PROJECT REPORT ON:

RETAIL MANAGEMENT

SUBMITTED BY:
RIDHIMA ARORA
T.Y.B.M.S. [Semester V]
101/ A MORESHWAR KRUPA,
NEAR. CLUB AQUARIA,
BORIVALI – WEST,
MUMBAI – 400103

LALA LAJPAT RAI COLLEGE

MAHALAXMI (W), MUMBAI - 400 034

SUBMITTED TO:
UNIVERSITY OF MUMBAI

Academic Year:
2006 – 2007

NAME OF PROJECT GUIDE:-

PROF. H.S.Cheema

UNIVERSITY SEAT NO:-

SUBMISSION DATE:-

1
 CERTIFICATE

I, hereby certify, that MS. RIDHIMA ARORA of LALA LAJPAT RAI COLLEGE of
T.Y.B.M.S. (SEMESTER V) has completed project on RETAIL MANAGEMENT in
the academic year 2006-2007. The information submitted is true and original to the best
of my knowledge.

___________________ ___________________

PROF. H.S.CHEEMA MR. KAPIL KAPOOR

(PROJECT GUIDE) (COURSE CO.ORDINATOR)

___________________
DR. ALAKHNANDA
(THE PRINCIPAL)

2
 DECLARATION

I, MS. RIDHIMA ARORA of LALA LAJPAT RAI COLLEGE OF T.Y.B.M.S of

SEMESTER V, hereby declare that I have completed this project on RETAIL
MANAGEMENT in the Academic Year 2006-2007. The information submitted is true
and original to the best of my knowledge.

SIGNATURE,

_____________________

RIDHIMA ARORA

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 ACKNOWLEDGMENT

This project was a great learning experience and I take this opportunity to acknowledge
the invaluable guidance and inspiration provided to me during the course of this project
by my guide PROF. H.S.Cheema. I would also like to acknowledge the help provided
by Ms. Shubhadra Panero, who helped me in knowing their true facts of the company.

I would also like to thank Our Principal Dr.Alakhnanda, and our BMS co-coordinator Mr.
Kapil Kapoor who gave me this opportunity to work on this project which has helped me
explore the real corporate world of marketing, a step ahead of just practical knowledge
provided during the course of this curriculum.

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 INDEX

PAGE
S. NO. PARTICULARS NO.
1 INTRODUCTION 8
2 RETAILING: An Overview 10
3 GLOBAL RETAIL SCENARIO 17
RETAILING IN INDIA: A Comparison With Other Asian
4 Economies 18
5 RETAILING IN INDIA 20
SWOT & PEST ANALYSIS OF ORGANISED RETAILING IN
6 INDIA 25
7 FDI IN INDIA 32
8 FUTURE OF RETAILING IN INDIA:
1. Reliance plans to do a Wal - Mart in India 34
2. ITC enters Rural Retail 36
9 ROAD AHEAD…. 38
10 RETAILING PROCESS 42
11 THE INDUSTRY STRUCTURE 44
12 CASE STUDY: WESTSIDE 47
13 CONCLUSION 68
14 BIBLIOGRAPHY 69

EXECUTIVE SUMMARY

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Although retailing in its various formats has been around in our country for many years,
it was confined for a long time to family or “Mom & Pop” stores. Now, various
professional organizations are busy setting up shop and retailing in India; they have a
passion to be closer to the consumers. At this time, when the country’s retailing business
is going thorough a transformation, there is a compelling need for those involved in
retailing- and those who want to be involved – to understand this phenomenon
systematically so that they can practice it perfectly.

Retailing consists of those business activities involved in the sale of goods and services to
consumers for their personal, family or household use. It is the final stage in a channel of
distribution, which comprises all of the businesses and people involved in the physical
movement and transfer of ownership of goods and services from producer to consumer.

Retailing involves
- Interpreting needs of the consumers
- Developing good assortments of merchandise
- Presenting them in an effective manner so that consumers find it easy and attractive to
buy.

Retailing is a vital and involuntary action performed by the living structure of the market
economy.

Over the last twenty years, retailing has changed as a result of following developments:
- The development of a 'motor car economy'. This has led to one stop shopping where
families buy all of their supplies at one shop.
- Own branding- large retailers have developed brands of their own made by large
leading manufacturers,
- New technology at the checkout and in the packaging and preserving of food has been
developed, which has speeded up the checkout process and reduced the delivery times
from suppliers.
- Faster transport links across the world, which has made available a wider range of
goods.

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- The growing sophistication of the customers and a general rise in the standard of living,
which has led to the fierce competition in the market.
- New technology in the home, which may cause a revolution in the shopping methods in
the future.

In India, organized retailing is catching up fast. Yet retailing is to be recognized as full-

fledged industry in the India. Organized retailing is bound to grow tremendously
provided the right marketing strategies are adopted.

To get a better picture of the Retailing Concept, a study has been undertaken to

understand what are the various Retailing activities undertaken by WESTSIDE

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 INTRODUCTION TO RETAILING

Retailing is a process of selling goods in small quantities to the public and is not meant
for resale. Retail is derived from the French word retailer, meaning to cut a piece off and
to break bulk.

Definition of Retailing:

Retailing consists of those business activities, which are involved, in the sale of goods or
services to customers for their personal, family or household use. It is the final stage in
the distribution process for goods and services from manufacturer to final consumers.

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Retailing involves:

• Interpreting needs of the consumers

• Developing good assortments of merchandise

• Presenting them in an effective manner so that consumers find it easy and

attractive to buy.

Retailing refers to those activities, which are related to marketing goods and /or services
to final consumers for personal, family or household use. Whereas marketing, according
to American Marketing Association, refers to “the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational objectives.”

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 RETAILING :An Overview

Retailing is the most important part of the entire logistics chain in a business. Without
proper retailing the companies can’t do their business. There are various ways of making
goods available to consumers like.

 Company to distributor to wholesaler to retailer to consumer

 Company to salesperson to consumer

 Company to consumers (online/phone/catalog ordering).

These three are among the most common ways of making the goods available to
consumers. But in India the three-layered system of distributor, wholesaler and retailer,
forms like backbone of the front-end logistics of most of the consumer-good companies.

Organizational buyers purchase in order to perform a task or sell a product effectively,

efficiently and at a profit. They could be industrial buyers or intermediary buyers.
Industrial buyers are those who purchase goods and services to be used in or to aid
manufacturing process. Intermediary buyers are those (i.e. wholesalers and retailers) who
buy merchandise for resale. Retailers include street vendors, local supermarkets,
departmental stores, restaurants, hotels, barbershops, airlines and even bike and car
showrooms. Still retailing may or may not involve the use of a physical location. Mail
and telephone orders, direct selling to consumers in their homes and offices and vending
machines – all fall within the purview of retailing. In addition to it, retailing may or may
not involve a “retailer”. Manufacturers, importers, non-profit firms and wholesalers are
acting as retailers when they sell goods and/or services to final consumers.

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Prerequisites for Retailing:

Prerequisites for retailing sector are:

 Real Estate

 Proper sourcing arrangements (Economies of scale)

 Proper logistics infrastructure

One of the basic requirements of retailing is that of real estate. As the organized retailing
is by and large an urban phenomenon the real estate prices in these urban cities are so
high that it acts as impediment in spreading of retailing culture. This is the reason why
despite being commercial capital of the country, Mumbai has lagged behind Chennai,
which has the first city to adopt this retail culture. The retail revolution or shift from
unorganized to organized started taking place in the country in Chennai and today
Chennai is leading all other major cities and towns in the country in number of organized
retail outlets.

Critical Success Factors:

Some of the main factors essential for running a successful organized retail stores are:

 Location of the store

 Sourcing the right merchandize

 Developing a promotional plan

 Area for moving around and browsing in the store

 Ambience of the store(designing, building, and fixturing the stores)

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  Type of staff and its training

 Varieties and choices available to the consumer

 Leveraging and gaining economic synergies across the locations (operational

economies of scale)

Factors that would lead to growth in retailing sector are:

 Increasing growth in disposable income

 Increasing demand of products by consumers

 Changing life styles

 Better product and shopping options available with consumers

 Relaxation of a number of regulations by government

 Rethinking on existing Real estate laws

 Restructuring in Tax regime (like uniform sales tax for all states)

 Increased investment and focus on infrastructure by government.

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 RETAIL MARKETING MIX

Whatever the form of retailing, a retail marketing strategy defines the execution of the
marketing process and facilitation of customer satisfaction. This retail marketing strategy
involves selecting a retail target market (i.e. the carefully/exactly identified group of final
consumers that a retailer seeks to satisfy) and then implementing the corresponding retail
marketing mix (i.e. a combination of product, price, promotion and distribution strategies
that will satisfy the retail target market). The elements of the marketing mix encompass
the facets shown in the table below. The table depicts consumer service as the crux of the
whole activity.

RETAILING MARKETING MIX

Product Price
Branding Cost of goods
Packaging Business Expenses
Product Design Gross Margin
Assortment Profit
Services
Promotion Distribution
Advertising Logistics
Personal Selling Store Location
Sales Promotion Site Evaluation
Public Relations Transportation
Visual Merchandising Storage of goods

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The implementation of such a retail strategy mix benefits consumers and producers and
yields economic utility.

MAIN FORMATS OF RETAILING

The retail format has an important influence on the entire business model. Store format is
a key element of strategy. It determines for example, the merchandising policy. A
Department store will generally stock a large range of merchandise than a focused shop
concentrating only on formal wear or cosmetics. The type of store also determines the
pricing policy. A store concentrating on designer wear is unlikely to offer discounts.
Employee requirements, their knowledge levels, and timings are other areas, which can
vary with the format. A super market is usually open all days and long hours. A
convenience store may be opened 24 hours. Store format is therefore a good starting
point to understand Organized Retail.

Conventional Supermarkets

A Conventional Supermarket is a self-service food store offering groceries, meat and

other products. In such a store, the sale of nonfood items, such as health, beauty aids and
general merchandise, is limited. They follow limited promotional campaigns and only
advertise in their local dailies. In these outlets the prices are lower than in the other
grocery shops in the vicinity. These shops usually offer a no-frills shopping experience
and have minimum advertising and promotion costs.

Convenience Stores
These provide a limited variety and assortment of merchandise at a convenient location
with a speedy checkout. These stores cater to customers who value convenience but do
not seek lower prices or broad selections. Due to their small size and high turnovers,
these stores usually receive merchandise everyday. We have Convenience Stores such as
Provision Stores.

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Specialty Stores

A specialty store concentrates on a limited number of complementary merchandise

categories and provides a high level of service. They focus on narrow or niche market
segments, but have a wider assortment, more personal attention and more intimate store
atmosphere than other formats like department or discount stores. Music World and
Crosswords are example of Specialty stores.

Department Stores

These are retailers carrying a broad variety and deep assortment, with considerable
customer services and organized, separate departments for displaying the merchandise.
Each department within the store has a specific selling space allocated to it, a point-of-
sale (POS) terminal to transact and record sales and salespersons to assist customers.
Pantaloon and Globus are forms of Department Stores.

Discount Stores

These retailers offer a broad variety of merchandise, limited service and low prices. They
can charge lower price than department stores as they provide less service, at low-cost
locations. They get their merchandise at favorable prices by buying large quantities of
first quality goods or by buying manufacturers' closeouts, end-of-season merchandise and
overruns. Thus they maintain low operating expenses, with no-frills facilities that are
plain, functionally efficient and economical to construct. The various factory outlets are
examples of discount stores.

Hypermarkets

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A hypermarket is a very large retail store offering low prices. They combine a discount
house and superstore food retailer in one warehouse- like building. They also function on
low operating margins and low prices. These supercentres price their food items more
aggressively, resulting in considerable competitive pressure on pure food retailers. Big
Bazaar of Pantaloon which has opened up in many cities across India is an example of
Hypermarket.

Manufacturer’s Retail Chain

Manufacturer owns and operates multiple retail outlets (store units) under common
ownership. Most chains have well defined management philosophies, which tend to be
solid overall strategies.
Consistent strategies with reference to store hours, product assortment, prices, sales
personnel, promotion and other policies must be maintained throughout all branches in
order to project a particular image of the chain. This calls for centralized decision making
which in turn result in difficulties for individual units in adapting to local needs of the
target markets.

Franchise System

Franchise results from a contractual agreement between a franchiser and a retail

franchisee, thus allowing the franchisee to conduct a given form of business under an
established name as per a particular business format in return for an initial fee and a
percentage of monthly gross sales as royalty. It helps franchise to create national or
international presence quickly and with similar investments. e.g. Pizza Hut, McDonalds
etc.

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 THE GLOBAL RETAIL SCENARIO

Retailing in more developed countries is big and better organized than what it is in India.
According to a report published by McKinsey & Co. along with the Confederation of the
Indian Industry the global retail business is worth a staggering US$ 6.6 trillion. In the
developed world, most of it is accounted for by the organized retail sector. For, instance,
the organized sector has an upto 80% share of retail sales in the United States. The
corresponding figure for Western Europe is 70%, while it is 40% in Brazil and Argentina
and 35% in Korea and Taiwan. Organised retailing in Asia, however, remains poorly
developed, accounting for a paltry 20% in Malaysia, Thailand and China.
The Service sector accounts for a large share of GDP in most developed economies. The
retail sector forms a very strong component of the service sector. Hence, the employment
opportunity offered by the industry is immense. According to the US Department of
Labor, about 22 million retail stores – that is, one out of every 5 workers employed. In
short, as long as people need to buy, retail will generate employment.
Globally, retailing is customer – centric with an emphasis on innovation in products,
processes and services. In short this means THE CUSTOMER IS THE KING!!!

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 RETAILING IN INDIA: A COMPARISON WITH OTHER
ASIAN ECONOMIES

India is the last large Asian economy to liberalize its retail sector. In Thailand more than
40% of all consumer goods are sold through the super markets and departmental stores. A
similar phenomenon has swept through all other Asian countries. This offers a great
scope for retailing in India as it is completely dominated by the unorganised sector.

Country Total market % of organized sector

Taiwan $40 bn 81

Malaysia $20 bn 45

Thailand $32 bn 40

Indonesia $75 bn 30

China $325 bn 15

India $180 bn 2

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 RETAILING IN INDIA

Traditional Retail Scene in India

Traditionally the retail business was run by Mom & Pop having Shop in the front &
house at the back. More than 99% retailers functioned in less than 500Sq.Ft of area. All
the merchandise was purchased as per the test & vim and fancies of the proprietor also
the pricing was done on ad hock basis or by seeing at the face of customer.

The Manufactures were to distribute goods through C & F agents to Distributors &
Wholesalers. Retailers happen to source the merchandise from Wholesalers & reach to
end-users. The merchandise price used to get inflated to a great extent till it reaches from
Manufacturer to End-user. Selling prices were not controlled by Manufacturers.

Branding was not an issue for majority of customers. More than 99% customers were
price sensitive and at the same time they were Brand conscious as well.

Weekly Bazaar in many small tows was held and almost all the commodities were on the
scene including livestock. Virtually there was only one format of retailing & that was
mass retail.

Almost all the purchases by mass population were need oriented & next turn could come
on festivals, Marriages, Birthdays & some specific occasions. Having extra pair of
trousers or Shirts or Casuals & Formals & leisure wear & sports wear & different pair of
shoes for occasions is till date is a luxury for majority population except for those living
in Metros.

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In the coming times also majority of organized retailers will find it difficult to keep
balance with rest of the unbranded retail market which is very huge.

Unorganized Retailing

Retailing in India is largely Unorganized. There is no supply chain management

perspective. According to a survey by AT Kearney, an overwhelming proportion of the
Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore
segment of the market is Organized.

In India presently the retailing market is Retailers dictated and now with a number of new
players coming in the shift has started taking place slowly to consumer dictated market.

The current retailing system prevalent across the country is highly fragmented and
unorganized. Anyone with some money and some real estate can open a small shop and
become a retailer catering to the locality in which he opens the shop. There are a number
of reasons behind this fragmented retail market. Some of the major reasons being:

- Poverty and lower literacy levels

- Low per capita income
- Savings focused and less indulgence mindset
- Poor infrastructure facilities like roads etc.
- Restrictions on intra-state good movement
- High taxes
- No exposure to media
- High import duties on imported goods
- FDI in retailing not allowed
- Retailing is not considered as a business or industry by the government

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 - Hitherto none of the business schools in India were offering specialized on
retailing
- Expensive supply chain.

There are around 12 million retail outlets across the country, which makes India number
one in retail outlet density. There is one outlet serving every 200 consumers. With
increasing urbanization and government following the policy of liberalization the
industry is waiting in wings to fly and grow at stupendous rates. It is in this anticipation a
number of studies and surveys have been done. Some of the leading studies have been
done by:
- CII-McKinsey
- KSA Technopak
- A.T.Keartney
- Rabo Bank

All these surveys might be differing in statistics but all have one thing in common: the
expected boom in the sector. The studies are based on a number of apparent changes that
have taken place in the society over past few years with onset of liberalization era in the
country.

Some of these factors are:

- Economic reforms ushered in by the central government

- Lower import duties Increase in imported goods
- Increase in exposure to media
- Higher amount of ad-spending by companies
- Increase in disposable income
- Change in spending and indulgence tendencies
- Changing profile of families, shift towards nuclear families

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 - Changing profile of women
- Higher level of education among women
- More number of working women
- Changing life styles

Organized Retailing in India

However there are some major changes that have taken place in retailing n India. We now
have specialized retailing for all kinds of products right form grocery to apparels to
music.

Food and Grocery Retailing:

Traditionally, personal care products tend to get retailed at food outlets, as both are fast-
moving products. The general store or kirana is the most common avenue for these
products in India, though other formats also exist, which stock these products. But we
now have a few big corporate who have fancied their chances by venturing into the
retailing of garment, food and grocery products and have made this retailing Organized.
The Big Bazaar of Kishore Biyani and the Giant of the RPG group are just a few
examples of the organized retailing in garment, food and grocery retailing.

Apparel Retailing:

The clothing market is also highly fragmented, with no reliable available statistics for its
size. The total number of stores is high, in line with the fragmented nature of Indian
retail. However, amongst all segments of consumer expenditure, organized retail is the
largest in this segment. The organized apparel and cloth market could be about Rs 4,000
crore, or about 4 per cent of the market on the whole.
Textiles witnessed the first influx of organized retail, as noted earlier. Among the bigger
players in this field, are Raymond, Bombay Dyeing, Arvind Mills and Madura Garments

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of Coates Viyella. The close association of clothing with lifestyle prompted
manufacturers to go for their own chains.

Pure retailers were also first to arrive in the clothing market, due to high value and high
margin nature of the trade. Shoppers' Stop, Ebony, Lifestyle, Globus, Pantaloon,
Westside and Pyramid are among the major players in apparel retailing.
Consumer Durables Retailing:

The Indian consumer durables market is about Rs 18,000-20,000 crore.

Organized chain stores have a turnover of Rs 1,000 crore. These are the manufacturers'
stores, like Videocon Plaza and the BPL Gallery. Viveks, VGP, Vijay Sales and others,
are the retail chain stores.

Single large stores, like Chennai's Spencer's, or Sony Mony or Sumaria in Mumbai, could
also contribute a large sum. Well-known throughout the city, these have become
destination stores. There has been a sharp increase in number of outlets selling consumer
durables.

Music Retailing:

Books and music have tended to come together in retail distribution in recent years.
Given quite a boost by cable television, the music market has exploded in recent years, as
music now occupies a significant share of broadcast time. Estimated at Rs 1,500 crore
for, the music market is expected to grow at close to 20 per cent per annum over the next
few years.

Data for overall number of music stores in India currently is not available. There are
about 70,000 outlets in India. Each of these would have registered a business of Rs 2.14
lakh annually on an average, or about Rs 600 per day.

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Corporations have made a determined entry into the Indian music market, to set up chains
only in the past couple of years. Planet M of Bennett, Coleman & Co., Musicworld of the
RPG group and Fast Forward of the LMW group are three such entrants. The T-series
group also has plans with its Music Cafés. The current combined turnover of these stores
is in the range of Rs 75-100 crore. This makes it a 5 per cent current market share for
future chains, a statistic that could rise sharply in the next year or two as new entrants set
up stores.
Book Retailing:

The book market presents the familiar, highly fragmented picture, with no reliable
statistics, as such, that are available. Some estimates fix the total market size for the book
trade at about Rs 2,800 crore, large part of which is educational books and textbooks. The
market is growing at about 10 per cent. Imports are 5-6 per cent of the total market.

Organized retail concentrates on the non-textbook market. Also known as 'general and
trade' books, this covers literature; children's books; management and computer books;
health and cookery books; encyclopedias, and so on.

Crossword is the fastest growing book chain. Fountainhead is another book chain to have
come up in recently. Landmark of Chennai opened its second store in Calcutta in 1999.
Strand is a two-store set-up in Mumbai and Bangalore. Navneet has retail chain in
Gujarat and Maharasthra. These chains would aggregate a turnover of about Rs.100 crore
or about 17 per cent share of the market.

Most large cities have one-store outlets offering fairly large collections. A Lotus in
Mumbai or a Bookpoint in New Delhi are such shops. These outfits could add up to about
Rs.50-75 crore of turnovers. Apart from a few large stores in each city, the rest of the
market is quite fragmented. Most of these cater to the textbook section of the market.
Overall, organized and semi-organized set-ups have about 25 per cent of the market.

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Organized 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.

Organised retailing has definitely made headway in the upper class. However, even in
this segment, items such as milk, fruits, vegetables and a significant portion of `through-
the-month' purchases seem to be done at traditional outlets. The middle income class
prefers shopping for processed food and personal care in supermarkets and fall back on
traditional outlets for bulk shopping. Organised retail outlets seem to be associated with
branded items/special purchases. Organised retailing does not seem to have made an
impact on the lower class, except for `curiosity' shopping.

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 SWOT ANALYSIS OF ORGANISED RETAILING

Strengths

− Economies of Scale
− Cost Advantage through bulk buying
− High dependence on information technology allows innovations & superior customer
service
− Professional Approach
− Trained Staff
− Wide range of products offered gives one-stop shop to the customers
− Provides touch, smell and feel - Shopping experience

Weaknesses

− Low market penetration

− High inventory costs
− High set-up costs

Opportunities

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− The rising consumption rate
− Increased consumer awareness about quality products
− Growing middle class
− Changing lifestyle
− Preferences of the consumers to buy branded Products.
− Various Institutes have now been set-up which gives training in retailing. Some of
them are the IIM-A, RPG, EBONY, etc. Also, now there are expert agencies like the
KSA and Mc-Kinsey which give the consultation to the Retailers.

Threats

− Lack of developed infrastructure which may lead to logistic problems

− ‘kirana’ stores are also turning professional by providing faster services and home
deliveries
− The unorganized market is a big threat to the existing form of retailing.
− The MNCs are now planning to set-up operations in India. “Lifestyle” is already
functional in Delhi and has operations in Mumbai. It has plans to set-up in other
leading cities of India.

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 PEST ANALYSIS

Now, in a particular geographic region, the environment there affects the retailers in the
region in various ways. The effects are studied under the following heads:
 Political environment
 Economic Environment
 Social (Socio-Cultural) Environment
 Technological Environment

Political Environment

With the opening up of the economy, more and more MNC's have pervaded the Indian
Business arena, through joint ventures, franchisees or even self-owned stores. The very
first MNC getting into the business was Spencer's, a tie up between the RPG Group and
the Dairy Farm International, a $ 10 billion Hong Kong based company, and a part of the
Jardine Mathenson group.

Government uses regulation to prevent development of monopolies, which results in

restricted competition and fixed prices. Government also propounds price competition
laws and unfair trade practice laws. Retailers must understand what rights they have in
pricing merchandise, what provision they should make for customer relations, what rights
and responsibilities they possess when making a sales, what rights their employees have
and what liabilities they may face while selling products to the consumers.

Economic Environment

The type of economic system (capitalism or socialism etc.) existing in a country has a
direct bearing on the potential for and the development of the retailing industry in that

28
country. A retailer cannot escape the effects of the factors in the macroeconomic
environment, be it domestic or global that influences the local market.

Inflation, unemployment, interest rates, tax levels, the GDP and the rate of real growth in
GDP (Inflation adjusted) are some aspects of the economy which a retailer must cope
with.

Real growth makes more income available to people who then tend to spend more,
leading to higher sales and more profits for the retailers. However growth also leads to
higher competition in the long run. As the economy expands, higher demand levels lead
more firms into the market, trying to fulfill the consumers' needs. The inflation (i.e.
increase in price) leads to less goods being bought at higher prices. As the retailers' cost
of goods increases, they attempt to pass on this increase to the consumers. However, it is
often not possible to pass on the entire amount to the consumer, hence resulting in cuts in
the retailers' profits.

With the increase in Purchasing Power Parity (PPP) and the disposable income of the
Indian consumer, retailing is catching up at a very fast pace in the country.

Social Environment

The demographic trend and lifestyle patterns, of the society that a retailer intends to
serve, decide the retailer's strategy.

Traditionally, children seldom accompanied their parents while shopping. Shopping for
children was confined to that during festivals when dresses were brought for them. But,
in the present day, due to scarcity of time, working parents prefer to spend as much time
as possible with their children and this includes their shopping hours also. As the
organisation retail sector offers the option of entertainment along with shopping, the
younger couples opt for these retail outlets for shopping. This is depicted in the following
diagram:

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 VALUE

PRE 80’s PRICE

MID 80’s QUALITY

PRICE
QUALITY + ENJOYMENT
1990’s
PRICE + TIME

QUALITY + ENJOYEMENT + ENTERTAINMENT

2000’s
PRICE + TIME + ENERGY + STRESS

Changing Consumer Expectations in India

So, apart from quality and range of products, value for money and attractive displays, the
human touch has a vital role to play. Smart, polite and courteous sales people might make
all the difference for a store, which is like any other in terms of its product offerings.

There is also emphasis on schemes and promotions, which, as the study ratifies, do pull
customers. Further the trend is towards more convenience and flexibility in terms of
exchange/ return policies, which play a vital role in encouraging the purchase.

Technological Environment

Technology is probably the most dynamic change agent for the retailing industry. The
computerization of the various operations in a retail store, including inventory
management, billing and payments as well as database (of customers) management,

30
widespread use of bar coding, point -of-sale terminals and Management Information
System has changed the face of retailing drastically. Apart from providing the retailers
with better and timelier information about their operations, the technology also does the
job of preventing theft, promoting the store's goods and creating a better shopping
atmosphere. These can be done with the help of closed circuit televisions, video walls, in-
store video networks, kiosks and other forms of interactive applications ranging from
CD-ROMs to virtual reality to let customers select and buy products.

They make the customer's life a lot easier by facilitating the use of developments like
Credit Cards. Toll free numbers have brought about a revolution in consumer's ordering
and feedback mechanisms. This also paves way for Tele-Shopping and Net-Shopping.
Emerging technologies will also facilitate Just-in-Time Management of certain products
within the store. These trends are already visible in the music and greeting card
industries.

31
 FDI IN INDIA

Government Policy on FDI in retailing

 FDI in retailing in not allowed per say, foreign retailers can operate in
India through
 Joint ventures, where the Indian partner is a export house (such as Total
Health Care)
 Franchising/Local manufacturing/Sourcing from small-scale sector (for
example, McDonald’s)
 Cash and carry operations (for example, Giant in Hyderabad)
 A McKinsey report states FDI will help the retail businesses to grow from
the present $390 billion to $460-470 billion by 2010.

However, one section of the industry apprehends that government policies are impeding
growth of supermarkets and retail food chains in India.
Critical negative factors are detailed below:

 FDI is not allowed in retailing- slowing the growth process of organised

retailing.

 Retailing is not regarded as an industry, very few banks are willing to invest
in this sector.
 Shortage of warehousing facilities, cold storage and large scale processing
units.

Retailing in India is unorganized with poor supply chain management perspective.

According to a recent survey by some of the retail consulting bodies, an overwhelming
proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs.
20,000 crore segment of the market is organized. As much as 96 per cent of the 5 million-

32
plus outlets are smaller than 500 square feet area. This means that India per capita
retailing space is about 2 square feet (compared to 16 square feet in the United States).
India's per capita retailing space is thus the lowest in the world.

Given that organised retail has been registering growth rates of approximately 40 per cent
over the last three years, it is expected to grow to about Rs 35,000 crore in 2005, and
close to Rs 70,000 crore in 2010.

33
 FUTURE OF RETAILING IN INDIA

Reliance plans to do a Wal-Mart in India

Reliance is about to launch a retail revolution in India - from no stores to 1,500

outlets in just six months. The reverberations will be felt across the world

Mukesh Ambani, RIL's chairman, plans to open 100m sq ft of retail space in India by
2010. Local press reports talk of between 5,000 and 10,000 stores spread across 1,500
towns and cities. Ambani has described the concept as "a pan-India footprint of multi-
format retail outlets".

Reliance will operate hypermarkets, convenience and speciality stores, as well as

business-to-business operations, selling food, clothing, electrical goods, consumer
durables, luxury goods and financial and travel services. The project will employ 1m
people within five years.

In developing the chain, Ambani is doing far more than simply opening a network of
shops. He is revolutionising the Indian food chain, setting up a nationwide distribution
infrastructure from scratch, and transforming the way that India's 1bn-plus inhabitants
consume.

Reliance Retail's launch is based on an audacious business bet. Wal-Mart and Tesco are
beating at India's door but have not been granted entry because of restrictions on foreign
ownership in the retail sector. The industry is likely to be liberalised soon and the
potential is vast.

If Ambani's concept works, it will be a masterstroke in pre-empting the international

competition's entry and beating them at their own game. On top of this, Reliance has been
signing deals with farmers across India, hovering up the country's supply of fresh food.

34
The project will cost up to £4bn, a figure Ambani appears happy to lay down. RIL has
already invested £400m in the "pilot" stages of the project. Press reports in India suggest
that this stage alone could comprise a breathtaking 1,575 stores within six months of
launch.

35
 ITC Enters Rural Retail

Just four-odd kilometers from the town Sehore, just before the village of Rafiqganj,
stands a freshly painted long, squat building that looks like a hangar. It is this cream, blue
and green edifice that is attracting all the attention.

Sometime back, ITC chairman Yogi Deveshwar promised his shareholders that the
company would open 1,000 rural malls in India. This is the first one to have come up. As
such, Chaupal Sagar is one of the first organised retail forays into the hinterland. It was
soft-launched on 15 August
As you walk around, you realise that Chaupal Sagar cannot be shoehorned into any of the
retailing categories we are familiar with. At 7,000 square feet, it is too small to be a mall.
And while it has opted for self-service, stocking its merchandise on shelves lining the
neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything
- from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps,
shirts to fertilizers... It defies pigeon-holing. It is just a very sharply thought-out rural
store.

Most of the brands it sells are national. You see Marico, LG, Philips; torches from
Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher.
We will look at this part of the equation in greater detail later. ITC is offering a very
compelling proposition to these companies. But first, a look at how this place came up
next to a warehouse.

It works like this. With its network of e-chaupals , ITC communicates its latest
commodity prices to the farmers via the Internet or VSAT lines. If they find these
attractive, they sell their produce to ITC. Listen to Rajesh Nigodia. He is the sanchalak
(the person who operates an e-chaupal; most of them are farmers) of a small village
called Mangawali, about 14 km away from Rafiqganj. He reckons that half the farmers in
his village deal only with ITC. Now, by setting up the mall next to the warehouse, ITC is
trying to monetise the footfalls from farmers. Agrees R. Nandkishore, director

36
(marketing), Philips Lighting, which is selling its products in the mall:
"ITC realised that the farmers had just got money, that they would spend it anyway, and
that they had an empty vehicle with which they could lug the stuff back."

37
 ROAD AHEAD…

1. What Retail Might Look Like in India

Thanks to a massive population and indications of better levels of disposable incomes

side by side with awareness emerging, retail is being seen as a massive emerging
opportunity in India. Naturally, since retail revolutions took place in the more developed
markets much earlier, the feeling is that India can draw from their experiences.

Consultants say that there are enough models out there in the developed part of the world
that will find acceptance here, even though they may find some modifications to suit
local needs better. The challenge, really, is in the re-invention.

There are certain formats these consultants feel can work in India:

• Small stores, with complex but efficient supply chains

• Small Supermarkets that run on brand variety and tight inventory control
• A mix of food and general merchandise stores
• Out-of-Town shoppatainment complexes
• Mid-sized retail propositions within town limits
• Small corner outlets with integrated home delivery

Effectively, then, leaving out hypermarkets of the US kind, other retail models are
possible in India, though a model cannot really be moved across borders piecemeal. What
can come in piecemeal, however, is the supply chain management model attached to a
broad model that is being transferred.

Consultants say that one has to build on what's already there – one can't just wipe the
slate clean and start afresh. And so the likes of catalogue or mail order buying will not
necessarily lose significance. Make it more efficient and it can work. However, since in a
lot of product categories, the consumer may prefer a touch-and-feel before taking a

38
decision, these kinds of formats can be supported by display outlets sans on-premise
stocking. Take your pick, order and get it all delivered at home. E-retailing could also
adopt something like this combination. And in India’s rural market there could be a
modified multi-product hyper-mart could work, is the opinion.

But there is nothing such as Best model or ideal model for the Indian market. One has to
Adopt, or Adapt, or Develop the best fit from the available form the West.

2. What will work in India?

i. Discounts

In India "Discount Store" concept will work but with a difference. Indian consumer by
and large is price conscious, wants the best of the commodities, and Brands at least price.
This consumer will go to different places for the same merchandise, and compare their
prices before buying.

The definition of Discount needs to be redefined to make it more clear to the customers.
Different types of discounts can be Category wise discount, Item – Brand wise discount,
General discount, Loyalty discount, Special discount, Festival discount & stock clearance
discount, fixed amount discount and percentage discount.

This discount structure should be worked out pertaining to specific categories on the
basis of Gross Profit they earn & profits they contribute.

The Vendor could contribute part of this sharing. As off take increases Vendor can offer
Turnover Discount. Vendor relations & off take discounts on buying should be discussed
& linked with discounts offered to customer or end users. Vendor partnership is an
essential element in success of the operations.

39
ii. Customer Loyalty Program

Customer loyalty fees should be charged by the retailer. In the same light customer
loyalty Programme should be linked with discount policy & discounts should be on the
spot & transferable, since volumes is the name of the game.

iii. Store Management

Store management, the way it is done today should be reworked to support the discount
store concept; manpower deployment at sales assistant level should be different for
different categories of goods.

Display should be more self-explanatory which will guide the customer for his buying
decision.

Price tags should be pasted depending on the commodity so that they are visible
irrespective of category of merchandise.

iv. Stock Management

Stock clearance of merchandise which has been in stock for a long period and has thus
become a dead stock should be held at regular intervals. Sales promotions in different
categories can be used to clear the dead stock.

40
3. Discount Stores Quietly Drive Up Sales

Discount stores have arrived in India and industry insiders feel that they would spearhead
a revolution in organized retailing.

If one looks at the list of top retailers in the world quite a few would be discounters.
Around 60 per cent of the business abroad comes from this format. Internationally, the
largest retailer in the world Wal-Mart is a discounter.

Subhiksa in Chennai, Margin Free in Kerala, Bombay Bazaar in Mumbai, RPG's - Giant
in Hyderabad, Big Bazaar of Binani; all of these are discount stores. They have all their
products at prices way below the MRP.

Kishore Biyani of Big Bazaar believes that these stores will generate revenues to the tune
of Rs 100 crore annually in three years. A part of pantaloon group, Big Bazaar invested a
total of Rs 30 crore to have a discount store each in Kolkata, Hyderabad Bangalore,
Mumbai and Gurgaon. Each of these outlets have a footfall of about 22,000 customers
each day with daily sales exceeding Rs.50 lakhs from all its stores.

All these outlets owned by the various companies are now on an expansion spree. RPG,
for instance, plans to have 15 Giant stores in the next five years which would entail total
investment of Rs 225 crore.

Raghu Pillai, President and CEO, RPG Enterprises says that modern retail formats will
have 10-15 per cent of the total market in the next ten years and while all formats will co-
exist, large discount stores could be front runners in this evolution.

41
 THE RETAILING PROCESS

The retailing as a process is least understood in India. For a start up, it is important to
have a comprehensive view of what retailing means and where he wants to focus on.
Most of the world players like Wal-mart, K-mart, Circuit city, Sears have developed in
house expertise in each of these processes. Others have set up specialised shop to cater to
one or more of these processes like The Retail design group, various trading houses etc.
Many have out-sourced these due to lack of expertise. The Indian organised sector needs
to understand how to manage each of these processes and success will be contingent upon
mastering them.
The following is the process involved in starting a retail outlet:.

 Site selection: Market selection, site selection, site acquisition, store design, store
construction and store upgrading and remodeling
 Assortment planning: Choice of target assortment, product development, vendor
management, outsourcing merchandise management
 Manufacturing and sourcing: Buying raw material, Manufacturing, Buying finished
goods, arranging delivery, payments
 Logistics and distribution: ordering and allocation, freight forwarding, warehousing,
distribution, inventory management and replenishment
 Marketing and branding: Marketing definition research, brand strategy, pricing,
developing advertising strategy, organizing support events, marketing monitoring
 In store operations: Creating store environment, recruiting, training labour,
Managing store operations, selling to and serving customer, handling after sales
services.

'India remains one of the last frontiers of modern retailing. Conquering the retailing in
India will be a challenge, given the problems of the supply chain and consumer readiness
as well as the prodigious complexities of so vast a market. At Advantage India, we have
set up a special cell to track the retailing Industry worldwide. We are also keenly

42
following how the retailing is taking shape in India. We are bench marking the best
practices in retailing and tailoring it to local needs and preferences. With hand on
experience in developing the largest retailing network of Consumer Electronics in the
Middle East, we have in depth know-how and knowledge through which the Indian
industry can benefit. We are also helping Indian retailers to create a retail revolution by
providing them with tools to cope up with challenges. The most interesting aspect of this
retail revolution is how the Indian companies leapfrog retail evolution in India.

43
 THE INDUSTRY STRUCTURE

Based on the form of ownership, various types of retailers comprising the retailing
industry are described below:

1. An unaffiliated or independent retailer is one who owns and operates only one retail
outlet. A family mostly owns it with high dependence on the owner, thus affecting long
run success and employee morale. He is supposed to have a friendly personalized image
and his offering reflects the tastes and preferences of its owners and customers. Kirana
shops are very good examples of such retailers.

2. A chain retailer or corporate retail chain owns and operates multiple retail outlets
(store units) under common ownership. Most chains have well defined management
philosophies, which tend to be solid overall strategies. These contribute towards limiting
the independence of the local owners of the individual units who, in addition, lack
commitment also.
Consistent strategies with reference to store hours, product assortment, prices, sales
personnel, promotion and other policies must be maintained throughout all branches in
order to project a particular image of the chain. This calls for centralized decision making
which in turn result in difficulties for individual units in adapting to local needs of the
target markets.
There also exist associations of independent retailers, which are formed in order to
compete more effectively with corporate chain stores. They enjoy benefits of a corporate
chain while still maintaining status of individual owners. These associations could be
formed with other retailers (known as co-operative chains), with sponsorship by a
wholesaler (known as voluntary chains) rather than by the retailers themselves or by
franchise agreements sponsored by manufacturers or distributors (known as dealers) or
by service firms (known as franchisees).

44
3. A franchise system results from a contractual agreement between a franchiser and a
retail franchisee, thus allowing the franchisee to conduct a given form of business under
an established name as per a particular business format in return for an initial fee and a
percentage of monthly gross sales as royalty. It helps franchise to create national or
international presence quickly and with similar investments (than required by the
franchise alone for creating such a presence independently).
On the flip side, franchisees, that are owners and not employees, have a greater incentive
to work hard than the owners (or caretakers) of retail units in other forms of retail chains.
Also to their advantage, they obtain SOPs and management skills from the franchise.
Further, they have support from co-representative to spot and solve problems. To affect
customer loyalty, uniformity has to be maintained throughout the franchisee network. So
in order to maintain the established image of the franchise, franchisees have to meet some
specified provisions of franchise agreements. These, if not met, give the right to the
franchise to avoid the individual franchisee. It is for this reason that franchisees are
seeking more and more independence from franchise rules and regulations.
There are some key questions that a franchisee must answer while evaluating franchisee
opportunity:
· Does the franchise have a strong chance of competing in his community?
· Does the franchise have potential for further growth or does its success depend on a fad?
· Will franchise ownership be an advantage in the business he is considering or could he
do as well on his own.
· What is the company's attitude towards -
Development of new products, franchisee termination and renewal, and territorial
protection for existing franchisees?

4. A Leased Department (LD) is a department in a retail store that is rented to an

outside party. If the existing store is well known, with a large number of steady
customers, it becomes easier for the LD to generate immediate sales. It operates in
categories on the fringe of the store's major product lines and it must be taken care that it
is not a parasite and does not live off the traffic generated by other parts of the store.

45
Thus goods or services lines that it can offer may be restricted. Apart from this, various
requirements are imposed to ensure overall consistency and co-ordination.

5. Vertical Marketing System (VMS) is comprised of all the levels of business along a
channel of distribution (Refer to Fig.1). In an independent VMS, there are three levels of
independently owned businesses - manufacturers, wholesalers and retailers. Such a
system is most beneficial if manufacturers and/or retailers are small, intensive
distribution is sought and customers are widely distributed.
In a partially integrated VMS, two independently owned businesses (most likely a
manufacturer and retailer) along a channel perform all production and distribution
functions without the aid of the third i.e. wholesaler. This type of system is most
appropriate if manufacturers and/or retailers are large, selective or exclusive distribution
is sought and existing wholesalers are too expensive or unavailable.
Through a fully integrated VMS, a single firm performs all production and distribution
functions without the aid of any other firms. A fully integrated VMS enables a firm to
have total control over its strategy, to have direct contact with final consumers, to have
higher retail markups without raising prices (by eliminating channel members), to be self
sufficient and not rely on others and to have exclusivity over the goods and services
offered.

6. Consumer Co-operatives are retail firms owned by their respective customer

members. In such co-operative arrangements, groups of consumers invest in the co-
operative, receive stock certificates, elect officers, manage operations and share the
profits or savings that accrue.
Consumer Co-operatives come into existence with the purpose (of some consumers) of
operating stores as well or better than traditional retailers, of getting control over prices,
of saving money by substituting their own labour or of getting access to healthful,
environmentally safe plots, not available from traditional stores.

46
WESTSIDE – Detailed study of the Huges Road outlet in
Mumbai

47
 The Westside story: Fashioned to succeed

Style, affordable prices, quality — these are the factors that have shaped Westside’s
success story in the retail fashion stores business. Launched in 1998 in Bangalore, the
Westside chain has, ever since, been setting the standards for other fashion retailers to
follow.

The Westside story really began in 1997, when the Tatas sold Lakme, their cosmetics
business, to Hindustan Lever and acquired the Britain-based Littlewoods retail chain. A
new entity called Trent Limited emerged from this move and Littlewoods was renamed
Westside. Today Westside has eighteen outlets, in Bangalore, Hyderabad, Chennai,
Mumbai, Pune, Nagpur, New Delhi, Vadodara, Indore, and Kolkata.

Westside stands out from the competition for a variety of reasons. One is that a majority
of the brands the chain stocks and sells are its own, unlike retailers who store multiple
labels. About 90 per cent of Westside’s offerings are home-grown, and they cater to
different customer segments. The other 10 per cent includes toys, cosmetics and lingerie.

The greatest challenge for Westside in its quest for a place in the retail sun is not the
competition from similar organised players, but from the unorganised sector (98 per cent
of India’s retail garment industry operates in the unorganised sector). The task at hand is
to get people who usually shop with unorganised players to visit organised stores such as
Westside.

48
 The ‘Retail Mix’ for Westside

Exterior
Design
Merchandi
se Location

Services

Layout

Personne
l Selling
Retail
Format
Advertisin Prices
g

Visual
Interior Merchandisi
Design ng
Promotio
n

49
 LOCATION

This Westside retail outlet is located on Huges road which is an A-grade area (income
level above Rs. 20,000/- a month). The location is chosen by any retail outlet after a
thorough study of customers and their shopping behaviour. Most of the customers of
Westside are in the cream segment which could be one of the reasons for selecting a
location at an A-grade area.

Another factor that influences the selection of this location is competitive advantage. The
outlet does not face hard core competition. There is only Vama retail outlet which is in
the neighboring area.

Tata’s retail business is handled by Trents ltd. Co. and Westside retail outlet is handled
by Trents ltd. Prior to Westside, this place was occupied by Tata’s car showroom and its
service centre in the basement. As the above two factors satisfy the location strategy of
the retail outlet, the Tata car showroom converted into a retail outlet i.e. Westside.

Westside is a destination store i.e. people come here for shopping and spend a good time
on shopping. Therefore there isn’t a need for Westside to be located in very crowded or
shopping areas. People do not visit the store because it is on the way. They specially
come to shop.

Westside is located on the main road. But the road has a curve because of which people
coming from far off cannot see that the outlet is located here. To overcome this, Westside
has huge hoardings on the way that approaches Westside.

50
 Design (Exterior & Interior)

Westside stores throughout India have a common theme i.e. of an ‘English store’ look.
This may be because its first store was started in Bangalore after taking over an English
store ‘Littlewoods’. The exterior of the store has brilliant curves and textured white walls
which gives it an elegant look. The front has huge glass panes where the passers-by can
have an eyeful view of the window display.

The window display was divided in 4 sections indicating the various departments or types
of products available at Westside. These include Women’s wear, Men’s Wear, Kid’s
Wear and Household items. The store front is curved therefore it may not be possible for
the visitors to be able to see all the window displays, but it makes sure form whichever
side the customer enters he can see the display on that side.

The store sign board is on the top of the entrance which is road side facing. But we
observed there are a few trees on the walkway which blocks the view and its difficult to
spot the sign board.

The interior is based on the ‘English store’ look as well. With the concept of ‘One floor
shop’ therefore most Westside across India are single floored and big in size around
15,000 Sq. ft. +.

Ms. Shubhadra Panero, store manager, says, they have a commonality across their stores
– A maroon colour patti (band) just below the ceiling and teal & maroon colour patti on
the pillar tops. Also, the lighting that is a combination of white and yellow lights giving a
natural colour look in the store. The ambiance created by the pleasant air-conditioning
and the lively hip-hop music which is clearly audible is unbeatable. Café West is an
added privilege to the shoppers which by itself can be a destination for a hangout.

51
STORE LAYOUT

52
 LAYOUT

A great layout is half the sale done. Westside has made half of its sales successful by
giving its store a strategic layout. It has well utilized its spaces, though limited, i.e.
approx. 15,000 Sq. ft. in size.

 The entrance of Westside is complimented with security check and customer

service.
 The entrance leads to a continuous isle till the end of the store.
 Once you enter the store and see the end through the isle where the household
goods section is, the first glance goes on the right side of the store entrance; this is
where the women’s formals section is located.
Westside has its own range of women’s formals branded as ‘Westside’.
 Adjacent to the women’s formals is the women’s semi-formal and traditional
section.
 Opposite the above two sections is the women’s casual wear in-house brand
‘SRC’ and other counters of women’s trend accessories like clips, purses,
jewellry, cosmetics , perfumes and inner wear .
These are the only products which are not in-house brands, which include Gili,
Maybelline, Chambor, Revlon etc.
 There are two fitting rooms in each corner at the end of this section.
 Going further the rest of the store is at a level 4 feet higher than as compared to
women’s section reason being underground parking.
 On climbing the stairs the exotic aroma of fresh coffee pulls you in Café west, on
the left side of isle, equipped with ten tables with a sitting capacity of 40 people.
 There is glass partition between the café and the women’s section.
 Behind the café counter are the kitchen and a store room.
 Outside the café kitchen and store room is a display for its own brand of formal
shirts ‘Richmond’

53
 Opposite the café are the men’s traditional and Discount sections followed by
men’s formals section.
 Between the men’s formals and the casual (in house brand: ‘2 fast 4 you’) section
there is an exit supplemented by the main cash counter with 5 machines.
 Opposite the men’s casuals; behind the café store room is the kid’s wear the boys
and then the girl’s clothes section followed by the playstation and toys section.
 Adjoining the kids section is another set of fitting rooms and a wash room, for
men and women.
 Towards the end is the households section which is also visible from the main
entrance, this section is in a home shape to give it an appealing look.
 To the left are the linens and towels, in the centre is the crockery/ kitchen wear
and to the right are the exotic interior decoration and gift articles.
 The section where the interior and gift articles are placed is specially designed to
give an ethnic castle type look to add to the ambiance.
 This section is the end of the outlet and leads to the exit, with the cash counter
adjoining it.
 Behind the cash counter is the store manager’s office. As the exit is next to this
office, the customers have the privilege of gift wrapping section which is directly
opposite to the office.

54
 Merchandise

Westside stores stock men’s wear, women’s wear, lingerie, kid’s wear, toy’s, household
accessories, cosmetics, perfumes and other fashion accessories. Each of Westside’s
departments offers a complete range.

For women, there are western casual, western formals and very classy ethnic wear with a
look unique to Westside. In western wear, again the range spans basic lines to very trendy
casual wear. Unlike a lot of stores, the range at Westside caters to a wide age group and
takes into account differing tastes and requirements. Westside has included a range of
designer garments by Monisha Bajaj, Anita Dongre, Wendell Rodricks, Mona Pali,
Krishna Mehta and will continue launching new designer labels.

The ladies section includes a pleasing mix of western wear, salwar kameez and sarees to
formal and very chic Indian wear, uniquely Westside in style. There is also an exclusive
collection of lingerie and nightwear.

The men's wear section caters to all, from formal to casual to sporty, with designs
coming in an equally accommodative price range, from value for money to the premium
segment. Westside believes in exclusive treatment not only for men and women but also
children, their most special customers. The kid's wear section is bound to be a parent's
ultimate choice with garments for a newborn to those for a pre-teenager.

The household section is one of the most contemporary with every item exclusively
selected to cater to Westside’s exacting standards. The merchandise is well co-ordinated
and customers can mix and match and put together a range to suit their own style. From
co-ordinated towels and bathroom sets to bed linen; from crockery down to bric-a-brac
for the household, the consumer's options are enhanced by the wonderful array in the gift
section for all prices and occasions.

The accessories section includes handbags, jewellery, scarves, hair accessories,

cosmetics, perfumes, watches, sunglasses and a whole lot more. Whatever the product,

55
Westside designers understand the range of their customer's fascination, their favourites
and foibles, as their designs span from the very basic to the stylised and very trendy
urban wear, while also keeping in mind the entire age range of Westside aficionados,
each with their special needs.

56
 Pricing

The Tata stamp of quality on the products comes after stringent quality control and the
pricing respects the extremely price-sensitive nature of the India consumer.

Women’s wear ranges from a mere Rs. 199/- to Rs. 1,999/- and a little more for its formal
and casual range.

Men’s wear also ranges from Rs. 199/- to Rs. 1,999/-.

Kid’s wear starts from Rs. 199/- and goes up to Rs. 699/-.

The household range includes coffee mugs, breakfast sets and photo frames in bright red,
priced between Rs. 99 and Rs. 399.

The '70s style, bold floral print magazine racks, CD racks and small dressing drawers in
wickerwork. These home accessories are not only light and practical but also light on the
pocket with prices ranging from Rs. 99 to Rs. 999.

Westside’s range of cool and funky alarm clocks those are available in different shapes
and sizes, light and durable and attractively priced at Rs. 899 to Rs. 999 only.

57
 Positioning Of Westside

 Drawing power of the store Vs Pedestrian / Vehicular

traffic.

High Drawing
Power

Low
High Traffic
Traffic

Low Drawing
Power

58
  Variety Vs. Assortment

High
Variety

Low
Assortment High
Assortment

Low
Variety

59
  Turnover Vs. Gross Margin

High Turn
Over

Low Margin
High
Margin

Low Turn
Over

60
 Price Vs. Service

High
Price

Low High
Service Service

Low
Price

61
 Visual Merchandising

 There is a special team of visual merchandising which comprises of at least one

person form each department who work in synergy to come up with a concept
based on the current theme.
 These themes are uniform in all the Westside stores.
 Current theme was based on the festival Ganesh Chaturthy i.e. the mannequins
were dressed in traditional clothes and thereby giving the store an Indian touch.
They also made use of props that added to the theme.

Segmenting/ Targeting / Positioning

 Segmentation is done according to the income level. (Rs. 15,000/- p. m.)
 They are targeting customers of class A1 & A2.
 They are positioning their store as “surprising affordable style” which also forms
a part of the Westside logo.

Brand Image
The Westside store wants to position itself as a ‘complete family store’. But the
image created by Westside is that of being a woman’s store. This is because Westside has
only in-house brands whereas men prefer branded goods such as Raymond, Arrow,
Provogue, Louis Philip etc.
To change the ‘women’s only’ image to ‘complete family store’ image, Westside is
taking up heavy promotion activities. Westside is also promoting its in-house brands like
SRC, 2 fast 4 you and Richmond.

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 Advertising & Promotional Strategies

 While Westside does its regular brand building through advertisements in the
media, more important are its in-house promotions, which peak during the
three main festive seasons: summer, Diwali and Christmas. The promotions
are mostly theme based, with decorations to match, live bands and other
attractions.
 Last year’s Westside show had a ‘Wild West’ theme and the year before that
the chain had gone the Hawaiian way.
 Promotional strategies are conducted by regional Marketing head and takes
place throughout the year.
 Club West members are informed about these strategies via direct mailers in
forms of booklets, pamphlet.
 Current promotion at Westside is discount offer i.e. buy 3 shirts for Rs.999/-
The other promotion is a tie up with 400 colleges in India targeting with
today’s youth, who are obsessed with fashion and want to have cool attitude.
 For advertising Westside uses all possible Medias ranging from T.V., Radio,
Print media to internet (for Club West members).
They may enter into full-fledged internet marketing. Though they believe
in word of mouth publicity.

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Westside provides there customers with the finest shopping experience. Now, they have
made shopping with the store a rewarding experience too! By introducing CLUBWEST
an extraordinary rewards program designed exclusively for Westside regulars.

Benefits of Club West card!

 Earn points every time you shop at Westside. These points can be
exchanged against subsequent purchases made in the store.
 A dedicated Club west desk for a member's assistance at each of the
stores.
 Exclusive shopping hours only for members during sales.
 Unprecedented access to a host of privileges and services through our
exclusive tie-ups from time to time.
 Advance intimation of all in-store promotions and special offers through
direct mailers.
 Special discounts on dining at select restaurants round the year.

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Other Observations

 The spaces are well utilized, i.e. displays are on stands and racks. The stands are
made up of stainless steel with a wooden base and have wheels. Therefore it is a
flexible layout. The racks can also be adjusted according to the varying sizes and
heights.
 The store is well lit with yellow and white lights spaced at equal distances all
throughout the ceiling. It’s been observed that the kids section is the brightest
with a lot of lights whereas the café west has dim lights creating a warm
atmosphere.
 Kids section has a panel of soft toys just below the ceiling. This panel runs all
through the kids section.
 The kids section also has a toys section next to the play station which has a
promotional Lego stand.
 The fitting rooms are well equipped with huge mirrors, proper latches and three
hooks behind the door.
 The pillars in Westside have mirrors on the side facing the isle.
 90% of the shoppers on Wednesday noon were women.
 Café West is an active place throughout the day.
 There are proper safety measures taken as there are sprinklers on the store
ceilings. Whereas in the café there are three fire extinguishers.
 At Westside we find both male and female sales assistants who do not disturb the
shoppers but they are always available for their assistance.
 Westside is differentiated from other similar stores where in the walking time is
reduced and there is a good connectivity between various departments.
 Household and women section are at two opposite ends of the outlet hence
women are to walk across the entire store giving them a chance to glance at the
men’s and the kids section thus increasing the possibility of impulse purchase.

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 Recommendations

1. This Westside outlet has no provision for physically challenged, they must
provide for ramps and wheelchairs.
2. Kids have a very small play section so parents may have to carry them along,
provision for prams must be made. The ramp will also be useful in this case.
3. The men’s casual section is very congested due to excessive use of cloth stands.
They should decrease the number of stands to make the layout more comfortable
for shopping.
4. Due to two trees in front of the main entrance of the outlet major portion of the
out let is covered and the Westside sign board not visible. To overcome this
problem they should have directional hoardings exactly opposite to the outlet
(currently occupied by Pantaloon hoarding)
5. Assistance is provided only for parking the car, as a result of which customers
have to face problems on their way out because of the steep curve at the exit of
the parking lot. Therefore assistance must be provided while exit from the store.

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 Future in Retailing

According to the Store Manager, Ms. Shubhadra Panero,the future in retail is going to be
dynamic with IT players like IBM entering into the retail management. There are two
major breakthroughs IBM has proposed for the retail business.

1. IBM has developed electronic shopping trolleys which has inbuilt barcode
readers which reads the laser tags and LCD screens which displays the bill
amount and also debits the amount directly from the customers account and
customers get a monthly statement all this saves customers time which is
spent standing in long payment queues.

2. One more invention in the pipeline is the hi-tech changing room, where
instead of the mirror there will be LCD screen with a scanner which will scan
the person and the computer will display images of the person in different
attires without physically getting into it, it will also suggest various
possibilities and act as a virtual fashion consultant.

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 CONCLUSION

With India's retail sector set to continue exploding, everyone from France's Carrefour to
Germany's Metro AG to Britain's Tesco is trying to get a foothold into the country.
One can reach a reasonable conclusion that consumer driven economy of India is on the
right course. A big leap forward economically, which is happening, just about now, is
also helping to develop a very large middle class. This in turn is leading to consumerism.

To beat the competition, stand out in a saturated marketplace and succeed despite
tightening margins, savvy retailers should focus on customer-centric services,
personalization and loyalty programs to attract and retain customers. Retaining and
growing profits requires new solutions to:

• Get shoppers into stores

• Create a complete customer view and determine customer value
• Improve contact strategies to strengthen relationships
• Uncover future multichannel growth opportunities

This leads to the conclusion that the retail industry in India has moved from being a
retailer driven industry to a customer driven industry, and to succeed in this scenario, the

companies have to follow one moto: THE CUSTOMER IS THE KING!

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 BIBLIOGRAPHY

BOOKS:-

 Ron Hasty, James Reardon – RETAIL MANAGEMENT

 Philip Kotler – MARKETING
 Barry Bearman, Joel R. Evans – RETAIL MANAGEMENT- A STRATEGIC
APPROACH
 Sam Hill. Glen Rifkin- MARKETING
 Philip Kotler, Gary Armstrong – PRINCIPLES OF MARKETING
 George Whalin- RETAIL SUCCESS
 Gibson. G. Vedamani- RETAIL MANAGEMENT

WEBSITES:-

 www.tata.com
 www.mywestside.com
 www.retailing.com
 www.rms-uk.com
 www.businessworldindia.com

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