barriers to the growth of modern retail formats are the supply chainmanagement issues. No major changes are needed in the supply chain for FMCGproducts; these are well developed and efficient. For perishables, the system is toocomplex. Government regulations, lack of adequate infrastructure and inadequate

investment are the possible bottlenecks for retail companies. The supply chain for staplesis less complicated than the net groceries. But staples have a unique problem of non-standardization.

Organized retailing in India is yet to get an industry status.100% Foreign DirectInvestment (FDI) is not permitted in retailing in India. Ownership of retail chain isallowed only to the extent of 49% but without FDI, the sector is deprived of access toforeign technologies and faster growth.

Lack of uniform tax system for organized retailing is also one of the obstacles.Inadequateinfrastructure is likely to be an obstacle in the growth of organizedretails.

The unorganized sector has dominance over the organized sector in India becauseof lowinvestment needs.

Labor rules and regulation are also not followed in the organized retails. Thesector isunable to employ retail staff on contract basis.

Problem of car parking in urban areas is serious concern.

Difficult to target all segments of society.


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Conclusion


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What, how and in this report we have analyzed in detail the retail industry in India. We hadinitially started with the evolution of the retail sector in India, and then moved onto its size,distribution and the growth of the retail sector. We have also covered issues like the Foreign

Direct Investment in the retail sector, the untapped opportunities that exist in the retail industryin India. We have also discussed about the bottlenecks that the retail industry is facing in India,online retailing in India and the role of Information Technology in the retail sector in India.

In this section we have coined down the major findings of our research.

1. The Retail Sector in India can be split up into two, the organised and the unorganized.The organized sector whose size is expected to triple by 2010 can be further split up intodepartmental stores, supermarkets, shopping malls etc.

2. In terms of value the size of the retail sector in India is $300 billion. The organised sectorcontributes about 4.6% to the total trade.

3. The retail sector in India contributes 10% to the Gross Domestic Product and 8% totheemploymentof the country.

4. In terms of growth the FMCG retail sector is the fastest growing unit and the retailrelating to household care, confectionery etc, have lagged behind.

5. The foreign retail giants were initially restricted from making investments in India. Butnow FDI of 51% is permitted in India only through single branded retail outlets. Multibrand outlets are still beyond their reach. Again they can only enter the market throughfranchisees.

6. This was how Wal-Mart had entered joining hands with Bharati Enterprises On lineretailing is still to leave a mark on the customers due to lacunae that we have alreadymentioned.

Customer Service is a critical factor for keeping your clients coming back and ensuring theyll

refer you to others.

1: Growing your business willbe a difficult task at best if you dont perform, meet and exceed your

clients expectations, and provide service that creates customers for life.
http://www.economywatch.com/business-and-economy/conclusion.htmlhttp://www.economywatch.com/business-and-economy/conclusion.htmlhttp://www.economywatch.com/business-and-economy/conclusion.htmlhttp://www.economywatch.com/business-and-economy/conclusion.html


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2: Customer service is all about the customers perception. You have to do more than just get the job

done. You must deliver on all the things (big and small) that affect the relationship with your client.

Consider opportunities for improvement in the following areas.

3: Setting/Reviewing Expectations: Do you work with your client to set clear, appropriate, realistic

expectations that you can always meet or exceed? Are you clear about the responsibilities (both

yours and the clients), timelines, and expectations of results? Are you then willing to go back and

review these expectations with the client at key points along the way?

4: Communication: Do you have mechanisms in place to ensure youre communicating with clients at

every stage of the engagement, from the sales process through to completion of the project? Being

clear about where youre at, whats been completed, whats coming up next, whos responsible, what

results you can expect, etc.? Has the client ever had to ask you for these things?

5: Organization: Are you organized? Punctual? Reliable? When you show up to work with your

clients, have you done the work and are you prepared to make them feel comfortable and taken care

of? Even though youve done it hundreds, maybe thousands of times before, do you take the time to

organize and prepare to make it the best client experience possible?

6: Committing to the Little Things:Dont ever dismiss the power of all the little things. Together theycan make all the difference and really separate you from the competition. Returning calls and emails

in a timely manner. Providing useful information to folks on a regular basis. Showing appreciation for

your clients through things like thank you notes, exclusive client-only briefings, and open house, etc.

Clearly these are not the only relevant areas for creating great customer service, I assure you. But

these were some of the Factors which might

Provide a boost to the sales figures, though I am sure the organization would have already

implemented most of these measures already.


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According to the survey conducted, it is found that pantaloon is the most loyal retail store in theview of the customers.

0

10

20

30

40

50

60

PANTALOON SHOPPER'S STOP GUCCI SPENCER

PREFERENCE OF CUSTOMERS

MOST PREFERABLE


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Recommendation


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1) Convert your customers into publicity agents. Develop an incentive for them to tell associates

and friends about the value of your products or services. An endorsement from them is more effective

than any amount of advertising - and it is much cheaper.

2) Surprise your customers with unexpected value. If you sell products, include an "unadvertised

bonus" with every order. If you sell services, get into the habit of doing something extra for every

customer or client without charging for it.

3) Reward them each time they refer someone who becomes a customer. Your reward can be

as simple as a credit toward their next order from you.

4) The management of BigBazaar can improve their understanding of the role and

capabilities of advertising to improve customer relation and enhance loyalty. This


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understanding should in turn results in a more effective and more efficient advertising

campaign.

5)Visual Merchandising: It is often seen that the people come to the store to browse rather

than buy.

6) Schemes: In store Promotions: The people visiting the store should be encouraged to visit

the store again and again. So it is necessary to delight the shoppers with the shopping

experience. It has been observed in


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References

http://www.economywatch.com/business-and-economy/conclusion.html

http://www.cygnusindia.com/pdfs/TOC-Indian%20Retail%20Industry.pdf

Marketing management By Philip kotlar

Varshney & Gupta; Marketing Management, Sultan Chand & Sons

Retail Marketing by J.A.Lamba
http://www.economywatch.com/business-and-economy/conclusion.htmlhttp://www.economywatch.com/business-and-economy/conclusion.htmlhttp://www.cygnusindia.com/pdfs/TOC-Indian%20Retail%20Industry.pdfhttp://www.cygnusindia.com/pdfs/TOC-Indian%20Retail%20Industry.pdfhttp://www.cygnusindia.com/pdfs/TOC-Indian%20Retail%20Industry.pdfhttp://www.economywatch.com/business-and-economy/conclusion.html


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Annexure

Questionnaire

Name:-______________

Age:-________________

Sex:-__________

Email id:-_____________


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Q. TICK THE PREFERABLE ANSWER ACCORDING TOA:-PANTALOONB.SHOPPER STOPC.GUCCI

D.SPENCER

QUESTIONAIRE ON CUSTOMER-RELATIONSHIP

MANAGEMENT IN RETAIL-SECTOR (Big BAZAAR)

RETAILOR BASED SURVEY

1.What is the most important criteria of selection for their Store Assistant and Store Manager?

Pleasing Personality Good Communication Team Work

S.NO QUESTIONS A. B. C. D.

1 .Consistentlyprovides the bestvalues for yourmoney?

2 Has the lowestprices overall?

3 Provides the leastvalue for your money

4 Has the poorestquality merchandise

5 Has the widestselection of nationalbrand merchandise


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Commitment Toward Customer needs

2.Do you display all the entire stock on the rack or some amount is kept for contingence?

Applicable to all product Applicable to some product Only to FMCG

3. Rate the following options as per your priorities while deciding the layout for store?

Security m Computerization Parking Air-conditions

4.How do you decide of point of purchase counter?

Brand Price Customer preference Product visibility

5. What is the preference order for promotional activity to create customer awareness?

Newspaper Radio jingle Advertising Banner

6. How would you analyze customer localities factor?


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Number of repeat customer localities benefit customer database

7. What is your method of analyzing customer satisfaction?

Feedback No. of repeat purchase interaction of manager with customer

8. What is the training methodology used to enhance customer satisfaction in your

employee ?


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QUESTIONAIRE ON CUSTOMER-RELATIONSHIP

MANAGEMENT IN RETAIL-SECTOR (BIG BAZAAR)

CUSTOMER BASED SURVEY

1.Are you satisfied with the services provided by Big-Bazaar?

YES NO CANT SAY

2.How do you find the Shopper Assistants behavior?

HELPING NOT HELPING RUDE

3.How would you rate the Shopper Assistants behavior on the scale of five?

5 4 3 2 1

4.Do you find the Layout of Big-Bazaar helpful in Shopping Experience?

YES NO CANT SAY

6.What do you like most about Bigd-Bazaar ?


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CREDIT FACILITY TRANSPORTATION FACILITY

DELIVERY SERVICES

7.How often do Food-Bazaar services exceed your expectations?

ALWAYS SOMETIMES NEVER

8. Do you think that Food-Bazaar follow the ethical Mktg. Practices like right pricing, right quality and

right quantity?

YES NO CANT SAY

9 What comes first when you think about FoodBazaar?

PRICE QUALITY

10 How would you rate themesetting display of Food-Bazaar in comparison to other?


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EXCELLENT GOOD SO-SO BAD WORST

NAME. ADDRESS

BBiigg BBaazzaaaarr--MMaarrkkeettiinngg MMiixx

Product Branding Price

Packaging Cost of goods

Product Design Business Expenses

Assortment Gross Margin

Services Profit

Promotion Distribution

Advertising Logistics

Personal Selling Store Location

Sales Promotion Site Evaluation

Public Relations Transportation


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Visual Merchandising Storage of goods

They seem to follow this to the core for effective Customer reach and encourage customer loyalty.

Nancy Final

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