A project report on identifying the opportunity for apparel retailing in south east bangalore

IDENTIFYING THE OPPORTUNITY FOR APPAREL RETAILING IN SOUTH EAST BANGALORE”

A

PROJECT REPORT

ON

“IDENTIFYING THE OPPORTUNITY FOR

APPAREL RETAILING IN SOUTH EAST

BANGALORE”

At

JONES LANG LASALLE PROPERTY

CONSULTANTS PVT. LTD.

BANGALORE

Babasabpatilfreepptmba.com


SR.NO PARTICULARS

1 INTRODUCTION

2 COMPANY PROFILE

3 THEORETICAL FRAME WORK

4 RETAIL SECTOR OVERVIEW

5 RESEARCH METHODOLOGY

6 DATA ANALYSIS

7 FINDINGS

8 CONCLUSION

9 BIBLIOGRAPHY

10 ANNEXURE



EXECUTIVE SUMMARY

The project title: “Identifying the opportunity for apparel retailing in South East

Bangalore”.

The primary objectives were to identify whether the specialty retail stores are

required in suburban areas – South East Bangalore and to identify the customer

attitude towards apparel shopping and the customer buying behavior. The secondary

objectives to identify the real estate requirement for setting up such stores.

The sample taken up was 200 and places covered for the study is South East

Bangalore, which includes areas like Whitefield, Kormangala, Marathalli,

Bannerghatta Road, Electronic city, HSR Layout, Hosur etc. These areas have retail

outlets and shopping malls – Forum, Globus, factory outlets etc.

The research covered call centre professionals, fresh graduates, middle and senior

level executives and housewives.

The outcome of the research says that there is a need for such retail outlets in South

East Bangalore and the retail sector opening up for foreign investment will lead to

many challenges. The availability of space in terms of real estate is very challenging.

In future, there is a huge opportunity for the developers to built more shopping malls

and maximize their revenues.



INTRODUCTION

Retail is India's largest industry, accounting for over 10% of the country's GDP and

around 8% of the employment. The retailing industry in India is estimated at

Rs.930,000 crore (2003-04) is expected to grow at 5% p.a. Booming IT and BPO

sectors with rising incomes, emergence of profitable retail models, availability of

retail space, increasing interest of foreign retailers in India, all have led to the growth

of retail sector. In this growth where the preferences of the people are shifting, new

retail outlets and shopping malls, coming up should be properly planned as the real

estate retail space availability is low and calls for huge capital expenditure.

The objective of the research is to study the market for branded apparels in South

East Bangalore, as it is one of the growing areas in Bangalore and lot more is

expected to happen in terms of real estate. Thus, helping Jones Lang LaSalle to cater

to their clients effectively and maximise the returns.



COMPANY PROFILE

Jones Lang LaSalle was formed by the 1999 merger of LaSalle Partners Incorporated

and Jones Lang Wootton. Building on Jones Lang Wootton’s international strengths

in Europe and Asia Pacific and LaSalle’s depth in North America and its position as a

leader in real estate investment management services, Jones Lang LaSalle brings

together two organizations with rich histories of client service.

Jones Lang LaSalle is a leading global provider of integrated real estate and money

management services. The Company serves clients locally, regionally and globally

from offices in more than 100 markets on five continents. Approximately 19,300

employees stand ready to provide each client with comprehensive investment,

transaction and management services.

Company’s real estate money management business, LaSalle Investment

Management, is one of the world's largest and most diverse, with approximately US$

23 billion of assets under management.

Jones Lang LaSalle Hotels, hotel and tourism specialty, is the first fully integrated

global hotel real estate investment banking services group delivering advisory,

transaction, financial and management services.

Jones Lang LaSalle’s Research function lies at the heart of their business, tracking

and interpreting the market forces and economic trends that affect the business to

support the professionals as they provide the best-informed solutions to meet our

clients' needs.

Working from three geographic regions— America, Asia Pacific and Europe—the

Company delivers management, transaction and advisory services to real estate

owners, occupiers and investors.



The branches across the world support multinational clients with the assistance of

two management functions: Global Client Services and Strategic Consulting.

These groups coordinate client activities and ensure consistent, high-quality services

across geographic regions and among businesses by offering clients a single point of

contact at Jones Lang LaSalle.

Jones Lang LaSalle is the world's only autonomous globally integrated real estate

services and money management firm. Wherever Jones Lang LaSalle’s employees

are located, they report to the same ownership and management structure. As a result,

the Company can deliver a consistent and comprehensive range of fully integrated

services to the clients, wherever their needs arise. The ability to combine

complementary services allows the Company to develop and implement real estate

strategies that meet increasingly complex business and financial needs.

Jones Lang LaSalle’s presence:


http://www.joneslanglasalle.com/services/services_detail.asp?serviceID=17



Organization Structure:

Jones Lang LaSalle has a flat organization structure. However, each Country follows

the below organization format:


National Director

Associate Director

Senior Manager

Manager

Senior Executive

Analyst / Executive


Services:

The Global Client Services function assists clients who require multiple services, are

looking for coverage in more than one region, or need help determining which

services will best serve their real estate objectives. Global Client Services also

ensures that operations worldwide work and interact at the consistently high levels.

The Company believes that their investments in people, research, technology and

knowledge not only helps them create and expand enduring client relationships, but

also enables them to continually strengthen their service capabilities. Whether the

client requires one real estate service in a single location or broader support across a

geographical region or around the world, the Company has the people, resources and

systems in place to deliver effective solutions with consistently high levels of service

and skill.

AGENCY LEASING

From portfolios of smaller properties to the world's most recognizable landmark

buildings, the leasing specialists are dedicated to achieving the highest possible rental

rates while exceeding lease-up schedules.

The leasing activities are characterized by:

Extensive experience with assets of all types and sizes.

Strong relationships with brokers in markets around the world.

Dedicated research professionals in all major markets.

Excellent track record for achieving top-of-market rates




CAPITAL MARKETS

Jones Lang LaSalle's Capital Markets combines the in-depth local knowledge of over

370 investment and corporate finance professionals based in 100 markets around the

world with the industry’s most respected property research capability.

By integrating real estate expertise in structuring, arranging and managing financial

transactions, and harnessing both local and cross-border capital flows, which

maximise returns from real estate holdings, and create valuable new opportunities to

serve the needs of investors, owners and users of real estate.

Capital Markets services include:

Investment Sales: A leader in the sale of single assets, portfolios and loan

notes, the Company supports their clients at all stages of the sales cycle: from

pre-offering due diligence, to marketing campaigns, negotiations and due-

diligence support, and on through closing.

Investment Acquisitions: The Company represents clients at all stages of the

acquisition process for single assets and portfolios, from research-based advice

on sector and location, through opportunity sourcing, stock selection, due

diligence and acquisition.

Corporate Finance: We offer clients a range of specialist real estate

investment banking services that provide strategic advice and implementation

on indirect vehicles. The Company is active in the areas of limited partnerships,

equity raising, mergers and acquisitions, securitisation, joint ventures,

structured finance, corporate disposals and real estate sales and financing

transactions including sale/leasebacks, synthetic leases and other net lease

structures.

Debt Capital Markets: Specialists in large, structured debt transactions, the

Company represents clients in single-asset financing, development financing,

loan note sales, portfolio financing and credit facility financing.

Equity Capital Markets: The Company is skilled at raising project and entity

level equity, developing balanced financial structures with an optimal mix of

flexibility, control and exit strategies.



Workouts and Advisory: The Company also conducts complex, confidential

analyses supported by the industry expertise, research and local and global

market knowledge to create effective solutions for owners, investors and

creditors.

International Capital Group: Extends the reach and impact of existing local

and regional Capital Market teams, delivering consistent, high-quality

investment sales, acquisition, and financing services between the major markets

and capital flows of all three regions – Europe, Americas and Asia-Pacific

CORPORATE FINANCE

Decisions about whether to own, lease, sell or finance corporate properties—and how

to structure such transactions—depend on many factors. The Company work’s

closely with owners and occupiers to explore available options and select the

alternative that best addresses specific real estate and business objectives.

Corporate Finance activities encompass:

Sale/Leasebacks: The Company advises corporations on structuring and

executing sale/leasebacks, enabling them to re-deploy capital to core business

priorities while continuing to occupy premises as long-term tenants with full

control of property operations.

Synthetic Leases: The Company help corporations structure net-lease financings

at low cost and with attractive ongoing purchase options.

Net Lease Financing: The Company assists in placing debt that is secured by the

corporation's credit and is typically priced at less expensive levels than typical

mortgage debt.

Dispositions: The Company provides clients with comprehensive pre-contract

property due diligence, marketing services and an aggressive sealed-bid process.

Consulting: To bring discipline to the real estate decision function and make real

estate support broader corporate business and financial goals, the Company

develops portfolio strategies that focus on the appropriate balance sheet role of

corporate real estate



CORPORATE PROPERTY SERVICES

The Company delivers property, asset and operational management and property

management services to corporations and institutions that outsource the management

of their occupied real estate. The facilities manage range from corporate headquarters

and data centres to educational and industrial sites.

The core services include:

Facility Management

Occupancy Planning

Engineering and Operations

Sourcing and Procurement

Facility Line

GLOBAL CLIENT SERVICES

The Global Client Services team works with clients to determine, and then act on, the

most effective ways in which Jones Lang LaSalle can support their needs. A Global

Client Services professional serves as a single point of client contact for Jones Lang

LaSalle resources across a region or around the world, assembling appropriate people

and expertise and serving as a client advocate to ensure service quality and

timeliness.

GOVERNMENT

The Company uses a collaborative approach to develop and implement real estate

solutions that help the public sector address its real estate challenges and priorities:

Improving the quality of life for military families

Maximizing real estate assets

Reducing costs

Managing facilities effectively



The government practice comprises a dedicated team of public sector specialists with

full access to global network of resources. The Company combines private sector

expertise with public sector experience to deliver integrated real estate solutions that

are focused on the unique needs of government agencies. The areas of expertise

include:

Asset Management

Development and Project Management

Facilities Management

Portfolio Strategy and Management

Public-Private Partnerships

HEALTHCARE

The Company delivers the highest quality service to healthcare clients in an

extremely dynamic and challenging environment. Our healthcare real estate

professionals develop strategies to meet the needs of investors, hospitals and

physicians, offering strategic insight into the doctor/hospital relationship and

healthcare delivery systems. Access to capital from varied sources enables to develop

financial solutions for a wide range of healthcare facilities.

The specialized services for the healthcare industry include:

Financing

Acquisitions and Sales

Development

Property Management

Leasing



HIGHER EDUCATION

The Company is the leader in delivering comprehensive real estate services and

solutions to colleges and universities. The unique needs of educational institutions are

well understood, and have helped administrators worldwide successfully address

important real estate needs and concerns. The Company’s professionals develop a full

understanding of each institution's mission, objectives and challenges to formulate

and implement strategies that add value to real estate assets and facility operations.

The range of services to the higher education community, includes:

Campus Operations Assessments

Commercial Leasing Analysis

Development Feasibility Studies

Master Plan Financial Analysis

Lease versus Buy Analysis

Project and Development Management

HOTELS

Jones Lang LaSalle Hotels is the world's largest and most qualified specialist hotel

real estate investment advisor. Working through 16 dedicated offices and the global

Jones Lang LaSalle network, provides clients with value-added investment

opportunities and advice, helping them achieve maximum value from their hotel and

tourism property assets.

The firsthand experience in local markets and financial expertise lead to superior

solutions across a range of disciplines:

Valuation and Appraisal

Transactions

Mergers and Acquisitions

Financial Advice and Capital Raising

Asset Management

Strategic Planning



Operator Assessment and Selection

Industry Research

Project and Development Management

Focusing on these areas, the Company helps clients maximize investment return,

minimize risk, increase operational efficiencies and synergies, and tap innovative

funding sources on a global scale.

INDUSTRIAL SERVICES

The Industrial Services practice leverages the firm's extensive global resources to

control costs, improve effectiveness and enhance the value of industrial real estate

holdings.

The worldwide capabilities for industrial users, investors and owners include:

Acquisition and Disposition

Project and Development Services

Strategic Consulting

Portfolio Management and Administration

INVESTMENT MANAGEMENT

LaSalle Investment Management, Inc., a member of the Jones Lang LaSalle group, is

a leading global real estate money manager with approximately US$23 billion of

public and direct real estate assets under management.

The investment strategy is shaped by three priorities:

Developing and executing customized investment strategies that meet the

specific investment objectives of each of our clients.

Providing superior performance for all clients.

Delivering uniformly high levels of service.

The Company offers separate accounts and co-mingled funds, for direct real estate as

well as public real estate securities in the United States, Europe and Asia:


http://www.lasalle.com/


Private Investments in Real Estate Properties: The Company oversees the

acquisition, management, leasing, financing and disposition of real estate

investments across a broad range of property types.

Investments in Public Equity and Debt Securities: The Company also offers

clients the ability to invest in separate accounts focused on public real estate,

debt and equity securities.

LEISURE SERVICES

The Company creates and implement innovative real estate solutions for the leisure

and entertainment industries. In Europe, the specialist teams provide management

advice on over 2 million square feet of leisure and lease over 3 million square feet of

commercial leisure developments.

The range of Leisure Services includes:

Investment Funding

Finance

Valuation

Leasing and Development

Consultancy and Research

Management

Professional Services

OFFICE

With a presence in more than 100 of the world's leading property markets, Jones

Lang LaSalle has the expertise to enhance the value of their client's office properties.

The network of professionals provides a full complement of services to office

building owners, occupiers and investors worldwide.



PROJECT AND DEVELOPMENT SERVICES

The Company provides a full range of services that address all aspects of the

development, construction, refurbishment and occupancy of buildings. The diverse

client base and consequent experience extend to property types ranging from offices

and industrial to warehousing. In addition to meeting or surpassing the agreed

objectives of each project, the goal is to add value to the client's position by applying

our expertise and best practice methodology.

The core service activities include:

Building Surveying

Development Advisory

Development Management

Interiors Project Management

Move Management

Multi-Site Program Management

Privatisation

Renovation and Rehabilitation

The Company delivers added value to their clients by relieving demand on internal

resources, maximizing client purchasing power and utilizing state-of-the-art

technology systems to monitor schedules and control costs.

PROPERTY MANAGEMENT

In a deregulated financial climate, real estate assets must be aggressively and

professionally managed if they are to achieve the best possible returns for owners and

investors, and compete effectively for investment capital. Owners across the globe

entrust their diverse real estate investments - large and small assets and portfolios,

new development and renovation, and urban and suburban properties.



The goal is to enhance clients' property values through active day-to-day

management that focuses on maintaining high levels of occupancy and tenant

satisfaction, while lowering property costs.

From due diligence and financial underwriting to environmental and engineering

services, we have the broad base of experience and knowledge needed to provide the

technical, operational and construction services that achieve the clients' objectives.

RESIDENTIAL DEVELOPMENT AND INVESTMENT

The Company provides marketing and sales services for major residential

development projects in Australia, Asia and select European markets. The Company

offers a philosophical approach to marketing clients' residential projects, which on

key points differs from the traditional agent's model of project marketing.

Jones Lang LaSalle has:

The financial strength to provide the services offered throughout the life of the

project

The skilled human resources and experience vital to sales and marketing

success

The international network, widening the market

The corporate commitment to its particular approach to the marketing of major

residential developments

RETAIL

The Company’s network of specialists provides retailers and retail property investors

in the world's leading markets with a full complement of services:

Leasing

Specialty Leasing

Acquisition and Disposition

Property Management

Project and Development Services

Construction Management



Consumer Marketing

Tenant Representation

Strategic Consulting

SALES AND ACQUISITIONS

The Company is a market leader in the sale and acquisition of large, institutional-

quality office, retail, industrial and mixed-use properties. Located in every major

market in the world, our professionals are positioned to market properties

internationally, using first-hand local knowledge to provide valuable insights into

what occupiers and investors are seeking in the marketplace.

STRATEGIC CONSULTING

The Company ensures that real estate is positioned to support the clients' business

objectives.

A network of 150 professionals in three regions allows them to share best practices

globally, invest in R&D, and assemble global teams. The professionals have

backgrounds in real estate, business, finance, design and corporate strategy.

Strengthening corporate real estate's contribution. The Company ensures that

corporations get value and efficiency from their real estate. Services include:

Aligning real estate with corporate objectives

Positioning real estate to accommodate changes in business needs

Creating best-in-class real estate departments

Disposing of redundant facilities quickly, at highest price

Providing better facilities using less capital

Assisting in location selection

Designing development strategies. Working with developers, investors,

corporations and governments. Services include:

Regeneration and master-planning



Repositioning vacant or under-utilized properties

Disposals and acquisitions

Strategic marketing

Transport related development

Development for arts, culture, education & sport facilities

Mixed-use schemes

Providing sound strategies for investors. The Company objectively analyses

investment opportunities to examine risks and returns associated with diverse

portfolios. They work with investors to:

Explore cross border opportunities

Advise on acquisition and divestment strategies

Achieve value enhancement and risk reduction, for single assets and portfolios

(including NPL and distressed assets workout strategies and REITs emerging in

many markets)

Advise on portfolio structuring and positioning

Offering solutions for retail clients. The Company works with retailers, owners and

developers to maximise the performance of retail outlets. The advice ranges from

refining retail portfolios to developing and repositioning the retail offers in major

cities. By using consumer led research, and provide all of the above for retailers.

TENANT REPRESENTATION

The Company develops strategic alliances with clients with complex real estate

requirements while partnering with them to evaluate and execute transactions that

meet their ongoing occupancy needs. The multi-discipline approach supports

occupancy strategies that are linked to the clients' core business objectives.

The Company works to help clients lower their real estate costs, minimize occupancy

risk, improve occupancy control and flexibility, and create more productive office

environments. In the process, they define space requirements, identify suitable



alternatives, recommend appropriate occupancy solutions and negotiate lease and

ownership terms with third parties.

Our transaction services encompass:

Portfolio Occupancy Strategy

Business Location Strategy

Acquisition

Disposition

Contact Centres

Mergers & Acquisitions

The Company also provides clients with the knowledge needed to consider the

development of new facilities, weigh the benefits of purchase or lease decisions and

evaluate long-term financing options for every asset type including industrial

properties. We also represent clients in large, complex transaction assignments that

typically involve relocations of headquarters facilities or major office consolidations.

VALUATIONS

From commercial office buildings, retail outlets and factories, to retirement villages,

hotels and hospitals, occupiers and owners in the public and private sectors benefit

from the proven valuation experience.

The services—which may focus on a single property or a global portfolio of multiple

asset types—help clients determine accurate values of office, retail, industrial and

mixed-used properties in the areas of:

Strategic Disposition Analysis

Investment and Market Analysis

Hold-Versus-Sell Analysis

Due Diligence

Feasibility Studies

Securitization

Asset Valuation

Bond Financing Cash Flow Feasibility

Asset Review and Market Surveys



Highest and Best Use Studies

Strategic Reviews

Acquisition Advice and Analysis

Valuation for Sale/Leaseback

Portfolio Valuation

Debt and Equity Financings

Mergers and Acquisitions

Privatisation

The valuation service fulfills the need for maximum accountability at the highest

professional level. The professionals work with clients to ensure comprehensive

recording and full utilization of property resources, regular revaluation of assets to

review performance and ascertain the best use of a property, and rapid evaluation of

property assets in any measurement of a company's value



RETAILING:

WHAT IS RETAILING …….?

“Retailing consists of those business activities, which are involved, in the sale of

goods or services to consumers for their personal, family or household use.” It is the

final stage in the distribution process for goods and services from manufacturers to

final consumers

Figure 1 A Typical Distribution Chain

Source: -Ron Hasty, James Reardon - Retail Management

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 differs from marketing in the sense that it refers to only 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."

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, department 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.

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.

Retail Marketing Mix

Product Branding

Packaging

Product Design

Assortment

Services

Price

Cost of goods

Business Expenses

Gross Margin

Profit

Promotion

Advertising

Personal Selling

Sales Promotion

Public Relations

Visual Merchandising

Distribution

Logistics

Store Location

Site Evaluation

Transportation

Storage of goods

Source: -Ron Hasty, James Reardon - Retail Management



Importance of Retailing

So far, it has been seen that retailing is a vital and involuntary action performed by

the living structure of the market economy (as opposed to the case in a barter

economy). In a barter economy, barter transactions take place between consumers

themselves. Consumers interact directly whereas in a centralized market economy,

transactions taking place at a larger scale (both in terms of volume and variety)

necessitate an interface between the manufacturers and final consumers. Hence we

reinforce the fact that retailing is not a new deal. This industry is extant as an

interface between production and consumption, from times immemorial, benefiting

us - consumers or producers in the various ways discussed above.

Our study concentrates on organized retailing, which consists of shopping malls,

super markets, Factory outlets stores, and like. In the last few years a shift has

occurred in India from individual retail outlets owned separately and managed

distinctively to professionally managed retailing. This is an industry, which has now

started attracting better investments and talent. Things changed primarily because of

the rising expectations of Indian consumers and the corporate responding quickly.

Today, the industry (in India) seems to be functioning somewhere between the

accelerated development and maturity stages, with high growth rates, intense

competition and moderate profitability. For reference, the table, depicting the various

stages of the Retail Life Cycle is given in order to get an idea of the magnitude of the

issue we are dealing with, we look at the international scenario. During 1992, the

largest 100 retailers in the world generated over $1.1 trillion in revenues.

Retailing is the second largest industry in the world, one of the largest employers of

the world and an index of economic growth. In India there are about 5 million retail

outlets varying in sizes and nomenclatures. India has the highest number of retail

outlets per capita in the world but has the lowest retail space per capita in the world

(2 ft / person). Out of these 5 million outlets 96% are smaller than 500 sq. ft. in area

3. There are about 3 million outlets in India's 3700 designated towns and more than



6,00,000 villages. About 350 million people live, within one-minute walk of these

retail shops According to retail census conducted by market researcher ORG-MARK,

Rs.4,79,568 crore worth of products were sold through these 5 million retail outlets

Manufacturers owned and retail chain store are springing up in urban areas to market

consumer goods to the middle class in a much similar style as malls around the globe.

At present about 8% of the Indian population is employed in the retailing industry as

against 20% in USA. As India moves towards the service oriented economy, a rise in

this percentage is expected. The number of the retail outlets is growing at about 8.5%

annually in the urban areas and in towns with population between 1,00,000 to 1

million; the growth rate is about 4.5%.

According to Kurt Salmon Association, a global management consulting firm,

organized retailing seems all set to power ahead from Rs. 5000 crore currently to

about Rs.30,000 crore in next five years. A.T.Kearney reports that organized retailing

will account for about 20% of the total $8 trillion retail market in India in the next 5-

7 years as against 1-2% today.

Consumer Spend by 2005 (in Rs. crore) Unorganized Retailing 7,08,836

Organized Retailing Food and grocery 5,956 Non food 23,886

Source: Shah, Jindal " Shop at Leisure" Economic Times (4th Feb 2000)

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.



Even though the big retail chains are concentrating on the upper segment and selling

products at higher prices like Crossroads, Akbarally's and Shopper's Stop, retail stores

are sprouting that cater to the needs of the middle class. With a huge middle class

population, the retailers like RPG's Food World are tapping this market. The market

is flooded with products - branded and unbranded. The customers are in a dilemma as

to pick which one! The organized retail chains, display all the products and the most

attractive product catches the customer attention. Gone are the days of customer

loyalty with increasing number of products of similar quality hitting the market.

Differentiation plays the lead role. According to Mr. Simon Bell of A.T.Kearney,

there is a close relation between the growth of brands and the growth of the organized

retailing. "Companies selling branded products prefer to have big and organized retail

outlets such as supermarkets where there can be differentiated from unbranded

products" he opines. India is going through that phase in retailing, which the US

experienced in 80s and early 90s. From product based shopping, the importance has

shifted to experience based shopping.

The customers of the 21st century would expect to pick his/her own products from an

array of choices rather than asking the local kirana wallas to deliver a list of monthly

groceries. Thus the way of distribution of products has gained importance in the past

decade.



BUYING BEHAVIOR:

Consumer decision making varies with the type of buying decision.the decision to

buy a toothpaste, tennis racket, a personal computer and a new car are all very

different. Complex and expensive purchases are likely to involve more buyer

deliberation and more participants.

Henry Assael distinguished four types of consumer buying behavior, based on the

degree of buyer involvement and the degree of differencec among brands.

High involvement low involvement

Complex Buying Behavior:

Complex buying behavior involves a three-step process. First, the buyer develops

beliefs about the product. Second, he or she develops attitudes about the product.

Third, he or she makes a thoughtful choice. Consumers engage in complex buying

behavior when they are highly involved in a

purchase and aware of significant differences among brands. This is usually the case

when the product is expensive, bought infrequently, risky, and highly self-expressive,

like an automobile.


Complex buying behaviour variety-seeking buying Behaviour

Dissonance-reducing habitual buying buying behaviuor behaviour

Significant differences between brands

Few differences between brands


The marketer of a high-involvement product must understand consumer’s information

gathering and evaluation behavior. The marketer needs to develop strategies that

assist the buyer in learning about the product’s attributes and their relative

importance, and which call attention to the high standing of the company’s brand on

the more important attributes. The marketer needs to differentiate the brand’s

features, use print media to describe the brand’s benefits, and motivate sales

personnel and the buyer’s acquaintances to influence the final brand choice.

Dissonance-Reducing Buyer Behavior:

Sometimes the consumer is highly involved in a purchase but sees little difference in

brands. The high involvement is based on the fact that the purchase is expensive,

infrequent, and risky. In this case, the buyer will shop around to learn what is

available. If the consumer finds quality differences in the brands, he or she might go

for the higher price. if the consumer finds little difference; he or she might simply

buy on price or convenience. Marketing communications should supply beliefs and

evaluations that help the consumer feel good about his or her brand choice.

Habitual Buying Behavior:

Many products are bought under conditions of low involvement and the absence of

significant brand differences. Consider salt, consumers have a little involvement in

this product category. They go to the store and reach

for the brand. If they keep reaching for the same brand, it is out of habit,not strong

brand loyalty. There is good evidence that consumers have low involvement with

most low-cost, frequently purchased products. Consumers do not search extensively

for information, evaluate characteristics, and make a decision. Instead, they are

passive recipients of information in television or print ads. Ad repetition creates

brand familiarity rather than brand conviction. After purchase, they may not even

evaluate the choice. For low-involvement products, the buying process begins with

brand beliefs formed by passive learning and is followed by purchase behavior, which

may be followed by evaluation.



Variety-Seeking Buying Behavior:

Some buying situations are characterized by low involvement but significant brand

differences. Here consumers often do a lot of brand switching. Think about cookies.

The consumer has some beliefs about cookies, chooses a brand of cookies without

much evaluation, and evaluates the product during consumption. Next time, the

consumer may reach for another brand out of a wish for a different taste. Brand

switching occurs for the sake of variety rather than satisfaction.

The market leader and the minor brands in this product category have different

marketing strategies. The market leader will try to encourage habitual buying

behavior by dominating the shelf space, avoiding out of stock conditions, and

sponsoring frequent reminder advertising.

Individuals are subject to a number of influences that tend to distort their perception;

some of these are discussed are below:

Physical appearances:

People tend to attribute the qualities they associate with certain people to others who

may resemble them, whether or not they consciously recognize the similarity. For this

reason, the selection of models for print advertisements and for television

commercials can be a key element in their ultimate persuasiveness. Studies on

physical appearance have found that attractive models are more persuasive and have a

more positive influence on consumer attitudes and behavior than average looking

models; attractive men are perceived as more successful businessmen than average-

looking men. Some studies suggest that models influence consumer perceptions of

physical attractiveness and through comparisons their own self-perceptions.

Stereotypes:

Individuals tend to carry “pictures” in their minds of the meanings of various kinds of

stimuli. These stereotypes serve as expectations of what specific situations, people or

events will be like and they are important determinants of how such stimuli are

subsequently perceived.



Irrelevant cues:

When required to form a difficult perceptual judgment, consumers often respond to

irrelevant stimuli. For example, many high-priced automobiles are purchased because

of their color, style or luxury options, rather than on the basis of mechanical or

technical superiority.

First impressions:

First impressions tend to be lasting; yet, in forming such impression, the perceiver

does not yet know which stimuli are relevant important, or

predictive of later behavior. A shampoo commercial effectively used the line,” you’ll

never have a second chance to make a first impression. “Since first impressions are

often lasting, introducing a new product before it has been perfected may prove fatal

to its ultimate success; subsequent information about its advantages, even if true, will

often be negated by the memory of its early performance.

Jumping to conclusions:

Many people tend to jump to conclusions before examining all the relevant evidence.

For example, the consumer may hear just the beginning of a commercial message and

draw conclusions regarding the product or service being advertised. For this reason,

some copywriters are careful to give their most persuasive arguments first.



POSTPURCHASE BEHAVIOUR

After purchasing the product the customer will experience some level of satisfaction

or dissatisfaction. The marketers’ job does not end when the product is sold to the

buyer, marketers must monitor post purchase satisfaction, post purchase actions, and

post purchase product uses

POSTPURCHASE SATISFACTION

The buyer’s satisfaction is a function of the closeness between the buyer’s

expectations and the products perceived performance. If performance falls short of

the expectations then the buyer is disappointed, and if it meets the expectations then

the customers is satisfied, and if the performance exceeds the consumers expectations

then the consumer is delighted, these feelings makes a difference in weather the

customers buys the product again and talks favorably or unfavorably about the

product.

POSTPURCHASE ACTION:

The consumer’s satisfaction or dissatisfaction with the product will influence

subsequent behavior. If the consumer is satisfied then he or she will exhibit a higher

probability of purchasing the product again. And he may also tend to speak good

about the brand. Dissatisfied consumers may abandon or return the product or

sometime they may also take public actions.



INDUSTRY ANALYSIS

ENVIRONMENTAL ANALYSIS

In order to understand the industry we undertook two different

environmental analyses. The first is the PEST Analysis where the

political, environmental social, and technological aspects are

looked into. In the Porter's Five Forces the competitive

environment of the industry is analyzed.

I) PEST Analysis:

Now, in a particular geographic region, the environment there

affects the retailers in the region in various ways. We have studied

the effects 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 bn 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. (MRTPC). 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 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:

As discussed under the title 'demographic and lifestyle trends'

above, 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

grocery food 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.

Speaking at KSA Retail Summit, 2000, Peter Lau, Chairman of

Giordans International, Hong Kong, said, "It is the format of

consumer expectation that changes, not the goods or services they

want. " This is depicted in the following diagram:

KSA Technopark conducted a study on consumer attitude towards

shopping in association with the market research firm ORG-



MARG in January and February 1999. The study was spread over

the four zones of India viz. North, South, West and East and

covered a random sample of 7300 respondents in twelve cities.

The results of this study clearly reflect that the buying patterns do

vary according to the customs and lifestyle of a region. In the south

approximately seven hours are spent on shopping per week. This

figure is the highest amongst the four zones, which probably

explains the more spurt of new malls and supermarkets in the south

than in the other zones. Further, the study has attempted to find out

what a customer expects out of a store. Here, the six attributes

desired by most number of people (65% and above) are polite and

courteous salespeople, quality of products, non intrusive sales

persons, value for money, attractive displays and range of

products. Although desired by a very low percentage of people

(only 10%) yet the attribute of an entertainment centre for children

has also figured in.

That is to say, 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,

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 800 numbers have

brought about a revolution in consumer's ordering and feedback

mechanisms. These also pave 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.



RETAIL SECTOR OVERVIEW

Retail is India's largest industry, accounting for over 10% of the country's GDP and

around 8% of the employment. The retailing industry in India estimated at

Rs.930,000 crore (2003-04) is expected to grow at 5% p.a. in line with predictions

made in 2002. However, the size of organised retailing market stands at Rs.28,000

crore in 2004, thereby, making up a mere 3% of the total retailing market. It is way

behind the development curve when compared with modern economies like the US

where organized retail forms about 85% of total retail sales. India also lags behind

other emerging markets in Asia (Taiwan, Malaysia, Thailand, Indonesia, China),

Eastern Europe (Poland) and South America (Brazil) where significant progress has

been made in the last two decades.

But the story is set to change. Moving forward, organised retailing in India is

projected to grow at the rate of 25-30% p.a. and is estimated to reach an astounding

Rs.100,000 crore by 2010. Its contribution to total retailing sales is likely to rise to

9% by the end of the decade.

Retail industry in India is at the crossroads. It has emerged as one of the most

dynamic and fast paced industries with several players entering the market. It is

gradually inching its way toward becoming the next boom industry. The whole

concept of shopping has altered in terms of format and consumer buying behavior,

ushering in a revolution in shopping in India. Modern retail has entered India in the

form of sprawling shopping centres, multi-storied malls and huge complexes that

offer shopping, entertainment and food all under one roof. The Indian retailing sector

is at an inflexion point where the growth of organized retailing and growth in the

consumption by the Indian population is going to take a higher growth trajectory.

The changing demographics of the Indian population can be attributed to this

phenomenon. A large young working population with a median age of 24 years and

emerging opportunities in the services sector are going to be the key growth drivers



of the organized retail sector in India. The last few years have seen the emergence of

several factors that will drive growth going forward;

Booming IT and BPO sectors with rising incomes

Emergence of profitable retail models

Availability of retail space

Increasing interest of foreign retailers in India

Surge in capex spend of Indian retailers

1. Booming industry and increasing incomes

The growth in our economy has resulted in growth of urbanization, which is only set

to grow further, producing younger families with both spending capacity and the

desire to spend. The continuously evolving consumer segment in India is the

youngest in the world with a median age of 24 years as compared to countries like the

USA where the ‘baby boom’ generation is now nearing retirement. The young Indian

consumer is willing to spend on lifestyle-oriented products and services and aversion

to credit is now a thing of the past. Further, consumers are spending on a wider range

of products and services because of which non-conventional product categories like

cell phone ringtones (estimated at Rs.400 crore) and Valentine’s Day gifts (Rs.1,500

crore) have evolved in very small time spans.

Growth drivers:

Urban households spend 2.5x more than rural families.

Urban population in India expected to grow by 85 million over the next 10

years, the second highest in the world after China.

The middle class (family income between Rs.2-10 lakhs p.a. as per NCAER),

currently estimated at about 92 mn, is expected to be around 153 mn by

2010.

Real incomes expected to grow by 5-6% p.a. resulting in significant

improvement in purchasing power



These positive macro trends will add to the large pool of young, urban consumers

with higher disposable incomes and the right mindset to shift towards an organised

retailing experience.

2. Profitable retail models

The last few years have seen development of various retail models across product

categories. Hypermarkets, food supermarkets and discount retailers are the key value

retail formats in India. Only in the recent years have private sector retailers

recognised the growth potential. Standalone supply models have started to appear

while others have started to open in the malls that are mushrooming all over the

country. The enclosed table gives a snap shot of the key domestic retailers

Segment Key domestic retailers

Food, grocery and tobacco Pantaloon (Big Bazaar, Food Bazaar), RPG (Spencers,

FoodWorld), Subhiksha, Nilgiris, Marginfree, Trent

(Star India Bazaar), Barista, Café Coffee, Fuel retailers

(BPCL, Reliance)

Clothing Trent (Westside), Pantaloon (Big Bazaar, Pantaloons),

Lifestyle**, ITC (Wills Lifestyle), Shopper's Stop,

Ebony, Globus, Pyramid, Raymond, Arvind Brands

(Arrow, Lee, Wrangler), Indian Rayon (Madura

Garments- Louis Philippe, Van Heusen, Allen Solly,

Peter England), Provogue, Reliance (Vimal), Bombay

Dyeing, Zodiac, Indus League

Consumer durables Vijay Sales, Vivek's, BPL, Videocon, Onida, Philips,

Samsung, LG India, Whirlpool etc

Jewellery and watches Titan (Titan showrooms + Tanishq (jewellery)),

Pantaloon (Gold Bazaar)

Home décor & furnishing,

household goods

Lifestyle**, Welspun, Himatsingka Seide

(Atmosphere), Bombay Dyeing, Durian Industries,

Zuari Industries, Featherlite, VIP, Home Stores, KK



Birla Group (Style Spa)

Beauty & other healthcare Marico (Kaya), HLL (Lakme salons), RPG (Health &

Glow)

Medical care & health

services

Subiksha, Apollo Pharmacy, RPG-Dairy Farm (Health

& Glow), Dr. Morepen (Lifespring)

Footwear Liberty, Lakhani, Woodlands, Action

Books, music & gifts Archies, Landmark, ITC, Ebony, Shopper's Stop

(Crossword), Times of India Group (Planet M), RPG

(Music World), Oxford (Apeejay Group)

Source: HSBC

Currently, footwear and clothing have a large penetration in the organised retail

segment. Bata – the oldest MNC retailer, commands a market share of 15% in the

domestic retail footwear market. Foreign players in this category like Reebok,

Adidas, Nike also marked a significant presence through franchisee agreements.

Outlets of these companies are mostly seen in malls due to the easy availability of

space along with amenities and the trend is expected to continue.

While lucrative opportunities exist across product categories, food and grocery

present the most significant potential in the Indian context, as consumer spending is

highest on food. Further, ‘wet groceries’ i.e. fresh fruits and vegetables is the most

promising segment within food and grocery as very few organised retailers have

tapped this opportunity inspite of wet groceries being the preferred choice of most

Indian households.

Opportunities galore

Home improvement: Potential exists for specialty retailing in the home

improvement segment with formats such as consumer durables retailing.

Electronics: Home and electronics-related sectors have performed better and

gained a higher share of the overall retail cake across the world. Electronic

gadgets like mobile phones, digital cameras, PC software and games, and, for



the more extravagant, PDA’s, notebook computers, and Apple’s stylish iPod

have undoubtedly stolen retail spend from apparel, acting as a new way to

make a fashion statement.

Wholesale trading: These cash-and-carry stores attract large volumes from a

sizeable number of retailers who do not have to maintain relationships with

multiple suppliers for their every need.

Rural Retailing: This poor-cousin has of late caught the eye of retailers

looking for new areas of growth. These malls offer a diverse product range

including soaps, detergents, toothpastes, televisions, DVDs, sewing

machines, grinders, etc attempting to provide farmers a one-stop destination

for all needs.

Baby care and Mother care segment: Huge potential also exists in these

segments where consumers are seeking “all under one roof” solutions i.e.

high quality products required for mothers (20 - 39 years) and child (0 - 6

years) with a deeper product assortment than what most kids specialty stores

today offer. The opportunity in this segment is highlighted by the fact that

currently no infant accessories brand has exclusive retail presence in India.

3. Availability of retail space

Unavailability of good quality real estate has hindered organised retail in India. It is

one reason why some of the first modern-format retailers have been real estate

developers (e.g., Shoppers’ Stop of Rahejas Group, CrossRoads of Piramals). But in

the last three years, organised retail space development in India has gone through a

significant change. With the rental yield on malls (12-15%) being much higher than

on commercial properties (7-12%), mall developers across the country are creating

superior real estate options at a frenzied pace.

From 35-40 operational malls currently occupying approximately 6 mn sq ft of retail

space, India is expected to have around 200 new malls by 2006 end, thereby adding

retail space to the tune of 35-40 mn sq ft. Further, by 2010, 500-600 malls occupying

~120 mn sq ft are at various stage of planning. While the six metros are expected to



account for a majority of these malls, they are expected to spread across 60 cities by

2010.

Many mall developers, in a bid to offer distinctive value propositions, are planning

‘specialty malls’, which will emerge as one-stop destinations in their chosen product

categories. The Delhi-based Aerens Group is one such exclusive jewellery mall. A

number of analogous developments like a ‘Wedding Mall’ by Omaxe Group,

‘Automobile Mall’ etc are also in the offing. ‘Home Malls’ offering the entire range

of building and interior decor solutions are also coming up. Concepts like a ‘Toys

Mall’ exclusively for kids and a ‘Factory Outlet Mall’ offering branded apparel at

throw away prices, which are popular in developed economies are likely to crop up in

India.

The fast-paced growth of mall development has been further fuelled by government

authorities like the Delhi Development Authority (DDA) beginning to release real

estate space for retail development in prime retail areas. In Mumbai a large supply of

defunct textile mill land is being released for development.

Is acquiring space really simple?

Getting good quality real estate in central locations is a tough game. Fragmented

private holdings, zoning laws and archaic regulations – all hinder development. But

the hope lies in state governments, which are expected to see retail as an opportunity

to reduce ballooning state fiscal deficits through sale/rent of land and through

generation of tax revenues that are easy to collect.

The lack of organised institutional capital also is a hindrance to the development of

malls in India. Most of the developers work on the “Design, Sell, Construct, Move

On” model, which has resulted in clustering of a large number of malls in a relatively

small geographical area. A chief example is Gurgaon where over 20 new malls are

likely to become operational in the next two years. This unhealthy concentration of

supply in a suburban zone with a limited catchment population will lead to mall

developers burning their fingers as their plans are not backed by the requisite



planning and market research. Also, with ownership being fragmented, a lot of mall

management issues are creeping in.

With the government opening up of 100% FDI in construction in Feb ‘05, it is

expected that joint ventures between Indian and foreign developers would increase,

which would in turn result in opening up of new malls. The entry of institutional

capital should result in ensuring unified ownership and thereby professional mall

management.

4. Foreign retailers eyeing the Indian markets

The last few years saw the entry of a multitude of international brands into the Indian

market on the strength of rising affluent levels of the young Indian population along

with the heightened awareness of global brands and international shopping

experiences and the increased availability of retail real estate space. Luxury brands

such as LVMH, Ermenegildo Zegna, Bvlgari, Escada, Hugo Boss, Tommy Hilfiger,

Cartier, etc have entered the Indian market with presence mostly in five-star hotels.

Many others are firming up plans to set up shop in the country to offer new-age

global Indians an aspirational lifestyle they have demanded for long.

Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M, Karstadt-Quelle, etc are

stepping up their sourcing requirements from India and moving from third-party

buying offices to establishing their own wholly owned/wholly managed sourcing and

buying offices which will further make India an attractive retail opportunity for the

global players.

5. Surging capex spends

Retail majors and manufacturers have laid out aggressive capex plans for the next few

years for expansion as well as renovation and maintenance of existing stores. In its

recent IPO, Shoppers’ Stop has raised about Rs.1.6 bn of which more than Rs.1.1 bn

would be used to finance new store capex. Pantaloons has been aggressively



acquiring prime real estate. It has recently made three strategic investments at a spend

of Rs.730 mn, by diluting 4.5% equity stake.

Trent, the retailing unit of the Tata Group has recently announced a Rs.1.18 bn issue

of preferentially convertible debentures to finance expansion. It has drawn up plans

aggregating an investment of ~Rs.1.25 bn between FY06-FY08. Its plans involve the

establishment of 16-18 new stores, upgrade of existing stores and strengthening of the

warehouse infrastructure.

These are just a couple of examples of Indian companies that have aggressive

expansion plans over the next few years.

Should foreign players be allowed to step-in?

India has the potential to become a giant in food processing and textiles as its

agricultural production is the lowest cost in the world, and textile labour is the

cheapest internationally. Allowing FDI in retail trade, especially in groceries and

garments marketing, provides the linkage effects of a modernised, globalised retail

trade.

Allowing foreign players into India would bring in better managerial practices and

IT-friendly techniques to cut wastage and set up integrated supply chains to gradually

replace the present disorganized and fragmented retail market. It is estimated that

India wastes nearly Rs.50,000 crore in the food chain itself. These international retail

outlets can help develop the food processing industry, which requires $28 bn of

modern technology and infrastructure.

Allowing entry of market-savvy and intelligent corporations like Wal-Mart, Tesco,

Carrefour, J C Penny etc into the country would also help in generating demand for

exports, which would in turn contribute towards the targeted GDP growth of 8 – 10%

per year.



OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES:

To identify whether the specialty retail stores are required in suburban areas –

South East Bangalore.

To identify the customer attitude towards apparel shopping and the customer

buying behavior.

SECONDARY OBJECTIVES:

To identify the real estate requirement for setting up such stores.

HYPOTHESIS

Null Hypothesis:

H0: The specialty retail stores are only good for the sub-urban areas.

Alternative Hypothesis

H1: The specialty retail stores are not good for the sub-urban areas.

STASTICAL TOOLS

The statistical tool used in this study for analysis is z-test, as the sample size is more

than 30.

RESEARCH DESIGN

SAMPLING

SAMPLING METHOD: The sampling method used for the research purpose is

Stratified Random sampling which helped in defining the strata, then randomly

selecting the sample.

SAMPLE SIZE: The sample size taken for the study was 200, which includes Call

center executives, fresh graduates, Middle and Senior level executives and

housewives.



RESEARCH METHOD:

The tool used for the research was Interview method.

TOOL: The tool used for the data collection was Questionnaire.

A structured questionnaire was prepared and was administered personally.

SOURCES OF DATA COLLECTION:

PRIMARY DATA:

The primary data will be collected on the basis of questionnaire.

Firstly there will be a set of questions for the consumers in Bangalore for

identifying their attitude.

Secondly there will be a different set of questions for the people who stay in

the semi-urban areas about their beliefs.

Thirdly there will be a different set of question for the local marketers on the

affect of these stores.

Interview with the managers of these stores about what they feel about the

market of these stores.

SECONDARY DATA: Secondary data is collected from the business journals,

research reports and Internet.

SCOPE OF THE STUDY:

The place covered for the study is only South East Bangalore, which includes

areas like Whitefield, Kormangala, Marathalli, Bannerghatta Road,

Electronic city, HSR Layout, Hosur etc.

The survey is undertaken to know the buying behaviour only for clothing.



ASSUMPTIONS:

The annual income level’s are assumed as

Call Centre professionals and fresh graduates - Rs. 96,000 to 2,40,000

Middle and Senior level executives – more than Rs. 2,40,000

Housewives – No income, but from families with good income.

LIMITATIONS OF THE STUDY:

Strict boundaries were not followed in terms of data collection.

Time given is very less.



ANALYSIS

Categories of respondents

Call center executives and fresh graduates 28%

Middle and Senior level professionals 46%

Housewives 26%

The sample interviewed were from different fields like Call center

executives, fresh graduates, Middle and Senior level professionals and

housewives wherein 46% of the respondents were Middle and Senior level

executives, 28% Call center executives and fresh graduates and 26% of

Housewives. The concept behind this was to have a set of diverse people in

the study living and working in South East Bangalore so that the result which

is derived from the study can be more accurate.


CATEGORIES OF RESPONDENTS

48%

26%

24%

Middle and SeniorLevel Executives

Call Center andFresh Graduates

Housewives


Frequency of shopping

The frequency of shopping varies as per the categories of the sample.

This is important for positioning of the product.

The analysis shows that around 52% people go shopping once in a week,

whereas 26% of people go very often for shopping.

The observation showed, Housewives usually go shopping twice in a

week, whereas call center and fresh graduates do shopping once in a

week usually weekends and Middle and Senior Executives go shopping

once in fortnight.


Frequency of Shopping

52%

22%26%

0%

10%

20%

30%

40%

50%

60%

Once a week Once in a month Often


Preference of attributes while shopping

The attributes like – Price, Quality, brand and look & feel are considered

while making a purchase decision, to know what is more important for the

purchase.

The data collected shows that 58% of the people consider price as an important

attribute and while shopping the second is quality followed by brand, Where as the

least preferred is design.

Inference:

The data collected showed that people are very price conscious. This is the first thing

which the consumers look for when they go for shopping.

Further, it was observed that Call Center professionals and fresh graduates prefer low

price, whereas Senior Executives prefer quality and branded clothing for Housewives

look and feel is more important.


ATTRIBUTES PREFERENCE

58%

12% 10%

20%

0%

10%

20%

30%

40%

50%

60%

70%

Price Quality Brand Look and Feel


Preference of location for shopping

To know the preference of location as people go for shopping to main city

areas or nearby their work place or residents or any other specific areas.

The concept behind this is to identify where do the people go out for

shopping, whether they travel long distance and buy from city areas or they

do it in their own areas.

Location for Shopping

41%

48%

11%

City areas

Nearby areas

Others

As per the analysis, 48% of the respondents do their shopping in nearby

areas, where as 41% of the people prefer shopping from city areas.

Many people do not go to city areas for shopping so there is a wider scope for

the lifestyle stores in such kind of areas. And they also look for good variety

of clothes in their own area.



Place of Shopping

This question aims at finding out which store they prefer for shopping –

Factory outlets/exclusive showrooms, shopping malls or local shops.

The analysis showed that 47% of people make their purchases from factory

outlets/exclusive showrooms, whereas 41% of them from Shopping malls and

12% from local shops.


Location for Shopping

41%

12%

47%

0%

10%

20%

30%

40%

50%

Factory Outlets Shopping Malls Local shops


Consumers visits to Specialty retail stores

At this stage the respondents were screened to those who have visited and

those who have not visited a specialty retail store.

From the data we got 93 of the respondents had visited a specialty retail store

and 7 had not. The data is given below.

per centage of r espondents actual l y visited l if e styl e stor e

93

7

0

20

40

60

80

100

visited Not visited

Series1



Striking features

The question aims at the attributes that attracts the consumers to this stores,

that is to find out the striking features of the stores – Brands, Variety,

Convenience or Price.

Striking Features

28%

35%

30%

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Brand Variety Convenience Price

From the analysis, it was found that variety and convenience are the most

preferred attributes or striking features of the stores.

From this we can infer that people are now looking for more and more

variety, availability of brands and convenience when they visit any store.



Price perception

This question aims to find out what is the perception of the consumers

regarding the pricing at these stores. It was to take their opinion about

whether the products sold by them are expensive or reasonable.

70%

27%

3%

0%

10%

20%

30%

40%

50%

60%

70%

Very Expensive Expensive Reasonable

Price perception

From the data collected it was found that 70% of the respondents are of the

opinion that the products are very expensive. Whereas 27% of the people

were of the opinion that the products are expensive and 3% said that the

products are reasonable.

The perception of the people is that these stores are very expensive. So the

stores should position themselves in the mind of the consumers in such a way

that these stores signify value for money, quality, provide excellent service

and relationship marketing should be followed.



Spending pattern:

The idea is to find out how much do people spend on shopping of clothes in a

month. Thus, the demand for such stores can be estimated.

Average spending per month

11%

27%

62%

0% 10% 20% 30% 40% 50% 60% 70%

> 10000

5000-10000

< 5000

in R

s.

From the data collected it was found that 62% of the people spend less than

Rs. 5,000 per month and 38% of the people spend around Rs. 5,000-10,000

per month.

From the analysis, its clear that the average spending is good enough for the

stores to be profitable.



Schemes and Offers

The idea behind this question is to find out whether the schemes and offers

drive the customers to the stores.

Schemes and Offers

13%

87%

Yes No

The results show that maximum of people would be driven to the stores

because of schemes, offers, discounts or sale and make the purchase decision.



Influencers

The idea behind this is to find out who are the influencers in the buying

decision process as they also have an important role to play in the buying

decision making process.

Influencers

20%

53%

27%

0%

10%

20%

30%

40%

50%

60%

Spouse Children Friends/Relatives

From the data collected it was found that 53% of the respondents get

influenced by their Children and spouse or friends/relatives play the

secondary role.

However, the friends score higher on influencing where the respondents were

bachelors.



Experience of the consumers

Through this question we try to identify what are the experiences of the

customer at these stores. And what do they perceive about these stores. It

helps us to find out their attitude towards these stores.

By the data collected it was found that around 56% of the people’s

experience was satisfactory and 20% of the people were extremely satisfied

and there were no dissatisfied customer.

Inference: by this we can say that people are really satisfied by these stores.

the variety in these stores and the services also play a very important role in

adding to the experience and ensure a second visit or recommendations to

other customers.

exper ience of consumer s

20

56

17

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102030405060

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SA

TIS

FA

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OR

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FA

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Series1



Do you think these stores can make you feel comfortable in sub-urban areas?

The concept behind this question is to see weather these stores are only

good in central city areas like highly crowded and commercial areas etc

or they also do well in semi-urban areas.

From the data collected it was found that 71% of the respondents said

that these stores can also do good business in sub-urban areas as these

people will not be able to go for leisure shopping during the weekdays

and most of the respondents do not prefer traveling as well as get into the

busy & crowded traffic during the weekends, they feel its waste of time.

Money and energy.



FINDINGS

The people go for shopping frequently in suburban areas, especially on

weekends. There are only few people who do their shopping very often.

The sample considered for the research is moving towards the new trends of

the new age and ready to accept the quick changes in the retail segment.

The sample is moreover looking for the comfort and an easy way to hangout

as well as to shop.

People have become more lifestyle oriented and brand conscious.

Visiting and shopping in specialty retail stores has become a dignity and high

class showoffs.

Family oriented people would like to take their family for a long drive so that

they feel comfortable and spent lot of time with the family.

There is a segment which would like to shop during the weekdays as they do

not prefer entering crowded city malls and lifestyles.

According to the real estate boom and the residential areas coming up in

these areas shows us a new ray of opportunity to these specialty retail stores.

Word of mouth can spread faster in case of influencers being friends and

relationship marketing plays a very important role in spreading the word of

mouth as rightly said “one satisfied customer gets ten customers”

The respondents who have visited life style stores are really satisfied and had

a good experience shopping there.

The people really want these stores to come to sub-urban areas and here lies a

great opportunity for these stores to come and set themselves in these areas.

As per the hypothesis it is also proved that this concept will do well in sub-

urban areas.



CONCLUSION:

Retail sector is growing full fledge against the hurdles like opposition from the left

parties and some sections within the Congress party is fending off the move. The

domestic trading community has also been lobbying aggressively against FDI on the

argument that it would hurt self-employment and lead to closure of many small

businesses. A study by the Associated Chambers of Commerce of Industry of India,

New Delhi, concluded that this would not happen for at least the next ten years.

Thereafter, the present fragmented system may get phased out or evolved into more

integrated networked units. This is already happening without FDI.

The government policy seems to be favourable with the Prime Minister Mr.

Manmohan Singh indicating that the government is yet to hit upon the right policy-

mix, but is certainly on its way to finding one soon. The policy for a measured

opening of retail sector is very much on reforms agenda and officials expect the move

to fructify before the PM's July visit to US.

The entry of foreign players would play an important role in how the industry shapes

up. While the current scenario certainly does not indicate the complete opening up of

the sector to FDI, the longer the entry is delayed, the greater the increase in scale,

resilience and competitive intensity of domestic retailers. This would provide an

opportunity for domestic retailers, who are still at a nascent stage to firm their base.

However, the extent would depend on how well these companies plan ahead and the

support they receive from the equity markets and other institutional investors.



`BIBLIOGRAPHY

Marketing Research – Donald S. Tull & Del I. Hawkins

Way 2 Wealth – Wealth Compass, June 2005 Issue

Jones Lang LaSalle research reports

www.joneslanglasalle.com


http://www.joneslanglasalle.com/


QUESTIONNAIRE

1. Name __________________________________________

2. Age _________

3. Occupation:

Call Centre Professional / Fresh graduates

Middle and Senior level executives Housewife

Others please specify___________________

4. How often do you go for shopping of clothes?

Once in a month Once in a week Often

5. What do you look for, when you go to buy clothes and accessories? Please rank

Price Quality Brand Look & Feel

6. Which areas do you prefer shopping your clothes?

City areas Nearby areas of work / Resident Other places

7. Where do you go for shopping?

Local shops Shopping malls Factory outlets/exclusive showrooms

8. Have you ever visited specialty retail stores ?Yes No

9. What really attracts you to these stores? Please rank

Brands Variety Convenience Price



10. What do you think about the price factor at these stores?

Very expensive Expensive Reasonable

11. How much do you spend on shopping per month?

Less than Rs. 5000 Rs. 5000 - 10000 more than Rs. 10000

12. Do you go for shopping because of schemes, discounts or offers?

Yes No

13. Who really influences your buying decision, Rank them?

Spouse Children Friends/Relatives

14. How was your experience at specialty retail stores?

Very satisfactory satisfactory Natural Dissatisfied

Extremely dissatisfied

15. Do you think these stores can make you feel comfortable in sub-urban areas?

Yes No

Reason: _______________________________________________________


A project report on identifying the opportunity for apparel retailing in south east bangalore

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Transcript of A project report on identifying the opportunity for apparel retailing in south east bangalore