28314264 Amarish Thesis Retail Marketing in India

Retail Marketing in India.

“RETAIL MARKETING IN INDIA”

A RESEARCH REPORT Submitted in partial fulfillment of the requirements for the post Graduate Diploma in Management (PGDM) By: Amrish Kumar Yadav PGDM- 2008-10

Under The Guidance Of: Mr. Gaurav Aggarwal Submitted To: Mr. Gaurav Aggarwal

GREATER NOIDA INSTITUTE OF MANAGEMENT Greater Noida


SYNOPSIS Thesis Title:

“Retail Marketing in India”

Introduction: The Indian retail industry is now beginning and growing day by day.The concept of retail which includes the shopkeeper to customer interaction, has taken many forms and dimensions, from the traditional retail outlet and street local market shops to upscale multi brand outlets, especially stores or departmental stores. In this thesis, I had focusing on two aspects of retail marketing i.e. Store Retailing and Non store Retailing.



Store Retailing: Store Retailing includes departmental store, which is a store or multi brand outlet, offering an Varity of products in various categories under one roof, trying to cater to not one or two but many segments of the society



Non store Retailing. : Non store Retailing Includes direct selling, direct marketing, automatic vending.

Therefore, this concept of retail marketing through departmental stores, which is coming up in a big way in India was decided to be studied in detail, through an exploratory and conclusive research.

Objective:The over all objective of the thesis is to study the concept of Retail Marketing in India OBJECTIVE :

 Retailing in India – Past, present and future


 Future growth potential of Retail Marketing in India.  How do Indian retailers sell their product?  Which International retailers eyeing Indian market..


OBJECTIVE

The over all objective of the thesis is to throw light on Retail Marketing in India SUB OBJECTIVE :

 Retailing in India – Past, present and future  Future growth potential of Retail Marketing in India.  How do Indian retailers sell their product?  Which International retailers eyeing Indian market..


 RESEARCH METHODOLOGYT

The methods adopted to fulfill the objective of the study that included collecting primary and secondary data. I conducted the survey in order to gather the information’s from the knowledgeable person of retail stores on the isssue reverent to my thesis topic.

The secondary data collected from : Magazines

The Franchising World.

Journals

Indian Management.

Web sited :

www.franchiseindia.com www.ksatechnopak.com

INTRODUCTION

“Any business that directs its marketing efforts towards satisfying the final consumer based upon the organization of selling goods and services as a means of distribution”


A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Retail organizations exhibit great variety and new forms keep emerging. There are store retailers, non store retailers, and retail organizations. Consumers today can shop for goods and services in a wide variety of stores. The bestknown type of retailer is the department store. Japanese department stores such as Takashimaya and Mitsukoshi attract millions of shoppers each year. These stores feature art galleries, cooking classes, and children’s playgrounds. A retailer is at the end of the distributive channel. He provides goods and service to the ultimate consumers. This he does through his small organization, with the help of a few personnel. In an individual retail store there is not much scope for organization except in the sense that the shopkeeper has to organize o apportions his time and resources. The need for organization becomes essential as soon as he hires people o enters into partnership or takes the help of members of his family in running his store. A retailer deals in an assortment of goods to cater to the needs of consumers. His objective is to make maximum profit out of his enterprise. With that end in view he has to pursue a policy to achieve his objective. This policy is called retailing mix. A retailing mix is the package of goods and services that store offers to the customers for sale. It is the combination of all efforts planned by the retailer and embodies the adjustment of the retail store to the market environment. Retailing mix, a communication mix and a distribution mix. The maximum satisfaction to the customers is achieved by a proper blend of all three. The success of the retail stores, therefore, depends on customers’ reaction to the retailing mix which influences the profits of the store, its volume of turnover, its share of the market, its image and status and finally its survival. There are three main phases in the life of a retailing institution. These are: 

Innovation ( Entry ) Trading Up



Vulnerability.

In the entry stage, a new retailer enters with new price appeal, limiting


In the entry stage, a new retailer enters with new price appeal, limiting product offerings, Sparton Stores & Limited services. Its monopoly power over the others is its price advantage, which means that it offers products at low prices so as to get a competitive edge over its competitors.

Indian Retail: The Road Ahead

With around 13% contribution to the GDP and 7% employment of the national workforce, retailing no doubt is a strong pillar of the Indian economy. What it requires is more corporate backed retail operations that have started to emerge over the past couple of years. Year 2001 has been an important year in the history of retailing when Wal-Mart emerged as # 1 company in the Fortune 500 list. This has never happened before when a retailer was at the top of the list. Over 50 of the Fortune 500 companies are retailers and 25 of the Asian Top 200 companies are retailers. Also, in terms of shareholders value it has performed considerably better than the banking, insurance and consumer industries yielding a return on investment of 18%. However, when we look at Indian retail in the global context it bears no water. Instead of comparing total global retail industry with Indian retail industry, lets compare Wal-Mart alone with Indian retailers. Here are ten interesting facts:


1. The annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry (estimated at about $180 billion) and almost 100 times more than the turnover of HLL (India's largest FMCG company). 2. The size of any Wal-Mart store is much higher than the size of any existing shopping mall in India. 3. Wal-Mart has over 4,800 stores (over 47 million square meters) where as none of India's large format store (Shoppers' Stop, Westside, Lifestyle) have more than 10 stores. 4. New stores opened annually by Wal-Mart are about 420, much higher than all organized Indian retailers put together. 5. The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry (one of the most fragmented in the world) employs about three million people. 6. Wal-Mart has around 30,000 suppliers throughout the world and more than 600,000 SKU's on its web site, a number that cannot be compared. 7. Daily customers are about 15.7 million (almost equivalent to Mumbai's entire population). 8. Time between each Barbie Sale at Wal-Mart is just two seconds (same rate at which babies are produced in India!) 9. One-day sales record at Wal-Mart (11/23/01) $1.25 billion (roughly two third of HLL's annual turnover). 10. None of the Indian organized retailer has ventured overseas where as Wal-Mart is now in 10 countries and will expand to 21 countries in two years.

Retail: A strong pillar of Indian economy


Retailing is the last mile infrastructure to access and deliver goods to consumers. Retail forms the backbone of the nation's delivery system and its importance can be exemplified by the network of 15,000 KVIC outlets which support 4 lakh plus small and medium handicraft manufacturers across the country. It also serves as the last mile infrastructure to the manufacturers as well as the government for tax collection. For instance, the success of the VAT proposal depends on its being able to be implemented at the retailer level, but nobody has consulted with them as a body yet on this issue. Furthermore, retailing is also an important and large contributor to the GDP and a major employment generator. In India, for the last four years its contribution to the GDP was around 13%. The sector gainfully employs 6-7% of the total workforce in India.

Changing Retail Landscape Indian retail is fragmented with over 12 million outlets operating in the country and only 4% of them being larger than 500 square feet in size. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market size as compared to India. Thus India has the highest number of outlets per capita in the world with a widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person). Recently, majority of store formats have hit India. Yet traditional format stores namely the kirana shops, pan/bidi shop, hardware shops, weekly haats and bazaars form the bulk. Formats like department stores, malls, speciality stores as well as discounters are shaping the burgeoning organized sector in India. Though still in its infancy with less than 2% share of the retail sector, organized retail has definitely struck its roots in India. What we are looking now are more corporate backed organised retail operations. Till seven years back organized retail was largely restricted to


the southern India, barring the Bata chain. Organized retail has now shifted gears and is moving ahead with accelerated speed throughout the country, without any direct incentive provided by the government. Organised retail is growing at a rate of about 40% per annum over the last three years. With a size of Rs. 15,000 crore (USD 3 billion), organized retail is very much on track according to KSA Technopak's projections made in 1999 based on in-house research. The projections claimed that organized retail would grow to be a Rs. 35,000 crore (USD 7.1 billion) by 2005.

Retailing in India – Past, present and future

Executive summary Retailing, considered a sunrise industry today after infotech, is the most happening industry with almost all the big players vying for a share of the coveted pie. Buoyed by a strong increase in private consumption (see raph), retailing is one industry that is waiting to explode.


Today however, organised retailing is less than 2 per cent of the retailing industry in India, that is, about Rs 5,000 crore.(see table) Therefore, there is no real retail revolution in India; the industry is still in the stages of infancy.

Share of Organised Retail Total Retail (US $ Billion) Organised Retail (US $ Billion) % Share of organised Retail.

1999 150 1.1 0.7

2002 180 3.3 1.8

2005 225 7 3.2

Source: KSA Technopack Organized retailing is bound to grow tremendously provided the right mark-eting strategies are adopted. Retail businesses have broken rank and seem poised to surge ahead with renewed vigour, optimism, confidence and cap-ability. There is an incredible amount of activity in terms of creation of retail-riented space across India. As per some estimates, there are over 200 retail mall projects under construction or under active planning stage spanning over 25 cities. This may translate into over 25 million sq. ft. of new retail space in the market within next 24 months. Huge retail formats, with high quality ambience and very courteous and ambivalent sales staff, are the regular features of retail formats in most Asian countries. However, in India except for a few big towns where modern retailing formats abound, these features are grossly missing. ETIG expects organised retailing to slowly penetrate the second rung and smaller towns which will catapult the growth rate for the sector. Even though the big retail chains are concentrating on the upper segment and selling products at higher prices like Crossroads, Akbarally's and Shopper's Stop, retail stores are sprouting that cater to the needs of middle class. With a huge middle class population, the retailers like RPG's


Foodworld are tapping this market. The market is flooded with products branded and unbranded. The customers are in a dilemma as to pick which one. Simon Bell of AT Kearney says "There is a close relation between the growth of brands and the growth of the organized retailing.Companies selling branded products prefer to have big and organized retail outlets such as supermarkets where they can be differentiated from unbranded products" Though doubts have been cast on the future of Indian retailing it is our belief that the retail boom is yet to happen. While the industry is in the introduct-ion stage in most geographies, it has just entered the growth region in the metro cities. Today, the right product mix, right sourcing strategy, and the right communications are the mantras for success. This paper begins by analyzing the retail formats in the present Indian scenario and proceeds to outline the key strategic factors in retailing. In the last part the paper shows the challenges facing retail and our recomme-ndations for making organized retailing a success.

Organized retail formats in India

Each of the retail stars has identified and settled into a feasible and sustainable business model of its own.

Retail Marketing in India. 

Shoppers' Stop - department store format



Westside - emulated the Marks & Spencer model of 100 per cent private label, verygood value for money merchandise for the entire family



Giant and Big Bazaar - hypermarket/cash & carry store



Food World and Nilgiris – supermarket format



Pantaloons and The Home Store - speciality retailing

 Tanishq has very successfully pioneered a very high quality organized retail business in fine jewellery

Structure of the retailing industry according to ownership patterns:  An unaffiliated or independent retailer  A chain retailer or corporate retail chain  A franchise system


 A Leased Department (LD)  Vertical Marketing System (VMS)  Consumer Co-operatives A new entrant in the retail environment is the 'discounter' format. It is also is known as cash-and-carry or hypermarket. These formats usually work on bulk buying and bulk selling. Shopping experience in terms of ambience or the service is not the mainstay here. RPG group has set up the first 'dis-counter' in Hyderabad called the Giant. Now Pantaloon is following suit. Two categories of customers visit these retail outlets. 1. The small retailer. For example, a customer of Giant could be a dhabawala who needs to buy edible oil in bulk. 2. The regular consumer who spends on big volumes (large pack sizes)

because of a

price advantage per unit.

Key Strategic Factors in Retailing The key to success is identifying a superior value-promise and who is in a better position to do it than retailers? Retailers are the closest to the point of purchase and have access to a wealth of information on consumer shopping behaviour. Retailers have some unique advantages for managing brands such as continuous and actionable dialogue with consumers, control over brand


presentation at point-of-sale, control over shopping environment, display location/adjacencies, and signage. And they have used this advantage with tremendous success.

The 3 stages of evolution of the trade channel are shown in the exhibit below:

EXTENDED

MANUFACTURER

DEPO/CNF

LIMITED

MANUFACTURER

DIRECT

MANUFACTURER

DEPO/CNF

DISTRIBUTOR

RETAILER

SHOPPER

RETAILER

SHOPPER

SHOPPER


As seen, the role of the intermediary is being diminished gradually, which has obvious implication of backlash of the trade channel upwards towards the suppliers. This is more severe in countries such as India, where the channel economics in favour of the middlemen is still strong enough given the fragmentation of the retail sector. Therefore when FoodWorld, the largest grocer in India has a “direct supply” contract with over 20% of its key suppliers, it gives rise to conflict of interest with the distribution infrastructure that suppliers have painstakingly built over the years. Thus companies like HLL have evolved a distinct distribution channel altogether (called “Modern Trade”) to service the needs of such large grocers. Even the mom and pop stores (known as kirana shops) are affected due to this “unfair” back-end advantage extended by the supplier to its leading accounts (the emerging supermarket chains). The strategies adopted by the retailer to compete with branded goods are illustrated by the following diagram. Branding the store and following a private label strategy is the key strategy which helps the retailer to compete with branded roducts.

Leverage Brands

Brand the Store

Strong Private Level Stratergy

Maximize customer traffic & Profitability.

Optimize Assortment

Loyalty Cards.

Keep Formats Constsnt.

Develop New Formats.

Reinvigor ate Existing For


Pricing & Promotion Strategry.

Online shopping.

Challenges Ahead For Retailing The unorganised nature of retailing has stunted its growth over several years. "Lack of industry status affects financing prospects and stunts growth of the industry", says Kishore Biyani, managing director, Pantaloon Retail India. In the current scenario, only players with deep pockets have been able to make it big. In addition to the advent of Internet, there are many other challenges which retailers have to address. Human Resources Availability of trained personnel and retaining the human resources is a major challenge for these big retailers. The bigwigs like Crossroads offer high compensation and create a cohesive environment that makes an employee proud to be a part of such big retail chains. Space and Infrastructure To establish a retail shop / mall, the real estate and the infrastructure are very vital. The expenditure and availability on both the accounts do hinder the growth of the retail chain. The lack of secondary infrastructure also affects the logistics and supply chain management for retail companies. Absence of retailer friendly laws


India still does not have retail-friendly laws especially relating to the movement of goods from one state to another. Retailers need to put in a whole lot of products from different parts of the country - at times from outside the country - on the shelf. But question of multiple tax levels is an issue. Then there are laws like shops cannot be open for all seven days, shops have to be open after or close before a certain time which affects operations.

Lack of technical know-how The Indian government does not encourage any foreign direct investment (FDI) in the retail industry. FDI is normally one of the ways of getting technical inputs. And because of this dearth of FDI in this sector, develop-ment in terms of people, skills etc is happening the hard way. Future perspective We should see fundamental shifts in the way Indians shop in the very near future. The Year 2003 could well be a landmark year for organised Indian retailing. According to a recent study done by ETIG the organized retail industry is expected to grow by 30 per cent in the next five years and is expected to touch Rs. 45,000 crore. Thus, the growth potential for the organised retailer is enormous. In the next 2-3 years, India will finally see operations of a number of very serious international players- notwithstandi-ng the current restrictions on FDI in retail. Metro from Germany is a very successful and resourceful retailer and their cash & carry format should offer a good run for money to others. Some others will also find perfectly legitim-ate ways to operate in India, for example, Marks & Spencer, Mango and Shoprite. Change Accelerators


The following factors will be significant in driving growth in the retail sector: Consumer factors Increase in income Working women Changes in lifestyle – demand for “global” trends Supply side factors Growing importance of retailing in political and economic agenda Real estate reforms to be undertaken in the next 24 months Major restructuring of the manufacturing sector easing product supply constraints for efficient retailing Reduction in import duties-offering more global sourcing options Which categories will grow? The single biggest opportunity in India in organised retailing is bound to be food and groceries; it is in this sector that the largest amount of consumer spends is concentrated. This sector has maximum opportunity for investm-ents and entrepreneurs to come in and try to make the supply chain a little more efficient.

Consumer durables is another promising sector because, with increasing purchasing power, consumers tend to spend the most on this category. Also, there is nothing to


prevent a company from putting up shops outside the city limits, because consumer durables are a premeditated purchase. Further-more, availability of finance options has increased spending in this sector. Third are home products - with increasing private ownership of homes by relatively young couples, across most major cities in India, national retail chains offering home furniture (and accessories) have great potential. Finally, personal care products, pharmaceutical products, and healthcare services have tremendous growth potential. Recently, we have seen some interest from organised healthcare players like Max, Fortis, Birlas and the Reliance group Where is this growth going to happen? The top 15 cities in India cater to 33 per cent of total urban population, but as high as 38 per cent of Sec A and B (the top two socio-economic consumer strata) urban population. The next 15 cities only add to another 7 per cent of Sec A and B population. So logically the focus will be restricted only to the top 15 cities. Research conducted by KSA Technopak, shows that today 96 per cent of total organised retail is in the top 10 cities, of which the top six cater to 82 per cent. However, the rate of growth will be higher in the bottom four of the top 10, which will have a 20 per cent share by 2005 against the present share of 15 per cent.

Which formats will grow? KSA Technopak's research suggests the top four formats to emerge in the next five years are: * Shopping Malls * Specialty Stores (in new categories such as office products, specialty food, optical and travel)


* Departmental Stores * Supermarkets

Recipe for Success Focus on the consumer: It is clear that consumers have changed and they are looking for something different. Understanding their evolving needs, aspirations and lifestyles is the underlying key to success for any retailer. The primary emphasis should be on access, experience and service and the secondary emphasis on product and price. There should be an effort to improve service by having better trained sales staff, better availability of products, and minor but important conveniences, e.g. delivery of goods either to the car or even home. Collaborative advertising and promotion can then round off this effort Brand the store: branding the store will increase volume and enhance customer loyalty.Branding is critical to maintaining competitive diff-erentiation in an increasingly challenging retail environment. However, the brand needs to be clearly communicated to the customer. Develop private label brand: Private labels act as margin generators, increasing sales volume by positioning the label as providing higher perceived value to consumers. In the long run, they also increase the retailers’ bargaining power with national brand suppliers. Private labels generate customer loyalty by providing exclusive products, which works towards differentiation strategy, much sought after by the retailers. In terms of geography some entrepreneurs should put efforts in creating customdeveloped solutions for tapping the rural and semi-urban spending potential. Even in


non-metro urban centres, there are very good oppo-rtunities in looking at starting or expanding operations. Some cities that should see greater organised retail action in the future would be Ludhiana, Chandigarh, Lucknow, Nagpur, Ahmedabad, Surat, Pune, Kochi, Thiruvananthapuram, Guwahati and Bhubaneshwar.

In terms of format malls have a sustainable competitive advantage over other formats. Consumer preferences are shifting towards malls from traditional markets. As a result of consumer shifts, retailers also prefer to be located in malls in anticipation of higher footfall. KSA Consumer Outlook 2000SM shows that increasingly consumers prefer "All Under One Roof” destination for shopping as well as eating out and entertainment. These findings together indicate an excellent potential for a mall with the following features:  a superior well-managed leisure experience  targeted at all members of the household  comprising of shopping, dining and entertainment, all under one roof  a wide range of products and services  proximity to homes


THE STRIKING NEW FACE OF RETAIL IN INDIA. Who says great retail is only for the metros? Check out Surat where residents are shopping like never before. This city in Gujarat has the state's largest textile market and is India's centre for the diamond trade. It also holds the distinction of being one of India's cleanest cities. It is Gujarat's second largest city with a population nudging 30 lakh as of 2001 and is home to some of industry's giants -- Reliance being the most prominent among them. This is Surat, which is now experiencing a retail revolution of sorts. Surat belies the general feeling that the retail revolution as we know occurs only in the metros. A walk along the main Ghoddod or Athwa Lines areas - akin to Mumbai's Bandra or Colaba - is like walking through a large shopping mall. Here, you'll find every brand, all kinds of products in every shape, shade and size and all types of food! You'll also find four of Surat's supermarkets here -- from the cosy Mother's Inn to the 3-storied Dhirajsons. All these are changing the way Surat shops.


Two of the largest supermarkets in Surat are Dhirajsons, run by the Modi family and Sahaj Superstore owned by the Patel family. Both offer valuable lessons in how organised retail in smaller towns can succeed. Despite dramatic changes in the retail scene, Surat’s retailers feel the need for a shift in mindset, habits, more modern restaurants and theatres to drive lifestyle changes. And this is already happening. Here we profile three leading retailers from Surat.


Dhirajsons

Theirs is a rags to riches story. Started as a small 400 sq. ft. general store in Surat's Chowpatty-Athwa Lines area, Dhiraj Modi and his sons built a retail chain of four stores, a total of 56,000 square feet in Surat's prime retail area and are today considered the pioneers of organised retail in Gujarat. The Dhirajsons Megastore is the flagship of the chain. At 15,000 sq. ft. spread over three stories, it stocks 38,000 active SKUs and employs 200 staff directly. Consumer spending has reduced slightly, agrees Rajnikant Modi, but he says, "We still average Rs 400 a bill and around 800 bills a day." Going by his figures, Dhirajsons sales are around Rs 20 crore a year, just from Dhirajsons Megastore. This makes the store the largest in Surat in terms of sales. The Megastore has around 3,000 footfalls a day, of which Modi estimates 50 per cent are buyers. There are 9 cash counters, each linked to a LAN and an automated inventory system which can be tracked everyday. The whole system cost him Rs 5 lakh. Every SKU is bar coded with the entire bar coding system costing Rs 2.5 lakh (each machine bought at Rs 50,00070,000 five years ago) but it has been worth it according to Modi. The Megastore has a 4,000 sq. ft. parking facility which accommodates 14-15 cars and 25-30 two-wheelers free of cost. Modi estimates his investment in all this at around Rs 15 crore over the past two years. Expansion is on the cards. Says Modi, "We target a growth of at least 10-15 per cent a year from now on." He understands very clearly that to finance expansions in Surat itself he will need to maintain that rate. The Megastore yields gross margins of between 15-20 per cent and net of 4-5 per cent, which has to grow to aid expansion. Although there have been several proposals from surrounding cities like Bharuch, Navsari and Billimora, Modi wants to consolidate in Surat first before stepping foot elsewhere. Acquisitions and mergers are one way of consolidating which fulfils a part of their vision statement - that of creating a chain of retail stores for total dominance in Surat. From one store in 1992, Dhirajsons now has a conglomerate of outlets for all kinds of products along with a supermarket of 10,000 sq. ft. - all totalling 10,800 sq. ft. all within 2 km of the Megastore. Excess stock is kept at a warehouse 4 km away. Earlier in 2002,


the Modis bought over Kutchhi's Supermarket in the upmarket Parle point area. Rajnikant Modi intends to convert this into a successful supermarket, offering FMCG and kirana at competitive prices. Dhirajsons' latest expansion is into lifestyle retailing with the acquisition of Rita Supermarket, located about 1 km from the Megastore, for a reported sum of around Rs 6 crore. With 26,000 sq. ft. carpet area, the new store, christened Dhirajsons Lifestyles, will have 4 levels, stocking garments and accessories for men, women and children. Says Modi, "We believe there's scope for such a store in Surat. With our brand name which stands for trust and quality in Surat, we can make headway into this segment." The lifestyle store is slated to open by Diwali 2002. Prices will be reasonable, says Modi. According to him, "here, you may find some prices even lower than those in Mumbai. This we can do by sourcing it right -- driving bargains with vendors and passing on the difference to customers." Certainly all the best sourcing practices and pricing policies will have to be used if Dhirajsons is to gross the targeted break-even sales of Rs 35 crore from Dhiraj Lifestyles in the first full year, 2003. Going one step further, Modi is in advanced talks with Mumbai-based bookstore Crossword, to become part of Dhiraj Lifestyle. And there's an added bonus -- Barista - which may slip in with Crossword. If he pulls it off, it'll be another feather in his cap. In fact, he is confident of bringing in music chains like Planet M to Surat. Talking like any other professional large-scale retailer, he says Dhirajsons is all about providing the right retail experience and attractive environment to drive sales. The Modis certainly do have a lot of retail experience to make it all work -- with 80 years of retailing behind them and a name that stands for trust, quality and personal touch. "That's our strong point", smiles Modi. "My father and indeed almost every member of the family even today know most of our regular customers by name. We maintain these relations religiously and believe this touch will make us successful, more than any shop, store or product." Travel adds to thinking and experience, continues Modi. The Modi family has seen every supermarket and store in India and overseas. They have visited Hong Kong, Dubai, Singapore, UK and USA over the past 8 years to understand retailing better and develop vendors. Today, all the display equipment is imported from Italy.


UAE based vendors supply crockery and other goods via Mumbai to Surat. Regular customers at Dhirajsons, however, feel that imported goods are priced very high. Does this restrict his sales? Says Modi, "Far from it. Surat is not as price sensitive as Mumbai is. Here people would pay even disproportionately for imported goods." This seems a legacy of Surat's dominance in the gems and textiles industries, where more often than not, generation of unaccounted money had to be balanced by spending it -- thereby creating price insensitivity. Education forms a continuous process for the Modis. They have sent people to the Landmark course, Arun Virani's retail course and even checked out the retail courses at Manipal and Nirma Institute in Ahmedabad. "It is a never ending course -- we have to stay ahead of the others", affirms Modi. This year Dhirajsons became a private limited company and as expansion and growth targets become ambitious, Modi is not averse to listing his company on the Ahmedabad stock exchange too. Currently, finance is from internal accruals and banks. Modi says banks have been very visionary in their belief in retailing and Dhirajsons, backing him all the way. Local government is a major issue. "Give me some government support and retailers can do just as well as any overseas chain," he affirms. Rajnibhai Modi takes a walk every half an hour around his Megastore. He meets old friends and regular customers, talking to them, addressing them personally. The Modis have a vision statement, which they call the six steps to success -- prominent amongst them is 'personalised public relations' which Modi does every day. Surveying his shop, he says, without a hint of pretension and with a gleam in his eyes, "I want to be known as the Dhirubhai of retailing in Gujarat."


SahajSuperstore

Sahaj, just under 2 years old, is the youngest of the new format retailers in Surat. At 30,000 sq ft, it is the largest single store in Surat, possibly in Gujarat, says its young Chairman Mahesh Patel. It certainly has the largest number of SKUs in Surat - 100,000 spread over 3 floors in the Adajan area of Surat, not exactly as upmarket as Athwa Lines or Chowpatty, where its largest competitor Dhirajsons is located. In a way, Sahaj defies the prime rule of retailing: location, location and location. "When we started in 2000," remembers Patel, "this location was somewhere out of the town. Every one said it's a risk and to be honest, I myself wasn't sure we would succeed. But then, business is a risk, and we took it." He had some experience in retailing, having spent 13 years in his chemist shop. "We visited all the shops and stores in India and found that, unlike overseas, there existed no real departmental stores, at least in Gujarat. I believe in a real departmental store, you should get 90-95 per cent of all your requirements under one roof. That's exactly what Sahaj Superstore offers." Patel says in spite of misgivings, Sahaj was constructed in 11 months flat with a Rs 2-3 crore investment. He is very appreciative of banks, local financiers and his own family, all of whom trusted his instinct. "We have met all the projections that we forecast when we approached them for financing," he says proudly. Today, Patel says his store has an average bill value of Rs 400 and more than 800-900 bills a day, from footfalls of around 2,000 a day. By these figures, that's Rs 3.2 lakh a day, Rs 100 lakh a month and Rs 12 crore a year. He has an ambitious target to touch Rs 100 crore by 2006 - 8 times current sales. He says high targets are a must to inspire his staff which number 150 currently. Sahaj is spread over 3 floors, with split levelling and no elevators. Says Patel, "Every floor can be reached by walking not more than 10 steps before reaching a sales floor. This ensures the customer doesn't get tired and goes through a larger array of goods than in an elevator." It also keeps costs of electricity and maintenance low. Sahaj has sections


for white goods, garments, processed foods, toys and provisions. Credit cards are accepted preferably for purchases above Rs 100 per bill. FMCG goods are priced below MRP - a result of hard negotiations with 1,000 plus suppliers for discounts and passing on the reduced prices to the customers. This puts margins under pressure but increases turnover. Patel is clear, "Right now we are driving turnover. We have to develop a clientele. Two years from the time we started, we are still in the investment mode." Sahaj pays serious attention to consumer feedback. For example, customers were getting tired of the same arrangement of a few counters. He got them rearranged last month. Sahaj has parking for 75 cars, has 1 ATM of the Surat Textile Bank and runs privilege schemes to retain customers. Sahaj has its own LAN system with 20 computers which update stocks and sales every day. Each section has its own CEO who handles day-to-day work and customer care. Its 8 cash counters and scanners update stock every day. Says Patel, "We have to computerise keeping in mind today as well as the near future. When we bought bar code scanners, they cost us Rs 30,000. Such changes will be helpful in our expansion plans." Patel has 3 bar code machines. He also has 50 cameras, which represent Rs 5-6 lakh of investment. Nearly 90 per cent of his wares are branded in FMCG, RMG and processed foods. Just over 5 per cent are private labels, mainly in pulses, grocery and rice. Grocery of all kinds accounts for 40 per cent of total sales and 60 per cent of his goods are priced below MRP. He has 3 chillers and a host of vending machines for ice cream and soft drinks where he stocks dahi, milk and other chilled products. His staff handles all display, activity and sales on its own. There is no vendor-managed inventory yet. "We can display and run schemes and promos as per our requirement and feel, rather than be bound by companies requirements," explains Patel. Which is why he is not looking at food courts, food services or events to drive growth. There are 1,000 vendors with 10 per cent of them supplying 65 per cent of all goods. "But if customers want even one product, then I have to get a vendor. I may not buy regularly, but I need him on the rolls." All vendor data is online, with reports on outstanding and on time delivery sent to Patel every morning. Local vendors deliver almost every hour, but


even the national ones deliver on fixed days. When he expands, then his bargaining power will increase. Currently, he has no warehouse, what he can stock in the store limits inventory.

What about the future? Patel says his catchment extends as far as Valsad and Vapi to the south and Bharuch to the north. People have approached him to start off Sahaj in their towns, but as of now, he has his hands full in Surat. "We will expand in Surat city, which I believe has enough potential to take in many more stores. We will look at rentals or ownership, as the case may be, but expansion within Surat will definitely be required to meet our self set targets." Patel intends to expand directly into Athwa Lines area which is where ownership rates can be as high as Rs 10, 000- 40,000 a yard depending on location and space. Sahaj is a privately held company and Patel has no immediate plans to go public.

Unlike Dhirajsons who have 85 years of retail experience, Patel is new to the field. But the ideas are there already, the options being explored. His son is being groomed for higher studies, possibly an MBA later on. "I myself am not even a graduate," muses Patel in his third floor expansive office, "But I want my next generation to be up to date. They will develop this shopkeeping into a full scale business - and lead the way in retailing in Gujarat."


A V Sons

Started in 1992, New AV Sons is managed by Raju Modi, and is located at Parle Point, the centre of Surat's happening retail scene. At 4,000 square feet, he stocks 15,000 SKUs and is one of the larger supermarkets. Today, there are two AV Sons within 3 km of each other. New AV Sons clocks up 250 bills a day from its 5 cash counters, each bill of Rs 250-400 - that's nearly Rs 60,000 a day - or Rs 18 lakh a month, which suggests annual sales at Rs 3 crore or so. He delivers home free of cost with no minimum level of purchases. Although he does not have credit card payment facility as yet, Rajubhai says he is in discussions with HDFC Bank for the credit card machine linkup. New AV Sons has 45 salesmen and encounters nearly 1-2 per cent shrinkage. Though his store had a computer since 1992, he went in for the automated inventory management on computer only in 1999-00. He also has a bar coding machine which cost him Rs 2.5 lakh and Rs 15,000 a year for AMC. All the 15,000 SKUs are now bar coded. All his 5 POS are linked to the LAN and hence to the accounts, all of which cost him Rs 1.5 lakh.

What has been the effect of these stores on other kirana/grocery/general stores? Says Patel, "We found that three kirana stores in our immediate neighbourhood have shut down, but beyond our area, we find not much change. Sales have fallen, we hear, but since these shops are still on, obviously, things aren't very bad." He has schemes, promos and freebies and offers home delievery but does not have loyalty cards.

Another interesting story is of Harisons departmental store located right next to Dhirajsons Megastore on Athwa Gate. At less than 1,000 sq. ft., it is no match for the 15,000 sq. ft. megastore, but is definitely trying. His people accost you outside the steps of Dhirajsons with a pamphlet extolling the virtues of Harisons. Innovation is the name of the game. For example, Harisons delivers your purchases made between the 5th and 15th of every month, of over Rs 1,500- 2,000 free of charge anywhere in Surat. He also lists


products which he sells 10-15 per cent lower than Dhirajsons, which is in any case lower than the MRP.

Harisons realised that none of the major supermarkets want to deliver home and that's the segment he's pitching for. However, not all have been so lucky. Some smaller kirana stores have lost clientele.

Surat is a city that cares for its money differently. Its citizens don't mind paying for quality, time and ambience. Retailers here are armed with selling acumen and a will to experiment.

Already retailers are reaching out to companies and other institutions to allow employees to buy at discounted prices at their stores. For example, Reliance gives employees Rs 1,300 as vouchers to spend in select retail stores. You could shop at a supermarket and get discounted theatre tickets or vice-versa. None of this is out of bounds in a city that can change its lifestyle, driven by increasing incomes, greater awareness and ability to spend.


Conclusion - How can it be done? For a start, these retailers need to invest much more in capturing more specific market intelligence as well as almost real-time customer purchase behaviour information. The retailers also need to make substantial investments in understanding/acquiring some advanced expertise in deve-loping more accurate and scientific demand forecasting models. Reengin-eering of product-sourcing philosophies - aligned more towards collabo-rative planning and replenishment should then be next on their agenda. The message, therefore, for the existing small and medium independent retailers is to closely examine what changes are taking place in their immediate vicinity, and analyse whether their current market offers a potential redev-elopment of the area into a more modern mult i-option destination. If it does, and most commercial areas in India do have this potential, it would be very useful to form a consortium of other such small retailers in that vicinity and take a pro-active approach to pool in resources and improve the overall infrastructure. The next effort should be to encourage retailers to make some investment in improving the interiors of their respective establishments to make shopping an enjoyable experience for the customer.


Appendix : Present Indian Scenario

Retail Realities:  Unorganized market: Rs. 583,000 crores  Organized market: Rs.5,000 crores  5X growth in organised retailing between 2000-2005  Over 4,000 new modern retail outlets in the last 3 years  Over 5,000,000 sq. ft. of mall space under development  The top 3 modern retailers control over 750,000 sq. ft. of retail space  Over 400,000 shoppers walk through their doors every week


 Growth in organized retail on par with expectations and projections of the last 5 years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2005-06

Major players: FOOD AND GROCERY FASHION OTHERS Foodworld Shoppers’ Stop Vivek’s Subhiksha Westside Planet M Nilgris Lifestyle Music World Adani- Rajiv’s Piramyd Crossword Nirma-Radhey Globus Lifespring Ebony Gautier Pantaloon

Key Categories:


4% 7% 11% 2% 3%

12%

9%

52% Trans port

H ous ing

F ood beverage and tobacEc ntertainm o ent H ealthc are

C lothing/F ootw ear

M is c l

F urniture/H om e

Source: KSA Technopack


FUTURE GROWTH POTENTIAL OF RETAIL MARKETING IN INDIA.

The overall retail market in India is likely to grow by 36% to touch Rs 8,00,000 crore by 2008 from the current level of Rs 5,88,000 crore, according to an Associated Chambers of Commerce and Industry of India (Assocham) study The study points out that of the overall retail market, the organised sector in retail marketing is expected to touch Rs 16,000 crore by 2008 from the present size of Rs 5,000 crore. The retail market at Rs 5,000 crore, includes the organised food and grocery (Rs 600 crore). Assocham president Mahendra K Sanghi said that initiatives from all the state governments, and the Centre are prime factors that will encourage the entry of the organised sector into retailing in the next few years. These initiatives include allocation of land at concessional rates, grants of loans at liberalised interest rates to promoters of shopping malls, and rationalisation of state levies. He pointed out that the expansion and diversification of the organised sector in retail marketing is currently under way because of the demand factor. The other reason which substantiates major foray of the organised sector into retail marketing is the availability of real estate and infrastructure facilities in most of the states for setting up retail stores. “Such laws will no longer be there in the near future as liberalisation has already reached its advanced stage and states are competing with one and another for attracting investment. This will motivate and encourage the foray of organised sector into retailing,


particularly when the entry of FDIs into retailing is being strongly opposed by a section of society and polity as well,” according to the release. According to Assocham estimates, the retail sector will create 50,000 jobs annually in the coming five years. The retail sector is the second largest source of employment and job market is receptive to retailing experience, with business schools focussing on the sector and large retailers setting up retail academies.

FOCUS ON GROWTH Two years ago, in the context of changing markets, we outlined a strategy for Hindustan Lever to deliver sustainable profitable growth. This strategy builds on the past and reshapes for the future. I would like to update you on the progress made in executing this strategy and also outline our future approach.

GROWTH POTENTIAL Our published results for 2002 show a sales decline of 6.7% on account of Discontinuation of non value adding businesses and divestments. Our domestic FMCG business was flat with the growth in Home & Personal Care being offset by a decline in Foods. This may lead to a question on our growth potential. Indeed, there is a common misconception that our categories are mature with little scope for growth. In fact, the very opposite is true. Several of our categories still have low usership levels. In addition, the actual amount used per capita is far lower in India as compared to other countries, as shown below:


Per Capital Consumpation (Kgs)

India Thailand Brazil UK

Fabric Wash 2.63 4.71 9.03 13.90

Personal Wash 0.50 0.87 1.46 1.31

Toothpaste 0.07 0.40 0.61 0.23

Shampoo 0.04 0.38 0.72 0.40

Tea 0.64 2.28

Also, the GDP growth of about 5% is driving up discretionary income of our consumers by about 8% per annum. Literacy levels are rising, creating higher aspirations further fuelled by the world they see on television. There is no doubt that today's consumer wants a better quality of life which is what our brands help realise.

However, HLL is faced with the challenge that FMCG markets, after growing in strong double-digits throughout the nineties are now declining in value for the last couple of years. Why is this happening? In urban India, consumers are now being exposed to and are trying several new categories, such as mobile phones, leisure, durables etc, and are, therefore, down-trading their FMCG purchases. Rural demand has been dampened by three unusually poor monsoons in the last four years. We believe that both these factors are transitory in nature and FMCG markets will surely find a new growth equilibrium. Be that as it may, we are leaders in many FMCG categories, and are taking active steps to reattract consumer spending to our brands. We are doing this by providing exciting, new and differentiated benefits as well as greater value, thereby leading growth. We have every confidence in the validity of this approach given our experience in recent years, whereby several of our biggest brands, supported by such innovation, have grown strongly, even in this very challenging context.


FOCUSSING THE COMPANY With increased competition for the consumer’s wallet in today’s market environment, driving growth requires a much higher level of resource in all areas, be it technology, media spend or people talent. Consumer brands in everyday life is our area of core competence both in India and globally with Unilever and thus our area of focus. Two years ago, the FMCG business accounted for 85% of HLL. Today, 95% of HLL is its FMCG business, of which 86% is domestic, with 9% being exports of consumer brands. Over the years, we had entered several non-FMCG businesses in line with national priorities. These businesses were successful and created good value. However, with the opening up of India, staying in these businesses would have required us to invest heavily in accessing technology and achieving world-class competitiveness. In line with our strategy, we have exited non-FMCG businesses like Animal Feeds, Seeds, Flavours & Fragrances, Nickel Catalyst and Adhesives with total sales of over Rs.600 crores. In doing so, we have secured good value realising in all Rs.430 crores with a profit on disposal of over Rs.260 crores. We also had a very broad export portfolio covering several areas which also has been restructured and focussed. Going forward, the major thrust is on driving exports of our consumer brands primarily to other Unilever companies from whom we receive considerable support. This is an area where we see enormous potential for growth, given our clear competitive advantage. Indeed we are already supplying Tea bags to Singapore, Australia, Japan and the USA, Personal Products to the Middle East, Far East and African countries and are marketing Pears globally. In all, such exports already constitute over 40% of our total exports of US $ 300 million. We are also driving exports in other chosen areas where India has a competitive advantage, like Rice, Castor and Marine products. Marine products, for example, have huge potential given India’s long coastline and Sustainable fishing capability. We are the largest exporters of Marine products from India and have already built up a leading position in shrimp exports to the demanding markets of


the USA and Europe. We also acquired Amalgam, a leader in value-added Marine products, to drive further growth in this area. At the same time, we have discontinued a number of non value-adding exports. Our continuing exports are now growing by about 15%.

FOCUS ON POWER BRANDS In the FMCG business, we had developed a portfolio of over 110 brands organically and through acquisitions. Several of these had overlapping benefits and competed directly with each other, while others were simply too small. Growing brands in today's market requires scale. We, therefore, decided to focus all our resources on thirty Power Brands. These were identified for their size, brand strength, uniqueness and growth potential. In addition, they span all the relevant benefit and price positions in our market. For example, in Laundry, we chose three brands: Surf - providing the very best stain removal, Rin - making clothes look very good, and Wheel-offering great cleaning and value. These three brands also cover the entire price spectrum for every class of consumer.

We have migrated several of our other brands to converge with these Power Brands and harvested others. Now, Power Brands account for over 93% of our domestic consumer business. Indeed, through this approach, we are achieving big scale with several brands being individually as big as our competitor companies. The top five brands together account for sales of over Rs.3000 crores, and last year, grew by over 10%. We see each of these mega brands achieving a potential scale of Rs.1000 crores in the foreseeable future.


GROWING THE POWER BRANDS How will we grow the Power Brands? Firstly, by leveraging their scale -- this is crucial in a crowded market where 3000 advertisements are seen on television every month and where the number of SKUs stocked by retailers has gone up by about 40% in last three years. Brand scale enables us to get a larger share of the consumer's mind as well as a larger share of the retail shelf. For instance five of our Power Brands are among the top ten most heavily advertised brands in India. We derive scale competitive advantage from our combined media spends. Redefining Categories We are redefining the way we look at our categories. For example, we have traditionally measured our presence in shampoos by our market share of more than 50%. Our real opportunity, however, is to view this as the hair wash market -- indeed consumers often use soap, natural products or just water to wash their hair, apart from shampoos. Seen this way, our share of hair wash is only 7%, providing enormous space for growth. Similarly, the launch of Lipton Ice Tea is attracting younger consumers and also redefining the role of tea in a consumer’s life. The thrust in placing Tea, Coffee and Ice-cream vending machines in offices, factories and places of public congregation is creating new opportunities to consume our brands out of home. Extension of the Lakme brand beyond cosmetics to Salons is another example.

Liberating Brands In addition, we are liberating brands from their existing category mindset. Historically,brands originated and stayed within a category product format. We, however, see ourPower Brands as being able to occupy a unique osition in the consumer’s mind andtherefore being able to stretch into other product formats or categories. The launch of


Fair & Lovely Soap, Lifebuoy Talc, taking the Max Ice-cream brand to Confectionery are all examples of extending brands into new categories. All these extensions have had a promising start and there are more to come. Exciting Innovations A key driver of growth is innovation that surprises and delights consumers with new, differentiated and relevant benefits. We identify these benefits by placing the consumer at the very heart of our business. Traditionally, the consumer has been brought into the business through the lens of the arketing department, using market research tools and techniques. This is valuable and necessary. However, much deeper insight is needed in today's competit-ive environment. We need to go well beyond listening to what the consumer tells us. Indeed we need to develop a degree of intimacy and understand what is deep in her sub-conscious mind -- and seldom or never articulated. We are doing this by having cross-functional teams interface continuously with the consumer at her home, in the shops, sharing her life, thereby buildi-ng a deep and shared understanding. This will help deepen our “collective intuition” and enable us to deliver better products as well as superior dvertis-ing.

Leveraging Technology for Innovation We continue to invest in technology, both to make our products better as well as to secure cost advantage. Over the years, we have built several global technology centres in India with about 200 R&D people. This, coupled with access to over 5000 R&D personnel in the global Unilever network, with a total budget of US$ 1.3 billion, gives us enormous advantage. There is often a misconception that everyday products like ours do not need high technolo-gy. This is totally untrue -- in fact, we need technology of a very high order to offer superior benefits at an affordable price. For instance, the recently relaunched Surf Excel is based on proprietary technology developed after extensive research. It ensures that rinsing is much easier and quicker. This new Surf Excel reduces


the time taken for rinsing by as much as 50%, thereby providing huge convenience. Most importantly, it reduces the amount of water used by 50%, which is a significant benefit, given the acute scarcity of water in most of India. Given that laundry consumes upto 20% of household water, this technology will indeed make a big impact. Similarly, we have recently launched Knorr Annapurna Salt with the benefit of providing “intact iodine” to the consumer. Iodine added to salt is lost in transport, storage as well as in the process of cooking. We have developed a proprietary patented technology that encapsulates iodine, protecting its bio-availability. This is a very key benefit, given the importance of iodine, especially for the mental development of young children.

TACKLING COMPETITIVE CHALLENGES In pursuit of growth, we are acutely conscious of the challenge posed by competition, especially the low price players. This phenomenon is not new to us in India or indeed to other developed markets where low price local players and trade brands coexist with large branded players like ourselves. We are quite clear that we will be able to sustain growth in the face of such competition as we have done in the past. In the Laundry market where there are over a thousand local players, our brand Wheel is now the clear market leader and the largest brand in HLL. What is more, this has not come at a cost to our bottomline as it is strongly profitable. In Personal Wash also, we grew our business by double-digits last year in the face of very aggressive low price competition. We will compete with low price competitors by playing to our strengths -- using our strongest brands backed by superior technology and the lowest cost supply chain. We will succeed in this by leveraging our unique combination of local and global scale.


NEW GROWTH ACORNS Three years ago, we had identified several new opportunities for growth as an outcome of Project Millennium. We have made very good progress in nurturing these growth acorns for the future. Specifically, we are driving nascent categories in our current businesses such as Deodorants and Processed Foods. In addition, we have entered new adjacent categories like Confectionery and Ayurvedic Health Care. We are also pioneering a retaili-ng business called Sangam and building a direct-to-consumer business called HLL Network. Taken together, all these new initiatives increase the size of our market opportunity by about 40%.

LEVERAGING HLL SCALE FOR GROWTH The power of HLL’s scale is derived from its combined volume of about 4 million tonnes, sales of Rs.10,000 crores and its presence across more than 20 distinct consumer categories. HLL's brands are available in 3 million outlets and touch the lives of two out of three Indians. We are leveraging this scale to derive competitive advantage and sustainable growth.

Building Supply Chain Competitiveness We are making a quantum change in our supply chain, both in terms of enhanced customer service as well as increased efficiency. Our supply chain is complex, with over 2000 suppliers, 100+ manufacturing locations, 7000 stockists and about one million retail outlets. Significant investment in Information Technology has provided connectivity across the supply chain, from the supplier to the stockist, thereby enhancing customer service while bringing down working capital. Today, we know what our stockists have sold every day, to almost a million outlets. This has brought us much closer to the market


place and significantly enhanced our speed of response.HLL's scale of operations gives a distinct cost benefit. Buying raw and packing materials for HLL as a whole, rather than separately for categories, gives us economies of scale. For example, inputs for packaging, like paper, board and polymers, are bought centrally for all divisions generating big savings. Similarly, in the areas of logistics and portation, scale enables greater efficiency. We are also exploiting our scale in optimising sourcing of our products. All this gives us a competitive advantage in our cost structure.

Deeper Commitment to Rural India Our scale also gives us the opportunity to build the deepest possible direct distribution reach into rural India, where over 70% of our population live. Interior villages are difficult to access because of weak infrastructure. In addition, a large proportion is media dark with no awareness of any brands. By consolidating our categories we are establishing a single distribution channel for rural India. We have already appointed 6000 sub-stockists for rural markets, and are now covering approximately 50,000 villages, reaching about 250 million consumers. In addition, we have also embarked upon an ambitious direct distribution programme called Project Shakti to reach the smallest of villages. Our vision is to reach over 100,000 villages, thereby touching about 100 million rural consumers. We have already piloted this initiative in 5000 villages and are now extending this rapidly. Project Shakti provides a unique micro-enterprise opportunity for under-privileged rural women. Armed with micro-credit from banks, they become direct-to-home distributors in these small villages, providing relevant products as well as improving the overall awareness of nutrition and hygiene. In turn, they benefit through sustainable income, thereby creating a virtuous cycle of growth. Project Shakti uniquely combines our business interest with our ongoing commitment to the development of rural India and women.


Partnering Modern Trade In addition to our ongoing commitment to the traditional grocery trade, we are building a special relationship with the small but fast emerging modern trade. Our scale enables us to provide superior customer service including daily servicing, improving their range availability whilst reducing inventor-ies. We are using the opportunity of interfacing more directly with our consumers in this retail environment through specially designed commun-ication and promotions. This is building traffic into the stores while yielding high growth for our business.


BUILDING PROCESSED FOODS There is a big opportunity to grow Processed Foods, which are still a very small proportion of the overall largely commoditised foods market.

Foods Market Structure Processed

6%

Semi Processed

16%

Unprocessed

78%

How-ever, developing this market will require relevant and differentiated products which cater to Indian tastes and habits as well as sustained and considerable investment and time for market development. Over the years, we had grown our Foods and Beverages business, organically and through acquisition to significant scale. However, it was necessary for us to increase the inherent profitability profile in several areas in order to generate the capacity to invest in market development. Over the last couple of years, our gross margins have improved by 9%, albeit at the cost of some topline, thereby providing the fuel to invest in both innovation and differentiation. We have reduced our losses in Ice-cream significantly, and considerably improved the performance of the recently acquired Modern Foods. Going forward, our priority is to lead growth of this market through innovation. We have recently launched Kissan Bistix, Kissan Mr.Fruit, Lipton Ice, Modern Atta Bread and the Knorr Annapurna Culinary range, all of which have met with an encouraging response.


TALENT FOR GROWTH Finally, the most important determinant of our growth is the quality of our people. We are deeply privileged to continue to attract the very best talent as the number one preferred employer at leading campuses. We are also encouraging diversity in our talent skills, especially for our newer business-es, and are also bringing in a large number of talented women. Our training programmes have been revamped to expose entrants to local and global business -- they spend time in Indian villages and international cities -all within a 12-month training programme. HLL's wide variety of

categories and

Unilever's global operations provide enormous development opportunit-ies through organised career planning. A lot of emphasis has always been placed on skill development -- today we are also concentrating on building individual and leadership capabilities. We offer an energising and empower-ing environment enabled by creating small teams focussed on key initiatives. We have found this the best way of combining both scale and speed. Deeper in the company, in factories and offices, we are unleashing the talent and creative potential of all employees through initiatives such as TPM. In conclusion, let me say that HLL's most valuable assets are its brands and people. Today's market is very dynamic and increasingly competitive. We have confidence in our strategy and are learning to grow even in declining markets. We are putting in place key enablers to build our capability for sustained high performance. We have brands with rich heritage and strong consumer equity. We have people who bring the power of their ideas and execution to exploit the full potential of our brands towards delivering continued profitable growth for Hindustan Lever.


Contents RETAIL SCENARIO IN INDIA Unlimited Opportunity

The Global Retail Industry: An Overview Retail Scene in India: Touching Meteoric Scales Different Forms of Retailing Malls in India Challenges of Retailing in India Retail as an Employment Generator Retail Industry in the East: Current Scenario, Growth Prospects and Upcoming Projects


Retail Education in the East Factors needed to promote the Industry in West Bengal Conclusion

The Global Retail Industry : An Overview Retail has played a major role world over in increasing productivity across a wide range of consumer goods and services .The impact can be best seen in ountries like U.S.A., U.K.,Mexico, Thailand and more recently China. Economies of countries like Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector. Retail is the second-largest industry in the United States both in number of establishments and number of employees. It is also one of the largest world wide. The retail industry employs more than 22 million Americans and generates more than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion sector. Wal-Mart is the world’s largest retailer. Already the world’s largest employer with over 1million associates, Wal-Mart displaced oil giant Exxon Mobil as the world’s


largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has become the most successful retail brand in the world due its ability to leverage size, market clout, and efficiency to create market dominance. Wal-Mart heads Fortune magazine list of top 500 companies in the world. Forbes Annual List of Billionaires has the largest number (45/497) from the retail business. GLOBAL RETAIL (Source : CSO ,MGI Study)

Total Retail (US $

1999 150

2002 180

2005 225

Billion) Organised Retail

1.1

3.3

7

(US $ Billion) % Share of

0.7

1.8

3.2

organised Retail.

Top Retailers Worldwide Rank

Retailer

Country

1

Wal-Mart Stores, Inc.

U.S.A.

2

Carrefour Group

France

3

The Kroger Co.

U.S.A.

4

The Home Depot, Inc.

U.S.A.

5

Metro

Germany


(Source: STORES / Deloitte Touche Tomahatsu)

Retail Scenario in India : Touching Meteoric Scales As the corporates the Piramals, the Tatas, the Rahejas, ITC, S.Kumar’s, RPG Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race to revolutionize the retailing sector, retail as an industry in India is coming alive. Retail sales in India amounted to about Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure. Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hypermarts. Sales from these large-format stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a latest report by Euromonitor International, a leading provider of global consumer-market intelligence. A. T. Kearney Inc. places India 6th on a global retail development index. The country has the highest per capita outlets in the world - 5.5 outlets per 1000 population. Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA. In a developing country like India, a large chunk of consumer expenditure is on basic necessities, especially food-related items. Hence, it is not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The share of foodrelated items had, however, declined over the review period, down from 73% in 1999. This is not unexpected, because with income growth, Indians, like consumers elsewhere,


have started spending more on non-food items compared with food products. Sales through supermarkets and department stores are small compared with overall retail sales. Nevertheless, their sales have grown much more rapidly, at almost a triple rate (about 30%per year during the review period). This high acceleration in sales through modern retail formats is expected to continue during the next few years, with the rapid growth in numbers of such outlets due to consumer demand and business potential. The factors responsible for the development of the retail sector in India can be broadly summarized as follows: •Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Looking at income classification, the National Council of Applied Economic Research (NCAER) classified approximately 50% of the Indian population as low income in 199495; this is expected to decline to 17.8% by 2006-07. •Liberalization of the Indian economy which has led to the opening up of the market for consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers. •Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. •The internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets. About 47% of India’s population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country. As India continues to get strongly integrated with the


world economy riding the waves of globalization, the retail sector is bound to take big leaps in the years to come. The Indian retail sector is estimated to have a market size of about $ 180 billion; but the organised sector represents only 2% share of this market. Most of the organised retailing in the country has just started recently, and has been concentrated mainly in the metro cities.India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold through the super markets and departmental stores. A similar phenomenon has swept through all other Asian countries. Organised retailing in India has a huge scope because of the vast market and the growing consciousness of the consumer about product quality and services. A study conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail-specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010.

A McKinsey report on India says organised retailing would increase the efficiency and productivity of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share of employment of retail in India is low, even when compared to Brazil (14%), and Poland (12%).

Different Forms of Retailing : Emergence of new formats of retailing in India


Popular Formats

•Hypermarts

•Large supermarkets, typically (3,500 - 5,000 sq. ft)

•Mini supermarkets, typically (1,000 - 2,000 sq. ft)

•Convenience store, typically (7,50 - 1,000 sq. ft)

•Discount/shopping list grocer

•Traditional retailers trying to reinvent by introducing self-service formats as well as value-added services such as credit, free home delivery etc.


The Indian retail sector can be broadly classified into:

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

b) HEALTH & BEAUTY PRODUCTS With growth in income levels, Indians have started spending more on health and beauty products .Here also small, single-outlet retailers dominate the market .However in recent years, a few retail chains specializing in these products have come into the market.


Although these retail chains account for only a small share of the total market , their business is expected to grow significantly in the future due to the growing quality consciousness of buyers for these products .

c) CLOTHING & FOOTWEAR Numerous clothing and footwear shops in shopping centers and markets operate all over India. Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and footwear stores have modern products and attractive displays to lure customers. However, with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely that the traditional outlets will survive the test of time. d) HOME FURNITURE & HOUSEHOLD GOODS Small retailers again dominate this sector. Despite the large size of this market, very few large and modern retailers have established specialized stores for these products. However there is considerable potential for the entry or expansion of specialized retail chains in the country.

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


f) LEISURE & PERSONAL GOODS Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. There are specialized retailers for each category of products (books, music products, etc.) in this sector. Another prominent feature of this sector is popularity of franchising agreements between established manufacturers and retailers.

Malls In India Over the last 2-3 years, the Indian consumer market has seen a significant growth in the number of modern-day shopping centers, popularly known as ‘malls’. There is an increased demand for quality retail space from a varied segment of large-format retailers and brands, which include food and apparel chains, consumer durables and multiplex operators. Shopping-centre development has attracted real-estate developers and corporate houses across cities in India. As a result, from just 3 malls in 2000, India is all set to have over 220 malls by 2005. Today, the expected demand for quality retail space in 2006 is estimated to be around 40 million square feet. While previously it was the large, organised retailers –with their modern, up-market outlets, and direct consumer interfacewho had been a key factor driving the growth of organised retail in the country, now it is the malls which are playing the role.


Factors such as availability of physical space, population densities, city planning, and socio-economic parameters have driven the Indian market to evolve, to a certain extent, its own definition of a ‘mall’. For example, while a mall in USA is 400,000 to 1 million sq.ft. in size, an Indian version can be anywhere between 80,000 sq.ft. and 500,000 sq.ft. By 2005, total mall space in the 6 cities of Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, and National Capital Region (Delhi, Noida, Gurgaon) is expected to increase to over 21.1 million sq. ft. Compared to other big cities, Kolkata and Hyderabad are relatively new entrants in the mall segment, but are witnessing quick growth. Smaller cities like Pune, Ahmedabad, Lucknow, Ludhiana, Jaipur, Chandigarh and Indore, are also expected to see a formidable growth in the growth of malls in the near future. But malls in India need to have a clear positioning through the development of differential product assortment and differential pricing, in order to compete effectively in a growing mall market. Segmentation in malls, like up-market malls, mid-market malls, etc. , proper planning, correct identification of needs, quality products at lower prices, the right store mix, and the right timing, would ensure the success of the ‘mall revolution’ in India.

Challenges of Retailing in India

Retailing as an industry in India has still a long way to go. To become a truly flourishingindustry, retailing needs to cross the following hurdles: •Automatic approval is not allowed for foreign investment in retail. •Regulations restricting real estate purchases, and cumbersome local laws. •Taxation, which favours small retail businesses.


•Absence of developed supply chain and integrated IT management. •Lack of trained work force. •Low skill level for retailing management. •Intrinsic complexity of retailing – rapid price changes, constant threat of product obsolescence and low margins.

The retailers in India have to learn both the art and science of retailing by closely following how retailers in other parts of the world are organizing, managing, and coping up with new challenges in an ever-changing marketplace. Indian retailers must use innovative retail formats to enhance shopping experience, and try to understand the regional variations in consumer attitudes to retailing. Retail marketing efforts have to improve in the country - advertising, promotions, and campaigns to attract customers; building loyalty by identifying regular shoppers and offering benefits to them; efficiently managing high-value customers; and monitoring customer needs constantly, are some of the aspects which Indian retailers need to focus upon on a more pro-active basis. Despite the presence of the basic ingredients required for growth of the retail industry in India, it still faces substantial hurdles that will retard and inhibit its growth in the future. One of the key impediments is the lack of FDI status. This has largely limited capital investments in supply chain infrastructure, which is a key for development and growth of food retailing and has also constrained access to world-class retail practices. Multiplicity and complexity of taxes, lack of proper infrastructure and relatively high cost of real estate are the other impediments to the growth of retailing. While the industry and the government are trying to remove many of these hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this industry. Fitch believes that while the market share of organised retail will grow and become significant in the next decade, this growth would, however, not be at the same rapid pace as in other emerging


markets. Organised retailing in India is gaining wider acceptance. The development of the organised retail sector, during the last decade, has begun to change the face of retailing, especially, in the major metros of the country. Experiences in the developed and developing countries prove that performance of organised retail is strongly linked to the performance of the economy as a whole. This is mainly on account of the reach and penetration of this business and its scientific approach in dealing with customers and their needs. In spite of the positive prospects of this industry, Indian retailing faces some major hurdles (see Table 1), which have stymied its growth. Early signs of organized retail were visible even in the 1970s when Nilgiris (food), Viveks (consumer durables) and Nallis (sarees) started their operations. However, as a result of the roadblocks (mentioned in Table 1), the industry remained in a rudimentary stage. While these retailers gave the necessary ambience to customers, little effort was made to introduce world-class customer care practices and improve operating efficiencies. Moreover, most of these modern developments were restricted to south India, which is still regarded as a ‘Mecca of Indian Retail’.

Retail as an Employment Generator

The retail sector can generate huge employment opportunities, and can lead to job-led economic growth. In most major economies, ‘services’ form the largest sector for creating employment. US alone have over 12% of its employable workforce engaged in the retail sector. The retail sector in India employs nearly 21 million people, accounting for roughly 6.7% of the total employment. However, employment in organised retailing is still very low, because of the small share of organised retail business in the total Indian retail trade. The share of organised retailing in India, at around 2%, is abysmally low,


compared to 80% in the USA, 40% in Thailand, or 20% in China, thus leaving the huge market potential largely untapped. A modern retail/retail services sector has the potential of creating over 2 million new (direct) jobs within the next 6 years in the country (assuming only 8-10% share of organised retailing), according to Arvind Singhal, CMD, KSA Technopak. Retail can create as many new jobs as the BPO/ITeS sector in India. A strong retail front-end can also provide the necessary fillip to agriculture & food processing, handicrafts, and small & medium manufacturing enterprises, creating millions of new jobs indirectly. Through it’s strong linkages with sectors like tourism and hospitality, retail has the potential of creating jobs in these sectors also. Though the Planning Commission has identified retail as a prospective employment generator, in order to strengthen the multiplier effect of the growth in organised retailing upon the overall employment situation, a pro-active governmental support mechanism needs to evolve for nurturing the sector. Issues like FDI in retail, allocation of governmentcontrolled land on more favorable terms, strong political and bureaucratic leadership, etc., need to be addressed adequately.

Retail Sector in the East : Current Scenario, Growth Prospects and Upcoming Projects

The retail sector in Eastern India is largely Kolkata-centric. The city of Kolkata has come a long way in terms of retail maturity with a proliferation of brands and organised retail chains. Shopping trends in the city have witnessed a radical shift over the recent years;


from the conventional trader run stand alone shops to more organized & large retail formats. Evidently, the future of retailing in the city lies in new-age shopping malls, which provide variety, value and convenience in a more comfortable environment. This is also evident by a surge in the consumer spending on branded goods in the recent times; for example the city's Music World outlet has recorded the highest earnings per square feet amongst all its outlets in the country. The city has also welcomed the other retail chains such as Pantaloons, Westside and Shopper’s Stop. Though Kolkata has been a bit late in catching up with the retail revolution in the country, the city has great potential to become a retail hub in the near future. Going by the 1991 census, the city qualifies as the second largest metro market in India; nearly one out of every six shops located in the country’s top 25 cities, can be traced to Kolkata. To a market strategist, Kolkata undoubtedly is an ideal location for the growth of the retail industry.Besides being the principal retail-and-services market to a vast hinterland comprising of the eastern and northeastern states of the country, the city also serves as a center of trade and commerce for the region. Its proximity to Bangladesh, a country of 13 crore consumers, and to the South-East Asian markets, is another factor for which the city is fast merging as a vibrant business center. The Kolkata Port and the Haldia Port are also instrumental in acting as gateways to landlocked countries like Nepal and Bhutan. The disposable incomes of Kolkatans have also been on the rise – according to a report by the National Council of Applied Economic Research (NCAER), about 62% of the households in Kolkata had annual incomes of up to Rs.18, 000 in 1985-86; while just a decade later, the figure had touched Rs.25,000-77,000 for some 61% of the households. The city truly represents an amalgamation of the advantages of a metro city, and the comparatively modest living costs of a non-metro town . Lately, Kolkata has emerged as a strong prospective destination in the expansion plans of retailers and is now perceived as a latent but highly potential market. Prominent retail chains like Music World, Westside, Dominos, Pizza Hut, Shopper’s Stop, WillsSport, Barista, and Pantaloons have already established their presence in the market. Apart from


these new-age, large retail chains which have started operating successfully in the city, there are a large number of traditional, specialized markets like the Bowbazar market, Bagri market, China bazaar, Lake market, Burrabazar market, Chandni market, etc., and high-street markets at Park Street, Esplanade area, Camac Street, Shakespeare Sarani, Gariahat, which offer a wide variety of items like stationary items, dairy products, electronic goods and appliances, glassware, crockery, wooden furniture, jewellery, musical instruments, fruits, flowers, vegetables, fish, flesh meat, textiles, spices, dry fruits, sugar, salt, groceries, paints, hardware items, etc. Besides these markets, there are small-format, non-branded shopping complexes/malls like the A/C Market, Vardaan Market, New Market, and the Shreeram Arcade, which offer a wide variety of items, from garments, watches, and footwear, to consumer durables like household electronic gadgets. The local retail chains which have become household names in Bengal include ‘Arambagh Hatcheries Ltd.’, Khadim’s, and Sree Leathers. Operational since 1998, Arambagh Hatcheries Ltd. is today one of the foremost companies in the marketing of poultry products Encouraged by the success of its “chicken” brand , and the realization that there was a void in the Kolkata market for quality food stuff sold under a single roof , the company took the initiative in starting “convenience stores” named “ Arambagh’s Food Mart” in 2000. An aggressive expansion strategy has seen the company’s physical strength grow to 14 outlets in Kolkata, with another 5-6 outlets being in the pipeline. Each of these stores are between 500 & 800 sq. ft. in dimension , and packed with at least 4000-4500 food and other FMCG items . Good quality , the right quantity, use of correct weights, and a low MRP are the main factors which have contributed to an impressive growth of this chain . Arambagh has tie ups with Nicco Park, Kwality Walls,Kellogs India and Frito Lays, among others. These tie ups help the chain in product and services promotion. Both Khadim’s and Sree Leathers are local footwear companies which have been tremendously successful, and have now reached out to international markets. Khadim’s


has exclusive showrooms not only in West Bengal, but also in states like Bihar, Jharkhand, Tripura, Orissa, Madhya Pradesh, Andhra Pradesh, Karnataka, Gujarat, and Tamil Nadu.The company offers products like Premium shoes, Gents’ shoes, Ladies’ shoes, Kids’shoes, and Leather Accessories. Khadim’s has become the destination for people from all walks of life, with a great range of footwear to choose from. The motto of the company is to provide good quality fashionable shoes at affordable prices. Sree Leathers entered the Kolkata market in 1987 with its first outlet in the city at Lindsay Street, which became hugely successful. The company’s second mega outlet at Free School Street, which has a floor area of more than 7500 sq. ft., provides a great shopping experience to its customers. Today the company has a number of outlets scattered over West Bengal, Orissa and Bihar, and has ventured into the international markets of the Middle East, Singapore, Maldives, USA, Denmark, Greece, Germany, Netharlands and Austria. Sree Leathers has started a new R&D section under the guidance of Italian and German experts, to enhance the comfort level of it’s products, and has plans of setting up a modern footwear factory at Kasba Industrial area in Kolkata. The two prominent fun-entertainment/amusement parks in Kolkata which have gained immense popularity among the masses, particularly children, are Nicco Park, and Aquatica. Situated in Salt Lake, and spread over an area of 40 acres, Nicco Park, promoted by the Nicco Group, can be termed as the ‘Disneyland of West Bengal’, with a variety of unusual and exciting games and rides like the Toy Train, Cable Car, Tilt-a-Whirl, Water Chute, Water Coaster, Flying Saucer, Pirate Ship, and Moonraker. The Cave Ride is the latest addition, and is perhaps the only of it’s kind in this part of the world. Aquatica, an 8-acre water park, is situated at Rajarhat in Kolkata, which came up in 2000. This Theme Park offers visitors a cool respite from the heat and grime of city life. The park, which can accommodate around 5000 people, has an artificial river meandering through it. Visitors can swim and wade in the river water, which is recycled every hour


for maintaining the cleanliness. Aquatica has breathtaking rides such as the Black Hole, Tornado and Wave Pool. The Aqua Dance Floor, where visitors can sway to non-stop music, has water-spraying nozzles on the roof which fill the surrounding air with water. Aquatica also hosts big events and programmes like fashion shows which are great crowd-pullers.The medium and large-format, branded and non-branded shopping complexes-malls which have come up in Kolkata, and are operating successfully, are : •Forum: It is a two lakh square feet mall, situated on Elgin Road , in South Kolkata with Shopper’s Stop as anchor .This shopping mall established by Sunsam properties within the Saraf Group was opened to the public in March 2003 , with the launch of Shopper’s Stop. Along with the retail brands having their outlets, the Forum also houses, a 300 capacity food court and a 4-auditorium multiplex called INOX. The multiplex, INOX has been the first of its kind in the city, having a sitting capacity for over 1000 viewers, and situated over 30000 square feet. Hence it can be really a great experience of shopping and movie-going for the Kolkatans, who do not want to compromise on the quality aspect. The retail outlets at Forum have witnessed almost 30-35 % increase in sales after the opening up of the multiplex in 2003. Most retailers are extremely happy with the growth rate and expect their sales to increase further in the coming months .At INOX , ticket sales have been averaging at almost 90% of the theatre capacity – the highest box office sales amongst all the multiplexes in the country . Forum has truly changed the experience of Kolkatans with regard to shopping and entertainment in the city .

•22 Camac Street: This large format-shopping complex is located on Camac Street .The retail brands like Pantaloons ,Westside , Pizza Hut , Planet M, Grain of Salt and Add Life , have already set up their outlets in the complex. It has 4 distinct blocks with a common atrium. The most advantageous aspect here is its huge parking space in the basement. It also houses smaller multi-branded outlets. The footfalls stay steady throughout the week and gets to an uncontrollable high over the weekend .Some of the outlets rank among the


leading individual retail outlets of the country . The total floor area of the complex is 380,000 square feet , and has 4 restaurants and 3 banquet halls . •Metro Plaza: Situated on Ho Chi Minh Sarani , this is basically a large scale retail cum office development area . The lower three floors with an area of 50,000-60,000 square feet is meant for retail business. Along with the retail units there is also a space for Bowling which is frequented by younger people. •Emami No. 1: This mall is located on Lord Sinha Road . Its close proximity to the Chowringhee-Park Street belt helps it to cater to a large section of quality conscious consumers. The usual facilities of power backup, vertical transportation and parking are available over here. The biggest disadvantage that it faces is its car parking area, which has a meagre capacity of just 70 cars at a time. The biggest attraction here is its “Landmark bookstore“ on the third floor, which has a wide range of books, music and stationary items. •City Centre: The recently inaugurated ‘City Centre’ project adds another feather to the already vibrant retail business in the city. The project, promoted by industrialist Harshvardhan Neotia, and located at Salt Lake, has been designed by one of India’s best known architects, Charles Correa. ‘City Centre’ is a dynamic mix of shopping mall, Cineplex (INOX), entertainment area, food court, offices, and residences- nestling amidst open spaces, lush greens, and the contours of an ideal cityscape. Big brands like Shopper’s Stop and Adidas have set up their shops in the complex. There are several aspects to ‘City Centre’ ; with no boundaries to separate it from the street, it is open to everyone- all income and age groups. The Complex has a parking space for as many as 800 cars, 14 entry and exit points, and large spaces to amble around. The ‘City Centre’, which is the single-largest architectural endeavour in Kolkata in recent times, has truly changed the way the city looks, and complements the city’s artistic heritage. The location of the project makes Salt Lake the epicenter of not just its immediate population (nearly half a million), but also of the upcoming, adjoining township of Rajarhat (with an expected population of about 750,000).


•Enclave: Spread over 36,000 sq. ft., the Enclave, has come up at up-market Alipore, and has five shopping levels, and an open-to-sky atrium. The complex, promoted by the Calcutta Metropolitan Group, has fine restaurants including Food Bar, Red Bar, Cookee Bar, coffee shops, a childrens’ entertainment zone named ‘Kool Kids’, among other facilities. Another prominent supermarket which offers a wide range of products, and provides customers with a great shopping experience, is C3- The Market Place. The shop commands over 6100 sq.ft. in the heart of Kolkata, at Lee Residency, 26, Lee Road. The approximately 25,000-strong product menu includes a wide range of products like fresh fruits and vegetables, rare herbs, groceries, ready-to-eat food, personal-care items, confectionaries, chocolates, home-care products, newspapers, magazines, and so on. Though the retail business mainly revolves around Kolkata, towns like Durgapur, Siliguri and Haldia also have the potential of becoming busy retail addresses. Already, the Durgapur City Centre project, promoted by Bengal Shristi Infrastru-cture Development Ltd., has come up in Durgapur, in Burdwan district. The project, which was inaugurated on the 10 th of August, 2003, is a modern, multi-facility, multi-utility, urban plaza, spread over a sprawling 370,000 sq.ft. It is a confluence of shopping, commerce, entertainment, education, recreation, health, hospitality, medical amenities, and premium residential accommodation. Lush green open spaces, an integrated entertainment multiplex, and various other urban amenities, provide a fascinating experience. Durgapur is wellconnected by both rail and road, and the project location is easily accessible from the bordering towns of Asansol, Ranigunj, Santiniketan, and Burnpur. A number of prominent projects in the retail sector are coming up in Kolkata. Some of these are: •South City: The upcoming, 31-acre South City project promises of a lifestyle of international standards. The project will have four 35-storey residential towers, a sprawling club, a shopping mall with entertainment zones, and a multiplex. Moderntechnology will ensure earthquake resistance, high-speed elevators, adequate fire-fighting and protection


systems, internal security and traffic management, and all conceivable civic comforts. The in-complex South City Academy, spread over 3.5 acres, will be equipped with a learning resource center, gym, cafeteria, an auditorium for extra-curricular activities like debates, dramatics, and sports, and a soccer field. The South City Club will have an airconditioned sports center, guest rooms, banquet facilities, swimming pools, a dining restaurant, a pub lounge, a business center, and a health club, among other things. The mega complex will also have India’s largest shopping mall- the Junction, spread across an area of 700,000 sq.ft., which will have large anchor stores, a multiplex, a food court, a six-screen Cineplex, an entertainment zone, and parking space for nearly 800 cars. The team behind this big venture comprises a host of experienced architects and Developers. Among them are : Dulal Mukherjee & Associates (the principal architects);Smallwood Reynolds Stewart Stewart & Associates Inc., the Atlanta-based international design consultants; Peridian Asia PTE Ltd., Singapore-based landscape architects; Meinhardt (Singapore) PTE Ltd., structural consultants; and MN Consultant, structural engineers. •Mani Square: Mani Square, a proposed project on a 4-acre plot next to Apollo Gleneagles Hospital on E.M.Bypass, will have a 500,000 sq ft. space, which will include a technology park, a 6-screen multiplex , a food court , business club , a multilevel 1000car parking area , a 40,000 sq ft. hypermart ( “Giant” ), as well as other direct retail stores .Designed and engineered by SAA Architects of Singapore and Meinhardt of Australia , and promoted by the Mani Group, Mani Square will be the single stop solution to all requirements of modern-day professionals and customers . The project will have readyto-use centrally air-conditioned offices with 100% power back-up ,lease-lines and roundthe-clock support services , which will be extremely attractive for IT and ITeS companies .Retail giants like Lifestyle , Westside , Shoppers’ Stop and Cineplex majors like Shringar and PVR have already shown interest to set up units in the complex . •Fort Knox: Fort Knox, a mega jewellery mall, owned and promoted by the Fort Group, is scheduled for a September, 2004 inauguration. The project, a 9-storied complex, on an


area of approximately 80,000 sq.ft., will have an estimated 37 showrooms, 40 offices, backed by 4 lifts, 8 escalators. The Fort Group is confident about eliciting a positive consumer response, and providing the customer with a comfortable, secure, and refreshing shopping experience, by creating access to the best products, from the best jewellers, at the best prices. The project, which is coming up at Camac Street, will have a formidable line-up of security measures including alarm system with instant links to the police headquarters and fire services, 24-hour armed security guards, etc. •Gariahat Mall: Gariahat Mall, which is coming up at an area between the Gariahat crossing, and the Rashbehari- EM Bypass Connector, will approximately be of 80,000 sq.ft., and will be accessible from every point in the southern belt of the city. The 5-floor structure will boast of world-class facilities and ambience, an expansive atrium, high ceilings, capsule lifts, and multi-level access up to the top floor. The scientific fusion of lofty ceilings, flat slabs, and a central atrium illuminated by natural light, is intended to evoke a sense of space, height, and depth. While an entire block has been earmarked for the anchor shop, the 3 rd and the 4 th floors are entirely reserved for jewellery outlets, and the 5 th floor will house restaurants and eating places. Toplight Commercials Ltd. (TCL), one of the prominent real-estate developers in Kolkata, and the promoter of the mall, expects to complete the project by December, 2004. •Metropolis: The 1,41,000 sq.ft. ‘Metropolis’ will be one of Kolkata’s newest retailcum-entertainment addresses. The complex will have a 4-screen, 1000-seater Cineplex, a 6- outlet food court, a sports bar, a restaurant, and a 350-capacity car park. Being developed by the Calcutta Metropolitan Group (CMG), the ‘Metropolis’ is designed by the reputed architectural firm, Peddle Thorp International of Hong Kong, and will come up at an area adjacent to CMG’s prestigious existing residential complex, ‘Hiland Park’, which has about 900 apartments and 35 penthouses. ‘Metropolis’ will have the Hyatt Regency, ITC Sonar Bangla, Peerless Hospital, and Udayan Condoville among its distingui-shed neighbours.


•Pam Shopping Centre: The marvellous Pam Shopping Centre, promoted jointly by Pam Developers, and the Kolkata Municipal Corporation, is scheduled for an end-August (2004) inauguration. This 60,000 sq. ft. eye-catcher at Rashbehari Avenue, will boast of a unique reflective glass curtain, and an artistically landscaped entrance ramp, besides having five levels of shopping. The Complex will have shops selling a wide range of products including garments, and jewellery. •Homeland: Homeland, a 1,00,000 sq. ft. exclusive shopping mall, promoted by the Merlin Group, is coming up in the heart of Central Kolkata, close to Chowringhee and Elgin Road crossing. The five-storied, centrally air-conditioned shopping center will have stylish spaces ranging from 300 sq. ft. to 2000 sq. ft., and spacious exhibition and product launch area. The mall will also have ATM centers at convenient points, internationally styled café and food stops, 24-hour power backup facility, and adequate car parking facilities. •Silver Springs: ‘Silver Springs’, a prestigious joint venture project between Bengal Silver Springs Projects Ltd. and the Kolkata Municipal Corporation, is due for a December, 2005 completion. Shapoorji Pallonji has done the piling of ‘Silver Springs’, and renowned architect J.P.Agarwal has designed the project. The project will have around 500 residential flats, 10 high-rises of 18 and 14 stories, a magnificent shopping mall named ‘Silver Arcade’, of 70,000 sq.ft. area, and a ‘Spring Club’ of an area of 70,000 sq.ft. The vendors at the shopping mall include Mainland China and a Hyundai dealer- showroom. ‘Silver Arcade’ will be a G+3 mall, with the 3 by Mainland China for 3 speciality restaurants; while the 2

nd

rd

floor being taken up

floor will have a Food

Court with 17 multi-cuisine food counters. The mall will be backed by a large parking space for 150 cars. ‘Silver Springs’ will boast of a modern, up-market residential complex, the shopping mall, ‘Silver Arcade’, a Montessori School, an AC Community Hall, among other new-age facilities. Bhubaneshwar is another city, which has the potential of becoming a retail hotspot in the East. The city is fast developing into a bustling center for economic activity, with


software giants like Infosys and Satyam have already set up their offices. This is giving rise to a new breed of consumers with high disposable incomes; thereby creating lifestyle and aspiration levels at par with other fast-moving metropolitan cities. Bhubaneshwar represents two faces of retailing - one, a traditional store evolving with time, and another, a recently inaugurated mall from a group that is credited with having revolutionized the retail scenario in Kolkata. •Satyam Shivam Sundaram: This 25 year old multi-brand department store is famous for its offerings in textiles and ready-to-wear garments. The uniqueness of the store lies in its ability to inculcate the latest retail concepts in terms of selection and display of merchandise in-store ambience, and other attractive features. This 8,000 sq ft. store, which is being upgraded to a 16,000 sq ft. one, spends a good amount of money annually on brand-promotion exercises. At the store, half of the retail space is devoted to menswear , 25 % to womens’ wear , 15% to children’s wear , and the rest 10% to teenagers . About Rs. 25 lakh in systems, while the standing stock of merchandise is worth about Rs. 5 crore. •Forum Mall: Bhubaneshwar’s Forum mall, launched on 29th of March,2004, is expected to bring in a turning point in the city’s retailing and retail real-estate development. Located at Kharvel Nagar, Unit III, in the Central Business District, the mall is the brainchild of Rahul Saraf, the man who masterminded the success of Forum at Kolkata. The 4-level Forum mall has a total area of 170,000 sq.ft., with 115,000 sq.ft. devoted to the retail and F&B. The ground, first, and second floors, is dedicated to pure retailing, while the food court and entertainment zones are located on the third floor. The top floor is reserved for IT and related business and trade. The prominent brands that have taken space in the mall include Big Bazar (anchor), Pizza Hut, Moustache, Dukes, Sree Leathers, Baskin Robins, Planet M, among others. The upcoming brands include Benetton, Blackberry’s, Chandrani Pearls, Bata, and Siyaram’s. The mall has received a great response; the average footfalls being 7000 per day, with expectations of an increase to 8000. Forum has not only become a shopping destination for the people of


Bhubaneshwar, but also for people from surrounding areas like Cuttack and other towns in the state. The retail revolution is slowly making changes in lifestyle in smaller towns also. This is evident from the fact that even a small town like Bhagalpur in Bihar, today has it’s own shopping mall. The already operational shopping center, named “Sriyash Aap Ka Apna Bazar”, located at Jiwan Sagar Towers, D.N. Singh Road, has been promoted by the Kishorepuria Group of Companies. The 2 floor- Rs.1.10 crore project has about 11,000 sq.ft. of total retail space, and offers a wide range of products like garments, appliances, furniture, cosmetics, electronic items, among others. The mall, which has a parking space for 10 cars, and 50 motorbikes, has received great response- the average footfalls being 900-950. There are plans to further improve infrastructural facilities in the complex; a well-equipped food court is coming up, with Hindustan Lever Ltd. (HLL) as one of the possible partners. The East is fast emerging as a formidable retail market. The spread of retailing beyond Kolkata would create an integrated ‘retail zone’ which would change the way people in this part of India work and live.

UPCOMMING PROJECTS. Punjab weddings get colour.


Punjab will soon get malls specially designed for wedding like Omaxe mall coming up in Patiala. Marriages in Punjab government to acquire more gaiety, with wedding-malls coming up in the state. Multi-crore real estate major Omaxe is setting up a state of the art wedding-mall in Patiala, attracted by the state’s rich lifestyle and high per capita income. Spread over 2,75,000 square feet and with an investment of Rs.140 Crore, Omaxe’s weeding-mall is likely to be completed in two and a half years. The mall, located in the city near historical Baradari Gardens, will provide its customers shopping-cum-entertainment facilities. With a showroom, banquet halls, a hotel, and a multiplex, it will be a one-stop destination for the entire range of wedding related items. The mall will also have offer trousseaus, jewelleries, banquet items, beauty parlors, whitegoods, lifestyle products, furnatureand furnishings, floral, decorations, and mehndi artists. Right from getting to organising honeymoon tours, all kinds of services will be avialable at Omaxe’s wedding mall. Speaking to Business Standard, Senior Vice president Kunal Banergi said they chose Patiala in place of Ludhina, Jallandar and Amritsar because of high literacy (81 percent), high per capita income (Rs 28,354) and the royal legacy of the city. Moreover, Patiala is close to Chandigarh and Ludhina.

Benergi said that wedding market in India was of Rs 50,000 crore and it was growing.


On average, an upper middle class family spends between Rs 500,000 and Rs 15 lahg on wedding. Punjab has a high population of NRIs, who can spend about Rs 25 lakh on wedding. Keeping all these factors in mind, omaxe has designed a wedding-mall where a marriage can be arranged with all purchase, even at Rs 3 lakh, very much within the reach of an average Punjabi family. The wedding mall will have two huge banquet halls where four marriages can take place simultaneously But the Chief Characteristic of the mall would be the shopping complex, Banerji said, The objective was to aid shopping by saving the consumer frequent visits to the market.

Retail Education in the East


The retail sector, which is poised for robust future growth, needs more and more professionally qualified personnel, with specialized knowledge in retailing. It is thus necessary to have more and more business schools in the country, which offer specialized courses in retailing. The need for providing quality retail management education has been recognized by theICFAI Business School in Kolkata, which offers a comprehensive retail management programme that enables the students to critically analyze the retailing process, the environment within which it operates, and the institutions and functions that are performed. The course aims to make students aware of the differences between retail marketing strategy and financial strategy, and provides knowledge of merchandise management. The programme inculcates analytical skills useful for retail decisionmaking, and provides a foundation for those students who plan to make career in the field of retailing or related disciplines. The course covers critical topics like understanding the retail customer, and institutions; retail marketing strategies; retail organization & management; pricing strategies; retail selling; logistics & information systems, etc.

Recently, the International School of Business & Media has, in its newly inaugurated campus at Salt Lake, Kolkata, started offering a 2-year full-time Post Graduate Programme in Management, with retail management as on of the specializations. The course covers essential topics like retail organization & management; introduction to risk management; retail location analysis; branding the retail organization; retail marketing & sales strategy, etc. This course has been launched looking at the tremendous growth potential of the retail sector in the coming years, and aims to gear up students to the rapidly changing business environment. Quality retail education is necessary to create a vast pool of qualified retail management professionals who can tackle the challenges of this intensely competitive industry. To cater to the increasing demand for technically efficient workforce in the retail sector,


more and more management institutions in the country should design and introduce innovative retail management programmes.

Factors needed to promote the Sector in West Bengal A number of important issues need to be addressed suitably to foster the further growth, and ensure competitiveness of the retail sector in West Bengal/Kolkata. These can be summarized as follows : •The principal issue with the development of retail in Kolkata is the acquisition of appropriate spaces for retail, and the cost thereof in the city. One of the main components of the cost of such spaces is the incidence of tax in terms of Kolkata Municipal Corporation Act, 1980. The KMC Act stipulates that an amount of 40% of the annual value as determined u/s 174 of the Act will be the amount of tax, in addition to which the premises that are used for non-residential purposes (which includes all retail and commercial establishments), there will be an additional levy of surcharge of 50% of the above tax. This effectively translates into a tax of 60% on the annual value (being the gross annual rental reduced by 10% for mainten-ance ) of a property, which is an extremely high tax threshold. Formatted retail, which is a developing industry, cannot afford such high rates of tax which it must effectively bear to transparently acquire property for the conduct of its business in Kolkata. These rates are amongst the highest in the world, and discourage the growth of the retail business. The municipal tax in Kolkata is so high, that the total expense on commercial, rental premises becomes much more expensive than in other fast growing cities like Bangalore, Hyderabad, Chennai, etc.

Property Tax rates for commercial, tenanted premises in different cities:


Kolkata (KMC) 18.90

Banglore

Chennai

Delhi

Gurgaon

5.58

7.75

5.76

3.21

Navi Mumbai 3.00

(All Figures are Property Tax in Rs./sq.ft./month)

It is thus absolutely necessary for the concerned authorities to take necessary steps for rationalization of the municipal tax rates in Kolkata to prevent loss of business, employment, and development opportunities. •The relevant provisions of the Shops & Establishment Act stipulate that a commercial establishment of any kind (which includes a retail operation) must allow its employees one and a half day of leave for every week of work. It also stipulates the total number of hours that any establishment can remain open for business on any working day. In this competitive environment virtually every retail, entertainment and food business requires to conduct its business every day of the week and provisions like this severely inhibit their profitability. •A number of retail environments have been asked to pay an entertainment tax for the music that they play in their stores. In fact it has also been reported that such taxes also demanded if a television is used inside such an establishment. This is our view in punitive since such music or television is not intended to provide any formal entertainment. •There is confusion about the size, number and nature of the signage that a commercial establishment is allowed to display outside its premises. The KMC has of late begun to demand tax on such signage at the same rates as are applicable to hoardings. A standard needs to be instituted proportionate to the area occupied by a commercial establishment indicating dimensions of the free signage permitted by the establishmentso that there is no confusion that is allowed to persist in this connection.


•The issue of fixing of Maximum Retail Price (MRP) by manufacturers, which is making retailers uncompetitive, needs to be addressed urgently. •The rigidity of the Weights & Measures Act, which empowers the arrests of members from the Board of Directors of a company, is another issue, which demands immediate attention. Kolkata is an ideal location for the growth of the retail industry. The inherent advantages of

West Bengal/Kolkata

need

to

be exploited

fully

by

strengthening

the

governmental/administrative support mechanism. A comprehensive, rational retail support policy can go a long way in making the sector act as an engine of growth for the state economy.


Conclusion In India the retail sector is the second largest employer after agriculture, although it is highly fragmented and predominantly consists of small independent, owner – managed shops .There are over 12 million retail outlets in India , and organised retail trade is worth about Rs.12,90,000 crore (September,2003). The country is witnessing a period of boom in retail trade, mainly on account of a gradual increase in the disposable incomes of the middle and upper-middle class households. 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. The retail revolution, apart from bringing in sweeping, positive changes in the quality of life in the metros and bigger towns, is also bringing in slow changes in lifestyle in the smaller towns of India. Increase in literacy,exposure to media, greater availability and penetration of a variety of consumer goods into the interiors of the country, have all resulted in narrowing down the spending differences between the consumers of larger metros and those of smaller towns. However, the supply of quality real estate space would be instrumental in propelling the future growth momentum of the retail sector in India. The addition of better and affordable retail space would enable retailers to deliver more better-quality products and services to the consumers, resulting in increase in operational efficiencies and decline in costs for the supply chain. India is one of the complex real estate markets in the world due to the large degree of variation and inconsistence in the market practice and regulatory norms. A combined effort by both central and state governments in terms of appropriate zoning laws, transparency in ownership, and availability of loans for retail land, is very much necessaryfor reducing existing bottlenecks. Accordance of ‘industry status’ to retail in India is an issue that needs to be addressed soon. Recognition would ease financing prospects, as well as standardize and unify taxes


for the industry. An alignment of the retail sector with the tourism sector could also promote India as a global shopping hub. For the retail sector to achieve further growth, the spread of organised retailing has to become a national phenomenon. According to KSA Technopak, a leading consulting firm, the organised sector will grow to almost Rs.30, 000 crores by 2005, representing 6% of the total retail market. The top 6 cities will account for 66% of total organised retailing. Although many international retailers and brands still regard India as too difficult, they would welcome the opportunity to create an appropriate joint venture, if they felt India was changing. The growth of the organised retail industry in the country will mean thousands of new jobs, increasing income levels and living standards, better products, and services, a better shopping experience, and more social activities. ==============================o==============================


HOW DO INDIAN RETAILERS SELL THEIR PRODUCT?

This brings to broadly identify and categorize the types of retail marketing, which are defined as follows: 1. Store Retailing 2. Nonstore Retailing

Store Retailing  Departmental Store  Convenience Stores  Specialty Stores  Discount Store  Catalog Showroom


Non Store Retailling.  Direct Marketing  Automatic Vending  Direct Selling

Store Retailing Store retailing provides consumers to shop for goods and services in a wide variety of stores and it also helps the Consumers to get all the needed goods and services from one shop only. The different types of store retailing are given below: Departmental Store These stores are usually build in large area and keep variety of goods under one shed. It is usually divided into different sections like clothing, kids section, home furnishings, electronic appliances and other household goods. In a departmental store a consumer can buy variety of goods under one shed. Convenience Stores These are relatively small stores located near residential area, open for long hours seven days a week, and carrying a limited line of high turnover convenience products at slightly higher prices than departmental stores. Many such stores also have added takeout sandwiches, coffee and pastries. Off - Price Retailer These stores sell goods at low price with lower margins & higher volumes. These stores sell goods with deteriorated quality. The defects are normally minor. This target at the persons belonging to the lower income group, though some have a collection of


imported goods aimed to target the younger generation. The company owned showroom selling the seconds products is a typical example of off - price retailer. Specialty Stores These stores focus on leisure tastes of different individuals. They have a narrow product line with deep assortment such as apparel stores, sporting goods stores, furniture stores, florists and bookstores. These stores are usually expensive and satisfy the needs of selected consumers who have liking or preference for exclusive things. Supermarket These stores are relatively large, low cost, low margin, high volume, self service operations designed to serve total needs for food, laundry and household maintenance products. Supermarkets earn an operating profit of only 1 % on sales and 10% on net worth. Discount Store These stores sell standard merchandise at lower prices by accepting lower margins and selling higher volumes. The use of occasional discounts or specials does not make a discount store. A true discount store regularly sells its merchandise at lower prices, offering mostly national brands, not inferior goods. In recent years, many discount retailers have “traded up”. They have improved decor, added new lines and services, and opened suburban branches—all of which has led to higher costs and prices. And as some department stores have cut their prices to compete with discounters. Not only that, discount stores have moved beyond general merchandise into specialty merchandise stores, such as discount sporting goods stores, electronics stores, and bookstores. Catalog Showroom


Catalog showrooms generally sell a broad selection of high-markup, fast-moving, brand-name goods at discount prices. These include jewelry, power tools, cameras, luggage small appliances, toys, and sporting goods. Catalog showrooms make their money by cutting costs and margins to provide low prices that will attract a higher volume of sales. Catalog showrooms have been struggling in recent years to hold their share of the retail market.

Non Store Retailling.


It is another type of retail marketing. Different types of nonstore retailing are given below:

Direct Marketing Direct marketing has its roots in mail-order marketing but today includes reaching people in other ways than visiting their homes or offices, including telemarketing, television direct response marketing, and electronic shopping. Automatic Vending Automatic vending has been applied to a considerable variety of merchandise, including impulse goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot beverages) and other products (hosiery, cosmetics, food snacks, hot soups and food, paperbacks, record albums, film, T-shirts, insurance policies, and even fishing worms).

Direct Selling Direct selling which started centuries ago with itinerant peddlers has burgeoned into a $9 billion industry, with over 600 companies selling door to door, office to office, or at home sales parties. A variant of direct selling is called multilevel marketing, whereby companies such as Amway recruit independent businesspeople who act as distributors for their products, who in turn recruit and sell to sub distributors, who eventually recruit others to sell their products, usually in customer homes.

Shoppers’ Stop


Pioneers in organized retailing in India, Shoppers' Stop Ltd., was started by the Rahejas, with the very first outlet being in Mumbai ( a retail area of 4500 sq. ft.) in 1991. It now holds around 1,95,000 sq. ft. of retail space from Shoppers' Stop alone. It also has chain of stores in other formats, with Cross words and Shoppersstop.Com under its wings.  Shoppers' Stop, is a specialty chain of garment and accessory retail stores with outlets in Mumbai, Bangalore, Hyderabad, Jaipur, and New Delhi.  Crosswords is a specialty chain of books, music and gifts retail stores with outlets in Mumbai, Bangalore, Ahmedabad, Delhi, Pune, Nasik, Goa and Vadodara.  Shoppersstop.Com (India) Pvt. Ltd, is 100% subsidiary of Shoppers' Stop Ltd. It has been floated with the intention of breaking down location barriers and helping customers from around the world to "Feel the Shoppers' Stop shopping experience", online.

MARKETING MIX OF SHOPPERS’ STOP Product Shoppers’ Stop offers their customers a range of the finest national and international brands, and a quality and price assurance that is backed by their guarantee, stamped on every bill: "We are responsible for the goods we sell." With the increasing number of nuclear families, working women, greater work pressure and increased commuting time, consumers are looking for convenience. And, convenience is defined as having everything under one roof, longer hours and multiplicity of choice. Shoppers Stop has gauged the changing trends and in response to


this it houses a variety of products under one roof thus providing the customers with value for time in addition to value for money. The product range includes the following items: •

Cosmetics

•

Jewellery

•

Perfumes

•

Watches

•

Sun glasses

•

Bags

•

Apparels for men, women and children

•

Sports equipment

•

Home furnishings

Price Pricing is not as important as convenience, today’s consumer is more upbeat about `money spending' and more conscious about `time spending', and the consumer prefers shopping for most of their requirements from a single store. Most of the products at Shoppers’ Stop are branded. One of the prominent features of branded products is the fact that they are available at the same prices within a particular geographical region. Therefore, in terms of pricing its products Shoppers Stop can exercise only a limited amount of control. Place Shoppers' Stop's first outlet in Delhi opened in December last year that took the total number of stores to seven. The company has two stores in Mumbai and one each in Bangalore, Hyderabad, Jaipur and Chennai. The company is planning to open a store in Kolkata. Massive expansions have been planned for Delhi by opening four new centers. The objective is to make state-of-the-art malls to "make shopping comfortable.” Another place where the company intends to sell its products in a big way is the internet.


Promotion Shoppers' Stop has been positioned as a store that offers its customers an international shopping experience. In their efforts to provide this experience, they have held, numerous path breaking events and promotions, which have got them both national and international accolades besides the appreciation of their customers. As already taken up earlier some of the hugely popular promotional schemes taken by the company are:

o

The Festival of Britain

o

Parikrama

o

The Disney Carnival

o

DOTY - The Designer Of The Year

o

Valentines Day

Here we should remember that the four Ps of marketing mix represents the sellers’ view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. The sellers’ four Ps correspond to the customers’ four Cs. Winning companies are those who can meet customer needs economically and conveniently and effective communication.


SWOT ANALYSIS OF SHOPPERS’ STOP Strengths  Prime location  Experienced and competent management  Highly trained and motivated sales force  Brand equity  Large scale operations in various cities throughout the country allows them to reap the benefits of “economies of scale”  Large floor space allowing for better visual merchandising  Large area also allows to stock a large variety of products under one roof  Financial backing by the Raheja Group Weaknesses  A large organization structure leads to delayed decisions. This can prove fatal for a business in the dynamic fashion industry. Shoppers Stop has a centralised purchasing department in Mumbai, this fact sometimes results in delayed decisions in adapting to changing market trends  Large scale of operations sometimes acts as a barrier to personalized customer relations  Large scale operations lead to reduced flexibility by increasing the amount of overheads and a huge commitment in terms of fixed costs Opportunities  According to the Consumer Outlook study, consumers are generally satisfied with the service that organized retailers extend to them. More importantly, they are increasingly regarding these organized retailers as providing `value-for-money’. These findings indicate that large retailers will capture most of the higher consumer spending


 Apart from the metros, cities like Ahmedabad, Pune, Lucknow, Indore and Coimbatore have shown substantial retail presence. Most sport modern retail formats like supermarkets, department stores and specialty chains. These markets are expected to show exponential growth in the next few years. Thus Shoppers Stop has the opportunity to explore new markets Threats The time when retailers had to worry about competition only from their peers down the street has come to an end. Shoppers Stop is now facing increased competition in the form of international retail chains that are making a beeline towards the highly potential Indian markets. Moreover many big Indian business houses are also vying a space in the Indian retail scene

RETAIL MARKETING PROMOTION IN INDIA ROLE OF ADVERTISING AND DIFFERENT MEDIA . The most efficient method of reaching method of reaching these potential customers for most retail is the marketing tool known as advertising. For purposes of definition: Advertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. The definition points out the true role of advertising in the promotional mix of a store. • Advertising id non personal: The retailer cannot expect advertising to do all the selling. It will not replace personal selling effort where it is needed. Advertising and personal selling must complement one another. • Advertising can sell something besides a product: The retailer should use advertising to sell the service of the store. For many retailers, services are their only


differential advantage. For some retailers, selling ideas as also significant. If a retailer is trying to promote a civic cause o a unique or different retailing image, this idea may be presented through the store’s advertising. • Advertising is a paid form of promotion: The retailer can control the placement and content of the advertising for the store. • Advertising requires an identified sponsor: The retailer wants to be sure the store is identified. A retailer should take extra care to insure that a potential customer has no doubt as to the name of the store and where the store is located. As a retailer studied the store’s advertising program, factors to be considered include. 

Advertising’s effect on the retail image



Characteristics of available media



Advertising schedule



Advertising budget



Cumulative effect of advertising



Objective of advertising



Coordination of advertising with the other parts of

the marketing program. By examining these key factors, a retailer can improve his understanding of the role and capabilities of advertising. This understanding should in turn results in a more effective and more efficient advertising campaign. Each of these factors for effective advertising are equally important to well-planned advertising. Although advertising’s effect on the retail image will be discussed first, non of the seven advertising areas in many stronger than any other in the chain of advertising success.


VARIOUS MODES OF ADVERTISING . For an advertisement to be effective it must be noticed, read, comprehended, believed, and acted upon. For one who has no objective, nothing is relevant. It is very much important to set the objective of the ad to be delivered for any of the product. The product is either of the FMCG, Consumer Durable, Service product, etc. but even that the company is looking for the promotion activities which help them in promoting the product. Advertising objectives, like organisational objectives, should be operational. They should be effective criteria for decision making and should provide standards with which results can be compared. Furthermore, they should be effective tools, providing a line between strategic and tactical decision. Knowledge of the various available advertising media and their various methods of application for retail situation is a vital to a wellplanned, successful advertising program. For a given situation, there are particular media that would be appropriate for a retailer to use.  Outdoor

Advertising

 Transit

Advertising

 Special

Advertising

 Direct Mail Advertising  “Donation” Advertising  Newspaper Advertising  Magazine Advertising  Television Advertising

RETAIL MARKETING IN INDIA Retail marketing is the most important part of the entire logistics chain in a business especially in consumer related products. Without proper retailing the companies can't do their business. Retailing is the process of selling goods in small quantities to the


public and is not meant for resale. Retail is derived from the French word retailer, meaning to cut a piece off or to break bulk. There are various ways of making goods available to consumers like: •

Company to distributor to wholesaler to retailer to consumer

•

Company to salesperson to consumer

•

Company to consumers (online/ phone/ catalog ordering)

These three are among the most common ways of making the goods available to consumers. But in India the three layered system of distributor, wholesaler and retailer, forms the backbone of the front-end logistics of most of the consumer-good companies. In this system the company operating on all India basis appoints hundreds of distributors across the country that supplies to various retailers and wholesalers. Wholesalers in turn can either directly sell in the market or can supply to retailers. The current retailing system prevalent across the country is highly fragmented and unorganized. Anyone with some money and some real estate can open a small shop and become a retailer catering to the locality in which he opens the shop. There are a number of reasons behind this fragmented retail market. Some of the major reasons being:  Poverty and lower literacy levels.  Low per capita income.  Savings focused and less indulgence mindset.  Poor infrastructure facilities like roads etc.  Restrictions on intra-state good movement.  High taxes.  No exposure to media.  High import duties on imported goods.


 FDI in retailing is not allowed.  Retailing is not considered as a business or industry by the government.  Hitherto none of the business schools in India were offering specialized courses on retailing.  Expensive supply chain. Besides this there is other reasons too, which led to stifling of growth of organized segment of retailing sector and which instead led to highly fragmented market. Today in India we have more than 12mn retail outlets and most of then are family run and locally owned. There are very few nationally present retail stores. In India the process of buying and selling at these unorganized retail outlets, is highly characterized by bargaining and negotiations. But slowly with increasing influence of media and urbanization the market is shifting towards organized segment. Seeing the huge market size of retail business in the country and the current level of organized segment, many players have jumped into the fray and many are waiting for the right opportunity to enter it.

Present Retail Scenario In India Retail experts find Indian industry promising Retail Sales To Touch Rs. 30,000 Cr. By 2005 Mall Mania: The Developing Mall Culture In India The Traditional Retail Scene And The Challenge Posed By The Internet. Retail experts find Indian industry promising The retail movement in India has acquired the critical mass that is required for rapid acceleration in terms of industry growth as well as geographical spread. The Indian retail industry can no longer be called nascent.


The spread of super stores to the northern cities such as Delhi, Chandigarh, Jaipur and Kolkata is evidence of the fact that organized retailing in India has emerged from its southern bastion. The retailing boom is being driven by increased expectations as well as changing shopping behavior of the urban Indian consumer. With the increasing number of nuclear families, working women, greater work pressure and increased commuting time, consumers are looking for convenience. And, convenience is defined as having everything under one roof, longer hours and multiplicity of choice. On the supply side, the current inefficient supply chain in India, particularly for food items has led a few players to consolidate their operations to take advantage of economies of scale and match consumer expectations in terms of delivery as well as space. So, we have a situation where both demand and supply side dynamics are fuelling the growth of organized retailing in India, although improvements in the supply chain are yet to fully match with consumer expectations. The future growth need not necessarily come only from the big metros, where there already exists a good retail network. The fact that big Indian retail chains are moving into places like Indore or Chandigarh is an important indicator of future growth. For the Rs. 5000-crore organized retail industry it is, perhaps, time to tap the relatively smaller cities. Retail Sales To Touch Rs. 30,000 Cr. By 2005 Retail is exciting, and action in the sector promises to hot up. KSA a leading international consultancy believes the organized sector will grow six folds to almost Rs 30,000 crore by 2005. The share of organized sector in total retail sales will grow from one per cent now to six per cent by 2005.While projections can be slippery, hard facts point to exciting growth ahead for this sector. According to KSA, organized retailing is focusing on only SEC-A cities, India’s 23 largest cities. That is where a large portion of the country's urban population exists. Today 82 per cent of organized retailing comes from the top six cities and 12 per cent


from the next four. KSA says the top 10 cities provide 94 per cent of organized retail sales in India. By 2005, KSA projects the top six cities will account for 66 per cent of total organized retailing and the next four for 20 per cent. The top 10 cities will account for 86 per cent of organized retail sales. There could be variations in growth patterns in different segments. The second half of the top 10 cities will provide large growth for food and groceries, while the top six would still be the growth centers for consumer durables, believes KSA. The spread of organized retailing is unlikely to be a national phenomenon yet. This appears to be the case so far. South India, particularly Chennai, Hyderabad and Bangalore, have seen the emergence of chain stores or large format stores.

While

garment stores have been around for sometime, other segments like food and groceries, consumer durables and even books and music have witnessed the emergence of organized players in large cities in South India. The lack of trained manpower or alternatively the tremendous scope the sector has to provide employment is another issue. Mall Mania: The Developing Mall Culture In India Till late last year, there were just three international style shopping malls in India --Spencer in Chennai, Crossroads in Mumbai, Ansal Plaza in New Delhi and Sriram’s Arcade in Kolkata . By the end of 2001, that number will have jumped to at least 20. It looks like a virtual stampede. Fifteen players with a cumulative investment of Rs 375 crore are set to change cityscapes across India. In the next one year, close to 40lakh square feet of retail space will be developed. In three years, this will rise to 70-lakh sq ft. As the retail industry evolves, consumers want more variety before making their purchase decision. A study on consumer outlook suggests that over 80% of consumers


want a wide range of products at hand while shopping. This signifies that people are finally ready for multi-option complexes. Many old-time corporates are seriously considering using their idle assets. It makes sense for landowners to develop it and keep the returns rather than sell it outright or even lease it, especially when there is opportunity here. It is perhaps the best way to use an idle real estate asset. The limited kitty of brands has yet another significant knock-on effect - the typical size of Indian malls. In the US and South-East Asia, malls are as large as 50 lakh sq ft. Spencer is by far the largest mall in India - it occupies 7 lakh sq ft and even that is dwarfed by Asia's largest mall, the 4-million sq ft mega mall in Malaysia. Even the 26 malls that are being planned are likely to measure between 50,000 sq ft and 2 lakh sq ft. The Indian mall cannot offer too many choices in terms of brands. So, developing a very large mall can never be sustainable. The Traditional Retail Scene And The Challenge Posed By The Internet. The Internet is changing the structure and definition of tradable services worldwide, according to the World Trade Organization’s report on Electronic Commerce. It predicts that the Net will profoundly transform inter-organizational commerce, retail, and Government procurement sectors worldwide. The ripple-effect of these changes is affecting the sale of items like books, PCs, apparel, tickets and music in advanced Internet economies like the U.S. -- and will soon impact India as well. Close to $7.8 billion worth of retail goods were sold via the Net in the U.S. in 1998. Deep product selection, easy shipping, and attractive online promotions made items like books and apparel a favourite with Net shoppers.


Leading online service America Online (AOL) reported that the majority of the goods sold in the record-breaking Christmas '98 season (amounting to over $1 billion) consisted of toys, apparel and books. And it is actually in the business-to-business sector, and not the business-toconsumer sector, that the Net is expected to have its most dramatic impacts as companies hook up Intranets and Extranets to cut costs, improve efficiency, and create whole new market spaces. Such trends are becoming visible in the Asian context as well. For instance, the site of trade information publisher AsianSources.com, a business-to-business trade inquiry hub, is facilitating millions of dollars of international trade leads for Asian companies in the manufacturing, pharmaceutical and apparel sectors. From humble email messaging and real-time market research to online sourcing and e- retailing, the Net has much to offer Indian businesses. Sectors like the apparel industry have only recently begin to sit up and take notice of the potential of e-business for a wide range of activities in apparel design and development, such as online brand building, visual merchandising, and data warehousing. Retailing will undergo tremendous change in India in the next decade, according to Simon Bell, principal consultant for retail practice at A.T. Kearney (India). One of the key global trends in the retail industry, is the "battle of the formats" between different kinds of outlets: value discounters, specialty stores, small independents, mega-stores, and non-store retailing. In addition to catalogue and Teleshopping, a new but fast growing segment in the non-store category of outlets is the eretail center, or Web-based merchandising driven by e-commerce. Online sales for the U.S. apparel industry amounted to $157 million in 1998, but will shoot up to at least $650 million by year 2001.


These trends will soon be replicated in India as well. According to estimates by the year 2005, more than 20 per cent of the apparel retail turnover in India would be accounted for by organized chains, who will use sophisticated information technology to cut costs, improve market responsiveness and manage customer loyalty programs. This new trend is best typified by Shoppers' Stop, which has invested heavily in retailing technology such as an ERP system and has also launched a Web site

www.shoppersstop.com. The company is "determining" integrated customer demographic and psycho graphic information from multiple offline and online sources to better understand customer buying habits, said Mr. Naveen Singh, marketing manager of Shoppers' Stop. In fact, quite a few Indian apparel organizations are already online, with "brochureware" Web sites providing basic information - such as the Indian Apparel Export Promotion Council, Balaji Garments, Polo India, Meenakhi Sarees, and www.apprelindia.com. There are hardly any examples of third-party business-to-business sites in India, which could serve as online hubs for strengthening cooperation and information sharing between apparel manufacturers and retailers for mutual growth and business opportunities. Sites like www.clothesnet.com and www.fashionwindows.com in the U.S. are superb examples of online business communities geared towards the apparel sector. They feature email newsletters, searchable business inquiry message boards, and directories of companies offering services like visual merchandising and niche garment design. E-retailing is moving into the accelerated growth stage in the U.S., but is still at the early development stage in India. Leveraging Net-based technologies will be key for


apparel companies and brands wishing to operate at the "warp speed" of the informationage economy. The Web will allow apparel stores to make more products more accessible to more consumers. E-commerce in India is very much alive, of course, with sites offering books for sale in Bombay, vegetables in Delhi, and movie tickets in Bangalore. IDC (India) estimates that the value of sales over the Net in India will mushroom to Rs.1,200 crore in year 2001, if the Internet user base takes off. Sites like Rediff-on-the-Net already have about 20,000 registered users for their ecommerce service, which was launched in August 1998. 90 per cent of the payments occur via credit cards, and 10 per cent via cheques. The average purchase amount is Rs. 600. Online retailers must ensure smooth logistics, encourage repeat traffic, anticipate consumer needs, offer slick navigation, and build strong online relationships with Internet users. The Indian apparel sector however, faces other challenges in areas like urban land market ceilings, lack of industry status, conservative consumer spending habits, neglect of rural markets, lack of confidence from the financial community, and low levels of professionalism. Besides, the Indian fashion industry is just about a decade old, as compared to more than a century for Western Counterparts. And as compared to other emerging economies like Brazil and South-East Asian countries, India is 20 years behind in adoption of large-scale retail models. However, efforts are on to clear these hurdles and move ahead smoothly and swiftly. Some of these are as follows:  To better equip the Indian garment industry with nationwide market grasp, the National Council of Advanced Economic Research (NCAER) will take on the apparel industry as a major focus for a future study.  Educational institutes like NIFT are stepping up course offerings and internship programs for students in areas like Internet marketing.  In terms of online assistance, more than a hundred Web solutions companies have sprung up all over India, offering services ranging from basic Web page publishing to


international marketing and consulting strategies. Companies like Polaris and Net Base Computing are already working on Web-based solutions for the retail industry.  The drivers for creating an organized, modernized retail sector for Indian apparel will thus be factors like economies of scale, time-to-market, and the use of information technologies like the Internet.

International Retailers eyeing Indian Market.

Retail giants heading towards Indian stores.

A plethora of International apparel brands and retail giants are waiting to capatilise on the Indian market place in a big way. If you are thinking about the growing importance attached to India, attribute it to the country’s rise as global business process outsourcing (BPO) hub. Indian Gen Y, earning loads of ‘disposable’ cash in the BPOs, has been found to the single largest consumer for international apparel brands. International brands and retailers have released that their brands have a high recall values amongst the urban Indian youth, even when their products are not present in the world and now scouting for opportunities. Tommy Hilfiger, the latest entrant in the market has decided to open seven exclusive stores by October 2004 and three more by Feb 2005.


International Retailers eyeing Indian Market. Retailer

Type

Status

Wal-Mart

Hypermarkets

Wait & watch

Marks & Spencer

Lifestyle stores

Already in

7-Level

Supermarkets

Evaluating

Carrefour

Multi-format retailer

Postponed Entry

Auchan

Hypermarkets

Evaluating

Shoprite

Supermarkets

Opening in Mumbai.

Dairy Firm

Multi-format retail

Tied up with RPG

Metro

Cash & Carry

Already in

Mango

Apparel retail

Already in


Landmark

Lifestyle stores

Already in

*Source: The Franchising World.

Wal – Mart plans to enter India.

The Indian Retail sector may soon see the world’s biggest retailer, Wal-Mart Stores, Inc. on its radar. The $245billion company has reportedly initiated studies on the Indian market and is working on a big-bang entry, once FDI norms are relaxed.The company is interested in India as a destination for stores of there own, exploring possible opportunities for presence. However, for business reasons, Wal-Mart does not say much about specific investment plans. The US-based gaint operates 1,494 stores in the international market. Wal-Mart plans to open 120 to 130 additional stores in the existing markets in current fiscal.


Anglo-Dutch petroleum giant Shell is coming to expand its retail marketing activities in India Anglo-Dutch petroleum giant Shell is committing a sum of Rs 250 crore to expand its retail marketing activities in India. Vikram Mehta, chairman of Shell group of companies in India, said the petrol stations will be established in the South. Shell, which announced the launch of its first petrol station in India at Bangalore after a gap of 28 years, intends to launch these stations on its own. “We are not willing to disclose how many stations will be established for this amount. Our national roll-out will occur after the first phase is completed,” Mr Mehta said. Shell is the single largest corporate investor in India, having invested $825m (around Rs 3,500 crore), he added.

It has the permission to launch as

many as 2,000 petrol stations. The giant got the Union government’s nod for the retail foray only in September this year. The group intends to adhere to the prescribed norms of opening petrol stations in rural centres. The government norms stipulate that 5.5% of each player’s petrol station network be in rural areas. The group has a MoU with MRPL to lift the stock for petroleum. MRPL, which is now a part of the ONGC stable, runs a 12m tonne refinery in Mangalore. Each Shell station will stock petrol and diesel, besides


having a convenience store. Mr Mehta said that Shell intended to stick to knitting and was not looking at investing in any petro-chemical venture in India.

Conclusion How can it be done? (Past,Present & Future) For a start, these retailers need to invest much more in capturing more specific market intelligence as well as almost real-time customer purchase behaviour information. The retailers also need to make substantial investments in understanding/acquiring some advanced expertise in deve-loping more accurate and scientific demand forecasting models. Reengin-eering of product-sourcing philosophies - aligned more towards collabo-rative planning and replenishment should then be next on their agenda. The message, therefore, for the existing small and medium independent retailers is to closely examine what changes are taking place in their immediate vicinity, and analyse whether their current market offers a potential redev-elopment of the area into a more modern mult i-option destination. If it does, and most commercial areas in India do have this potential, it would be very useful to form a consortium of other such small retailers in that vicinity and take a pro-active approach to pool in resources and improve the overall infrastructure. The next effort should be to encourage retailers to make some investment in improving the interiors of their respective establishments to make shopping an enjoyable experience for the customer.


CONCLUSION FOR GROWTH Finally, the most important determinant of our growth is the quality of our people. We are deeply privileged to continue to attract the very best talent as the number one preferred employer at leading campuses. We are also encouraging diversity in our talent skills, especially for our newer business-es, and are also bringing in a large number of talented women. Our training programmes have been revamped to expose entrants to local and global business -- they spend time in Indian villages and international cities -all within a 12-month training programme. HLL's wide variety of

categories and

Unilever's global operations provide enormous development opportunit-ies through organised career planning. A lot of emphasis has always been placed on skill development -- today we are also concentrating on building individual and leadership capabilities. We offer an energising and empower-ing environment enabled by creating small teams focussed on key initiatives. We have found this the best way of combining both scale and speed. Deeper in the company, in factories and offices, we are unleashing the talent and creative potential of all employees through initiatives such as TPM.


In conclusion, let me say that HLL's most valuable assets are its brands and people. Today's market is very dynamic and increasingly competitive. We have confidence in our strategy and are learning to grow even in declining markets. We are putting in place key enablers to build our capability for sustained high performance. We have brands with rich heritage and strong consumer equity. We have people who bring the power of their ideas and execution to exploit the full potential of our brands towards delivering continued profitable growth for Hindustan Lever.

CONCLUSION

How do Indian retailers sell their product? The Indian retail industry is now beginning and growing day by day. multi brand. Even Ebony is trying to follow the chain system and very soon they are planning to open their outlet in Gujrat. They are strongly tied to independent intermediaries, which they cannot easily give up. But they must eventually realign themselves with the high-growth vertical marketing systems on less attractive terms. Furthermore, vertical marketing systems constantly threaten to bypass large manufacturers and setup their own manufacturing. The new competition in retail marketing is no longer between independent business units but between whole systems of centrally programmed networks (corporate, administered, and contractual) competing against one another to achieve the best cost economies and customer response. In India the retail sector is the second largest employer after agriculture, although it is highly fragmented and predominantly consists of small independent, owner – managed shops .There are over 12 million retail outlets in India , and organised retail trade is worth about Rs.12,90,000 crore (September,2003). The country is witnessing a period of boom in retail trade, mainly on account of a gradual increase in the disposable incomes of the


middle and upper-middle class households. 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. The retail revolution, apart from bringing in sweeping, positive changes in the quality of life in the metros and bigger towns, is also bringing in slow changes in lifestyle in the smaller towns of India. Increase in literacy,exposure to media, greater availability and penetration of a variety of consumer goods into the interiors of the country, have all resulted in narrowing down the spending differences between the consumers of larger metros and those of smaller towns.

BIBLIOGRAPHY Books: 1. Philip Kotler

--

Marketing Management

2. V. K. Dubey

--

Retail Management

Journals: 1. Business World 2. The Franchising World. Internet: 1. francchiseindia.com 2. Google.com 3. Altavista.com


28314264 Amarish Thesis Retail Marketing in India

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