Minor Project Report On MANAGING RETAILING

Submitted in partial fulfilment of the requirements for the award of the degree of Bachelor of Business Administration (BBA) To Guru Gobind Singh Indraprastha University, Delhi

Institute of Information Technology and Management New Delhi 110058 Batch 2009 - 2012

1. DEFINITION AND MEANING Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.

Pic.1. Retailing process The process of bringing the ultimate user to the main producer, through a series of stages, where retailing is the last one. It is not limited to quantities, but limited to the exact requirement of the ultimate user. Therefore, bringing about operational efficiency at this last stage, and creating an environment so compelling that he looks nowhere else, is "Retail
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Management"(RM).

RM- is an art, and necessitates employing several tools of logistics management for a complete end user satisfaction. RM - is getting to know the final user on behalf of the producer. RM - is a process of facilitation.

2. CONCEPT OF RETAILING
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The distribution of consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middleman-the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. The word retail is derived from the French work retailer, meaning to cut a piece off or to break bulk.

Manufacturer

Distributors/Wholesalers

Retailers

Consumer

Pic.2. Distribution process of consumer goods. A retailer is a person, agent, agency, company, or organisation which is instrumental in reaching the goods, merchandise, or services to the ultimate consumer. Retailers perform specific activities such as anticipating customers wants, developing assortments of products, acquiring market information, and financing. A common assumption is that retailing involves only the sale of products in stores. However, it also includes the sale of services like those offered at a restaurant, parlour, or by a car rental agencies. The selling need not necessarily take place through a store. Retailing encompasses selling through the mail, the internet, door-to-door visit sany channel that could be used to approach the consumer. Retailing has become such an intrinsic part of our day today lives that it is often taken for granted. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer-an easier access to a variety of products, freedom of choice and higher levels of customer service.

Therefore, the ease of entry into retail business results in fierce competition and better value for customer. To enter retailing, is easy and to fail is even easier. Therefore, in order to survive in retailing, a firm do a satisfactory job in its primary role i.e., catering to customers.

3. SCOPE OF RETAILING
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Retail is clearly the sector that is poised to show the highest growth in the next five years. The sector is set for a revolution, as both the present players and new entrants are gearing up to explore the market. This sector contributes 10% of India's GDP and the current growth rate is 8.5%. The present size of the organized retailing sector is approximately 3% and is expected to grow to 25-30% by the year 2010. There are about 300 new malls, 1500 supermarkets and 325 departmental stores currently under construction. Many players are coming up with huge investments, due to which the present 12 million mom-and-pop shops and kirana stores fear losing their business. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010. (Data provided by www.naukrihub.com)

3.1 Retail Landscape Modern retail development in India is focused on the following cities: West

Mumbai Pune Ahmadabad

North

Delhi and the National Capital Region

South

Chennai Bangalore Hyderabad

East

Kolkata

Over the past 2-3 years the modern retailing has also shifted to suburban and small cities as well like Ludhiana, Rajasthan, etc. 3.2 Some leading Indian Retailers are as follows:

Bata India Ltd Big Bazaar Food Bazaar Liberty shoes Ltd. Music World Entertainment Ltd. Pantaloon Retail India Ltd. Shoppers Stop Subhiksha Titan industries

3.5 FDI in retailing sector

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3.5.1 What is FDI? Foreign direct investment (FDI) is the movement of capital across national frontiers in a manner that grants the investor control over the acquired asset. Thus it is distinct from portfolio investment which may cross borders, but does not offer such control. Consistent economic growth, de-regulation, liberal investment rules, and operational flexibility are all the factors that help increase the inflow of Foreign Direct Investment or FDI. 3.5.2 Retailing Sector and FDI - Retailing is the largest private sector industry in the world economy with the global industry size exceeding $6.6 trillion and a latest survey has projected India as the top destination for retail investors. And the further upsurge is anticipated in the retail sector as the Government of opened up 51% FDI in single brand retail outlets. And as the government is in a process to initiate a second phase of reforms, it is cautiously exploring the avenues for multi-brand segment. The Government is seeking for these options keeping in view the existing social framework of India and the will ensure that the entry of global retail giants do not displace the existing employment in the retail business. Industry experts are sensitive to the point that local markets have an edge over the retail investors in India as they have unique advantages such as an understanding of local needs and extended service like home delivery. As the FDI influence on the Indian retail sector sets in, the total size of the retail trade is expected to grow extensively in the coming years and the consumer segments patronizing the big malls will create frenzy for organized retailing predicting a growth of 25-30 per cent per annum over the next decade. Moreover, Indian retail chains would get integrated with global supply chains since FDI will bring in technology, quality standards and

marketing thereby, leading to new economic opportunities and creating more employment generation. 3.5.3 Benefits of FDI in Retail Sector Higher competition would lead to higher quality in products and services. Better lifestyle as better products would be introduced. Exports would increase due to greater sourcing of major players. Investment in whole supply chain would increase. Technology would be upgraded in terms of logistics, production, and distribution channels. The markets of the sector would flourish and develop. Employment would increase and skills & manpower will develop. A strong retailing sector would promote tourism. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer.

In the long term it will be beneficial in the up-gradation of agriculture and small scale & medium scale industries. (Above data in figures is provided by www.docstoc.com)

4. RETAILING IN INDIA 4.1 Origin in India Although retailing does not enjoy the status of an industry, the sheer size it will develop into, is grabbing attention. The origin of retail in India dates back to ancient times when the melas and mandis made their presence felt. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores, which became a part of the civic planning. The next step was the commercial plazas, which comprised merely shops offering a variety of goods and services clubbed together. The inconveniences caused by lack of parking place, toilets and maintenance, ushered in the entry big international brands opening their exclusive showrooms. The opening up of the economy only fuelled this globalization. There are, however, certain bottlenecks as well; the scarcity of space, coupled with the stringent provisions of the Rent Control Act, act as a dissuasive factor for many players to initiate operations in the main markets. This also explains why the Rahejas forayed into their retail venture-Shoppers Stop. 4.2 Composition of Urban Outlets RETAIL OUTLET Grocers Cosmetic stores Chemist Food stores General stores Tobacco, pan stores Others (Data Source: www.docstoc.com)
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COMPOSITION 34.7% 4.0% 6.3% 6.6% 14.4% 17.0% 17.0%

4.3 Emergence of Organised Retailing 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.(data source:www.naukrihub.com). 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 providing 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. Women are taking up corporate jobs, which is adding to the familys 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 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 favour of onestop 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 traders who fears that foreign companies would take away their business, lead to the closure of many small businesses and result in large-scale unemployment. Therefore, government has discouraged FDI in
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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 (McDonalds, Pizza Hut); cash and carry operations (Giant) and licensing (Marks & Spencers). The main condition for organised 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. 4.4 Current Scenario The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. It is only natural that the service sector is the biggest employer with its contribution to GDP pegged at 54%. (Data source: www.tradechakra.com) Retail in Indias largest industry after Agriculture with around 20% of the economically active population engaged in it and generation 10% of Indias GDP. The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. The 12 million retail outlets in India are the highest in the world. Its interesting to note that the Urban Population although just 25% of the total, is an astounding 250 million in size is growing at healthy rate of 7% per annum. The chief driver of growth in the retail sector has been the consumer,

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with the spending increasing at an average of 11% per annum. The core and the Lower middle have increased their share in the Growth. The Indian consumers shopping needs are and traditionally have been fulfilled by Kirana sores, Kiosks, street vendors and high-street shops for consumer durables and luxury goods. To cater to this, each city developed its own identity and shopping cluster, for instance in Pune there is MG Road, Bangalore has Brigade Road and Commercial Street, Delhi has Connaught Place, Karol Bagh and South Extension. In India we have 196 malls, covering an area of 51.6 million sq ft. And by year end (2010) the count will shoot up to 258 malls. It will cover 94 million sq ft area. (Data provided by www.docstoc.com) 4.5 Drivers of Change in Retailing Changing demographics and industry structure Expanding computer technology Emphasis on lower costs and prices Emphasis on convenience and service Focus on products Added experimentation Continuing growth of non-store retailing

In todays competitive environment retailers have redefined their role in general, and in the value chain in particular. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. As a result, they have a strong say in the success of the product or service launched by a business firm. A product manager of household appliances claimed, Marketers have to sell a new product several times, first within the company, then to retailer and finally to the user of the product.
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It is a well-established fact that manufacturers need to sell their products through retail formats that are compatible with their business strategy, brand image, and market profile in order to ensure a competitive edge. The role of retailers in the present competitive environment has gained attention from manufacturers because external parties such as market intermediaries and supplying partners are becoming increasingly powerful. It is necessary for marketers of consumer products to identify the need and motivations of their partners in the marketing channel. This is especially true in the case or new products. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market

intermediaries. Retailers want of optimize sales within the limited shelf space, governed by their individual sales philosophy. Retailers undertake risk in selection of goods to be sold given the following major concern which is selling space available is relatively fixed and returns maximum profits. If such space is occupied by merchandise that is not moving, it will not result in profit. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. Therefore, we can say that retailing is a dynamic industry-constantly changing due to shifts in the needs of the consumers and the growth of technology. Retail formats and companies that were unknown three decades ago are now major forces in the economy. Therefore, the challenges for retail managers the world over are increasingthey must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. Selecting target markets, determining what merchandise and services to offer, negotiating with suppliers, training salespeoplethese are just a few of the many functions that a retail manager has to perform on a perpetual basis.
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The larger retailers have managed to set up huge supply/distribution chains, inventory management systems, financing pacts and wide-scale marketing plans. In the backdrop of globalization, liberalization and highly aware customers, a retailer is required to make a conscious effort to position himself distinctively to face the competition. This is determined to a great extent by the retail mix strategy followed by accompany to sell its products.

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5. FUNCTIONS OF RETAILERS As the final link between consumers and manufacturers, retailers are a vital part of the business world. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. It would be very costly and time consuming for you to locate, contact and make a purchase from the manufacturer every time you wanted to buy a candy bar, a sweater or a bar of soap. 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. In brief they provide us with following functions: Provides personal services to all. Provides two-way information - The retailer buys a variety of

products from the wholesaler or a number of wholesalers. He thus performs two functions like buying of goods and assembling of goods.

Facilitate standardisation and grading - He resorts to

standardization and grading of goods in such a way that these are accepted by the customers.

Undertake physical movement and storage of goods - The

retailer performs storing function by stocking the goods for a consumer.

Assembles goods from various sources.

Stock goods for ready supply to buyers- He makes arrangement for delivery of goods and supply valuable market information to both wholesaler and the consumer.
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Extend credit facility - He develops personal contact with the consumers and gives them goods on credit.

Create demand by window display etc. He bears the risks in connection with Physical Spoilage of goods and fall in price. Besides he bears risks on account of fire, theft, deterioration in the quality and spoilage of goods.

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6. TYPES OF WHOLESALERS 6.1 Merchant Wholesalers: These wholesalers own the products they sell. For example, a wholesale lumber yard that buys plywood from the producer is a merchant wholesaler. It actually owns - takes title to - the plywood for some period of time before selling to its customers. About four out of five wholesaling establishments in the United States are merchant wholesalers - and they handle about 59 percent of wholesale sales. Merchant wholesalers often specialize by certain types of products or customers and they service relatively small geographic areas. And several wholesalers may be competing for the same customers. For example, about 3,000 specialized food wholesalers compete for the business of restaurants, hotels, and cafeterias across the United States.

6.2 General Merchandise Wholesalers: These are service wholesalers who carry a wide variety of non-perishable items such as hardware, electrical supplies, plumbing supplies, furniture, drugs, cosmetics, and automobile equipment. These wholesalers originally developed to serve the early retailers - the general stores. Now, with their broad line of convenience and shopping products, they serve hardware stores, drugstores, electric appliance shops, and small department stores.

6.3 Single-line (or general-line) Wholesalers: These are service wholesalers who carry a narrower line of merchandise than general merchandise wholesalers. For example, they might carry only food, wearing apparel, or certain types of industrial tools or supplies. In consumer products, they serve the single- and limited-line stores. In business products, they cover a wide geographic area and offer more specialized
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service.

6.4 Speciality Wholesalers: These are service wholesalers who carry a very narrow range of products - and offer more information and service than other service wholesalers. A consumer products specialty wholesaler might carry only health foods or oriental foods instead of a full line of groceries. Or a specialty wholesaler might carry only automotive items and sell exclusively to massmerchandisers. Specialty wholesalers often know a great deal about the final target markets in their channel. For example, Advanced Marketing is the leading wholesale supplier of books to membership warehouse clubs. The company offers hardcover best sellers; popular paperbacks, basic reference books, cookbooks, and travel books. Consumers in different geographic areas are interested in different kinds of books and that affects what books will sell in a particular store.

6.5 Cash-and-Carry Wholesalers: These wholesalers operate like service wholesalers - except that the customer must pay cash. Some retailers, such as small auto repair shops, are too small to be served profitably by a service wholesaler. So service wholesalers set a minimum charge - or just refuse to grant credit to a small business that may have trouble paying its bills. Or the wholesaler may set up a cash-and-carry department to supply the small retailer for cash on the counter. The wholesaler can operate at lower cost because the retailers take over many wholesaling functions. And using cash-and-carry outlets may enable the small retailer to stay in business. These cash-and-carry operators are especially common in less-developed nations where very small retailers handle the bulk of retail transactions.

6.6 Drop-Shippers: These wholesalers own (take title to) the products they sell 19

but they do not actually handle, stock, or deliver them. These wholesalers are mainly involved in selling. They get orders - from wholesalers, retailers, or other business users - and pass these orders on to producers. Then the producer ships the order directly to the customers. Because drop-shippers do not have to handle the products, their operating costs are lower. Drop-shippers commonly sell products so bulky that additional handling would be expensive and possibly damaging.

6.7 Truck Wholesalers: These wholesalers specialize in delivering products that they stock in their own trucks. By handling perishable products in general demand - tobacco, candy, potato chips, and salad dressings - truck wholesalers may provide almost the same functions as full-service wholesalers. Their big advantage is that they deliver perishable products that regular wholesalers prefer not to carry. Some truck wholesalers operate 24 hours a day, every day - and deliver an order within hours.

6.8 Mail-Order Wholesalers. These wholesalers sell out of catalogs that may be distributed widely to smaller industrial customers or retailers who might not be called on by other middlemen. These wholesalers operate in the hardware, jewellery, sporting goods, and general merchandise lines. For example, Inmac uses a catalog to sell a complete line of 3,000 different computer accessories and supplies. Inmac's catalogs are printed in six languages and distributed to business customers in the United States, Canada, the United Kingdom, Germany, Sweden, the Netherlands, and France. Many of these customers - especially those in smaller towns don't have a local wholesaler.

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6.9 Producers' Cooperatives. These wholesalers operate almost as full-service wholesalers - with the "profits" going to the cooperative's customer-members. Cooperatives develop in agricultural markets where there are many small producers. Examples of such organizations are Sunkist (citrus fruits), Sunmaid Raisin Growers Association, and Land O' Lakes Creameries, Inc. Successful producers' cooperatives emphasize sorting - to improve the quality of farm products offered to the market. Some also brand these improved products - and then promote the brands. For example, the California Almond Growers Exchange has captured most of the retail market with its Blue Diamond brand. 6.10 Rack Jobbers: These wholesalers specialize in nonfood products sold through grocery stores and supermarkets - and they often display them on their own wire racks. Most grocers don't want to bother with reordering and maintaining displays of nonfood items (housewares, hardware items, and books and magazines) because they sell small quantities of so many different kinds of products. Rack jobbers are almost service wholesalers - except that they usually are paid cash for what is sold or delivered.

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7. SERVICES RENDERED BY RETAILERS 7.1 Services provided by the retailers to the wholesalers and manufacturers: They provide selling outlets to wholesalers and manufacturers. They save the manufacturers from the inconvenience and expenses of selling the goods in small lots to a large number of consumers. They communicate the needs and desires of consumers to the manufacturers. They may also arrange for transportation of goods from the wholesalers' godowns to the ultimate consumers. They may also perform storage function by keeping stocks of goods.

7.2 Services provided by the retailers to the consumers: They anticipate the needs of consumers and accordingly assemble goods of different varieties. Thus they satisfy their demands and provide them a wide choice of goods. They sort out goods supplied by the wholesalers and keep them in convenient packages for the benefit of the consumers. They even act as an advisor and guide to the consumers by bringing new products to their notice and educating them about its diverse uses. They keep the consumers informed about the changing trends in the market about the different varieties of products.

They also provide other services to the consumers such as free home delivery, after sale services, credit facility, etc.

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8. KINDS OF RETAILERS 8.1 On the Basis of Ownership There are four basic legal forms of ownership for retailers: 8.1.1 Sole Proprietorship: - The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has the day-to-day responsibility for running the business.

8.1.2 Partnership: - A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. In a partnership, two or more people share ownership of a single business.
8.1.3 Joint Venture: - A joint venture is not well defined in the law. Unless

incorporated or established as a firm as evidenced by a deed, joint ventures may be taxed like association of persons, sometimes at maximum marginal rates. It acts like a general partnership, but is clearly for a limited period of time or a single project.
8.1.4 Limited Liability Company (public and private): - The Limited

Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed.

8.2 On the Basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. Operational structure defines the key strategic decision
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of retail entity, whether to hire employees and manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by the local entrepreneurs. Retail firms can be classified into five heads on the basis of their respective operational structures:
8.2.1 Independent Retail Unit: - The total number of retailers in India

is estimated to be over 5 million in 2003. About 78% of these are small family businesses utilizing only household labour. An independent retailer owns one retail unit.
8.2.2 Retail Chain: - A chain retailer operates multiple outlets (store

units) under common ownership; it usually engages in some level of centralized (or coordinated) purchasing and decision making.
8.2.3 Franchising: - Franchising involves a contractual arrangement

between a franchiser (which may be a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a given form of business under and establishments name and according to a given pattern of business.
8.2.4 Leased Department or Shop in Shop: - It refers to

department in a retail store that are rented to an outside party. Usually this is done in case of department and specially stores and also at times, in discount stores.
8.2.5 Co-operative Outlets: - Co-operative outlets are generally owned

and managed by co-operative societies. In this context the detailed example of Kendriya Bandar in India.

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8.3 On the Basis of Location

8.3.1 Retailers in a free-standing location: - Retailers located at a site which is not connected to other retailers depend entirely on their sores drawing power

and on the various promotional tools to attract customers. This type of location has several advantages including no competition, low rent, and better visibility from the road, easy parking and lower property costs. For example the Haldirams outlet on the Delhi-Jaipur highway and the McDonalds outlet on Delhi Ludhiana highway.
8.3.2 Retailers in a Business- associated Locations:- In this case, a retailer

locates his store in a place where a group o retail outlets, offering a variety of merchandise, work together to attract customers to their retail area, and also compete against each other for the same customers.
8.3.3 Retailers in Specialized Markets: - Besides the above location-based

classification, we also have in India-retailers who prefer specialized markets, particularly traditional independent retailers or chain stores. In India, most of the cities have specialized markets famous for a particular product category. For example, in Chennai, Godown Street is famous for clothes, Bunder street for stationary products, Usman Street for jewellery, T Nagar for ready-made garments, Govindappan Naicleen street for grocery, Poo Kadia for food and vegetables.
8.3.4 Airport Retailing: - For quite some time, duty-free shops and

newsstands dominated the small amount of commercial space provided at airports. Lately, serious efforts are being made to design new airports facilities in order to incorporate substantial amounts of retail space.
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9. MARKETING DECISIONS BY RETAILERS Today, retailers are looking for new marketing strategies to attract and retain customers. Previously, it suffices was to offer people the convenience of location, special or unique assortment good, better than the competitor, service, and Internet presentations credit cards that buyers can make purchases on credit. Now everything is different. At many stores you will find quite the same range - trying to reach maximum volume of sales, the manufacturers sell their products wherever possible. Many stores cut its own set of services and shops reduced prices, on the contrary, increased their number. People are not going to pay for the same or similar mark more, especially if the amount provided in this service is reduced. Not they need a credit card of a shop, because bank cards now accepted almost universally. All this leads to the fact that many retailers trade today are rethinking their marketing strategies. Example, department stores, faced with competition from specialized and trading at a discount store, started a real war, trying to regain former popularity. Many of them have historically located in the centre of cities, opening their offices in the suburbs, where there is always space on the Parking, and higher income families. Others are increasingly satisfied with the sale; rebuild their stores, experimenting with trading by mail and tele marketing. Superstores compete with supermarkets, and so have to open offices with a large range and variety of goods, upgrade their facilities. Supermarkets more money spent on activities sales promotion, moving to small private brands, to reduce its dependence on marks on a national scale. One of the most important and most responsible decisions that have to take a retailer associated with the target market. What customer oriented shop: high, medium, lowincome? Do buyers diversity, depth of assortment, convenience? Yet will identify and
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describe the target market, the retailer will not make informed decisions on assortment, store environment, means and content of advertising, the price level. Many companies do not have a specific target market. Trying meeting the needs of a large number of different segments, they are not satisfying either one of them. Some retailers target market determined fairly accurately. Therefore, with the emergence of retailing sector in India retailers should periodically conduct market studies to monitor the achievement and satisfaction targets consumers and should adopt effective marketing strategies so as to establish its position in market and also fulfils the needs of consumers by catering services to them.

10. TYPES OF RETAIL DISTRIBUTION OUTLETS

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10.1 Small-scale Retailers: - are those retailers whose scale of operation is restricted to a small segment of the market and to a narrow range of products. They generally hold small stocks of the products of regular use. Such retailers are very large in number but account for a small portion of the total retail business. But, small-scale retailing is a very common, simple and flexible way of distributing the products to the final consumers. It incurs low operating costs and is usually owned and operated by a proprietor. The most important feature is that the small-scale retailers have a direct and personal contact with their customers. This form of retailing faces the problems of small capital, lack of professionalism and low purchasing power.

Pic.3.Small Scale Retail Outlets The two prevalent forms of small scale retailing in India are:10.1.1 Mobile Traders: - are those retailers who carry on their business by moving from place to place for selling the products and have no fixed business premises. They change their place of business according to their convenience and sales prospects. They serve either at the consumer's doorsteps or on busy places frequently visited by the customers. They do not have any particular line of business and carry very little stock of those goods. They save time and efforts of customers in buying articles of ordinary use. The hawkers and pedlars; cheap jacks; market traders and street sellers fall under this category.

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Pic.4.Mobile Retailing. 10.1.2 Fixed Shop Retailers: - are those retailers which have fixed business premises and operate through unit stores or small shops located in residential areas or markets. They mainly include:- Street stalls: - are the small shops on the roadside, streetcrossing, bus stops, etc. They sell a limited variety of products of regular use like stationery, grocery, etc. ; Dealers of second hand goods: - are engaged in purchase and sale of used goods like books, clothes, etc. ; General stores or variety stores: - are the shops which deal in all types of general consumer goods of regular use like bread, butter, paper and pencils, etc.They are set up in residential areas or busy markets. They provide services like goods on credit and home delivery to their customers ; Speciality shops: - are the shops which deal in only one or two special types of goods. They are generally located in shopping centres. For example, chemist shops, grocery shops, readymade garments shop, sweets shop, etc.

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Pic.5. Fixed Shop Retailers 10.2 Large-scale Retailers: - are those retailers whose scale of operation extends to a large segment of the market and to a wide range of products. They have a fixed line of business in which they have invested huge capital. Such retailers are not very large in number. This form of retailing involves high operating costs and lacks personal contact with the customers. But it involves more of professionalism in selling the products through the use of various promotional techniques like advertising, publicity, sales promotion, etc. The various forms of large scale retailers are:10.2.1 Departmental Stores: - are large scale retail establishments comprising of a number of departments in the same building. All its departments are centrally controlled but each forms a complete sales unit in itself and specialises in a particular line of product. They offer a wide choice of products to the customers under one roof. They also provide many amenities for customer's convenience such as restaurants, car parking, recreation rooms, and post and telegraph offices and so on. Such stores are generally located in central places of big cities so that they can be easily accessible to the customers.

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Pic.6. Large Scale Retailing in form of Departmental Stores

10.2.2 Supermarkets: - are large scale retail shops operating at lower costs. They sell a wide variety of consumer goods of regular use such as food items, groceries, etc at one place. They sell goods at lower prices than the departmental stores. Customers select the goods themselves without salesman's assistance. It is also called self-service stores. But, they do not provide additional facilities to their customers.

Pic.7. Retailing in supermarkets

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10.2.3 Multiple Shops or chain stores: - are a group of retail stores of the same type under one common ownership and centralised management but are located at various locations. All of them deal in similar range of products and sell the same standardised products at the same terms and conditions. The goods dealt are generally meant for everyday use and are readily acceptable to all kinds of customers. They offer goods at lower prices as they enjoy economies of bulk buying.

Pic.8. Multiple shops or the retail chain outlets in India 10.3 Mail order houses: - are those retail trading establishments which receive their orders by mail and deliver the goods by parcel or post express. The post office is their main channel of distribution. Orders from customers may be secured by advertising in newspapers or journals or through telephone contacts. But this type of retailing is nonpersonal and without any face-to-face contact between buyers and sellers. However, it helps the consumers to get their requirements at their own place and thus saves their time and expenses.

Pic.9. Mail order house retailing

10.4 Consumer cooperative stores: - are the cooperative stores which are owned and operated by the consumers themselves. They are incorporated as an association under
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the cooperative societies act. The membership of such stores is voluntary and capital is subscribed by the members themselves by purchasing shares of a small denomination. They purchase their requirements of goods in bulk from manufacturers and wholesalers and sell them to its members at lower prices. The aim of such cooperative stores is to render service to its members and not to maximise profits.

Pic.10. Consumer cooperative stores which are owned by the consumers themselves

10.5 Automatic vending machines: - is a new and complementary form of retailing operated by inserting coins or tokens into the machine by the buyers. In return, buyers receive a specified quantity of the product from the machine. These are used to sell prepacked and low cost products of mass consumptions like beverages, tickets, etc. This form of retailing can sell goods at places and at times where other types of retailing are not convenient or economical. For example, mother dairy sells milk

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through

such

vending

machines.

Pic.11. Vending machines

BIBLIOGRAPHY BOOKS:

Pradhan, Swapana (2007). Retailing Management; McGraw Hills Weitz, A Barton (2003). Retailing Management; Sage Publications Ltd. Krafft, Manfred and Mantrala, K.Murali (2010). Current and Future Retailing Trends; Springer Heidelberg Dordrecht; London.

John Fernie, John and Moore, Christopher (2003). Principles of Retailing; Oxford OX2 200 Wheeler Road Burlington.

INTERNET:

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http://www.hinduonnet.com/businessline/praxis/pr0301/03010380.pdf accessed on date 12.8.2010 and time 5:00 p.m

http://retail.about.com/od/startingaretailbusiness/tp/retail_types.htm accessed on date 20.8.2010 and time 2:15 p.m

www.naukrihub.com(source) accessed on date 20.8.2010 and time 4:00 p.m http://www.scribd.com/doc/37041356/Retailing accessed on date 21.8.2010 and time 6:00 p.m

http://www.docstoc.com/docs/12163960/RETAIL-CONCEPT date 21.8.2010 and time 7:30 p.m

accessed

on

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