CHAPTER -1

INTRODUCTION

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An Overview of B-CITIES Retail Sector

The retail sector has helped in giving strong impetus to overall

economic growth as a significant driver of the growth of services

sector, which contributes as much as 54 per cent of GDP. It has

strong backward and forward linkages with other sectors like

agriculture and industry through stimulating demand for goods and

through mass marketing, packaging, storage and transport.

Moreover, it creates considerable direct and indirect employment

in the economy. Also, the consumers have benefited in terms of

wide range of products available in a market.

Size of the B-CITIES Retail Sector

The emergence of new formats and the evolution of modern retail

in B-CITIES has attracted attention in recent years. [The data sets

published by different authorities are not strictly comparable as

they are based on surveys, but they give some idea of the trends

and prospects.] The retail sector, currently, is said to contribute 10

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per cent of India’s GDP (Confederation of Indian Industry), and is

expected to grow at a robust rate of 36 per cent per annum by the

end of 2008 (Associated Chambers of Commerce and Industry of

India, ASSOCHAM). This growth would expand the size of the

market to over Rs 14, 79,000 crore from its current level of Rs 5,

88,000 crore. The B-CITIES retail market is estimated at Rs 9,300

billion and is expected to grow at a compounded rate of 30 per cent

over the next five years (Retailers Association of India). Moreover,

the retail sector employs over 7 per cent (21 million) of the

national workforce (Aggarwal, 2000), the second only to

agriculture. The retail density more than doubled between 1978

and 1996 and the number of outlets per 1000 people at an all India

level, increased from 3.7 in 1978 to 5.6 in 1996. For the urban

sector alone, the shop density increased from 4 per 1000 people in

1978 to 7.6 per 1000 people in 1996 (Venugopal, 2001). Because

of their small size, Indian retailers have very little bargaining

power with manufacturers, unlike in the case of retailers in

developed countries, (Sarma, 2000).

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Structure of B-CITIES Retail Sector

The retail sector is classified broadly into two: Organised Retail

sector and, Unorganised Retail Sector

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ORGANIZED RETAIL SECTOR

The organised segment is mainly characterized by typically large

number of retailers, greater enforcement of taxation mechanisms

and better labour law monitoring systems. It is not just a stocking

and selling, but is more about efficient supply chain management,

developing vender relationships, quality customer service, efficient

merchandising and timely promotional campaigns. It, however,

constitutes a very little share of at around 3 per cent (Rs 300

billion) of the total retail market. (In China 20 per cent of the retail

is organized and in the ASEAN countries it is more than 40 per

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cent - Ministry for Commerce & Industry, February 2005)

According to the Retailers Association of India, the share of

organised sector to the overall retailing market in India is expected

to grow from 3 per cent to 20 per cent in the next 10 years. The

KSA Technopak’s estimate is that by 2005, the organised retail

sector would be employing in excess of 2, 50, 000 individuals

directly and perhaps 8-10 times as many indirectly in the supply

chain.

The organised retailing has been successful in metropolitan cities

so far, more so in the south and west India. It is expected that the

tier II cities would take another 5 years to absorb modern retailing

opportunities. Moreover, the case for Indian retailers to explore

rural markets is also strong due to the size of rural population and

agricultural income growth in last couple of years. A clear

indicator of this potential is the share of rural market across most

categories of consumption.

UN-ORGANIZED RETAIL SECTOR

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The unorganised sector, on the other hand, which represents 97 per

cent of the total retail market is mainly characterised by typically

small retailers, more prone to tax evasion and lack of labour law

supervision. India is one of the largest unorganised retail markets

in the world and more than 96 per cent of the retailers work in less

than 500 sq ft of area. 

Components of Retail Sector in B-CITIES

The major components of the retail sector are:

Food and Grocery, Fast Moving Consumer Goods (FMCGs), 

Consumer Durables, Apparel, Footwear and leather, Watches,

Jewellery, and Health and Beauty

The anatomy of the retail market has shown that the clothing and

textiles constitutes 39 per cent of the organised retail pie, followed

by food and grocery, which accounts for 11 percent of the total

retail market. 

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However, according to the survey conducted by KPMG for

Federation of Indian Chamber of Commerce and Industry (FICCI),

among these, the food and grocery is expected to witness the

fastest growth followed by clothing as the second-fastest growing

segment.

 

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Key Players in the B-CITIES Retail Sector

The main players in the sector are classified as big corporate

houses, dedicated brand outlets and multi-brand outlets. Some of

the market leaders are:

1) Corporate Houses: Tata’s (Tata Trent), RPG Group (Food

World, Health & Glow), ITC (Life Style), Rahejas (Shoppers’

Stop), Hiranandani (Haike)

2) Dedicated Brand Outlets: Arrow, Nike, Reebok, Zodiac, Louis

Phillip etc.

3) Multi Brand Outlets: Vijay Sales, Apana Bazaar, Videos etc.

4) Manufacturers/ Exporters: Pantaloons, Bata, Weekender etc.

Among these, the formats like supermarkets (e.g. Food Bazaars)

have the highest potential for growth in India followed by

hypermarkets (e.g. Big Bazaar, Spencer’s).

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Rural-Urban Share in Retail Sector

A distinctive feature of organised retailing in India is that it is

largely an urban phenomenon. Organised retail has been more

successful in metros and cities, more so in the south and west of

India. The reasons for this regional variation range from

differences in consumer buying behaviour to cost of real estate and

taxation laws. Nonetheless, the case for Indian retailers to explore

rural markets is strong. Factoring the size of the rural population

and agricultural income share of rural market across major growth

in rural India, the rural market is certainly an opportunity for

retailers with an innovative retail proposition. A clear indicator of

this potential is the current categories of consumption.

 

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Growth and Future Prospects

With the economy growing at a robust rate at near 8 per cent, the

retail sector has also been witnessing notable growth due to an

unprecedented consumption boom. The multiple factors driving

this boom are: 

First, favourable demography with roughly 60 per cent of the total

population below 30 years of age group.

Higher disposable incomes of young middle class consumers due

to employment in IT, management and increasing number of

working women,

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Table 1: Share in Retail Market: Urban vs. Rural (per cent)

Segment Rural Urban Food 64 36 Clothing and Footwear 61 39 Misc Consumer Goods 57 43 Consumer Durables 50 50 Consumer Services 44 56 Entertainment 33 67 Source: NSSO and KPMG Analysis

 Change in consumption pattern with high aspiration levels. The

AC Nielsen Online Omnibus Survey 2005 has rated India in the

highest category of Aspiration Index (especially in consumer

durables segment) in Asia along with China, Indonesia and

Thailand. 

Easier consumer credit with low interest rates and,

Aggressive marketing by companies

A notable growth in the retail sector is characterised by the

performance of various retail segments:

Growth in Major Retail Segments

(i) Apparel Industry

The robust performance of an apparel industry has been largely an

outcome of a buoyant growth of the textile industry. The Indian

textile industry has increasingly benefited since the post-quota

regime [The multi-fibre arrangement (MFA), which governed

global trade in textiles and clothing since 1974, came to an end in

December 2004)] in terms of higher textiles export, especially due

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to the demand from UK and US retailers. Though, according to

Directorate General of Commercial Intelligence and Statistics

(DGCIS), the textiles and apparel exports have decelerated in

2005, according to the import data from US and UK , the exports

have grown by 15 per cent in 2005 to about US $ 15 billion.

Nevertheless, currently the overall apparel market is worth Rs

88,000 crore and though the share of branded segment may be

limited, is growing at a healthy 25 per cent. Moreover, in the home

textile market, India currently exports about Rs 21,000 crore of

home textile products to the US alone and the share of domestic

market is about one third of it. 

 

( ii) Food and Grocery

The food industry is the second largest

growing industry after the clothing

segment. According to the FICCI study, the size of the food and

beverages industry is Rs 3,58,000 crore and it is expected to grow

between 8 to 8.5 per cent in value terms during 2005-06. The

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highest growth is expected in the semi-processed or readymade

food segment, which is estimated, to grow by 22 per cent. Other

segments, which are expected to expand rapidly, are fruit juices,

pulp and concentrate (18 per cent), followed by sauces (17 per

cent) and branded milk products (15 per cent). The FICCI has

urged the government to have pro-active approach for helping the

industry to achieve the lower cost, quality improvement and better

performance in the competitive environment.

(iii) FMCG (Fast Moving Consumer Goods)

In the last couple of years, the FMCG segment has grown at a

rapid pace, especially due to increasing number of big FMCG

outlets like Big Bazaar. According to the AC Nielsen India study,

the Rs 48,000 crore FMCG industry grew by 5.3 per cent in value

terms in 2005 over the previous year. A rise in food and personal

care categories is fuelling this growth in value terms, with biscuits

growing at 13.8 per cent, shampoos by 17.5 per cent as against 9.8

per cent and 8.6 per cent, respectively, registered in 2004. 

Interestingly, the FMCG growth (in value terms) in rural markets

has far outpaced the sector’s growth in urban markets during April-

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December 2005. The products, which have shown significant

growth in rural markets, are toothpaste, hair oils and shampoos.

Shampoo sales, for eg., in rural areas have gone up by 30.8 per

cent as compared to just 11 per cent in urban areas. The reasons

attributed to such buoyant growth in rural markets are highly

saturated urban markets (tier I and II cities), successive good

monsoons and a resultant growth in farm income coupled with

increasing awareness towards better lifestyle in rural areas.

(iv) Consumer Durables

The size of the Indian consumer goods industry is at around Rs

20,000 crore. After three years of buoyant performance, the

consumer durables industry has shown a moderate growth (in

terms of production) of 13.6 per cent during the period April-

January 2006 as compared to 14.8 per cent over the corresponding

period in the previous year (Ministry of Statistics and Programme

Implementation). According to the study by Investment and Credit

Rating Agency (ICRA), based on recent trends, the Indian colour

television (CTV) market is estimated to increase from 8.3 million

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numbers of units during 2003-04 to 10.1 million during 2005-06.

Similarly, the refrigerator and washing machine markets are also

expected to increase by 13.5 per cent and 14.2 per cent,

respectively, in the same period.

 

Investment in B-CITIES Retail Sector

According to the KSA Technopak’s Retail Summit 2005,

investment in the Indian retail sector is estimated at Rs 2000 crier

to Rs 2,500 crore in the next two to three years and over Rs 20,000

crore by the end of 2010. Large Indian corporate houses like Tata,

Reliance, Area, ITC, Bombay Dyeing, Murugappa Group and

Primal Group have continued to show interest in huge investments

in organised retailing. The buying volumes for many of these

players are in the range of Rs 1000 to Rs 2000 crore per year with

the plans to increase it to Rs 10,000 to Rs 15,000 crore within the

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next three four years. Similarly, foreign investors and private

equity players are also firming up plans to identify investment

opportunities in the Indian retail sector.

The medium to long-term prospects for the Indian retail industry

appears positive. The growth prospects for individual items,

would, however, depend on specific demand drivers.

 

Effects of retail boom:

As we have seen earlier in the report, the retail boom has some

specific implications on various aspects of the country. This aspect

can be negative as well as positive. The retail sector as a whole has

made tremendous changes in the country which shows the effects

of it on functions such as consumers, other retailers, government,

farmers as well as the economy as a whole.

Thus the following are the effects of the retail

boom on these various aspects of the country:

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Consumers:

The consumer is the function that is most affected by the retail

boom. Consumers include all the major classes such as upper,

middle and lower class. Also they include various genders, age

groups, races and people having different perceptions.

o Positive effects:

The retail boom has brought in a vast change in consumer

behaviour. The entrance of organized retail has given the

consumers more number of options to choose from and hence they

can be more satisfied with there purchases.

Also more number of competitors in the industry has increased the

bargaining power of the consumers. Thus the consumers are able

to purchase at a comparatively low price.

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The organized retail has given the opportunity to the consumers to

buy several products under a single roof. Thus major cost and time

of the consumers is saved which enhances there satisfaction.

Even the lower end consumers get a chance to purchase high

quality goods at comparatively lower costs which otherwise is not

available.

Due to high competition, the consumers get various discounts as

well as offers.

The organized retail provides the consumers with better services

which otherwise was not possible.

o Negative effects:

Due to various options available to the consumers, they keep on

shifting from one service provider to another. This shows a

decrease or negative effect on consumer loyalty.

Due to organized retail getting a foot-hold in the market, the

consumers can be exploited if the forerunners get a glimpse of

monopoly setting in.

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Small retailers:

The small retailers form the second major group which is affected

by the retail boom. There are various reasons for this which are

explained below:

o Positive effects:

Small retailers get a chance to understand various complexities of

retailing. Thus they have to compete with major players.

Small retailers can exploit the vast industry by becoming organized

themselves. Thus they can form unions or groups to compete with

the organized sector.

The retail boom has brought in various new products to the market

including newer and better technologies which was otherwise not

available. Hence they have the opportunity to adopt these

technologies in their business.

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Young entrepreneurs are now attracted towards retail sector as a

whole due to its boom. Thus they start up with small retail shops

that are modern in nature and fully equipped to compete with

major players. Thus the small retail sector also gets a boost.

o Negative effects:

The threat posed by new entrants in the form of organized retailers

is a big concern for the small retailers. Hence the competition has

increased.

Due to various new competitors and services being made available

to the consumers by the organized retailers, the customer base for

the unorganized retailers has decreased.

Other major negative effect of the entrance of organized sector is

that it has forced some of the smallers players to shut down their

business due to increasing competition.

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The small retailers are not able to provide the high quality at

competitive cost which is done in the organized sector.

The expectations of the consumers from the small retailers (lorries,

kirana stores) has increased which poses negatively to the retail

Government:

Government is the body that decides on the rules and regulations

in any particular industry. Thus the government has to control the

working of the economy, standard of living, various industries and

there working cycles etc. and to control these aspects, the

government needs to impose policies and laws. Thus the boom in

the retail sector has made the government think on various aspects

and redefine and re-evaluate the rules and regulations.

o Positive Effects:

The retail boom requires the government to increase its

expenditure on the infrastructure. This has been the major concern

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for the government as well as the industry itself. Thus the economy

has seen drastic changes in the infrastructure.

The government has to enact laws that reduce the tax evasions to

increase the attraction for new entrances. Thus the new laws will

enable new entrepreneurs to indulge in retailing.

The retail sector has brought in more income to the entrepreneurs.

This shows in the increased tax paying population in the economy

which increases the government income. This income in turn can

be utilized to finance retail as well as other sectors.

The government has to keep better control over law and order due

to opening of new 24 hr retail shops. Also the government needs to

safeguard the interest of the retailers as a whole.

o Negative effects:

The retail sector has shown a boom in recent years. This has

increased government expenditure towards this sector to maintain

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stable growth. Hence some of the other sectors that actually require

major capital investments are overlooked.

The government has played a major role in the retail boom by

supporting the small retailers. This has shown a negative effect in

states where in the organized retail has been banned.

The major concern for the government is consumer interest. Thus

the government has to enact laws which favour consumers more.

This proves to be an hindrance in the expansion process. Since the

government has liberalized the policies for foreign entrance in this

sector, these foreign majors might drain money out of the

economy, which is a negative concern for the government.

Economy:

The retail boom has the biggest effect on the economy as a whole.

Since the above factors together contribute to the economy, the

economy is affected in a larger sense.

Thus the retail boom’s effect on the economy can be summarized

as follows:

o Positive effects:

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Due to high growth in the retail sector, the GDP of the economy

has risen. Thus there is an increase in investments through stocks

and savings.

The retail boom has attracted foreign direct as well as portfolio

investments. Thus the economy has more foreign exchange to

support other transactions.

Employment opportunities in the economy has increased manifold.

Thus the overall productivity of the economy has increased which

shows a better standard of living for the population at large.

Due to increase in infrastructure, other sectors get a boost and thus

economy as a whole prospers.

The boom has brought in newer and better technologies in the

country which helps the economy to develop such better

technologies in the long run. Also the economy is able to compete

with other developed countries.

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o Negative effects:

The retail boom has in functionality no real negative effects in the

economy as a whole. This means that individual functions of the

economy are affected but not the economy as a whole in negative

terms.

CHALLENGES

1. LOCATION- “Right Place”, Right location choice is the

most important ingredient for any business that relies on

customers, and is typically the prime consideration in a

customer store choice. Locations decisions are harder to

change because retailers have either to make suitable

investments to buy and develop Real estate. While

formulating decision about where to locate, the retailer must

refer to the strategic plan by focusing on following aspects:

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Investigate alternative trading areas.

Determine the type of desirable store location.

Evaluate alternative specific store sites.

2 MERCHANDISE- The primary goal of most retailers is

to sell the right kind of merchandise. Merchandising

consists of activities involved in acquiring goods and

services and making them available at 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.

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4 PRICING- Pricing is a crucial strategic variable due to its

direct relationships with other retailing elements. The

importance of pricing decisions is growing because today’s

customers are looking for good value when they buy and

merchandise. Price is the easiest and quickest variable to

change.

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5 TARGET AUDIENCE- “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 great extent with the influence on

the retail industry relating to fuel the retailing boom.

6 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 Indian

retailers are facing. The cost of business operations is very

high in India.

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CHAPTER 2

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OBJECTIVES

&

SCOPE OF THE STUDY

OBJECTIVE OF STUDY

Retail is clearly the sector that is poised to show the highest growth

in the next five years. The sector is set for a revolution as both the

present players and the new entrants are gearing up to explore the

market. This sector contributes 10% of India’s GDP and the

current growth rate is 8.5%. The present size of the Organized

retailing sector is approximately 3% and is expected to grow to 25-

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30%. There are about 300 new malls, 1500 supermarkets and 325

departmental stores currently under construction.

1.)The research study assists solving various operations and

planning problems of the retail industry. It also helps to

develop social relationships.

2.)Transform ideas into viable and creative solutions of the

retail industry.

3.) Analysis of the existing marketing conditions for retailing

activities.

4.) Finding the new opportunities for retail business.

5.) To analyze the growth of retail industry in B-CITIES.

SCOPE OF THE STUDY

1.) Evaluation of existing HR strategies

2.) Competition may be less in markets.

3.) A retailer may be able to offer goods & services or

technology not yet available in the existing market.

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4.) Market may represent growth opportunities if HR strategies

are properly implemented.

PAST/ PRESENT/ FUTURE OF RETAIL INDUSTRY

Before the decades of 80’s, India with hundreds of towns and cities

was a nation striving for development. In this evolution the people

of India played different roles as businessmen and consumers.

Retail which literally means to put on the market, is a very

important aspect of every city. Without a well organized retail

industry the people would not have their necessities and luxuries

fulfilled, whether it may be our daily groceries or fashion

accessories and everything in between, retail industry brings us the

blissful experience of shopping.

Though organized retailing industry began much earlier in

the developed nations, India had not actively participated.

However with its vast expanse and young population, India in the

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21st century emerges as a highly potential retail market. The

journey of retailing in B-CITIES has been reviting and the future

promises further growth. It is widely accepted that the retail

industry has undergone a drastic change in the last five years and

there is yet more to come.

The beginning for B-CITIES has been emerged that the

sector will see the rosy days in the future. This confidence has

helped India to acquire the No.1 position among 30 most attractive

retailing destinations in the world according to Global Retail

Development Index, Among emerging markets India holds the 2nd

position after china in the list of most favored retail destinations

PAST RETAIL INDUSTRY IN B-CITIES

The foundation for a strong economy was being laid in past

retailing in B-CITIES. Youths were beckoning new awareness in

all spheres, and this brought in an opportunity for retail industry to

flourish. First in the metros and major cities and later to the sub

urban and rural market as well. Retailing in B-CITIES at this stage

was completely unorganized and it thrived as separate entities

operated by small entrepreneurs’ in their own territories. There was

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a lack of International exposure and only a few Indian companies

explored the retail platform on a larger scale.

From overseas only companies like Levi’s, Pepe, Marks

and Spencer etc., had entered targeting upper middle and rich

classes of Indians. However as more than 50% population was

formed by lower and lower middle class people, the market was

not completed captured. This

Was later realized by brands like Big Bazaar and Pantaloons who

made their products and services accessible to all classes of people

and today the success of these brands proves the potential of Indian

retail market.

The B-CITIES retail Revolution was the eruption of malls across

all regional markets. Now at its peak, the mall culture actually

brought in the organized format for retailing in B-CITIES which

was absent earlier. It was surprising that there was not a single

mall in B-CITIES a decade before and just a few years ago only a

handful of them were striving, today there are many malls across

different cities and 2 years from now around 500 malls are

predicted to come up.

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PRESENT- RETAIL INDUSTRY IN B-CITIES

At present the Retail industry in B-CITIES is accelerating. Though

B-CITIES is still not at an equal pace with other Asian

counterparts, but geared to become the major player in the Retail

market. B-CITIES secure a high position in the International

market. Also with a highly diverse demography, B-CITIES provide

immense scope for companies bringing in different products

targeting different consumers.

According to the Global Retail Development Index, B-CITIES is

positioned as the foremost destination for the retail investment and

business development. The factor that is presently playing a

significant role is the fact that the large section of the Indian

population is in the age

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Group of 20-34 with a considerably high purchasing power, this

has caused the increase in the demand in the urban marketing

resulting into the consistent growth in the retail business.

And though the metros and other tier 1 cities continue to

sustain retail growth, the buzz has now shifted from the big cities

to the lesser known ones. As the spending is no longer limited to

metros, every tier 2 city in the country has good market for almost

every product or service.

Due to this tier 2 cities like Chandigarh, Coimbatore, Pune,

Kolkata, Ahmadabad, Baroda, Hyderabad, Cochin, Nagpur,

Indore, and Trivandrum etc. provide a good platform for a brand to

enter Indian market.

However, there are a few precautions for every brand that

explores B-CITIES market. As B-CITIES consumers are very

curious and have a broad perspective, they respond well to a new

product or concept and there are very fair chances of a brand

surviving well. But every B-CITIES consumer whether urbanite or

a small town dweller possess the feeling of value of money.

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Although labeled as tight fisted, B-CITIES consumers are large

spenders once they realize that they are getting the value for their

money. Also new product/service concepts from the western world

are better adopted first by the Indian urban Indians, the smaller

markets respond well to the need based retailing rather than luxury

concepts. As the Indian retailing is getting more & more organized

various retail formats are emerging to capture the potential of the

market.

Mega Malls

Multiplexes

Large and small supermarkets

Hypermarkets’

Departmental stores are the formats which flourishing in both

the big and small regional markets.

As the major cities have made the present retail scenario

pleasant, the future of the B-CITIES Retailing

industry lies in the rural regions. Catering to these consumers

will bring tremendous business to brands from every sector.

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However as the market expands companies entering B-

CITIES will have to be more cautious with their strategic

plans.

FUTURE RETAIL INDUSTRY IN B-CITIES

According to a study, the size of Indian retail market is

currently estimated at Rs.704 crores which accounts for a

meager 3% of the total retail market. As the market becomes

more and more organized the Indian retail Industry will gain

greater worth. The retail sector in small towns and cities will

increase by 50 to 60% pertaining to easy and inexpensive

availability of demand among consumers.

Growth in B-CITIES of the Real estate sector is also

complementing the retail sector and has become a strong

feature for the future trend. Over a period of next 4 year there

will be a retail space demand of 40 million sq. ft. However,

the growth in the retail sector is also caused by

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the development of retail specific properties like malls and

multiplexes. According to a report the retail sales are

growing at a rate of 8.3% per annum. With the organized

retail which currently has the 15.8% of the total market will

acquire 18-20% of the market share in the coming years.

Factors that are playing the vital role in fulfilling the bright

future of the Retail in B-Cities:

The income of an average Indian is increasing and thus there

is proportional increase in the purchasing power.

The Infrastructure is improving greatly in all regions is

benefiting the market.

Indian economy and its policies are also becoming more &

more liberal making way for a wide range of companies to

enter Indian market.

Indian consumers have learnt to become good consumers and

all National and International brands are benefitting with this

new awareness.

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Another great factor is the internet revolution, which is allowing

foreign Brands to understand Indian consumers and influence them

before entering the market. Due to the reach of media in the

remotest of the markets, consumers are now aware of the global

products and it helps the brands to build themselves faster in a new

region.

However, despite of these factors contributing to

the growth of B-CITIES retail industry, there are few challenges

that the industry faces, there are few challenges that the industry

faces which are need to be dealt in order to realize the complete

scope of growth in B-CITIES market. Foreign direct investment is

not allowed in the retail sector which can be a concern for many

brands but Franchise agreements can avoid this problem, and with

good planning, timely implementation and a media campaign that

touches B-CITIES consumers any brand can go far ahead in the B-

CITIES Retail Revolution.

RECENT TRENDS AND CHANGES

Retail in B-CITIES is witnessing a huge revamping exercise.

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India is rated the fifth most attractive emerging retail market;

a potential goldmine.

Multiple drivers leading to the consumption boom.

Favorable Demographics.

Growth in Income

Increasing population of women.

There are many problems faced by Retail industry in

Indian market. They are as following:

The format does not suit Rural India: While the format

suits the urban areas, it does not suit the rural areas in a

country like India. Today in India, Organized retailing is

confined to class A cities i.e. the 23 largest cities. About 82% of

organized retailing comes from the top six cities and another

12% from the next four. Thus the top 10 cities accounts for 94%

of all organized retailing in India.

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Purchasing patterns not very conducive: Even in the urban

areas, the purchasing pattern of Indian consumers differs

from those of Westerners. Whereas in the West, the

purchases are by and large made in the first week of the

month. Purchasing patterns differ also because of the

difference in the eating habits of people.

Inadequate growth of brands: Inadequate growth of brands

is another factor in B-CITIES, until recently; branding was

almost non-existent in convenience products. Supply chain

problems, as Suppliers are not properly organized in the

country, replenishment of stock poses problems for large

chains.

Being family businesses retailing enterprises have

limitation in expansion: Yet another reason for the slow

pick up of the mega retailing idea in B-CITIES is that all retail

enterprises have been family concerns. And family business

usually has the limitation in expansion,

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Real estate problems: Real estate is an integral requirement

of large scale chain store operations. Also big chains have to

operate in several cities. Real estate thus becomes crucial,

that is why groups that have been in Real estate and hotel

businesses are more comfortable in branching off into

retailing. From other firms, Real estate development is a

problem which is major.

INTRODUCTION TO HUMAN RESOURCE

DEPARTMENT OF RETAIL INDUSTRY

41

In retail industry the job of HR manager can be compare with

the job of conductor, whose job is to instruct and direct all of the

various musicians so that they can perform well together. But

before a conductor can direct a beautiful performance, all of the

individual musicians must be able to play their instruments well.

What kind of performance could one can expect if the violinists

did not know how to play their instruments or the flutists could not

read music?

So it is in the hospitality industry, before a manager can

direct and shape employee’s individual contributions into an

efficient whole, he or she must first turn employees into competent

workers who know how to do their jobs. Employees are the

musicians of the orchestra that the members of the audience-the-

guests-have come to watch performance. If employees are not

skilled at their jobs, then the performance they give will get bad

reviews. Just as an orchestra can have a fine musical score from a

great composer and still perform poorly because of incompetent

musicians, so a hotel can have a finest standard recipes, service

procedures and quality standards and still have dissatisfied guests

because of poor employee performance.

42

That is why properly managing human resources is so

important. No other industry provides so much contact between

employees and customers and so many opportunities to either

reinforce a positive experience or create a negative one.

As in the retail sector and in different sector there are around lots of employee are involved in different jobs in different fields there

is dire need to look and control on them. No doubt different

department’s heads are present to look their department employee,

but HRD is a place, which supervise and effectively communicate

with these departments head and communicate with the top

management. Thus there function is very large and diverse as

compared with respect to different

Fig: A Typical Organization of Personnel Department

43

Personnel Policies of HR

The personnel function in retail includes many activities such as:

44

General Manager

Personnel Director

Personnel Manager

Personnel Officer

Personnel Research & Development Officer

TrainingDepartment

PersonnelDepartment

Operative TrainingSupervisory TrainingManagement TrainingTraining Instruction

Training Aids & Equipments

WelfareTrainingRecruitmentMaintaining Payroll

≈ Consideration of leadership style

≈ Relationship

≈ Responsibilities

≈ Philosophy

≈ Social orientation

≈ Organizational structure

In most of the retail the personnel policies are put in writing. These

policies are distributed to key and responsible executive to provide

guidance and ensure consistent application. Periodically the HRD

review these policies.

Arrears of personal policies

The personal policies are concern with each of the following

areas:-

Employment

≈ Recruitment

Process

45

Fig: HRP Process

Organizational Objectives & Policies

HR plans need to be based on organizational objectives. In

practice, this implies that the objectives of the HR plan must be

derived from organizational objectives. Specific requirements in

46

OrganizationalObjectives & Policies

HR Demand Forecast HR Supply Forecast

HR Programming

HRP Implementation

Control and Evaluation of Program

Environment

Surplus Shortage

terms of number and characteristics of employees should be

derived from the organizational objectives.

HR Demand Forecast

Demand forecasting must consider several factors – both

external as well as internal. Among the external factors are

competition, economic climate, laws and regulatory bodies,

changes in technology and social factors. Internal factors

include budget constraints, production levels, new products and

services, organizational structure and employee separations.

HR Supply Forecast

The next logical step for the management is to determine

whether it will be able to procure the required number of

personnel and the sources for such procurement. This

information is provided by supply forecasting. Supply

forecasting measures the number of people likely to be available

from within and outside an organization, after making

allowance for absenteeism, internal movements and promotions,

wastage and changes in hours and other conditions of work.

47

HR Programming

Once an organization’s personnel demand and supply are

forecast, the two must be reconciled or balanced in order that

vacancies can be filled by the right employees at the right time.

HR programming is the third step in the planning process,

therefore, assumes greater importance.

HR Plan Implementation

Implementation requires converting an HR plan into action. A

series of action programmes are initiated as a part of HR plan

implementation. Some such programmes are recruitment,

selection and placement; training and development; retraining

and redeployment; the retention plan; the redundancy plan; and

the succession plan.

Control and Evaluation

Control and evaluation represents the fifth and the final phase in

the HRP process. The HR plan should include budgets, targets

and standards. It should also clarify responsibilities for

implementation and control, and establish reporting procedures

48

which will enable achievements to be monitored against the

plan. These may simply report on the numbers employed

against establishment and on the numbers recruited against the

recruitment targets. But they should also report employment

costs against the budget, and trends in wastage and employment

ratios.

Consequences of Inadequate Planning

One example of inadequate planning is the case of an

organization caught in a severe budget crisis for which

management sees only one solution – to lay off large numbers of

employees. Careful planning for such a crisis during better times

might have resulted in a series of alternatives, making layoffs

unnecessary.

Many other problems can occur if human resources planning

are haphazard or neglected. For example, planning should take into

account staff reductions in all parts of the organization and should

be tried into any system for transferring employees. Top

management because of declining sales or increased automation,

49

including the use of computers and latest technology, might

contemplate staff reductions.

JOB DESIGN

Job design is a process of determining the specific tasks and

responsibilities to be carried out by each member of the

organization. In simple words, the logical sequence to job analysis

is job design. Job analysis provides job-related data as well as the

skills and knowledge expected of the incumbent to discharge the

job. Job analysis, then, involves conscious efforts to organize

tasks, duties and responsibilities into a unit of work.

50

Factors Affecting Job Design

Job design is affected by organizational, environmental,

behavioural factors. A properly designed job will make it

productive and satisfying. If a job fails on this count, the fault lies

with the job designers who, based on the feedback, must redesign

the job. (See Fig)

51

Feedback

Organizational FactorsCharacteristics of taskWork flowErgonomicsWork practices

Environmental FactorsEmployees abilities and availability Social and cultural expectations

Behavioral FactorsFeedback AutonomyUse of abilitiesVariety

Job Design

Productive & satisfying job

Techniques of Job Design

Fig: Techniques of Job Design

≈ Work Simplification: In this technique, the job simplified or

specialized. A given job is broken down into small sub-parts

and each part is assigned to one individual.

52

Work Simplificatio

n

JobRotation

Autonomous Teams

High Performance Work Design

Job Enrichment

Job Enlargemen

t

JobDesign

≈ Job Rotation: Job rotation implies movement of employees

from job to job. Jobs remain unchanged, but incumbents shift.

With job rotation, a given employee performs different jobs, but

more or less, jobs of the same nature.

≈ Job Enlargement: Job enlargement involves expanding the

number of tasks or duties assigned to a given job. Job

enlargement is naturally opposite to work simplification.

Adding more tasks or duties to a job does not mean that new

skills and abilities are needed to perform it.

≈ Job Enrichment: Job enrichment seeks to improve both task

efficiency and human satisfaction by building into people’s

jobs, quite specifically, greater scope for personal achievement

and recognition, more challenging and responsible work, and

more opportunity for individual advancement and growth.

≈ Autonomous or Self-directed Teams: A self-directed work

team is an intact group of employees who are responsible for a

whole work process or segment that delivers a products or

service o an internal or external customer.

53

≈ High-Performance Work Design: It is a means of improving

performance in an environment where positive and demanding

goals are set.

Role of Human Resource Department

The human resources department’s role in job design is

usually indirect, although job design influences almost every

aspect of human resources management. The department diagnoses

organizational problems that suggest job redesign, incorporate

information on job design in training and management

development programs, and help plan job redesign programs to

ensure that sound human resources policies and practices are

developed. Further, the department is needed to prepare to modify

job descriptions and job specifications and to an object modify

recruitment, selection, training, compensation and other practices

to be consistent with any job redesign program.

54

RECRUITMENT

In simple terms, recruitment is understood as the process of

searching for and obtaining applicants for jobs, from among whom

the right people can be selected. Recruitment is the process of

finding qualified people and encouraging them to apply for work

with the firm.

Managerial Roles

Responsibility for the overall recruitment process is assigned

to human resources managers. They are responsible for designing

and implementing a recruitment program that will meet the hotel

industry’s personnel needs while complying with all legal

requirements. This responsibility includes finding sources of

applicants; writing and placing advertisements; contacting schools;

agencies and labor unions; establishing procedures to guarantee

equal employment opportunity; and administering the funds the

firm has budgeted for recruitment.

55

Factors Governing Recruitment

The given fig. represents the factors that normally affect the

recruitment process. These factors add additional function to that

of HR manager.

Fig: Factors influencing recruitment

Types of Recruitment

In hotel industry, the types of recruitment are:

Internal Recruitment

Internal recruitment seeks applicants for positions from those

56

External ForcesSupply & DemandUnemployment rateLabor MarketPolitical-socialSons of soilImage

Internal ForcesRecruitment PolicyHRPSize of the firmCostGrowth & Expansion

Recruitment

who are currently employed. Internal sources include present

employees, employee’s referrals, former employees, and former

applicants.

External Recruitment

Finding qualified applicants from outside the organization is the

most difficult part of recruitment. The success of an expanding

hotel industry or one with many positions demanding

specialized skills often depends on the effectiveness of the

organizations recruitment program. Specifically, sources

external to an organization are professional or trade

associations, advertisements, employment exchanges,

college/university/institute placement services, consultants,

displaced persons, radio and television, acquisitions and

mergers and competitors.

Recruitment Process

HR practices its function in each and every stages of recruitment.

The process comprises five interrelated stages, viz. (i) Planning,

57

(ii) Strategy development, (iii) Searching, (iv) Screening, and (v)

Evaluation and control.

The function of HR is to make the selection procedure an ideal

one. The ideal recruitment programmed is the one that attracts a

relatively larger number of qualified applicants who will survive

the screening process and accept positions with the organization,

when offered

ORIENTATION AND PLACEMENT

Orientation

Orientation is called as induction. It is the planned process of

introducing new employees to their jobs, their co-workers and the

organization. The main purpose of induction is to relieve the new

employee from possible anxiety and make him or her feel at home

on the job.

These orientation programmes are carried out formally as well as

individually/collectively in the hotels. These programmes are

carried from 1 weak – 2 weak.

58

Organizational Issues

History of employer Product line or services

provided

Organization of employer Overview of production

process

Names & titles of key

executives

Company policies & rules

Employee’s title &

department

Disciplinary regulations

Layout of physical facilities Employee handbook

Probationary period Safety procedure &

enforcement

Employee Benefits

Pay scales and pay days Insurance benefits

Vacations and holidays Retirement programme

Rest breaks Employer-provided services

to employees Training & education

benefits

Counseling Rehabilitation programmes

Introduction

To supervisor To co-workers

To trainers To employee counselor

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Job Duties

Job location Overview of job

Job tasks Job objectives

Job safety requirements Relationship to other jobs

Placement

After orientation comes placement. Placement refers to the

assignment of a new employee to his or her job. The jobs of HR

are simple where the job is independent, but where the jobs are

sequential or pooled, HR specialists use assessment classification

model for placing newly hired employees. For example the job of

placing a waiter to its position is quite simpler as compared with

that of the placing the employee at managerial level. The job of

placing a waiter to its position is called an independent job but the

job of placing employee at managerial level can be considered as

sequential or pooled job.

60

TRAINING AND DEVELOPMENT

Training and development activities are designed in order to

impart specific skills, abilities and knowledge to employees.

Effective training is basic ingredient of success in the hotel

industry. The concept of training is endorsed my most managers in

the hotel industry, yet managers often give little thought to the

training function in the context of their own business or

departmental responsibilities until something goes wrong! One of

the main problems in hotel industry is that investment in training

and development of employees is a reactive process for many

companies. Frequently, training and development arises as the

result of significant change in the operational environment or as a

consequent of crisis such as staff turnover or major departmental

problems. Training is then used to cope with the immediate

difficulty. This process may be proved costly to hotel. Whereas

development refers to learning opportunities designed to help

employees grow and evolve a vision about the future.

Here the job of HR is to identify the training need and then

accordingly to design the suitable programme for that. Training

within a hotel provides the best opportunity to influence the

61

attitude and performance of employees. The training programmes

include is such as introduction, fire, food hygiene, control of

substances hazardous to health, manual handling first-aid,

technical skills, product knowledge, and customer service.

Methods and Techniques of Training

A multitude of methods of training are used to train employees.

Training methods are categorized into two groups and they are:

1. On-the-job training (OJT)

2. Off-the-job training

1. On-the-job training: On-the-job training is primarily learning

by doing and, as such, is probably the most used and most

abused approach to training. Like other form of training, OJT

requires planning, structure and supervision to be effective for

developing a variety of practical and customer-oriented

capabilities. When done correctly, OJT is a sensible and cost

effective method for training and assessing trainees’ progress in

jobs such as retail sales, food and beverage operatives, and

check-in and check-out positions. Some of the On-the-job

methods of training are orientation training, job-instruction

62

training, apprentice training, internships and assistantships, job

rotation etc.

For example, at Domino’s Pizza, approximately 85% of

employee training is OJT, delivered by store managers using

extensively by Ramada Inns, Inc., which has developed an OJT

training aid. It also provides trainees with a list of sequential

steps that should be followed to perform the task correctly, as

well as the list of tools, materials, and equipment needed to do

the task. Finally, the training aid provides an evaluation form

for providing feedback to the trainees.

2. Off-the-job training: Off-the-job training allows for the

development of broader and more conceptual skills while

providing a practice environment in which error need not be so

costly. There are three main forms of off-the-job training: In-

house, External, and Independent.

In-house off-the-job training may take several formats

including lectures and other classroom techniques, discussions,

demonstrations, case studies and role plays, and simulations.

What distinguishes in-house off-the-job training from other type

of off-the-job training is that in-house training is conducted

63

away from the physical location where the job is actually carried

out, but still on company premises.

Like in-house off-the-job training, external off-the-job

training can also take a variety of forms. Such training may be

tailored to the company’s specific need or it may be offered on a

more general basis; it may focus on special disciplines related to

hospitality.

Independent off-the-job training refers to training

methods that are controlled and managed by the learner. A

number of these training options which are becoming

increasingly important to employees in the hotel industry are:

≈ Distance/open learning or training (may involve

correspondence teaching, use of television or radio, video-

conferencing, etc.)

≈ Computer-assisted learning

≈ Interactive-video learning

≈ A combination of the above method

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The Training Process

Assessing Training Needs

Preparing the Training Plan

Specifying Training Objectives

Designing the Training Programs

Selecting the Instructional Methods

Completing the Training Plan

Conducting the Training

Evaluating the Training

Planning Further Training

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PERFORMANCE APPRAISAL

Performance appraisal refers to the assessment of an employee’s

actual performance, behavior on jobs, and his or her potential for

future performance. It is done generally for the purpose of

assessing training needs to employee, to effect his promotions and

to give him pay increase, retention or termination.

Though there are different methods of performance appraisal only

one method that is commonly used in this industry is Rating Scale

Method.

For Example: In most of the hotels that I visited the performance

appraisal is done on yearly basis but in Hotel Imperial Palace on

day to day basis the briefing of employee is done. In Orchid Hotel,

the rating scales method is used by the way of Questionnaire (1-

10).

Challenges of Performance Appraisal

Create a culture of excellence that inspires every employee to

improve or lend himself or herself to be assessed.

Align organizational objectives to individual aspirations.

Clear growth paths for talented individuals.

66

Provide new challenges to rejuvenate careers that have reached

the plateau stage.

Forge a partnership with people for managing their careers.

Empower employees to make decisions without the fear of

failing.

Embed teamwork in all operational processes.

Debureaucratise the organization structure for ease of flow of

information.

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Performance Appraisal

Process

Fig: Performance Appraisal Process

68

Objectives of Performance Appraisal

Establish Job Expectations

Design an Appraisal Programme

Appraise Performance

Performance Interview

Use Appraisal Data for Appropriate Purposes

JOB EVALUATION

Job evaluation refers to the process of determining the relative

worth of each job for purpose of establishing satisfactory wage and

salary differentials. Jobs are evaluated on the basis of their content

and are placed in the order of their importance. In a job evaluation

programme, the jobs are ranked and not the job holders.

Methods of Job Evaluation

Fig: Methods of Job Evaluation

69

Job Evaluation

Analytical Non-Analytical

Point-Ranking Method

Factor Comparison

Method

Ranking Method

Job-Grading Method

Though there are different types of methods available but the most

common method practiced in this industry is analytical method and

in analytical method point ranking methods is the most appropriate

one.

70

Process of Job Evaluation

Fig: Job Evaluation Process

71

Objectives of Job Evaluation

Job Analysis

Job Evaluation Programme

Wage Survey

Employee Classification

Job Description

Job Specification

EMPLOYEE RELATIONS

As the name suggest it is all about maintaining relationship with

the employee. It includes all terms that are concerned with the

employee like employee remuneration, i welfare, safety and health

issue, trade unions etc. Here it’s where the HR manager

communicates with employee about their problems, suggestion and

so on. All these steps are followed in order to retain best employee.

Employee Remuneration

In most of the hotels, the human resource department plays a

crucial role in determining the remuneration policy of employees.

For this they take into consideration all external as well as the

internal factors. By this they have to deal with external factors like

labor market, going rate, cost of living, labor unions, labor laws,

society and the economy as well as internal factors like company’s

ability to pay, job evaluation and performance appraisal and the

worker himself or herself. In hotel industry both financial as well

as non-financial methods of remuneration are followed.

72

Incentives Payments

It is seen that HRD are highly involved in deciding the incentives

programmes. As this department is involved in deciding the

remuneration programmme, they are serving as the foundations for

most incentive plans. The management of these plans is

collaborative. These incentives schemes are for direct workers who

work in batches, as well as for indirect workers.

Employee Benefits and Services

The HRD has a major role in the development and management of

benefits programs. These benefits are designed by HRD in order to

suit the requirement of employee. And further, they are sent to the

top management for approval. Thereafter they are implemented.

These benefits, which are given to the employee, are both financial

as well as non-financial.

73

Some of the benefits and services, which are practiced in the hotel

industry, are as follows:

Legally required payments

Old age, survivors, disability and health insurance

Worker’s compensation

Unemployment compensation

Contingent and deferred benefits

Pension plans

Group life insurance

Sick leave

Maternity leave

Payments for time not worked

Vacations

Holidays

Voting pay allowances

Employee Welfare

Labor welfare refers to taking care of the well being of workers by

employers, trade unions, and government and non-government

74

agencies. Recognizing the unique place of the worker in the

society and doing good for him/her retaining and motivating

employees, minimizing social evils, and building up the local

reputation of the hotel are the arguments in favour of employee

welfare. Hence this area has generated one more area for practicing

of HR roles.

360 DEGREE PERFORMANCE APPRAISAL

360 degree appraisals are a powerful developmental method and

quite different to traditional manager-subordinate appraisals. As

such a 360 degree process does not replace the traditional one-to-

one process - it augments it, and can be used as a stand-alone

development method.

360 degree appraisals involve the appraise receiving feedback from

people (named or anonymous) whose views are considered helpful

and relevant.

360° Feedback is a proven method of helping individuals reviews

their performance through the eyes of their working colleagues.

The feedback is typically provided on a form showing job

75

skills/abilities/attitudinal/behavioral criteria and some sort of

scoring or value judgment system. The appraise should also assess

themselves using the same feedback instrument or form.

BENCHMARKING

Benchmarking is the process of determining who is the very best,

who sets the standard, and what that standard is. In baseball, you

could argue that seven consecutive World Series Championships

made the New York Yankees the benchmark. It is done to motivate

people to improve toward that goal.

Benchmarking is usually part of a larger effort, usually a Process

Re-engineering or Quality Improvement initiative. Benchmarking

is a management tool that is being applied almost anywhere. Once

we decide what to benchmark, and how to measure it, the object is

to figure out how the winner got to be the best and determine what

we have to do to get there.

76

CHAPTER-3

RESEARCH

METHODOLOGY

77

SOURCES OF DATA

Data’s are the useful information or any forms of documents

designed in a systematic and standardize manner which are used

for some further proceedings. One of the important tools for

conducting marketing research is the availability of necessary and

useful data. Sometimes the

data’s are available readily in one form or the other and sometimes

the data’s are collected fresh.

The sources of data falls under two categories:

1.)Primary Sources.

2.)Secondary Sources.

Secondary Data- The Secondary data was collected through the

following:

Online Research material of the various Institutions/Outlets

directly or Indirectly involved with the Retail Industry.

78

Secondary Data used in External Source of Information Like.

# Internet

# Magazine

# Paper cutting

OTHER SOURCES

Information SourcesInformation has been sourced from namely,

Books

Newspapers

Trade journals

White papers

Industry portals

Government agencies

Trade associations

Through industry news and developments.

79

CHAPTER-4

DATA

ANALYSIS &

OBSERVATIONS

80

RETAIL ANALYSIS

Raising aspirations: Value added good sales

Organized retailing in B-CITIES has been largely an urban

phenomenon with affluent classes and growing no. of double

income households.

Rural markets emerging as a huge opportunity for retailers

reflected in the share of the rural market across most

categories of consumption.

Companies using their own web portals with the horizontal

players like Rediff.com and Indiatimes.com to offer products

on the web.

DLF plans to invest US$4.02 billion over four years to

develop about 20 large shopping malls across the country’s

retail market.

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Israeli mall developer plaza Centre NV plans to invest

US$ 1.25 billion over the next five-seven years to set up 50

malls in India.

Reliance Retail is going ahead with plans worth an

investment of US$ 3.77 billion for setting up 205 stores.

IT is a tool that has been used by retailers ranging from

Amazon.com to eBay radically changing the buying behavior

across the globe.

Experimentation with formats: Retailing in B-CITIES is

still evolving and the sector is witnessing a series of

experiments across the country with new formats being

tested out.

Ex. Quasi malls, sub-urban discount stores, Cash and Carry

etc.

Unorganized retailing is getting organized: To meet the

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challenges of Organized retailing such as Cineplex’s and

malls, which are backed by the corporate houses such as

Annals’ and ‘PVR’. The Unorganized sector is getting

organized. 25 stores in Delhi under the banner of provision

mart are joining hands to combine monthly buying.

Bombay Bazaar and E-food mart formed which are

aggregations of Kirana’s.

Emergence of discount stores: They are expected to

spearhead the organized retailing revolution. Stores trying to

emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay

Bazaar, RPG’s etc.

83

CHAPTER-5

IMPORTANCE

OF

STUDY

84

ROLE OF HUMAN RESOURCE IN RETAIL INDUSTRY

Service quality and productivity were the most crucial competitive

issues facing these firms. When asked to different hotels regarding

strengthening competitiveness, 50 percent choose internal

management actions, including educating and training employees,

with publicly announcing employee policy. And all these

procedure of implementing such task is over HR shoulder.

To achieve a progressive, innovative culture within organization-

and to cope with the critical challenges that the future might bring-

human resources professionals are likely to assume certain roles

with greater frequency. These roles are following:

The Consultant Advisor Role:- In particular, the top human

resources executive will increasingly play a major role in

advising the CEO and the top management team about the

human resources implications of broad organizational strategy,

both nationally and globally. Further, the human resources

department will be called upon more and more advice

management at all levels about the motivational, morale and

legal implications of various present and proposed practices and

policies.

85

The Catalyst Facilitator Role: - The human resources directors

have a unique opportunity to serve in a catalyst-facilitator role

in stimulating a top management philosophy, leadership style

and organizational culture and climate. It is important that

management develops a clear view of these interrelated matters

and that management is self-conscious about them on an

ongoing basis. In addition, the human resources director can

serve as a resource person about these concepts and their links

to organizational outcomes such as effectiveness, efficiency,

development and participant satisfaction.

The Diagnostic Role: - By this, they are expected to identify the

underlying causes of an organizational problem as distinct from

its symptoms and to come up with solutions – or system for

solving the problem- that correspond with the diagnosis. All too

often, programs of various kinds, like job enrichment, incentives

systems, and quality circles and so on, are proposed by

managers or human resources people. What is usually needed is

an accurate description of the problem to be solved, a careful

analysis of the dynamics of that problem, and a close look at

86

alternative solutions and their rectifications before a program are

implemented.

The Assessment Role: - One of the most difficult roles for

human resources professionals is the assessment role, in which

they assess the effectiveness of various human resources

practices and policies. A comprehensive evaluation of the

effectiveness of various human resources policies and practices

is called a human resources management audit or personnel

audit. These comprehensive human resources audit may be used

to analyze a wide array of human resources practices and

outcomes.

BENEFITS TO THE B-CITIES CONSUMERS

One has to agree that the entrance of big players will ensure the

high quality of service produced and being sold to the consumers.

There are other indirect benefits in terms of choice and pricing that

will be passed along to the consumers as the big retailers with

compete with each other for having the greater share in the market.

87

CHAPTER-7

FINDINGS

88

MAJOR FINDINGS

1- The Retail Sector in India can be split up into two parts, the

Organized and the Unorganized. The Organized sector, whose size

is expected to triple in the coming years, can be further split up

into departmental stores, supermarkets, shopping malls.

2- 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.

3- The retail sector in India contributes 10% of the Gross

Domestic Product and 8% to the employment of the country.

4- In terms of growth, the FMCG retail sector is the fastest

growing unit and the retail relating to household care,

confectionery etc, have lagged behind.

5- The foreign retail giants were initially restricted from making

investment in India. But now FDI at 51% is permitted in India only

through Single branded retail outlets. Multi brand outlets are still

89

beyond their reach. At this point they can only enter the market

through franchisees. Example, Wal-Mart had entered joining

hands with Bharti Enterprises.

6- On- line retailing is still to leave a mark on the customers due to

lacunae that have already been mentioned.

7-Cultural and Regional’s 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 favorable format for the time being in India.

90

CHAPTER-8

RECOMMENDATIONS

91

RECOMMENDATIONS

Looking for Opportunities, developing proposals and

implementing projects is very time consuming in formulating

the project.

1.) The management of the organization must allocate sufficient

human and financial resources if it wants the project to be

successful.

2.) Good quality project preparation pays off fine results.

3.) Thinking before the action taking is necessary.

4.) One has to be précised & complete with the information.

5.) It must be made sure that all the activities are ‘translated’ into

the Budget.

92

CHAPTER-9

PROJECT

LIMITATIONS

93

PROJECT LIMITATIONS

The Organized retail industry in India is faced with the stiff

competition from the unorganized sector.

There is the shortage of quality Real estate and Infrastructure

requirements in the country.

Opposition to Foreign Direct Investment from small traders’

effect retail industry.

A very high stamp duty on transfer of property affects the

industry.

Shortage of retail space in central and downtown locations

also hinders the growth of retail industry.

Land use conversion is time consuming and becoming

complex.

For settling property disputes, it consumes lot of time.

94

Non residents are not allowed to own property except they

are of Indian origin.

Inadequacies in infrastructure such as lack of high quality,

road networks, power shortages and insufficient storage

spaces.

Presence of strong Pro-tenancy laws makes it difficult to

evict tenants and this is posing problems.

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CHAPTER-10

CONCLUSION

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CONCLUSION

For a start, this retailer does not use HR Strategies in capturing

much more specific market. The retailers also need to make the

substantial investment in understanding/acquiring some advanced

expertise in developing more accurate and scientific demand

forecasting models,HR Policies, Recruitment, Development 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 environment, and

analyze whether their current market offers a potential

redevelopment of the area into a more modern multi-option

destination.

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, the potential for

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Improving retail productivity and cutting code decreases.

Therefore, it will become important for retailers to secure a

distinctive position in the market place based on value,

relationships or experience.

Finally, it is important to note that these strategies are not

strictly independent of each other; value is a function of not just

price, quality and service but can also be enhanced by

Personalization and offering a memorable experience. Infact

building relationships with customers can itself increase the quality

of overall customer experience and thus the perceived value. But

most importantly, it is critical to understand the target customer’s

definition of value and make an offer, which not only delights the

customer but also is difficult for competitors to compete.

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CHAPTER-11

BIBLOGRAPHY

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BIBLIOGRAPHY

1. S. Namakumari “Marketing Management”, Macmillan

Business Book, Delhi.

2. Philips Kotler “Marketing Management”, 11th Edition,

Eastern Economy Edition.

3. Ramanuj Majumdar “Product Management in India” 2nd

Edition, Eastern Economy Edition.

4. Christopher Lovelock “Service Marketing” 5th Edition,

Pearson Education.

5. Dr. S.L Gupta “Sales and Distribution Management”, Excel

Books.

6. Business and Marketing Magazine “4P’s Business &

Marketing”.

7. Business Magazine “Business Today”.

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8. “Changing Consumer Interface of Market Driven

Innovations”- Report.

9. “Retail Industry- Where does India stand?”- Report by

Sanjeev Kumar.

10“Global Powers of Retailing 2006”- Report by Stores

Magazine, Nation.

11 Human Resource Management by V.S.P.RAO

12 “The Great Indian Retail Story”- Report by Ernst & Young

India.

13“Indian Retail Industry”- Report by www.Rocsearch.com .

14 http:// www.indianretailing.com

15 http:// www.pantaloon.com

16 http://www.google.com

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17http://economywatch.com/business-and-economy/retail-industry

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