CHAPTER-1

INTRODUCTION

1.1 Retail Industry

The word "Retail" originates from a French-Italian word. Retailer-someone who cuts off or

sheds a small piece from something. Retailing is the set of activities that markets products or

services to final consumers for their own personal or household use. It does this by

organizing their availability on a relatively large scale and supplying them to customers on a

relatively small scale. Retailer is a Person or Agent or Agency or Company or Organization

who is instrumental in reaching the Goods or Merchandise or Services to the End User or

Ultimate Consumer.

Retail is India’s largest industry. It accounts for over 10 per cent of the India’s GDP and

around eight per cent of the employment. Retail sector is one of India’s fastest growing

sectors with a 5 per cent compounded annual growth rate. India’s huge middle-class base and

its untapped retail industry are key attractions for global retail giants planning to enter newer

markets. Driven by changing lifestyles, strong income growth and favourable demographic

patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in

India could be worth US$ 175-200 billion by 2016.

Emerging markets such as India and China are the final frontier for retail taking the focus

away from saturated Western markets. Since 2001, 49 global retailers entered 90 new

markets, but at the same time, 17 retailers left markets in 2005.

The Indian retail industry in valued at about $300 billion and is expected to grow to $427

billion in 2010 and $637 billion in 2015. Only three percent of Indian retail is organized.

1
Retailers of multiple brands can operate through a franchise or a cash-and-carry wholesale

model.

The Indian retail environment has attained $ 210bn quiche, witnessing a strong development

pace of five percent per year as per latest survey by Price Waterhouse Coopers. As per the

estimation 200 malls, presenting additional 50mn sq ft of retail space will be ready in next

two years. Existing retail space in 160 malls is nearly 32mn sq ft

Fig 1.1 Indian Retail Market

The analysts foresee bright future of the retail sector. A huge number of shopping malls,

nearly 100, have come up in the recent past, generating 20mn sq ft. retail space, extending

more space of about 12mn sq ft to it. Nearly 60 malls are on the verge of completion and may

be operational by the end of current financial year. A forecasted number of nearly 200 malls,

in a move to make additional 50mn sq ft of retail space, will be completed within the next

two-years.

India retail industry is expanding itself most aggressively, as a result a great demand for real

estate is being created. Indian retailers preferred means of expansion is to expand to other

2
regions and to increase the number of their outlets in a city. It is expected that by 2010, India

may have 600 new shopping centres.

In the Indian retailing industry, food is the most dominating sector and is growing at a rate of

9% annually. The branded food industry is trying to enter the India retail industry and convert

Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists

of non- branded items.

The global retail giants like Wal-Mart, Gap, Tesco, Versace, K-Mart/SEARS, Carrefour,

ZARA, FCUK, Fendi, NEXT, Mother Care, lKEA, Trussardi, DKNY and Debenhams have

made plans to march in the Indian market.

ESPRIT, GUESS, Chanel, Mango and many other global marked their presence in India by

implementing licensing and franchisee agreements. The global retailers on the line of control,

awaiting the green signal from Govt. to enter Indian retail market. However, the current

scenario has encouraged Indian players to speed up retail expansion and fresh retail ventures.

Companies like Shoppers Stop, Trent, Reliance, Lifestyle, Pantaloons Tanishq, Crossroads,

Akbarallys and Tanishq already have planned to invest over Rs 5,000cr. Trent is on the edge

to take both its brands Star India Bazaar and Westside to new cities, meanwhile Shoppers

Stop has recently geared up for expansion of present ones and to add 11 new stores including

two hypermarkets. Also, Pantaloon has planned to add eight Big Bazaar malls within the next

6 to 8 months.

After partition, Reliance Industries Ltd (RIL) is substantially getting ready to enter in field of

retailing. RIL is poised to emerge as the single largest player in this sector. On the other hand,

Tosco’s, Wal-Marts or Safeway does ultimately enter in the country. So finally, Shoppers

Stops, Westside, Pantaloons and West sides in coming years have will face stiff competition.

3
 Fig 1.2 Map of Income classes

STRUCTURE OF RETAIL INDUSTRY

The retail industry continued in India in the form of Kiranas till 1980.Soon, following the

modernization of the retail sector in India, many companies started pouring in the retail

industry in India like Bombay Dyeing, Grasim etc. As has been mentioned earlier the retail

sector in India can be widely split into the organized and the unorganized sector.

 Organized Retail Sector

After 50 years of unorganized retailing and fragmented Kiranas stores, the Indian

retail industry has finally begun to move towards modernization, Systematization and

consolidation. Today, modernization is the catch phrase and the key to understanding

retail in the next decade. Traditionally retailers Have had localized operations. This

localized nature of the industry is Changing as retailers face lower growth rates and

4
threatened profitability in home Markets. New geographies help them sustain top line

growth in Addition to enabling global sourcing and encasing on global advantages of

getting the best products at optimum prices.

Fig 1.3 Organized retail market

There has been a boom in retail trade in India owing to a gradual increase in the

disposable incomes of the middle-class households, as a result of good performance

of IT, Service and Infrastructure sectors. More and more players are entering the retail

business in India to introduce new formats like malls, supermarkets, discount stores,

department stores and even changing the traditional looks of bookstores, chemist

shops, and furnishing stores.

Organized retail formats prevalent globally

Supermarkets: Self-service 4000-20000 sq ft stores with shopping carts typically

focused on regular groceries, household goods and personal care

Hypermarkets: Huge stores over 40000 sq ft situated outside the town with ample

parking space aimed for bulk purchases stocking electronics, furniture and clothing.

Carrefour is the global major in this format.

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Mass merchandise: Large destination stores that sell everything at competitive

prices. They have cross-country chain operations with centralized sourcing and a hub-

and-spoke distribution. Makro and Sams Club are leading players in this format.

Discounters: Aimed at bargain buyers offering less choice but deep discount on bulk

sourcing deals through controlled inventory. Aldi is the world leader in this format.

Convenience stores: Small stores located at convenient points like petrol stations

working round the clock.

Fig 1.4 Growth of retail industry

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7
 CHAPTER -2

RETAIL INDUSTRY STRUCTURE

World over, the retail segment has performed exceptionally since its inception in the

20thcentury. It is currently the biggest industry in the world with sales of $7.2 trillion, every

10th billionaire in the world today is a retailer and 25 of the top 50 Fortune 500companies are

in retail.

The Indian retail story couldn’t have been more different. India has approx. 15 million retail

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

retail is just 2 sq. Ft or 0.2 sq. meters with fragmented kirana stores being the predominant

players. Retailing in India had remained in the unorganized sector andlargely untouched by

corporates till very recently. However, times are changing. With the GDP at an all-time high

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

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

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

 At 271 million, India has one of the largest consumer bases in the world, forming

27% of the total population.

 A high spending community below 45 years comprises 81 percent of the population.

 A young population with 54% population below 25 years.

 Increased literacy from 44% in 1965 to 70% in 2003

 Increase in workingwomen from 1.3 million in 1961 to 4.8 million in 1998

 Increase in media penetration to 38-million cable household and 80-million TV

household in 2001

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 Fig 2.1 Business world marketing white book 2005

The overall size of the retail market in India is estimated at Rs 9300 billion (2003-04) and is

expected to have grown at 5% p.a. making organized retailing a Rs 350 billion market in

2005 according to INDIA RETAIL REPORT 2005. Currently, the sector is highly

fragmented and dominated by small individually owned businesses. In a developing country

like India, bulk 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 71per

cent of retail sales in 2002. The remaining 29 per cent of retail sales are non-food items. The

share of food related items has declined from 73 per cent in 1999, as with income growth,

Indians, like consumers elsewhere, spent more on non-food items compared with food

products.

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2.1 Emerging sectors

Retailing, one of the largest sectors in the global economy, is going through a transition phase

not only in India but the world over. For a long time, the corner grocery store was the only

choice available to the consumer, especially in the urban areas. This is slowly giving way to

international formats of retailing. The traditional food and grocery segmenthas seen the

emergence of supermarkets/grocery chains (Food World, Nilgiris, ApnaBazaar), convenience

stores (Convenience, HP Speedmart) and fast-food chains(McDonalds, Dominos).

It is the non-food segment; however that foray has been made into a variety of newsectors.

These include lifestyle/fashion segments (Shoppers Stop, Globus, LifeStyle,Westside),

apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies,Music World,

Crosswords, Landmark), appliances and consumer durables (Viveks,Jainsons, Vasant & Co.),

drugs and pharmacy (Health and Glow, Apollo).

The emergence of new sectors has been accompanied by changes in existing formats aswell

as the beginning of new formats:

• Hypermarts

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

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

• Convenience stores, typically 750-1,000sq. ft.

• Discount/shopping list grocer

The traditional grocers, by introducing self-service formats as well as value added services

such as credit and home delivery, have tried to redefine themselves. However, the boom in

retailing has been confined primarily to the urban markets in the country. Even there, large

chunks are yet to feel the impact of organised retailing. There are two primary reasons for

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this. First, the modern retailer is yet to feel the saturation effect in the urban market and has,

therefore, probably not looked at the other markets as seriously. Second, the modern retailing

trend, despite its cost-effectiveness, has come to be identified with lifestyles.

In order to appeal to all classes of the society, retail stores would have to identify with

different lifestyles. In a sense, this trend is already visible with the emergence of stores with

an essentially `value for money image. The attractiveness of the other stores actually appeals

to the existing affluent class as well as those who aspire for to be part of this class. Hence,

one can assume that the retailing revolution is emerging along the lines of the economic

evolution of society.

2.2 SHARE OF ORGANISED

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Organised retailing is spreading and making its presence felt in different parts of the country.

The trend in grocery retailing, however, has been slightly different with a growth

concentration in the South.

However, the Mecca of retailing is undoubtedly Chennai. What was considered a`traditional,

conservative and `cost-conscious market, proved to be the home ground for most of the

successful retail names – Food World, Music World, Health and Glow, Vitan, Subhiksha and

Viveks -to name a few.

The choice of Chennai as the `retail capital has surprised many, but a variety of factors acted

in its favour. Chennai, in spite of being a rapidly growing metropolis offers reasonable real

estate prices, one of the most critical elements for the industry. Chennai has been witnessing

a high industrial growth and increasing presence of the MNCs, both in the IT sector as well as

outside it. The industrial boom has led to the emergence of new residential areas with

aggregation of professionals as well as a rapid increase in the number of `double-income

households and growth of the nouveau riche/upper middleclass with increased purchasing

power. These have been combined with the increasing need for touch and feel shopping

(especially for the large migrant population). All the factors have acted favourably in

nurturing the industry.

2.3 KEY CHALLENGES

1) Location

"Right Place, Right choice"

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Location is the most important ingredient for any business that relies on customers, and is

typically the prime consideration in a customer’s store choice. Locations decisions are harder

to change because retailers have to either make sustainable investments to buy and develop

real estate or commit to long term lease with developers. When formulating decision about

where to locate, the retailer must refer to the strategic plan:

• Investigate alternative trading areas.

• Determine the type of desirable store location

• Evaluate alternative specific store sites

2) Merchandise

The primary goal of the most retailers is to sell the right kind of merchandise and nothing is

more central to the strategic thrust of the retailing firm. Merchandising consists of activities

involved in acquiring particular goods and services and making them available at a place,

time and quantity that enable the retailer to reach its goals. Merchandising is perhaps, the

most important function for any retail organization, as it decides what finally goes on shelf of

the store.

3) Pricing

Pricing is a crucial strategic variable due to its direct relationship with a firms goal andits

interaction with other retailing elements. The importance of pricing decisions isgrowing

because todays customers are looking for good value when they buymerchandise and

services. Price is the easiest and quickest variable to change.

4) Target Audience

"Consumer the prime mover"

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"Consumer Pull", however, seems to be the most important driving factor behind the

sustenance of the industry. The purchasing power of the customers has increased to a great

extent, with the influencing the retail industry to a great extent, a variety of other factors also

seem to fuel the retailing boom.

5) Scale of Operations

Scale of operations includes all the supply chain activities, which are carried out in the

business. It is one of the challenges that the Indian retailers are facing. The cost of business

operations is very high in India.

2.4 Major Industry Players

Nanz in North India, Nilgiris in the South, Pantaloon in the East and Crossroad in the West

were the pioneers of the retail revolution in India. Nanz faced several obstacles (See Case

Study) in their business and had to finally down their shutters. Nilgiris, due to some strange

reason, did not see any logic to expand beyond the southern frontiers. Pantaloon went to scale

up and become bigger and bigger to form the Future Group, that is now omnipresent in

almost all formats right from small groceries to e-tailing. Crossroads in Mumbai imparted

some valuable lessons to their parent, the Pyramid Group, who has since then gone on an

expansion drive with other formats of retailing in different cities.

The big players in Indian retail landscape now are the Future Group, Shoppers Stop,

Westside, Subiksha and RPG Spencer. The newcomers who are knocking at the gates are

Reliance Retail, Bharti Walmart and Aditya Birla Trinethra. Here, we intend to do a brief

profiling of the major players in order to understand the retail business in a better manner.

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The Future Group

The Future Group, which was earlier known as PRIL (Pantaloon Retail India Limited) began

as a trouser manufacturer in the mid-1980s. The Future Group is divided into six verticals –

Future Retail, Future Capital, Future Brands, Future Space, Future Media and Future

Logistics. The Future Group started operations in the mid 1987s by in corporating the

company as Manz Wear Private Limited. The company went on to manufacture readymade

trousers under the “Pantaloons” brand name. It came out with a public issue in 1991 and later

changed their name to Pantaloon Fashions (India) Limited (PFIL).

The first exclusive men’s store called Pantaloon Shoppe was inaugurated in 1992.Pantaloons

went for a franchisee route to expand the number of retail outlets and by1995, it had reached

to a crucial number of 70. The first departmental store called Pantaloons was opened in

Kolkata in 1997 with an investment of Rs 0.7 million. The store was a success and recorded

revenues of Rs 100 million within the first year of operations. In 1999, the company’s name

was changed to Pantaloon Retail (India)Limited (PRIL).

The success of Pantaloons departmental stores encouraged PRIL to come up with other

retailing formats such as “Big Bazaar” to retail low cost general merchandising, and “Food

Bazaar” to retail food products. As of 2005, the Future Group has 3.5 million sq ft of retail

space and over 100 stores across 25 cities in India. It employs more than 12,000people and

has a customer base of more than 120 million.

Kishore Biyani, the promoter of the group who likes to address himself as “Chief Knowledge

Officer” has plans to launch 18 formats and over 3,340 stores, thereby turning the Future

Group into a US$7 billion company with over US$1 billion in profits by the year 2010.

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Shoppers Stop

Shoppers’ Stop, promoted by the real estate group K Raheja, was one of the first movers to

have set up a large retail outlet in New Delhi with international ambience. Shopper’s Stop Ltd

now has a considerable presence all over the country with 36api 7 lakh square feet of retail

space and stocks over 200 brands of garments and accessories. The stores are spread all over

India with presence in Mumbai, Delhi, Bangalore, Hyderabad, Jaipur, Pune , Kolkata,

Gurgaon, Chennai & Ghaziabad.

Shoppers’ Stop is also very well known for having pioneered several quality retailing

concepts in India like CROSSWORD, Hyper CITY and Mothercare. They are the only

retailer from India to become a member of the prestigious Intercontinental Group of

Departmental Stores (IGDS).

Shoppers’ Stop is positioned as a family store delivering a complete shopping experience.

With its wide range of merchandise, exclusive shop-in-shop counters of international brands

and world-class customer service, Shoppers’ Stop brought international standards of

shopping to the Indian consumer providing them with a world class shopping experience.

Shoppers’ Stop’s core customers represent a strong SEC A skew. They fall between the age

group of 16 years to 35 years, the majority of them being families and young couples with a

16
monthly household income above Rs. 20,000/- and an annual spend of Rs.1,50,000/-. A large

number of Non – Resident Indians visit the shop for ethnic clothes in the international

environment they are accustomed to.

TREND-WESTSIDE

Westside has 25 outlets across 17 cities in India offering a variety of designs and styles in

garments, footwear and accessories, as table linens, artefacts, home accessories and

furnishings. Well-designed interiors, sprawling space, prime locations and coffee shop

enhance the customers’ shopping experience.

Trent also runs another chain of retail stores called Star India Bazaar. Launched in 2004, Star

India Bazaar provides a large assortment of high quality products made available at the

lowest prices coupled with a unique shopping experience. Star India Bazaar is located in

Ahmedabad and offers a wide choice of staple food, beverages, health and beauty products,

vegetables, fruits, dairy products, consumer electronics and household items at the most

affordable prices.

Trent has also recently acquired a 76 per cent stake in Landmark, one of the largest books and

music retail chains in India. Landmark commenced its operations in 1987 with its first store

in Chennai, and now has nine stores in the major metros of the country. Earlier Landmark

was focused on books, stationery and greeting cards. In 1996 it added music to its product

portfolio and also started the trend of stocking curios, toys, music, CDs and other gift items.

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Reliance Retail

With a vision to generate inclusive growth and prosperity for farmers, vendor partners, small

shopkeepers and consumers, Reliance Retail Limited (RRL), a subsidiary of RIL, was set up

to lead Reliance Group’s foray into organized retail. The first store christened “Reliance

Fresh” opened in November 2006 at Hyderabad. Within a few months they have now opened

stores in Mumbai, Pune and Ahmedabad and plans foray into other cities on a rapid scale.

On June 26, 2006, Mukesh Ambani, Chairman and Managing Director, Reliance Industries

Limited, announced a Rs 25,000-crore investment in the retail sector.

Reliance Retail started its retail operation with “Reliance Fresh”, a grocery store that sells

vegetables, fruits, personal care items and other food products. Soon, these retail outlets will

also be selling apparel and footwear, lifestyle and home improvement products, electronic

goods and farm implements and inputs. They will also offer products and services in energy,

travel, health and entertainment. In addition to this, partnerships would be developed to bring

the best of global luxury brands to India as well.

Reliance Retail plans to extend its footprint to cover 1,500 Indian cities and towns with

outlets of a varied format, a mix of neighbourhood convenience stores, supermarkets,

18
specialty stores and hypermarkets. Reliance also plans to open restaurant outlets, financial

services marts and tourism counters within its stores.

Mukesh Ambani’s ultimate ambition seems to be to create the Indian equivalent of Wal-Mart

by scaling up the business to unprecedented heights to reach every nook and corner of the

country. With its retailing venture, Reliance expected a revenue target of US $20billion

through its retail operations by 2010. Over a span of five years, RRL expects a20% return-on-

investment.

Bharti Wal-Mart

Bharti Retail (Pvt.) Ltd. Unveiled the roadmap for its retail venture on 19th February,2007

envisaging an investment of $2.5 billion with expectation of revenue of $4.5 billion (about

Rs. 20,000 crore) from this business by 2015. The first retail outlet is expected to open

somewhere in the month of August.

Bharti’s plan is to invest $2.5 billion by 2015 and open stores across all major cities. This

investment would be only for setting up front-end stores. The modalities for its back-end

linkage, including its joint venture with the world’s largest retailer Wal-Mart, are in the

process of being worked out.

A high-level team from Wal-Mart was visited India in the later part of February to workout

the details of the back-end chain. While Bharti would manage front-end of the retail venture,

Wal-Mart would be involved in the back-end, including logistics, supply chain and cash-and-

carry, he added.

However, Bharti and Wal-Mart have been facing stiff opposition from the left parties and

other political outfits who fear that the entry of the Bentonville giant will make life difficult

19
for the small grocers and create massive unemployment. They also expect Wal-Mart to take a

tough stance on lowering prices and force farmers to sell their produce at lower rates. A

lurking fear of monopolistic regime in the retail sector is also enhancing their fears. Both

Bharti and Walmart are presently having a tough time in convincing the ministers, politicians,

agriculturists, the NGOs and other pressure groups that their business model would serve to

work in the best interests of all the stakeholders.

VISHAL RETAIL

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

ranges. The showrooms have over 70, 00, 00 products range which fulfils all your household

needs, and can be catered to under one roof. It is covering about 1282000 sq. Ft. in 18 states

across India. Each store gives you international quality goods and prices hard to match. The

cost benefit that is derived from the large central purchase of goods and services is passed on

to the consumer. What started as a humble one store enterprise in 1986 in Kolkata (erstwhile,

Calcutta) is today a conglomerate encompassing 51showrooms in 39 cities. India’s first

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

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

commodities sold under one roof in India. The group’s prime focus is on retailing.

The Vishal stores offer affordable family fashion at prices to suit every pocket. The group’s

philosophy is integration and towards this end has initiated backward integration in the field

of high fashion by setting up a state-of-the-art manufacturing facility to support its retail

endeavours. Company has already tied up for 5-lakh sq. ft space and is looking for more.

Company will come up with 32 new stores this year. Company is doing research on more

formats. Company is looking for opportunities of expansion int he South. Contribution of

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apparels business at 53% may slightly come down to 50%. India is a big country and there is

huge space for four-five big retail players. Vishal can always sustain growth in this big

market. Company can sustain margins as it is going for backward integration. Currently

manufacturing contributes 10% of the business, which in the next two to three years, will go

up to 25%. Company is increasing its focus on the non-apparel and FMCG segment. The

current share of FMCG at 15% could go up to20-25%. Apparel sales currently at 63% in the

next 2-3 years should come down to 50%as the company is now also focusing on different

segments. With growth in volumes, the cost of sourcing will come down in the near future.

Company will venture wherever it gets real estate space. Currently, it has very little space in

the south India. Eventually, it will have a pan-India set up.

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 CHAPTER 3-

LITERATURE REVIEW

Thompson & Chen (1998),

Retail store image has been shown to play an important role in

store patronage, and it is widely accepted that psychological factors have a significant role in

storeimage formation. Past research has often involved the measurement of tangible

attributes, or links between store images and consumers’ self images. This study was

undertaken to move to the next stage by exploring the link between perceived store image

and the personal values which underlie behavioural choices. Fashion retailing was selected as

an appropriate research domain because of the well-established associations between clothing

choice, personality, self-concept and personal values. Means-end theory and laddering

methodology were employed in interviews with 30 female respondents. The hedonic values

of “enjoyment and happiness” and “quality of life” were found to be the terminal values most

sought by consumers in association with store image. These were linked through the

consequence “nice feeling” to the tangible attributes of “price”, “quality” and “reputation”.

The study illustrates an application of means-end methodology in a retail environment, and

the results provide a platform for fashion store image and positioning strategies. Suggestions

for further research are made.

Erdem & Oumlil & Tuncalp (1999),

Retailing business is greatly affected by the patronage behavioural orientations of shoppers.

Understanding these orientations can assist retailers indeveloping appropriate marketing

strategies toward meeting the needs and wants of consumers. One important factor explaining

22
consumer behavioural orientations is their values. Another important factor affecting

consumer behavioural orientations is the store image, an image shaped by store attributes.

This study examines the linkage between consumer values and the importance of some

salient store attributes. Marketing management implications are also discussed.

Steve & Carralero (2000),

Argues that for many retailers, competitive advantage in the home market has been based

upon the development of strong store and corporate images as retailers strive to develop

themselves as brands. The construction of store image, comprising both tangible and

intangible dimensions, compounds problems of moving into international markets – as

consumers in the host environment are less familiar with the intangible dimensions of image,

which have been built up over time with exposure to the retail company. Retail companies

therefore need to fully understand the importance of image in competitive positioning and the

components of store image before attempting to replicate this image and positioning

overseas. Explores these issues with reference to Marks & Spencer and the company’s entry

into the Spanish market. A survey of customer perceptions of a range of store image

attributes in the UK and Spain reveals differences and similarities in perceptions, which must

be managed if a standardized position is to be sought in the host market.

Uusitalo (2001),

Grocery retailers are operating in a slow-growth market. The pursuit of market share is one of

the main concerns for retail managers. The retail structure is becoming increasingly

standardized and homogenous because of concentration of the ownership of stores. Cultural

differences remain, however, between different European countries. Cultural factors

influence the success of a positioning strategy. This study examined how consumers perceive

23
grocery retail formats and brands in Finland. Data from personal interviews were used in

highlighting the consumer perspective. Consumers perceive meaningful differences in

various store formats, meanwhile store brands are seen as quite similar. Consumers rely on

functional attributes of stores when discussing grocery stores. However, it seems that

consumers are unable to recognize the fabricated, often imaginary differences at the brand

level. The informant’s own, creative symbolic work results in this case to interpreting all

grocery retail brands as similar. Managerial implications of the study are presented.

Paulins & Geistfeld (2003),

Consumer perceptions of retail store attributes for a set of particular stores were examined to

determine their effect on store preference. Respondents rated13 stores. Four variables were

found to affect store preference using forward stepwise logistic regression: type of clothing

desired in stock, outside store appearance, shopping hours, and advertising. Significance of

the effect of store attributes on store preference varied by store type. In addition, associations

between customer perception of store attributes, education and age were observed.

Implications for researchers and practitioners are discussed.

Gehrt & Yan (2004)

Most research related to consumer choice of retailers emphasizes retailer attributes and/or

consumer characteristics. Since many retail formats, including online retailing, have emerged

in recent years, knowledge of how consumers select retail formats must be updated. A source

of influence that has been examined to a very limited extent for store

retailers but not for emerging retail formats is situational influence. From a modern interactio

nism perspective, this study investigates the influence of situational as well as consumer and r

etailer factors on preference for online, catalogue, and store formats. Key results show that

24
situational factors have significant influence on online and catalogue format selection and

perceptions of attributes that are crucial to that selection.

Miranda & Kónya (2005),

To identify the factors that influence shoppers' satisfaction with their “primary” grocery store,

and those that encourage them to continue patronising it despite being presented with a

significant inducement to shop elsewhere. A structured questionnaire containing31 variables

relating to shopping behaviour and satisfaction was administered to 934 shoppers leaving

several grocery stores in an Australian city during a two-week period. Results were used to

construct two mathematical models predicting customer satisfaction and store loyalty, from

which two research hypotheses were derived. The results of model estimation show that

factors with a significant influence on store satisfaction have little in common with others that

impel shoppers to remain loyal to one store. Indeed, there was no evidence in this study that

shoppers' overall satisfaction was by itself a significant influence on continued patronage.

The questionnaire did not ask questions, judged to be intrusive, relating to respondents'

income level, education background, employment status or household size characteristics

known to have a bearing on perception of risk associated with

switching to an unfamiliar store and hence potentially to inhibit action. It would be instructiv

e in future research to assess the extent towhich demographic characteristics mediate

perceptions of financial, psychological and social risk, and their influence on satisfaction and

loyalty. Retailers often do not recognise that what influences customer satisfaction is not the

same as what engenders store loyalty, and consequently do not allocate scarce resources

systematically among tactics influencing one or the other. Unless they are vigilant to

changing consumer behaviour patterns, they will not be able to isolate in their strategy the

elements of the retail mix that could insulate their loyal customers from responding to

competitors' special offers. This study introduces intelligence gatherers and strategic planners

25
in the retail context to an important distinction between general satisfaction and specific

loyalty.

Carpenter & Moore (2006),

To provide a general understanding of grocery consumers' retail format choice in the US

market place. A random sample of US grocery consumers (N=454) was surveyed using a

self-administered questionnaire. Descriptive and inferential statistical techniques (regression,

ANOVA) were used to evaluate the data. Identifies demographic groups who frequent

specific formats (specialty grocers, traditional supermarkets, super centres, warehouse clubs,

internet grocers) and examines store attributes (e.g. price competitiveness, product, selection,

and atmosphere) as drivers of format choice. The results included in this research were

gathered and reported on an individual format basis. In order to capture consumer choices

across a range of grocery retail formats, forcing respondents to compare formats was not

initiated. In addition, data pertaining to whether consumers had access to each type of format

in the study were not collected. Examination of how dimensions of consumer access limit or

expand retail patronage behaviour could also be highly beneficial to grocery retailers.

Korgaonkar & Silverblatt (2006),

To investigate if consumer online patronage is influenced by product category and online

store type. Building on the prior work in this area by the authors and other researchers the

study collected data in two phases to investigate the study hypotheses. The study results

suggest that consumers' online patronage is differed based on product type. Interaction effects

of the online stores and product type were significant too. Additionally, the rank order of

importance of the Internet attribute varied among the three types of online retailers. The study

results should be replicated in other markets. Future studies may also include variety of

different types of online outlets to improve the conclusiveness of the findings reported in this

26
study. The results should be of interest to the online retailers in choosing the types of

merchandise and services to emphasis in the retailers marketing program. The paper should

be of interest to academicians as well as practitioners as it contributes to the small but

growing literature in the area of online retailing. It adds to the literature on the product

classification paradigm as well as offers practical guidelines for managers.

Yun & Good (2007),

The purpose of this paper is to investigate e-tail store attributes that develop customers'

positive perceptions of e-tail store image and determines whether they develop a sense of

loyalty to an e-tailer. Acknowledging the importance of customer retention, this paper is

designed to examine e-customer loyalty intentions toward the e-tailer. To understand the

concept of loyalty toward an e-tailer, this study focuses on the importance of thefinal stage of

the customer decision-making process: post-purchase evaluation. This paper develops a

model that describes the extent to which e-tail store image (derived from a set of e-tail store

attributes) indicates patronage intentions and finally predicts customer loyalty. We use the

structural equation modelling to test the model and hypotheses. Results in this paper indicate

that e-tail store image is derived from e-merchandise, e-service, and e-shopping atmosphere

attributes, all of which support the way consumers shop. A favourable e-tail store image

positively influences e-patronage intentions, which thus leads to e-loyalty. The research in

this paper provides a conceptual model that will help retailers better articulate how

and why consumers may be e-loyal shoppers. Second, the research identifies attributes,

unique to online shopping that serve as the basis for conceptualizing e-tail image as a second

order factor.

Da Silva & Syed Alwi (2008),

27
The purpose of this paper is to look into the relationship between the physical aspect of a

retail store, product-related attributes, personal interaction with customers and perceived

reliability and corporate brand image in an offline or bricks and mortar context. The study is

based on 511 interviews conducted in various bookstores and uses structural equation

modelling as a statistical tool for concluding the above. The paper argues that physical

aspect of a retail store, product-related attributes and personal interaction with customers will

have a significant and positive direct effect on the offline corporate brand image whilst there

was no significant connection between reliability and corporate brand image. The research

has been conducted in one organisation, albeit a number of bookstores were scrutinized. The

paper's managerial contribution lies in its lessons for practitioners who want to understand

what are the key drivers of corporate brand image in an offline context. It also provides a

background for further studies which can extrapolate the current thinking into other sectors in

order to validate or refute the results presented here. The paper scrutinizes the impact of

physical aspects; product related information; reliability; and personal interaction in the

corporate brand image of a retail organisation.

Brengman & Willems (2009),

The purpose of this paper is to identify the main determinants of fashion store personality, as

perceived by the shopper. It aims to discover factors that are responsible for specific store

personality trait perceptions in order to understand how these humans like personality traits

are induced in a retailing context. With this end in mind, a qualitative exploratory study was

undertaken. A total of 70 in-depth semi-structured interviews were conducted with a

convenience sample of Belgian adult respondents to systematically assess the connotations of

the 34 different store personality trait descriptors put forward by d'Astous and Lévesque.

Respondents were asked which fashion stores they considered to embody these specific

personality traits and they were probed for the sources of inference they used. The findings

28
reveal that the store environment and store design particularly is an important factor in

determining the personality of fashion stores.

29
 CHAPTER- 4

OBJECTIVE AND RESEARCH METHODOLOGY

4.1 Primary Objective

 To study the current scenario of the Indian retail industry and various changes and

developments it is going through.

 To ascertain the customer’s perception towards organized retail

 To ascertain the factors that influences people to purchase goods from organized retail

stores.

4.2 Scope of the project

The studies will provide some basic ideas of the current scenario in the Indian retail industry

as research was done on the NCR region so we will be able to know more about that region

and will get a hint about the other region too.

4.3 Research methodology

4.3.1 Exploratory Research

Exploratory research is research conducted for a problem that has not been studied more

clearly, intended to establish priorities, develop operational definitions and improve the

final research design. Exploratory research helps determine the best research design, data-

collection method and selection of subjects.

4.3.2 Research Design

The research design which was used for this research was secondary research. The data

required for analysis of the project was taken from secondary sources of data such as internet,

30
magazines, newspaper and journals. The data obtained from such sources was organised and

analysed to study the required objective of the project. The primary data will also be collected

with the help of questionnaire.

4.4 Data Collection

METHOD: The data is collected through both primary and secondary sources. The data

required for the analysis of the project was taken from secondary sources of data such as

internet, magazines, newspaper and journals. The data obtained from such sources was

organised and analysed to study the required objective of the project. The primary data will

also be collected with the help of questionnaire.

Sample size: 100

Sample unit: Delhi NCR

Sample selection: Random

31
 CHAPTER-5

DATA ANALYSIS AND INTERPREATATION

1.Age of the respondents:

Age No. of respondents percentage
Less than 25 11 11%
25-35 40 40%
35-45 20 20%
Above 45 29 29%
Total 100 100

INTERPRETATION:

32
2. Do you visit mall?
Particulars No. of respondents percentage
Yes
No
Total

INTERPRETATION

33
3. How many malls are there in your area or nearby area?
Particulars No. of respondents percentage
0-1
1-3
3-5
5-8
Total 100 100%

INTERPRETATION:

34
4. In the malls, are there stores like: Big bazaar, Food bazaar, Pantaloons, Vishal Megamart,
Westside etc?
Particulars No. of respondents Percentage
Big bazaar
Food bazaar
Pantaloons
Vishal Megamart
Westside
Total

INTERPRETATION:

35
5. Do you like buying clothes and accessories from malls or local markets?
Particular No. of respondents percentage
Malls 35 35%
Local markets 8 8%
Both 57 57%
Total 100 100%

INTERPRETATION:
From the survey it was found that amongst 100 respondents, highest population goes for both
malls and local market for their shopping requirements. This shows, how malls and local
markets and equally important.

36
* Reason for buying clothes and accessories from malls?
Particular No. of respondents percentage
Ambience 28 28%
Service 28 28%
Brand 44 44%
Total 100 100%

INTERPRETATION:
The above pie chart shows that 44% of the population who visits retail stores in the malls
goes for the branded products, as they are Hight net worth income group consumers.

37
*Reason for buying clothes and accessories from local market?
Particular No. of respondents percentage
Price 44 44%
Variety 32 32%
Accessibility 24 24%
Total 100 100

INTERPRETATION:
The above pie chart shows that 44% of the consumers makes their purchase from local
markets as the markets are easily accessible. Price is always a factor for them as they are
middle class consumers. They always get a wide range of variety at a lower price in the local
market.

38
6. How often do you visit these malls/ retail stores?
Particular No. of respondents percentage
Daily 7 7%
Weekly 49 49%
Monthly 32 32%
Occasionally 12 12%
Total 100 100%

INTERPRETATION:
The above pie chart shows the frequency of the population of visiting malls. The highest
population i.e. 49% of the population visits malls weekly for various purposes e.g. shopping,
hangout, dating etc. 32% of the population visits mall monthly, they normally go for planned
shopping and sometimes for hangout only.

39
7. What is the purpose of visiting these places?
Particular No. of respondents percentage
Hangout 25 25%
Planned shopping 39 39%
Window shopping 14 14%
Dating 17 17%
Other reasons 5 5%
TOTAL 100 100%

INTERPRETATION:
The above pie chart shows that the highest population i.e. 39% visits malls for planned
shopping. While others mostly for hangouts followed by dating, window shopping and other
reasons as well.

40
8. What do you prefer to buy from these places?
Particulars No. of respondents percentage
Clothing
Accessories
Grocery
Total 100 100%

INTERPRETATION:

41
9. What propels you to buy clothes and accessories from these retail stores?
Particulars No. of respondents percentage
Need 8 8%
Discount sales 32 32%
Variety 26 26%
Quality 34 34%
Total 100 100%

INTERPRETATION:
The above pie chart shows that 34% of the consumers goes for quality while purchasing
clothes and accessories, 32% of the consumers goes for the discounted sale, as they get same
quality at a lower price, while 26% of the consumers believes in the variety and the rest 8%
makes their purchases only when they are in need.

42
10. Where do you like buying groceries from?

Particulars No. of respondents percentage

Retails stores
Kirana shops
Local vegetable vendors
Total

INTERPRETATION:

43
11. Will these malls/ retails stores will grow over a period of time?
Particulars No. of respondents percentage
Yes 93 93%
No 7 7%
Total 100 100%

INTERPRETATION:
The above pie chart shows that 93% of the population of the sample size believes that the
malls and retail stores will grow over a period, as this industry is going to generate a huge
number of employments, places for recreation and it will also help in grooming other
industries.

44
 CHAPTER-6
CONCLUSIONS, SUGGESTIONS AND
LIMITATIONS

CONCLUSION

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 investment in understanding/acquiring some advanced

expertise in developing more accurate and scientific demand forecasting models. Re-

engineering of product sourcing philosophies-aligned more towards collaborative 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 redevelopment of the area into a more modern multi-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 investments in improving the interiors of their respective

establishments to make shopping an enjoyable experience for the customer.

As the retail marketplace changes shape and competition increases, thepotential for

improving retail productivity and cutting costs is likely to decrease. Therefore, it will become

45
important for retailers to secure a distinctive position in the marketplace based on value,

relationships or experience.

Finally, it is important to note that these strategies are not strictly independent of each other;

value is function of not just price, quality and service but can also be enhanced by

Personalization and offering a memorable experience. In fact, building relationships with

customers can by itself increase the quality of overall customer experience and thus the

perceived value. But most importantly for winning in this intensely competitive marketplace,

it is critical to understand the target customers definition of value and make an offer, which

not only delights the customers but also is also difficult for competitors to replicate.

46
FINDINGS

 The Retail Sector in India can be split up into two, the organized and the unorganized.

The organized sector whose size is expected to triple by 2010can be further split up

into departmental stores, supermarkets, shopping malls.

 In terms of value the size of the retail sector in India is $300 billion. The organized

sector contributes about 4.6% to the total trade.

 The retail sector in India contributes 10% to the Gross Domestic Product and 8% to

the employment of the country.

 In terms of growth the FMCG retail sector is the fastest growing unit and the retail

relating to household care, confectionery etc, have lagged.

 The foreign retail giants were initially restricted from making investments in India.

But now FDI of 51% is permitted in India only through single branded retail outlets.

Multi brand outlets are still beyond their reach. Again, they can only enter the market

through franchisees, this was how Wal-Mart had entered joining hands with Bharti

Enterprises.

 On line retailing is still to leave a mark on the customers due to lacunae that we have

already mentioned.

 Cultural and regional differences in India are the biggest challenges in front of

retailers. This Factor deters the retailers in India from adopting a single retail format.

 Hypermarket is emerging as the most favourable format for the time being in India.

LIMITATIONS

For every research there are restrictions and limitations. Without them the world does not

exist. Similarly, there are some restrictions in my research work, which could not be

47
controlled. The following were the limitations in my research which I faced in the making of

this research.

 The study was restricted to selected malls and stores in Delhi NCR.

 Time was the biggest constraint. It was difficult and time consuming to get the

questionnaire filled with 100 respondents. Nevertheless, all efforts were made to get

relevant information for the successful completion of the research.

 There may be discrepancies in views as some people might give false information in

the questionnaire, as they might not be interested in filling the form.

 The respondents may be biased in their opinions.

SUGGESTIONS

48
BIBLOGRAPHY
 The monthly fact sheet available from the company for studying the features of

products.

 Online information from the various websites namely:-

o www.lic.co.in

o www.wikipedia.com

o www.tata-aig-life.com

o www.birlasunlife.com

 www.irdaindia.org

 www.google.com

 www.wikipedia.com

 . William, Smith and Young 1998 Risk Management & VaughanInsurance; edition

VII

 Mc Graw Hill Publication & Vaughan, (1999), "Insurance & Risk Management";

Edition I 60

 http://www.hdfclife.com/

 http://www.hdfclife.com/AboutUs/AboutUs.aspx

 http://en.wikipedia.org/wiki/Standard_Life

 Internal Experts

 INDUSTRY Audit Reports

 Journals

 Websiteswww.hdfcinsurance.com www.qooqle.comwww.bimaquru.com

 www.insurance.comwww.mibknowledge.com

 Niehaus, Gregory R.; (1999) "Risk Management and Insurance"; Irwin/McGraw -Hill.

49
 ANNEXURE

Q1. Age of the respondent

 Less than 25
 25-35
 35-45
 Above 45

Q2. Do you visit mall?

 Yes
 No

Q3. How many malls are there in your area or nearby area?
 0-1
 1-3
 3-5
 5-8

Q4 In the malls, are there stores like: Big bazaar, Food bazaar, Pantaloons, Vishal Megamart,
Westside etc?
 Big bazaar
 Food bazaar
 Pantaloons
 Vishal Megamart
 Westside

50