Institute of Innovation in Technology and Management

SUMMER PROJECT REPORT On A study of Retail Industry prospects in India

Submitted in partial fulfillment of the requirement of Bachelor of Business Administration (Computer Aided Management), Guru Gobind Singh Indraprastha University

Submitted to: Ms. Neha Bhatia

Submitted By: Nancy Verma

Enrolment No. : 03624401910

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

CERTIFICATE
I, Ms Nancy verma, Roll No.03624401910 certify that the Minor Project Report (Paper Code213) entitled A Study of retail industry prospect in India is completed by me by collecting the material 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 industry prospect in India done by Ms Nancy verma, Roll No.03624401910 is completed under my guidance. Signature of the Guide

Name of the Guide: Ms. Neha Bhatia Designation: Date:

Countersigned Director/Project Coordinator

A study of Retail Industry prospects in India

Index

TABLE OF CONTENT
INTRODUCTION OBJECTIVE OF STUDY RESEARCH METHODOLOGY ANALYSIS OF STUDY

PAGE NUMBER
6-12 13-14 15-17 18-44 45-47 48-49 50-51 52-53

CONCLUSION
SUGGESTION/RECOMMENDATION REFERENCES ANNEXURE

INTRODUCTION

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, the regulations are still only changing very slowly and there are still lots of uncertainties. AT Kearney (2009), the well-established international management consultancy, in their Annual Global Retail Index, ranked India as No. 1 out of 30 of the top emerging markets, and has done for some years. Foreign Investors are watching India, ready for a piece of the action in the retail market, 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 just one 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. The organized sector includes the big companies like the RPG, Pantaloons and the foreign players like adidas, Reebok, McDonalds and Pizza hut. Most of the Indian Retail industry is characterized by an unorganized market but the growth of the organized sector in the past few years 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 organized retail in India has been divided into various categories like Jewellery and Watches, Catering and services, 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, the organized retail sector in India is also witnessing a hold back. Most of the major retail giants have either postponed their ideas of expansion and are afraid of undertaking any new big projects. Although most of the companies have already taken an initiative to make their way in the rural market and others are also planning to do the same but due to the economic turmoil, this effort seems to have taken a back seat. The Retail Environment The foreign retailers who considered India as a gold mine, till a 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 of all, the government regulations on the foreign entry in retail (51 % in single brand retailing and 100 % in cash and carry format) along with the economic slowdowns and terrorist activities has forced most of the companies to reconsider about their plans of entering Indian retail industry.

Disorganized supply chain network Along with economic slowdown, a disorganized supply chain is also standing in the way of organized players to tap the rural markets and expand their operations. An efficient supply chain network enables the company to reduce the cost as well as manage the demand of its customer. Without an efficient supply chain, it becomes almost impossible for these companies to provide better product assortments across the country effectively with minimum cost. Therefore, an under developed supply chain network has also been hindering the scaling of the retail operations since a long time. Technology hurdles - .An effective IT system is very crucial for the success of the supply chain which supports the retailing operations but as compared to the developed countries, India is incompetent in installing and managing an effective IT system especially in the rural areas which has been a trouble for the Indian Retailers since a long time.

Lack of utilities Most of the metro cities are equipped with all the facilities and requirements of the modern businesses but the inadequate utilities like transport system, power, telecommunication, water, internet facilities etc. in the other part of the countries has also pushed the retailers one step back in sustaining the retail operations in a widespread geographical location. Although relevant steps have been taken over the past few years to make these facilities available in all parts of the country but this endeavor needs an acceleration to match the growth of the zooming industry. Location planning Location 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 the country, a higher stamp duty as compared to the other countries and the zoning laws, a dilemma has been created over the land use for the commercial purposes. The Retailers are finding it very difficult to first of all select a location which is found to be the most appropriate for their operations and then to cope up with the fluctuating costs of land and paying 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 of employment 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, no weekends and festival holidays, it becomes very difficult to hire people who can create a bottleneck for the success. In the aura of optimizing the cost, the companies are also neglecting the training needs of the newly hired people which is also a major factor for reducing the efficiency of the human resource.

The Indian Retail Revolution Retailing in India is evolving rapidly, with consumer spending growing by unprecedented rates and with increasing number of global players investing in this sector. Organized retail in India is undergoing a metamorphosis and is expected to scale up to meet global standards over the next five years. Indias retail market has experienced enormous growth over the past decade, more than doubling in size tous$ 311.7 billion in 2005-06. The market was estimated at us$ 1.1 trillion (in ppp terms) in 2005-06. the most significant period of growth for the sector was between years 2000 and 2006, when the sector revenues increased by about 93.5 per cent translating to an average annual growth of 13.3 per cent. The sectors growth was partly are reflection of the impressive Indian economic growth and overall rise in income levels of consumers

Even the introduction of Value Added Tax (VAT) in April 2005 has not severely impacted consumer demand or retail goods. Greater exposure to western products and lifestyles has helped drive consumerism. The sector also benefited considerably by the rising popularity of satellite television since the early 1990s, which provided a highly effective mass marketing route, reaching out to the large Indian consumer base

Traditional and modern retailing: the India story Traditional retailing continues to be the backbone of the Indian retail industry, with Traditional/unorganized retailing contributing to over 95 per cent of total retail revenues. The quintessential 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, the highest 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 primary presence of neighborhood kirana stores, push-cart vendors, melasand mandis. Organized formats are only in the initial stages of adoption in these regions. Leading retail players in the industry are beginning to explore these markets and the rural consumers are slowly beginning to embrace the newer organized retail formats. Modern/Organized retailing is growing at an aggressive pace in urban India, fuelled by bourgeoning economic activity. Organized retail revenues are expected to increase from an estimated US$ 12.9 billion per annum in 2005-06 to more than US$ 43 billion 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 in formats. Retail sector in India is primarily categorized by the type of products retailed, as opposed to the different retail formats in operation. The Food and Beverages vertical accounts for the largest share of revenues at 74 per cent of the total retail market. This category has the highest consumer demand across all income levels and various retail formats. The Indian consumer behavior of preferring proximity to retail formats is highly pronounced in this sector, with food, grocery and allied products largely sourced from the local stores or push-cart vendors. Apparels and consumer durables are the fastest growing verticals in the retail sector. Mobile phone as a product category has witnessed the highest growth in consumer demand amongst all retail product offerings, with increasing penetration of telecommunications in towns and villages. The Telecommunications sector has been adding on an average 5 million new users every month. The other product categories are gaining traction predominantly in the urban areas and 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 estimated at 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 of malls and introduction of several domestic and international apparel brands in the country. The Food and Beverages segment recorded the highest growth over 2004-05, with the proliferations of supermarkets, hypermarkets and the entry of major players like Reliance Fresh (promoted by Reliance Retail Ltd). This segment is poised to gain traction, with several new players planning their entry and the existing players expanding their business in this segment at a rapid pace. The Home Decor segment followed suit growing at 18 per cent, with a boom in the real estate and housing sector. Penetration of organized retail was at 4.15 per cent in 2005-06, an increase from the 3 per cent estimated for2004-05, and is projected to increase to 9.52 per cent in2009-10, with revenues from organized retail expected to touch US$ 43,829 million in 2009-10.Footwear segment recorded the highest penetration 32.84 per cent, primarily due to the presence of wellestablished players like Bata, Liberty and Paragon. These players have been in the market for over three decades, have good brand recall and a well established distribution network penetrating 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 retail will adapt and absorb some of the traditional formats in the course of its expansion. Unorganized retail formats are expected to converge and combine in formats such as mushrooming village malls and rural retailing ventures. With the rural retail revenues forming the largest share of total retail revenues, increasing number of players are in the ray to explore opportunities in the rural areas. The rural retail revenues are estimated to increase by 60 per cent by2012, with larger share of increase in demand for consumer and household products .Retail giants are set to embrace newer and innovative formats, by giving modern retail a traditional look in line with consumer needs and expectations. Pilot test concepts are already being rolled out by players like Indian Tobacco Company (ITC) and DCM Shri ram Consolidated Ltd. (DSCL) with their rural initiatives of Choupal Saagar and Hariyali Kisan Bazaar, and are exploring options to increase their customer outreach. Established players like Unilever, Dabur and Godrej have strengthened their distribution channels and are increasing their penetration to leverage the higher consumer demand in these markets. Reliance Retail Ltd, a wholly owned subsidiary of Reliance Industries Ltd, is set-to embark on the establishment of 1,600-odd rural retail hubs by 2010, with the aim to make these hubs the nodal institutions for retailing activity, ushering in a new era of organizedrural retail. With modest store formats being pursued to attract the average rural customer, as opposed to the plush and vibrant formats adopted for the urban retailing, rural retailing is set-to provide 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 suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating Hypothesis. In short, the search for Knowledge through Objective and Systematic method of finding solutions to a problem is Research. RESEARCH DESIGNTYPE OF RESEARCH:Descriptive research Descriptive research includes Surveys and fact-finding enquiries of different kinds. The main characteristic of this method is that the researcher has no control over the 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 through questionnaire 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 the study is known as primary data. So in this research the data is collected from respondents through questionnaire. SECONDARY DATA For the company information I had used secondary data like brochures, web site of the company etc.The Method used by me is Survey Method as the research done is Descriptive Research. RESEARCH INSTRUMENTS Selected instrument for Data Collection for Survey is Questionnaire.

QUESTIONNAIRE DESIGN FORMULATION Under this method, list of questions pertaining to the survey are prepared for marketing staff of consumers of Nike shoes. Questionnaire has structured type questions as well as unstructured type questions. Structured objective type questions are prepared for the respondents with fixed response categories. Some of the questions are of multiple-choice type. The questions have more than one alternative.

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Questionnaire: - A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended or Open Ended Open Ended. Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate.

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 attractive destination 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 Indian consumerism; with the Indian consumers confident about their earnings and are Spending a large portion of their high disposable incomes.

Projections by analysts suggest that India has the potential to be labeled the fastest-growing economy and outpace the developed economies by 2050. Analysts predict India to sustain an average GDP growth rate of 5 per cent till the mid of this century, with India projected to outpace 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 of over 9 per cent posted for India, promise a continued robust growth story. Private consumption Accounted for 62 per cent of Indias GDP in2004-05, comparable to most of the leading economies around the world

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 The young India Against the backdrop of an ageing world, India possesses the advantage of having a largely 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) till 2050. Two-thirds of Indian population is under 35, with the median age of 23 years, as opposed to the world median age of 33. India is home to 20per cent of the global population under 25 years of age. This trend is projected to continue for the next decade, with the share set to reach its maximum in 2010. The large proportion of the working-age population translates toa lucrative consumer base vis--vis other economies of the world, placing India on the radar as one of the most 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 deemed Priority 1 market for international retail. Organized retail penetration is on the rise and overs 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 super rich population and impressive disposable incomes offers a spectrum of opportunities, spanning from rural retailing to luxury retailing. The impressive retail space availability and growing trend of consumerism in the emerging cities and small towns add to the market attractiveness. Pantaloon Retail India Limited, one of Indias retail giants captures a mere 0.3 per cent of total market; compared to Tesco Plc, which captures 14.3per cent of Englands market and Wal-Mart which captures 20 per cent of USAs market; giving an insight into the large untapped market potential Abundant availability of skilled labor India has a vast resource base of talent and skilled labour.over 37,000,000 students were enrolled in about 150,000pre-college institutes and over 11,700,000 in 14,000 higher education institutions in 2005-06 .with English being the language for business in India, the language skills of the Indian workforce score higher than that of emerging economies. Retail management is a sought after education stream amongst students, with over15 premier institutes offering specialized 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 opera ti ons The most attractive component of Indias value proposition is its cost attractiveness. Existing players are increasingly turning to Tier II and Tier III cities for retail establishments and for manpower sourcing. These cities offer significant cost advantage in the form of availability of low-cost skilled human resources. With well-educated small town graduates turning to the urban cities for employment, these graduates are ideal candidates for sales and marketing executive roles in modern organized retail format

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 Policy and Regulatory Environment The Government is progressively undertaking reforms and liberalizing the retail sector; thereby attracting significant foreign investments. The regulatory and supervisory policies are being reshaped and reoriented to meet the new challenges and opportunities in this sector. To facilitate easier flow of Foreign Direct Investments(FDI) inflow, instead of having to seek Foreign Investment Promotion Board (FIPB) approval, FDI up to 100 per cents allowed under the automatic route for cash and carry wholesale trading and export trading.FDI up to 51 per cent is allowed, with prior Government approval for retail trade in Single Brand products with the objective of attracting investment, technology and global best practices and catering to the demand for such branded goods in India. This implies that foreign companies can now sell goods 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 the business 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 a domestic retailer or partnering with Indian promoter owned companies in the Middle East(UAE) or South East Asian countries (Singapore, Malaysia, Thailand, Indonesia).

Franchising This is a widely taken entry route, with many international brands setting up shop via this provision. 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 primarily used by domestic brands Master franchisee: Rights are granted for an entire territory to the master franchisee and the master 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 a larger scale the master and regional franchisee routes are the most preferred and the oft-adopted routes 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 distribution infrastructure to assist local 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 through this route entails the company the rights to retail the products in India through individual retailing outlets.

Distributi on An international company can set up distribution offices in India and supply products to the local retailers. Franchisee outlets can also be set up in this route. The labor laws in India are under the scanner for higher liberalization, with the Government permitting exibilities in the rules in emerging retail hubs like Bangalore and Hyderabad. Instituted laws like restriction on working hours, mandatory closure of the store once a week are being modified to suit the modern retailing demands and necessities, without adversely impacting the labour benefits. Efforts are also being undertaken by the Government to remove impediments being posed by licensing and clearance mechanisms in India; with the aim of introducing single-window clearance mechanism. This would 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 a calibrated approach in land and rent reforms to improve the real-estate regulatory environment and facilitate easy access to retail space for international investors. The Government is releasing large tracts of unused land for retail development in the Mumbai and NCR regions. This is soon to 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 lease rentals and pro-tenancy laws, which significantly deter international investors, are being pursued by the Government, with initiatives like Special Economic Zones (SEZs), allotment of Government controlled land etc.Value Added Tax (VAT) has been introduced and implemented in most states and territories, and many industry verticals to resolve the multiple taxation issue and maintain uniform prices across regions. The Agricultural Produce Marketing Committee Act(APMC), which curtails direct sourcing of agriculture produce (grocery, food grains) is proposed to be amended soon, with a Draft Model Act being legislated by the government. The new 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 with players like Reliance and Pepsi Co. forging alliances with local farmers for direct procurement of raw materials. The Government is encouraging the contract farming practice, as it benefits both the farmers and the corporate retailers, with the former gaining access to better prices and the latter to a steady supply source. The Government is currently considering modernizing and developing eight strategically located Mandis with cold storage, sorting and grading facilities made available as a part of the infrastructure services.

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Key Trends and Drivers Matu ring metros

National Capital Region (Ncr) NCR comprises of National Capital Territory (NCT), Faridabad and Gurgaon of Haryana and Noida and Ghaziabad of Uttar Pradesh. NCR contributed to US$ 16,342 million of retail revenues in 2005-06, and is projected to open doors to markets worth US$ 19,522 million by 2010-11. Delhi, the fashion capital of India and home to the highest number of rich and superrich households, contributes US$ 12,683million to the retail revenues. The total number of households in Delhi stood at2.8 million in 2005-06, with more than 7,000 households belonging to the rich and super-rich category, with incomes higher than US$ 243,902 per annum. This is the highest for any city across the country. Mumbai A potpourri of consumers, this city contributes to US$ 10,195million of total retail revenue. The hub of Indian cinema and home to diverse income categories; the middle class and the rich account for 47 per cent and 30 per cent of retail revenues of the city. Each category of population has a significant share in the retail pie, with the city offering opportunities for a spectrum of retail formats, from value segment to the lifestyle segment. Mumbai is home to a large percentage of the rich and super-rich households, with businessmen, politicians and bollywood personalities, having their base in the city. This city is projected to offer a retail potential of US$ 14,927 million by 2010-11. The regions of NCR and Mumbai dominate the organisedretail scenario in India. The combined contribution of these metros is estimated to reach 40 per cent by 2007-08. These cities which are also referred to as the Maturing Metros, have been projected to achieve worlds 2nd and 3rd largest city status by 2015 and have the highest number of malls and modern retail format stores in operation and many more in the pipeline. Most panIndia retailers have multiple retail outlets present in these cities. These cities also act as launch pads for the new entrants. Lastly, these maturing metros are the hub of the luxury-retailing in India.

Metros on the growth Path Metros of Bangalore, Hyderabad, Chennai and Kolkata are growing at an exceptional rate, with the retail buzz in these cities becoming more pronounced by the day. These cities contributed to US$ 15,511 million worth retail revenues in 2005-06, projected to touch US$ 25,610 million by 2010-11.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 growth over the past few years, and are expected to demonstrate robust economic performance in the coming 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 and superrich households in these cities. The middle class households contribute to almost half the retail activity in these metros, with lifestyle formats beginning to mushroom. These cities are expected to witness a radical transition in the migration of households belonging to the lower income 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 have considerable latent demand for branded products and offer suitable opportunities for a variety of retail offerings. Most of the retail sector giants have a footprint in these cities, with aggressive future 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 and Madurai contribute to US$ 15,619 million worth total retail activity. Organized retail penetration is 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 the population falling in this category. The combined retail potential of these cities is expected to increase toUS$ 23,563 million. Underprivileged population is expected to decrease by more than 30 per cent in cities of Pune and Ahmadabad by 2010-11, with the other smaller cities also following a similar trend. Pune and Ahmadabad are the fastest growing cities with thriving industry activity. Investors from the IT/ITeS sector and the other emerging sectors are eyeing these cities for expansion. These two cities contributed to US$ 3,854 million worth retail revenues in 2005-06, projected to increase to US$ 5,976 million by 2010-11. Pune has witnessed an explosive increase in the mall space availability in the recent years, with the organized retail penetration substantially increasing. The cities, along with the other potential cities as listed below, are set to take centre stage as the future retailing hotspots, with significant improvement in their infrastructure and purchasing power.

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The Malls Phenomenon From the setting up of Indias first mall in 1999, there has-been a steady proliferation of malls, a trend specially pronounced in the urban cities. Total number of malls was estimated at 200 for 2005-06, projected to increase to 600by 2010-11. With increasing number of malls, there is increasing retailing space availability for players, with malls further providing incentives like lower rentals for anchor tenants and greater consumer exposure. The activity in the retail sector is further being supported by the allowance of FDI in real estate by the Government

The total mall space across seven cities (NCR, Mumbai, Bangalore, Kolkata Hyderabad, Pune and Chennai), was spread over 40 million square feet in 2006-07. Mall spaceis projected to increase 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 being pursued aggressively across all the metros and the high-growth cities, with significant investments in the pipeline. The evolving cosmopolitan population with rising aspirations and growing 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 progressively changing the face of Indian consumerism. With the economy opening new vistas of employment and with employers offering attractive compensation packages and perks, the pool of Indian skilled professionals are boasting of higher disposable incomes. From frugal spending to frenzied shopping, Indias swelling middle class is redefining lifestyle patterns with adoption of western values and growing brand consciousness. The average household disposable income has doubled since1985, with analysts predicting a similar trend for the next two decades. The thriving services sector growth has handed young India a bulging wallet and a penchant for luxury products. The new found freedom to shop at plush malls and stores for expensive gadgets like mobile phones and laptops has fuelled the growth of organized retail in India. The Indian consumer is gradually moving from the local kirana shopping to Mall Hopping. With a number of domestic and international brands available in stores in metros and smaller cities and with a wide range of product offerings from food and grocery to furniture and fixtures, the Indian consumer is fast embracing modern retail With the countrys income pyramid changing dramatically, there has been a definite shift from the saving tendency to the spending attitude. Increased consumer exposure to the latest trends and brands driven by the mass media is contributing to the soaring retail revenues. There has been a marked increase in the number of new entrants in the retail sector with player revenues increasing across all the retail segments. Higher disposable incomes Disposable incomes are on the rise with the economy providing new avenues of employment in IT/its and other sunrise sectors like biotechnology. The increase of per capita income has been more pronounced in the metros and the emerging cities, with a progressive growth in the standard of living with employers offering attractive compensation packages and perquisites to the pool of skilled Indian professionals.

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Delhi, the seat of Indian Government and the centre of thriving economic activity has the highest per capita income, mirroring the higher standard of living. Urban Indias disposable incomes are ricocheting with favorable and conducive economy and employment trends

Increasing urbanization Indias urban population is estimated at 286 million, constituting 27.8 per cent of the total population of 1,029million as on 2001. The urban population is projected to increase to 468 million, 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 grow rapidly. Urban population has grown over five times over the past five decades, with Indias urban 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 in urban areas. Class I cities (cities with population greater than 1, 00,000) have an average concentration of 73.7 per cent urban population, with the share increasing rapidly. An increase in the number of young employed executives and the increasing population of workingwomen is stimulating 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 financial institutions have increased their range and amount of retail credit and loans service offering the average 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 the consumer habits of the Indian population. The number of credit cards issued was at 16.6 million in 2005-06, growing at a compound annual growth rate of 28 per cent in the last 6 years. The number of debit cards have increased manifold and touched 53.7million by 2005-06. The growing acceptance of plastic money across small and medium sized stores and retail outlets has stimulated 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 the global 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 Retail Ltd. and plans to set up its first cash-n-carry outlet by 2007-08. It is anticipated that the Starbucks Pepsi Co. joint venture would provide Indian market access to the worlds largest coffee chain. Carrefour, Frances retail major is set to analyze its entry route to Indian retail sector

Increasing technology adoption With modern retail store formats growing players are increasingly deploying advanced Information Technology tools for managing their supply chain, warehousing and logistics requirements. Retail sector constituted 8 per cent of the IT export revenues in 2005-06. Apart from the industry giants, the small scale retailers are also embracing IT solutions to optimise their operational efficiencies. Big league IT forms like IBM India, Oracle and SAP are developing 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 1993 and has since emerged the retailing giant of India with over 5 million square feet of retail space spread over 450 stores across40 cities in India. Pantaloon Retail operates in over twenty diverse store 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 of malls, 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 in Pantaloons capturing large part of the organized retail pie. The company clocked revenues worth US$ 869 million in 2006-07, an 84 per cent increase over 2005-06. The operating income stood at US$ 43.9 million, 5 per cent of total revenues. It employed over 13,000 people in 2005-06 in its various retail activities. The attrition rate stood at 8.36 per cent as against a sector average of 20-25 per cent, attracting and

33

retaining skilled workforce through various management and academic initiatives. The company offers post-graduate programme in Retail Management in association with premier institutes across the country The unique selling proposition of Pantaloon Retail is the dual approach to tap both the Value segment and Lifestyle and Luxury segment consumers, by establishing retail formats in each segment like Big Bazaar, Fashion Station etc. aimed at value retailing while Central, Pantaloons captures the lifestyle segment consumer. Shoppers STOP limited

Shoppers Stop, established in 1991 with its flagship store-Shoppers Stop by the K. Raheja Group, has now expanded to over 100 retail outlets spread across 1.1 million square feet of builtup area, spanning a spectrum of retailing verticals and formats. The group offers formats in the lifestyle 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 cent increase from revenues of US$ 155 million in 2005-06. The operating income stood at US $ 16.7 million for 2006-07, 8 per cent of total revenues. Private labels account for more than 21 per cent of their retail revenues, with Shoppers Stop clocking impressive total number of transactions to customer footfalls ratio (conversion ratio) of 27 per cent. The form employed 3,157customer care associates in 2006-07

34

Strategic partnerships with international retailing players like Mother care Plc of Britain and Leisure & Allied Industries of Australia, are aiding Shoppers Stop in catering to the niche markets. Aggressive expansion plans are being developed for formats like Time zone, a leisure and entertainment format venture and Brio the coffee bar located strategically in their Crossword bookstores. The Company signed the Memorandum of Understanding and Shareholders Agreement with the Nuance Group AG of Switzerland. The50:50 joint venture has been incorporated as the Nuance Group (India) Pvt. Ltd. for undertaking the operation and management 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 with Home Retail Group Plc, United Kingdom, to develop the format of catalogue retailing in India under an exclusive franchise. The form has forayed into the entertainment industry by acquiring 45 percent stake in Time zone Entertainment Private Ltd. which has 5 outlets spread across 35,606 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 1999 Retail sector activity: Apparel, Home dcor & Furnishing Current store formats: Department stores, Hypermarkets Current outlets: Lifestyle-10 outlets, Max Retail-4 outlets Future plan: Presence in mini metros and Tier-II cities
35

 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 cities being home to the highest number of households belonging to the affluent category(with income greater than US$ 24,000 per annum). Retail revenues contributed by the affluent category accounted for over 30 per cent of total revenues in 2005-06. The number of affluent households is expected to double by2010-11, projected to trigger high growth in the luxury retailing segment. 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 the percentage of middle class households and their adorability, the scope for the neighborhood malls and hypermarkets will be pronounced in the residential suburbs. However, the lack of space and the strict bringing down of law on illegal constructions will reinforce the migration towards organized retailing. Metros on the growth lane

The growing disposable incomes, the consuming class and the increasing standard of living across these cities translate to opportunities across all the retailing formats and verticals. The mushrooming 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 most often also serve as the test beds for any innovative store formats. Metros-in-the-making Many metro retailers are expected to open outlets in these cities to benefit from the FirstMover 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 of retail space, access to farms and agricultural produce. Consuming class accounts for over 60 per cent of the total households, offering potential in the food and grocery, consumer goods and apparel verticals.

36

The FIRST-mover advantage

More than 72 per cent of Indias population resides in small towns and rural areas with Agri-produce retailing forming the largest share of total retail pie in these regions, offering immense potential for the food and grocery vertical with customer preference tuned towards value retailing. Players like Reliance Retail, Aditya Birla Nuvo Groups Trinethra Supermarket etc. 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 already planning their establishments in these emerging cities and regions to gain the first-mover advantage over other entrants. Innovative Formats

Formats like Wedding Malls, which are unheard of in the far west are found to be very successful in the Indian market. The Wedding Malls for instance, stock the complete range of wedding product offerings from apparel to jewellery. The retail industry players are successfully blending knowledge from the experiences of the global retail industry with the unique requirements and preferences of the Indian consumer. Such customization to the latent needs of the Indian consumer has brought about a great deal of innovation in the product offerings as well the retail formats in which they are being sold. Khadi & Village Industries Commission is set to roll out a string of swanky Khadi Plazas, which would showcase the traditional handloom textiles in a completely new form. Over 7,000 existing outlets are to be beefed up to cater tothe changing tastes of the young Indian consumer and thereby provide a boost to the presently stagnant sales of the khadi textiles. The latest addition to the list of diverse retail formats are the Village Malls, with the air price shops being revamped to cater to larger needs of local populations. The Government of Gujarat has spearheaded one such initiative with 512 Village malls 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 important global sourcing hub for top international brands India has had a continued presence in the global scenario as one of the leading exporters of apparels and textiles. The expiry of the Multi Fiber Arrangement has further widened the global markets for apparel. Many international brands have identified India as one of the important supply centre for procurement of textiles and apparels.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 owned Indian subsidiary, Hindustan Unilever Limited. Adidas, Next and Calvin Klein are expected to follow suit, with Adidas opening its first office in Bangalore.

37

Online retailing The Click-to-buy phenomenon is fast catching up in India, with increase in number of 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. The stated factors are facilitating rapid growth of online shopping with the industry players scaling up to meet the consumer requirements. Most retailers are developing and maintaining their own online sale portals for easy consumer access, facilitating online purchase of merchandise. Tata Indicoms i-choose.in and G&Bs godrejlifespace.com are good examples of this trend. Players like Rediff.com, eBay. In, Indiatimes.com were some of the early entrants in the Indian online retail space, clocking impressive revenues through online transactions. Some of the more recent players to enter this niche market include Pantaloons Retail India Ltd., through itsFuturebazaar.com venture. Many smaller retail portals are also thriving on the internet, meeting the niche Indian consumer requirements such as ethnic apparel, handicrafts and jewellery. 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 consumers increasing exposure to the virtual world of internet. With value-added services like cash-ondelivery to facilitate online transactions by consumers without credit/debit card, unique bidding schemes 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 per cent of Indias population concentrated in the rural areas. Rural hypermarkets are growing at a blistering pace meeting the unique requirements of the rural consumer. The range of services provided by the rural retailers extends from creating a platform to buy and sell farm produce, to banking services, to restaurants etc.One of the key players in the rural retail segment is ITC with its Choupal Saagar initiative. ITC has 14 outlets in operation presently and plans to increase the number to700 over the next 7-10 years. ITCs Choupal Saagar retails products and also acts as a procurement hub for ITCse-choupals where farmers are offered better rates for their agriculture produce, compared with the prevalent market rates for the same. Other examples of players and their services in the rural retail segment are DSCLs Hariyali Kisan Bazaar and Indian Oil Corporations Kisan Seva Kendra.DSCLs Hariyali Kisan Bazaar has over 70 outlets presently and the company proposes to operate a total of 200 outlets over the next 12 months. The outlets provide a spectrum of offerings including agronomist-consultations, agri-inputs, and financial services, apart from the conventional retailing services .Indian Oil Corporations Kisan Seva Kendra offering extend over fuel, agri-produce, fast moving consumer goods and other value added services. The company has a network of over 1400 outlets presently. Reliance Retail and Pantaloon Retail India Ltd. are expected to undertake more ventures to capture the vast untapped potential in the rural retail segment.

38

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 retail sales, translating to US$ 62,340 million of retail revenues. The number of affluent households is estimated to increase by 8.5 per cent by 2010-11. The contribution of affluent households to retail 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. The luxury retail segment is hence a substantial opportunity for retail industry players. Many international investors are actively pursuing an entry route into India for opportunities in the luxury segment. Delhi and Mumbai are the prime contributors to the luxury retail revenues and have the highest density of luxury brand outlets in the country. However, currently the location of these outlets is primarily limited to five-star hotel mall spaces, with limited footfalls and consumer exposure. Industry players have aggressive expansion plans in the pipeline, with investor confidence reinforced by the booming sales in the luxury segment. The two Louis
39

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

40

RESULT OF SURVEY ON CRM IN RETAIL MANAGEMENT (BIG BAZAAR) CUSTOMER SURVEY

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

YES

20

NO

5 CANT SAY

25 20 15
Series1

10 5 0 YES NO CAN'T SAY

Result:

41

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

20 18 16 14 12 10 8 6 4 2 0

Series1

42

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 behavior on the scale of five?

10

14

05

00

3 3

2 1

43

5 4 3 2 1 0 5 10 15 20
Series1 Series2

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

44

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

YES

NO

CANT SAY

can't say

2 8 20 0 10
Series1

no

yes

20

30

45

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

18

DELIVERY SERVICES

46

20 15 10 5 0 Cr.Facility Tr.Facility Dl.facility 18 7 5

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.

47

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

ALWAYS

18

SOMETIMES

NEVER 9

20 15 10 5 0 18 9 3
Series1

Result: 48

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?

25

YES

NO

CANT SAY

30 25 20 15 25
Series1

10
5 5 0 Yes No 0 Can'tsay
49

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

20

QUALITY

50

QUALITY 33%

PRICE 67%

Result:

51

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
0

GOOD

SO-SO

BAD

WORST

20 15 10 5 0 9

18

52

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

53

Pleasing Personality

Good Communication

Team Work

Commitment toward Customer needs

10

9 8 10 7 6 5 4 3 2 1 1 0 0 5 10 15 0 5 0 0 4

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.

54

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

Applicable to all product

14

Applicable to some product

Only to FMCG

55

7 6 5 4 3 2 1

14 0

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.

56

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

Brand

Price

Customer preference

Product visibility

6 5 4 12 3 2 1 0 0 0 0 2 2 5 10 15 0 4

57

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?

10

Newspaper

Radio jingle

Advertising

Banner

12 10 8 6 4 2 0

58

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 database 10
59

10

0 0 0 0 3 7

10

15

Result :

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

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15. What is your method of analyzing customer satisfaction?

Feedback

No. of repeat purchase

interaction of manager

With customer

7 6 5 4 3 2 1 0 5 10 15

61

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 the strength, 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 at cheaper price. So consumers get value for their money. Employment opportunities both direct and indirect have been increased. Farmers get better 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, along with increasing working women population and emerging opportunities in the service sector are going to 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 global players 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 retailing and 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 about permitting the use of land for commercial development thus increase the availability of land for retail space. 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.
63

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

WEAKNESS OF MODERN RETAIL The rapid development of retail sector is the sharp improvement in the availability of retail space. But the current rally in property prices, retail real estate rentals have increased remarkably, which may render a few retailing business houses unavailable. Retail companies have to pay high rentals which are blockage in the turn of profits. Small size outlets are 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 superstore food 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 five years driven by changing lifestyles, increase in income and favorable demographic outline. 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 and establishments. 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

One of the greatest barriers to the growth of modern retail formats are the supply chain management issues. No major changes are needed in the supply chain for FMCG products; these are well developed and efficient. For perishables, the system is too complex. Government regulations, lack of adequate infrastructure and inadequate investment are the possible bottlenecks for retail companies. The supply chain for staples is less complicated than the net groceries. But staples have a unique problem of nonstandardization. Organized retailing in India is yet to get an industry status.100% Foreign Direct Investment (FDI) is not permitted in retailing in India. Ownership of retail chain is allowed only to the extent of 49% but without FDI, the sector is deprived of access to foreign technologies and faster growth. Lack of uniform tax system for organized retailing is also one of the obstacles.Inadequate infrastructure is likely to be an obstacle in the growth of organizedretails. The unorganized sector has dominance over the organized sector in India becauseof low investment needs. Labor rules and regulation are also not followed in the organized retails. Thesector is unable to employ retail staff on contract basis. Problem of car parking in urban areas is serious concern. Difficult to target all segments of society.

65

66

Conclusion

67

What, how and in this report we have analyzed in detail the retail industry in India. We had initially 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 industry in 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 into departmental stores, supermarkets, shopping malls etc. 2. In terms of value the size of the retail sector in India is $300 billion. The organised sector contributes about 4.6% to the total trade. 3. The retail sector in India contributes 10% to the Gross Domestic Product and 8% to the employment of the country. 4. In terms of growth the FMCG retail sector is the fastest growing unit and the retail relating to household care, confectionery etc, have lagged behind.

5. The foreign retail giants were initially restricted from making investments in India. But now FDI of 51% is permitted in India only through single branded retail outlets. Multi brand outlets are still beyond their reach. Again they can only enter the market through franchisees. 6. This was how Wal-Mart had entered joining hands with Bharati Enterprises On line retailing is still to leave a mark on the customers due to lacunae that we have already mentioned. Customer Service is a critical factor for keeping your clients coming back and ensuring theyll refer you to others.

1: Growing your business will be a difficult task at best if you dont perform, meet and exceed your clients expectations, and provide service that creates customers for life.

68

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 they can 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.

69

PREFERENCE OF CUSTOMERS
60 50 40 30 20 10 0 PANTALOON SHOPPER'S STOP GUCCI SPENCER

MOST PREFERABLE

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

70

Recommendation

71

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 Big Bazaar can improve their understanding of the role and capabilities of advertising to improve customer relation and enhance loyalty. This
72

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

73

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

74

75

Annexure

Questionnaire Name:-______________ Age:-________________ Sex:-__________ Email id:-_____________

Q. TICK THE PREFERABLE ANSWER ACCORDING TO A:-PANTALOON B.SHOPPER STOP C.GUCCI D.SPENCER
S.NO
1

QUESTIONS
.Consistently provides the best values for your money? Has the lowest prices overall? Provides the least value for your money

A.

B.

C.

D.

2 3

Has the poorest quality merchandise

Has the widest selection of national brand merchandise

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

77

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?

78

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 ?

79

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?

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 ?

80

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?

81

EXCELLENT

GOOD

SO-SO

BAD

WORST

NAME.

ADDRESS

Big Bazaar-Marketing Mix

82

Visual Merchandising

Storage of goods

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

83