RETAIL MARKETING

CONTENT:

INTRODUCTION

STATUS IN INDIA

IMPACT OF GLOBALIZATION INDIAN RETAILING

GLOBAL TRENDS IN RETAILING

BIBLIOGRAPHY
INTRODUCTION:
Retailing today occupies a key role in the world economy. This
is evidenced by the fact that the largest firm is not a manufacturing
organization; rather it is a retail firm, i.e. Wal-Mart. According to Fortune
500 of July 2002 , Walt-Mart stores had revenue of $219,812 million and
employed about 1.4 million people.
These retailers originated in the US, Europe and Japan. Today the retail
industry is estimated at $6.6 trillion. In India too we have been witnessing
a retailing revolution since 1991, when the first organized and
contemporary retail store chain Shopper’s Stop was opened in Mumbai.
Today, India has 12 million retail outlets but organized retailing accounts
for only 2% of the business. As opposed to this, China accounts for 20%
Thailand 40% and Malaysia 55% of the organized retailing.
DEFINITION: “Retailing involves selling of goods and services to the
ultimate consumer for their personal consumption.” MEANING- Retailing
includes all the activities involved in selling goods or services directly to
final consumer for personal non-business use. A retailer or retail store is
any business enterprises whose sales volume comes primarily from
retailing. Any organization selling to final consumer – whether it is a
manufacturer, wholesalers, Or retailer- is doing retailing. It doesn’t matter
how the goods/services are sold. (By person, mail, telephone and vending
machine or Internet) LEVELS OF RETAILING- Retailers can position
themselves as offering one of four levels of services- 1. Self service- The
corner stores of all discount operation; many customers are willing to
carry out their own locate-compare-select-process to save money. 2. Self
selection – Customers find their own goods although they can ask for
assistance. 3. Limited services- These retailers carry more shopping goods
and a customer needs more information and assistance. The stores also
offer services. (Such as credit and merchandise return privileges). 4. Full
services- Sales people are ready to assist in every phase of the locate-
compare-select-process. Customers who like to be waited on prefer this of
store. TYPES OF RETAILERS- Retailers are o 5 types. They are- 1.
Specialty Store – Narrow product line with deep assortment, a clothing
Total plagiarism: 37%Total plagiarism: 37%
LEVELS OF RETAILING- Retailers can position themselves as
offering one of four levels of services- 1. Self service- The corner
stores of all discount operation;
1 http://www.indianmba.com/occasional_papers/op129/op129.html
many customers are willing to carry out their own locate-compare-
select-process to save money. 2.
2 http://info.psu.edu.sa/psu/fnm/saloun/Kotler16.ppt
Self selection – Customers find their own goods although they can
ask for assistance. 3.
Limited services- These retailers carry more shopping goods and a
customer needs more information and assistance.
3 http://electricalsandelectronics.retail-business-
review.com/news/micro...
The stores also offer services.
(Such as credit and merchandise return privileges). 4. Full services-
Sales people are ready to assist in every phase of the locate-
compare-select-process. Customers
37%

store would be a single line store, a men’s clothing store would be a super
specialty store e.g. Athlete’s Foot, Chiragdin Mumbai (Sport’s goods,
bookstore and so on.) 2. Department Store- Several product line typically
clothing home furnishing and household goods with each line operated as
a separated department managed by specialist buyer or merchandisers e.g.
“Akbarally’ s” which has three stores in Mumbai. 3. Supermarket-
Supermarkets are large, low-cost, low margin, high volume, self-service
operation designed to serve the customer’s need for food, laundry and
household maintenance precuts e.g. “Food land and Garware’s” in
Mumbai and similar in Delhi and other major cities. 4. Convenience Store
– Relatively small stores located near residential area, open long hours,
seven days a week and carrying a limited line of high-turnover
convenience products at slightly higher prices plus takeout sandwiches,
coffee, soft drinks. 5. Discount Store – Discount stores sell standard
merchandise at lower prices, by accepting lower margins, but pushing for
pushing for higher sales volume e.g. Big Bazaar. STATUS IN INDIA –
India is the fifth largest emerging retail market in the world and is growing
at a rapid pace. Retailing is the largest private sector in India. And second
to agriculture in employment. India today has perhaps the highest retail
outlet density – with approximately 15 million retail outlets. The entire
retail trade contributes about 10-11% to India’s GDP and is valued at an
estimated Rs. 9,30,000 Cr. Out of this organized retailing is around Rs. 35,
000 Cr. Growing at more than 30% the organized sector has been driving
the retail growth in India and has been contributing significantly to the
growth of the economy. However the Indian retail sector is still in a
nascent stage. Organized retailing contributes to only about 2% of the total
retailing in the country. Organized retailing presupposed a retailer’s ability
to manage or more importantly influence a set of “supply chain variables
in a commercially viable and sustainable way”. During the last one decade
it has emerged as one of the sunrise industries in India, closely following
the information Technology and Biotechnology Industries. Indian retailing
has evolved over the past decade, from largely and ‘informal’ and
disorganized marketplace to an increasingly organized industry at least in
the urban India. The change in the nation’s social structure like
improvement of the economy, consumerism, urbanization and profusion of
brands have been the main causal factor the development of these modern
formats. The boom in the sector started in 1999 in the country. The Indian
retail industry, which was traditionally dominated by small. Family-run
kirana stores, seems to have come of age. Traditionally grocery stores
have embraced the modern retail formats.

 Changing demographic structure,

 Consumer psychology,
 Increased purchasing power and
 The advent of plastic money,
Are tempting the consumer to splurge more on shopping. The increasing
number of nuclear families, double income households, working women,
and greater, work pressure and increased commuting. Time has put the
consumers under constant time pressure. Some Other reasons –

 Increasing influence of children,

 Gradual acceptance of frozen, semi-processed and processed foods
by the Indian consumers.
 The growing influence of television on decision-making,
 Improvement of literacy rates.
As the modern homemaker appreciates and prefers-

 A pleasant shopping environment,

 Convenience o one-stop shopping,
 Speed and efficiency of processing,
 More information,
 Better quality and hygiene
 Discounts whenever possible.
INDIAN RETAIL MARKET – India’s vast middle class and its almost
untapped retail industry are key attractions for global retail giants wanting
to enter never markets. Rated the fifth most attractive emerging retail
market, India is being seen as a potential goldmine. It has been ranked
second in a Global Retail Development Index of 30 developing countries
drawn up by AT Kearney. The list was developed as a response to requests
from retail chains facing saturated demand in most western markets.

 AT Kearney has estimated India’s total retail market at $202.6 bm.

Which is expected to grow at a compounded 30% over the next five
years.
 With the organized retail segment growing at the 25-30% per annum,
revenues from the sector are expected to triple from the current $7.7
bn to $24 bn by 2010.
 The share of modern retail is likely to grow from its 2% to 15-20%
over the next decade, analysts feel.
In the next couple of years, India will see at least two Indian retail
businesses attaining the magic figure of $218 mn in sales.
IMPACT OF GLOBALIZATION OF INDIAN RETAILING : With
globalization now having become a reality, it isn’t uncommon to see well
known US and European retail chains setting up their operations in
different parts of world and several players have entered India though
different tie-ups and ventures. For example:

 Marks and Spencer has already opened its store in India and so have
some others like Benettan, McDonalds, Pizza Hut, Domino’s etc.
 Nuance Group, World’s leading Airport Retailer has joint ventured
with Shoppers’ Stop. The venture aims to set up duty free shops in
the new airports in India, as airports provide the last minute shopping
destination for travelers.
 To provide health related products, Pantaloon has also joint ventured
with Talwalkars.
 Giordano has opened the first retail store in Chennai to provide
seasoned collections. The company has planned to establish 20 stores
by 2008, including in cities like Mumbai, Hyderabad and Bangalore.
 Maso Shoes Private Ltd has joint ventured with Mauritius-based
Tano Indian Private Ltd., to set up an exclusive retail outlet for Nike
product. Likewise, lifestyle, a Dubai based chains, has opened its
store in India similar trends are visible all over the world. The reasons
for this development etc.
 Increased foreign travel by consumer
 Satellite television, which has created a global customer.
 Saturation of domestic market.
Coopers and Lybrands have identified ten-country market for retailers
focus. These have been grouped as follows. (a) The For middle Four :
Brazil, Russia, India, China (BRIC). This group has a rapidly expanding
middle class, which is hungry for quality consumer goods and services.
This Group, however, high in political and economic risk and also retail
infrastructure. ( b) The Torrid Three : Mexico, Turkey, and Argentina.
These economies have a rapid but volatile economic growth and have an
undeveloped retail sector. (c) The Tough Three : Italy, South Korea and
Japan these are strong economies with large middle-income consumer.
However, Local restrictions have limited the degree of concentration of
retailing and entry of foreign group.
GLOBAL RETAIL DEVELOPMENT INDE 2006
2006 Country Region Country Market Market
(Rank) Risk attractiveness saturation
Weight 25 25 30
(%)
1 India Asia 55 34 89
2 Russia Eastern 43 59 53
Europe
3 Vietnam Asia 43 24 87
4 Ukraine Eastern 42 37 76
Europe
5 China Asia 58 40 57
Source : Euro Money, The world Bank, And Global competitiveness
Report 2005
GLOBAL TREND IN RETAILING : One of the major global trends in
retailing is the growing polarity of retail trade. On the one end is the
growth of boutiques or highly focused specialty stores such as Body shop
and Gap, and on the other hand the mass merchandisers like Wal-Mart.
The first are categorized as boutiques because they service customer needs
on a “personalized basis”. These are also termed as “high touch” retail
stores. The second trend is the growth of large stores (in terms of square
footage), like Wal-Mart and Target, who rely on ware – house technology
and self – service to sell large volumes at very low margins. (Big – Bazaar
is the Indian example) Although Wal-Mart and Target have been views as
high tech retailers, there are others today who are high turnover/low
margin/massive volume retailers. Examples of such types are Home Depot
and Costco in USA Both these trends (boutique or “high touch” and mass
merchandisers or “high-tech”) in retailing are being impacted by prospects
of anticipated rates of growth and profitability. The wheel of retailing is
today visible n all its manifestations in more matured markets like the US.
Another trend is the increasing power of retailers in the marketing
channels for packaged goods (e.g. packaged foods and beverages and
branded health and beauty aids.) Today retailers’ power exceeds that of
the manufacturer of these products, who includes the well-known name
like Colgate, Procter & Gamble, and Unilever etc. this is because of
intensity of competition at the retail level. Given the fact that the
competitive wars are wiping away profit margins, these retailers are turned
to ways and means to enhance them either through more negotiated deals
with manufacturers or by stocking lesser – know brands that offer them
higher margins. They have been developed their own store brand. Another
reason is that their management now treats the “retail buyers” as profit
centers. Hence they are now responsible for capital management, service
levels, sales turnover, retail margins, shelf space and position, operating
cost etc. In order to achieve their profit targets, these buyers look for
supplier to give them good price discounts and promotion and service
support.
CONCLUSION : Retailing in India is undergoing revolution. It is said
grow because of the expansion in the markets across the country and
organized retailing accounting for an abysmally low proportion in the
industry. The Indian retail industry is fast crossing the nascent stage with
multiplicity of choices under one roof and expectations evolving over time
consumer demand is truly the driving force for organized retailing in the
country. The changing face of retailing in India has changed the way
business is done. It is not only about selling at the shop but also about
surveying the market, offering choice and experience to consumers,
competitive prices and retaining consumers as well.
BIBLIOGRAPHY
BOOKS:
Philip Kotlar, Marketing Management, Prantice-Hall India
Rajan Saxena, Marketing management, Tata-McGraw Hill
Publishing Co.Ltd.
 V. S. RAmaswamy and S Namakumari, Marketing Management,
Third Edition, McMillan India Limited, 2002
JOURNALS:
The ICFAI Journals of Marketing Management, February 2006
Marketing Mastermind, June 2006
Global CEO, September 2006
WEBSITES:
 www.google.com
 www.wikipedia.com