TERM PAPER

OF
RETAIL MANAGEMENT

Course code:-MGT533

Topic:- Retail store----Furniture & Furnishing.

Submitted to:- Submitted by:-

Mr. Rajbir Singh Sethi Vikas Kumar

Deptt of Mgt Reg no;- 10811383

LSB Sec:- RR1807

Group:-(BG1)
 ACKNOWLEDGEMENT

This term paper is the valuable contribution of many persons to whom, I remain in debt. I am

especially grateful to Mr Rajbir Singh Sethi for his consistent guidance and

constructive criticism. My special thanks also to lovely professional university for

providing the term paper .

. This term paper bears the imprint of many people therefore I would like to thank all

of them who gave their valuable times as well as information regarding my term

paper . Without their immense help the term paper would not have proven

meaningful.

VIKAS KUMAR
INTRODUCTION TO RETAIL INDUSTRY IN INDIA

Retailing involves all activities incidental to selling to ultimate consumer for their personnel
family and household use. It does this by organizing their availability on a relatively large scale
and supplying them to a customers on a relatively small scale. Retailer is any
person/organization instrumental in reaching the goods or merchandise or services to the end
users .Retailer is a must and cannot be eliminated.
The Indian retailing industry is becoming intensely competitive, as more and more payers are
Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers
Stop, Reliance, etc..,
Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in
retailing in India signifies the beginning of retail revolution. India's retail market is expected to
grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity
shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006.
India's retail market is expected to grow tremendously in next few years. India shows US$330
billion retail market that is expected to grow 10% a year, with modern retailing just beginning.
India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for
retailers, because now India is in peaking stage.

SHARE OF ORGANISED RETAIL

1999 2002 2005
Total Retail (in billion INR) 7000 8250 10000
Organized Retail (in billion INR) 50 150 350
% Share of Organized Retail 0.70% 1.80% 3.5%

The organized sector is expected to grow faster than GDP growth in next few years driven by
favorable demographic patterns, changing lifestyles, and strong income growth. This organized
retail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores,
departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer
hypermarkets, three Spencer super markets and 49 Spencer Dailys. Now the company is
planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of
total market, today modern retailing is expected to enter a boom phase, which has major players
and these players might capture 10% of total market, within next five years. The retail sales in
India for future are shown below (data from 2005-2008 is based on estimates):

PRESENT INDIAN SCENARIO

* Unorganized market: Rs. 583,000 crores
* Organized market: Rs.5, 000 crores
* 5X growth in organized retailing between 2000-2005
* Over 4,000 new modern Outlets in the last 3 years
* Over 5,000,000 sq. ft. of mall space under development
* The top 3 modern retailers control over 750,000 sq. ft. of retail space
* Over 400,000 shoppers walk through their doors every week

INTRODUCTION TO INDIAN FURNITURE INDUSTRY:

The Indian furniture market is estimated to be worth Rs 350,000 million. Within this, the
wooden furniture accounts for Rs 60,000 million. Of this the imported furniture market is
currently worth Rs 6000 million and is growing at 50 - 60% each year. The furniture
sector in India only makes a marginal contribution to the GDP, representing about 0.5 per
cent of the total GDP.

The furniture and fixtures industry encompasses that manufacture household, office, store, public
building, and restaurant furniture and fixtures. The Census to track the movement of goods and
services within the economy.
 FURNITURE RETAIL STORE

RETAIL FORMAT:-

HYPER MARKET

Retail format of Furniture store

Hyper market retail stores:- this retail store offering multiple branded products belonging to
the different category product .

Typical size sq feet: - 80,000-220,000.

Interior:- combination of light purple, and white color

Varity of product :-

• Household Furniture
• Office Furniture
• Public Building and Related Furniture
• Partitions, Shelving, Lockers, and Office and Store Fixtures
• Miscellaneous Furniture and Fixtures.

The household furniture manufacturing industry consists of producers of wood furniture

accounting for 42 percent of household furniture industry shipments in upholstered furniture
accounting for 30 percent of shipments; metal furniture accounting for ten percent of shipments;
and miscellaneous furniture accounting for four percent of shipments. This industry is
comprised of the production of many different types of products including wood household
furniture, metal household furniture, mattresses, machine cabinets, shelving, and lockers.
Because the items produced vary greatly in design depending upon the type of material used,
style, price, and final use, the different types of machinery used in the various phases of
production can reach into the hundreds or even thousands. This diversity of products provides a
challenge for most manufacturers. Production lines for assembling furniture are costly, and
because of this most manufacturers do not supply an exceptionally large range of
items. To combat this problem, many firms specialize their production processes, allowing
facilities to fill a specific niche in the market while still retaining flexibility in their
manufacturing area. Manufacturers may specialize depending on the product manufactured, the
product group, or the production process. Specialization has also allowed manufacturers to focus
on quality by more carefully monitoring the entire production process, from raw material to
finished product. Because covers such a diverse group of products.

PRODUCTS AND SERVICES OFFERED

OUR COLLECTION:

• Wood Household Furniture,

• Wood Household Furniture,
• Wood Television, Radio, Phonograph, and Sewing Machine Cabinets
• Wood Office Furniture
• Public Building and Related Furniture
• Wood Office and Store Fixtures, Partitions,Shelving, and Lockers.

MULTICHANNEL DECISSION:

• STORE

• CATALOG

• WEBSITE
STORE CHANNEL:
• Browsing

• Touching and feeling products

• Personal service

• Cash payment

WEBSITE CHANNEL:
• Broder selection

• More information to evaluate merchandise

• Personalization

Today, online consumers think nothing of shopping across a retailer’s stores, Web site and
catalog. As a consequence, online product research is actually driving more land-store sales than
online sales.

The Multi-Channel Retailing decision consider the factors that are contributing to make online
product research a vital driver of offline retail sales. Any retailer who isn’t using the online
channel to promote offline sales—as well as online sales—is missing a huge opportunity. In
2007, eMarketer estimated that store sales influenced by online research totaled $471 billion.
Comparatively, retail e-commerce sales were $136 billion. Another way to look at it is that for
every $1 in online sales, the Internet influenced $3.45 of store sales. From 2007 to 2009 , Web-
influenced store sales are forecast to grow at a 19% average annual rate, compared with a 12%
rate for retail e-commerce.

Multi channel decision means how to promote the product through different channels. It may be
real or virtual. In this case of Arena we should go for Store Format and by Internet.In this due
course of technology we should definite go for e-marketing. E-marketing provide immense
market potential for Arena as the reach in increased through the means of Internet. One should
easily go through the product and features as well as price. The main thingh is that the consumer
get virtual demonstration of the product through easy accessibility, the best use of the new new
technology through which we can increase our market share by providing quality product to the
perspective consumer. We should go for good web designing of the website which is user
friendly and helps in easy accessibility for the demonstration of different product.

CONSUMER BUYING BEHAVIOR

Consumer behavior refers to the mental and emotional process and the observable behavior of
consumers during searching, purchasing and post consumption of a product or service. Consumer
behavior involves study of how people buy, what they buy, when they buy and why they buy. It
blends the elements from psychology, sociology, sociopsychology, anthropology and economics.
It also tries to assess the influence on the consumer from groups such as family, friends,
reference groups and society in general. Buyer behavior has two aspects: the final purchase
activity visible to any observer and the detailed or short decision process that may involve the
interplay of a number of complex variables not visible to anyone.

Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors:

1. Social Factors

2. Psychological Factors

3. Personal Factors.

A. Social Factors Social factors refer to forces that other people exert and which affect
consumers’ purchase behavior. These social factors can include culture and subculture, roles and
family, social class and reference groups. Example: By taking into consideration Reference
group, these can influence/ affect the consumer buying behavior. Reference group refers to a
group with whom an individual identifies herself/ himself and the extent to which that person
assumes many values, attitudes or behavior of group members. Reference groups can be family,
school or college, work group, club membership, citizenship etc. Reference groups serve as one
of the primary agents of consumer socialization and learning and can be influential enough to
induce not only socially acceptable consumer behavior but also socially unacceptable and even
personal destructive behavior. For example, if fresher student joins a college / university, he/she
will meet different people and form a group, in that group there can be behavior patterns of
values, for example style of clothing, handsets which most of group member prefer or even
destructive behavior such as excessive consumption of alcohol, use of harmful and addictive
drugs etc. So, according to how an individual references him / herself to that particular reference
group, this will influence and change his/her buying behavior. B. Psychological Factors These
are internal to an individual and generate forces within that influence her/his purchase behavior.
The major forces include motives, perception, learning, attitude and personality. Example:
Attitude, is an enduring organization of motivational, emotional, perceptual and cognitive
processes with respect to some aspect of our environment. Consumer form attitude towards a
brand on the basis of their beliefs about the brand. For example, consumers of Sony products
might have the belief that the products offered by Sony are durable; this will influence those
customers to buy Sony products due to this attitude towards the brand. C. Personal Factors These
include those aspects that are unique to a person and influence purchase behavior. These factors
include demographic factors, lifestyle, and situational factors. Example: Lifestyle is an indicator
of how people live and express themselves on the basis of their activities, interests, and opinions.
Lifestyle dimension provide a broader view of people about how they spend their time the
importance of things in their surroundings and their beliefs on broad issues associated with life
and living and themselves. This is influenced by demographic factors and personality. E.g. A
CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal
clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle
and profession, the buying behavior of people differ from one another.

FACTORS AFFECTING THE PURCHASE BEHAVIOUR OF CONSUMER

THROUGH SURVEY

The consumer segment chosen for this study is Males in the age group of 25 to 40 years, working
professional and married.

The internal factors that influence the purchase decision of these Furniture Product:-

1. Need for the Furniture Product (whether need is physiological or esteem)

2. Personality of the buyer: whether he is extrovert or introvert, open to experiment, etc.

3. Level of Involvement of the buyer with the Furniture Product.

 4. Motivation towards the furniture .

5. Emotions towards the furniture: which dimension will it satisfy amongst the pleasure,
dominance and arousal.

6. Brand personality as perceived by the buyer and how he relates it to his own
personality.

7. Attitude of the buyer towards the Product or the brand.

8. Self-concept of the buyer: his thoughts and feelings towards the Products/brands
having reference to himself as an object.

9. Loyalty towards a particular brand.

10. Positioning of a particular brand in the mind of the buyer in the mind of buyer

RETAIL FORMAT:-

The retail format for furniture retail chain would be in such a format which can be easily
accessible and approachable to the customer. We will launch a website for our customers to
make it a ease to find and chose the choice of product and many more JUST IN ONE
CLICK.this wiil be a competitive edge to us too.our retailing format will be according to the
analyzed Indian market scenario .we will make these as benchmarks and work accordingly.

• Launch online website.

• Any furniture product in one click.

• Marketing online and penetration strategy.

• Push strategy at starting.

RETAIL MARKETING STRATEGY:-

 A retail strategy is a statement identifying retailer’s target market, the retail format to meet
the need and requirements of the customers of target market and finally to build a sustainable
competitive advantage.

PENETRATION STRATEGY

PUSH STRATEGY

We are providing the furniture of good at relatively lower prices than the other local market
players so as to build a strong competitive advantage. There are services provided to
customers along with the products so as to gain their loyalty such as good dedicated staff to
handle their queries. there queries will be solved in just one click at website.

Financial Strategy:
The cost of establishing a new store 50 Lakh when considering:

• Building acquisition, layout and design

• Human resources
• Establishing local supplier links
• Advertising and promotion of the new location (catalogues are expensive)
• Stocking the new store

Location strategy of retail store;

You might have heard people say that location is the most important thing for a business. Then,
the next most important is ... location, and so on.

For many businesses, getting the right location can make the difference between success and
failure. Can think of a shop or restaurant near where you live that has closed down, maybe
because it was in the wrong place?

OUR STORE LOCATION

G.T. ROAD, JALANDHAR

(PUNJAB)
Why I choosing this location:-
There are lots of different reasons why I will choose this location . my retail store location will be based
on these reasons .

Here are some reasons why I will choose this location

Customers

• This retail store will be there to be able to reach its customers.

• For a retail shop, you might want potential customers to be walking past all the time.
• An Internet business might be able to locate almost anywhere!

Language
• As businesses become more global, I need people who can speak the same language as my
customers. This is one reason why, for example, India has been successful in attracting call
centres and software development from the UK and North America.

Image
• This retail store need to be in a location that suits their image.
• Remember, though, high class locations tend to have high rents!

Competitors
• This retail store will be where , there is less competition .

Labour
• Workers must be available locally, or must be willing to travel to work at the business.
• These workers must have the right skills.
• If there is high unemployment locally, I might find it easier to recruit workers, and maybe I
won’t have to pay them as much as I would elsewhere.
• But if there is high unemployment, local people may not have as much to spend with my
business.
• Often a location becomes a centre for related industries - Staffordshire for potteries, Sheffield for
steel, and the local people have particular skills.

Land/buildings
• The right amount and type of land and buildings must be available.
 • For some businesses, you need a lot of space - perhaps your business is noisy or creates fumes
and needs to be well away from where people live.
• The ratail store need to be near their customers, or to their suppliers.

Transport and communications links

• There workers need to be able to travel to work.
• I might need to be able to transport materials and products in and out of my business.
• Telephone, postal and Internet services might be better in cities than in the countryside.

Human Resource:

It is a part and partial of our store.The HR manager will lead to conduct a lot of
analysis,feedback and performance oriented works.because we are starting this store at a lower
level so there will not be too much need of HR but HR professional will be needed for
maintaining the internal operations of the staff and many more.the staff will be-

• IT professional-2
• Operations and supply managers-4
• Guard and peons-3
• Staff-6
• Clerks-2
• Accountant-2

SUPPLY CHAIN:

supply chain management is the delivery of economic value to customer through the
management of the flow of physical goods and associated information from vendors to
customers.we will have PULL SUPPLY CHAIN.a supply chain in which orders of Furniture will
be generated at the store level on the basis of sales data.

The supply of Furniture will be from different Furniture markets situated in PUNJAB and in
different parts of North Zone if India.we are preferring only North Zone of India because if we
cover whole India it will be very costly for us,first we will grab N Indian market then
accordingly will have expantion plans.

The supply of furniture will be from:

 • Local Furniture dealers
• From professional Furniture markets.

PRICING, PROMOTION AND COMMUNICATION-MIX

DECISIONS:-
Pricing:

LOW PRICING:
This strategy emphasis the continuity of retail prices at a level somewhere between the regular non sale
price and deep-discount sale price of high low retailers.

I have choosen the LP because

• It assures customers of lower prices.

• Reduces advertising and operating expenses.

• Reduces stockouts and improves inventory management.

Promotion decision:-
As a part of differentiating our product offerings from that of other major lifestyle stores we
conducting many events and promotion campaigns to combine entertainment with shopping.
These included advertisement through add on T.v, newspaper, through internet websites. As
internet also becomes one of the main source in retailing so we promote our products through
internet also.

Communication mix:-
As Consumers are loudly demanding to be able to access relevant information through the
channel of their choice, which means that the more channels an organization offers their
customers, the better response they will get. So for this we contact consumers is by a
combination of channels such as a piece of direct mail, Television home shopping, skill full
employees, mobile phone or

with a choice of channels for the response mechanism, or an SMS with an online voucher code,
all these possibilities help hone in on our understanding of what makes the customer tick.

CUSTOMER RELATIONSHIP MANAGEMENT AND

SERVICES:-
CRM (customer relationship management) is a business philosophy and set of strategies,
programs and systems that focuses on identifying and building loyalty with a retailer’s most
valued customers.

There are four important characteristics that CRM system may offer you:

1. First it will track and report every interaction with a customer, describing the customer's
purchase, interest or demand. It will report also the changing needs of the customer and the way
your business reacts effectively to them.
2. Furthermore, the CRM will be a universal instrument for collecting data about the service
requests, order entry, satisfaction and billing.
3. Third, the CRM will be able to measure the performance of the business on the basis of
internal benchmarks.
4. Last the CRM will facilitate the working processes by emphasizing on the positive and
exclude the negative practices in your customer relations center.

As all we know that customer is all in all in any kind of business. So our main focus is also to
satisfy the customer very well, so that if customers want to purchase again he will prefer to come
only in our store. For this we develop CRM programs on time to time basis which will help us to
develop good customer and then converting these customers into high ltv (life time value)
customers.

We give special services to our LTV customers also like:

1. We give credit purchase facility to our customer.

2. We give special discounts or gifts on time to time to our LTV customer.
3. We also provide home service to our customer.

CONSUMER BEHAVIOUR AND PRESENT MARKET

SCENARIO:
The Effect of the Internet in the Furniture Retail Market
There are many new challenges for small businesses in the 21st century, especially the extensive
use of Internet. It leads that the competition of small businesses, such as the Furniture retail
market, is fierce and getting fiercer. How the internet affect on the Furniture retail market
1. Introduction

About ten years ago, dealing with the retail trade was wonderfully simple for publishers. They
had their own dedicated retail outlets that actually in the main sold only Furniture. Meanwhile
for buyers there were only two ways to buy a Furniture, either order it via a catalogue or
Furniture club or, more commonly, simply go to a shop, pay money and take it home in a bag.
Now following an explosion in the use of the internet, the buyers and sellers have been affected
by this expansion. “The Internet has changed the way your customers shop, and that means you
must change the way you market your store.”

2. The effect of the Internet

Nowadays, customer can visit the onlin furniture, browse through the shop’s collection, make a
selection, and pay for the furniture product online. The furniture may be delivered physically or,
in some cases, downloaded onto the buyer’s computer. And as many of the orders are
international, this raises challenging issues for existing furniture retail market.

Reducing costs
The Internet market can reduce costs, including fixed costs and variable costs, for both buyers
and sellers. To buyers, these costs include the opportunity cost of time spent searching, as well as
associated expenditures such as driving, telephone calls, computer fees and magazine
subscriptions. Similarly, sellers face costs in identifying qualified buyers for their products, such
as market research, advertising, and sales calls. For instance, quite a few internet-based
technologies lower buyer search costs. Many sites help buyers identify appropriate seller
offerings. However, on-line agents help buyers identify the most desirable prices and product
offerings without requiring them to take specific action. Internet can also lower the cost to buyers
of acquiring information about the reputations of market participants. Such reputations may be
provided as part of the marketplace. The Internet lowers seller search costs as well, by allowing
sellers to communicate product information cost effectively to potential buyers, and by offering
sellers new ways to reach buyers through targeted advertising and one-on-one marketing. By
reducing costs on both sides of the market, it appears likely that buyers will be able to consider
more product offerings and will identify and purchase products that better match their needs,
with a resulting increase in economic efficiency. But the reduction in costs combined with new
capabilities of information technology can set off more complex market dynamics too.
HOW TO GET EXTRA CUSTOMERS FOR YOUR RETAIL BUSINESS

Every business needs to have customers for the survival of the business as well as for the
prosperity of the business. In retail business also customer plays a key role to improve the
business and for the frequent sales. Always there will be an alternative supplier for the same
product in the same center, same city or even on the internet. The success of a retail business lies
in the satisfaction of the customer and this success will help you in getting the customer again
and again. Customer satisfaction is important because a satisfied customer recommend the
business to other as they have confidence in the retailer. So retailer who is focused only on price
will distract the customer from the business as the customers finds that there is nothing to match
between their expectations and what actually happens.

Here are the seven ways to attract customers to your retail business:

(1) Know Your Customer: In a retail business personalized service with a smile is more
important. You have to create a lasting impression in the mind of each customer. Firstly create a
friendly atmosphere by calling them by name because people like to be known. Secondly
remember the things purchased by the customers generally and show new items of things they
are interested in. The care given by the retailer will definitely bring the customers back to the
same shop. Finally you can boost up the enjoyment of positive shopping experience of the
customer with a warm smile.

(2) Follow the Trends: You have to follow the trends to keep up-to-date. If you know the
industry well, you will gain more customers because you can give what they want. So for
accomplishing the goal, you must be committed to learn the trends that are changing daily.

(3) Convenience: Accessibility of the store is also important to create a positive shopping
experience. The customer service, payment options, trading hours, home delivery or product
assembly are all plays a role in customer satisfaction. Every one want to save their time also i.e.
nobody wants to waste their time in shopping. Customers definitely go for those shops which
have respect on their time and those which offer them most convenient shopping.

(4) Innovative Ideas and Recommendations: Most the customers are interested in the use of
the products but some retailers have a wide range of products and do not have any knowledge
about the products displayed in the shop. In this age of technology most of the customers know
about the product they going to buy. Such customers expect the sales people to know more about
the product and assess the information they have taken from the internet and also be able to
review the claims of the products. Retailers who provides innovative or interesting ideas,
explains the benefits of the products they have and show how these product can compliment each
other will definitely win extra customers than the competitors.

(5) Performance as Promised: Every customer are expecting from the retailer to do the
expected and then to do the unexpected. Basic expectations of a customer should be satisfied and
should meet the promises that have been made by the retailer. Retailer can give the unexpected
as a bonus of his appreciation of the sale.

(6) Value of the product over price: Customers always need a fair price for the products and
the use of the products should match the price. If the retailer gives a product at a cheap price
won’t bring back the customer who had a bad experience with the product of previous sale.
Quality of the product always provides customer satisfaction but price necessarily not.

(7) Post sales Relationship: Customer satisfaction can be attained by guarantees and warranties.
Delivery or installation of a product in a good condition also gives a positive view toward the
retailer. The relationship with the customer can be continued through the notification of new
product or add-ons. You can also check the performance of the purchased products through
follow up calls.

References:-
 http://multichannelmerchant.com/retailchannel/

 Retailing Managent Book by LEVY

 Marketing Management Book by KOTTELER, KELLER & JHA