INTRODUCTION

Retailing industry occupies a prominent segment in any economy both in

terms of GDP contribution and share in total employment. It is contribute
10% of total Indian GDP. Indian retail sector is divided into two sector
organized and unorganized. Organized retailers are the licensed retailers
who pay sales tax, income tax but in India only 2% are organized retailer
and 98% is unorganized. Retail has been acknowledged as one
of the major employment sources all over India and the number of
potential opportunities in the sector is on the rise. Many changes have
been occurred in the field of retailing and hence marketing functions too
have been experiencing dramatic changes across the world by virtue
of the unrelenting wave of globalization sweeping across the world. The
project explain the current retail scenario of India and growth of different
retail sector and about the major retail players of India. The project will
Also describe the opportunities and challenges of Indian retail sector.

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A.OBJECTIVE OF THE STUDY

o To know the past and current scenario of organized retail sector in

India.

o To know strengths, weakness, opportunities and, threats to retail

sector in India.

o To know about the major retail players and their future.

o To understand the future growth of retail sector and their

contribution in the country .

o Scope of investment in retail market.

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B. RETAILING

Retailing is the interface between the producer and the individual

consumer buying for personal consumption. This excludes direct interface
between the manufacturer and institutional buyers such as the government
and other bulk customers. A retailer is one who stocks the producer’s
goods and is involved in the act of selling it to the individual consumer, at
a margin of profit. As such, retailing is the last link that connects the
individual consumer with the manufacturing and distribution chain.

The retail industry in India is of late often being hailed as one of the
sunrise sectors in the economy. AT Kearney, the well-known international
management consultancy, recently identified India as the ‘second most
attractive retail destination’ globally from among thirty emergent markets.
It has made India the cause of a good deal of excitement and the cynosure
of many foreign eyes. With a contribution of 14% to the national GDP
and employing 7% of the total workforce (only agriculture employs more)
in the country, the retail industry is definitely one of the pillars of the
Indian economy
The retail scenario is one of the fastest growing industries in India over
the last couple of years. India retail sector comprises of organized retail
and unorganized retail sector. Traditionally the retail market in India was
largely unorganized; however with changing consumer preferences,
organized retail is gradually becoming popular. Unorganized retailing
consists of small and medium grocery store, medicine stores, subzi mandi,

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kirana stores, paan shops etc. More than 90% of retailing in India fall into
the unorganized sector, the organized sector is largely concentrated in big
cities. Organized retail in India is expected to grow 25-30 per cent yearly
and is expected to increase from Rs35, 000 cr. in 2004-05 to Rs109, 000
cr. ($24 billion) by 2010.

Manufacturer
Retailers Customers

Distributors/Wholesalers

Retailing involves selling products and services to consumers for their

personal or family use. Department stores, like Burdines and Macy's,
discount stores like Wal-Mart and K-Mart, and specialty stores like The
Gap, Zales Jewelers and Toys 'R' Us, are all examples of retail stores.
Service providers, like dentists, hotels and hair salons, and on-line stores,
like Amazon.com, are also retailers.

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B.1 Importance of Retailing

• As the final link between consumers and manufacturers, retailers

are a vital part of the business world. It would be very costly and
time consuming for you to locate, contact and make a purchase
from the manufacturer. Similarly, it would be very costly for the
manufactures of these products to locate and distribute them to
consumers individually. By bringing multitudes of manufacturers
and consumers together at a single point, retailers make it possible
for products to be sold, and, consequently, business to be done.

• Retailers also provide services that make it less risky and more fun
to buy products. They have salespeople on hand who can answer
questions, may offer credit, and display products so that consumers
know what is available and can see it before buying. In addition,
retailers may provide many extra services, from personal shopping
to gift wrapping to delivery, that increase the value of products and
services to consumers.

• According to the National retail federation, 1 in 5 American

workers are employed in the retail industry. The Department of
Labor estimates that since 1990, 700,000 new jobs have been
created in the retail sector. That's 13% of all new jobs in the United
States.

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B.2 Traditional Retailing of India

India is the country having the most unorganized retail market.

Traditionally the retail business is run by Mom & Pop having Shop in the
front & house at the back. More than 99% retailers function in less than
500Sq.Ft of area. All the merchandise was purchased as per the test &
vim and fancies of the proprietor also the pricing was done on ad hock
basis or by seeing at the face of customer. Generally the accounts of
trading & home are not maintained separately. Profits were accumulated
in slow moving & non-moving stocks which were to become redundant or
consumed in-house. Thus profits were vanished without their knowledge.
The Manufactures were to distribute goods through C & F agents to
Distributors & Wholesalers. Retailers happen to source the merchandise
from Wholesalers & reach to end-users. The merchandise price used to
get inflated to a great extent till it reaches from Manufacturer to End-user.
Selling prices were largely not controlled by Manufacturers. Branding
was not an issue for majority of customers. More than 99% customers are
price sensitive & not quality or Brand Sensitive at the same time they are
Brand conscious also. Weekly Bazaar in many small tows was held &
almost all the commodities were on the scene including livestock.
Bargaining was the unwritten law of market. Educational qualification
level of these retailers was always low. Hence market was controlled by
handful of distributors &/or Wholesalers. Virtually there was only one
format of retailing & that was mass retail. Retailer to consumer ratio was
very low, for all the categories without exception. Varity in terms of
quality, Styles were on regional basis, community based & truly very low

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range was available at any given single place. Almost all the purchases /
(buying) by mass population was need oriented & next turn may be on
festivals, Marriages, Birthdays & some specific occasions .

Impulsive buying or consumption is restricted to food or vegetables etc.

Having extra pair of trousers or Shirts or Casuals & Formals & leisure
wear & sports wear & different pair of shoes for occasions is till date is a
luxury for majority population except for those living in Metros.
Purchasing power of Indian urban consumer is very low and that of
Branded merchandise in categories like Apparels, Cosmetics, Shoes,
Watches, Beverages, Food, Jewellery, are slowly seeping into the lifeline
of Indian City folks. However electronic & electrical home appliances do
hold appropriate image into the minds of consumers. Brand name does
matter in these white goods categories. In the coming times also majority
of organized retailers will find it difficult to keep balance with rest of the
unbranded retail market which is very huge.

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B.3Quick facts of Indian Retail

• Indian Retail sector is the fifth largest global retail destination.

• India retail market is dominated by the unorganized sector.

• The top five companies in retail hold a combined market share of
less than 2%.
• The Indian retail market has been ranked by AT Kearney's eighth
annual Global Retail Development Index (GRDI), in 2009 as the
most attractive emerging market for investment in the retail sector.
• Currently the share of retail trade in India's GDP is around 12 per
cent, and is estimated to reach 22 per cent by 2010.

• According to Government of India estimate the retail sector is

likely to grow to a value of Rs. 2,00,000 cr. (US$45 billion) and
could yield 10 to 15 million retail jobs in the coming five years;
currently this industry employs 8% of the working population.
• India continues to be among the most attractive countries for global
retailers. According to the Department of Industrial Policy and
Promotion, approximately US$ 47.43 million was the amount of
Foreign Direct Investment (FDI) inflow as on September 2009, in
single-brand retail trading.

More than 80% of the retail sector in the country is concentrated in the
large cities. A study reveals that among the more than 20 locations, for
organized retail in India, Mumbai was found to be the most preferred
location followed closely by Bengaluru in the second position.

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B.4 Industry analysis of Indian Retail sector

Modern retailing has entered India in form of malls and huge complexes
offering shopping, entertainment, leisure to the consumer as the retailers
experiment with a variety of formats, from discount stores to
supermarkets to hypermarkets to specialty chains. However, kiranas still
continue to score over modern formats mostly due to the convenience
factor i.e. near to their house. This organized segment typically comprises
of a large number of retailers, greater enforcement of taxation
mechanisms and better labour law monitoring system. It's no longer about
just stocking and selling but about efficient supply chain management,
developing vendor relationship quality customer service, efficient
merchandising and even the labour class is also in the working process
timely promotional campaigns. The modern retail formats are
encouraging development of well-established and efficient supply chains
in each segment ensuring efficient movement of goods from farms to
kitchens, which will result in huge savings for the farmers as well as for
the nation. The government also stands to gain through more efficient
collection of tax revenues. Network marketing has been growing quite
fast and has a few large players today. Gas stations are seeing action in
the form of convenience stores, ATMs, food courts and pharmacies
appearing in many outlets. In the coming years it can be said that the
hypermarket route will emerge as the most preferred format for
international retailers stepping into the country. Estimates indicate that
this sector will have the potential to absorb many more hypermarkets in
the next four to five years.

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Traditionally, the kirana retailing has been one of the easiest ways to
generate self-employment, as it required minimum investment in terms of
land, labour and capital. These store are not affected by the modern
format of retailing. In order to keep pace with the modern formats, kiranas
have now started providing more value-added services like stocking ready
to cook vegetables and other fresh produce. They also provide services
like credit, phone service, home delivery etc. The organized retailing has
helped in promoting several niche categories such as packaged fruit
juices, hair creams, fabric bleaches, shower gels, depilatory products and
convenience and health foods, which are generally not found in the local
kirana stores. Looking at the vast opportunity in this sector, big players
like Reliance has announced its plans to become the country's largest
modern retainers by establishing a chain of stores across all major cities.

However, retailers need to adjust their product mix for smaller cities, as
they tend to be more conservative than the metros. In order for the market
to grow in modern retail, it is necessary that steps are taken for rewriting
laws, restructuring the tax regime, accessing and developing new skills
and investing significantly in India.

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B.5 Present Indian Retail scenario

• Unorganized market: Rs. 583,000 cores.

• Organized market: Rs.5, 000 cores

• 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

• Growth in organized retailing on par with expectations and

projections of the last 5 Years: on course to touch Rs. 35,000 crores
(US$ 7 Billion) or more by 2005-06

India has highest number of outlets per person (7 per thousand) Indian
retail space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world
Indian retail density of 6 percent is highest in the world 1.8 million
households in India have an annual income of over 45 lakes (US$97,650)

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A. UNORGANISED RETAIL IN INDIA

Retail in India is essentially “unorganized.” 98% of the retail industry is

made up of counter-stores, streetmarkes, hole-in-the-wall shops and
roadside peddlers. The term “unorganized retail” is better understood
when comparing this form of retail to the organized retail that one is
familiar with in developed countries. Unorganized retail is characterized
by:

1) Family-run stores

2) Lack of best practices when it comes to inventory control and supply-

chain management

3) Lack of standardization

4) Essentially a sector populated by anyone who has something to sell

Unorganized Retail is essentially the next-step above agriculture for those
seeking to climb the ladder of affluence in search of a higher income.
Combine this with very few barriers to entry in the retail sector andone
gets an industry run by people commonly referred to as “Baniyas”(See
exhibit), with a lack of education, experience and exposure. This is the
major factor responsible for the manner in which the retail industry
functions. It is no surprise then that the productivity of this sector is
approximately 4% that of the U.S. retail industry.

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A.1 Causes of Low Productivity in Unorganized Retail

1) Labor intensity: Counter-stores in India have a very low output to labor

consumption ratio. Low labor costs, failure to employ part-time labor and
the absence of multitasking are the mainly responsible for the unusually
high consumption of labor. This has driven down the productivity in the
sector.

2) Inventory and Supply Chain Management: Unorganized retailers in

India rarely track consumer behavior and sales data to improve their
inventory management practices. Even among the handful of retailers that
employ experience-based improvements in their business, their efforts are
largely met with no support from their suppliers. Counter stores and street
vendors do not have the infrastructure, exposure or credibility to form
lasting relationships with suppliers. As a result retailers usually use
different suppliers every time they purchase inventory. This leaves them
largely incapable of strategically managing their business.

3) With 700 million agricultural labor18 looking to move into retail, low
barriers to entry and the absence of regulation in this sector have made it a
largely over-supplied sector. The excess supply of counter-stores and
street vendors represents a tremendous decrease in the productivity of this
sector.

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4) The absence of any real competition-almost all retailers find a way to
make ends meet or change their merchandise till they make ends meet-is
also responsible for a form of status quo in the sector where little to no
improvements in efficiency, management and by extension productivity
are seen. In fact, this sector is so stagnant with respect to operational
changes that no improvement in productivity is expected in the near
future.

A.2 Low Productivity, but Still Successful:

However, low productivity is only an indication of underutilization and/or

over allocation of resources. It does not reflect the market share or
potential of the unorganized retail sector when it comes to catering to the
Indian consumer.

The unorganized retail sector competes on the basis of a number of factors

that give it a leg up on organized retail. Much of the reason why
unorganized retail has dominated the retail market is the unique ways in
which it operates when it comes to serving the consumer. Corner-stores
have catered to the traditional Indian consumer psyche and are partially
responsible for shaping it. For unorganized retail in India the market
mantra is “convenience”:

1) Home-Delivery: Corner-stores and street vendors do their best to cater

to the local population in the area in which they operate. As a result most

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of them provide home-delivery services, for any and all order sizes, at no
extra charge. Shopping is as simple as making a phone call and narrating
the shopping list to the store owner. Within minutes, the entire list of
groceries with an itemized, hand-written bill reaches your doorstep. The
absence of product variety, brand diversity,
marketing and exposure had made shopping in stores almost unnecessary
for the Indian consumer. Retailers unconstrained by labor costs had no
problem in understanding this dynamic and adapting to the needs of the
Indian consumer.

2) Credit: Unorganized retailers enjoy a loyal and limited clientele. The

personal nature of transactions coupled with small transaction sizes allows
unorganized retailers to sell goods on credit often settling bills with
clients at the end of the month.

3) Proximity: Unorganized retailers like corner stores are almost always

located at a few minutes walking distance from their clients. Street
vendors will go door-to-door selling their goods. This has provided a
number of advantages to the Indian consumer. He receives his purchase
almost immediately thanks to the home-delivery of goods, he never has to
move more than half a mile from his house to purchase food, clothing and
other goods. Finally, the proximity of unorganized retailers caters to the
just-in-time mentality of Indian consumers who prefer to buy goods when
needed for immediate use rather than making bulk purchases in advance.

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Unorganised re
etail: secctor wise
e break u
up

23% food &
& groceries

2%
% beautty care
3%
% cloth & textile
60% 4%
4% consu
umer durables
4
4% jewellery & watchess
homee décor & furnising
otherrs

F
Fig.1

S
Shows unorrganized reetail sectorr wise breaak up.

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G
Growth of unorganizzed retail sector in India
I 2010

Go
owth in 2010

14% 3%
30%
10% f
food & groceri
ies
Beauty care

20% C
Cloth & Textile
e
C
Consumer durable
40%
% J
Jewellery
Home décor 

F
Fig.2

S
Shows the growth off unorganizzed retail sector
s 20100.

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B. ORGANISED RETAILING IN INDIA

In late 1990's the retail sector has witnessed a level of transformation.

Retailing is being perceived as a beginner and as an attractive commercial
business for organized business i.e. the pure retailer is starting to emerge
now. Organized retail business in India is very small but has tremendous
scope. The total in 2005 stood at $225 billion, accounting for about 11%
of GDP. In this total market, the organized retail accounts for only $8
billion of total revenue. According to A T Kearney, the organized
retailing is expected to be more than $23 billion revenue by 2010.
In organized retailing will grow faster than unorganized sector and the
growth speed will be responsible for its high market share, which is
expected to be $ 17 billion 2010-11.
Retailing will show good prospects in cities like Mumbai, Delhi, Chennai,
kolkata, Banglore and Kanpur. After Dubai, Singapore and Hong Kong,
In India Delhi will be the next big retail destination, According to
Confederation of Indian Industries whose findings have shown that Delhi
has the good resources and good conditions for the retail sector. Out of the
total earnings of the Government of Delhi Rs 11,000 crore, Rs 6,500 crore
is achieved from the retail sector. .

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Organise
O ed retailing:secttor wise berak u
up

2% 1%
Foot wear 22%
3% Clothing 12
2%
5% 22%
Book & maagazines 9%
8%
Jewellery &
& assessory 8%
%
Durable 5%
%
9%
12
2% Home furn
nishing 3%
Medical seervices 2%
Food & gro
ocery 1%
Health & b
beauty 1%

F
Fig.3

S
Shows orgaanized retail sector wise
w break up.
u

19 
 
 
 
 
 

Secttor wise CAGR ggrowth: o
organise
ed 
retailing
80.00%
8
70.00%
7
60.00%
6
50.00%
5
40.00%
4
30.00%
3
20.00%
2
10.00%
1
Sector wise CAGR growth: 
0.00% organised reetailing

F
Fig.4

S
Shows secto
or wise CA
AGR grow
wth.

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G
Growth of Organizeed retail in
n India 2010

Growth in 2010

6.40% 11.50%
9.90% Foo
otwear
2.90% Clotthing
3%
Boo
ok & Magazinee
Jew
wellary & assessary
38.10%
Durrable
Hom
me Furnishing

F
Fig.5

S
Shows the growth
g of organizedd retail secttor 2010

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C.AUTHORISED VS UNAUTHORISED
RETAILING

Many consumers are confused about the terms "authorized" and

"unauthorized" retailers. Partly due to the efforts of manufacturers, who
discourage unauthorized retailers, consumers may be reluctant to purchase
legitimate products from an unauthorized retailer who is offering a
genuine product.

What is an "authorized" retailer?

An authorized retailer has a contractual relationship with a big

manufacturer. This benefits both the retailer and the manufacturer. Big
corporations like to have as much oversight over their marketing as
possible, because more control means bigger profits. They like to operate
vertically-that is, with direct control over everything from research to
manufacturing to retail sales. This makes it easier to keep retail prices
high and generate bigger profits.

Big companies want customers to buy from their authorized dealers

because they make a bigger profit. However, many retailers operate
outside the corporate system. Why?

To offer lower prices. The unauthorized retailer can often purchase and
then re-sell products at a lower price than the authorized retailer.
Generally, the unauthorized retailer can do this by obtaining genuine
products overseas and bringing them back to the U.S. for sale.

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Who does this?

Surprisingly, not just Internet or regional operations; even some big-box

names like Costco, Amazon, and Target have engaged in unauthorized
retailing.

Is this legal?

Yes! In the case of Quality King Distributors v. L'Anza Research

International, No. 96-1470, the Supreme Court held unanimously that an
American company cannot block the domestic sale of genuine products
that the company had originally sold overseas. The Court ruled that once a
product had been distributed in an authorized manner (the "first sale,"
according to Federal copyright law), the copyright owner had no further
control over the product's fate.

The Supreme Court's decision overturned a lower court case establishing

copyright law as a defense against unauthorized retailers. In 1996 the
United States Court of Appeals for the Ninth Circuit, in San Francisco,
had ruled that a distributor of genuine beauty products had infringed the
copyright on a brand of hair products manufactured in the United States
for sale at a discount overseas. In the U.S. market, the products were
intended for exclusive sale in salons.

The Supreme Court ruling supports free trade that benefits American
consumers. The products in question are authentic American-made goods,
not counterfeit or pirated. Trademark law was not at issue in this case
because the challenged products were legitimate products authorized by

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the manufacturer for sale. So big corporations sought to use copyright law
as a source of protection.

How does the consumer benefit?

Simple-lower prices! Because unauthorized retailers are free to purchase

genuine products from a variety of sources-not just from the
manufacturers-they can offer lower prices than other stores. So if you
know you are buying a genuine product, you may be able to get a great
deal from an unauthorized retailer.

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D. DEVELOPMENT OF RETAIL

Peddlers and Producers

The Retail Trade is rooted in two groups, the peddlers and producers.
Peddlers tended to be opportunistic in their choice of stock and customer.
They would purchase any goods that they thought they could sell for a
profit. Producers were interested in selling goods that they had produced.

General Store:

This division continues to this day with some shops specializing in

specific areas, reflecting their origins as outlets for producers (such as
Pacific Concord of Hong Kong), and others providing a broad mix,
known as General Store (such as Casey's in the Midwest of the
U.S.A.).Although specialist shops are still with us, over time, the general
store has increasingly taken on specialist products. Customers have found
this to be more convenient than having to visit many shops - thus the term
"Convenience Store" has also been applied to these shops. As the
popularity of general stores has grown, so has their size. This combined
with the advent of Self-Service has lead to the Supermarket, or
Superstore.

Early Markets:

Over time, producers would have seen value in deliberately over-

producing in order to profit from selling these goods. Merchants would
also have begun to appear. They would travel from village to village,

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purchasing these goods and selling them for a profit. Over time, both
producers and merchants, would regularly take their goods to one selling
place in the centre of the community. Thus, regular markets appeared. The
First Shop : Eventually, markets would become permanent fixtures i.e.
shops. These shops along with the logistics required to get the goods to
them were, the start of the Retail Trade.

The Birth of Distance Retailing:

Defined as sales of goods between two distant parties where the deliverer
has no direct interest in the transaction, the earliest instances of distance
retailing probably coincided with the first regular delivery or postal
services. Such services would have started in earnest once man had
learned how to ride a camel, horse etc. When individuals or groups left
their community and settled elsewhere, some missed foodstuffs and other
goods that were only available in their birthplace. They arranged for some
of these goods to be sent to them. Others in their newly adopted
community enjoyed these goods and demand grew. Similarly, new settlers
discovered goods in their new surroundings that they dispatched back to
their birthplace, and once again, demand grew. This soon turned into a
regular trade. Although such trading routes expanded mainly through the
growth of traveling salesmen and then wholesalers, there were still
instances where individuals purchased goods at long distance for their
own use. A second reason that distance selling increased was through war.
As armies marched through territories, they laid down communication
lines stretching from their home base to the front. As well as garnering

26 
 
 
 
 
 
goods from whichever locality they found themselves in, they would have
also taken advantage of the lines of communication to order goods from
home.

It is likely that, as markets became more permanent fixtures they

evolved into shops. Although advantageous in many respects, this
removed the mobility that a peddler or traveling merchant may still have
enjoyed. For some shopkeepers, it made sense to obtain extra stock and
open up another shop, most probably operated by another family member.
This would recover business from peddlers and create new business and
the greater volume would allow the shopkeeper to strike a better deal with
suppliers. Thus the retail chain would have started. Its thought that this
process would have started in china over 2200 years ago with a chain of
shops owned by a trader called Lo Kass.

The First Self-Service Store:

This all changed in 1915 when Albert Gerrard opened the Groceteria in
Los Angeles, the first documented self-service store. This was soon
followed a year later by the Piggly Wiggly® self-service store, founded
by Clarence Saunders in Tennessee in the U.S.

Growth:

This new type of shopping was more efficient and many customers
preferred it. Although personal service stores remain to this day, this new
concept started a rapid growth of self-service stores in the United States.

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Other countries were slow to take up the idea, but there has been a steady
rise in the global amount of self-service stores ever since

.Efficiency

These entrepreneurs noticed that their staff had to spend a great deal of
time taking grocery orders from customers. The groceries were stacked on
shelves allowing customers to walk around and browse, collecting their
shopping in a basket that was supplied. The shopkeeper would only need
to tot up the final bill at the end of the process and transfer the goods from
the basket to the customer and receive payment.

From Family Business to Formal Structure:

Although retail chains would have been mostly run by families, as some
chains grew, they would have needed to employ people from outside of
their family. This was a limiting factor as there would have been a limit to
the amount of trusted non family members available to help run the chain.
Another, even more definite limiting factor was the distance the furthest
shop would have been from the original shop. The greater the distance,
the more time and effort would have been needed to effectively manage
outpost shops and to service them with goods. There was, therefore, a
natural barrier to expansion. That was the case until transport and
communications became faster and more reliable. When this happened
towards the end of the 19th century, chains became much bigger and more
widespread. Many of these businesses became more structured and
formalized, leading to the retail chain that we see today.

28 
 
 
 
 
 
It is likely that, as markets became more permanent fixtures they evolved
into shops. Although advantageous in many respects, this removed the
mobility that a peddler or traveling merchant may still have enjoyed. For
some shopkeepers, it made sense to obtain extra stock and open up
another shop, most probably operated by another family member. This
would recover business from peddlers and create new business and the
greater volume would allow the shopkeeper to strike a better deal with
suppliers. Thus the retail chain would have started. Its thought that this
process would have started in china over 2200 years ago with a chain of
shops owned by a trader called Lo Kass.

29 
 
 
 
 
 
E. CLASSIFICATION OF INDIAN RETAIL
SECTOR

a) FOOD RETAILERS
There are large number and variety of retailers in the food-retailing sector.
Traditional types of retailers, who operate small single-outlet businesses
mainly using family labour, dominate this sector .In comparison, super
markets account for a small proportion of food sales in India. However
the growth rate of super market sales has being significant in recent years
because greater numbers of higher income Indians prefer to shop at super
markets due to higher standards of hygiene and attractive ambience.

b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on
health and beauty products .Here also small, single-outlet retailers
dominate the market. However in recent years, a few retail chains
specializing in these products have come into the market. Although these
retail chains account for only a small share of the total market , their
business is expected to grow significantly in the future due to the growing
quality consciousness of buyers for these products .

c) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets
operate all over India. Traditional outlets stock a limited range of cheap

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and popular items; in contrast, modern clothing and footwear stores have
modern products and attractive displays to lure customers. However, with
rapid urbanization, and changing patterns of consumer tastes and
preferences, it is unlikely that the traditional outlets will survive the test of
time.

d) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this
market, very few large and modern retailers have established specialized
stores for these products. However there is considerable potential for the
entry or expansion of specialized retail chains in the country.

e) DURABLE GOODS
The Indian durable goods sector has seen the entry of a large number of
foreign companies during the post liberalization period. A greater variety
of consumer electronic items and household appliances became available
to the Indian customer.
Intense competition among companies to sell their brands provided a
strong impetus to the growth for retailers doing business in this sector.

f) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have
encouraged consumer expenditure on leisure and personal goods in the
country.

31 
 
 
 
 
 
F. INVESTMENT POLICY AND INITIATIVES

F.1.FDI Policy in the Retail Sector

India has kept the retail sector largely closed to outsiders to safeguard the
livelihood of nearly 15 million small storeowners and only allows 51 per
cent foreign investment in single brand retail with prior Government
permission. FDI is also allowed in the wholesale business. Single-brand
retailers such as Louis Vuitton, Fendi, LLadro, Nike and Toyota can
operate now on their own. Metro is already operating through the cash-
and-carry wholesale mode.

The policy makers continue to explore areas where FDI can be invited
without hurting the interest of local retail community. Government is
considering opening up of the retail trading for select sectors such as
electronic goods, stationery, sports goods, and building equipment.

Foreign direct investment (FDI) in retail space, specialized goods

retailing like sports goods, electronics and stationery is also being
contemplated. The Government has to walk a tightrope to ensure a `level
playing field' for everyone.

The policy of permitting 51 per cent FDI in single-brand product retailing

has led to the entry of only a few global brands such as Nike (footwear),
Louis Vuitton (shoes, travel ,accessories, watches, ties, textiles ready-to
wear), Lladro (porcelain goods), Fendi (luxury products), Damro (knock-
down furniture), Argenterie Greggio (silverware, cutlery, traditional

32 
 
 
 
 
 
home accessories and gift items) and Toyota (retail trading of cars), into
retail trading. A 12-billion euro French luxury industry is also eyeing the
domestic luxury segment to make a presence through retailing directly.

F.2 Business models for entry in Indian markets

Due to the FDI restrictions the international players are looking for
alternative avenues to enter the Indian markets. However FDI restrictions
in retailing have not deterred prominent international players from setting
up shops in India.

In recent developments, the Australian retail giant Woolworth Ltd made

in innovative entry in India’s retail space, with India’s Tata group. The
Tata group has floated Infiniti Retail Ltd, in venture with which will sell
consumer goods and electronics across the country. Infiniti Retail will be
a 100 per cent subsidiary of Tata Sons and will receive an initial equity
infusion of Rs 4 billion. This Tata retail venture joined hands with
Australian retail giant Woolworths Ltd, which currently operates more
than 2,000 stores in 12 different formats.

While Infiniti will own and run retail operations in India, Woolworths,
which has attained notable success in selling electronics and consumer
goods through its Dick Smith Electronics chain, will provide technical
support and strategic sourcing facilities from its global network.

33 
 
 
 
 
 
G. MAJOR TYPES OF RETAIL STORES

It is in retailing that very drastic changes have occurred during the last
two decades. Some institutions have disappeared whereas newer ones
have been added.
This process of deletion / addition still continues in newer forms. There
are large scale retailing shops together with very small units, both
working simultaneously.
They have from hawkers and peddlers, who have no permanent place, to
well organized, settled retail shops like chain stores, departmental stores,
etc.
The institutions carrying on the retail business can be classified as under

Major Types of Retail Stores

A) Instore-Retaling B) Non-Store Retailing

1. Department Stores 1. Direct Selling
2. Grocery Stores 2. Telemarketing
3. Speciality Stores 3. Online Retailing
4. Box stores 4. Automatic vendirs
5.Hyper Market 5. Direct Marketing.
6.Super Market
7.Shopping Mall
C) Franchising

34 
 
 
 
 
 
G.1 A. Instore retailing
Department Stores
Department stores consist of separate sections, known as departments,
such as clothing, sporting goods, automotive supplies, health and beauty
products and electronics equipment. Some department stores may also sell
food products. Some department stores feature discounted merchandise,
while others sell more expensive items geared toward the upscale
shopper.

35 
 
 
 
 
 
Grocery Stores

Grocery stores sell prepackaged dry food products as well as perishable

items like produce, dairy and meat products. Grocery stores also typically
sell non-food items such as stationery supplies, cookware, health and
beauty products and greeting cards. Larger grocery stores may include
features like fast-food restaurants and flower shops, as well as modern
conveniences like Internet cafes.

36 
 
 
 
 
 
Specialty Stores

Specialty stores sell specific types of merchandise, such as jewelry,

electronics equipment or toys. The specialty store may be further divided
into different categories within the specialty. For example, toy stores may
have separate departments for board games, video games, dolls and model
cars. Specialty stores may be small, independently-owned operations or
larger stores that are part of a retail chain.

37 
 
 
 
 
 
Box Stores

Box stores, also known as warehouse stores, sell merchandise packaged

in larger quantities that feature lower unit costs to the consumer. They
appeal to shoppers who wish to buy frequently-used items in bulk to save
money. Because they offer larger package sizes, box stores are usually
very large and sparsely decorated, giving the look and feel of a
warehouse.

38 
 
 
 
 
 

Hypermarket
In commerce, a hypermarket (from the French hypermarché) is a store
which combines a supermarket and a department store. The result is a
gigantic retail facility which carries an enormous range of products under
one roof, including full lines of fresh groceries and apparel. When they
are planned, constructed, and executed correctly, a consumer can ideally
satisfy all of their routine weekly shopping needs in one trip to the
hypermarket.

39 
 
 
 
 
 
Supermarket:
Supermarkets usually offer products at low prices by reducing margins.
To maintain a profit, supermarkets attempt to make up for the low
margins with a high volume of sales. Customers usually shop by putting
their products into trolleys (shopping carts) or baskets (self-service) and
pay for the products at the check-out. At present, many supermarket
chains are trying to reduce labour costs (and thus margins) further by
shifting to self-service check-out machines, where a group of four or five
machines is supervised by a single assistant.

40 
 
 
 
 
 
Shopping mall:
Collection of independent retail stores, services, and parking areas
constructed and maintained by a management firm as a unit. It is a 20th-
century adaptation of the historical marketplace. A shopping mall,
shopping centre, shopping precinct or simply mall is one or more
buildings forming a complex of shops representing merchandisers, with
interconnecting walkways enabling visitors to easily walk from unit to
unit, along with a parking area – a modern, indoor version of the
traditional marketplace.

41 
 
 
 
 
 
G.2 B.Non-Store Retailing
A large majority - about - 80% - of retail transactions are made in stores.
However, a growing volume of sales is taking place away from stores.
Retailing activities resulting in transactions that occur away from a
physical store are called non-store retailing. It is estimated that non-store
sales account for almost 20% of total retail trade.
Following are the five types of non store retailing: direct selling, tele-
marketing, online retailing, automatic vending and direct marketing. Each
type may be used not just by retailers but by other types of organisations
as well.

Direct Selling
In the context of retailing, direct selling is defined as personal contact
between a sales person and a consumer away from a retail store. This type
of retailing has also been called in home selling. Annual volume of direct
selling in India is growing fast from the beginning of the 21st century.

The two kinds of direct selling are door to door and party plan. There are
many well known direct-selling companies including Amway, Creative
memories and Excel communications. Diverse products are marketed
through direct selling. This channel is particularly well suited for products
that require extensive demonstration.

42 
 
 
 
 
 
Telemarketing
Sometimes called telephone selling, telemarketing refers to a sales person
initiating contact with a shopper and closing a sale over the telephone.
Telemarketing many entail cold canvassing from the phone directory.
Many products that can be bought without being seen are sold over the
telephone. Examples are pest control devices, magazine subscriptions,
credit cards and cub memberships.

Telemarketing is not problem free. Often encountering hostile people on

the other end of the line and experiencing many more rejections than
closed sales, few telephone sales representatives last very long in the job.
Further some telemarketers rely on questionable or unethical practices.
For instance firms may place calls at almost any hour of the day or night.
This tactic is criticized as violating consumers' right to privacy. To
prevent this, some states have enacted rules to constrain telemarketers'
activities.

Despite these problems, telemarketing sales have increased in recent

years. Fundamentally, some people appreciate the convenience of making
a purchase by phone. Costs have been reduced by computers that
automatically dial telephone number, even deliver a taped message and
record information the buyer gives to complete the sale. The future of
telemarketing is sure to be affected by the degree to which the problems
above can be addressed and by the surge of online retailing.

43 
 
 
 
 
 
Online Retailing:
When a firm uses its website to offer products for sale and then
individuals or organizations use their computers to make purchases from
this company, the parties have engaged in electronic transactions (also
called on line selling or internet marketing). Many electronic transactions
involve two businesses which focuses on sales by firms to ultimate
consumers. Thus online retailing is one which consists of electronic
transactions in which the purchaser is an ultimate consumer.

Online retailing is being carried out only by a rapidly increasing number

of new firms, such as Busy.com, Pets Mart and CD Now.com. Some
websites feature broad assortments, especially those launched by general
merchandise retailers such as Way-mart and Target. Some Internet only
firms, notably Amazon.com are using various methods to broaden their
offerings.

Automatic vending
The sale of products through a machine with no personal contact between
buyer and seller is called automatic vending. The appeal of automatic
vending is convenient purchase. Products sold by automatic vending are
usually well-known presold brands with a high rate of turnover. The large
majority of automatic vending sales comes from the "4 c's" : cold drinks,
coffee, candy and cigarettes.

Vending machines can expand a firm's market by reaching customers

where and when they cannot come to a store. Thus vending equipment is

44 
 
 
 
 
 
found almost everywhere, particularly in schools, work places and public
facilities. Automatic vending has high operating costs because of the need
to replenish inventories frequently. The machines also require
maintenance and repairs.
The outlook for automatic vending is uncertain. The difficulties
mentioned above may hinder future growth. Further, occasional vending-
related scams may scare some entrepreneurs away from this business.

Direct Marketing
There is no consumers on the exact nature of direct marketing. In effect, it
comprises all types of non-store retailing other than direct selling,
telemarketing,
automatic vending and online retailing. In the context of retailing, it has
been defined as direct marketing as using print or broadcast advertising to
contact consumers who in turn, buy products without visiting a retail
store.

Direct marketers contact consumers through one or more of the following

media: radio, TV, newspapers, magazines, catalogs and mailing (direct
mail). Consumer order by telephone or mail. Direct marketers can be
classified as either general - merchandise firms, which offer a variety of
product lines, or specialty firms which carry - only one or two lines such
as books or fresh fruit.

45 
 
 
 
 
 
Direct marketing has drawbacks. Consumers must place orders without
seeing or touching the actual merchandise. To off-set this, direct
marketers must offer liberal return policies. Furthermore, catalogs and to
some extent, direct mail pieces are costly and must be prepared long
before they are issued. Price changes and new products can be announced
only through supplementary catalogs or brochures.

Direct marketing's future is difficult to forecast, given the rise of the

Internet. The issue is whether or not firms relying on direct marketing can
achieve and sustain a differential advantage in a growing competition with
online enterprises.

46 
 
 
 
 
 
G.3 C.Franchising
A franchising operation is legal contractual relationship between a
franchiser (the company offering the franchise) and the franchisee (the
individual who will own the business).

The terms and conditions of the contract vary widely but usually the
franchiser offers to maintain a continuing interest in the business of the
franchisee in such areas as the site selection, location, management,
training, financing, marketing, record-keeping and promotion. He also
offers the use of a trade name, store motif standardized operating
procedure and a prescribed territory. In return the franchisee agrees to
operate under conditions set forth by the franchiser.

For the manufacturers, the franchising is beneficial in these directions:

i. it allows them to conserve capital.
ii. the distribution system is established in the shortest possible time,
iii. Marketing costs are lowest and
iv. Expenses of fixed overhead such as administrative expenses of the
personnel of the company owned units are cut down substantially.

47 
 
 
 
 
 
H.COMPETITIVE ADVANTAGE WITH SPECIAL
REFERENCE TO PHYSICAL FACILITIES

Another competitive advantage of retailers will be how they create

physical facilities which represent the distribution element of a retailer's
marketing mix. Some firms engage in non-store retailing by selling on
hire or through catalogs or door to door, for example-but many more
firms rely on retail stores. Firms that operate retail stores must consider
four aspects of physical facilities.

LOCATION
It is frequently stated that there are three keys to success in retailing:
Location! Although overstated, this axiom does suggest the importance
that retailers attach to location. Thus a stores site should be the first
decision made about facilities. Considerations such as surrounding
population, traffic and cost determine where a store should be located.

SIZE
This factor means the total square footage of the physical store, not the
magnitude of the firm operating the store. These are much different
factors. A firm may be quite large with respect to total sales, but each of
its outlets may be only several thousand square feet in size.

48 
 
 
 
 
 
DESIGN
This factor refers to a stores appearance, both interior and exterior over its
competitor.

LAYOUT
The amount of space allocated to various product lines, specific locations
of products and a floor plan of display tables and racks comprise the
store's layout.
As would be expected, the location, size, design and layout of retail stores
are based on where consumers live and how they like to go about their
shopping.
Consequently, the bulk of retail sales occur in urban, rather than rural,
areas. And suburban shopping areas have become more and more popular,
where as many down town areas have declined.

49 
 
 
 
 
 
I. KEY PLAYERS IN INDIAN RETAIL SECTOR

1.AV Birla Group has a strong presence in apparel retail and owns
renowned brands like Allen Solly, Louis Phillipe, Trouser Town, Van
Heusen and Peter England. The company has investment plans to the tune
of Rs 8000 – 9000 cr. till 2010

Different business areas of AV group

cement
The Group's cement business was earlier under both Grasim Industries
and UltraTech Cement. The two entities are now merged into Ultra Tech
cement to form India's largest cement company. UltraTech cement was
originally the cement business of L&T which was acquired by Aditya
Birla Group in 2004.

50 
 
 
 
 
 
Carbon black

The Group is the fourth largest manufacturer of Carbon Black worldwide.

It operates out of facilities in Egypt, Thailand, India and China.

Textile business

The Aditya Birla Group is the world's largest player in the Viscose Staple
Fiber industry. It operates out of India, Laos, Thailand, Malaysia and
China. It owns the Birla Cellulose brand. Apart from viscose staple fiber,
the group also owns acrylic fiber businesses in Egypt and Thailand,
viscose filament yarn businesses and spinning mills at several locations all
over India and South East Asia. The group has pulp and plantation
interests in Canada and has recently invested in plantations in Laos. The
Aditya Birla group is also a major player in the branded garments market
in India.

Telecom Services

Idea Cellular is now owned by Aditya Birla Group.Idea Cellular started

off as a joint venture with the group, AT&T and the Tata Group. However
the stakes of the remaining partners was eventually acquired by the group.
After an Initial Public Offering on the Indian Stock Markets, Idea Cellular
now accounts for a third of the group's market capitalization. The
company is headquartered in Mumbai and has operations in all the 22
telecom circles in India and is the 3rd largest GSM player in the country.

51 
 
 
 
 
 
Other Businesses
Apart from the above businesses, the Group is a major player in industry
sectors like Insulators, Fertilizers, BPO (Aditya Birla Minacs), Insurance
(Birla Sun Life Insurance), IT, Chemicals, Mining, Sponge Iron, Financial
Services (jointly with Sunlife and more recently, Retail. Aditya Birla
acquired Business Processing Outsource Minacs in 2007.

52 
 
 
 
 
 
2.Trent is a subsidiary of the Tata group; it operates lifestyle retail chain,
book and music retail chain, consumer electronic chain etc. Westside, the
lifestyle retail chain registered a turnover of Rs 3.58 mn in 2006 areas of
business.

Trent is a retail operations company that owns and manages a number

of retail chains in India. Established in 1998, Trent runs lifestyle chain
Westside, one of India’s largest and fastest growing chain of lifestyle
retail stores, Star Bazaar, a hypermarket chain, Landmark, a books and
music chain, and Fashion Yatra, a complete family fashion store.

53 
 
 
 
 
 
Areas of business

• Westside: With a number of stores across India, this chain

offers clothes, footwear and accessories for men, women and
children, along with furnishings, artifacts and a range of home
accessories.
• Star Bazaar: This hypermarket chain offers a wide choice of
products, including staple foods, beverages, health and beauty
products, vegetables, fruits, dairy and non-vegetarian products.
• Landmark: A leader in the books and music category, this
chain has a range of over 100,000 titles in books and music, and
also stocks movies, toys, gift items and stationery.
• Fashion Yatra: The stores bring quality fashion at low prices to
value conscious customers in towns across India.

54 
 
 
 
 
 
3.Landmark Group invested Rs. 300 cores to expand Max chain, and Rs
100 cores on Citymax 3 star hotel chain. Lifestyle International is their
international brand business.

The Landmark Group provides value-driven product range for the

entire family through a diverse portfolio of core retail brands:

Landmark Brands

55 
 
 
 
 
 

56 
 
 
 
 
 
1. K Raheja Corp Group has a turnover of Rs 6.75 billion which is
expected to cross US$100 million mark by 2010. Segments include
books, music and gifts, apparel, entertainment etc.

K Raheja Corp are the pioneers in organized retail by taking a first

giant step to successfully establish a retail store know as "Shopper's
Stop"

The group is expanding its retail chains across the country on the back
of the vast experience it gathered from feedbacks and keen observance
of people's taste keeping in tune with its culture, customs, traditions
and income. .

Crossword, Inorbit Mall & Hyper City have set new bench marks on
the basis of information and adaptation of worldwide changes,
innovations and new techniques in retailing practices.

57 
 
 
 
 
 
2.Reliance has more than 300 Reliance Fresh stores; they have multiple
formats and their sale is expected to be Rs 90,000 crores ($20 billion) by
2009-10.

Since its inception in 2006, Reliance Retail Limited (RRL) has grown into
an organisation that caters to millions of customers, thousands of farmers
and vendors. Based on its core growth strategy of backward integration,
RRL has made rapid progress towards building an entire value chain
starting from the farmers to the end consumers.

A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010

with a planned investment of Rs 30,000 crore over the next five years -
that's the retail vision of Mukesh Ambani and his RIL retail team. RIL's
retail venture seems all set to achieve the status of being the flag-bearer of
India Retail Inc, and that too in record time!

58 
 
 
 
 
 
Subsidiaries of Reliance Retail Limited

Reliance Fresh Limited

Retail Concepts & Services (India) Limited

Reliance Retail Insurance Broking Limited

Reliance Dairy Foods Limited

RESQ Limited

Reliance digital Retail Limited

Reliance Financial Distribution and Advisory Services Limited

Reliance Hypermart Limited

Reliance Retail Finance Limited

Reliance Retail Travel & Forex Services Limited

Reliance Trends Limited

Reliance Wellness Limited

Reliance Brands Limited

Reliance Footprint Limited

Reliance F&B Services Limited

Strategic Manpower Solutions Limited

Reliance Gems and Jewels Limited

59 
 
 
 
 
 
Reliance Integrated Agri Solutions Limited

Reliance Universal Ventures Limited

Reliance Lifestyle Holdings Limited

Reliance Autozone Limite

Delight Proteins Limited

Reliance Supply Chain Solutions Limited

Reliance Leisures Limited

Reliance Home Store Limited

Reliance Agri Products Distribution Limited

Reliance Food Processing Solutions Limited

Reliance Trade Services Centre Limited

Reliance Digital Media Limited

Reliance Personal Electronics Limited

Daiwik Trading Private Limited

Reliance Home Products Limite

Reliance Style Fashion India Private Limited

60 
 
 
 
 
 
5.Future group

Retail forms the core business activity at Future Group and most of its
businesses in the consumption space are built around retail. Future
Group’s retail network touches the lives of more than 200 million Indians
in 73 cities and 65 rural locations across the country. The group currently
operates around 1,000 stores spread over 16 million square feet of retail
space. Present in the value and lifestyle segments, the group’s retail
formats cater to almost the entire consumption expenditure of a wide
cross-section of Indian consumers.

61 
 
 
 
 
 
India’s largest retailer, Pantaloon Retail India Ltd, is gearing up to more
than double the number of its Food Bazaar and Big Bazaar stores, the
expansion contrasting with its simplification drive.

Three years ago, the Future group, the parent company, set out on a
journey to redefine itself. That coincided with the economic slowdown,
which allowed the group to look inward and simplify the complexities of
running a high-growth retail business.

The process began with the group’s fashion and apparel concept
Pantaloons—a Rs1,000 crore business. It cut its production offerings and
assortments by 60-70% and consolidated its supply chain from 18
delivery centers to four for its fashion business.

Big Bazaar is a chain of hypermarket in India, which caters to every

family’s needs and requirements. This retail store is a subsidiary of Future
group, Pantaloons Retail India Ltd.

At Big Bazaar, you will definitely get the best products at the best prices -
that’s what we guarantee. With the ever increasing array of private labels,
it has opened the doors into the world of fashion and general merchandise
including home furnishings, utensils, crockery, cutlery, sports goods and
much more at prices that will surprise you. And this is just the beginning.
Big Bazaar plans to add much more to complete your shopping
experience.

62 
 
 
 
 
 
5.RPG spencer:Its largest chain of Spencers offers a complete array
of products and durables. It is operating through 80 stores spread in 20
cities, and is still growing rapidly. Every month nearly 2.6 million people
walk in its stores. The stores are located in Bangalore, Mumbai, Delhi,
Chennai, Trivandrum, Hyderabad, Faridabad, Vizag, Aurangabad, Pune,
Ghaziabad, Cochin, and many more.

Spencer's has retail footage of approximately 1 million square feet and

over 220 Spencer's stores in 35 cities. The company operates through the
following formats:
• The Spencer's Hyper stores are destination stores, of more than
15,000 sq. ft in size. They offer everything under one roof. The
merchandise ranges from fruits & vegetables, processed foods,
groceries, meat, chicken, fish, bakery, chilled and frozen foods,
garments and fashion accessories, consumer electronics &
electrical products, home decor and needs, office stationeries, soft
toys. On an average, a Spencer's hyper stocks 70,000 SKUs across
35,000 items.

63 
 
 
 
 
 
2. Vishal Retail Group:
The jewel in Vishal Group’s crown is its flagship company Vishal Retail
Ltd. a company engaged in Hyper market stores with an average area of
25,000 to 30,000 sq. ft. through an impressive chain of 172 fully
integrated stores in spread over the area of more than 24,00,000 sq. ft. in
around 110 cities across India in 24 states. The turnover of the company
for 09-10 was 1105 Cr . Maintaining the highest standards in quality and
design, these stores have come to offer the finest fashion garments at
down-to-earth price structure. A fact that is better visible in the constant
flow of shoppers all through the year. Under the title of Vishal Mega Mart
these stores have emerged as the regular haunts for the bargain-hunters
and fashion enthusiasts alike.

64 
 
 
 
 
 
7.Other retailers:

• Next retail India Ltd (Consumer Electronics)

• Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service
Centre, Viveks Safe Deposit Lockers
• PGC Retail -T-Mart India, Switcher , Respect India , Grand India
Bazaar ,etc.,
• REI AGRO LTD Retail-Formats:6TEN Hyper & 6TEN Super
• RPG Retail-Formats: Music World, Books & Beyond, Spencer’s
Hyper, Spencer’s Super, Daily & Fresh
• The Tata Group-Formats: Westside, Star India Bazaar,
Steeljunction, Landmark, Titan Industries with World of Titans
showrooms, Tanishq outlets, Chroma.
• Lifestyle International-Lifestyle, Home Centre, Max, Fun City and
International Franchise brand stores.
• Pyramid Retail-Formats: Pyramid Megastore, TruMart
• Nilgiri’s-Formats: Nilgiris’ supermarket chain
• Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom
discount chain.
• Trinethra- Formats: Fabmall supermarket chain and Fabcity
hypermarket chain
• BPCL-Formats: In & Out
• German Metro Cash & Carry
• Shoprite Holdings-Formats: Shoprite Hyper
• Paritala stores bazar: honey shine stores
• Kapas- Cotton garment outlets

65 
 
 
 
 
 
J. FUTURE TRENDS

• Lifestyle International, a division of Landmark Group, plans to

have more than 50 stores across India by 2012–13.

• Shoppers Stop has plans to invest Rs250 crore to open 15 new

supermarkets in the coming three years.

• Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million

this fiscal to add up to existing 2.4 million sq ft retail space. PRIL
intends to set up 155 Big Bazaar stores by 2014, raising its total
network to 275 stores.

• Timex India will open another 52 stores by March 2011 at an

investment of US$ 1.3 million taking its total store count to 120. In
the first six months of the current fiscal ending September 30, 2009,
the company has recorded a net profit of US$ 1.2 million.

• Australia's Retail Food Group is planning to enter the Indian market

in 2010. It has plans to clock US$ 87 million revenue in five years.

66 
 
 
 
 
 
In 20 years they expect the India operations to be larger than the
Australia operations.

• Carrefour, the world’s second-largest retailer, has opened its first

cash-and-carry store in India in New Delhi. Germany-based
wholesale company Metro Cash & Carry (MCC) opened its second
wholesale centre at Uppal in Hyderabad, taking to its number to six
in the country.

• Electronic retail chain major, Next Retail India, plans to open 400
showrooms across the country during January-March 2011
increasing the total number of retail stores to 1,000 by the end of
the fiscal year 2010-11.

• Jewellery retail store chain Tanishq plans to open 15 new retail

stores in various parts of the country in the 2011-12 fiscal.

• V Mart Retail Ltd, a medium-sized hypermarket format retail chain,

is set to open 40 outlets over the next three years, starting with 13
stores in 2011, in Tier-II and Tier-III cities.

67 
 
 
 
 
 

• Reliance Retail, the wholly owned subsidiary of Mukesh Ambani's

Reliance Industries, is set to open 150 stores by the end of March
2011 and double the number of stores across the country in all
formats within five years.

• Future Value Retail, a Future Group venture, will take its

hypermarket chain Big Bazaar to smaller cities of Andhra Pradesh,
with an investment of around US$ 1.54 million to US$ 4.41 million
depending on the size and format.

• RPG-owned Spencer's Retail plans to set up 15-20 new stores in the

country in 2011-12.

• Spar Hypermarkets, the global food retailing chain of the Dubai-

based Landmark Group, expects to start funding its India expansion
beyond 2013 out of its local cash flow in the country. So far, the
Landmark Group has invested US$ 51.31 million in setting up five
hypermarkets and plans to pump in another US$ 51.31 million into
the next phase of expansion.

68 
 
 
 
 
 
• Leading watchmaker Titan Industries Limited plans to invest about
US$ 21.83 million for opening 50 premium watch outlets Helios in
next five years to attain a sales target of US$ 87.31 million.

• British high street retailer, Marks and Spencer (M&S) plans to

significantly increase its retail presence in India, targeting 50 stores
in the next three years.

• Spain's Inditex, Europe's largest clothing retailer opened the first

store of its flagship Zara brand in India in June 2010. It further
plans to open a total of five Zara outlets in India.

• Bharti Retail, owner of Easy Day store—supermarkets and

hypermarkets—plans to invest about US$ 2.5 billion over the next
five years to add about 10 million sq ft of retail space in the country
by then, according to a company spokesperson

69 
 
 
 
 
 
14. EXPECTED GROWTH OF RETAIL SALES

• The BMI India Retail Report for the first-quarter of 2011 forecasts that
total retail sales will grow from US$ 392.63 billion in 2011 to US$
674.37 billion by 2014. Strong underlying economic growth, population
expansion, the increasing wealth of individuals and the rapid
construction of organised retail infrastructure are key factors behind the
forecast growth. With the expanding middle and upper class consumer
base, there will also be opportunities in India's tier II and III cities.

• Mass grocery retail (MGR) sales in India are expected to undergo

enormous growth over the forecast period. BMI predicts that sales
through MGR outlets will increase by 145 per cent to reach US$ 21.35
billion by 2014.

• BMI forecasts consumer electronic sales at US$ 29.09 billion in 2011,

with over-the-counter (OTC) pharmaceutical sales at US$ 2.69
billion. The former sub-sector is expected to show growth of 55.6 per
cent between 2011 and 2014, reaching US$ 45.27 billion, with
projected double-digit growth of key products such as notebooks,
mobile handsets and TVs. OTC pharmaceuticals, meanwhile, should
increase slightly more, by 56.5 per cent throughout the forecast
period, to reach US$ 4.21 billion.

70 
 
 
 
 
 
• China and India are predicted to account for more than 91 per cent of
regional retail sales in 2011, and by 2014 their share of the regional
market is expected to be more than 92 per cent. Growth in regional
retail sales for 2011-2014 is forecast by BMI at 48.1 per cent, an
annual average 15 per cent.

• According to a McKinsey & Company report titled 'The Great Indian

Bazaar: Organised Retail Comes of Age in India', organised retail in
India is expected to increase from 5 per cent of the total market in
2008 to 14 - 18 per cent of the total retail market and reach US$ 450
billion by 2015.

• Furthermore, according to a report titled 'India Organized Retail

Market 2010', published by Knight Frank India in May 2010 during
2010-12, around 55 million square feet (sq ft) of retail space will be
ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata,
Chennai, Hyderabad and

• Pune. Besides, between 2010 and 2012, the organized retail real estate
stock will grow from the existing 41 million sq ft to 95 million sq ft.

71 
 
 
 
 
 
• Driven by the growth of organized retail coupled with changing
consumer habits, food retail sector in India is set to be more than
double to US$ 150 billion by 2025, according to a report by KPMG.

• India's retail market is expected to be worth about US$ 410 billion,

with 5 per cent of sales through organized retail, meaning that the
opportunity in India remains immense. Retail should continue to
grow rapidly—up to US$ 535 billion in 2013, with 10 per cent
coming from organized retail, reflecting a fast-growing middle class,
demanding higher quality shopping environments and stronger
brands, according to the report ‘Expanding Opportunities for Global
Retailers’, released by A T Kearney.

• Foreign direct investment (FDI) inflows between April 2000 and

October 2010, in single-brand retail trading, stood at US$ 197.04
million, according to the Department of Industrial Policy and
Promotion (DIPP).

72 
 
 
 
 
 
L. GROWTH OF INDIAN RETAIL 2010

The Indian retail industry is the fifth largest in the world. Comprising of
organized and unorganized sectors, India retail industry is one of the
fastest growing industries in India, especially over the last few years.
Though initially, the retail industry in India was mostly unorganized,
however with the change of tastes and preferences of the consumers, the
industry is getting more popular these days and getting organized as well.
With growing market demand, the industry is expected to grow at a pace
of 25-30% annually. The India retail industry is expected to grow from
Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010.

According to the 8th Annual Global Retail Development Index (GRDI)

of AT Kearney, India retail industry is the most promising emerging
market for investment. In 2007, the retail trade in India had a share of 8-
10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose
to 12%. It is also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is

expected to grow to US$ 700 billion by 2010. By the same time, the
organized sector will be 20% of the total market share. It can be
mentioned here that, the share of organized sector in 2007 was 7.5% of
the total retail market.

73 
 
 
 
 
 
M. OPPERTUNITIES AND CHALLENGES

M.1. Investment Opportunities in the Retail Sector

AT Kearney’s study on global retailing trends found that India is the least
competitive as well as least saturated of all major global markets. This
implies that there are significantly low entry barriers for players trying to
setup base in India, in terms of the competitive landscape. The report
further stated that global retailers such as Walmart, Carrefour, Tesco and
Casino would take advantage of the more favourable FDI rules that are
likely in India and enter the country through partnerships with local
retailers. Other retailers such as Marks & Spencer and the Benetton
Group, who operate through a franchisee model, would most likely switch
to a hybrid ownership structure.

A good talent pool, unlimited opportunities, huge markets and availability

of quality raw materials at cheaper costs is expected to make India
overtake the world's best retail economies by 2042, according to industry
players. The retail industry in India, according to experts, will be a major
employment generator in the future. Currently, the market share of
organised modern retail is just over 4 per cent of the total retail industry,
thereby leaving a huge untapped opportunity.

74 
 
 
 
 
 
M.2. The Potential of the Indian Retail Sector

A.The high growth projected in domestic retail demand will be fuelled by:

• ¾ The migration of population to higher income segments with

increasing per capita incomes
• ¾ An increase in urbanization
• ¾ Changing consumer attitudes especially the increasing use of
credit cards
• ¾ The growth of the population in the 20 to 49 years age band

B.There is retail opportunity in most product categories and for all types
of formats

• ¾ Food and Grocery: The largest category; largely unorganised

today
• ¾ Home Improvement and Consumer Durables: Over 20 per cent
p.a. CAGR estimated in the next 10 years
• ¾ Apparel and Eating Out: 13 per cent p.a. CAGR projected over
10 years

C. Opportunities for investment in supply chain infrastructure:

Cold chain and logistics India also has significant potential to emerge as a
sourcing base for a wide variety of goods for international retail
companies ¾ Many international retailers including Wal-Mart, GAP, JC
Penney etc. are already procuring from India

75 
 
 
 
 
 
The sector is expected to see an investment of over $30 billion within the
next 4-5 years, catapulting modern retail in the country to $175-200
billion by 2016, according to Technopak estimates.

Of the total organized retail market of Rs 550 billion, the business of

fashion accounts for Rs 300.80 billion, which translates into nearly 55 per
cent of the organized retail segment in the country.

Total fashion sector was estimated at Rs 1,914 billion and forms about 15
per cent of the country's retail market of Rs 12,000 billion. Commanding
such a large chunk of the organized retail business in India, fashion
retailing has indeed been responsible for single-handedly driving the
business of retail in India.

76 
 
 
 
 
 
M.3.Challenges of Retailing in India

Retailing as an industry in India has still a long way to go. To become a

truly flourishing industry, retailing needs to cross the following hurdles:
• Automatic approval is not allowed for foreign investment in retail.
• Regulations restricting real estate purchases, and cumbersome local
laws.
• Taxation, which favors small retail businesses.
• Absence of developed supply chain and integrated IT management.
• Lack of trained work force.
• Low skill level for retailing management.
• Intrinsic complexity of retailing – rapid price changes, constant threat of
product obsolescence and low margins.
The retailers in India have to learn both the art and science of retailing by
closely following how retailers in other parts of the world are organizing,
managing, and coping up with new challenges in an ever-changing
marketplace. Indian retailers must use innovative retail ormats to enhance
shopping experience, and try to understand the regional variations in
consumer attitudes to retailing. Retail marketing efforts have to improve
in the country - advertising, promotions, and campaigns to attract
customers; building loyalty by identifying regular shoppers and offering
benefits to them; efficiently managing high-value customers; and
monitoring customer needs constantly, are some of the aspects which
Indian retailers need to focus upon on a more pro-active basis.
Despite the presence of the basic ingredients required for growth of the
retail industry in India, it still faces substantial hurdles that will retard and

77 
 
 
 
 
 
inhibit its growth in the future. One of the key impediments is the lack of
FDI status. This has largely limited capital investments in supply chain
infrastructure, which is a key for development and growth of food
retailing and has also constrained access to world-class retail practices.
Multiplicity and complexity of taxes, lack of proper infrastructure and
relatively high cost of real estate are the other impediments to the growth
of retailing. While the industry and the government are trying to remove
many of these hurdles, some of the roadblocks will remain and will
continue to affect the smooth growth of this industry. Fitch believes that
while the market share of organized retail will grow and become
significant in the next decade, this growth would, however, not be at the
same rapid pace as in other emerging markets. Organized retailing in
India is gaining wider acceptance. The development of the organized
retail sector, during the last decade, has begun to change the face of
retailing, especially, in the major metros of the country. Experiences in
the developed and developing countries prove that performance of
organized retail is strongly linked to the performance of the economy as a
whole. This is mainly on account of the reach and penetration of this
business and its scientific approach in dealing with customers and their
needs. In spite of the positive prospects of this industry, Indian retailing
faces some major hurdles (see Table 1), which have stymied its growth.
Early signs of organized retail were visible even in the 1970s when
Nilgiris (food), Viveks (consumer durables) and Nallis (sarees) started
their operations. However, as a result of the roadblocks , the industry
remained in a rudimentary stage. While these retailers gave the necessary
ambience to customers, little effort was made to introduce world-class

78 
 
 
 
 
 
customer care practices and improve operating efficiencies. Moreover,
most of these modern developments were restricted to south India, which
is still regarded as a ‘Mecca of Indian Retail’.

79 
 
 
 
 
 
A COM
A. MPERAT
TIVE AN
NALYS
SIS OF GROWT
G TH OF
B BAZ
BIG ZAAR AND
A RE
ELIANC
CE MAR
RT OF 2010

1 Footwearr

footwe
ear

8% 8
8%

Big Bazaarr
Reliance M
Mart

F
Fig.6.a
Inn 2010 botth Big bazaaar and Reliance marrt both grow
wth their footwear
f
seegment up
pto 8%.

80 
 
 
 
 
 
2. Clothing
g

clothin
ng

9.90
0%

Bigbazaarr
Reliance m
mart
37%

F
Fig.6.b
Inn 2010 Big
g bazaar grrowth theirr clothing upto
u 9.90%
% and Reliaance Mart
u
upto 37% which
w is greeat growthh regardingg to Big bazzaar.

81 
 
 
 
 
 
3.Book

Bookk

3%

4%
% Big Bazaarr
Reliance m
mart

F
Fig.6.c
Inn 2010 Big
g bazaar seelling grow
wth of bookk upto 3% and
a Reliannce mart
u
upto 4%.

82 
 
 
 
 
 
4
4.Jewellary
y

jewelle
ery

6%

Big bazaarr
Reliance m
mart
40
0%

F
Fig.6.d
Inn 2010 jew
wellery growth upto 6%
6 in Big Bazaar
B andd 40% uptoo Reliance
m
mart.

83 
 
 
 
 
 
5 Durable
5.

Durablle

30%

40%
% Big bazaarr
Reliance m
mart

F
Fig.6.e
Inn Durable good in 20010 Big baazaar growtth upto 30%
% and Reliiance martt
u
upto 40%.

84 
 
 
 
 
 
6
6.Home furrnishing

Ho
ome furn
nising

6%
% 6
6%

Big bazzarr
Reliance m
mart

F
Fig.6.f
Inn 2010 Home Furnishhing upto 6%
6 in Big Bazaar annd Reliancee upto 6%
w
which is eq
qual in this year.
C n between higher groowth of Reeliance Mart and Big Bazaar
Competition

85 
 
 
 
 
 
Result of comparison

Segment Big Bazaar Reliance Growth Comparative

Mart increase growth
Footwear 8% 8% 0% Equal
Clothing 9.9% 37% 27.1% Reliance
Mart
Book 3% 4% 1% Reliance
Mart
Jewellery 6% 40% 34% Reliance
Mart
Durable 30% 20% 10% Big Bazaar
Home 6% 6% 0% Equal
furnishing

86 
 
 
 
 
 
G
Graphical representtation of grrowth

45% 40%
%
40% 37.00%
35% 30%
30%
25% 20%
20% Big B
Bazaar
15% 8%% 9.90% Reliaance Mart
10% 8% 6% 6% 6%
5% 3% 4%
0%

F
Fig.7 , show
ws graphical represenntation of growth
g

C
Compariso
on of grow
wth increasse of differrent sectorr

40%
34%
35%

30% 27%
25%

20%
Big Bazaar
15% Reliance martt
10%
10%

5%
0% 0% 0% 0% 1% 0% 0% 0 0%
0%
0%
wear
Footw Clothin
ng Book Jewellery Durable Home 
furnishing

F
Fig.8, show
ws compariison of growth increaase

87 
 
 
 
 
 
B. RESEARCH METHODOLOGY

Research is a systematic and objective investigation of a subject or a

problem in order to discover relevant information or principles. Research
methodology is basically the method of how to collect data. The
information regarding our research are as follows:

2.1 Objective of our research: We wanted to understand as well as

compare the “customer relationship management” followed by the
Reliance Mart and Big Bazaar. It is expletory study

2.2 Type of research: Our research was empirical kind of research since
we were dealing with the behavioral or qualitative aspect of customers
and not the quantitative data’s. Here we were not supported with any
external data nor were adopting any secondary data to do our research.

2.3 Data collection and analysis: collection, and analysis of the

information gathered by Interaction with employees and customers and
also by observing activities of the employees. For better understanding
of CRM in Big Bazaar and Reliance Mart we also had prepared a
questionnaire for both customers and managers.

2.4 Sampling procedure and sample size: persons selected by us were

randomly selected and were from different age group, sex and
educational background .this diversification was done to measure the

88 
 
 
 
 
 
different choice and preferences prevailing in customers
demographically different.

B.1CRM policy of Reliance Mart

Meaning of Customer Relationship Management (CRM):
CRM is a comprehensive strategy & process of acquiring & retaining
customers to create superior value for the company as well as the
customers. It consists of the processes a company uses to track and
organize its contacts with its current and prospective customers. To
support these processes, various CRM Software like SAP, ORACLE
Sales force.com etc. are used. These software record and store
information about customers, various customer interactions, their
problems etc which can be accessed by employees in different
departments of the company. These information are used by the
organization to make future plans that can satisfy the customer on a better
way and retaining them for a longer period.

Goal of CRM:
The goal of CRM is to provide improved services to the customers, and to
use customer contact information for targeted marketing.

CRM policy of reliance mart can be divided into four major parts,
namely;
1) Customer loyalty
2) Customer retention

89 
 
 
 
 
 
3) Customer communication
4) Customer gratification

There exists a blanket customer relationship programmed called the

reliance one membership programmed for the purpose of maintaining
customer loyalty. The membership programmed is a very simple one
where a willing customer is required to fill a form giving personal
information and he gets a temporary card which will be made permanent
after six months.

On each purchase of Rs. 100 the customer gets one redeemable point on
the production of card at billing counter. The collected points can be
redeemed in form of discounts on future purchases on demand of the
customer.
The customers also get the opportunity of availing four different kinds of
insurance on the payment of a nominal fee. For example a customer can
get an accidental death insurance of Rs. six lakes on the payment of Rs.
400 only. Other forms of insurances are disability, hospitalization and
home insurances.
The members of reliance one get the opportunity of taking part and
winning prizes by the way of lucky draws on regular intervals.

Customer retention policy implementation is at the zonal level. Generally

each state is regarded as a zone and the offers and discounts in a zone are
not available in other zones. Such policy helps reliance retail to

90 
 
 
 
 
 
understand and capture the local markets better. The products which show
improvement due to offers and discounts on them are repeated with these
offers again so as to retain the sales of the customers who bought it the
last time. Also such the days best offers are constantly announced in the
store making the regular customers aware about them.

Maintaining a good store ambiance is also a part of customer retention

policy of reliance retail. Clean and hygienic environment with properly
and well spaced products along with a uniform color theme attracts the
existing customers to the store again and again. A fast billing system and
good and easy grievance handling system which can be accessed through
customer service desk and company website, ensures that customers feel
satisfied with the store management. Less harassment to customers
means better customer retention.

Communication to existing customers takes the form of sms and e-mails,

generally sent to reliance one members. They get information about
ongoing offers and also information and latest news about their nearest
stores and the company in general. Another source of customer database
is the information collected during the organizing of special events in the
stores. Customers participating in such events provide their contact
information which are also used in form of database for communication
purposes.

Thank you and festive cards on special occasions are an innovative way of
communicating with the customers.

91 
 
 
 
 
 

Trained salespersons make customer gratification very easy. A simple

thank you with a smile goes a long way for the store to keep the
customers happy.
The special events organized by the stores across India are also a way to
gratify the customers by allowing them to play and win prizes.
Gift vouchers and discount coupons are an attraction for the customers
and give them the feel that the store cares about them and their money.
Local customers many a times make limited personal contacts with the
store staff just like that made at a Kirana store and help the store to some
extent to maintain a relationship with the customers.

The implementation of the policies brings out certain limitations in them.

Few major ones are as follows:

• The personal contact numbers of reliance one members are open to

tele marketing calls from various marketers as they leak out of the
reliance retail’s database, causing unnecessary harassment to
customers.

• The customer communication policy is less followed in small towns

and cities and is more concentrated towards the metro cities.

92 
 
 
 
 
 
• There is a common CRM policy for both reliance fresh and mart.
This should not be the case as both the stores offer different kinds
of merchandize and generally attract different kinds of customers.

• Reliance retail generally delays the processing of permanent

membership cards to those customers who have not paid for such a
card. Customers have been waiting for over three months for their
card. Those who have paid the nominal fee of Rs. 50 get their
permanent card within 15 days but the rest who have optioned not
to pay the fees do not receive the card until too late.

• Unmanned billing counters create long queues at the open counters.

This creates impatiens in the customers as they expect faster billing
at the stores and do not want to stand with too much of goods held
in their hands while billing.

93 
 
 
 
 
 
B.2. CRM policy of Big Bazaar

Database is formed through the issue of future card and card is of three
types silver card, gold card and sakthi card. Sakthi card is issued to ladies
and this card provides, free sugar(1 kg) per month.
Customer profitability analysis (CPA) is done on the basis of transactions
made through the future cards.
○Platinum customers (most profitable).
○Gold customers (profitable).
○Iron customers (low profitability but desirable).
○Lead customers (unprofitable and undesirable).

Differentiate customers in terms of: (1) their needs and (2) their value to
company.
Interact with individual customers to improve the knowledge about
individual needs and to build stronger relationships.

There are four type of analysis done for analysis of CRM

○Periodic Surveys: It’s done on quarterly, its an overall survey done by

the future group authorities and CRM is a part of it.
○Customer Loss Rate :
○Mystery Shoppers: They pose as normal customers perform specific
tasks such as purchasing a product, asking questions, registering

94 
 
 
 
 
 
complaints or behaving in a certain way – and then provide detailed
reports or feedback about their experiences
○Monitor Competitive Performance

Complain Handling Procedures

Screening And Logging
-- The type of product or service;
manufacturer/brand name; model name/number; date of
purchase/contract; warranty expiration date; salesperson; cost of
product/service; date problem occurred; and a description of the problem
is listed. This allows organization to exercise control, and assure proper
follow-through.

Investigating
-- customer's explanation of a problem provides much
information. Nevertheless, to assure they have all the information needed
for a thorough review of the facts involved, by:
○Researching in-house records on the customer;
○Requesting receipts, or other records;
○Inspecting the product, or service performed; and
○Following-up with the customer for any necessary additional
information.

95 
 
 
 
 
 
Acknowledging

-- When Big Bazaar cannot resolve an issue immediately, it

is important to let customer know that the matter is receiving attention.
Customer is given information about how long it will take to complete
action on the complaint. If there is further delay, it’s made sure to advise
customer why and when Big Bazaar expects to have an answer.

Formulating A Solution
-- solution is made to be consistent with established
customer relations policy and important criteria are taken into account:
○Contractual and/or warranty obligations;
○The customer's expectations;
○expectations of the customer;
○The cost/benefit of alternative solutions;
○The probability and cost of customer seeking redress in some other way;
○The comprehensiveness and fairness of solution;
○ability to perform the solution; and
○What to do if the customer rejects solution.

96 
 
 
 
 
 
Responding

-- The response is made clear and appropriate. The customer

must understand the response, and the response must address the issues
raised in the customer's original complaint.
An explanation of decision preserves the goodwill of customer, even if the
decision itself is adverse.

Following-Up

– Customer is contacted following response to verify whether

or not the matter has been resolved satisfactorily. If customer is unhappy
with response, organization refers the matter to a third party dispute
resolution mechanism for assistance.

Steps Involved in customer Satisfaction through Service:

○Seeing problems from the customer’s perspective
○Managing customers' "moments of truth"
○Communicating effectively through better listening
○Analyzing how customer perceptions are formed
○Managing anger and other service behaviors
○Dealing with long-term consequences of service breakdowns
○Negotiating solutions
○Generating an action plan for improved on-the-job effectiveness

97 
 
 
 
 
 
CUSTOMER COMMUNICATION:

Future group maintains its records of customers by observing their

purchasing habits & categories them into various groups like high
revenue, moderate revenue & low revenue customers. They communicate
to the customers through various medium like SMS, E-mail, Mobile
vans, Print media etc. This is the way to built a strong presence in the
existing customers & prospective customers. Presently they are using
oracle software to maintain database. Recently they have tied up with
California based firm GREENPLUM to provide new software for data
warehousing.

The company boasts strong share of its profits from top line customers
who provide them around 70% of their revenues in total. The company
can said to be going on the famous management principle i.e. 80/20
PRINCIPLE which says that 20 percent of variables cause 80% effect. In
big bazaar it can be related to the fact that 20% of its top line customers
provide 80% of its revenues in a year. This is the reason why the retail
giant is focusing strongly on customer retention in order to boasts its
sales numbers substantially.

98 
 
 
 
 
 
CUSTOMER GRATIFICATION :

It is an important element of a sales process. Every company should

survey their customers in order to find out the satisfaction level among the
consumers. Big bazaar also conducts periodic surveys in order to ascertain
the satisfaction level in their consumers. Various activities are done in
order to enhance the shopping experience among buyers & various offers,
discount coupons; exchange offers are initiated by the firm in order to
develop a good satisfaction level in their existing customers. Special
coupons are given to customers who can be redeemed by the costumers in
their future purchases from the store.

99 
 
 
 
 
 
B
B.3.Custo
omer’s pooint of viiew

1)Sales Person’s Assiistance: Thhis refers too the extennt of help an

a individuual
g
gets from the
t sales person
p present in thee store in choosing a particular
p
product or in
i case of any
a query. There cann be two innstances i.ee. inadequaate
h
help or exccess help. Inadequatee help is a very casee because most of thhe
tiime sales person
p is thhere to solvve our querries.

Innstances of excess heelp can ariise which makes

m the customer feel that thhe
p
person nterfering inn his decission or pushing the prroduct to him.
is in h

P
People’s preference of
o sales perrsons assisttance

15%
35%

Big bazaarr
Reliance m
mart

50% Other

F
Fig.9.a
S
Shows ple prefereence of salees persons assistance
peop

100 
 
 
 
 
 
2
2)Expectati
ion Fulfilm
ment: everyy customerr has certaain expectaations wheen
h visits a store. Thiss expectatiion will vaary from peerson to peerson. It caan
he
b getting a particularr brand off product orr particularr quantity or
be o variant of
o
thhe productt. 55% peoople felt thhat their exxpectationss are moree fulfilled at
B Bazaarr while 45%
Big % preferreed Reliancee Mart. Thhis may bee because of
o
g
greater prod
duct depth at Big Bazzaar than in
i Reliancee Mart.

P
People’s ex
xpectation level
l

expectation fu
ulfilmen
nt

45%

55%
%
Big Bazaarr
Reliance M
Mart

F
Fig.9.b
S
Shows the fulfillment
f t of people expectatioon level

101 
 
 
 
 
 
3)Discountss & Offerrs: these are
a announnced from time to time
t to luure
cuustomers to
t buy moore 60% peeople prefferred the Discounts
D & Offers of
o
B Bazaar while onlyy 40% preferred thatt of Reliannce Mart. This
Big T may be
b
b
because ore people are awaree of the diiscounts offfered by Big
mo B Bazaar
d to theirr huge adveertisementss.
due

Disccosunt &
& offers

40%

60
0% Big Bazzarr
Reliance M
Mart

F
Fig.9.c
S
Shows peop
ple’s preferrence of discount
d & offers

102 
 
 
 
 
 
4
4)Product Arrangeme
A ent: this basically
b m
means the sequence or order in
w
which ments of prooducts are arranged so
diffeerent varieeties, brandds or segm s
thhat custom
mers feel at ease in seelecting thee product of
o his/her choice.
c
P
People’s preference of
o product arrangemen
a nt.

Produ
uct Arran
ngementt

45%

55%
%
Big Bazzarr
Reliance M
Mart

F
Fig.9.d

S
Shows 55%
% people preferred
p thhe productt arrangem
ment of Reeliance Maart
w
while 45% preferred that of Biig Bazaar. This is beecause Bigg Bazaar haas
laarge spacee due to whhich produucts are more
m fragm
mented or scattered on
o
y Reliance Mart has smaller sppace in whiich produccts are more
thhe contrary
loogically arrranged. Also
A it hass more spaace between the sheelves whicch
p
provide easse of walking to custoomers and they thinkk less spacee means less
ennergy wastage.

103 
 
 
 
 
 
5)Accessibiility: it refeers to the reach
r of thee store to the
t customers.
P
People’s prreference of
o accessibbility.

A
Accessib ility

11%

50%
Big bazzar
39
9%
Relian
nce

F
Fig.9.e

S
Shows 50%
% people preferred
p B Bazaaar, 39% Reliance
Big R M
Mart & 11%
%
w
were m. Majority
neutraal that meeans accesssibility dooesn’t mattter to them
liikes Big Bazaar
B because it is situated inn the maiin city while Reliancce
i very far from the main
M is locaated at a veery posh arrea which is
Mart m city.

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6
6)Preferenc
ce: it referss to the preeference off the custom
mer regarding makingg
a choice beetween the two storess i.e. Big Bazaar
B & Reliance
R M
Mart.
S
Shopping preference
p o people..
of

preferen
nce

35%

Big bazaarr
65%
6
Reliance m
mart

F
Fig.9.f

S
Shows 65%
% people prefer
p shoppping at Bigg Bazaar annd 35% peeople
p
preferred to
o do shoppping at Reliance Martt. This mayy be becauuse of any of
o
thhe above mentioned
m r
reasons.

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C. LIMITATIONS OF THE STUDY
To carry out the research study the following limitations are faced:

o Availability of sufficient data from different sources may be difficult.

o Wrong selection of sample may create of wrong conclusion.

o Time, cost and factor may cause difficulties.

o Sample size may not be exact representative of the universe.

However sincere efforts has been put to overcome the expected

limitations.

106 
 
 
 
 
 
D. CONCLUSION

• Transformation by integrating customer facing front-end with back-end

systems and partners and suppliers.
This will effectively help in generating better filtered data source from
feedbacks received. Also the feedbacks will be dealt with in a much more
careful and professional way.
• Growth of CRM facilitated by growth of IT.
In this age of Information Technology an effective IT planning on the
CRM can help the organization earn a lot of repute.
• New database solutions.
This will help to filter and clean the raw data received from feedbacks
more efficiently.
• Mutual benefit through CRM.
The stores and their customers can mutually benefit through the
application of CRM. So at this “era of customers”, the companies should
project themselves as customer oriented as possible to help them benefit
in a long term survival plan.
• Effective segmentation of customers.
With more and better quality of data, this can be done very easily.
Enhancing the shopping solutions.
This is the age of innovation. Especially in Indian markets, low cost
innovation is the ultimate tool to win the battle for the companies. Thus,
the companies need to be innovative with their ideas and always try to
deliver the customer with some added value for their purchase.

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A.BIBLIOGRAPHY

BOOKS

Marketing Management by Phillip Kotlar and Khoshy 
Retail management by Michael Levy and Barton A Weitz
Retail management by Chetan Bajaj

 
                                   

WEB SITES
 

 www.auditbureau.org 
 www.executiveplanet.com/business‐etiquette/India.html 
 www.cygnusindia.com 
 www.scribd.com 
 
 

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