Research Methodology

Minor Project
In customer perception of services in
EBO’s vs MBO’s
 Introduction
Multi Brand Outlets:

Retailers more often prefer multi brand options because they get the
freedom choose and decide. In exclusive formats, retailers lose their
freedom as they will have to abide the vendor guidelines such as fixed set of
promotions for a year. Apparels are more product driven, and less brand
driven, and hence MBOs will prove more profitable. In case of apparels,
consumption rates are seeing an increasing trend since; customers get a
variety of apparels to choose from. EBOs need efficient and skillfully trained
staff, as they are the face of the brand. MBOs are free from this.

Multi brand formats put the brand and its product right in the middle of its
competitors. New offerings are showcased in a way, facilitating the
consumers to compare and decide. The sheer volume of shoppers stepping
in MBOs makes it essential; not to be ignored. Stores like Lifestyle, and
Shoppers Stop etc are gaining more popularity with the consumers.

But this too, is not an unmixed blessing. Providing multiple choices might
confuse the shopper. The retailer would also not be in a position to
recommend any brand to his customer, as that would indirectly imply under
selling the remaining brands. Multi brand retailers also get fewer benefits
from the vendors. Exclusive brand retailers get territory protection from
their vendors, while multi brand retailers will have to face fierce competition
if another multi brand outlet is launched in the same area.

Exclusive Brand Outlets:

Exclusive brand outlets are vendor centric models. They provide complete
fashion solution keeping clothes both fashionable, and functional. The
retailer makes deep commitments through his investments, and marketing
strategies. The retailer enjoys territory protection, rebates and marketing
support from the vendor, better margins, and other subsidies. 'Koutons',
'Fab India', and 'W' are a few EBOs that are carving a niche market for itself.

A branded outlet includes the exclusivity of a brand and creates a store

image to convey its brand image. It enables the brand to choose the
location, size, and configuration of the store. Unique promotional strategies
are followed. They also get more discounts and incentives comparatively
over multi brand retailers. An exclusive retail store maintains uniformity in
store design, interiors, products, store size, promotions undertaken, and its
product pricing. This prevents harsh competition among exclusive store
retailers, giving them a fair chance of profits.

However, similar to its multi brand counterpart, exclusive stores too; have
their own drawbacks. These retailers get very little footfall, and are lost out
on customers who seek options of similar brands. An EBO requires high
investment, and it is challenging for a retailer to find the right location to set
his store. If he is a new player in the market, he would face issues running
the store without prior retail experience, as it deals with one specific brand.

Most of the customers today are well informed about the product they
prefer to buy, and are aware of the comparative benefits, and pricing of
similar other brands. They prefer to go to a store, where they can see many
brands, compare their performance benefits, and pricing before they make
their buying decisions. A multi brand retailer would be able to satisfy this
kind of customer.

Despite, all prevailing rationale, starting up a business as an EBO for

visibility, and gradually leveraging the business through MBOs would prove
to be successful for retailers. Both retail concepts have their own pros, and
cons. One point of time, the retailer benefits from exclusive outlets, and
another time, he may benefit from multi brand outlets. While EBOs are
important for branded apparel makers to establish a market presence, and
create an impression in the customer's mind, MBOs make a pragmatic
approach for the success of a retailer as they offer a wide variety of choice
to the shoppers under a single roof