Project on Operations at Retail Industry

Description
“Retailing includes all activities involved in selling goods or services directly to final consumers for personal, non-business use.

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A PROJECT REPORT
“STUDY OF OPERATIONS AT RETAIL
INDUSTRY”
In partial fulfillment for the awar of the e!ree
Of
POST GRADUATE DIPLOMA IN BUSINESS
ADMINISTRATION
Submitted by
PANKAJ KUMAR TYAGI
Registration No. : !!"!#$$$
SYMBIOSIS CENTRE %OR DISTANCE LEARNING
PUNE
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A&'no()e*ge+ent
A task or project cannot be completed alone. It requires the effort of many
individuals. I take this opportunity to thank all those who helped me
complete this project.
I express my sincere gratitude to Pro,. Go-ar*.an Ja/ant.i for giving us
the opportunity to undergo this project. I further thank his for lending a
helping hand when it came to solving my problems related to the project.
This project would not have been possible without his valuable time and
support.
I also thank SYMOBSIS for an opportunity to undertake a Soft skills project
at the start of our !"#A course which helped us to understand deeply for
those topics which are untouched.
This project is an attempt to talk about the Scenario of $etailing and its
%perations in India.
Any suggestions to improve are always welcome.
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TABLE O% CONTENT
Acknowledgement
&xecutive Summary
%bjective
$esearch 'ethdology
C0APTER 1 $ : INTRODUCTION
C0APTER 1 : 20AT IS RETAIL
!lobal Senario
Senario of $etailing of India
'ajor layer
C0APTER 1 3 : OPERATION O% RETAIL %ORMATS
Trends in resent $etail 'arket
Technology in $etail 'arket
C0APTER 1 4 : OPERATION SUPPPORT SYSTEM
(uture Trends
C0APTER 1 5 : S2OT ANALYSIS
C0APTER 1 6 : RESEARC0 MET0DOLOGY
)hange in $etailing
CONCLUSION
BIBLIOGRAP0Y
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E7e&8ti-e S8++ar/
"emographics continue to show a positive report to spur retailing growth.
)onsumers aged *+,-. years is emerging as the fastest growing consumer
group and the mean age of Indians is now pegged at */0 a mean age that
reinforces spending across all the retailing channels of grocery0 non,grocery and
non,store.
The government stance of protecting local retailers and prohibiting 1++2
foreign direct investment in retailing continued in *++.0 restraining
international retailers3 entry. 4owever0 there was gradual economic reform0
giving way to easier and faster franchising agreements as well as the loosening
of 5onal regulations on retail expansion0 thus stimulating retailing.
6on,store retailing is expected to continue its fast,paced growth from a
miniscule base. Across all channels0 growth in retailing is expected to be
boosted heightened competition during the forecast period due to the growing.
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OBJECTI9E O% T0E STUDY
The present study was undertaken with the main objective of examining the current practices of
Supply )hain 'anagement followed in Pro&ess O:eration In*8str/ and comparing them with
the best practices.
The other objectives are7
• To study the degree of %peration
• To identify the status of Information Technology implementation in these )ompanies
&ffective supply,chain management is a powerful tool for business transformation
• it can dramatically increase a company8s profitability while simultaneously improving
customer service.
• 9hile today3s competitive environments are forcing businesses in this direction0 the steps
to take are often not evident.
• roblems of %peration management can be complex0 and their solution requires special
knowledge and experience.
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MET0DOLOGY
MANAGEMENT %UNCTION:
'anagement is creative problem solving. This creative problem solving is accomplished
through four functions of management
? lanning
? %rgani5ing
? Staffing
? "irecting
? )ontrolling
The intended result is the use of an organi5ation3s resources in a way that accomplishes
its mission and objectives.
P)anning is the ongoing process of developing the business3 mission and objectives and
determining how they will be accomplished. lanning includes both the broadest view of
the organi5ation0 e.g.0 its mission0 and the narrowest0 e.g.0 a tactic for accomplishing a
specific goal.
Organi;ing is establishing the internal organi5ational structure of the organi5ation. The
focus is on division0 coordination0 and control of tasks and the flow of information within
the organi5ation. It is in this function that managers distribute authority to job holders.
Sta,,ing is filling and keeping filled with qualified people all positions in the business.
$ecruiting0 hiring0 training0 evaluating and compensating are the specific activities
included in the function. In the family business0 staffing includes all paid and unpaid
positions held by family members including the ownerperators.
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C0APTER < $
INTRODUCTION
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India8s retail market which is seen as T4& !%;"'I6& by global players has grabbed
attention of the most developed nations. This is no wonder to the one who knows that the
total Indian retail market is <S =>.+bn. ?1@0 ++0+++ crore I6$ approx.A of which
organi5ed retailing is only around > percent i.e. <S =Bbn ?>@0+++ crore I6$ approxA.
C$etailing includes all activities involved in selling goods or services directly to final
consumers for personal0 non,business use. A retailer or retail store is any business
enterprise whose sales volume comes primarily from retailing.D $etail is India3s largest
industry0 accounting for over 1+ per cent of the country3s !" and around eight per cent
of the employment. $etail industry in India is at the crossroads. It has emerged as one of
the most dynamic and fast paced industries with several players entering the market.
The presence of 1.million kirana stores brings into light the very fact that the Indian
retail industry is highly fragmented: unorgani5ed. $etailing in India is gradually inching
its way toward becoming the next boom industry0 organi5ed retailing in particular. The
whole concept of shopping has altered in terms of format and consumer buying behavior0
ushering in a revolution in shopping in India. 'odern retail has entered India as seen in
sprawling shopping centers0 multi,storeyed malls and huge complexes offer shopping0
entertainment and food all under one roof.
The future of Indian retailing may even witness the concept of *- hour retailing. &ven
though this concept has been in existence in few retail segments like pharmaceuticals and
fuel0 it still remains to be a challenge for other segments like food and groceries0 apparel
etc to adopt this trend.
Although the organi5ed retailing in India is coming up in a big way0 it cannot simply
ignore the competition from the conventional stores because of various factors like reach0
extending credit facility and other intangible factors like the human touch which are
provided only by the conventional stores.
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The urban retail market has been embracing various new formats and the malls turned out
to be the trend setters by promising the concept of shoppertainment. The trends in the
rural market also have been changing from the old 4aats and 'elas to the rural malls like
E)haupal Sagar8 launched by IT)0 ")' Shriram !roups one,stop shopping destination
called E4ariyali #a5aar80 !odrej groups agri store EAdhar8 etc.
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Intro*8&tion to O:eration Manage+ent
%perations management is an area of business that is concerned with the production of
good quality goods and services0 and involves the responsibility of ensuring that business
operations are efficient and effective. It is the management of resources0 the distribution
of goods and services to customers.
AI)S The Association for %perations 'anagement also defines operations management
as Fthe field of study that focuses on the effectively planning0 scheduling0 use0 and control
of a manufacturing or service organi5ation through the study of concepts from design
engineering0 industrial engineering0 management information systems0 quality
management0 production management0 inventory management0 accounting0 and other
functions as they affect the organi5ationF.
Additionally0 The %perations 'anagement #ody of Gnowledge ?%'#%GA (ramework
defines the scope of operations management and the activities and techniques that are a
part of the operations management profession.
%perations also refer to the production of goods and services0 the set of value,added
activities that transform inputs into many outputs. (undamentally0 these value,adding
creative activities should be aligned with market opportunity for optimal enterprise
performance.
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O:erations as a Trans,or+ation Pro&ess
Inputs Transformation %utput ? ?
%perations management is about the way organi5ations produce goods and services.
&verything you wear0 eat0 sit on0 use0 read or knock about on the sports field comes to
you courtesy of the operations managers who organi5ed its production. &very book you
borrow from the library0 every treatment you receive at the hospital0 every service you
expect in the shops and every lecture you attend at university all have been produced.
This definition reflects the essential nature of %perations 'anagementH it is a central
activity in organi5ing things. Another way of looking at an operation is to consider it as a
transformation process.
%perations are a transformation processH they convert a set of resources ?I6<TSA into
services and goods ?%<T<TSA. These resources may be raw materials0 information0 or
the customer itself. These resources are transformed into the final goods or services by
way of other 3transforming3 resources , the facilities and staff of the operation.
? Ra( Materia)s
An obvious example is a cabinet maker0 who takes some wood0 cuts and planes it0
and then polishes it until a piece of furniture is produced.
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? In,or+ation
A tourist office gathers and provides information to holiday makers0 and assists in
advising on places to stay or visit.
? C8sto+ers
At an airport0 you are one of the many resources being processed. The operation
you are involved in is about processing your ticket and baggage0 moving from
ticket desk through the customs and duty,free areas0 to deliver you to the awaiting
plane.
E7ten*ing t.e :ro&ess...
If we add a few more parts to the transformation process0 we can see the key elements
that operations managers need to consider. %perations is about designing services0
products and delivery systemsH
1. 'anaging and controlling the operations system.
*. (inding ways to improve operations.
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O:erations Manage+ent is a)) a=o8t :ro-i*ing &8sto+ers (it. :ro*8&ts an*
ser-i&es.
Iou survive by giving customers with what they want
? &very roduct or Service is really a bundle of different attributes.
? roduct0 place0 price0 performance0 quality0 timing0 service0 etc.
? )ustomers are looking for a bundle of characteristics
? Total bundle provides the level of value customers deem appropriate
? #uying products with the attributes they want at the lowest price possible
• Attributes
• rice
• Juality
• Image
• erformance
• Safety
• lace K distribution
• Time K delivery0 availability
? 4ow do you decide which product to produceL
? 4ow do you find out what attributes your product should haveL
? 4ow do you get those attributes into your productL
• 9hat processL
• 9hat resources do you needL
• 9here do you get those resourcesL
E7a+es o, O:erations De&isions
%perations managers must make decisions on three levels
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? Strategic
? Tactical
? %perating
STRATEGIC DECISIONS:
? ;onger term decisions
? <sually made at the senior management level
? roduct and service strategy
? )ompetitive priorities
? ositioning strategy
? ;ocation0 capacity
? ;ong term partnerships
? Juality system and overall approach to quality
TACTICAL DECISIONS
? 'edium term decisions
? Tactical in nature
? 'ade by middle and senior managers
? rocess design
? Technology management
? Mob design and workforce management
? )apacity management
? (acility location
? (acility layout
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OPERATING DECISIONS
? Shorter term decisions
? 'ade at middle and lower management levels
? (orecasting
? 'aterials management
? Inventory management
? Aggregate planning
? 'aster production scheduling
? roduction control
? Scheduling
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C0APTER <
20AT IS RETAIL>
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The word 3retail3 is derived from the (rench word 3retaillier3 meaning 3to cut a piece off3 or
3to break bulk3. In simple terms it involves activities whereby product or services are sold
to final consumers in small quantities. Although retailing in its various formats has been
around our country for many decades0 it has been confined for along time to family
owned corner shops.
&nglishmen are great soccer enthusiasts0 and they strongly think that one should never
give Indians a corner. It stems from the belief that0 if you give an Indian a corner he
would end up setting a shop. That is how great Indians retail management skill is
considered.
T.e %a&ts
$etailing in more developed countries is big business and better organi5ed that what it is
in India. $eport published by 'cGinsey N )o. in partnership with )onfederation of
Indian Industry ?)IIA states that the global retail business is worth a staggering <S = /
trillion. The ratio of organi5ed retailing to unorgani5ed in <S is around B+ to *+0 in
&urope it is /+ to >+0 while in Asia it comes to around *+ to B+.
In India the scenario is quiet unique0 organi5ed retailing accounts for a mere .2 of the
total retail sector. Although there are around . million retail stores in India0 O+2 of these
have a floor space area of .++ sq.ft. or less. The emergence of organised retailing in India
is a recent phenomenon and is concentrated in the top *+ urban towns and cities.
T.e Reason
This emergence of organi5ed retailing has been due to the demographic and
psychographic changes taking place in the life of urban consumers.
!rowing number of nuclear families0 working women0 greater work pressure0 changing
values and ;ifestyles0 increased commuting time0 influence of western way of life etc.
have meant that the needs and wants of consumers have shifted from just being )ost and
$elationship drive to #rand and &xperience driven0 while the Palue element still
dominating the buying decisions.
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G)o=a) S&enario
$etail stores constitute *+2 of <S !" N are the >
rd
largest employer segment in <SA.
)hina on the other hand has attracted several global retailers in recent times. $etail sector
employs /2 of the population in )hina. 'ajor retailers like 9al,'art N )arrefour have
already entered the )hinese market. In the year *++>0 9al,'art N )arrefour had sales of
<S = /+.- )rore N <S = 1@+ )rore respectively.
The global retail industry has traveled a long way from a small beginning to an industry
where the world wide retail sales is valued at = / x 1+
.
)rore. The top *++ retailers alone
accounts for >+ 2 of the worldwide demand. $etail turnover in the &< is approximately
&uros *0++0+++ )rore and the sector average growth is showing an upward pattern. The
Asian economies ?excluding MapanA are expected to grow at @2 consistently till *++.,+@.
%n the global $etail stage0 little has remained same over the last decade. %ne of the few
similarities with today is that 9al,'art was ranked the top retailer in the world then N it
still holds that distinction. %ther than 9al,'art3s dominance0 there3s a little about today3s
environment that looks like the mid,1OO+s. The global economy has changed0 consumer
demand has shifted N retailers3 operating systems today are infused with far more
technology than was the case six years ago.
S&enario o, Retai)ing in In*ia
$etailing is the most active and attractive sector of last decade. 9hile the retailing
industry itself has been present since ages in our country0 it is only the recent past that it
has witnessed so much dynamism. The emergence of retailing in India has more to do
with the increased purchasing power of buyers0 especially post,liberali5ation0 increase in
product variety0 and increase in economies of scale0 with the aid of modern supply and
distributions solution.
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Indian retailing today is at an interesting crossroads. The retail sales are at the highest
point in history and new technologies are improving retail productivity. though there are
many opportunities to start a new retail business0 retailers are facing numerous
challenges.
KEY C0ALLENGES:
1A ;%)ATI%67
?Rig.t P)a&e@ Rig.t &.oi&e?
;ocation is the most important ingredient for any business that relies on customers0 and is
typically the prime consideration in a customer8s store choice. ;ocations decisions are
harder to change because retailers have to either make sustainable investments to buy and
develop real estate or commit to long term lease with developers. 9hen formulating
decision about where to locate0 the retailer must refer to the strategic plan7
Q Investigate alternative trading areas.
Q "etermine the type of desirable store location
Q &valuate alternative specific store sites
*A '&$)4A6"IS&7
The primary goal of the most retailers is to sell the right kind of merchandise and nothing
is more central to the strategic thrust of the retailing firm. 'erchandising consists of
activities involved in acquiring particular goods and services and making them available
at a place0 time and quantity that enable the retailer to reach its goals. 'erchandising is
perhaps0 the most important function for any retail organi5ation0 as it decides what finally
goes on shelf of the store.
>A $I)I6!7
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ricing is a crucial strategic variable due to its direct relationship with a firm3s goal and
its interaction with other retailing elements. The importance of pricing decisions is
growing because today3s customers are looking for good value when they buy
merchandise and services. rice is the easiest and quickest variable to change.
-A TA$!&T A<"I&6)&7
F)onsumer the prime moverF
F)onsumer ullF0 however0 seems to be the most important driving factor behind the
sustenance of the industry. The purchasing power of the customers has increased to a
great extent0 with the influencing the retail industry to a great extent0 a variety of other
factors also seem to fuel the retailing boom.
.A S)A;& %( %&$ATI%6S7
Scale of operations includes all the supply chain activities0 which are carried out in the
business. It is one of the challenges that the Indian retailers are facing. The cost of
business operations is very high in India.
PRESENT INDIAN SCENARIO
Q <norgani5ed market7 $s. .B>0+++ crores
Q %rgani5ed market7 $s..0 +++ crores
Q .R growth in organi5ed retailing between *+++,*++.
Q %ver -0+++ new modern %utlets in the last > years
Q %ver .0+++0+++ sq. ft. of mall space under development
Q The top > modern retailers control over /.+0+++ sq. ft. of retail space
Q %ver -++0+++ shoppers walk through their doors every week
Q !rowth in organi5ed retailing on par with expectations and projections of the last .
Iears7 on course to touch $s. >.0+++ crores ?<S= / #illionA or more by *++.,+@
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MaAor a/ers
, (ood and grocery
, (ashion
, %thers
, (ood world
, Shoppers3 Stop
, Pivek3s
, Subhiksha
, 9estside
, lanet '
, 6ilgris
, ;ifestyle
, 'usic 9orld
, Adani, $ajiv3s
, yramid
, )rossword
, 6irma,$adhey
, !lobus
, ;ife spring
;et us look at the evolution process7
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"etailing reasons why Indian organi5ed retail is at the brink of revolution0 the I'A!&S,
GSA report says that the last few years have seen rapid transformation in many areas and
the setting of scalable and profitable retail models across categories. Indian consumers
are rapidly evolving and accepting modern formats overwhelmingly. $etail Space is no
more a constraint for growth. India is on the radar of !lobal $etailers and suppliers :
brands worldwide are willing to partner with retailers here. (urther0 large Indian
corporate groups like Tata0 $eliance0 $aheja0 IT)0 #ombay "yeing0 'urugappa N
iramal !roups etc and also foreign investors and private equity players are firming up
plans to identify investment opportunities in the Indian retail sector. The quantum of
investments is likely to skyrocket as the inherent attractiveness of the segment lures more
and more investors to earn large profits. Investments into the sector are estimated at
I6$ *+++ , *.++ )rore in the next *,> years0 and over I6$ *+0+++ )rore by end of *+1+.
(ew of India3s top retailers are7
1. Big Ba;aar<Panta)oons: #ig #a5aar0 a division of antaloon $etail ?IndiaA ;td is
already India3s biggest retailer. In the year *++>,+-0 it had revenue of $s @.B.>1 crores N
by *+1+H it is targeting revenue of $s B0B++ )rore.
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. %oo* 2or)*: (ood 9orld in India is an alliance between the $! group in India with
"airy (arm International of the Mardine 'atheson !roup.
3. Trinet.ra : It is a supermarket chain that has predominant presence in the southern
state of Andhra radesh. Their turnover was $s /B.B )rore for the year *++*,+>.
4. A:na Ba;aar: It is a $s 1-+,crore consumer co,operative society with a customer base
of over 1* lakh0 plans to cater to an upwardly mobile urban population.
5. Margin %ree: It is a Gerala based discount store0 which is uniformly spread across *-+
'argin (ree franchisees in Gerala0 Tamil 6adu and Garnataka.
9holesale trading is another area0 which has potential for rapid growth. !erman giant
'etro A! and South African Shoprite 4oldings have already made headway in this
segment by setting up stores selling merchandise on a wholesale basis in #angalore and
'umbai respectively. These new,format cash,and,carry stores attract large volumes from
a si5eable number of retailers who do not have to maintain relationships with multiple
suppliers for all their needs.
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INDIAN RETAIL IS MO9ING INTO SECOND GEAR
$B %IRST GEAR:
?)reate awarenessA
Q 6ew retailers driving awareness
Q 4igh degree of fragmentation
Q $eal estate groups starting retail chains
Q )onsumer expecting 3value for money3 as core value
B SECOND GEAR:
?'eet customer expectationsA
Q )onsumer,driven
Q &mergence of pure retailers
Q $etailers getting multi,locational and multi,format
Q !lobal retailers evincing interest in India
3B T0IRD GEAR:
?#ack end managementA
Q )ategory management
Q Pendor partnership
Q Stock turns
Q )hannel synchroni5ation
Q )onsumer acquisition
Q )ustomer relation3s management
4B %OURT0 GEAR:
?)onsolidationA
Q Aggressive rollout
Q %rgani5ed retail acquitting significant share
Q #eginning of cross,border movement
Q 'ergers and acquisitions
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C0APTER < 3
OPERATION O% RETAIL %ORMATS:
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0/:er+ar'et7 It is the largest format in Indian retail so far is a one stop shop for the
modern Indian shopper.
? 'erchandise7 food grocery to clothing to spots goods to books to stationery.
? Space occupied7 .++++ Sq .ft. and above.
? SG<s7 *++++,>++++.
? &xample7 antaloon retail8s #ig #a5aar0 $!8s Spencers ?!iantA.
S8:er+ar'et7 A subdued version of a hypermarket.
? 'erchandise7 Almost similar to that of a hypermarket but in relatively smaller
proposition.
? Space occupied7 .+++ Sq. ft. or more.
? SG<s7 Around 1++++.
? &xample7 6ilgiris0 Apna #a5aar0 Trinethra.
Con-enien&e store7 A subdued version of a supermarket.
? 'erchandise7 !roceries are predominantly sold.
? Space occupied7 Around .++ Sq. ft. to >+++ Sq. ft.
? &xample7 stores located at the corners of the streets0 $eliance $etail8s (resh and
Select.
2
De:art+ent store7 A retail establishment which speciali5es in selling a wide range of
products without a single prominent merchandise line and is usually a part of a retail
chain.
? 'erchandise7 Apparel0 household accessories0 cosmetics0 gifts etc.
? Space occupied7 Around 1++++ Sq. ft. K >++++ Sq. ft.
? &xample7 ;andmark !roup8s ;ifeStyle0 Trent India ;td.8s 9estside.
Dis&o8nt store7 Standard merchandise sold at lower prices with lower margins and
higher volumes.
? 'erchandise7 A variety of perishable: non perishable goods.
? &xample7 Piswapriya !roup8s Subiksha0 iramal8s Tru'art.
S:e&ia)t/ store7 It consists of a narrow product line with deep assortment.
? 'erchandise7 "epends on the stores
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? &xample7 #ata store deals only with footwear0 $!8s 'usic 9orld0 )rossword.
MBOCs7 'ulti #rand outlets0 also known as )ategory Gillers. These usually do well in
busy market places and 'etros.
? 'erchandise7 %ffers several brads across a single product category.
Kirana stores: The smallest retail formats which are the highest in number ?1. million
approx.A in India.
? 'erchandise7 'ostly food and groceries.
? Space occupied7 .+ sq ft and even smaller ones exist.
Ma))s: The largest form of organi5ed retailing today. ;ocated mainly in metro cities0 in
proximity to urban outskirts.
? 'erchandise7 They lend an ideal shopping experience with an amalgamation of
product0 service and entertainment0 all under a common roof.
? Space occupied7 $anges from @+0+++ sq ft to /0 ++0+++ sq ft.
? &xample7 antaloon $etail8s )entral0 'umbai8s Iorbit.
The percentage of organi5ed retail per sector wise is very miniscule and this does not
mean that there is stagnation of growth because if we look at the following table we can
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clearly observe the burgeoning pace of growth happening in all the sectors of Indian
retailing.
The organi5ed retail industry is growing at *., >+ percentage and is expected to
reach the mark of 10 ++0+++ crore I6$ by *+1+ from the present figure of >.0+++ crore
I6$ approx. 9ith such a mouth watering figures the organi5ed retailing has been
attracting many players and even persuading the existing retailers to expand and
experiment with newer formats. This can also be substantiated by looking the estimation
of the organi5ed retail space to be around /* million sq ft. by the end of *++/. The
present players and their retail formats details are presented below7
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Tren*s in Present Retai) Mar'et:
Ne( Pro*8&t Categories:
(or a long time0 the corner grocery store was the only choice available to the
consumer0 especially in the urban areas. This is slowly giving way to international
formats of retailing. The traditional food and grocery segment has seen the emergence of
supermarkets:grocery chains ?(ood 9orld0 6ilgiris0 Apna #a5aarA0 convenience stores
?)onveni%0 4 SpeedmartA and fast,food chains ?'c"onalds0 "ominosA.
It is the non,food segment0 however that foray has been made into a variety of
new sectors. These include lifestyle:fashion segments ?Shoppers3 Stop0 !lobus0 ;ifeStyle0
9estsideA0 apparel:accessories ?antaloon0 ;evis0 $eebokA0 books:music:gifts ?Archies0
'usic9orld0 )rosswords0 ;andmarkA0 appliances and consumer durables ?Piveks0
Mainsons0 Pasant N )o.A0 drugs and pharmacy ?4ealth and !low0 ApolloA.
In&reasing &o+:etition in t.e retai) +ar'et:
6ew entrants such as $eliance0 #harti &nterprises and the AP #irla group will
compete against well,established retailers0 such as antaloon $etail0 Shoppers8 stop0
Trent0 Spencer8s and ;ifestyle stores. (oreign retailers are keenly evaluating the Indian
market and identifying partners to forge an alliance with in areas currently permitted by
regulations. 9ith an estimated initial investment of <S" /.+ million0 $eliance is
planning to launch a nationwide chain of hypermarts0 supermarkets0 discount stores0
department stores0 convenience stores and speciality stores. These .0.++ stores will be
located in B++ cities and towns in India.
In&rease in Pri-ate La=e)s:
9ith the emergence of organi5ed retail and modern retail formats0 private labels
have been gaining significance. They enhance the profitability levels of product
categories0 increase retailers8 negotiation powers and create consumer loyalty. 'ore
retailers are introducing their own brands in all categories including (ood N !roceries0
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apparel0 accessories0 footwear. These own brands also do not have to manage
intermediaries since retailers maintain oversight of the supply chain.
The label penetration is in a huge rise. rivate ;abel penetration has been on a
rise. It is mainly growing among (')! products in most supermarkets with groceries
accounting for -..O2
E7:an*ing to Tier II an* III &ities:
Indian retailers are planning to extend operations into Tier II and Tier III cities as
heightened IT offshoring activity in these locations have increased consumers8 disposable
income. The population in these cities is typically well educated and willing to purchase
goods and services. Some major retailers0 like !lobus0 $eliance $etail and antaloon0
have already begun building a retail presence in Tier III cities before many retailers have
finali5ed their Tier II retail operations.
%ora/ into Retai) Agri<B8siness:
India8s most prestigious business houses and global retailers are planning to enter
retail agri,business. 'arket entrants plan to invest in the entire value chain0 moving
goods Cfrom the farm to the fridge at home.D Piewed as India8s next CSunrise Sector0D
retailers are employing contract farming as a means of boosting their ventures. )ontract
farming enables farmers to access land0 manpower and farming skill without having to
purchase land. %f the total )ultivable land of -++ million acres in India0 contract farming
represents / million acres thus indicating a tremendous opportunity. (or pure corporate
contracts between farmers and companies0 only *0++0+++ acres are used.
E7:eri+enting (it. ,or+ats:
Selecting the right retail format is essential in modern retailing. The difference
between urban and rural customers is one of the reasons why multiple formats are
required in India. ;ocal conditions and insights into buying,behaviour shape the format
choice. 6o single format will be suitable for an all India strategy and selecting the
relevant format is the key success factor.
2
Te&.no)og/ in Retai):
%ver the years as the consumer demand increased and the retailers geared up to meet this
increase0 technology evolved rapidly to support this growth. The hardware and software
tools that have now become almost essential for retailing can be into * broad categories.
C8sto+er Inter,a&ing S/ste+s:
Bar Co*ing an* S&anners
oint of sale systems use scanners and bar coding to identify an item0 use pre,stored data
to calculate the cost and generate the total bill for a client. Tunnel Scanning is a new
concept where the consumer pushes the full shopping cart through an electronic gate to
the point of sale. In a matter of seconds0 the items in the cart are hit with laser beams and
scanned. All that the consumer has to do is to pay for the goods.
Pa/+ent
ayment through credit cards has become quite widespread and this enables a fast and
easy payment process. &lectronic cheque conversion0 a recent development in this area0
processes a cheque electronically by transmitting transaction information to the retailer
and consumer3s bank. $ather than manually process a cheque0 the retailer voids it and
hands it back to the consumer along with a receipt0 having digitally captured and stored
the image of the cheque0 which makes the process very fast.
Internet
Internet is also rapidly evolving as a customer interface0 removing the need of a
consumer physically visiting the store.
2
C0APTER < 4
OPERATION SUPPORT SYSTEMS
2
ERP S/ste+
Parious &$ vendors have developed retail,specific systems which help in integrating all
the functions from warehousing to distribution0 front and back office store systems and
merchandising. An integrated supply chain helps the retailer in maintaining his stocks0
getting his supplies on time0 preventing stock,outs and thus reducing his costs0 while
servicing the customer better.
CRM S/ste+s
The rise of loyalty programs0 mail order and the Internet has provided retailers with real
access to consumer data. "ata warehousing N mining technologies offers retailers the
tools they need to make sense of their consumer data and apply it to business. This0 along
with the various available )$' ?)ustomer $elationship 'anagementA Systems0 allows
the retailers to study the purchase behavior of consumers in detail and grow the value of
individual consumers to their businesses.
A*-an&e* P)anning an* S&.e*8)ing S/ste+s
AS systems can provide improved control across the supply chain0 all the way from raw
material suppliers right through to the retail shelf. These AS packages complement
existing ?but often limitedA &$ packages. They enable consolidation of activities such as
long term budgeting0 monthly forecasting0 weekly factory scheduling and daily
distribution scheduling into one overall planning process using a single set of data
The major reasons behind the development of new trends are7
? Scalable and profitable $etail models are well established for most of the
categories
? $apid &volution of 6ew,age Ioung Indian )onsumers
? $etail Space is no more a constraint for growth
2
? artnering among #rands0 retailers0 franchisees0 investors and malls
? India is on the radar of !lobal $etailer Suppliers
%UTURE TREND: SCOPE O% 4.r RETAILING
The concept of *-hr. retailing in India has been present only in very limited formats like
the pharmaceuticals ?ApolloA and fuel retail outlets ?4.0 $eliance etc.A and the other
retail formats used to operate only till the early hours of the night. #ut because of the
changing lifestyles and the buying habits of the consumers the retailers have been
extending their operating hours till late nights.
'ost of the Indian retail formats though capable of operating their formats round the
clock do not choose to do so because of the non feasibility of the idea at present taking in
conjunction the customers8 readiness. (or instance if any of the hyper market or
supermarket is functioning during the night the retailer has to bear the extra costs of
electricity0 labor and maintenance if the number of footfalls are less very low during the
late nights which otherwise would be profitable to him. Anyways0 the shopping time of
2
the consumer is considerably increasing. 'oreover0 in India most of the retailing is all
about food and groceries. It might not be a rational prediction that all the consumers will
step into the retail outlet at midnights to buy food and groceries.
This problem can be overcome by implementing the idea in places which have a floating
population even during the nights like railway stations and bus stations. 4owever with
the upcoming culture of malls and the changing lifestyles of the people one can design a
small part of the store or a mall for a new *-:/ retail format which consists of the
essential products like medicines0 fruits and vegetables0 groceries and some other (')!
products and test market it. %nce if the sales start showing some consistent positive
figures and if the crowd increases then the store can come in a bigger way to reach out to
their customers.
The other option for trying the concept of *-hr retailing is that the retailer can have a
mobile outlet which can place itself in the areas which have substantial night traffic for
the sales to happen. And once the people are to the *-hr shopping then the retail plans can
be altered accordingly.
R8ra) 9s Ur=an Retai) Tren*s
India3s largely rural population has also caught the eye of retailers looking for new areas
of growth. IT) launched the country3s first rural mall E C.a8:a) SagarD 0 offering a
diverse product range from (')! to electronics appliance to automobiles0 attempting to
provide farmers a one,stop destination for all of their needs. There has been yet another
initiative by the ")' Sriram !roup called the E 0ari/a)i Ba;aarD 0 that has initially
started off by providing farm related inputs and services but plans to introduce the
complete shopping basket in due course. %ther corporate bodies include &scorts0 and Tata
)hemicals ?with Tata Gisan SansarA setting up agri,stores to provide products:services
targeted at the farmer in order to tap the vast rural market.
2
)ommenting on the $ural $etailing chapter in I6"IA $&TAI; $&%$T *++.0 'r. Adi
#. !odrej0 )hairman0 The !odrej !roup ?India3s one of the leading corporate majorsA
said that his group had also launched the concept of agri,stores named 3Adhaar30 which
served as one,stop shops for farmers selling agricultural products such as fertilisers N
animal feed and also providing farmers knowledge on how to effectively utilise these
products. FThere are B stores already operating in 'aharashtra and !ujarat and further
expansion is very much on the cards. 4e added.
("I could indeed do a lot in this sector as entry of international retailers would bring in
the required expertise to set the supply chain in place which would result in elimination
of wastage0 better prices and quality for consumers and higher income for farmers besides
of course farm produce retailing getting a facelift0 said 'r. !odrej.
Tapping the fresh farm produce sector0 the group plans to take its recently launched retail
concept K 6ature3s #asket , to newer cities steadily. !odrej !roup3s Agro and (ood
division0 !odrej Agrovet ;td. ?!AP;A operates the format0 selling a variety of
vegetables0 fruits and herbs , both local and exotic thereby introducing the concept of
3farm,to,plate3 to urbanites. !odrej plans to open four more 6ature3s #asket stores in
'umbai before taking them national. Setting up cost of a store is about I6$ .,1+ million
and per stores sales are expected in the range of I6$ >+, $s .+ million a year.
Interestingly0 the world3s largest corporation0 9al,mart0 also had its roots in rural
America. <nlike many other retailers who started from urban centres and then trickled
down to rural areas0 9al,mart had started from rural areas and then came closer to cities
over a period of time. 'any more such concepts are likely to be tested in the future as
marketers and retailers begin to acknowledge that the rural consumer is more than a Epoor
cousin3 of the urban counterpart. The I'A!&S GSA $eport avers that these concepts are
likely to go a long way in bringing a huge untapped population within the purview of
organi5ed retailing0 thereby0 increasing the si5e of the total market
2
The above chart makes it clearly evident why the rural retail market has been attracting
the big giants to invest in it.
Ur=an Tren*s
The urban retailing has been experimenting with many formats like the supermarkets0
hypermarkets0 specialty stores0 multi branded outlets etc. and of latest it seems to be
embracing the trend of mall culture. It is a rich man3s world too0 with multi,screen
cinemas0 restaurants0 games and branded shops , well out of the reach of many of the
country3s one billion people. #ut India3s middle,classes0 widely travelled and with deep
pockets0 are flocking to malls.
RAPID GRO2T07
India3s organi5ed retail industry accounts for just >2 of the country3s total retail sales0
though it is poised to grow by O/2 per year in the next five years to a staggering =*-bn.
(uelling this growth are India3s sprawling shopping malls0 which are increasingly
challenging 4igh Street stores0 corner shops and village markets alike. Must five years
ago0 there were shopping arcades but no malls. Today there are nearly 1++ big shopping
2
malls in the country0 more than half of them in "elhi and 'umbai alone. And in two
years there will be >@+ malls across the country. 'ore than *+ are in various stages of
development in "elhi and 'umbai. Among them is India3s biggest shopping mall0 Ambi0
which is being built in !urgaon0 near "elhi. Spread over >.* million square feet0 it is set
to become a virtual town0 where multi,screen cinemas0 recreational facilities for adults
and children0 food courts and branded outlets will fill the space. It will have exclusive
showrooms of international brands0 where0 according to the developers0 customers will
have to shop by prior appointment. Analysts comment that this is just the beginning and
this is going to experience a Esea change8 once the platform is opened up for the ("I.
2
C0APTER < 5
S2OT ANALYSIS:
2
A S9%T analysis of the Indian organi5ed retail industry is presented below7
STRENGT0:
1. $etailing is a ?Te&.no)og/<intensi-e? industry. It is technology that will help the
organi5ed retailers to score over the unorgani5ed retailers. Successful organi5ed retailers
today work closely with their vendors to predict consumer demand0 shorten lead times0
reduce inventory holding and ultimately save cost. &xample7 9al,'art pioneered the
concept of building competitive advantage through *istri=8tion E in,or+ation s/ste+s
in the retailing industry. They introduced two innovative logistics techniques K cross,
docking and &"I ?electronic data interchangeA
*. %n an average a super market stocks up to .+++ SG<3s against a few hundred stocked
with an average unorgani5ed retailer. This will provide variety in products ?required
breadth N depth for consumersA
>. As a consequence of high volumes0 procurement will be direct from the 'anufacturer.
4ence0 merchandise can be offered at lower costs.
2ea'ness:
$. Less Con-ersion )e-e)7 "espite high footfalls0 the conversion ratio has been very low
in the retail outlets in a mall as compared to the standalone counter parts. It is seen that
actual conversions of footfall into sales for a mall outlet is approximately *+,*.2. %n the
other hand0 a high street store of retail chain has an average conversion of about .+,@+2.
As a result0 a stand,alone store has a $%I ?return on investmentA of *.,>+2H in contrast
the retail majors are experiencing a $%I of B,1+2
. C8sto+er Lo/a)t/7 $etail chains are yet to settle down with the proper merchandise
mix for the mall outlets. Since the stand,alone outlets were established long time back0 so
2
they have stabili5ed in terms of footfalls N merchandise mix and thus have a higher
customer loyalty base.
O:rt8nit/:
1. The Indian middle class is already >+ )rore N is projected to grow to over @+ )rore by
*+1+ making India one of the largest consumer markets of the world. The IMAGES<
KSA projections indicate that by *+1.0 India will have over 55 Crore :eoe 8n*er t.e
age o, ! , reflecting the enormous opportunities possible in the 'i*s an* teens retai)ing
seg+ent.
*. %rgani5ed retail is only >2 of the total retailing market in India. It is estimated to grow
at the rate of *.,>+2 p.a. and reach I6$ 10++0+++ )rore by *+1+.
3. Per&o)ating *o(n 7 In India it has been found out that the top @ cities contribute for
@@2 of total organi5ed retailing. 9hile the metros have already been exploited0 the focus
has now been shifted towards the tier,II cities. The 3retail boom30 B.2 of which has so far
been concentrated in the metros is beginning to percolate down to these smaller cities and
towns. The contribution of these tier,II cities to total organi5ed retailing sales is expected
to grow to *+,*.2.
4. R8ra) Retai)ing: India3s huge rural population has caught the eye of the retailers
looking for new areas of growth. IT) launched India3s first rural mall F)haupal SagaF
offering a diverse range of products from (')! to electronic goods to automobiles0
attempting to provide farmers a one,stop destination for all their needs.F 4ariyali #a5arF
is started by ")' Sriram group which provides farm related inputs N services. The
!odrej group has launched the concept of 3agri,stores3 named FAdhaarF which offers
agricultural products such as fertili5ers N animal feed along with the required knowledge
for effective use of the same to the farmers. epsi on the other hand is experimenting with
the farmers of unjab for growing the right quality of tomato for its tomato purees N
pastes.
2
T.reats:
1. If the unorgani5ed retailers are put together0 they are parallel to a large supermarket
with no or little overheads0 high degree of flexibility in merchandise0 display0 prices and
turnover.
*. S.o::ing C8)t8re7 Shopping culture has not developed in India as yet. &ven now
malls are just a place to hang around with family and friends and largely confined to
window,shopping.
>. )ultural Pariation leads to variation in merchandise in India at different geographical
locations.
C.a))enges in Retai)
The following are the key areas that may pose a threat to those retail companies that
ignore the impacts of giving less importance to manage their demand and supply7 ,
? (orecasting and Inventory 'anagement for MIT replenishments of products.
? eak Season "emand 4andling.
? %rder 'anagement in case of retailers with multiple outlets.
? 9arehouse 'anagement in case of multiple outlets.
? Introducing new products.
? 4andling variety of items.
2
Prose* S8:/ C.ain Strategies ,or Retai) In*8str/
S8:/ C.ain Strategies in Retai)
#ulk,#reaking7 %rders can be done in smaller lots with a good understanding with the
supplier. This can be achieved by following ways7 ,
? Spatial )onvenience7 Strategically locating the outlet with distribution
networks and warehouses located proximally.
? Supplier holds inventory.
Pendor 'anaged Inventory7 In this case0 the vendor himself is given the responsibility to
handle the inventory. A space for the vendor is rented in the outlet0 and he takes care of
2
the shelves and the space. It is a *,way agreement wherein the vendor gets the space to
market his product by interacting one,to,one with the customers.
oint of Sale Information System7 As soon as one stock keeping unit moves out of the
store when purchased by a customer0 the information readily flows to the supplier.
? 4e is given access to the inventory database.
? A re,order point can be imposed based on consumption pattern and the supplier is
asked to fill the shelf upon inventory reaching the re,order point.
S$' , Supplier $elationship 'anagement7
? $elationship with supplier should not be a marriage of convenience. Supplier has
to act in ways more than what is required.
? #y providing special offers0 discounts and incentives0 the supplier savors the
relationship. This also serves as a promotion strategy for the outlet.
Co+:etiti-e Areas o, I+rtan&e
(ulfillment7
Stock filling is taken care of at both customer end ?end productA and at the end of shelves
at the shop. $eaching the customer at the right time and constant check on stocks and
making sure right quantity is ordered at the right time.
;ogistics7
? Safe and reliable transport at as much low price as possible.
? )onstant contact with distribution teams ?trucks0 trains0 etc.A and track where
material is.
2
? artnership with transportation firms so that cost and transport can be shared if
the shipment does not occupy the whole truck space.
rocurement7 ?Pendor8s side points to take careA
? Strong $elationship
? Information sharing and updating plan change
? )ombine vendors by minimi5ing transportation cost
? )hoose vendors in proximity
? %ptimum lot si5e taking vendors into confidence
roduction7
;ine should run smoothly without delays due to ordering and transportation ?fulfillment
and logistics have to be met firstA.
Mo*e) in Detai)
Integrate* De+an* Manage+ent:
? The sales in the outlet is kept track of bill after bill hour after hour.
? Store register work is made online and paper work is done with.
? (orecasting made with data on past consumption and present market trend.
? %ptional forecasting is made in case of seasonal requirements.
2
? eriodic offers and incentives are made available to the customers to generate
demand.
Ti:s %or Contro))ing Retai) In-entor/
art of the answer to the Fbuying problemF is inventory control. In fact0 the biggest
reason retail businesses fail is that they lack inventory control. 4owever0 when employed
aggressively against competitors0 effective management of your inventory can be a lethal
weapon. Imagine doubling your inventory turnover rate ?certainly not far,fetched with
proper controlA7 you could sell product at half the normal margin and still gross the same
amount of dollars in a given time period. Inventory control has been used to take down
many competing retailers.
;ike much of the new technology available to business owners0 'anagement Information
Systems ?'ISA is still evolving0 and along the way it becomes both more sophisticated
and less expensive. 'iS tools can be implemented to gain a significant advantage over
competitors. 4owever0 it is critical that you understand the uses and goals of an inventory
management system before implementing. ossibly the best examples of inventory
management come from big retailers. To put it simply7 Gmart neglected inventory control
and failed0 and 9al,'art concentrated on becoming the leading edge of inventory control
and is now one of the world3s largest companies.
It is a common misconception among small retailers that only industry giants like 9al,
'art can use 'IS effectively. Sam 9alton himself began as a small retailer0 but one of
his most advantageous assets was his deep understanding of inventory control3s
importance.
'IS is commonly regarded as a daunting system to implement by those with limited
experience in this highly,technical area0 however it is critical to understand exactly what
'IS can accomplish. Although internal hires are available0 'IS is made greatly
accessible to the small retailer by consulting companies. The basic goal of a point,of,
purchase inventory control system is to provide information on profitability0 status0 and
2
rate of sale for every item a retailer stocks0 instantly. These metrics can then be used to
improve inventory turnover and return on investment.
%nce an 'IS infrastructure is established0 it makes sense for the retailer to integrate
vendors into the system. Pendors are subject to an incentive to keep their inventory on
store shelves0 and systems are available which provide vendors with sales and stock
information directly from the point of sale system. roviding your vendors with timely
information and making them responsible for maintaining inventory your overall
efficiency is improved as your own workload is diminished. The net impact on your
business is increased turnover rates and fewer runs on inventory.
Anything that results in making the chain between Pendors0 $etailers and )ustomers
more efficient also results in additional profit. ($I"0 an example of an electronic
recognition system0 enables tracking of items via a computer chip embedded in the
product or packaging0 which is detected at various stages along the distribution process.
roduct information obtained in this way is uploaded instantly to the inventory control
system0 which reduces the time spent in receiving and stocking and allows for a more
efficient shipping process. It is imperative for retailers to be aware of inventory
performance and its effects on profitability.
Inventory control is not0 however0 the answer to all questions. Inventory controls systems
can tell you how the inventory in stock is performing. It doesn3t tell you that new
products you should carry. #uying is a great area of opportunity0 especially for the small
retailer who is close to customers and much more responsive to their demands than is the
national chain.
%f course0 inventory control is not the ultimate solution to retailers3 problems. (or
example0 inventory control tells you what products are performing well0 but it can3t tell
you what new products to stock. Inventory control is a great way for small retailers to act
like one of the big guys0 and gain an advantage over other small competitors.
2
2
C0APTER 1 6
RESEARC0 MET0DOLOGY
2
Pri+ar/ Data
%perations are classified into > functions below7
? 'anagement (unction
? !eneral 'erchandise
? Inventory N )redit 'anagement

MANAGEMENT %UNCTION:
'anagement is creative problem solving. This creative problem solving is accomplished
through four functions of management
? lanning
? %rgani5ing
? Staffing
? "irecting
? )ontrolling
The intended result is the use of an organi5ation3s resources in a way that accomplishes
its mission and objectives.
P)anning is the ongoing process of developing the business3 mission and objectives and
determining how they will be accomplished. lanning includes both the broadest view of
2
the organi5ation0 e.g.0 its mission0 and the narrowest0 e.g.0 a tactic for accomplishing a
specific goal.
Organi;ing is establishing the internal organi5ational structure of the organi5ation. The
focus is on division0 coordination0 and control of tasks and the flow of information within
the organi5ation. It is in this function that managers distribute authority to job holders.
Sta,,ing is filling and keeping filled with qualified people all positions in the business.
$ecruiting0 hiring0 training0 evaluating and compensating are the specific activities
included in the function. In the family business0 staffing includes all paid and unpaid
positions held by family members including the ownerperators.
Dire&ting is influencing people3s behavior through motivation0 communication0 group
dynamics0 leadership and discipline. The purpose of directing is to channel the behavior
of all personnel to accomplish the organi5ation3s mission and objectives while
simultaneously helping them accomplish their own career objectives.
Contro))ing is a four,step process of establishing performance standards based on the
firm3s objectives0 measuring and reporting actual performance0 comparing the two0 and
taking corrective or preventive action as necessary.
Manageria) )e-e)s an* .ierar&./
The management of a large organi5ation may have three levels7
1. Senior management ?or Ftop managementF or Fupper managementFA
*. 'iddle management
>. ;ow,level management0 such as supervisors or team,leaders
-. (oreman
.. $ank and (ile
2
2
To:<)e-e) +anage+ent
? $equire an extensive knowledge of management roles and skills.
? They have to be very aware of external factors such as markets.
? Their decisions are generally of a long,term nature
? Their decisions are made using analytic0 directive0 conceptual andr
behavioralarticipative processes
? They are responsible for strategic decisions.
? They have to chalk out the plan and see that plan may be effective in the future.
? They are executive in nature.
Mi**)e +anage+ent
? 'id,level managers have a speciali5ed understanding of certain managerial tasks.
? They are responsible for carrying out the decisions made by top,level
management.
Lo(er +anage+ent
? This level of management ensures that the decisions and plans taken by the other
two are carried out.
? ;ower,level managers3 decisions are generally short,term ones
? (oreman : lead hand
2
? They are people who have direct supervision over the working force in office
factory0 sales field or other workgroup or areas of activity.
? $ank and (ile
? The responsibilities of the persons belonging to this group are even more
restricted and more specific than those of the foreman.
Genera) Mer&.an*ise
In marketing0 a product is anything that can be offered to a market that might satisfy a want or
need. In retailing0 products are called merchandise. It is an art and science of displaying
merchandise within store0 it is about implementing effective design0 ideas to educate customer0
create desire and finally increase store traffic and sales volume.
? 4ome ;ien Items
? &lectronic Items
? 'obile Sone
? (urniture
? Star Sitara
? %pticians
? 'en0 ;adies and Gids wear
? (oot 9ear
? 'usic
? Toys
2
? Stationery
In-entor/ E Cre*it O:erations FUsing JETRMS So,t(areA
In-entor/ Manage+ent
Inventory 'anagement and Inventory )ontrol must be designed to +eet t.e *i&tates o,
t.e +ar'eta&e an* s8:rt t.e &o+:an/Ds strategi& an. The many changes in
market demand0 new opportunities due to worldwide marketing0 global sourcing of
materials0 and new manufacturing technology0 means many companies need to change
their Inventory 'anagement approach and change the process for Inventory )ontrol.
"espite the many changes that companies go through0 the basic principles of Inventory
'anagement and Inventory )ontrol remain the same. Some of the new approaches and
techniques are wrapped in new terminology0 but the 8n*er)/ing :rin&ies ,or
a&&o+is.ing goo* In-entor/ Manage+ent an* In-entor/ a&ti-ities .a-e not
&.ange*.
The Inventory 'anagement system and the Inventory )ontrol rocess provides
information to efficiently manage the ,)o( o, +ateria)s0 effectively 8ti)i;e :eoe an*
eG8i:+ent@ &oor*inate interna) a&ti-ities@ an* &o++8ni&ate (it. &8sto+ers.
Inventory 'anagement and the activities of Inventory )ontrol do not make decisions or
manage operationsH they provide the information to 'anagers who make +ore a&&8rate
an* ti+e)/ decisions to manage their operations.
The basic building blocks for the Inventory 'anagement system and Inventory )ontrol
activities are7
? Sa)es %ore&asting or "emand 'anagement
? Sa)es an* O:erations lanning
2
? Pro*8&tion lanning
? Materia) ReG8ire+ents lanning
? In-entor/ Re*8&tion
The emphases on each area will vary depending on the company and how it operates0 and
what requirements are placed on it due to market demands. &ach of the areas above
will nee* to =e a**resse* in so+e ,or+ or anot.er to .a-e a s8&&ess,8) :rogra+ of
Inventory 'anagement and Inventory )ontrol.
M&T$'S Software is classified in to @ operations which controls the Inventory0 )redit
and Security management
In-entor/ E Cre*it O:erations
? &mployee 'anagement System
? Scanning System
? Smart System
? Pendor 'anagement System
? Security 'anagement System
E+o/ee Manage+ent S/ste+
? &mployee "etails
? 'argin Tracking
S+art S/ste+
? "aily Sales $eport
2
? #illing $eport
? Total "iscount N $evenue $eports
2
S&anning S/ste+
? roduct "iscount
? roduct ricing "ecision
? roduct 'anagement
Pendor 'anagement System
? Inventory 'anagement System
? urchasing %rder 'anagement
? Invoice urchasing %rder System
Se&8rit/ Manage+ent
? )4&)G %I6T SIST&'
? )) SIST&'
• Soft checks
• 4ard checks
2
" PCs o, Ser-i&es
$st P: PRODUCT
? roduct, refers to the merchandise i.e. the range of clothes.
? Supplementary services ,include a component of fashion0 life style and Ambient
shopping as an addition to the core product.
? Today0 customers buy experiences and not brands or products.
n* P : PRICING
)ost plus price and ercentage method pricing7
? 'ost widely used technique to price apparels.
2
? &x7, )%;%$ ;<S and I6,4%<S& brands like those of S4%&$8S ST% or
9&STSI"& use this technique.
2
3r* P : PLACE
Apparel $etailing #usiness is driven by one crucial factor7
? ;ocation
? Approachable
? arking
4t. P: PROMOTION
? rint medium.
? ;oyalty programs
? In,store Pisual merchandising
5t. P: PEOPLE
? &very second a customer spends inside the store has to be viewed as 'oment of Truth
? CeopleD is that aspect of the marketing mix which adds tangibility to the service of
creating an experience
6t. P: PROCESSES
2
"t. P : P0YSICAL E9IDENCE
? 'anaging Appearance of the building N ;ocation
? 'aintaining Temperature 0 'usic0 ;ighting and (ragrance inside the store
? Availability of services like rams0 9heel )hair0 Palet arking etc
? Stylish Stocking of 'erchandise
2
C0ANGES IN RETAILING
2
2
2
2
2
2
2
Con&)8sion
(or a start0 these retailers need to invest much more in capturing more specific market.
Intelligence as well as almost real,time customer purchase behavior information. The
retailers also need to make substantial investment in understanding:acquiring some
advanced expertise in developing more accurate and scientific demand forecasting
models. $e,engineering of product sourcing philosophies,aligned more towards
collaborative planning and replenishment should then be next on their agenda. The
message0 therefore for the existing small and medium independent retailers is to closely
examine what changes are taking place in their immediate vicinity0 and analy5e 9hether
their current market offers a potential redevelopment of the area into a more modern
multi,option destination. If it does0 and most commercial areas in India do have this
potential0 it would be very useful to form a consortium of other such small retailers in
that vicinity and take a pro,active approach to pool in resources and improve the overall
infrastructure. The next effort should be to encourage retailers to make some investments
in improving the interiors of their respective establishments to make shopping an
enjoyable experience for the customer.
As the retail marketplace changes shape and competition increases0 the potential for
improving retail productivity and cutting costs is likely to decrease. Therefore0 it will
become important for retailers to secure a distinctive position in the marketplace based on
value0 relationships or experience.
2
R H Rain &.e&'
E H Esta=)is.+ent
T H Tra*e
A H A,,i)iate* C.ains
I H In-est+ent O::t
L H Lo( Pri&e G8arant/
(inally0 it is important to note that these strategies are not strictly independent of each
otherH value is function of not just price0 quality and service but can also be enhanced by
ersonali5ation and offering a memorable experience. In fact0 building relationships with
customers can by itself increase the quality of overall customer experience and thus the
perceived value. #ut most importantly for winning in this intensely competitive
marketplace0 it is critical to understand the target customer3s definition of value and make
an offer0 which not only delights the customers but also is also difficult for competitors to
replicate.

2
BIBLIOGRAPHY
Secondary information –
Books on operation Management:
Basics of Operation Management: Study Guide
Fundamentals of Operation Management by John T Mentzer
We!ite!"
http://fndarticles.com/p/articles/mi!""#/is2"/ain2$%22$"$/
http://&&&.careersinsupplychain.org/&hat'is'scm/"rights.asp
http://&&&.supplychainmanagement.in/scm/principlesofscm.htm
http://en.&ikipedia.org/&iki/Operationmanagement
http://&&&. Operation management.in/scm/bull&hip.htm
logistics.about.com/od/genericsub(ect/a/aa)*)2)).htm
http://&&&.ltdmgmt.com/mag/march+$.htm

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