PROJECT REPORT ON

Emerging T rends in Modern Retail Formats

SUBMITTED TO: PROF. DEEPAK

SUBMITTED BY: SATISH TRIPATHI SEC - B REGD NO. - 6019 PGDM: 2010-12

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I hereby declare that this Project Report titled

EMERGING T RENDS IN MODERN RETAIL FORMATS submitted by me to the

Department of Name of _vishwa vishwani institute of system and management_is a bonafide work undertaken by me and it is not submitted to any other University or Institution for the award of any Degree / Diploma / Certificate or published any time before

Name & Addres Satish tripathi SEC-b PGDM Date:o4. 05 . 2010 Place: HYDERABAD

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MODERN RETAIL FORMATS

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INTRODUCTION
From the strict marketing point of view, the market structure in India is dichotomous having rural and urban markets. But many do not concur with this view as they contend that consumer everywhere is a consumer and hence their needs, aspirations, beliefs and attitudes will also be the same. The fact, however, remains that there are certain unique characteristic features which call for separate marketing strategies to be distinctively developed to suit the rural and urban market behaviour. Conditions existing in urban markets at present can also be analyzed in this context. First, the urban markets have almost reached a saturation level that further tapping them with a high profit margin has become difficult. Secondly, competition is becoming tough in urban markets compelling many firms to incur heavy costs in promotional expenditure.Thirdly, the awareness level of urban consumers is high and hence product features have to be changed often. Needless to say this process needs a huge investment which willhave a negative impact on profitability. Thus, except perhaps for easy reach the urban markets have become as oasis. Facts* India is 2nd fastest growing economy in the world. * India, in 2003-2004 grew at 8.2%. * More English speaking people. * 2nd most attracting developing market, head of china. * AT Kearney has estimated India's total retail market at US $ 202.6 billion which is expected to grow at a compounded 30 % over the next five years.

Retail Marketing The essence of retail marketing is developing merchandise and services that satisfy specific needs of customers, and supplying them at prices that will yield profits. Thereby the concept is a philosophy, not a system of retailing or retail structure. In today's CRM landscape the old analogy comparing the rifle and shotgun approaches to message and / or offer delivery is perhaps more appropriate than ever, as more retail organizations struggle to achieve one-to-one marketing-communications with customers and prospects. Targeting allows a retail enterprise to channel its marketing budget4ere there is the greatest (and fastest) possibility of Return On Investment (ROI) .

Source: Future Group Research, Published in the Book Kishore Biyani, 2007 issue.

It Happened in India

by

. Figure 3: Income Growth in India

EMERGING T RENDS IN MODERN RETAIL FORMATS

It is difficult to fit a successful international format directly and expect a similar performance in India. The lessons from multinationals expanding to new geographies also point to this. For example, Wal-Mart is highly successful in USA but the story is different in Asian countries like China. Therefore, it is important for a retailer to look at local conditions and insights into the local buying behavior before shaping the format choice. Considering the diversity in terms of taste and preferences prevailing in India, the retailers may go for experimentation to identify the winning format suited to different geographies and segments. For example, the taste in south is different from that in north and this brings challenges to the retailers. Therefore, most of grocery retailers are region centric at this point in time. The available research findings on retail indicate the following trends in Modern Retail formats: -1) TRIAL & ERROR: Now a number of retailers are in a mode of experimentation and trying several formats which are essentially the representation of retailing concepts to fit into the consumer mind space. Apart from geography even rural and urban divide poses different kind of challenge to the retailer. Pantaloon Retail India is experimenting with several retail formats to cater to a wide segment of consumers in the market. Some of the new formats are Fashion Station (popular fashion), Blue Sky (fashion accessories), aLL (fashion apparel for plus-size individuals), Collection i (home furnishings), Depot (books & music) and E-Zone (Consumer electronics) 2) EMERGENCE OF WHOLESALE CLUBS: Since retailers are trying to segment the market with the help of formats, they developed another new format in the form of Wholesale Club to sell a segment of consumers, who purchase on bulk and look out for substantial discounts and offers. The new format is going to be a kind of wholesale club which is likely to be located close to Food Bazaar. Consumers who are interested to purchase on bulk can take benefit from this format. Similarly the Land mark group also operates multiple formats such as hypermarket (Max), departmental store (Lifestyle), Shoe mart and Funcity8 etc. 3) INCREASING ACCEPTANCE OF RURAL MARKETS: Mall-mania is phenomenal in India and is spreading fast and entering even the second tier cities in India. Real estate developers are jumping very fast to take this further from Metro cities to smaller cities and corporate houses like ITC and Sriram group are making steady progress to make this phenomena feasible in rural markets as well. There is no denying that the top notch cities like Mumbai, Delhi, Bangalore, Hyderabad, Kolkata, Chennai and Pune are leading the way but the second tier cities like Ludhiana, Chandigarh, Nagpur and Surat are also catching the eye of all retailers. Retail developers are in such a mood that they may over ride the requirement in a specific city. 4) Govt. is also promoting the Development of Modern Retail Formats: Large format malls are increasingly getting prominence with adequate retail space allocated to leisure and entertainment. Some states like Punjab have lifted entertainment tax on multiplexes till 2009. This boosted the confidence ofthe mall developers to accommodate entertainment players like PVR, Waves, Adlab and Fun Republic in large malls.

5) Efficient Buying: Increasing Importance of Supermarkets & Discount Stores: Such a format provides the greatest selection of any general merchandize and very often serves as the anchor store in shopping mall or shopping centre. In India, the number of department stores is less as compared to other retail formats such as supermarkets and discount stores. Shoppers' Stop is the first one to open a department store in the early 1990s and currently operates 19 stores in 10 different cities in India .The store strongly focuses on lifestyle retailing and mainly divides into five departments such as apparel, accessories, home dcor, gift ideas and other services. Shoppers Stop is getting stronger and stronger year after year. It attracts more than 12 million shoppers every year with a conversion rate of 38 per cent. In the end of FY2000 this retailer had 5 stores and is in the process of reaching 39 stores with retail space of 2,502,747 sq ft by FY08.Another operator Lifestyle India began operations in 1998 with its first store in Chennai in 1999 and in March 2006 it opened one of the largest department stores in the same city. The store spreads over 75,000 sq. ft and store provides customers a great shopping experience with three floors of apparel, footwear, products for children, household furniture and decor, health and beauty products. 6) HYPERMARKETS: THE BIGGEST CROWD PULLER: Hypermarkets have emerged as the biggest crowd pullers due to the fact that regular repeat purchases are a norm at such outlets. Hypermarkets not only offer consumers the most extensive merchandise mix, product and brand choices under one roof, but also create superior value for money advantages of hypermarket shopping. With product categories on offer ranging from fresh produce and FMCG products to electronics, value apparels, house ware, do it yourself (DIY) and outdoor products, the hypermarkets are emerging as one of the popular formats in India..Number of players operating hypermarket format are increasing day by day. One of the leading players in this format is Pantaloon Retail India Limited which operates 32 Big Bazaars in twenty cities. In early 2006, the K. Raheja Corp (C.L.Raheja Group) has introduced its value retail concept hyper city which is the countrys largest hypermarket at 118000 sq ft. hyper city Retail plans to open 55hypermarkets by 2015. As the market is expanding and consumers are in a mood to accept changes, hypermarkets are getting overwhelming response fromconsumer. Currently there are about 40 odd hypermarkets in India but this format holds a great potential for growth. 7) CUSTOMERS STILL RELY ON TRADITIONAL CONCEPTS: A super market normally sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small utensils, cutlery, stationery and Gift items. In India Food World, Food Bazaar, Nilgiri (30 plus stores), and Adani are the leading super market operators .One of the biggest super market operators in the western India is Adani Retail Limited which operates Adani super market plans to continue its journey to reach total 19 cities with the store strength of 60 plus in the state of Gujarat. ARL also plans to expand its operation in the neighboring states of Rajasthan, Madhya Pradesh, Maharashtra and Chhattisgarh. Subhiksha is one of the leading super market operators, who largely operates in the southern part of India is expanding to WESTERN INDIA. One more retailer Reliance Retail is on the move and this retailer opened its Reliance Fresh-a super market chain with 11 stores in Hyderabad in November 2006 and is planning to enter 70 more cities within 2 years. 8) EMERGENCE OF PRIVATE-LABEL BRANDS: The private labels are offering flexibility to both the retailer and the consumer on price front. The objective of the store is to offer variety at affordable price in each category. Food Bazaar have made the transition from just a grocery retailer to developing emotional bonding with shoppers by providing some value added services to the shoppers. Some of these initiatives include : ( JO DIKHTA HAI WO HI BIKTA HAI)

FINDINGS There are very big opportunity in rural market thats why many big giants are move torural market .they made serious efforts to tap the potential ,initially, innovation were confined to product or services offering, or to packaging (SKUs),price (point) and communication strategy by brands. Companies are concentrated on low cost product 5 Rs product are very famous in rural market They use communication in local medium ( folk media ,haats,melas) They make small size /quantity products for rural India There are a change in rural people lifestyle. Rural peoples are aware with urban market. Lots of job opportunities are coming in rural market. Growth of employment . Rural people are aware with information technology with help of these Companies. Farmers are benefited with ITC E chupal & Godrej Aadhar & hul shakti . Increase the productivity of rural India.

CONCLUSION Marketers make consistent attempt to innovate tools and strategy to overcome the challenges they face in the business arena .business innovation are broadly classified under two heads ,namely product/service innovation and process innovation .marketers need to design creative solution to overcome challenges typical of the rural environment such as physical distribution channel management and promotion and communication.

Corporate India and govement bodies alike have made several efforts to bridge the between rural and urban India

LIMITATIONS Problems related to rural marketing Barter system. Underdeveloped people and underdeveloped markets Lack of proper physical communication facilities. Many language and Dialects. Dispersed population and trade.

SUGGESTION PRICING Pricing is the major element for rural marketing so cheaper price product are affordable

for rural people. IMPROVEMENT IN TECHNOLOGY Technology is the major part of the rural area without nothing is possible through media and electrification we improve the lifestyle of rural people. MAINTAIN THE QUALITY STANDARD Quality standard is also very important part of rural market because some people are quality oriented customer. ESTABLISHMENT OF DISTRIBUTION CHANNELS Rural market certainly offer a big attraction to marketers, it would be nave to think that any company can enter the market without facing any problem and walk away with sizable share .but there are large number of small marketers . Make a good distribution channel. Underdeveloped people and underdeveloped markets Lack of proper physical communication facilities so trained people. Make an opinion leader for every village. Increase the communication strategy in villages Many language and Dialects Make the idol distribution channel in the villages . Improve the electrification in the villages. Provide the training program for rural people.

REFERENCES BIBLIOGRAPHY

BOOKS: Marketing Research Paneerselvam Research Methodology C.R Kothari Principles of Marketing Philip Kotler Rural Marketing -Pradeep kashyap WEB RESOURCES: WWW.GODREJ.COM WWW.GOOGLE.COM WWW.HUL.CO.IN www.itcportal.com MAGAZINE: Outlook Express Business today Money Outlook NEWS PAPER : Business standard Times of India Economic times