economic significance of retailing in india
TRANSCRIPT
-
8/11/2019 Economic Significance of Retailing in India
1/26
PPT 1-1 Consumer Behavior Ignacio J. Vzquez E. 2007
ntroduction to the
World of Retailing
Unit I:
Place of Retailing in the Marketing Mix, Trends
in retailing, Retail Economics
-
8/11/2019 Economic Significance of Retailing in India
2/26
PPT 1-2 Consumer Behavior Ignacio J. Vzquez E. 2007
What is Retailing?
Retailinga set of business activities that adds value to the
products and services sold to consumers for their personal or
family use.
A retaileris a business that sells products and/or services to
consumers for personal or family use
Retailers:
-HUL , Relience Fresh,Pantloon, Croma, Shoppers Stop,
Dmart , Food Bazar, Holiday Inn, McDonalds, Amazon.com
-
8/11/2019 Economic Significance of Retailing in India
3/26
PPT 1-3 Consumer Behavior Ignacio J. Vzquez E. 2007
Place of Retailing in the Marketing Mix
The Four Ps of Marketing
Distribution
Retailers are part of the
distribution channel
Retailers are part of the
distribution channel
Product
Price
Promotion
-
8/11/2019 Economic Significance of Retailing in India
4/26
PPT 1-4 Consumer Behavior Ignacio J. Vzquez E. 2007
Distribution Channel
Distribution ChannelPPT 1-4
-
8/11/2019 Economic Significance of Retailing in India
5/26
PPT 1-5 Consumer Behavior Ignacio J. Vzquez E. 2007
A retailers role in a distribution channel
Retailer:is a business that sells products and/or services to consumersfor their personal or family use. Retailers are the final business in adistribution channel that links manufacturers to consumers.
Distribution Channel: is a set of firms that facilitate the movement ofproducts from the point of production to the point of sale to the
ultimate consumer. Manufacturers: typically make products and sell them to retailers orwholesalers.
Vertical integration:means that a firms performs more than one set ofactivities in the channel, such as investments by retailers in wholesalingor manufacturing.
Backward integration:arises when a retailer performs some distributionand manufacturing activities, such as operating warehouses ordesigning private label merchandise.
Forward integration: is when a manufacturer undertakes retailingactivities, such as Ralph Lauren operating its own retail stores.
-
8/11/2019 Economic Significance of Retailing in India
6/26
PPT 1-6 Consumer Behavior Ignacio J. Vzquez E. 2007
Accounting Finance
MISOperations
Marketing
Human Resources
Retailers are a Business Like Manufacturers
-
8/11/2019 Economic Significance of Retailing in India
7/26PPT 1-7 Consumer Behavior Ignacio J. Vzquez E. 2007
Decision Variables for Retailers
Customer Service
Store Designand Display
MerchandiseAssortment
Communication
Mix
LocationPricing
Retail
Strategy
-
8/11/2019 Economic Significance of Retailing in India
8/26PPT 1-8 Consumer Behavior Ignacio J. Vzquez E. 2007
Functions Performed by Retailers
Providing Assortments: Supermarkets typically carry 20,000 to 30,000
different items made by over 500 companies. Offering an assortment enables
their customers to choose from a wide selection of brands, designs, sizes,
colors, and prices at one location.
Breaking Bulk: To reduce transportation costs, manufacturers and
wholesalers typically ship cases of frozen dinners or cartons of blouses to
retailers. Retailers then offer the products in smaller quantities tailored to
individual consumersand householdsconsumption patterns.
Holding Inventory: A major function of retailers is to keep inventory that is
already broken into user-friendly sizes so that products will be available
when consumers want them. Thus, consumers can keep a smaller inventory
of products at home because they know local retailers will have the productsavailable when they need more. By maintaining an inventory, retailers
provide a benefit to consumers; they reduce the consumerscost of storingproducts.
-
8/11/2019 Economic Significance of Retailing in India
9/26PPT 1-9 Consumer Behavior Ignacio J. Vzquez E. 2007
Providing Services: Retailers provide services that make it
easier for customers to buy and use products. They offer credit
so consumers can have a product now and pay for it later. They
display products so consumers can see and test them before
buying.
Increasing the Value of Products and Services: By
providing assortmentsbreaking bulk, holding inventory, andproviding services, retailers increase the value consumers
receive from their products and services.
Contd.
-
8/11/2019 Economic Significance of Retailing in India
10/26PPT 1-10 Consumer Behavior Ignacio J. Vzquez E. 2007
Opportunities in Retailing
Management Opportunities:To cope with a highly competitive andchallenging environment, retailers are hiring and promoting people with awide range of skills and interests. Students often view retailing as a part ofmarketing because the management of distribution channels is part of amanufacturers marketing function. But retailers operate businesses and, likemanufacturers, undertake most traditional business activities. Retailers raise
capital from financial institutions; purchase goods and services; developaccounting and management information systems to control operations;manage warehouses and distribution systems; design and develop new
products and undertake marketing activities such as advertising,promotions, sales force management, and market research.
Entrepreneurial Opportunities:Retailing also provides opportunities forpeople who wish to start their own business. Some of the worlds richestpeople are retailing entrepreneurs
-
8/11/2019 Economic Significance of Retailing in India
11/26PPT 1-11 Consumer Behavior Ignacio J. Vzquez E. 2007
Social and Economic Significance of
Retailing Support for Community:Retailers are also responsible for
developing many innovative products and services.
Retail Sales:Retailing affects every facet of life. Just think of howmany daily contracts you have with retailers when you eat meals,
furnish your apartment, have your car fixed, and buy clothing for apart or job interview.
Employment:Retailing also is one of the nations largest industriesin terms of employment.
Global Retailers:With worldwide retail sales estimated at $8Trillion, the 20 largest retailers represent a 12 percent share of theworld market.
-
8/11/2019 Economic Significance of Retailing in India
12/26PPT 1-12 Consumer Behavior Ignacio J. Vzquez E. 2007
Economic Significance of Retailing
Retail industry is one of the pillars of Indian economy and accounts for 1415% ofits GDP
The Indian retail market is estimated to be US$ 450 billion and one of the top five
retail markets in the world by economic value
India is one of the fastest growing retail market in the world, with 1.2 billion
people India's retail and logistics industry employs about 40 million Indians (3.3%
of Indian population).[5]
India's retailing industry essentially consists of the local mom and pop store, owner
manned general stores, convenience stores, hand cart and pavement vendors, etc.[
Organised retail supermarkets account for 4% of the market as of 2008
Regulations prevent most foreign investment in retailing
Management training opportunities
Entrepreneurial opportunities
http://en.wikipedia.org/wiki/Retailing_in_Indiahttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Small_businesshttp://en.wikipedia.org/wiki/Retailing_in_Indiahttp://en.wikipedia.org/wiki/Retailing_in_Indiahttp://en.wikipedia.org/wiki/Retailing_in_India -
8/11/2019 Economic Significance of Retailing in India
13/26PPT 1-13 Consumer Behavior Ignacio J. Vzquez E. 2007
Retailing Industry in India is estimated at INR 15.5 trillion growing at CAGR
of 15 to 20 %
Organized Retail accounts for 5-8% which is lowest compared to its peers inBRIC countriesBrazil (38%), Russia (33%) and China (20%)
The Organized Retail has been growing at 35% CAGR
The retail and wholesale sector in India accounts for approx 14% of GDP
In terms of employment, the sector is second largest employer providing over
10% of all formal jobs
Indian retail has evolved into a major growth opportunity
-
8/11/2019 Economic Significance of Retailing in India
14/26PPT 1-14 Consumer Behavior Ignacio J. Vzquez E. 2007
India has witnessed a robust growth rate of 9% p.a. from 2005 to
2008 and an impressive growth of 6.7% in 2009 despite the global
downturn& 4.7 % in 2013-14
Government is committed to encourage inclusive growth 72.2%
of Indiaspopulation resides in rural areas
High agriculture growth rate offers huge potential Householdsforming richclass have grown at CAGR of 35% during and that
of Major consuming classhave grown at a CAGR of 11 %
Supported by Strong Economic Fundamentals
-
8/11/2019 Economic Significance of Retailing in India
15/26PPT 1-15 Consumer Behavior Ignacio J. Vzquez E. 2007
THE GROWTH FACTORS OF THE RETAIL SECTOR OF
INDIAN ECONOMY
Increase in per capita income which in turn increases the
household consumption
Demographical changes and improvements in the standard of
living
Change in patterns of consumption and availability of low-cost
consumer credit
Improvements in infrastructure and enhanced availability of
retail space
Entry to various sources of financing
-
8/11/2019 Economic Significance of Retailing in India
16/26PPT 1-16 Consumer Behavior Ignacio J. Vzquez E. 2007
The future trends of the retail sector of
Indian economy
The retail sector of Indian economy will grow up to 10% of
total retailing by the year 2012.
No one single format can be assumed as there is a huge
difference in
cultures regionally.
The most encouraging format now would be the hypermarts The hypermart format would be further encouraged with the
entry of the TNC's
-
8/11/2019 Economic Significance of Retailing in India
17/26PPT 1-17 Consumer Behavior Ignacio J. Vzquez E. 2007
The Retail Management Decision Process
Competitors: At first glance, identifying competitors appears easy. A
retailers primary competitors are other retailers using the same format.
Thus, department stores compete against other department stores and
supermarkets against other supermarkets. This competition between the
same types of retailers is called intratype competition.
Variety: To appeal to a broader group of consumers, many retailers are
increasing the variety of their merchandise. Variety is the number of
different merchandise categories within a store or department. By offering
greater variety in one store, retailers can offer one-stop shopping to satisfy
more of the needs of their target market.
Scrambled Merchandising: The offering of merchandise not typically
associated with the store type, such as clothing in a drug store, is called
scrambled merchandising. Scrambled merchandising increases intertype
competition, or competition between retailers that sell similar
merchandise using different formats, such as discount and department
stores.
-
8/11/2019 Economic Significance of Retailing in India
18/26PPT 1-18 Consumer Behavior Ignacio J. Vzquez E. 2007
Customers:The second factor in the microenvironment is customers.
Customer needs are changing at an ever-increasing rate. Retailers mustrespond to broad demographic and lifestyle trends in our society, such as the
growth in the elderly and minority segments of the US population and the
importance of shopping
Retail Strategy:indicates how the firm plans to focus its resources to
accomplish its objectives. It identifies
1) the target market, or markets, toward which the retailers will direct its
efforts;
2) the nature of the merchandise and services the retailer will offer to satisfy
the needs of the target market; and
3) how the retailer will build a long-term advantage over its competitors.
Strategic Decision Areas:The key strategic decision areas for a firm involve
determining its market, financial, location, organizational structure, and
human resource, information systems, and supply chain, and customer
relationship management strategies.
Contd.
-
8/11/2019 Economic Significance of Retailing in India
19/26PPT 1-19 Consumer Behavior Ignacio J. Vzquez E. 2007
Retail Mix:To implement a retail strategy, management develops a retail
mix that satisfies the needs of its target market better than that of its
competitors. The retail mix is the decision variables retailers use to satisfy
customer needs and influence their purchase decisions.
Ethical and Legal Considerations:When making the strategic and tactical
decisions discussed previously, managers need to consider the ethical and
legal implications of their decisions in addition to the effects those
decisions have on the profitability of their firms and the satisfaction of
their customers. Ethics are the principles governing the behavior of
individuals and companies to establish appropriate behavior and indicate
what is right and wrong.
Contd.
-
8/11/2019 Economic Significance of Retailing in India
20/26PPT 1-20 Consumer Behavior Ignacio J. Vzquez E. 2007
Retail Structure in India
-
8/11/2019 Economic Significance of Retailing in India
21/26PPT 1-21 Consumer Behavior Ignacio J. Vzquez E. 2007
Company Size
Pantaloon Retail Ltd(Future Group venture)
Over 2 million sq ft of retail space spread over 35 citieswith 65 stores and 21 factory outlets
Shoppers Stop
(K Raheja Group venture)
Over 3.21 million sq ft of retail space spread over 23 cities
with 51 stores
Spencer Retail
(part of RP-SG Group)
Retail footage of close to 1 million sq ft across 45 cities
with 200 stores
Lifestyle Retail
(Landmark Group venture)Approximately 15 lifestyle and eight Home Centre stores
Bharti Retail
74 Easyday stores with plans to invest about 2.5 billion
USD over the next five years to add about 10 million sq ft
of retail space in the country
Reliance Retail 700 stores with a revenue of 7,600 crore INR
Aditya Birla More575 stores with approximate revenue of 2,000 crore INR.
Recently, purchased stake in Pantaloon Retail
Tata Trent59 Westside stores, 13 Starbazaar hypermarkets and 26
Landmark bookstores
Retail Companies in India
-
8/11/2019 Economic Significance of Retailing in India
22/26
PPT 1-22 Consumer Behavior Ignacio J. Vzquez E. 2007
Organised Retail Structure in India
-
8/11/2019 Economic Significance of Retailing in India
23/26
PPT 1-23 Consumer Behavior Ignacio J. Vzquez E. 2007
Nature of Retail Industry is Changing
Mom and Pop Store
To Todays Retailer
-
8/11/2019 Economic Significance of Retailing in India
24/26
PPT 1-24 Consumer Behavior Ignacio J. Vzquez E. 2007
Trends in Retail Industry
Growing Diversity in Retail Format
Increasing Industry Concentration
Globalisation
-
8/11/2019 Economic Significance of Retailing in India
25/26
PPT 1-25 Consumer Behavior Ignacio J. Vzquez E. 2007
Factors Underlying Trends of Modern
Retail in India
Economic development
Improvements in civic situation
Changes in government policies
Changes in consumer needs, attitudes and behavior
Increased investment in retailing
Rise in power of organized retail
-
8/11/2019 Economic Significance of Retailing in India
26/26
C B h i