TERM PAPER REPORT

Submitted for the Partial Fulfillment of Post Graduate Diploma in

Business Management 2008-10

Submitted To: Submitted By:

Pradeep Sir Mousumi Paul

Roll No -M08058

PGDM 4th Sem.

IIMT PROFESSIONAL COLLEGE

IIMT Nagar, Ganga Nagar, Mawana Road, Meerut – 250001

Ph: 91-121-2626284, 2620287, Fax: 91-121-2649606, 2621006

Email: directorprofessionaliimt@gmail.com; Web Site: www.iimtindia.net

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 QUESTION NUMBER :- 1

SWOT
ANALYSIS

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SWOT Analysis of IACM Smart Learn Ltd.

ABOUT IACM:

IACM is committed to deliver new programmes, training methodologies that meet

and exceed customer expectations by:

• Setting quality objectives for the business, our delivery and our people

• Measuring performance and taking action to realize the objectives

• Continually working to improve the effectiveness of the quality management

system

• Constantly improving the training system and manpower skills variability

By developing employees and work places everywhere, IACM deliver unmatched

customer satisfaction through constant interaction with customer and continually

improve the performance to achieve the best.

MEANING OF SWOT ANALYSIS:

SWOT analysis is a strategic planning method used to evaluate

the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in

a business venture. It involves specifying the objective of the business venture or

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project and identifying the internal and external factors that are favorable and

unfavorable to achieve that objective.

SWOT analysis groups key pieces of information into two main categories:

 Internal factors – The strengths and weaknesses internal to the

organization.

 External factors – The opportunities and threats presented by the

external environment to the organization.

The usefulness of SWOT analysis is not limited to profit-seeking organizations.

SWOT analysis may be used in any decision-making situation when a desired end-

state (objective) has been defined. and many competitor analyses, marketers build

detailed profiles of each competitor in the market, focusing especially on their

relative competitive strengths and weaknesses using SWOT analysis. Marketing

managers will examine each competitor's cost structure, sources of profits, resources

and competencies, competitive positioning and product differentiation, degree of

vertical integration, historical responses to industry developments, and other factors.

SWOT ANALYSIS OF IACM

1. STRENGTHS:

 IACM is not just a computer hardware and networking institute but

also deals in providing security system training that makes it different

from other hardware training institute.

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  IACM has attained ISO 9001:2000 Quality Management System

certification for conducting quality IT programmes, since 2003

 Ranked No. 1 hardware institute in India Today .

 Smart learning and teaching Methodology.

 Good Customer servives , focused on ultimate customer satisfaction.

 Strong Brand Image in hardware and networking training market.

2.WEAKNESS:-

 Internal operating problems

 Too narrow product line

 Missing some key skills/competencies

 Weak marketing and communications skill

 Opened in very less number in different cities.

3.OPPORTUNITIES:-

 Serving additional “customer”groups.

 Expanding to new geographic areas.

 Expanding product line.

 Take market share from rivals.

4.THREATS:-

 Slowing market growth.

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 Entry of potent new competitors.

 Reduced student’s needs for hardware courses or services

QUESTION NUMBER: 2

PORTER’S
FIVE FORCES

ANALYSIS
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 PORTER’S FIVE FORCES MODEL STUDY

Porter's five forces is a framework for the industry analysis and business strategy

development developed by Michael E. Porter of Harvard Business School in 1979

Michael Porter provided a framework that shows an industry as being influenced by

five forces. The strategic business manager who wants to develop an edge over rival

firms can use this model to better understand the industry in which the firm operates.

Threat of new entrants

Barganing power Competitive Barganing power

Of Suppliers Rivary of customers

Threat of substitude product

Porter's five forces include - three forces from 'horizontal' competition: threat of
substitute products, the threat of established rivals, and the threat of new entrants;
and two forces from 'vertical' competition: the bargaining power of suppliers and the
bargaining power of customers.

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This five forces analysis is just one part of the complete Porter strategic models. The
other elements are the value chain and the generic strategies

Three of Porter's five forces refer to competition from external sources. The
remainder is internal threats. It is useful to use Porter's five forces in conjunction
with SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats).

PORTER’S FIVE FORCES MODEL FOR IT INDUSTRY.

 Threat from new entry:

An IT company can be started with very low initial cost, further the government

policies also promotes the entrepreneurs by providing benefits in terms of tax

holidays and building Hardware & Software Technology Parks. Apart from this there

is large amount of venture capitalists that are ready to fund new start-ups enabling

them to scale up.

 Threat of Substitutes:

The Indian IT industry currently enjoys a very high growth rate due to following

advantages:

• High availability of skilled labour.

• Availability of large English speaking population.

• Low cost of labour.

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 • Good government policies (like tax holidays till 2009 for IT companies &

setting up of special economic promotion zones).

But there are many countries such as China, Philippines, and many east European

countries that have started to provide similar opportunities and Indian IT industries

always need to innovate and move into new sectors to keep out the competition.

 Competitive Rivalry:

As the IT industry is still in its growth stage, there is enough room for expansion for

existing players and new entrants. With the entry of many multinational companies

(MNC) are opening their operations in India to leverage the low cost advantage

provided by India, has increased the completion ratio (CR) of the industry. Also as

there is no huge capital investment required to start a new company, the industry see

a very large numbers of small and medium-size companies operating in a niche

market. Presence of such large number of players has made the industry as one of the

most competitive industry in the market.

 Buyer’s barganing Power:

Buyers in IT industry can be briefly classified into following categories: institutional

buyers and individual or small consumers. Institutional buyers comprises of big and

small enterprises which outsource part of their work or implement an IT solution for

improving their processes. As the IT industry has large number of suppliers and few

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entry barriers for new entrants, the buyer has a many option to choose from thus have

a large bargaining leverage. Similarly the individual consumer enjoys options of

plenty and has large bargaining power.

 Supplier’s barganing Power:

As there exist many competitive suppliers in the market the supplier has very little or

no power in this industry. In the relationship between the industry and its suppliers,

the power axis is tipped in industry’s favor. The industry is comprised of powerful

buyers who are generally able to dictate their terms to the suppliers

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 QUESTION NUMBER :- 3

CORPORATE
GOVERNANCE
AND
SOCIAL
RESPONSIBILITY
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 Corporate Governance and Social Responsibility of
IACM Smart Learn Ltd.

CORPORATE GOVERNANCE

• Company’s philosophy on corporate governance

The Company’s philosophy of Corporate Governance is aimed at assisting

the management of the Company in the efficient conduct of its business and

in meeting its obligations to stakeholders, and is guided by a strong emphasis

on transparency, accountability and integrity. For several years, the Company

has adopted a codified Corporate Governance Charter, which is in line with

the best practice, as well as meets all the relevant legal and regulatory

requirements. All Directors and employees are bound by Codes of Conduct

that sets out the fundamental standards to be followed in all actions carried

out on behalf of the Company.

• Code of Conduct

As required under revised Clause 49 of the Listing Agreement the following

code of conduct has been approved by the Board of Directors and is

applicable to the Directors and Senior Management of the Company.

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 a) Ethical Conduct:

All directors and senior management employees shall deal on behalf of the

Company with professionalism, honesty, integrity as well as high moral and

ethical standards. Such conduct shall be fair and transparent and be perceived

to be as such by third parties.

b) Conflict of Interest:

Any director or senior management employee of the Company shall not

engage in any business, relationship or activity, which might detrimentally

conflict with the interest of the Company.

c) Transparency:

All directors and senior management employees of the Company shall ensure

that their actions in the conduct of business are totally transparent except

where the needs of business security dictate otherwise. Such transparency

shall be brought about through appropriate policies, systems and processes.

d) Legal Compliance:

All directors and senior management employees of the Company shall at all

times ensure compliance with all the relevant laws and regulations affecting

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operations of the Company. They shall abreast of the affairs of the Company

and be kept informed of the Company's compliance with relevant laws, rules

and regulations. In the event that the implication of law is not clear, the

course of action chosen must be supported by eminent legal counsel whose

opinion should be documented.

e) Confidential Information:

All Board Members and Senior Management Personnel shall maintain

confidentiality of information (price sensitive or otherwise) that they receive

during their association with IACM.

f) Rightful Use of Company’s Assets:

All the assets of the Company both tangible and intangible shall be employed

for the purpose of conducting the business for which they are duly authorized.

None of the assets of the Company should be misused or diverted for

personal purpose.

g) Cost of Consciousness:

All the directors and senior management employees of the Company should

strive for optimum utilization of available resources. They shall exercise care

to ensure that costs are reasonable and there is no wastage. It shall be their

duty to avoid ostentation in Company expenditure

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 h) Interaction with Media:

The Directors and senior management employees other than the designated

spokespersons shall not engage with any member of press and media in

matters concerning the Company. In such cases, they should direct the

request to the designated spokespersons.

i) Safety and Environment:

The Directors and senior management employee shall follow all prescribed

safety and environment-related norms.

j) Review of the Code:

The adequacy of the Code and its working shall be reviewed from time to

time by the Board of Directors of the Company. Such amendments /

modifications shall take effect from the date stated therein.

K) Placement of the Code on the Website of the

Company:

This Code of Conduct as amended from time to time shall be posted on the

website of the Company.

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 CORPORATE SOCIAL RESPONSIBILITY

It is a Computer Hardware and Networking Institute that trains non-technical

students into IT professionals of tomorrow in some of the most in-demand hardware

and networking courses; courses which are compatible with the needs of various

sectors such as IT and BPO, retail, and manufacturing, PSUs, healthcare and many

more.

It believes that through its business it make a valuable contribution to society by

training, developing and placing students which improve their lives.

VISION
Confirming our commitment to build a “learning society” in which everyone has

the opportunity to fulfill their potential, build a worthwhile career and actively

participate in the lives of the community.

MISSION
To produce versatile and resourceful professionals who are relevantly

qualified for their chosen profession and vocations within an educational

environment that fosters innovation, enterprise and enthusiasm for

excellence.

VALUES

We believe in: Quality, Trust, Learning & Teaching, Innovation, Self-

motivation, and Equanimity.

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EMPOWERING THE GIRL STUDENT

A great believer in the equality of the sexes and independence of women,

IACM awards a 25 percent fee discount to all girl students, enabling them to

carve out a successful career and to lead an independent life.

EMPOWERING THE UNDERPRIVILEGED

IACM has also been actively involved in spreading computer literacy

amongst the masses. The Computer Centers set up by the company are

testimony to this effort. These centers provide computer training to students

who come from underprivileged families and cannot afford the same. IACM

six operational centers impart computer literacy to these youngsters at a

minimal fee of Rs.100/-per month. Each center has six computers. Thus, 12

students get trained in batches of 2 for an hour each day. In a day six slots

are operational. Thus 432 students get trained in computer usage, daily.

EMPOWERING THE YOUTH

C.K. Prahalad -Extract from "Fortune at the Bottom of the Pyramid"

If we stop thinking of the poor as victims or as a burden and start

recognizing them as resilient, creative entrepreneurs and value-conscious

consumer, a whole new world of opportunity will open up. What is needed is

a better approach to help the poor: an approach that involves partnering with

them to innovate and achieve sustainable win-win scenarios where the poor

are actively engaged and, at the same time, the companies providing

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products and services to them profit, too.

Following the above IACM focuses at empowering the youth through its

specialized courses and training.

QUESTION NO. 4

COMPANY

REPORT
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19
QUESTION NUMBER- 5

A PROJECT ON CUSTOMER

PERCEPTION ON

RETAIL CHAIN

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 CHAPTER- 1

INTRODUCTION TO

RETAIL INDUSTRY

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Introduction to Indian retail industry:

The sea of change can pull customers in many directions. It is our

responsibility to light the way and take care of them… before the

competition does.

RETAILING Means “Re-tailing” to the customers so that they comeback. Retailing

consists of all activities involved in selling goods and services to consumers for their

personal, family, or household use. It covers sales of goods ranging from

automobiles to apparel and food products, and services ranging from hair cutting to

air travel and computer education. Sales of goods to intermediaries who resell to

retailers or sales to manufacturers are not considered a retail activity.

The Indian retail story couldn't have been more different. India has approx12 million

retail stores, more than rest of the world put together. But the per capita square feet

area under retail is just 2 sq.ft or 0.2 sq. meters with fragmented kirana stores being

the predominant players. Retailing in India has remained in the unorganized sector

and largely untouched by corporate. The first decade of modern retail in India has

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been characterized by a shift from traditional channels to new formats including

department stores, hypermarkets, supermarkets and specialty stores across a

range of categories. Modern retail formats have mushroomed in metros and mini-

metros, in the last few years modern retail has also established its presence in the

second rung cities. Thus, exposing the residents of these cities to shopping options,

they have never experienced before. It has been forecasted that the share of

modern retail will increase from 2 per cent currently, to about 15-20 per cent over the

next decade. To begin with, retailers today will have to support the large retail

infrastructure in terms of Malls and Superstores that are being created. The challenge

for leading retailers shall therefore shift from diverting demand to creating demand.

With all the modern stores offering convenience in terms of an assortment of

products, ambience, service and innovative products, the paradigm shall shift from

competing with the kirana stores to an in-house demand creation.

Relevant experiences from consumer goods companies, which have successfully

crafted an explosion in demand in their sectors, through innovation, consumer driven

strategies, will be head runner. Times are changing. With the GDP at an all time high

and income levels shooting through the roof, the average Indian consumer has never

had it so good. The propensity to consume has reached peaks that had never been

scaled before.

Credit cards are flashed with disdain and shopping baskets are getting bigger all the

time. Here are some factors that indicate the potential of retail in India:

 At 271 million, one of the largest consuming base in the world, forming

27% of the total population.

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  A high spending community below 45 years comprises

81 percent of the population. A young population with 54% population

below 25years.

 Increased literacy from 44% in 1965 to 70% in 2003.

 Increase in working women from 1.3 million in 1961 to 4.8 million in

1998.

The first decade of modern retail in India has been characterized by a shift from

traditional kirana shops to new formats including department stores, hypermarkets,

supermarkets and specialty stores across a range of 4 categories. Modern retail

formats have mushroomed in metros and minimetros.

However, even as modern retailers garner share from traditional channels, there is a

larger role they would be required to play in boosting consumption levels. Figures

suggest that the total turnover of the sector is around Rs 10 lakh cores, of which 4

percent is contributed by the organized sector.

The retail sector in India is highly fragmented with organized retail

contributing to only 2% of total retail sales. The retail sector in developed countries

was also highly fragmented at the beginning of the last century but emergence of

large chains like Wall Mart, Sears, and McDonald’s led to rapid growth of organized

retail and growing consolidation of the retail industry in the developed countries.

Organized retail is growing rapidly and we see the emergence of large organized

retail chains like Shopper’s Stop, Lifestyle, and Westside. We also find retail malls

mushrooming all over the country. The opportunities in retail industry in India will

increase since Indian retailing is on the threshold of a major change.

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India retail industry is the largest industry in India, with an employment of around

8% and contributing to over 10% of the country's GDP. Retail industry in India is

expected to rise 25% yearly being driven by strong income growth, changing

lifestyles, and favorable demographic patterns. It is expected that by 2016 modern

retail industry in India will be worth US$ 175- 200 billion. India retail industry is one

of the fastest growing industries

With revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate

of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India

by growth in consumerism in urban areas, rising incomes, and a steep rise in rural

consumption. It has further been predicted that the retailing industry in India will

amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

Shopping in India has witnessed a revolution with the change in the consumer buying

behavior and the whole format of shopping also altering.

Industry of retail in India which has become modern can be seen from the fact that

there are multi- stored malls, huge shopping centers, and sprawling complexes which

offer food, shopping, and entertainment all under the same roof. India retail industry

is expanding itself most aggressively; as a result a great demand for real estate is

being created.

Today’s Retail in India

Today’s Retail in India is comprised of organized and traditional retail formats,

Indian Retail market is estimated to be worth US$ 511 billion, and is poised to grow

to US$ 833 billion by 2013. The organized retail that currently accounts for less than

5 per cent of the total retail market is expected to register a compound annual growth

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rate (CAGR) of 40 per cent and swell to US$ 107 billion by 2013. A report by global

consultancy firm, AT Kearney said "The consumer spending in India has increased

by an impressive 75 per cent in the last four years and will quadruple in the next 20

years." Moreover, India recently topped the Nielsen Global Consumer Confidence

study, conducted by Nielsen, a market research company. The biannual report

revealed that Indians are "the most optimistic lot globally who think that their

country will be out of the economic recession in the next twelve months."

However the size of Organized Retail in India will exceed US$22bn

mark from current level of about US$4bn with its space requirement touching over

220mn sq. ft., by 2010, according to “The Associated Chambers of Commerce and

Industry of India (ASSOCHAM)”. In a Paper brought out by ASSOCHAM on

`Retail Scenario in India and Its Related Issues’, it has been stated that approx. 40mn

sq. ft. is currently generating a business of about US$4bn in organized retail.

India’s vast middle-class and its almost untapped retail industry are

key attractions for global retail giants wanting to enter newer markets and India

provides for the ideal locations. Since, Delhi and its suburbs have so far seen the

growth of 100 bigger and smaller malls; roughly 600 new malls are coming up in

other metropolis and large townships in which less than 35% of retail business is

going to be transacted. It is seen that over 1000 malls are in the pipelines for smaller

townships in which the retail sector is projected to grow at over 60% because of

ample availability of land and increased purchasing power of the folks living in those

areas because of increased economic activities. Naturally, the large players will

prefer to go there and put up their shops by sourcing their supplies from the places

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convenient to them. Some of the key areas in which retail boom will prevail in towns

beyond metros and even large cities will include food items, FMCG products,

grocery, sportswear, outerwear, tailored clothing, eyewear, watches, footwear and

accessories and the like. The retail business that will pre-dominantly stay with malls

put up in metros and large cities will include apparel, pharmaceuticals, luxury goods

and consumer durables. Changes should be brought about in Agricultural Produce

Marketing Committee (APMC) Act (a key contributor to the large number of

intermediaries) such as the introduction of contract farming and allowing direct

procurement from farmers by retail owners so that a direct chain is established

between the user and farmers for their equal benefits. It also highlights, pointing out

that even in the case of non-agricultural products such as apparel, FMCG and general

merchandise, the situation is far from ideal.

The key cause for inefficiency is the poor integration between the

retailer and supplier. None of the retailers, in view of ASSOCHAM has so far an

automated system for information exchange with their

suppliers. In developed countries, retailers practice Vendor

Management Inventory (VMI) systems, where the supplier has access to the point of

sales data of the retailer and plans automatic

replenishments responding to the stocks available at the retailer.

EMERGENCE OF ORGANIZED RETAILING.

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Organized retailing in India represents a small fraction of the total retail market. In

2001, organized retail trade in India was worth Rs 11,228.7 billion. The modern

retail formats are showing robust growth as several retail chains have established a

base in metropolitan cities, especially in south India and are spreading all over India

at a rapid pace. However, space and rentals are proving to be the biggest constraints

to the development of large formats in metropolitan cities since retailers are aiming

at prime locations.

In urban India, families are experiencing growth in income but dearth of time. More

and more women are taking up corporate jobs, which is adding to the family’s

income and leading to better lifestyles rising incomes has led to an increased demand

for better

quality products while lack of time has led to a demand for better quality products

while lack of time has led to a demand for convenience and services. The demand for

frozen, instant, ready-to-eat food has been on the rise, especially in the metropolitan

and large cities in India. There is also a strong trend in favor of one-stop shops like

supermarkets and department stores.

Rural India continues to be serviced by small retail outlets. Only 3.6 million outlets

cater to more than 700 million inhabitants of rural India. Here, provision stores, paan

shops and ration shops are the most popular vehicles of retailing. Apart from this,

there are periodic or temporary markets, such as haats, peeth and melas that come up

at the same location at regular time intervals. The McKinsey report predicts that FDI

will help the retail businesses to grow to US $ 460-470 billion by 2010. There has

been a strong resistance to foreign direct investment (FDI) in retailing from small

28
traders who fears that foreign companies would take away their business, lead to the

closure of many small trading businesses and result in large scale unemployment.

Therefore, government has discouraged FDI in the retail sector. At present, foreign

retailers can enter the retailing sector only through restricted modes. Global players

in the retail segment have been entering the market for a while now. Players that

entered before the easing of restrictions on FDI in retail had to come through

different modes, such as joint ventures where Indian partner is an export house (Total

Health Care); franchising/local manufacturing/sourcing from small-scale sector

(McDonald’s, Pizza Hut); cash and carry operations (Giant) and licensing (Marks &

Spencer’s). The main condition for organized retailing is that the retailer should be

able to manage and influence the supply chain variables in a commercially viable and

sustainable manner. The organized retailer should be able to, through diversified

risks and volume sales command huge concessions on prices from the manufacturers.

He should then be in

a position to allow a trickle down of this advantage to consumers out of his saved

costs.

KEY POINTS OF INDIAN

ORGANISED RETAIL INDUSTRY

1. Potential to be the third largest economy in terms of GDP in next

few years.

2. It ranks high amongst the top 10 FDI destinations of the world.

3. Fastest growing tourist market in Asia.

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4. World bank states, India to be worlds second largest economy
after china by the year 2050.

5. Stable and investor friendly Central Government at the helm of

Affairs.

6. Introduction of Value Added Tax or VAT and tax reforms.

7. High degree of professionalism and corporate ethics.

8. Excellent Investment opportunities in Indian retail sector and in

Allied sectors; sure and high returns on investments.

9. To invest US $130 billion for the development of infrastructure,

by the year 2010.

10. Bullish stock markets.

11. Hordes of foreign investors are thronging in to invest in Indian

Retail market.

12. Highly educated English speaking young workforce.

13. Vibrant and multi cultured cities.

14. Huge opportunity exists, especially in semi-rural and rural

area.

15. Till date the second largest employer after agriculture sector, for
the huge semi-skilled Indian population.

16. Offers highest shop density in the whole world.

17. Having almost 1, 20, 000 shops, across the length and breadth of the country.

FORMATS IN INDIAN ORGANIZED RETAIL SECTOR

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1. Supermarkets: A supermarket, also called a grocery store is a self service store

offering a wide variety of food and household Merchandise, organized into

departments. It is larger in size and has a wider selection than a traditional grocery

store and it is smaller than a hypermarket or superstore.

2. Hypermarkets: A hypermarket is a superstore which combines a supermarket and

a department store. The result is a very large retail facility which carries an enormous

range of products under one roof, including full lines of groceries and general

merchandise. In theory, hypermarkets allow customers to satisfy all their routine

weekly shopping needs in one trip.

3. Department Stores: A department store is a retail establishment which

specializes in satisfying a wide range of the consumer's personal and residential

durable goods product needs; and at the same time offering the consumer a choice

multiple merchandise lines, at variable price points, in all product categories.

Department stores usually sell products including apparel, furniture, appliances,

electronics, and additionally select other lines of products such as paint, hardware,

toiletries, cosmetics, photographic equipment, jewelry, toys, and sporting goods.

Certain department stores are further classified as discount department stores.

Discount department stores commonly have central customer checkout areas,

generally in the front area of the store. Department stores are usually part of a retail

chain of many stores situated around a country or several countries.

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4. Shopping malls: A shopping mall or shopping centre is a building or set of

buildings which contain retail units, with interconnecting walkways enabling visitors

to easily walk from unit to unit.

5. Specialty Chains: A Specialty Chains is numbers stores which are specialized in a

specific range of merchandise and related items. Most stores have an extensive width

and depth of stock in the item that they specify in and provide high levels of service

and expertise. They differ from department stores and supermarkets which carry a

wide range of merchandise.

TOP MAJOR RETAIL PLAYERS

Retailer Existing Brand Names No.of Total Retail

formats Stores Space (‘000 sq ft)

Pantaloon Department store Pantaloon 13 1948

Retail Hypermarket Big Bazaar 450 5000
Indian Seamless Malls Central 12 1200
Ltd
Hyper markets Spencer’s 400 6000
Music Stores Music world 225 230

RPG Retail books Stores Books and

Beyond
Shopper’s Department Shopper’s Stop 20 1000
Stop Ltd. stores
Books & Music Crosswords 33 N/A
Stores
Home furnishing Home Stop N/A N/A
Landmark Department Lifestyle 8 370
Group(Based Stores
in Dubai)
Trent India Department West side 19 350
Ltd Stores

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 Hypermarkets Star India 1 N/A
Bazaar
Books & Music Land Mark 4 N/A
Stores

CLASSIFYING INDIAN RETAIL:

(A)Modern Format retailers

1) Supermarkets (Food world)

2) Hypermarkets (Big Bazaar)
3) Department Stores (Shoppers Stop)
4) Specialty Chains (IKEA)
5) Company Owned Company Operated (BP)

(B)Traditional Format Retailers:

1) Kiranas: Traditional Mom and Pop Stores

2) Kiosks
3) Street Markets
4) Exclusive /Multiple Brand Outlets

ORGANIZED v/s UNORGANIZED RETAIL SECTOR

Indian retail is dominated by a large number of small retailers consisting of the local

kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops,

paan and beedi shops, hand-cart hawkers, pavement vendors, etc. which together

make up the so-called “unorganized retail” or traditional retail. The last 3-4 years

have witnessed the entry of a number of organized retailers opening stores in various

modern formats in metros and other important cities. Still, the overall share of

organized retailing in total retail business has remained low. While total retail sales

have grown from Rs. 10,591 billion (US$ 230 billion) in 2003-04 to Rs. 14,574

billion (US$ 325billion) in 2008- 09, which is at an annual compound growth rate of

33
about 11 per cent, the organized retail sales grew much more at about 20 per cent per

annum from Rs. 350 billion (US$ 7.6 billion) in 2003-04 to Rs. 598 billion (US$

13.2 billion) in 2006-07. As a result, the share of organized retail in total retail grew,

although slowly, from 3.3 per cent in 2003-04 to 4.4 per cent in 2008-09. Food and

grocery constitutes the bulk of Indian retailing and its share was about two – thirds in

2003-04 gradually falling to about 65 per cent in 2008-09. The next in importance is

clothing and footwear, the share of which has been about 7 percent in 2003-04 and

rose to 10% per cent in 2008-09. The third biggest category is non-institutional

healthcare whose share has slowly reduced from 9 per cent in 2003-04 to 7 per cent

in 2008-09. The next is furniture, furnishing, appliances and services, whose share

rose from about 5 per cent in 2003-04 to 8 per cent in 2008-09. The category of

jewelry, watches, etc. constituted about 7 per cent of total Indian retailing in 2008-

09, rising from 5 per cent in 2003-04. While the overall share of organized retailing

remains low, its share in certain categories is relatively high and in certain other

categories quite low. Thus, for clothing and footwear, the share is already in the

range of 19-22 per cent, for the category of sports goods, entertainment, equipment

and books the share is 12-16 per cent, and for furniture, furnishing, appliances and

services, the share is 10-13 per cent. In contrast, the share of organized sector in the

largest category of food and grocery retailing, although growing, remains just below

one per cent.

34
 CHAPTER - 2

INTRODUCTION
TO THE TOPIC

35
MEANING OF PERCEPTION:

Perception is the process by which a customer makes sense of information that he

receives. Therefore, it is to be tried that customer receives the right information

about every product and about its scheme, because a single error in communication

to customer can create confusion to him and he may not buy the product.

THE CUSTOMER'S PERCEPTION:

Customer perception is an important component of our relationship with our

customers. Given that 90% plus of our orders at some point involve the phone, how

we handle the telephone is essential to creating a perception for our customer that

aligns with the company mission of service. Smiling stretches your vocal cords, and

gives a more upbeat presentation to the customer. Slowing down ensures that the

customers perception is of an organized systematic company that can handle their

project.

Satisfy customers perception is the biggest challenge: In meeting customers'

requirements and measuring customers' satisfaction indexes, customer perception

should be definitely a key consideration. Qualified services in the operation

execution layer, technical management layer and business development layer are

necessary. It is more important to understand customer expectations and make efforts

to exceed their expectations. In customer satisfaction management, the biggest

challenge is customer perception management, or customer perception satisfaction.

36
The major characteristics of service is intangible, hence the core value of services is

not like a physical product but the spiritual experience and perception of customers.

The final aim and ideal effect of service provisioning is to have customers perceive

and enjoy the service. Such perception is both at psychological and behavior levels,

and it is the contents of high quality life in the modern society. Customers are

seeking for material deliverables as well as perceptive enjoyment when purchasing a

service product. Since perceptive enjoyment is a vital service objective, one of the

key service management objectives shall be meeting customers' perceptive

enjoyment.

CONSUMER BEHAVIOR AND RETAILING DECISIONS:

Consumer behavior refers to the mental and emotional process and the observable

behavior of consumers during searching, purchasing and post consumption of a

product or service. Consumer behavior involves study of how people buy, what they

buy, when they buy and why they buy. It blends the elements from psychology,

sociology, sociopsychology, anthropology and economics. It also tries to assess the

influence on the consumer from groups such as family, friends, reference groups and

society in general. Buyer behavior has two aspects: the final purchase activity visible

to any observer and the detailed or short decision process that may involve the

interplay of a number of complex variables not visible to anyone.

37
CONSUMER’S BUYING PROCESS

a. NEED RECOGNITION:

The customer first points out the things which he need. His good part of income is

spend on things of his daily requirement.

b. INFORMATION SEARCH:

Before purchasing of a product, customer research internally and externally.

Internally-retrieving information about similar purchase made earlier, decision

about choice criteria, brand included, or advertisement related to the product.

Externally- source such as family, friends, commercial sources, etc.

c. EVALUATION OF ALTERNATIVES:

Before, purchasing customer looks for the alternatives of that product. Customer

goes for good quality in cheapest rate.

d. PURCHASES:

Purchaser many times faces cognitive dissonance which arises due to uncertainty of

making right decision. This is because choice of one product often means

rejection of attractive features of the alternatives.

38
e. AFTER PURCHASE EVALUATION:

Customer by using the product comes to know about the real value of product. This

stage is also called as feedback stage.

COMPANY PROFILE:

VISHAL MEGA MART

Vishal is one of fastest growing retailing groups. Its outlets cater to almost all price

ranges. The showrooms have over 70,000 products range which fulfills all your

household needs, and can be catered to under one roof.

What started as a humble one store enterprise in 1986 in Kolkata is today a

conglomerate encompassing 183 showrooms in 110 cities / 24 states. India’s first

hyper-market has also been opened for the Indian consumer by Vishal. Situated in

the national capital Delhi this store boasts of the singe largest collection of goods and

commodities sold under one roof in India. The group’s philosophy is integration and

towards this end has initiated backward integration in the field of high fashion by

setting up a state of the art manufacturing facility to support its retail endeavors.

Vishal is one of fastest growing retailing groups in India. Its outlets cater to almost

all price ranges. The showrooms have over 70,000 products range which fulfills all

your household needs, and can be catered to under one roof. It is covering about 29,

90, 146 sq. ft. in 24 states across India. Each store gives you international quality

goods and prices hard to match. The cost benefits that is derived from the large

39
central purchase of goods and services is passed on to the consumer. There are three

classes of consumers the lower class is restricted only to unorganized retail, upper

class consumers are limited and scattered. According to the Vishal Retailing

Strategy, they are targeting middle class as it is the largest consumer base in India

and can be sold off then in large volumes because with the increasing purchasing

power the middle class is shifting towards organized retail. The group had a turnover

of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership of Mr.Ram

Chandra Agarwal . The group had a turnover of Rs 2884.43 million for fiscal 2006

and Rs. 6026.53 million for fiscal 2007.

TYPES OF CUSTOMER:

There are three types of consumer in the Indian retail market Upper class , midle

class and lower class. Vishalmega mart is a firm believer of that the Middle class and

upper middleclass are the potential customer in their product categories. The flow of

customer in garment departments is relatively higher than the others departments.

The vishal store have 10 cash counters and they are making bills of more than 280

bills per day per counter Product lines and the quality of the products in the Garment

Section are basically for the medium and average grade income level people and

price range in this section is averagely lies between Rs.250 to 600.Product lines and

the quality of the products in the Gifts Section range in this section is averagely lies

between Rs.500 to 800 .Music section consist of Music CD’s, Game CD & DVD’s

and also Movie DVD’s. Product lines and the quality of the products in the Music

40
Section are basically for price range in this section is averagely lies between Rs.150

to 500.

FLOW OF CUSTOMERS IN DIFFERENT DEPARTMENTS:

This table shows flow of customers in various department of vishal mega mart.

Inter-Department Customer Flow

DEPARTMENT NUMBER OF CUSTOMER
GARMENTS DEPARTMENT 900
GIFTS DEPARTMENT 250
CARDS DEPARTMENT 100
MUSIC DEPARTMENT 300

41
 CHAPTER - 3

RESEARCH

METHODOLOGY

42
 OBJECTIVES OF THE STUDY

The objectives of doing the projects are :-

1. To analysis and study the growth of organized retail

Industry of India.

2. To understand the customer’s perception on Retail

chain.

3. To study about the perception of customer with reference

to availability of Products and services in retail market.

4. To study about customer preferences and frequency of

shopping in retail market.

RESEARCH DESIGN

It is the arrangement of conditions for collections and analysis of data in a

manner that aim to combined relevance to the research purposes with

economy in procedure It is a conceptual structure within which research is

conducted; it constitutes the blue print for the collection, measurement and

analysis of data.

Exploratory study design has been conducted for this study.

43
 SAMPLING METHOD

I had employed random sampling method for the collection of data. A random

sample gives every unit of the population a known and non-zero probability of being

selected.

Since random sampling employees equal probability to every unit in the population it

is necessary that the selection of the sample must be free from human judgments. I

have taken a sample size of 100 respondents .

TYPE OF DATA:

Data type collected for analysis is PRIMARY i.e. data has been observed and

recorded by the researchers for the first time to their knowledge. Data collected

through journals, newspapers & internet is SECONDARY type.

Method of data collection

This study is a research which utilizes interrogation and observation method for data

collection. Secondary data was obtained from intensive analysis & observation. The

primary data are those, which are collected afresh and for the first time, and thus

happen to be original in character. The secondary data, on the other hand, are those

which have already been collected by some one else and which have already been

passed through the statistical process.

44
Method employed to collect data is Questionnaire. This is a simple survey conducted

by filling in questionnaire from the people who visit vishal mega mart.

Collection of the Primary data:

As this study is of descriptive type, the primary data has been collected through

Questionnaire.

SURVEY INSTRUMENT

A structured questionnaire was used to collect data. The questionnaire consists of

different parts to gather information on the different variables under considerations.

The questionnaire is the best instrument for the survey in this case because, for a

correlation study the sample sizes have to be very large as it is quantitative in nature,

so surveying so many people with personal interviews or observations would be next

to impossible. With questionnaires, no responses of the respondents can be missed

out. It gives more time to the respondents to think and then give the answers. And it

is a quicker and cheaper way to conduct the survey. Questionnaires can be conducted

in any environment, with minimum influence of the outside environment.

Questionnaires also have the advantage of keeping the personal details of the

respondents confidential. A sample of the questionnaire has been attached in the

appendix 1.

PRESENTATION OF DATA

The data collected is then coded in the tables, charts and diagrams to make the things

presentable and more effective. The results are shown by tables, charts & diagrams

45
which will help me out in easy and effective presentation and hence results are being

obtained.

46
 CHAPTER-4

DATA ANALYSIS

AND INTERPRETATION

47
 1. How often do you buy your product?

a. Once a week

b. Once a month

c. Once in a six month

d. Once in a year

The graph given below shows that the most of the people l ie; approx 20%

people like to buy their product at the beginning of the month and they like to

buy their products once in a month.

48
 2. What is your Monthly shopping budget?

0-2k 2-5 k 5-10k

10-20k <50k

This graph helps in analyzing the Shopping Budgets of the customers of Organized

Retail. Around 40% customers spend 2-5 k in shopping. 25% customers have their

monthly shopping budget between 5-10k.Around 15% customers have a budget of 0-

2 k for shopping. The graph also shows that only 5% higher middle or upper class

spend more than 50k in shopping whereas 10% people spend 10-20 k in monthly

shopping

49
 3. From where do you buy your product?

Organized Retail Store 6 48%

Unorganized Retail Store 52%

The above pie chart shows that people of Harayana are more focused on unorganized

Retail sector. This is because of the convenience of Kirana stores near there living

places. Thus Approx. 65 % of people go for Unorganized Retail Store while only

35% population is concerned with organized retail Store.

50
 4. Which product do you normally buy from retail chains.?

Clothes Furniture FMCG Goods

Electronic Goods

Any other (pls specify)……………………………………

The Purchasing choice of customers in an organized retail store is more focused on

FMCG Goods as they get all their daily items under roof. Thus 30% shows FMCG

goods and 20% is for purchasing choice of customer towards clothes whereas only

10% shopping is done for furniture by customers. The rest shows that only 15%

people are interested for purchasing of electronics items. 25% people go shopping for

items like Cosmetics, shoes, gift items, etc.

51
 5 . On which basis you have purchase the goods?

a. Price
b. Quality
c. Services
d. After sales services

Sales
after sales
service, 5%

service, 21% price, 33%

price
quality
service
quality, 41%
after sales service

The above graph shows that people mainly focused on quality of goods as 41 %

customer prefer good quality items and 33% customers are price concerning people .

rest 21% goes for service and only 5% customer prefer after sales service.

52
6.How much time do you spend in the retail chain on every visit?

0-60 min 1-3 hrs 1-4 hrs

1-5 hrs <5 hrs

The above chart represents the shopping hrs that the customer spends in their

shopping. 47% people like spending 1-3 hrs of their time in shopping while

24% gives only 1 hrs of their time in this activity. A very less number of

people i.e. 9% and 7% spend 1-5 hrs or more than 5 hrs in shopping, these

type of people are mostly having shopping as their hobby. 13% people spend

1-4 hrs in doing mostly window shopping.

53
7.Do you find any price variation from unorganized retail store?

54
 Yes No

In my survey 60% people said yes and 40% said no. 60% customer finds price

variations in an organized retail store in comparison to the unorganized one. The

55
price variations is both in positive and in negative views. Mostly vishal mega mart

the price provided in food bazzar are lower than any kirana shop .

8. Are you satisfied with the response of the employees of organized retail

store?

Yes No

The above chart shows the satisfaction of customers from the response of the

employees of an organized retail store. 75% customer feels satisfied with the

56
 employees and only 25% customer feels unsatisfied with the response of

employees.

1. From where do you buy your product?

a. Vishal mega mart

b. Citi bazaar
c. Others
d. Kirana stores

40%

35%

30%

25%
vishal mega others, 40% Series1
20%
mart, 35%
15% citi
bazaar, 25%
10%

5%

0%
vishal mega mart citi bazaar others

57
The above graph shows that 35%people like vishal mega mart, 25% like citi

bazaarand 40% people like kirana and departmental store for shopping.

2. Do you like Vishal Mega Mart?

Yes No

58
In my survey I found that 70% customers like Vishal Mega Mart and 30% people

don’t prefer Vishal Maga mart for shopping.

3. Why do you like that particular retail chain?

Attractive prizes

Wide range of choices

Discount Schemes

Free offers

After sales services

The above graph shows that 30% people like the free offers schemes of

the organized retail store, 23% and 24% people goes for the wide range of

choices and discount schemes respectively.18% people like the attractive

59
prizes offered time to time by the organized retail stores and 5% people like

the after sales service provided by the organized retail stores.

12. Which one is better according to your opinion?

Organised Retail

Unorganised Retail

60
The aboce graph shows that 60% people think that organised retail chain is better due

to its convenience and avalibility of various items under one roof.

61
 CHAPTER-5

FINDINGS

 Maximum no of customers belongs to upper middle class.

 Brand Choice of customers is changing and this also influencing shift from

kirana to convenience store. .

 Maximum no of customers do not compromise quality with Discount and

offers.

62
 Age is one of the most important factors responsible for the changing

preference of customers.

 Maximum number of customers here is female.

 Maximum number of customers are young.

 Local market and kirana stores till today are the first choice of customers.

63
 CHAPTER- 6

LIMITATIONS

 The research will be conducted in a limited area.

 The internet information can be irrelevant.

 Time will be a major constraint.

 Respondent can be biased.

64
 Language is one of the worst problem, some of the consumers are unable

to understand English.

CHAPTER-7

CONCLUSION

65
The past 4-5 years have seen increasing activity in retailing. And, various business

houses have already planned for few investments in the coming 2-3 years. And

though the retailers will have to face increasingly demanding customers, and

intensely competitive rivals, more investments will keep flow in. And the share of

organized sector will grow rapidly.

More and more corporate houses including large real estate companies are coming

into the retail business, directly or indirectly, in the form of mall and shopping center

builders and managers. New formats like super markets and large discount and

department stores have started influencing the traditional looks of bookstores,

furnishing stores and chemist shops.

. Lastly I want to conclude my project in some points-

1. The customers are attracting towards shopping malls & retail

outlets.

2. The shopping malls & retail outlets are targeting to middle class

customers because the purchasing power of this class is rapidly

growing as well as the class is also growing.

3. The young generation is fashion & show-off conscious so retail

outlets are mainly focused on them.

4. Most of the family wants to purchase from big showrooms and

malls because there are no bargaining system so the have a trust

66
 that there is no cheating.

5. The main strength of most of the retail outlets are providing

attractive offers to attract customers.

6. Big retail stores are running customer loyalty programmes which

has increased profits and no. of customers.

7. Beside of this kirana store and local market is still the first choice of

maximum customers.

BIBLIOGRAPHY

67
WEBSITES:

www.google.co.in

www. wikipedia.com

www.retailindia.net

www.retailyatra.com

www.aboutus.com

www.businessworld.in

BOOK REFERRED:

Research methodology (C.R. Kothari)

Retailing Management (Levy & weitz)

ANNEXURE
QUESTIONNAIRE

68
1.How often do you buy your product?

a. Once a week

b. Once a month

c. Once in a six month

d. Once in a year

2.. What is your Monthly shopping budget?

0-2k 2-5 k 5-10k

10-20k <50k

3. From where do you buy your product?

Organized Retail Store

Unorganized Retail Store

4.Which product do you normally buy from retail chains.?

Clothes Furniture FMCG Goods

Electronic Goods

Any other (pls specify)…………………………………

5. On which basis you have purchase the goods?

• Price
• Quality

69
 • Services
• After sales services

6.How much time do you spend in the retail chain on every visit?

0-60 min 1-3 hrs 1-4 hrs

1-5 hrs <5 hrs

7.Do you find any price variation from unorganized retail store?

Yes No

8. Are you satisfied with the response of the employees of organized retail store?

Yes No

9.From where do you buy your product?

• Vishal mega mart

• Citi bazaar
• Others
• Kirana stores

10.Do you like Vishal Mega Mart?

70
 Yes No

11.Why do you like that particular retail chain?

Attractive prizes

Wide range of choices

Discount Schemes

Free offers

After sales services

12. Which one is better according to your opinion?

Organised Retail

Unorganised Retail

71
72