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Transcript of To study the consumer behaviour in Max lifestle retail, lucknow
ACKNOWLEDGEMENTACKNOWLEDGEMENT
Concentration, dedication and application are necessary but not sufficient to achieve any
goal. These must be awarded by guidance, assistance and co-operation of some person to
make it enable.
Many people have given their valuable time and ideas to enable me to complete the
research and the report. I am deeply indebted to all for their ideas and assistance, while
bearing the entire responsibility for weakness in the report.
I am highly obliged to MR. NIKHIL RANJAN (STORE MANAGER) and MRS. RITA
CHATTERJI (ASSISTANT STORE MANAGER), MAX LIFESTYLE, LUCKNOW
for providing me an opportunity to undergo this project report.
I am also indebted to MR. RAZAUR RAHMAN & ALL FACULTY MEMBERS of
SRMCEM, LKO who have been a constant source of inspiration and provided guidance
to me at every point of time.
My gratitude to all those, who RESPONDED TO MY QUESTIONNAIRE in a well
defined manner and helped me acquiring knowledge.
Lastly, I thanks all those, who have directly or indirectly, helped me in this project..
ABHISHEK PANDEY
PGDM- I YEAR
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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DECLARATIONDECLARATION
I, ABHISHEK PANDEY, student of POST GRADUATE DIPLOMA IN MANAGEMENT
hereby declare that the project report entitled “A DETAIL STUDY OF CONSUMER
BEHAVIOUR AND BUYING BEHAVIOVR OF CUSTOMERS IN MAX STORE OF
LUCKNOW CITY” has been compiled by me on the basis of my project report and has not been
submitted any where in any manner.
It is a report, which is based on various interviews, surveys that is conducted during my
project report period in LUCKNOW as a student of P.G.D.M. from “SHRI
RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW.”
ABHISHEK PANDEY
PGDM- I YEAR
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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EXECUTIVE SUMMARYEXECUTIVE SUMMARY
This study is a modest effect at understanding the consumer behavior especially in
retail store in Lucknow. Analysis to Lucknow people perception of retail store (survey only
retail channel in Zee mall). The survey was constituted in visiting of Zee Mall Customers
were interviewed by means of carefully prepared questionnaire to study and understand
customer behaviour in depth. I study also the consumer decision making in retail store in
Indian city and what effect consumer decision-making in retail store.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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PREFACEPREFACE
The sea of change can pull customers in many directions. It is our responsibility to light the way
and take care of them… before the competition does.
RETAILING Means Re-tailing to the customers so that they comeback
Retailing consists of all activities involved in selling goods and services to consumers for their
personal, family, or household use. It covers sales of goods ranging from automobiles to apparel
and food products, and services ranging from hair cutting to air travel and computer education.
Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not
considered a retail activity.
The retail sector in India is highly fragmented with organized retail contributing to only 2% of
total retail sales. The retail sector in developed countries was also highly fragmented at the
beginning of the last century but emergence of large chains like Wall Mart, Sears, and
McDonald’s led to rapid growth of organized retail and growing consolidation of the retail
industry in the developed countries.
Organized retail is growing rapidly and we see the emergence of large organized retail chains like
Shopper’s Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over the
country. The opportunities in retail industry in India will increase since Indian retailing is on the
threshold of a major change.
The study of retailing is very important to MBA students interested in employment opportunities
with large retail chains.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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The remarkable world of Retail
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Retail, according to Concise Oxford English Dictionary, is "the sale of
goods to the public for use or consumption rather than for resale."
World over, the retail segment has performed exceptionally since its
inception in the 20th century. Sample these facts:
Retail is currently the biggest industry in the world with sales of
$7.2 trillion
Every 10th billionaire in the world is a retailer.
25 of the top 50 Fortune 500 companies are in retail.
The Indian retail story couldn't have been more different. India has approx
12 million retail stores, more than rest of the world put together. But the
per capita square feet area under retail is just 2 sq.ft or 0.2 sq. meters with
fragmented keerana stores being the predominant players.
Retailing in India has remained in the unorganized sector and largely
untouched by corporate.
The first decade of modern retail in India has been characterized by a shift
from traditional channels to new formats including department stores,
hypermarkets, supermarkets and specialty stores across a range of
categories.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Retailing
including all
activities
involved in
selling goods or
services directly
to the final
consumers for
personal, non
business use
Any organisation
selling to final
consumers-
whether it is a
manufacture,
whole seller, or
retailer – is
doing retailing.
Consumers today
can shop for
goods & services
in a wide variety
of retail Org.
The best- known
type of retail is
the Department
store.
Modern retail formats have mushroomed in metros and mini-metros, in the last few years modern
retail has also established its presence in the second rung cities. Thus, exposing the residents of
these cities to shopping options, they have never experienced before. It has been forecasted that
the share of modern retail will increase from 2 per cent currently, to about 15-20 per cent over the
next decade.
To begin with, retailers today will have to support the large retail infrastructure in terms of
Malls and Superstores that are being created.
The challenge for leading retailers shall therefore shift from diverting demand to creating
demand.
With all the modern stores offering convenience in terms of an assortment of products, ambience,
service and innovative products, the paradigm shall shift from competing with the kirana stores to
an in-house demand creation. Relevant experiences from consumer goods companies, which have
successfully crafted an explosion in demand in their sectors, through innovation, consumer driven
strategies, will be head runner.
Times are changing. With the GDP at an all time high and income levels shooting through the
roof, the average Indian consumer has never had it so good. The propensity to consume has
reached peaks that had never been scaled before. Credit cards are flashed with disdain and
shopping baskets are getting bigger all the time. Here are some factors that indicate the potential
of retail in India:
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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At 271 million, one of the largest consuming base in the world, forming 27% of the total
population.
A high spending community below 45 years comprises 81 percent of the population.
A young population with 54% population below 25 years
Increased literacy from 44% in 1965 to 70% in 2003
Increase in working women from 1.3 million in 1961 to 4.8 million in 1998.
Increase in media penetration to 38-million cable household and 80-million TV household
in 2001
The first decade of modern retail in India has been characterized by a shift from traditional kirana
shops to new formats including department stores, hypermarkets, supermarkets and specialty
stores across a range of categories. Modern retail formats have mushroomed in metros and mini-
metros. In the last few years, modern retail has also established its presence in the second-rung
cities, exposing residents to shopping options like never before. However, even as modern
retailers garner share from traditional channels, there is a larger role they would be required to
play in boosting consumption levels.
Figures suggest that the total turnover of the sector is around Rs 10 lakh crores, of which 4 per
cent is contributed by the organised sector.
During the last decade, India's middle- and high-income segment notched up an impressive 105
per cent growth. This segment has been triggering the demand for consumer goods. Increased
awareness, free access to information and choice in competing products and services are making
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customers redefine the retail business. They are on the lookout for convenience, speed, efficiency
and a wide range of products. Retailers need to explore different channels of retailing to cater to
customers' needs.
The days of brick-and-mortar's limited potential are fading and retailers need to tap the immense
opportunities that other channels offer.
Driven by increasingly intense competition in an increasingly global marketplace, retailers must
seek new ways of capturing the hearts and minds of consumers. The traditional levers of price,
selection and location — although still important — are no longer sufficient as bases for
competitive differentiation. Retailers should be focused on improving the end-to-end shopping
experience, boosting sales and winning customer loyalty by connecting to the shopper in every
possible way.
Multichannel retailing is all about giving the customer a choice of which shopping channel he or
she wishes to purchase products through. The most popular shopping channels include the stores,
Internet and catalogues and telemarkets (including mobile shopping).
Retailers must provide a seamless multichannel experience for their customers. For this, they
become the most valuable consumers within a retailer's customer base.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Multichannel retailing needs to be adopted:
Grow market share
Increase customer base
Offer convenience
Achieve cost reductions through economies of scale, supply chain efficiencies, and
logistics
Improve customer analytics
Open new revenue streams by cross-sell & sell ups
Reduce cycle time between order and delivery
Lower fulfillment cost & Improve demand planning
However, going multichannel, the retailer should not ignore the critical part: the customer.
Customers have become more sophisticated and expect a retailer to recognize them.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Evolution of Indian RetailEvolution of Indian Retail
Traditional Rural Retail Fairs
Traditional Family Run Convenience Stores
Traditional Rural Retail FairsTraditional Rural Retail Fairs
Traditional rural retail fairs are a very big at traction to foreign tourists . We
have the Pushkar fair in Rajasthan which brings in a lot of revenue both from
domestic buyers and buyers from abroad. In the Pushkar fair l ive stock l ike
camels, horses, cows, goats, and sheep are sold as well as bought. A range of
exotic i tems are also available. The traditional items here are handmade
jewelry and other colorful memorabil ia of Rajasthan.
Traditional rural retail fairs in India deal in a good number of handcrafts
items which are mentioned below:
Hand painted wooden chest drawers
Wooden wall brackets
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Embossed wooden table
Hand painted chairs in chowki
Wooden corner stand
Wooden Hand painted table
Embossed wooden chairs
Brown wooden stool
Camel bone Jewelry
Metal jewelry
Snake charmer puppets
Handmade candles
The Suraj Kund mela is also a huge galore of Indian traditional items . This
fair is held at Haryana which is 8 kilometers from South Delhi . The fair has
been held for the last 20 years. The fair deals in i tems categorized as
Indian arts
Handicrafts
Heritage
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Culture and tradit ion
Traditional rural retail fairs have a typical rural set up l ike:
Huts of mud
Thatched platforms
lamps of wood
String cots
Plainness ground
The small thatched stores are a vibrant display of handcraft i tems. The focus
every year is on a part icular State for instance, in 2006 i t was Maharashtra. The
other group of i tems representing the Indian Subcontinent available there are:
Classical
Tribal art
Folk art
As such Traditional Rural Retail fairs involve credit worthy art isans and
weavers of over 350 in number and they are selected from across the country.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Along with the county's r ich cultural heritage being showcased, the fair is
open to foreign traditional goods as well . The more rejuvenating side of these
fairs would be l isted as under:
Indian Sweets Snacks
Indian folk music
Classical dance
Bengal t iger show
Elephant r ides
Tiger show and rides
Giraffe tr icks
Balloon and Clay i tems
Painting
Games
Therefore, traditional rural retail fairs are a never ending occupation and the
key to i t l ies in the originali ty and attractiveness of the i tems.
Traditional Family Run Convenience StoresTraditional Family Run Convenience Stores
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Traditional family run convenience stores are too well established in India
than to be wiped out and besides there is uniqueness in the tradit ional i tems that
represent the sub-continent. The retail stores in India are essential ly
dominated by the unorganized sector or tradit ional stores. Infact the tradit ional
stores have taken up 98 percent of the Indian retai l market . Now stores run by
families are primarily food based and the set up is as Kirana or the 'corner
grocer ' s tores. Basically they provide high service with low prices. If the stores
are not food based then the type of retai l i tems available are local in nature.
The tradit ional family run convenience stores can take pride in the fact that the
Kirana is the most common outlet forms for the consumers. The tough
competi t ion for convenience stores are coming from organized retai l stores
dealing in food i tems, l ike:
Apna Bazaar
Canteen stores
Food World
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Subhiksha
Food Bazaar
Convenience Stores are open for long hours and is one of the formats of
the Indian retai l stores that cater to basic needs of the consumer. A good
example of such would be Convenio. These stores are found in both
residential as well as commercial markets. The food products of
tradit ional family run convenience stores are comprised of branded as well
as non-branded i tems. The benefi ts of family run convenience stores is
that they give importance to:
Personal touch
Facil i t ies of credit
Quick home delivery
Non-food based stock comprises of multiple and variet ies of local brands.
The future of such stores as they face competi t ion from organized sector,
would depend on the following part iculars:
Place and capacity
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Diligent area coverage
Disciplined work schedule
Managing turnover
Revenue from assets
Customer service and satisfaction
The traditional family run convenience stores serves the purpose of the
housewives who definitely wants to avoid traveling long distances to purchase
daily needs. The convenience factor in terms of i tems, among people in general
can be highlighted as below:
Groceries
Fruits
Drug Store
Necessary stat ionery
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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As such tradit ional family run convenience stores are here to stay and cannot
be oversized by the organized retail sector besides, i t represents the variety of
India
Indian retail industry
India retai l industry is the largest industry in India, with an employment of
around 8% and contributing to over 10% of the country's GDP. Retail industry
in India is expected to rise 25% yearly being driven by strong income growth,
changing l ifestyles, and favorable demographic patterns.
I t is expected that by 2016 modern retail industry in India wil l be worth US$
175- 200 bil l ion. India retai l industry is one of the fastest growing industries
with revenue expected in 2007 to amount US$ 320 bil l ion and is increasing at a
rate of 5% yearly. A further increase of 7-8% is expected in the industry of
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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retai l in India by growth in consumerism in urban areas, r ising incomes, and a
steep rise in rural consumption. I t has further been predicted that the retai l ing
industry in India will amount to US$ 21.5 bil l ion by 2010 from the current size
of US$ 7.5 bil l ion.
Shopping in India have witnessed a revolution with the change in the consumer
buying behavior and the whole format of shopping also al tering. Industry of
retai l in India which have become modern can be seen from the fact that there
are multi- stored malls, huge shopping centers, and sprawling complexes which
offer food, shopping, and entertainment al l under the same roof.
India retai l industry is expanding i tself most aggressively, as a result a great
demand for real estate is being created. Indian retailers preferred means of
expansion is to expand to other regions and to increase the number of their
outlets in a ci ty. I t is expected that by 2010, India may have 600 new shopping
centers.
In the Indian retai l ing industry, food is the most dominating sector and is
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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growing at a rate of 9% annually. The branded food industry is trying to enter
the India retai l industry and convert Indian consumers to branded food. Since at
present 60% of the Indian grocery basket consists of non- branded i tems.
India retai l industry is progressing well and for this to continue retai lers as well
as the Indian government will have to make a combined effort .
Indian organized retail marketIndian organized retail market
Indian organized retai l market is growing at a fast pace due to the boom in the
India retail industry . In 2005, the retai l industry in India amounted to Rs
10,000 bil l ion accounting for about 10% to the country's GDP . The organized
retai l market in India out of this total market accounted for Rs 350 bil l ion
which is about 3.5% of the total revenues.
Retail market in the Indian organized sector is expected to cross Rs 1000 bil l ion
by 2010. Tradit ionally the retai l industry in India was largely unorganized,
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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comprising of drug stores, medium, and small grocery stores. Most of the
organized retai l ing in India have started recently and is concentrating mainly in
metropoli tan ci t ies.
The growth in the Indian organized retai l market is mainly due to the change in
the consumers behavior. This change has come in the consumer due to increased
income, changing l ifestyles, and patterns of demography which are favorable.
Now the consumer wants to shop at a place where he can get food,
entertainment, and shopping all under one roof. This has given Indian organized
retai l market a major boost .
Retail market in the organized sector in India is growing can be seen from the
fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are
being buil t . Many Indian companies are entering the Indian retail market
which is giving Indian organized retai l market a boost . One such company is the
Reliance Industries Limited. I t plans to invest US$ 6 bil l ion in the Indian retai l
market by opening 1000 hypermarkets and 1500 supermarkets.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Pantaloons is another Indian company which plans to increase i ts retai l space to
30 mill ion square feet with an investment of US$ 1 bil l ion. Bharti Telecoms an
Indian company is in talks with Tesco a global giant for a £ 750 mill ion joint
venture. A number of global retai l giants such as Walmart , Carrefour, and Metro
AG are also planning to set up shop in India. Indian organized retai l market wil l
definitely grow as a result of al l this investments.
Indian organized retai l market is increasing and for this growth to continue the
Indian retai lers as well as government must make a combined effort .
The Global Retail Industry : An OverviewThe Global Retail Industry : An Overview
Retail has played a major role world over in increasing productivity across a wide range of
consumer goods and services .The impact can be best seen in countries like U.S.A., U.K., Mexico,
Thailand and more recently China. Economies of countries like Singapore, Malaysia, Hong Kong,
Sri Lanka and Dubai are also heavily assisted by the retail sector.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Retail is the second-largest industry in the United States both in number of establishments and
number of employees. It is also one of the largest world wide. The retail industry employs more
than 22 million Americans and generates more than $3 trillion in retail sale annually.
Retailing is a U.S. $7 trillion sector. Wal-Mart is the world’s largest retailer. Already the world’s
largest employer with over l million associates, Wal-Mart displaced oil giant Exxon Mobil as the
world’s largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has
become the most successful retail brand in the world due its ability to leverage size, market clout,
and efficiency to create market dominance. Wal-Mart heads Fortune magazine list of top 500
companies in the world. Forbes Annual List of Billionaires has the largest number (45/497) from
the retail business.
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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GLOBAL RETAILGLOBAL RETAIL
19991999 20022002 20052005
Total Retail (US$ Billion)Total Retail (US$ Billion) 150150 180180 225225
Organized Retail (US$ Billion)Organized Retail (US$ Billion) 1.11.1 3.33.3 77
% Share of Organized retail% Share of Organized retail 0.70.7 1.81.8 3.23.2
Rank Retailer Home Country
1. Wal-Mart Stores, Inc. U.S.A.
2. Carrefour Group France
3. The Kroger Co. U.S.A.
4. The Home Depot. Inc. U.S.A.
5. Metro Germany
(Source: STORES / Deloitte Touch Tomahastsu)
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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The factors responsible for the development of the retail sector in India can be broadly
summarized as follows:
Rising incomes and improvements in infrastructure are enlarging consumer markets and
accelerating the convergence of consumer tastes. Looking at income classification, the
National Council of Applied Economic Research (NCAER) classified approximately
500Io of the Indian population as low income in 1994-95; this is expected to decline to
17 by 2006-07.
Liberalization of the Indian economy which has led to the opening up of the market for
consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to
make significant inroads into the vast consumer market by offering a wide range of
choices to the Indian consumers.
Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
The internet revolution is making the Indian consumer more accessible to the growing
influences of domestic and foreign retail chains. Reach of satellite LV. channels is
helping in creating awareness about global products for local markets. About 47% of
India’s population is under the age of 20; and this will increase to 55°h by 2015. This
young population, which is technology-savvy, watch more than 50 TV satellite
channels, and display the highest propensity to spend, will immensely contribute to the
growth of the retail sector in the country.
As India continues to get strongly integrated with the world economy riding the waves of
globalization, the retail sector is bound to take big leaps in the years to come. The Indian retail
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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sector is estimated to have a market size of about $ 180 billion; but the organised sector represents
only 2% share of this market. Most of the organised retailing in the country has just started
recently, and has been concentrated mainly in the metro cities. India is the last large Asian
economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold
through the super markets and departmental stores. A similar phenomenon has swept through all
other Asian countries. Organized retailing in India has a huge scope because of the vast market
and the growing consciousness of the consumer about product quality and services. A study
conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especially
through increased levels of penetration in larger towns and metros and also as it begins to spread
to smaller cities and B class towns. Fuelling this growth is the growth in development of the
retail-specific properties and malls. According to the estimates available with Fitch, close to 2Smn
sq. ft. of retail space is being developed and will be available for occupation over the next 36-48
months. Fitch expects organized retail to capture l5%- 20% market share by 2010. A McKinsey
report on India says organised retailing would increase the efficiency and productivity of entire
gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share
of employment of retail in India is low, even when compared to Brazil (l4%), and Poland (12%).
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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Key Strategic Factors in RetailingKey Strategic Factors in Retailing
The key to success is identifying a superior value-promise and who is in a better position to do it
than retailers? Retailers are the closest to the point of purchase and have access to a wealth of
information on consumer shopping behaviour. Retailers have some unique advantages for
managing brands such as continuous and actionable dialogue with consumers, control over brand
presentation at point-of-sale, control over shopping environment, display location/adjacencies,
and signage. And they have used this advantage with tremendous success.
The 3 stages of evolution of the trade channel are shown The 3 stages of evolution of the trade channel are shown
in the exhibit below : in the exhibit below :
Extended Limited Direct
Manufacture
Depo/CNF
Distributor
Retailer
Shopper
Manufacture
Depo/CNF
Retailer
Shopper
Manufacture / Retailer
ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
Shopper
27
As seen, the role of the intermediary is being diminished gradually, which has obvious implication
of backlash of the trade channel upwards towards the suppliers. This is more severe in countries
such as India, where the channel economics in favour of the middlemen is still strong enough
given the fragmentation of the retail sector. Therefore when FoodWorld, the largest grocer in
India has a “direct supply” contract with over 20% of its key suppliers, it gives rise to conflict of
interest with the distribution infrastructure that suppliers have painstakingly built over the years.
Thus companies like HLL have evolved a distinct distribution channel altogether (called “Modern
Trade”) to service the needs of such large grocers. Even the mom and pop stores (known as kirana
shops) are affected due to this “unfair” back-end advantage extended by the suppiier to its leading
accounts (the emerging supermarket chains).
The strategies adopted by the retailer to compete with branded goods are illustrated by the
following diagram. Branding the store and following a private label strategy is the key strategy
which helps the retailer to compete with branded products.
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FORMAL RETAILING SECTORFORMAL RETAILING SECTOR
1. Typically large retailers
2. Greater enforcement of taxation mechanisms
3. High level of labor usage monitoring
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CATEGORIES OF INDIAN RETAILCATEGORIES OF INDIAN RETAIL
1. Corporate Houses
Tatas: Tata Trent
RPG group: Food World, Health and Glow, etc
ITC: Wills Life Style
Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc.
2. Dedicated brand outlets
Nike, Reebok, Zodiac etc
3. Multi-brand outlets
Vijay Sales, Viveks etc
4. Manufacturers/ Exporters
Pantaloons, Bata, Weekender
Classifying Indian retailClassifying Indian retail
(A)Modern Format retailers
1) Supermarkets (Foodworld)
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2) Hypermarkets (Big Bazaar)
3) Department Stores (S Stop)
4) Specialty Chains (Ikea)
5) Company Owned Company Operated
(B)Traditional Format Retailers
1) Kiranas: Traditional Mom and Pop Stores
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2) Kiosks
3) Street Markets
4) Exclusive /Multiple Brand Outlets
(C)Large Indian retailers
I. Hypermarket
1) Big Bazaar
2) Giants
3) Shoprite
4) Star
II Department store
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1) Lifestyle
2) Pantaloons
3) Piramyds
4) Shoppers Stop
5) Trent
III Entertainment
1) Fame Adlabs
2) Fun Republic
3) Inox
4) PVR
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The Indian retail sector can be broadly classified intoThe Indian retail sector can be broadly classified into
a) FOOD RETAILERS
There are large number and variety of retailers in the food-retailing sector Traditional types of
retailers, who operate small single-outlet businesses mainly using family labour, dominate this
sector In comparison, super markets account for a small proportion of food sales in India However
the growth rate of super market sales has being significant in recent years because greater
numbers of higher income Indians prefer to shop at super markets due to higher standards of
hygiene and attractive ambience.
b) HEALTH & BEAUTY PRODUCTS
With growth in income levels, Indians have started spending more on health and beauty
products .Here also small, single-outlet retailers dominate the market .However in recent years, a
few retail chains specializing in these products have come into the market. Although these retail
chains account for only a small share of the total market their business is expected to grow
significantly in the future due to the growing quality consciousness of buyers for these products
C) CLOTHING & FOOTWEAR
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Numerous clothing and footwear shops in shopping centers and markets operate all over India
Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing
and footwear stores have modern products and attractive displays to lure customers. However,
with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely
that the traditional outlets will survive the test of time.
D) HOME FURNITURE & HOUSEHOLD GOODS
Small retailers again dominate this sector. Despite the large size of this market, very few large and
modern retailers have established specialized stores for these products. However there is
considerable potential for the entry or expansion of specialized retail chains in the country.
E) DURABLE GOODS
The Indian durable goods sector has seen the entry of a large number of foreign companies during
the post liberalization period. A greater variety of consumer electronic items and household
appliances became available to the Indian customer. Intense competition among companies to sell
their brands provided a strong impetus to the growth for retailers doing business in this sector.
F) LEISURE & PERSONAL GOODS
Increasing household incomes due to better economic opportunities have encouraged consumer
expenditure on leisure and personal goods in the country. There are specialized retailers for each
category of products (books, music products, etc.) in this sector. Another prominent feature of this
sector is popularity of franchising agreements between established manufacturers and retailers.
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Benefit to customer through retailer sector
There has been a significant change in retail trading over the years, from small
kiranawalas in the vicinity to big super markets; a transition is happening from the
traditional retail sector to organized retailing. The unorganized sector still holds a dominant
position in this industry. The organized segment holds just about 1.2% of the current US$
245 billion retail market, which is expected to reach about US $ 385 billion by the middle of
this decade.
With consumers looking at convenience with multiplicity of choice under one roof and
expectations evolving over time, consumer demand is truly the driving force for organized
retailing in the country. Food and beverages form the main chunk of the retail market. They
are followed by apparel and footwear. The Indian textile industry, the backbone of the
apparel segment, has a large share of the Indian economy, accounting for over 20% of
industrial production as well as providing direct and indirect employment to around 65
million people.
Despite the retail store density in India with regard to population being the largest, it is
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estimated that over 90% of the stores are less than 500 sq. ft in size. Industry estimates put
the number of retail outlets at 12 million. This is clearly indicative of small-shop ownership
crowding the unorganized segment of retailing. While this fragmented market structure does
pose significant challenges for organized retailing, potential does exist if modern
information and supply chain management systems are to support the development of
convenience shops that match customer expectations.
Today trend is the development of integrated retail cum Entertainment centers or
shopping malls. An increasing number of retailers are focusing on malls now as opposed to
stand-alone developments. While the number of shopping malls has seen a massive surge in
the recent past in the metros and their suburbs, the latest trend in this sector is the increasing
focus on providing leisure activities such as multiplexes, facilities for kids' entertainment,
eateries etc. within the mall premises. Customer less the time consumes and more
entertainment with his family in malls because they within shopping mall number of retail
shop and variety of products and selected the product they want. Good environment in mall.
Less crowed and These are enclosed, air-conditioned, multi-level malls of at least
100,00 sq ft. Critical to these malls is the concept of the anchor, the key outlet or store
around which other outlets cluster. The most popular Indian anchors include Shoppers' Stop,
Globus, Pantaloon, Lifestyle and hypermarkets like Big Bazaar and Giant. Cinemas also
often anchor malls. Driven by the lucrative tax breaks, the old single screen theatres are
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being divided into three-five smaller screens, as was done in the US, years ago. Example for
wave and PVR.
Landmark GroupLandmark Group
The Landmark Group, founded in 1973 with a single store in Bahrain has grown
into one of the largest retai l conglomerates in the Middle East and is expanding
rapidly in India. I t currently operates over 750 stores across the region with a
retai l presence in China as well . In addit ion to i ts retai l sector, the Group has
also diversified into leisure, food, hotels and electronics and has created a
comprehensive infrastructure including i ts own logist ics and distr ibution
division, to support i ts retai l operations and other businesses.
Key FactsKey Facts
35 Years of retail experience.
Turnover in excess of US$2.5bn.
Total retail space over 10 million sq ft.
Retail Presence across 12 countries: Bahrain, China, India, Jordan, Kingdom of Saudi Arabia, Kuwait, Oman, Qatar, Spain, UAE, Pakistan & Egypt.
Operates over 825 stores.
Employs 24,000 personnel.
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Core Values of Landmark GroupCore Values of Landmark Group
1. Passion for excellence – We are committed to sett ing industry benchmarks –
be i t our product or practices. Our doctrine is to str ive and maintain the lead in
whatever we do, with str ict adherence to quali ty and delivering value for
money.
2. Integrity in everything we do - Our business is driven by trust , strong ethics
and mutual respect .
3. Empowering people to strive and deliver – Our core strength is our
employees. We believe in giving our personnel the opportunity and
responsibil i ty that are integral to their professional development and our
Group’s success.
4. Adapting to changing market and customer needs – We keep ourselves
abreast with industry trends and dynamic consumer preferences. Our offerings
keep evolving to address changing and discerning consumer needs.
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Look Good Feel GoodLook Good Feel Good
Max a value retai l store for the family was launched in May 2004 in the
UAE.
With stores that typically measure between 25,000 to 30,000 sq. f t , Max
retai ls i ts own label clothing for men, women and children as well as
footwear and home ware.
A pioneer in the Middle East of the global trend of delivering quali ty and
value at very at tractive prices, Max is being increasingly recognized as a
key player in the value retai l format.
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With 75 stores across UAE, Saudi Arabia, Jordan, Kuwait , Bahrain, Qatar,
Oman & India, Max plans to expand i ts network in more potential markets
within the Middle East , Turkey and India to build a significant presence
for the brand by targeting to have 100 stores by 2009.
A good shopping experience and great value is an assurance that translates
into making customers “Look good. Feel good” with Max.
Key Facts Key Facts
Established in 2004.
75 stores spread across 8 countries.
The Largest Value Fashion Chain in the Middle East
Products designed and developed exclusively for Max, by a large team ofin-house designers and buyers.
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KIDSWEAR DEPARTMENT
INFANTS SECTION: -
BOYS (SIZES) PREPACK GIRLS (SIZES) PREPACK
6-12 MONTHS 3 6-12 MONTHS 3
12-18 MONTHS 3 12-18 MONTHS 3
18-24 MONTHS 3 18-24 MONTHS 3
TOTAL 9 9
BOYS SECTION: -
SUB SECTION 1-8 YEARS PREPACK 8-14 YEARS PREPACK SIZES SIZES
2-3 YEARS 3 8-9 YEARS 3
3-4 YEARS 3 9-10 YEARS 3
5-6 YEARS 3 11-12 YEARS 3
7-8 YEARS 3 13-14 YEARS 3
TOTAL 12 12
GIRLS SECTION: -
SUB SECTION 1-8 YEARS PREPACK 8-14 YEARS PREPACK SIZES SIZES
2-3 YEARS 3 8-9 YEARS 3
3-4 YEARS 3 9-10 YEARS 3ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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5-6 YEARS 3 11-12 YEARS 3
7-8 YEARS 3 13-14 YEARS 3
TOTAL 12 12
INFANTS GIRLS
TUNICV-NECKR- NECKCOLLERFRONT OPEN
SKIRTCAPRISHIRT
2-8 BOYS
T-SHIRTDENIM JEANSTROUSERS
CARGO PAINTS
¾ CAPRI COTTON WOVEN KNITTED DENIM
2-8 GIRLS
TUNICSKIRTST-SHIRT
HALTER NECKPOTSEGDEHALF SLEAVESCUT SLEAVESSLEAVELESSHOODED SKIRT
SPORTS CAPRI
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LEGINGS
¾ LEGINGSFULL LEGINGS
LONG TOPSMINI SKIRTSCALF LENGTH SKIRTDENIM
JEANSCAPRI
STYLES: - KNIT TOP, KNIT BOTTOM, WOVEN TOP, WOVEN BOTTOM, SPEGDEE, HALTER NECK TOP, DRESS, TUNIC, DENIM, CAPRI, DONGRIE, 3 PIECE PACK (SPORTS, SLEAVELESS, HALF SLEAVES), 2 PIECE PACK (NIGT WEAR, SKIRTS).
ETHNIC
FUSION
KURTIROUND NECKV-NECKHALTER NECKMATKA NECKCUT NECKSQUARE NECKCUT SLEAVESSTEPS KURTI
SKIRTSTRAIGHT SKIRTSCRUSH SKIRTSCRUSH ANKLE SKIRTS
FABRICS: - ACOBA, COTTON, GORGET, SHIFFON, LINEN, VISCOS.
SIZES PREPACK
XS 1 S 2 M 2 L 2
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TRADITIONAL
KURTISHORT LENGTH KURTIHE KURTALONG KURTA
DUPATTACOTTONSHIFFON
SALWARPATIALANORMALCHOORIDAR
SIZES PREPACKS 2M 3L 3XL 2XXL 1
ETHNIC WEAR BASICS: -
KURTASALWARCHOORIDARPATIALADUPATTAPANTSBASICS SLIPS
HOMES
TABLE MATTABLE RUNNERTABLE COVERDUBLE BED SHEETSINGLE BED SHEETDOUBLE BED COVERSINGLE BED COVERNAPPKINTOWEL
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BATH MATSCUSHION COVERS
WESTERN WEAR
COREKNIT TOPWOVEN TOPKNIT BOTTOMWOVEN BOTTOMSKIRTS
YOUNGKNIT TOPWOVEN TOPKNIT BOTTOMWOVEN BOTTOMDENIM BOTTOMJACKETSHORTSSKIRTS
SPORTYJACKETKNIT TOPWOVEN TOPKNIT BOTTOMWOVEN BOTTOM
DENIMDENIM FULL LENGTHCAPRI
NIGHT WEARGOWNSSLEEPWEAR
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MENSWEAR
CASUAL DENIMBOOT CUT REGULAR FITSLIMFIT
CASUAL NON- DENIMKNITTED TOP- FULL SLEAVESKNITTED TOP- HALF SLEAVESKNITTED TOP- SLEAVE LESSWOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVES WOVEN TOP- SLEAVE LESSWOVEN TOP- H/S BASICWOVEN TOP- F/S BASIC
FORMALWOVEN BOTTOM- FLAT FRONTWOVEN BOTTOM- PLEATEDWOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVES
INNER WEARTRUNK VALUE PACKWEST VALUE PACKY FRONT VALUE PACK
SEMI FORMALWOVEN BOTTOM- FLAT FRONTWOVEN BOTTOM- PLEATEDWOVEN TOP- FULL SLEAVESWOVEN TOP- HALF SLEAVES
SPORTS WEARKNITTED TOP- FULL SLEAVESKNITTED TOP- HALF SLEAVESKNITTED TOP- SLEAVELESSJACKETKNITTED TRACK BOTTOMWOVEN TRACK BOTTOMWOVEN TRACK SHORTSKNIT TRACK SHORTS
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SIZES- SHIRTS T-SHIRTS DENIM REGULAR FIT SLIM FIT 39 to 44 S to XL 28 to 36 28 to 36 28 to 38
FOOTWEAR
MENS FOOTWEAR
CASUAL SHOES FORMAL SHOES CASUAL LACE UPS FORMAL LACE UPS CASUAL SLIP UPS CASUAL SLIP ONES CASUAL SANDALS FORMAL SANDALS SPORT SHOES
LADIES FOOTWEAR
H-HEAL SANDAL M-HEAL SANDAL WEDGE HEAL SANDAL FLAT SANDAL CASUAL SANDAL SPORTS SANDAL COMFORT SANDAL FORMAL SANDAL EVA SANDAL
KIDS FOOTWEAR
KIDS BOYS KIDS GIRLS INFANT BOYS INFANT GIRLS BOTIES
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STORE OPENING
1. Check the lock before unlock.
2. unlock the door at 9:30 am.
3. Switch on optimum lights on floor.
4. Security in place with complete uniform.
5. Adequate housekeeping staff sould be in store.
6. Select the housekeeping workdone, cleaning, moppng.
7. Switch on A.C. at 10:00 am.
8. Switch on the music.
9. Trials rooms are empty and clean before 10:30 am.
10. Floats issued in tills and dedicated cashier by 10:25 am.
11. Ensure that staff is complete uniform by 10:30 am.
12. Merchandise well present on the floor.
STORE CLOSING
1. All the tills closed.
2. Switch off sensomatic, E.D.C. machine, music at till point.
3. Recycling of Security ags and hangers.
4. Merchandise well present on the floor.
5. Trial rooms are empty.
6. Switch off A.C.
7. Switch off all lights.
8. Lock Manager’s room.
9. Lock I.T. room.
10. Switch off Sensomatic on both floors and at entrance.
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11. Security in place with complete uniform at back door.
12. Manager signature.
13. Security signature.
DUTIES &RESPONSIBILITIES OF STORE MANAGER
Duties & Responsibilities
Sales Forecasting & Budget
Personnel Recruitment, selection, training, motivation and evaluation
Merchandise Display, Inventory Management and merchandise reorders
Handling store receipts, preparing bank transactions, opening and closing
store
Reviewing customer complaints
Reviewing computer data forms
Review of overall operations and reports to top management.
DEPARTMENT MANAGERS DETAIL CHECKLIST
Cleaning and Dusting
Floor cleaned and Mopped
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Fixture (Clean, Alignment & Breakage)
Stock Replenishment
All style displayed on floor.
Size cubing on all merchandise
Price t ickets on all merchandise
Security tag on all merchandise
Merchandise well presented
Shelf Talkers (Clean and Properly displayed)
Ensure ironing of Merchandise is in process.
Trial rooms clean
Cash Counters Clean (Merchandise, hangers & tags)
Daily sales register updation
Daily grooming check
Ensure that the adequate manpower on the floor on hourly basis
Staff should try and attend each and every customer, greeting is very
important
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Ensure that staff is regularly interacting with the customer by giving
exceptional service for customer delight at al l t ime
Ensure the presence of one manager at any given t ime on each floor
Time and again check that the vil l ing check out is fast enough as per the
standard norms
Ensure that the lunch breaks should start by 1:00 pm and finished by max
4:00 pm
Ensure the presence of al l staff on the floor in peak hours between 5:00
pm to 9:30 pm
Time and again check on walk-ins, average bil l size, sales on hourly basis
an accordingly
Encourage the staff for further improvement
Ensure your morning shift staff and weekly off for the next day is
conveyed to al l staff .
Maintain DM’s log book on daily basis & acknowledge by SM, ASM on
daily basis
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CRE DETAIL CHECKLIST
Cleaning and dusting of shelves, browsers, arms & back bars.
Check at 10:30 am floor clean & mopped
Fixture (Clean & Alignment)
Have a walk on the floor after 10:30 am and check the replenishment
require
Stock replenishment for new lines & broken sizes on the floor
Remove broken sizes from the floor if i t is not available in back
Ensure that al l style displayed on floor
Price t ickets on all merchandise
Start size cubing on all merchandise
Security tags on all merchandise
Merchandise well presented
Start ironing of merchandise at 10:00am ti l l 4:00 pm
Trials rooms (clean, tokens and manned) by 10:30 am
Try and attend each and every customer, greeting is very important .
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Distribution Of Target In Departments
Let,
Store target = Rs 50,00,000
Department Target = Rs. 9,50,000
Department Target in % = 19%
One Month = 8 weekends and 23 week days One Weekend Target = Rs 9,50,000/23 = Rs 41304
Total weekend target = Rs 41304*8 = Rs 3,30,434
Total weekday target = Rs 9,50,000- Rs 3,30,434 = Rs 6,19,566
One weekday target = Rs 6,19,566/23 = Rs 26,937
CRE target (Monthly) = Rs 9,50,000/5 = Rs 1,90,000
One Weekend Target = Rs 41304
One Weekday Target = Rs 26937
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DIPSTICK PARAMETERS
Enable retai lers to f ind out about the health of
specific area of operation in an instant .
Customer Transactions
Customer Conversion Ratio
Return To Net Sales
Transactions Per Hour
Sales Per Transaction
Hourly Customer Traffic
Stocks
Average Sell ing Price
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Average Stock Price
Stock Turnover/Inventory Turnover Rate
Percentage Inventory Costs
Gross Margin Return on Inventory
Markdown Goods Percentage
Shrinkage to Net Sales
Space
Occupancy Cost Per Square Foot Sell ing Space
Sales Per Square Foot
Stock Per Square Foot
Percentage of Sell ing Space
Employees
Net Sales Per Full Time Employee
Labour Productivity
Gross Margin Per Full Time Employee
Customer Conversion Ratio
Customer Conversion Ratio
= Number Of Transactions x 100
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Customer Traffic
-Reflects Retailers abil i ty to turn a potential customer into a buyer
-Low figure means that promotional activit ies are not being converted into sales
or that the overall sales effort needs to be assessed afresh
-Automatic counting mechanisms or periodic surveys of customer traffic
Returns to Net Sales
Returns to Net Sales
= Total Returns x 100
Net Sales
-Indication of Customer satisfaction
-Increase in value is an early warning indication
-Quali ty of merchandise is a suspect
Transactions Per Hour
Transactions Per Hour = Number Of Transactions
Number of Hours
-Hourly variat ions in sales activit ies is important for sett ing store hours and
staff schedules
-Cash registers will give the t ime of sale
Sales Per Transaction
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Sales Per Transaction
= Net Sales
Number Of Transactions
-Reflects Retailers abil i ty to turn a potential customer into a buyer
-Low figure means that promotional activit ies are not being converted into sales
or that the overall sales effort needs to be assessed afresh
-Automatic counting mechanisms or periodic surveys of customer traffic
Hourly Customer Traffic
Hourly Customer Traffic
= Customer Traffic In
Number of Hours
-Can be applied to an entire store or a single department to schedule hours and
establish staff levels
-Used to track customer traffic
Average Selling Price
Average Sell ing Price
Total Values of Good Sold
Total Quanti ty Sold
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Average Stock Price
Average Stock Price
= Total Values of Goods in Stock
Total Quanti ty in Stock
-Turning stocks around efficiently yields better profi ts
-If daily sales account for 2% sales i t wil l take 50 days to sell stock and in 365
days the turnaround of the stock is 365/50 i .e 7.3 t imes
Stock Turnover / Inventory Rate Turnover
Stock Turnover / Inventory Rate Turnover
= Net Sales
Average Retail Value of Inventory
-Indicates how often the inventory is sold and replaced in a given period of t ime
-When this rat io declines there is a possibil i ty that the inventory is excessive
Percentage Inventory Carrying Costs
Percentage Inventory Carrying Costs
= Inventory Carrying costs x 100
Net Sales
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-Important measure as there is a r ise in inventory carrying costs due to higher
interest rates
-Important to reduce stock obsolescence and prevent blockage of working
capital
-Retailers use this measure to track the percentage of their net sales represented
by the fixed costs of maintaining inventory.
Gross Margin Return on Inventory
Gross Margin Return on Inventory
= Gross Margin
Average Value of Inventory
-GMROI compares the margin on sales with the original cost value of
merchandise to yield a return on merchandise investment
-Preferably the inventory is to be valued at cost rather than retai l value as i t
gives a better indication of investment
Markdown Goods percentage
Markdown Goods percentage
= Net Sales at Markdown
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Total Net Sales
-If the rat io increases, the retai ler may need to take a closer look at
merchandising practices, especially pricing
-Markdowns may be symptoms of other problems l ike or buying, advert ising or
store layout.
Shrinkage to Net Sales
Shrinkage to Net Sales
= Actual Inventory – Book Inventory x 100
Net Sales
-Percentage of net sales lost due to shrinkage
-Does not indicate cause of shrinkage but the magnitude of the problem.
Occupancy Cost Per Square Foot Selling Space
Occupancy Cost Per Square Foot Sell ing Space
= Occupancy Cost
Square Feet of Sell ing Space
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-Translates into occupancy cost per unit of sel l ing space
-In other words the amount that needs to be generated by that unit of space to
just ify occupancy costs
-For multi-unit retai ler i t is a useful tool to compare the performance of units at
different locations.
Sales Per Square Foot
Sales Per Square Foot
= Net Sales
Square Feet of Sell ing Space
-Used to compare different departments or stores using a common standard
-Important tool to decide al ternate uses of the space
Percentage of Selling Space
Percentage of Sell ing Space
= Sell ing Space x 100
Total Space
-Efficiency of space uti l i ty
-Ratio varies with merchandise and can be used to compare different
departments or stores.
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Net Sales Per Full Time Employee
Net Sales Per Full Time Employee
= Net Sales
Total Full Time Employees
-Average Sales generated by each full t ime employee
-Can be used to set performance targets.
Labour Productivity
Labour Productivity
= Total Labour Costs x 100
Net Sales
-Tracks labour costs incurred to achieve a given sales volume
-Can be applied purely to sales employees
Gross Margin Per Full Time Employee
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Gross Margin Per Full Time Employee
= Gross Margin
Total Full Time Employees
-Gross profi t generated per employee, used to gauge performance of sales
employees
-Not the only measure but a start ing tool.
THE STORE LAYOUTThe store design and layout tells a customer what the store is all about. It is a very strong tool in
the hands of the retailer for communicating and creating the image of the store in the minds of the
customers.
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For a retailer store layout is:
The primary considerations that the retailer takes into account while choosing the look for his
store are his target audience, their needs, and buying habits and the merchandise that he is going
to sell. Creating a store image is like giving a personality to the store
For the consumer:
A store needs to be simple to navigate; it must appeal to his sensory perceptions and must create a
sense of belonging, a sense of relationship, a sense of security or assurance and a sense of
pleasure in the shopping experience
Finally it is the physical attribute of the store which affects the customer’s sensory perceptions,
and makes him relate to the store in a particular manner.
The store layout can be classified into
Grid
Race track
Free form.
Grid layout: It is most commonly used in a supermarkets and discount stores. It Is a
preferred layout in many retail stores that adopt self service.
Race track layout: This layout is popularly found in department stores. The display is in the form
of the race track or a loop with a major aisle running through the store. It links the various
departments or the sections inside the store.
Free form layout: In a freeform, merchandise is arranged in an asymmetrical
manner. I t al lows for free movement and is often used in retai l outlets to
encourage people to browse and shop.
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Kids wear Department
Foot wear Department
Western wear Department
Ethnic wear and home
Department
AccessoriesDepartment
MenswearDepartment
CashTill
Baggage Counter
700 ft2
2350 ft2
1502 ft2
2315 ft2
1805 ft2
2234 ft2
12 3
4
Pantry
MAX STORE LAYOUT
Consumer Behavior and Marketing Strategy
The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how
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The psychology of how consumers think, feel , reason, and select between
different al ternatives (e.g. , brands, products);
The the psychology of how the consumer is influenced by his or her
environment (e.g. , culture, family, signs, media);
The behavior of consumers while shopping or making other marketing
decisions;
Limitations in consumer knowledge or information processing abil i t ies
influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between products
that differ in their level of importance or interest that they entail for the
consumer; and
How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.
Understanding these issues helps us adapt our strategies by taking the consumer
into consideration. For example, by understanding that a number of different
messages compete for our potential customers’ at tention, we learn that to be
effective, advert isements must usually be repeated extensively. We also learn
that consumers will sometimes be persuaded more by logical arguments, but at
other t imes will be persuaded more by emotional or symbolic appeals. By
understanding the consumer, we will be able to make a more informed decision
as to which strategy to employ.
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One "official" definit ion of consumer behavior is "The study of individuals,
groups, or organizations and the processes they use to select , secure, use, and
dispose of products, services, experiences, or ideas to satisfy needs and the
impacts that these processes have on the consumer and society." Although i t is
not necessary to memorize this definit ion, i t brings up some useful points:
Behavior occurs ei ther for the individual, or in the context of a group
(e.g. , fr iends influence what kinds of clothes a person wears) or an
organization (people on the job make decisions as to which products the
firm should use).
Consumer behavior involves the use and disposal of products as well as
the study of how they are purchased. Product use is often of great interest
to the marketer, because this may influence how a product is best
posit ioned or how we can encourage increased consumption. Since many
environmental problems result from product disposal (e.g. , motor oil
being sent into sewage systems to save the recycling fee, or garbage pil ing
up at landfil ls) this is also an area of interest .
Consumer behavior involves services and ideas as well as tangible
products.
The impact of consumer behavior on society is also of relevance. For
example, aggressive marketing of high fat foods, or aggressive marketing
of easy credit , may have serious repercussions for the national health and
economy.
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There are four main applications of consumer behavior:
The most obvious is for marketing strategy—i.e. , for making better
marketing campaigns. For example, by understanding that consumers are
more receptive to food advertising when they are hungry, we learn to
schedule snack advertisements late in the afternoon. By understanding that
new products are usually init ial ly adopted by a few consumers and only
spread later, and then only gradually, to the rest of the population, we
learn that (1) companies that introduce new products must be well
f inanced so that they can stay afloat unti l their products become a
commercial success and (2) i t is important to please init ial customers,
since they will in turn influence many subsequent customers’ brand
choices.
A second application is public policy . In the 1980s, Accutane, a near
miracle cure for acne, was introduced. Unfortunately, Accutane resulted in
severe birth defects if taken by pregnant women. Although physicians
were instructed to warn their female patients of this, a number st i l l
became pregnant while taking the drug. To get consumers’ at tention, the
Federal Drug Administrat ion (FDA) took the step of requiring that very
graphic pictures of deformed babies be shown on the medicine containers.
Social marketing involves gett ing ideas across to consumers rather than
sell ing something. Marty Fishbein, a marketing professor, went on
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sabbatical to work for the Centers for Disease Control trying to reduce the
incidence of transmission of diseases through i l legal drug use. The best
solution, obviously, would be if we could get i l legal drug users to stop.
This, however, was deemed to be infeasible. I t was also determined that
the practice of sharing needles was too ingrained in the drug culture to be
stopped. As a result , using knowledge of consumer at t i tudes, Dr. Fishbein
created a campaign that encouraged the cleaning of needles in bleach
before sharing them, a goal that was believed to be more realist ic.
As a final benefi t , s tudying consumer behavior should make us better
consumers. Common sense suggests, for example, that if you buy a 64
l iquid ounce bott le of laundry detergent, you should pay less per ounce
than if you bought two 32 ounce bott les. In practice, however, you often
pay a size premium by buying the larger quanti ty. In other words, in this
case, knowing this fact wil l sensit ize you to the need to check the unit
cost labels to determine if you are really gett ing a bargain.
There are several units in the market that can be analyzed. Our main thrust in
this course is the consumer . However, we will also need to analyze our own
firm’s strengths and weaknesses and those of competing f irms . Suppose, for
example, that we make a product aimed at older consumers, a growing segment.
A competing firm that targets babies, a shrinking market, is l ikely to consider
reposit ioning toward our market. To assess a competing firm’s potential threat ,
we need to examine i ts assets (e.g. , technology, patents, market knowledge,
awareness of i ts brands) against pressures i t faces from the market. Finally, we
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need to assess condit ions (the marketing environment). For example, al though
we may have developed a product that offers great appeal for consumers, a
recession may cut demand dramatically.
Segmentation
Segmentation is important in consumer analysis because understanding the
consumer will allow us segment the market more meaningfully.
Segmentation basically involves dividing consumers into groups such that
members of a group (1) are as similar as possible to members of that same
group but (2) differ as much as possible from members other segments.
This enables us then to "treat" each segment differently—e.g., by:
Providing different products (e.g., some consumers like cola taste,
while others prefer l ime)
Offering different prices (some consumers will take the cheapest
product available, while others will pay for desired features)
Distributing the products where they are likely to be bought by the
targeted segment.
Culture
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Culture is part of the external influences that impact the consumer. That is,
culture represents influences that are imposed on the consumer by other
individuals.
The definition of culture is "That complex whole which includes
knowledge, belief, art , morals, custom, and any other capabilit ies and
habits acquired by man person as a member of society."
Culture has several important characteristics:
(1) Culture is comprehensive . (2) Culture is learned rather than being
something we are born with. (3) Culture is manifested within boundaries of
acceptable behavior. (4) Conscious awareness of cultural standards is
l imited. (5) Cultures fall somewhere on a continuum between static and
dynamic depending on how quickly they accept change.
Different perspectives exist in different cultures on several issues; e.g.:
Monochronic cultures tend to value precise scheduling and doing one
thing at a t ime; in polychronic cultures, in contrast, promptness is
valued less, and multiple tasks may be performed simultaneously.
(See text for more detail).
Space is perceived differently. Americans will feel crowded where
people from more densely populated countries will be comfortable.
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Symbols differ in meaning. For example, while white symbols purity
in the U.S., i t is a symbol of death in China. Colors that are
considered masculine and feminine also differ by culture.
In terms of etiquette, some cultures have more rigid procedures than
others. In some countries, for example, there are explicit standards as
to how a gift should be presented. In some cultures, gifts should be
presented in private to avoid embarrassing the recipient; in others, the
gift should be made publicly to ensure that no perception of secret
bribery could be made.
The United States has undergone some changes in its predominant culture
over the last several decades. Again, however, i t should be kept in mind
that there are great variations within the culture. For example, on the
average, Americans have become less materialistic and have sought more
leisure; on the other hand, the percentage of people working extremely
long hours has also increased. The text discusses changes in values in more
detail .
Demographics and Social Stratification
Demographics are clearly tied to subculture and segmentation. Here,
however, we shift our focus from analyzing specific subcultures to trying
to understand the implications for an entire population of i ts makeup.
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Several issues are useful in the structure of a population. For example, in
some rapidly growing countries, a large percentage of the population is
concentrated among younger generations. In countries such as Korea,
China, and Taiwan, this has helped stimulate economic growth, while in
certain poorer countries, i t puts pressures on society to accommodate an
increasing number of people on a fixed amount of land. Other countries
such as Japan and Germany, in contrast, experience problems with a
"graying" society, where fewer non-retired people are around to support an
increasing number of aging seniors. Because Germany actually hovers
around negative population growth, the German government has issued
large financial incentives, in the forms of subsidies, for women who have
children. In the United States, population growth occurs both through
births and immigration. Since the number of births is not growing,
problems occur for firms that are dependent on population growth (e.g.,
Gerber, a manufacturer of baby food).
Family Decision Making
The Family Life Cycle . Individuals and families tend to go through a "life
cycle." The simple life cycle goes from
child/teenager ---> young single ---> young couple* ---> full nest
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---> empty nest ---> widow(er).
*For purposes of this discussion, a "couple" may either be married or
merely involve living together. The breakup of a non-marital relationship
involving cohabitation is similarly considered equivalent to a divorce.
In real l ife, this situation is, of course, a bit more complicated. For
example, many couples undergo divorce. Then we have the scenario:
full nest ---> single parent
Family Decision Making : Individual members of families often serve
different roles in decisions that ultimately draw on shared family
resources. Some individuals are information gatherers/holders , who seek
out information about products of relevance. The decision maker(s) have
the power to determine issues such as:
owhether to buy;
owhich product to buy (pick-up or passenger car?);
owhich brand to buy;
owhere to buy it; and
owhen to buy.
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Group Influences
Humans are inherently social animals, and individuals greatly influence
each other.
A useful framework of analysis of group influence on the individual is the
so called reference group—the term comes about because an individual
uses a relevant group as a standard of reference against which oneself is
compared. Reference groups come in several different forms. The
aspirational reference group refers to those others against whom one
would like to compare oneself. For example, many firms use athletes as
spokespeople, and these represent what many people would ideally like to
be. Associative reference groups include people who more realistically
represent the individuals’ current equals or near-equals—e.g., coworkers,
neighbors, or members of churches, clubs, and organizations. Finally, the
dissociative reference group includes people that the individual would not
l ike to be like. For example, the store li terally named The Gap came about
because many younger people wanted to actively dissociate from parents
and other older and "uncool" people. The Quality Paperback Book
specifically suggests in its advertising that i ts members are "a breed apart"
from conventional readers of popular books.
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Diffusion of Innovation
The diffusion of innovation refers to the tendency of new products,
practices, or ideas to spread among people. Usually, when new products or
ideas come about, they are only adopted by a small group of people
initially; later, many innovations spread to other people. The bell shaped
curve frequently il lustrates the rate of adoption of a new product.
Cumulative adoptions are reflected by the S-shaped curve. The saturation
point is the maximum proportion of consumers likely to adopt a product. In
the case of refrigerators in the U.S., the saturation level is nearly one
hundred percent of households; i t well below that for video games that,
even when spread out to a large part of the population, will be of interest
to far from everyone.
Some cultures tend to adopt new products more quickly than others, based
on several factors:
oModernity: The extent to which the culture is receptive to new
things. In some countries, such as Britain and Saudi Arabia,
tradition is greatly valued—thus, new products often don’t fare
too well. The United States, in contrast, tends to value progress.
oHomophily: The more similar to each other that members of a
culture are, the more likely an innovation is to spread—people
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are more likely to imitate similar than different models. The two
most rapidly adopting countries in the World are the U.S. and
Japan. While the U.S. interestingly scores very low, Japan
scores high.
oPhysical distance: The greater the distance between people, the
less l ikely innovation is to spread.
oOpinion leadership: The more opinion leaders are valued and
respected, the more l ikely an innovation is to spread. The style of
opinion leaders moderates this influence, however. In less
innovative countries, opinion leaders tend to be more conservative,
i .e . , to reflect the local norms of resistance.
Perception
Background . Our perception is an approximation of reali ty. Our brain at tempts
to make sense out of the st imuli to which we are exposed. This works well , for
example, when we "see" a fr iend three hundred feet away at his or her correct
height; however, our perception is sometimes "off"—for example, certain
shapes of ice cream containers look l ike they contain more than rectangular
ones with the same volume.
Factors in percpetion. Several sequential factors influence our perception.
Exposure involves the extent to which we encounter a st imulus. For example,
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we are exposed to numerous commercial messages while driving on the freeway:
bil l boards, radio advert isements, bumper-st ickers on cars, and signs and
banners placed at shopping malls that we pass. Most of this exposure is random
—we don’t plan to seek i t out . However, if we are shopping for a car, we may
deliberately seek out advert isements and "tune in" when dealer advert isements
come on the radio.
Learning and Memory
Background. Learning involves "a change in the content or organization of
long term memory and/or behavior." The first part of the definit ion focuses on
what we know (and can thus put to use) while the second focuses on concrete
behavior. For example, many people will avoid foods that they consumed
shortly before becoming i l l . Learning is not al l knowledge based. For example,
we may experience the sales people in one store being nicer to us than those in
the other. We thus may develop a preference for the one store over the other;
however, if pressed, we may not be able to give a conscious explanation as to
the reason for our preference.
Motivation, Personality, and Emotion
Perspectives on Consumer Behavior and Motivation . We considered
several perspectives on behavior as a way to understand what motivates the
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consumer. Each of these perspectives suggests different things as to what the
marketer should do and what can (and cannot) be controlled. Note that each
perspective tends to contain a "grain" oftruth and that one should not be too
dogmatic in emphasizing one over the others.
Maslow’s Hierarchy of Needs . The late Abraham Maslow suggested
the intuit ively appealing notion that humans must satisfy the most basic
objectives before they can move onto "higher level" ones. Thus, an individual
must satisfy physiological needs (such as food and l iquid) before he or she will
be able to expend energy on less fundamental objectives such as safety. Only
when basic objectives have been met will a person move on to seek such
objectives as love and belonging, and only a small minority of people make i t as
far as seeking self-actualization.
Maslow’s Hierarchy is useful in understanding different needs of consumers
across the World. However, one must be careful not to take i t too l i terally,
since people may occasionally "swing" between needs. For example, a homeless
person who currently does not have shelter may seek that out even though he or
she is hungry.
Propert ies of motivation. Motivation is described through several propert ies:
Motivation is composed of energy and direction . A person may or may
not have enough motivation to engage in a given activity. For example, a
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person may be motivated enough to go and shop for food, but not enough
to engage in a comprehensive exercise program.
Motives may be overt, hidden, and multiple . Some motivations are
publicly expressed (e.g. , the desire to buy an energy efficient house),
while others (e.g. , the desire to look wealthy by buying a fancy car) are
not. Individuals may also hold multiple motivations (e.g. , buy a car and
save money for ret irement) which may conflict .
Many motivations are driven by the desire for tension reduction
(e.g. , el iminate thirst or hunger).
Motivations can be driven by both internal and external factors .
That is , a person may want a painting either because he or she l ikes i t
( internal motivation) or because this will give her status among the
art ist ic el i te (external) .
Motivations may have either a positive or negative valence --people
may either be motivated to achieve something (e.g. , get a promotion at
work) or avoid something (e.g. , being hospital ized without having
adequate insurance).
Consumers are motivated to achieve goals . Achieving these goals may
require sustained activity over t ime (e.g. , exercising every day for months
or years) as opposed to just taking some action once.
Consumers maintain a balance between the desires for stability and
variety . Most consumers want some variety (e.g. , they do not want to eat
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the same meal every day), but also want a certain stabil i ty ( they do not
want to try an entirely new food every day).
Motivation reflects individual differences . Different consumers are
motivated to achieve different things, and i t may be difficult to infer
motivations from looking at actual behavior without understanding these
differences in desired outcomes.
Self-Concept, Situational Influences, and Lifestyle
The self-concept . The consumer faces several possible selves. The actual
self reflects how the individual actually is , al though the consumer may not be
aware of that reali ty (e.g. , many anorexic consumers who are dangerously thin
believe that they are in fact fat) . In contrast , the ideal self reflects a self that a
person would l ike to have, but does not in fact have. For example, a couch
potato may want to be a World famous athlete, but may have no actual athlet ic
abil i ty. The private self is one that is not intentionally exposed to others. For
example, a police officer may l ike and l isten to rap music in private, but project
a public self-image of a country music enthusiast , playing country songs at
work where police officers are portrayed as heroes. The key here is to keep in
mind which kind of self we are trying to reach in promotional messages. If we
appeal to the hidden self , for example, we must be careful to make our appeals
subtle and hint , i f appropriate, on how the individual’s confidential i ty and
privacy can be enhanced.
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Individuals will often seek to augment and enhance their self concepts, and i t
may be possible to market products that help achieve this goal . For example, a
successful at torney may want to wear ( in poli t ically correct terms) cowchild
boots and a cowchild hat to bring home an image as a ranch enthusiast .
Lifestyles. Self-concept often translates into a person’s l ifestyle, or the way
that he or she l ives his or her l ife. For example, a person may be very
material ist ic, preferring to wear f lashy clothes and drive expensive cars, or
prefer instead a simpler l ife with fewer visible status symbols. Attempts have
been made to classify consumers into various segments based on their l ifestyles.
The Values and Lifestyle (VALS) Project , developed by the Stanford Research
Insti tute (SRI), at tempts to classify people based on a combination of values
and resources. Thus, for example, both "Achievers" and "Strivers" want public
recognit ion, but only the Achievers have the resources to bring this about. A
global analogue is the Global Scan.
Situational influences . Specific circumstances often influence consumer
behavior. For example, consumers in a rush are l ikely to take the most
convenient product available. Consumers whose at tention is demanded
elsewhere are l ikely to disregard commercial messages. Consumers shopping for
a special occasion (e.g. , a wedding) may buy different products.
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Consumer Decision Making
Definitions . Consumer decision making comes about as an attempt to solve
consumer problems. A problem refers to "a discrepancy between a desired
state and an ideal state which is sufficient to arouse and activate a decision
process." Thus, problems can be major (e.g., a consumer has been fired and
is without a job) or minor (e.g., the consumer lacks an eraser necessary to
take an exam the next day), and the broader and more ambiguous a problem
is, the more potential solutions are generally available (see class slides for
examples).
Consumer Problem Recognition. Consumers often note problems by
comparing their current, or actual, situation, explicitly or implicitly, to
some desired situation. In terms of the "big picture," what is compared may
be the totality of one’s lifestyle. Once a discrepancy is found, a
determination is found as to whether this is large enough to warrant action,
in which case a search for solutions is initiated.
Problems come in several different types. A problem may be an active one
(e.g., you have a headache and would like as quick a solution as possible)
or inactive-- you are not aware that your situation is a problem (e.g., a
consumer is not aware that he or she could have more energy with a new
vitamin). Problems may be acknowledged (e.g., a consumer is aware that
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his or her car does not accelerate well enough or unacknowledged (e.g., a
consumer will not acknowledge that he or she consumes too much alcohol).
Finally, needs can be relatively specific (generic), as in the need for
enjoyment (which can be satisfied many different ways), or specific, as in
the need for professional attire to wear at a new job.
Several different methods can be used to detect consumer problems, which
are discussed on pp. 508-509 in the text.
Creating problems for consumers is a way to increase sales, albeit a
questionably ethical one. One way to create new problems, and resultant
needs, is to create a new ideal state. This is often done quite arbitrarily in
the fashion industry, as skirt lengths and the appropriate number of buttons
on a suit often change arbitrarily up and down. It may also be possible to
create dissatisfaction with current states--e.g., a firm may publicize current
crime statistics to increase the sales of handguns and alarms. Many
vocational training schools advertise that better careers than the
consumer’s current one are available upon graduation (a promise on which,
by the way, they may not deliver in the end).
There are two main approaches to search. Internal searches are based on
what consumers already know. Thus, i t may be important for certain firms
to advertise to consumers before they actually need the product. For
example, one bail bond company advertised its existence to people "in case
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you ever find yourself in jail ." As another example, if you decide to go out
for fast food, you may not consult any directories, but instead search your
memory for fast food restaurants conveniently located. A problem is that
some excellent ones which are not remembered, or have never been heard
of, are not considered. External searches get people to either speak to
others (getting information by word of mouth) or use other sources (such as
advertisements now sought out or yellow page listings). Because the yellow
pages are often the first place to which people turn, this medium is able to
charge very large advertising rates.
Consumers often do not consider all alternatives. Some are not known (the
"unawareness" set), some were once known but are not readily accessible
in memory (the "inert" set), others are ruled out as unsatisfactory (the
"inept" set--e.g., Glad bags attempts to get "bargain bags" into that set),
and those that are considered represent the "evoked" set, from which one
alternative is l ikely to be purchased.
The amount of effort a consumer puts into searching depends on a number
of factors such as the market (how many competitors are there, and how
great are differences between brands expected to be?), product
characteristics (how important is this product? How complex is the
product? How obvious are indications of quality?), consumer
characteristics (how interested is a consumer, generally, in analyzing
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product characteristics and making the best possible deal?), and situational
characteristics (as previously discussed).
Two interesting issues in decisions are variety seeking (where consumers
seek to try new brands not because these brands are expected to be "better"
in any way, but rather because the consumer wants a "change of pace," and
"impulse" purchases . Impulse purchases are, generally speaking,
unplanned, but represent a somewhat fuzzy group. For example, a shopper
may plan to buy vegetables but only decide in the store to actually buy
broccoli and corn. Alternatively, a person may buy an item which is
currently on sale, or one that he or she remembers that is needed only once
inside the store (remember the Wal-Mart article).
Several different strategies for influencing consumer decision making are
discussed in the text on pp. 537-541.
Consumer Outlet Selection
Retail evolution and consumer choice . For many products, consumers
frequently have numerous choices as to where they are going to actually obtain
the product. Although we are used to thinking of buying automobiles only from
dealerships, for example, i t is today possible to buy them through brokers or
f leet sales organizations that may both (1) offer a lower price and/or (2) provide
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the help of a neutral third party which does not have a vested interest in the
sales of one make over the other.
In general , the evolution of diversi ty in the retai l scene has provided consumers
with more choice. In the old days, most consumers had access only to "general"
stores for most products. Gradually, in urban environments, specialty and
discount stores evolved. Today, a consumer may generally choose to buy most
products ei ther at a relat ively high price, frequently with a significant amount
of service, in a specialty store, or with lower service in a discount store. A
special case of the discount store is the category ki l ler --a store that tends to
specialize in some l imited area (e.g. , electronics), lacking the breadth of a
tradit ional discount store often undercutt ing the tradit ional discount store on
price (which they are able to do because of the bargaining power that results
from high buying volumes of a narrow assortment of merchandise from the same
manufacturer) .
"At home" shopping and electronic commerce . During the last
several decades, the incidence of "at home" shopping has increased. The growth
of catalog sales can be traced to advances in computer technology and
subsequent l ist availabil i ty (as we discussed in the section of direct marketing
segmentation methods). A more recent development is Internet based marketing.
Although sales are modest in this domain at the moment, i t is too early to judge
the total potential of this medium. Although many of the concerns that
consumers hold about computer crime tend to be exaggerated and/or largely
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unwarranted, public fears are a major holdback. Another problem is the
demographics of computer and Internet use--the majori ty of U.S. consumers,
and certainly the great majori ty of residents of even highly industrial ized
countries, are not regular Internet users. Certain products specifically aimed at
heavy Internet users (e.g. , records, software) and products/services that require
a high level of customization (e.g. , air l ine t ickets) may find good opportunit ies.
An interesting problem with Internet commerce, which may well have spil lover
effects outside the realm of the Net, is the relat ive ease with which consumers
may compare prices of different retai lers, result ing in intense price competi t ion.
Note that recent legislat ion has l imited taxation of Internet sales in the U.S., in
a sense at tempting to "jump start" this innovation.
Store positioning. Posit ioning of retai l stores is essential . In general , stores
which excel on a signif icant dimension seem to perform better--for example,
Nordstrom’s excels through i ts intense customer service, while Wal-Mart excels
through i ts efficiency and low prices. (In a course on marketing strategy or
retai l ing, you will probably discuss the issue of the importance of balanced
markets--i t is healthier if different f irms have different strategies, so that
everyone will not be competing intensely on the same variables). Stores which
fal l somewhere in between--e.g. , Sears--tend to do less well since they get
"stuck in the middle" and have to compete against both. Obviously, there is a
l imit to how strongly you can move toward one extreme. For example, if
Nordstrom were to double i ts prices and even double i ts service, that posit ion
would be untenable, and certain extreme discount stores that offer lower prices
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than Wal-Mart tend not to be successful because they are ult imately not
satisfactory to consumers.
Consumer behaviour and retailingConsumer behaviour and retailing
decisionsdecisions
Does consumers' selection of retail outlets depend on the brands available or is
i t the retail outlet f irst and the brand next? Marketers need to do in-depth
research on the various aspects that l ink brand and retail strategy.
DECISION-MAKING with regard to retai l outlet selection is very similar to
consumer decision-making on brands where the consumer goes through a
process start ing from identifying needs to post-purchase issues. There are a few
interesting and important dimensions associated with consumer behaviour and
retai l outlet selection.
Does the retai l outlet have psychological implications on the target segment?
When Titan and Timex watches were retai led through exclusive shops,
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consumers wanting lower-end watches probably fel t that a typical Titan
showroom was too eli t ist , which could have had a negative impact.
Does selection of outlets vary in accordance with types of product
categories? While buying a TV or a washing machine, would consumers visi t an
exclusive showroom of BPL, Onida or Sony, or would they visi t a multi-brand
outlet?
Would there be differences in the psychographic (and demographic) profi les
of consumers choosing outlets? What is the sequence in which consumers are
l ikely to go about their decisions? Will they select the brand or the category
first before choosing the outlet?
What is the impact of the image developed by a retai l outlet? Is FoodWorld
different from a neighbourhood grocery shop in the minds of consumers? What
kind of perception are consumers l ikely to have with regard to shopping from an
online outlet such as Fabmart vis-à-vis a brick-and-mortar outlet l ike
Fountainhead or Landmark?
Would consumers be interested in store or retai l brands? Tradit ionally,
retai lers have been carrying manufacturers ' brands. But in recent t imes (at least
to a significant extent in the foods category), supermarkets such as FoodWorld
have started carrying retai l or store brands. Nilgiri 's is another example in the
South which carries i ts own brands of chocolates, biscuits and other
commodities.
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What contributes to retai l equity or retai l image or retai l loyalty?
How do retai l outlets handle perceived risks?
Marketers need in-depth knowledge about the various dimensions which l ink
retai l ing and consumer behaviour. There is research required to handle retai l
decisions in a competi t ive context. McDonald's found that a major chunk of i ts
consumers decide to eat a few minutes before they make the purchase decisions
and hence i t is building small outlets in large supermarkets such as Wal-Mart
and Home Depot. I t is providing play areas to ensure a number of families visi t
i ts outlets with children. A few companies also operate through kiosks in
airports, malls and high-traffic areas. Sunglass Hut is a brand which operates
kiosks at various places which displays about 1,000 different models along with
their prices. Consumers could place an order through these kiosks and the
product is home-delivered.
Retail outlet selection and brand selection
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There are three fundamental patterns, which a consumer can follow and they
could be:
(I) Brand first , retai l outlet second
(i i) Retail outlet f irst , brand second
(i i i) Brand and retai l outlet simultaneously.
A consumer wanting to buy a car may collect information on brands and
purchase i t from a retai l outlet based on his perception of price offered or after-
sales service provided by the outlet ( typically, search for information on brands
is followed by retai l outlet selection in durables). In certain product categories,
especially where `category kil lers ' exist , consumers may think of the retai l
outlet ini t ial ly and then the brands (television, refrigerator and audio products
retai led through outlets l ike Vivek and Co. in the South, could be an example).
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One more dimension may be to compare brands in the evoked set at retai l
outlets which also exist in an evoked set of their own. This is highly possible,
especially in the Indian context where dealers develop a social relat ionship with
consumers, especially in semi-urban and rural areas. Primary research could be
used to discover the specific sequence involved in a si tuation of this kind. A
`brand first ' dimension may need feature-based advertising and a `retai l outlet
f irst ' dimension may require a set of point-of-purchase (POP) materials and
special training to sales personnel to recognise the needs of consumers.
Further, i f i t is known that a number of consumers may be oriented to visi t their
favourite retai ler (before obtaining information on brands) in a geographical
area, there would have to be more emphasis on regional/ local advert ising which
highlights the retai l shop rather than regular brand-based national advert ising.
Strategies and sequences
Retail outlet f irst and brand second: When a number of consumers follow this
sequence of decision-making, display of point-of-purchase material and
building the image of the outlet becomes important . The manufacturer of the
brand may have to ensure that the brand (and the variants demanded) will be
available at the key outlets in a locali ty. Point-of-purchase materials which are
to be used at the retai l outlet may require primary research - should visuals be
used, should product features be used, should the POP material be in the
regional language. There may also be a need to monitor competi t ion from other
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retai l outlets to ensure that consumers are kept satisfied in terms of service,
price, promotional deals and ambience. This is especially applicable to durables
retai l ing in India (in ci t ies) . Retailers at tempt to increase consumer traffic by
providing a number of `add-ons' .
Brand first and outlet second: The brand was probably thought of by the
consumers because (i) the consumers may not have developed a relat ionship
with any retai ler which is strong enough to get into the `evoked retai l set ' or ( i i)
the brand has got into the evoked set because of advert ising or posit ive word of
mouth. Local advert ising with the mention of brand names which have already
got into the evoked set would enable consumers to be `pulled' to the outlet .
Primary research may be required to identify the brands in the evoked set . This
feedback may have to be provided by the manufacturers of a brand to retai lers
in various regions (especially if i t is a brand with a major chunk of the market
and one which is nationally advert ised). Even multinational outlets could make
use of this approach and mention the brands in the evoked set ( in a given
geographical area). This is l ikely to improve traffic to the outlet . Besides, the
evoked set could also change from time to t ime depending on the strategies of
brands.
About two decades ago, brands l ike Solidaire, Dyanora and Crown may have
been top-of-the-mind (in a specific geographical area) but slowly gave way to
other brands - these changes should be captured (how often this happens, why,
and the differences between markets) to formulate retai l strategies. The local
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advertising could be different from the national advert ising for the brand. A
brand may be advert ised on features nationally but the retai l outlet in may
prefer to highlight the effective after-sales service associated with the brand as
this may be a priori ty of consumers. The combination of `push-pull ' s trategy is
shown in the table.
The interest generated in the brand would have to be backed by good pre-sale
services at the outlet .
Brand and retai l outlet simultaneously: When consumers think of the brand and
retai l outlet together, i t means that they have a certain preference for the outlet
and would l ike to check the evoked set of brands there. The marketer would
have to carry out primary research to find out specific markets where consumers
have a very posit ive relat ionship with retai lers. This is important because of the
influence of retai lers over the purchase behaviour of consumers in the Indian
context.
I t may also be worthwhile to check if the evoked brands are carried by the
retai lers who have a posit ive relat ionship with the target segments. This is to
ensure that the retai lers who have a favourable perception among the target
segment carry the desired brands. Fail ing this, consumers may turn to a
different retai ler , which would be to the disadvantage of a retai ler who has
already won the confidence of consumers. Retail sales personnel also become
important in this si tuation. The prospective consumers are "carried over" to the
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purchase stage by the store personnel and hence there should be incentive
programmes for the store personnel.
If a company such as BPL or Videocon is dealing with a number of brands/sub-
brands, i t has to ensure the availabil i ty of specific brands which may interest
the consumers. If the retai l outlet is a large one dealing with a number of
brands (l ike Vivek), a shop-in-shop arrangement may be preferable. This model
puts the brand in focus and reinforces the posit ive association a consumer may
have about i t . A considerable amount of pre-sale service would have to back up
the shop-in-shop concept.
The shop-in-shop concept creates an aura of exclusivity. Consumers tend to
have higher expectations about the pre-sale service and the at tention given to
them. A large store also is l ikely to stock several brands and hence all brands in
the evoked set would have to compete with each other to progress from the
evoked set to choice set . Large outlets may also have a buil t- in provision for a
lower price (because of volumes) and hence may be in a better posit ion to
cl inch the deal with consumers who may simultaneously consider both the brand
and the retai l outlet .
THE STRIKING NEW FACE OF LUCKNOWTHE STRIKING NEW FACE OF LUCKNOW
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Who says great retail is only for the metros? Check out Lucknow where residents are
shopping like never before.This city in Utterpradesh has the state's largest shopping mall. It also
holds the distinction of being one of India's cleanest cities.
It is Utterpradesh’ capital with a population nudging 30 lakh as of 2001. This is LUCKNOW,
which is now experiencing a retail revolution of sorts.Lucknow believes the general feeling that
the retail revolution as we know occurs only in the metros. A walk along the main Hagaratganj,
Aminabad, Gomtinagar Lines areas is like walking through a large shopping mall. Here, you'll
find every brand, all kinds of products in every shape, shade and size and all types of food! You'll
also find four of Lucknow's supermarkets here. All these are changing the way Lucknow shops.
Two of the largest supermarkets in LUCKNOW are Saharaganj location Hagaratganj run by the
Sahara group and wave location in gomti nagar, Fun Republic Family Entertainment
Centre,Location: Near Eldeco Greens, Gomti Nagar.Total area: 18,000 sq mtrs/ 4.5 hectares of
prime land.Project deadline: March 2006.
With a total of 74 shops, this is part of the Zee Groups master plan of 25 all-India malls. Touted
as Lucknow’s biggest mall, not just in terms of size but owing to the names it is planning to bring
into the city, the project is reportedly 95 per cent sold-out. Ladhani’s Taj Multiplex,Location:
Near Hoteltaj Residency, Gomti Nagar.Total area: 20,000 sq ft.Project deadline: March 2006.
Fortuna’s City Malllocation: Near Cms Gomti Nagar.Total Area: 70,000 Sq Ft.Project deadline:
By 2007.
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Singapore mall,gomti nagar( work in progress) . Both offer valuable lessons in how organised
retail in smaller towns can succeed. Despite dramatic changes in the retail scene, Lucknow’s
retailers feel the need for a shift in mindset, habits, more modern restaurants and theatres to drive
lifestyle changes. And this is already happening. Here we profile three leading retailers from
Lucknow. Barista, the fast-growing espresso chain. At present two mall heart of Lucknow
Saharaganj or Wave I analysis to Luck now people perception of retail store (survey only retail
channel in Sahara gang, wave). The survey was constituted in visiting of Sahara gang and wave
Customers were interviewed by means of carefully prepared questionnaire to study and
understand customer’s psychology in depth.
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Selection of the TopicSelection of the Topic
First of all our research topic was selected. The topic being “A DETAIL STUDY OF
CONSUMER BEHAVIOUR IN LIFESTYLE INTERNATIONAL Pvt. Ltd. MAX RETAIL
DIVISION AT LUCKNOW”
Objective of researchObjective of research
To know the perception of customers towards the purchasing.ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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To know the buying behavior of customers in retail store.
To know the strategy of retail store for attracting customers
To know the satisfaction level of customers.
Extensive literature SurveyExtensive literature Survey
The yearly Journals and manuals & project reports provide by our institute were studied.
Lots of valuable information regarding real estate industry was collected through Internet
and necessary information regarding company through website of the organization.
Sampling DesignSampling Design
Sampling unit Respondents of Fun Mall
Size of sample 100 respondents
Sample Method Random Sampling
Types of questionnaire Close ended
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Type of DataType of Data
Data type collected for analysis is PRIMARY i.e. data has been observed and recorded by
the researchers for the first time to their knowledge.
Data collected through journals, newspapers & internet is SECONDARY type.
Method of data collectionMethod of data collection
This study is a research which utilizes interrogation and observation method for data
collection. Secondary data was obtained from intensive analysis & observation. The
primary data are those, which are collected afresh and for the first time, and thus happen to
be original in character. The secondary data, on the other hand, are those which have
already been collected by some one else and which have already been passed through the
statistical process. Method employed to collect data is Questionnaire. This is a simple
survey conducted by filling in questionnaire from the people who visit malls.
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Collection of the Primary dataCollection of the Primary data
As this study is of descriptive type, the primary data has been collected through
Questionnaire.
Observation methodObservation method
Under the Observation method, the information is sought by way of direct observation
without asking from the respondent. The main advantage of this method is that subjective
bias is eliminated, if observation is done accurately.
Analysis of DataAnalysis of Data
Data collected through questionnaire is being processed .This processed data is represented
by means of suitable graphs & diagrams.
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WHICH TYPE OF PLACE DO YOU VISIT FREQUENTLY FOR YOURWHICH TYPE OF PLACE DO YOU VISIT FREQUENTLY FOR YOUR SHOPPING NEEDS ?:SHOPPING NEEDS ?:
a) SHOPPING MALL [ 80 RESPONDENTS]
b) UPSTREET MARKET [ 8 RESPONDENTS]
c) LOCAL MARKET [ 12 RESPONDENTS]
On the basis of above respondents the graph shows that maximum respondents
i.e. 80 out of 100 are agree that they frequently visit shopping mall for their
shopping needs.
It means maximum no of customer are preferred Shopping Malls for purchasing.
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80%
8%
12%
RespondentsA B C
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YOU PREFER TO GO IN STORE WITH:YOU PREFER TO GO IN STORE WITH:
a. FAMILY [52 RESPONDENTS]
b. SPOUSE [12 RESPONDENTS]
c. FRIENDS [ 36 RESPONDENTS]
d. OTHERS [ 0 RESPONDENTS]
52%
12%
36%
RespondentsFAMILY SPOUSE FRIENDS OTHERS
On the basis of above respondents the graph shows that maximum respondents
i.e. 52 out of 100 are preferred to go in store with their family.
It means maximum no of customers are family conscious for visiting retail store.
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FROM WHERE WOULD YOU PREFER TO BUY PRODUCTS:FROM WHERE WOULD YOU PREFER TO BUY PRODUCTS:
a) SINGLE BRANDED STORE [ 24 RESPONDENTS ]
b) MULTI BRANDED STORE [ 60 RESPONDENTS ]
c) FACTORY OUTLET [ 4 RESPONDENTS ]
d) LOCAL BIG RETAIL OUTLET [ 12 RESPONDENTS ]
24%
60%
4%
12%
RespondentsSINGLE BRAND STORE MULTI BRAND STOREFACTORY OUTLET LOCAL BIG RETAIL OUTLET
On the basis of above respondents the graph shows that maximum respondents
i.e. 60 out of 100 are preferred multi branded store for shopping.
It means maximum no of customers are time conscious and desire for many brand
under one roof.
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HOW OFTEN DO YOU ASK FOR ASSISTENCE FROM STORE STAFF INHOW OFTEN DO YOU ASK FOR ASSISTENCE FROM STORE STAFF IN SELECTING YOUR PURCHASE?SELECTING YOUR PURCHASE?
a) ALMOST ALWAYS [ 12 RESPONDENTS ]
b) FREQUENTLY [ 16 RESPONDENTS ]
c) SOMETIMES [ 60 RESPONDENTS]
d) NEVER [ 12 RESPONDENTS ]
12%
16%
60%
12%
RespondentsALMOST ALWAYS FREQUENTLY SOMETIMES NEVER
On the basis of above respondents the graph shows that maximum respondents
i.e. 60 out of 100 wanted sometime assistance from store staffs.
It means maximum no of customers do not compromise with their choice.
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WHAT DO YOU LOOK FOR IN A PRODUCT DURING YOUR PURCHASE:WHAT DO YOU LOOK FOR IN A PRODUCT DURING YOUR PURCHASE:
a) FASHION [ 12 RESPONDENTS ]
b) COMFORT [ 16 RESPONDENTS ]
c) PRICE [ 60 RESPONDENTS ]
d) COLOURS AVAILABLE [ 12 RESPONDENTS ]
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12%
16%
60%
12%
RespondentsFASHION COMFORT PRICE COLOUR
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On the basis of above respondents the graph shows that maximum respondents
i.e. 60 out of 100 preferred price during their purchasing.
It means maximum no of customers are price conscious so maximum customers
belongs to middle class.
WHEN DO YOU PREFER TO SHOP MOST IN STORE:WHEN DO YOU PREFER TO SHOP MOST IN STORE:
a) DURING SALE [ 18 RESPONDENTS ]
b) DURING FRESH SEASON STOCK [ 54 RESPONDENTS]
c) DURING DISCOUNT [ 24 RESPONDENTS ]
d) WHEN REQUIRED [ 4 RESPONDENTS]
18%
54%
24%
4%
SalesDURING SALE DURING FRESH SEASON STOCKDURING DISCOUNT WHEN REQUIRED
On the basis of above respondents the graph shows that maximum
respondents i.e. 60 out of 100 are prefer shopping during fresh season stock.
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It means maximum no of customers did not compromise quality with discount and
offers.
A) RANGE B) PRICE C) SIZE D) FASHION E) BRAND
1st OPTION 30 20 30 8 10
2nd OPTION 22 32 25 10 13
3rd OPTION 20 18 15 14 33
4th OPTION 16 17 19 32 16
5th OPTION 12 13 11 36 28
WHAT INFLUENCES YOUR BUYING SELECTIONS:WHAT INFLUENCES YOUR BUYING SELECTIONS:
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RANGE PRICE SIZE FASHION BRAND0
5
10
15
20
25
30
35
40
Option 1Option 2Option 3Option 4Option 5
On the basis of above respondents the graph shows that maximum respondents
are attracted towards the Store due to this ranking-
FASHION BRAND PRICE RANGE, SIZE
It means maximum no of customers are prefer to the Malls for FASHION
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HOW FREQUENTLY YOU VISIT THE STORE: HOW FREQUENTLY YOU VISIT THE STORE:
a) <1 MONTH [ 60 RESPONDENTS ]
b) 1-3 MONTH [ 28 RESPONDENTS ]
c) 1-6 MONTH [ 4 RESPONDENTS ]
d) 1 YEAR [ 8 RESPONDENTS ]
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60%
28%
4%8%
Respondents< 1 MONTH 1-3 MONTH 1-6 MONTH 1 YEAR
On the basis of above respondents the graph shows that maximum respondents
i.e. 60 out of 100 are visited the store with in one month.
It means maximum no of customers are visiting the store monthly.
WHAT IS AVERAGE MONEY YOU SPEND ON SHOPING? WHAT IS AVERAGE MONEY YOU SPEND ON SHOPING?
a) <=999 [ 20 RESPONDENTS ]
b) 1000-1999 [ 52 RESPONDENTS ]
c) 2000-2999 [16 RESPONDENTS ]
d) >3000 [ 12 RESPONDENTS ]
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20%
52%
16%
12%
Respondents<= 999 1000-1999 2000-2999 >3000
On the basis of above respondents the graph shows that maximum respondents
i.e. 52 out of 100 are spend Rs 1000-1999 on shopping.
It means maximum no of customers prefer middle class shopping.
::HOW DO YOU RATE THE PRICING OF PRODUCT AT MAX?HOW DO YOU RATE THE PRICING OF PRODUCT AT MAX?
a) EXPENSIVE [ 10 RESPONDENTS ]
b) COMPETITIVE [ 16 RESPONDENTS ]
c) AFFORDABLE [ 34 RESPONDENTS ]
d) REASONABLE [ 40 RESPONDENTS ]
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10%
16%
34%
40%
RespondnetsEXPENSIVE COMPETITIVE AFFORDABLE REASONABLE
On the basis of above respondents the graph shows that maximum respondents
i.e. 40 out of 10 are agree that price of products are reasonable.
It means maximum no of customers are agree that price of products are equal to the
other market rate.
HOW DID YOU COME TO KNOW ABOUT MAX?HOW DID YOU COME TO KNOW ABOUT MAX?
a) NEWSPAPER [ 12 RESPONDENTS]
b) RADIO ADVERTISEMENT [ 12 RESPONDENTS]
c) LEAFLET [ 20 RESPONDENTS]
d) SMS [ 6 RESPONDENTS]
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e) WORLD OF MOUTH [ 46 RESPONDENTS]
f) OTHERS [ 4 RESPONDENTS]
12%
12%
20%
6%
46%
4%
RespondentsNEWSPAPER RADIO ADVERTISEMENT LEAFLETSMS WORLD OF MOUTH OTHERS
On the basis of above respondents the graph shows that maximum respondents
i.e. 46 out of 100 are know about max store by reference group.
It means maximum no of customers are know about the max store by other people
reference.
WHAT MORE FACILITY WOULD YOU LIKE TO GET AT MAX?WHAT MORE FACILITY WOULD YOU LIKE TO GET AT MAX? a) MEMBERSHIP CARD [ 16 RESPONDENTS]
b) DISCOUNT MAILERS [ 32 RESPONDENTS]
c) FREE PARKING OFFERS [ 24 RESPONDENTS]
d) LUCKY DRAW OFFER [ 28 RESPONDENTS]
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16%
32%
24%
28%
Respondents
MEMBERSHIP CARDDISCOUNT MAILERSFREE PARKING OFFERSLUCKY DRAW OFFER
On the basis of above respondents the graph shows that maximum respondents
i.e. 32 out of 100 want discount mailers facility.
It means maximum no of customers want every information at their door step.
WHICH CATEGORY OF PRODUCT DO YOU BUY MOST AT MAX?WHICH CATEGORY OF PRODUCT DO YOU BUY MOST AT MAX? a) MEN’S WEAR [ 12 RESPONDENTS ]
b) WOMEN’S WEAR [ 36 RESPONDENTS ]
c) ETHNIC WEAR [ 20 RESPONDENTS ]
d) KIDS WEAR [ 12 RESPONDENTS ]
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e) FOOTWEAR [ 4 RESPONDENTS ]
f) ACCESSORIES [16 RESPONDENTS]
12%
36%
20%
12%
4%
16%
Respondents
MEN'S WEARWOMEN'S WEARETHNIC WEARKIDS WEARFOOT WEARACCESSORIES
On the basis of above respondents the graph shows that maximum respondents
i.e. 36 out of 100 are purchasing maximum from women’s wear.
Customers prefer shopping according to-
WOMEN’S WEAR ETHENIC MEN’S, KID’S WEAR
FOOTWEAR ACCESSORIES
WHEN YOU THINK OF SHOPPING WHICH STORE COMES INWHEN YOU THINK OF SHOPPING WHICH STORE COMES IN
YOUR MIND FIRST-YOUR MIND FIRST-
A) PANTALOONS [ 16 RESPONDENTS ]
B) GLOBUS [ 30 RESPONDENTS ]
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C) MAX [ 44 RESPONDENTS ]
D) WESTSIDE [ 10 RESPONDENTS ]
16%
30%44%
10%
Respondents
PANTALOONSGLOBUSMAXWESTSIDE
On the basis of above respondents the graph shows that maximum respondents
i.e. 44 out of 100 prefer MAX for shopping.
It means max retail targeting to the middle class customers.
AGE WISE DISTRIBUTIONAGE WISE DISTRIBUTION
A) <20 [ 12 RESPONDENTS ]
B) 20-29 [ 45 RESPONDENTS ]
C) 30-39 [25 RESPONDENTS ]
D) >40 [18 RESPONDENTS]ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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12%
45%
25%
18%
Respondents
< 2020-2930-39>40
On the basis of above respondents the graph shows that maximum respondents
i.e. 45 out of 100 are young age people.
It means maximum no of customers belongs to young age group.
GENDER WISE DISTRIBUTIONGENDER WISE DISTRIBUTION
E) MALE [ 58 RESPONDENTS ]
F) FEMALE [ 42 RESPONDENTS ]
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58%
42%
Respondents
MALEFEMALE
On the basis of above respondents the graph shows that maximum respondents
i.e. 58 out of 100 are males.
It means maximum no of customers are male in malls due to family responsibility.
NO. OF FAMILY MEMBER WISE DISTRIBUTIONNO. OF FAMILY MEMBER WISE DISTRIBUTION
A) <=2 [ 08 RESPONDENTS ]
B) 3-4 [ 54 RESPONDENTS ]
C) >4 [ 38 RESPONDENTS ]
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8%
54%
38%
Respondents
<=23 to 4>4
On the basis of above respondents the graph shows that maximum respondents
i.e. 54 out of 100 having 3-4 members in their family.
It means maximum no of customers having nucleur family.
EDUCATION WISE DISTRIBUTIONEDUCATION WISE DISTRIBUTION
A) HIGH SCHOOL [ 08 RESPONDENTS]
B) LESS THAN GRADUATION [ 12 RESPONDENTS ]
B) GRADUATION [ 32 RESPONDENTS ]
C) POST GRADUATION [ 32 RESPONDENTS ]ABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOWABHISHEK PANDEY, SHRI RAMSWAROOP COLLEGE OF ENGG & MGMT, LUCKNOW
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D) PROFESIONAL QUALIFICATION [ 16 RESPONDENTS ]
8%
12%
32%
32%
16%
Respondents
HIGH SCHOOLLESS THAN GRADUATIONGRADUATIONPOST GRADUATIONPROFESSIONAL QUALIFICATON
On the basis of above respondents the graph shows that maximum respondents
i.e. 32 out of 100 are graduates and 32 out of 100 are post graduate.
It means maximum no of customers are educated and aware about retail store.
OCCUPATION WISE DISTRIBUTIONOCCUPATION WISE DISTRIBUTION
A) STUDENT [ 33 RESPONDENTS ]
B) GOV. SERVICE [ 8 RESPONDENTS ]
C) PVT. EMPLOYEE [ 40 RESPONDENTS ]
D) SELF EMPLOYEE [ 12 RESPONDENTS ]
E) HOUSE WIFE [ 07 RESPONDENTS]
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33%
8%40%
12% 7%
Respondents
STUDENTSGOV. SERVICEPVT. EMPLOYEESELF EMPLOYEEHOUSE WIFE
On the basis of above respondents the graph shows that maximum respondents
i.e. 40 out of 100 are Pvt. Employee.
It means maximum no of customers are self dependent.
INCOME WISE DISTRIBUTIONINCOME WISE DISTRIBUTION
A) LESS THAN Rs 20,000 [ 28 RESPONDENTS ]
B) BETWEEN Rs 30,000 TO 40,000 [ 48 RESPONDENTS ]
C) BETWEEN Rs 40,001 TO 50,000 [ 20 RESPONDENTS ]
D) MORE THAN Rs 50,000 [ 12 RESPONDENTS ]
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Respndents
LESS THAN Rs. 20,000BETWEEN Rs. 30,000 T0 40,000BETWEEN Rs. 40,000 TO 50,000MORE THAN Rs. 50,000
On the basis of above respondents the graph shows that maximum respondents
i.e. 48 out of 100 are having monthly income between Rs 30,000 to 40,000.
It means maximum no of customers are belonging to upper middle class.
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1. Maximum no of middle class customers come to max for shopping.
2. Max retail targeting to the middle class customers.
3. Maximum no of customers belongs to young age group.
4. Maximum no of customers are male in malls due to family responsibility.
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5. It means maximum no of customers having nucleur family.
6. Maximum no of customers are educated and aware about retail store.
7. Maximum no of customers are self dependent.
8. Maximum no of customers are belonging to upper middle class.
9. Maximum no of customer are preferred Shopping Malls for purchasing.
10. Maximum no of customers are family conscious for visiting retail store.
11. Maximum no of customers are time conscious and desire for many brand under
one roof.
12. Maximum no of customers do not compromise with their choice.
13. Maximum no of customers are price conscious so maximum customers belongs to
middle class.
14. Maximum no of customers did not compromise quality with discount and offers.
15. Maximum respondents are attracted towards the Store due to this ranking-
FASHION BRAND PRICE RANGE, SIZE
16. Maximum no of customers are visiting the store monthly.
17. Maximum no of customers prefer middle class shopping.
18. Maximum no of customers are agree that price of products are equal to the other
market rate.
19. Maximum no of customers are know about the max store by
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20. Most of the customers know about the MAX retail through other people
reference.
LIMITATIONSLIMITATIONS
Every report has its pros and cons so mine also have some limitations.
They can be pointed as:
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1) Conclusions are for Lucknow City only.
2) Use of secondary data for analysis.
3) Only Zee Mall was present for collection of data so it was tough to collect
more respondent.
4) Respondents were not keen to give the answers of questionnaire.
CONCLUSIONCONCLUSION
The past 4-5 years have seen increasing activity in retailing. And, various business
houses have already planned for few investments in the coming 2-3 years. And
though the retailers will have to face increasingly demanding customers, and
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intensely competitive rivals, more investments will keep flow in. And the share of
organized sector will grow rapidly. retailing in India is surely poised for a takeoff
and will provide many opportunities both to existing players as well as new
entrants.. The country is witnessing a period of boom in retail trade, mainly on
account of a gradual increase in the disposable incomes of the middle and upper-
middle class households. More and more corporate houses including large real
estate companies are coming into the retail business, directly or indirectly, in the
form of mall and shopping center builders and managers. New formats like super
markets and large discount and department stores have started influencing the
traditional looks of bookstores, furnishing stores and chemist shops. The retail
revolution, apart from bringing in sweeping, positive changes in the quality of life in
the metros and bigger towns, is also bringing in slow changes in lifestyle in the
smaller towns of India. Increase in literacy, exposure to media, greater availability
and penetration of a variety of consumer goods into the interiors of the country,
have all resulted in narrowing down the spending differences between the
consumers of larger metros and those of smaller towns.
Lastly I want to conclude my project in some points-
The customers are attracting towards shopping malls & retail outlets.
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The shopping malls & retail outlets are targeting to middle class customers
because the purchasing power of this class are rapidly growing as well as
the class is also growing.
The young generation is fashion & show-off conscious so retail outlets are
mainly focused on them.
Most of the family wants to purchase from big showrooms and malls
because there are no bargaining system so the have a trust that there is no
cheating.
The main strength of most of the retail outlets are providing attractive offers
to attract customers.
Big retail stores are running customer loyalty programmes which has
increased profits and no. of customers.
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RECOMMENDATIONSRECOMMENDATIONS
My recommendations on the basis of the are:
Grant industry status to retail
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Retail stores should use an area that is easily approachable.
Invest in supply chain infrastructure
Ease distribution – infrastructure creation
It should take steps to convert the footfall in the Retail Stores into sales by offering,
“Catchy & Intelligent schemes”.
The attitude of sales force must be helping & communication in formal way.
Proper signage’s should be used in retail store
Exchange Policies of retail store should be properly communicated to customers
during Sale.
Men’s Accessories like Sunglasses and Bracelets can be add up in Accessories
section.
To solve the problem of alteration on Sunday, Company can provide the home
delivery of Altered merchandise.
Sizes of the merchandising should be standard.
Sizes of merchandising should be easily visible or one rack can be made for each
size of different style.
BibliographyBibliography
BOOKS:-
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Marketing Management. ----Kotler & Keller
Marketing Management in Indian Perspective
----V. S. Ramaswamy & S. Namakumari
Research methodology ---C.R. Kothari
Quantitative Methods ---B. M. Aggarwal.
Retail management ---Levy & Weitzs
MAGZINES:-
Business worlds
Indian retail
Economics of India
India today
WEBSITES:-
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www.goggle.com
www.tataretail.com
www.retailindia.net
www.retailyatra.com
www.retailbiz.com
www.aboutus.com
www.businessworld.in
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GENERAL QUESTIONNAIR
NAME:-………………… DATE:-……/……/2008 PLACE:-……………….
1) Which type of place do you visit frequently for your shopping needs?a) Shopping mall b) Upstreet market
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c) Local markets
2) You prefer to go in Store with –a) Family b) Spousec) Friends d) Others
3) What influences your buying selections? a) Availability of range b) Reasonable pricec) Availability of size d) Fashion appeale) Customer service f) Brand name
4) From where would you prefer to buy products?a) Single brand store b) Multi brand storec) Factory outlets d) Local Big Retail Store
5) How often do you ask for assistance from store staff in selecting your purchase?a) Almost always b) Frequentlyc) Sometimes d) Never
6) What do you look for in a product during your purchase?a) Fashion b) Comfort c) Price d) Colors Available
7) When do you prefer to shop Most in Store?a) During Sale b) During Fresh season stockc) During Discount d) When required
8) How frequently you visit the Store?a) <1 month b) 1-3 monthc) 1-6 month d) 1 year
9) What is average money you spend on Shopping?a) <= 999/- b) 1000-1999c) 2000-2999 d) >3000
(If not customer of Max leave question 10-13).
10) How do you rate the pricing of product at Max?a) Expensive b) Competitivec) Affordable d) Reasonable
11) How did you come to know about Max?a) Newspaper b) Radio advertisementc) Leaflet d) SMSe) Word of Mouth f) others specify………
12) What more facility would you like to get at Max?a) Membership Card b) Discount Mailers
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c) Free Parking offers d) Lucky draw offer
13) Which Category of Product do you buy most at Max ?a) Men’s wear b) Women’s wear c) Ethnic weard) Kids wear e) Foot wear f) Accessories
14) When you think of Shopping which Store comes in your mind first-a) Pantaloons b) Globusc) MAX d) Westside
15) Any suggestion …………………………………………………………..………………………………………………………………………………...………………………………………………………………………………...………………………………………………………………………………...
Age group <20 20-24 25-29 30-34 35-39 >40Gender Male FemaleNo of FamilyFamilyMembers
<=2 3-4 >4
Qualification
HighSchool
DiplomaOr pre-graduate
Graduate Post-graduate
Professional course
Occupation Student
Gov.Service
Pvt.Employee
Self Employed
House wife Retired
Location Gomtinagar
Mahanagar
Aliganj Hazratganj
Indiranagar
Niralanagar
other
Household Income(per month)
Less Than20,000
30,000-40,000
40,001-50,000
More then50,000
THANK YOU
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