The Internet Addiction Media Essay

The Internet Addiction Media Essay In recent years, internet addiction has been a world-wide problem among the youth. Many of them may sit in front of the computer to play online game; chat with others for the whole day without resting. Those prolonged activities bring a lot of destructive effect to them both Internet can be very constructive, but we must be conscious how much time we spend on it on a daily basis. People are addicted to the internet since they do not control the amount of time they spend on it. It is important to have other interests apart from the internet. Today, surfing the Web has become a hobby as social and marketable as bar hopping or going to the movies. As the web has become a part of mainstream life, some mental health professionals have noted that a percentage of people using the web do so in a compulsive and out-of-control manner. In Japan (Aril 2010), a 30-year-old man who is addicted to internet killed his father and his 1 year-old niece because of his father terminated the contract of internet broadband. He then set up a fire and burnt his house. In this case, 2 people died and 3 people injured. This phenomenon of obsessive Internet use has been termed Internet Addiction based on its similarity to common addictions such as smoking, drinking, and gambling. Internet Addiction has even been championed as an actual disorder, notably by some psychologists. Nevertheless, at this time the true nature of Internet Addiction is not yet determined. Because the Internet is used by many people as a normal part of their career or education, knowing how to separate excessive from normal use becomes difficult and cannot using simple measures such as amount of time spent online in a given period. Most fundamental in distinguishing normal from problem Internet use is the experience of compulsion to use the net. Normal users, no matter how heavy their usage, do not need to get online and do not neglect their occupational duties or their relationships with family and friends to get online. Mental health professionals are split as to whether Internet addiction is real or not. No one disputes that some people use the Internet in an obsessive manner even to a point where it interferes with their ability to function at work and in social relationships. What is doubtful is whether people can become addicted to the Internet itself, or rather to the stimulation and information that the web provides. The argument surrounding Internet Addiction is precisely whether people become addicted to the net itself, or to the stimulation to be had via the net, such as online gambling, pornography or even simple communication with others via chat and blogs. Some psychologists do not consider in addiction to the Internet itself, but rather in addiction to stimulation that the Internet provides. They propose that new Internet users often show an initial fascination with the innovation of the Web, but eventually lose interest and reduce their time spent online back to a normal, healthy amount. Those abuser who do go on to show obsessive Internet utilization, for the most part become compulsive only with considering to particular types of information to be had online, mainly often gambling, pornography, chat room or shopping sites. This is not an addiction to the Internet itself, but rather to risk-taking, sex, socializing or shopping. In real meaning, the main addictive characteristic of the Internet is its capability to enable instant and relatively social stimulation. Addicted Internet users are addicted to a favored kind of social stimulation and not to the Internet itself, although it is also true that the Internet has made it easier a nd more convenient for someone to develop such a compulsion. Why peoples especially youth have internet addition? There are some reasons to explain it. By Internal Factors-The background of growth, the family is believed to have a fundamental influence on the developing child. A caregiver who is emotionally and physically available is essential for healthy child and adolescent development. Besides, dysfunctional caregiving, lack of positive parenting skills, and poor family management are strongly associated with substance use and delinquency in youth. Therefore, the youth growth up in poor family will seek alternative to fulfil their psychological needs, it is compensation. The level of compensation is depending on the individual factors such as the degree of self control, emotional control, ability of problem solving, anxiety management. When over compensation, addition will occur. There are some reasons that people choose internet for compensation. From social learning, when adolescents strong developmental needs, such as personal identity, autonomy, and relationships with peers may not be fulfilled through physical activities, t hey may then shed social inhibitions, which leads to Internet addiction (Lin Tsai, 2002), also when they are dissatisfied with their leisure time, they may be motivated to seek excitement and pleasure from cyberspace and therefore raise their level of Internet addiction. Besides, encourage of society and the common use of Internet activities raise the level of Internet addiction. Furthermore, the traditional activities are perceived to be boring and fails to satisfy expected optimal experience, the youth may be motivated to seek another alternative-the Internet. Internet not only fulfills youths psychological needs but also entertainment needs. Lastly, Internet dependency was burden and the youth become habituated by using. Internet addiction is not recognized as a formal mental health disorder. However, mental health professionals who have written about the subject note symptoms or behaviors that, when present in sufficient numbers, may indicate problematic use. These include: Obsession with the Internet: User often thinks about the Internet while he or she is offline.   Loss of control: Addicted users feel unable or unwilling to get up from the computer and walk away. They sit down to check e-mail or look up a bit of information, and end up staying online for hours. Inexplicable sadness or moodiness when not online: Reliance on any substance often causes mood-altering side effects when the addicted user is separated from the substance on which he or she depends. Distraction (Using the Internet as an anti-depressant): One common symptom of many Internet addicts is the compulsion to cheer ones self up by surfing the Web. Dishonesty in regard to Internet use: Addicts may end up lying to employers or family members about the amount of time they spend online, or find other ways to conceal the depth of their involvement with the Internet. Loss of boundaries or inhibitions: While this often pertains to romantic or sexual boundaries, such as sharing sexual fantasies online or participating in cyber sex, inhibitions can also be financial or social. Online gambling sites can cause addicts to blow more money than they would in a real-life casino because users never actually see their money won or lost, so it is easier to believe the money is not real. Chat rooms can incite users to reveal secrets they would not reveal in face-to-face or phone conversations because of the same separation from reality. Also, addicted users are much more likely to commit crimes while online (e.g., hacking) than non-addicts. Creation of virtual intimate relationships with other Internet users: Web-based relationships often cause those involved to spend excessive amounts of time online, attempting to make connections and date around the Net. Loss of a significant relationship due to Internet use: When users spend too much time on the Web, they often neglect their personal relationships. Over time, such relationships may fail as partners simply refuse to be treated badly and break off from relations with the addicted individual. Internet Addiction is not an official disorder, and many mental health professionals are not certain if it ever should be considered a real disorder. Nevertheless, compulsive Internet use is a serious problem for some people, and there are methods that can be helpful in alleviating this problem. Discussion below will describe some of these methods. Internet addiction is a problem of compulsive stimulation, much like drug addiction. Because of this similarity, well studied treatment procedures known to be useful for helping drug addicts towards recovery are adapted for use with Internet addicts when the need arises. The techniques we describe below are drawn from a popular school of therapy known as cognitive-behavioral therapy. Cognitive behavioral forms of therapy are well studied and known to be helpful as applied to many different mental and behavioral difficulties. They are also very practical and focus directly on reducing out of control addict behaviors, and preventing relapse. They are not the only valid forms of therapy, however. In treating drug addiction, frequently the goal of therapy is abstainence. An alcoholic, for example, is often best off if he or she ceases to drink alcohol entirely and to maintain a sober lifestyle. While this makes sense for a drug like alcohol which we might argue is a at best a luxury recreational indulgence and not a necessity, but it doesnt necessarily make sense for Internet over-usage. Much like the telephone, the Internet has become an essential part of modern business. To ask people to not use the Internet at all could be a significant burden for them. Instead of abstainence, then, a reasonable goal for Internet addiction therapy is a reduction in total use of the net. Because Internet addicts by definition will have difficulty moderating their use on their own, therapy techniques can be employed to help them to become more motivated to reduce their use, and to become more conscious of how they get into trouble with the Internet. Motivational Interviewing may be employed to assess how motivated Internet addict may be to change their behavior and to help addicts to increase their motivation to make a lasting change. To accomplish the latter, a therapist may help addicts to develop genuine empathy for the people who are hurt by their addiction (e.g., family and friends, employers, etc.). By helping addicts to see how their actions affect others they care about or are dependent on economically, therapists can help increase addicts motivation to change. Therapists will also generally help addicts to identify triggers that lead to episodes of uncontrolled Internet use. Naive addicts of any type typically believe that their indulgences just happen and that they played little or no role in an episode happening. A more realistic appraisal of an addicts true situation will often reveal that a particular unconscious set of events occurred involving triggers that prompted an addict to binge. Like a noun, a trigger is a person, place or thing that is a step in a chain of events that leads towards a relapse into addict behavior. To provide a fictitious but realistic example, a first trigger might be boredom, or horniness, or even a bad mood brought on by a fight. Addicts seek out their stimulation of choice in response to these triggers, most of the time without ever being all that aware of why they are acting as they do. Therapists will often discuss in detail episodes of indulgence with addicts so that they become conscious of their trigge rs and can choose to act in an alternative fashion when they next become vulnerable. They will also help addicts to generate lists of safer, more functional alternative behaviors they can engage in when they realize they are in danger so that they do not default to their addictive behavior. Part and parcel with identifying triggers, is helping addicts to set realistic goals for their Internet use. It may be that Internet use is important at use, but needs to be restricted at home. It may be that particular websites need to be avoided, but other uses of the Internet are okay. Therapists work with their patients to set realistic and measurable goals for their Internet usage. Patients are then asked to actually record their Internet usage in a log which is used in therapy to track progress. For example, to help reduce the amount of time spent of the Internet, or one specific portion thereof, a user will set a maximum allowed time per day or week. The goal is to keep under this maximumthe farther under, the better. To ensure this goal is met, users can rely on timers or alarms, to monitor how long they have spent online. For example, if an Internet user feels he is spending too much time in chat rooms, he may set a goal to spend no more than two hours per week using the Int ernet for this purpose. He sets a thirty-minute timer for each of the four times per week he wants to use the Internet for chat rooms, and as soon as his timer goes off he exits the chat room. He also records his actual usage on the log so as to see how well he is able to conform to his goal. As anyone can quickly surmise, conforming to goals and logging your behavior is hard, disciplined work that is difficult for many people to sustain on their own. Therapists help patients to sustain this disciplined work by having them give weekly progress reports (either in individual or group therapy settings), or setting up (healthy) rewards that patients can earn when goals have been met for an agreed upon amount of time. Since one of the main draws of the Internet is the secrecy it appears to give, sharing online experiences in the context of offline relationships may discourages a user from hiding in the Internet. Sharing progress in a group therapy session, with a therapist, or with a family member can help motivation to cut back on Internet time. Even with the best intentions, it is easy for an addict to forget to record a lapse, or to simply not bring it up in sessions. Denial and peoples desire to please can be powerful forces to overcome. Objective monitoring can be useful when self-discipline and self-reporting are not enough to keep an addict on the straight and narrow. Regular urine, blood and hair samples are used for this purpose when dealing with drug addicts. With regard to Internet addiction, it is possible to install computer programs designed to monitor where someone surfs and how long they spend there to provide an accurate and objective report of someones surfing behavior. PC software will monitor the kinds and number of websites a person uses and the amount of time spent Web surfing or checking e-mail. Such programs can help compulsive Internet users supervise their own Internet use, but only if they are installed so as to be hard to tamper with. The therapy techniques described above are best delivered by a trained mental health professional in the context of a therapy relationship. A fair amount of self-help literature in the form of books and websites are available for those whose problems are not so demanding, or those who simply wish to be more educated about this problem. See the reading suggestions below, or the Links section of this topic center for suggestions. The bottom line when dealing with Internet Addiction is to identify triggers that lead to problematic use, to set realistic goals for reducing use, and to then stick to and monitor conformance with those goals, sharing this conformity data with someone else to encourage honesty and sticking to the plan.

Profitability And Sustainability Analysis Of Superstore Industry Marketing Essay

Profitability And Sustainability Analysis Of Superstore Industry Marketing Essay There are several framework on the financial performance have been became apparent during last couple of decades and most of them relates to social and financial performance, which are mainly associated around the corporate social responsibility and performance concept . Only few of the study emerged to evaluate financial performance and the sustainability of competitive advantage. Furthermore, most of the work has been associated with industry level but not the firm level, which is also more important to consider in the study on micro level. This is one the strong reason to investigate the firm level financial performance and the competitive advantage. However, there are some limitation related to data gathering for the industry analysis but it seems feasible to gather or access company level data and their availability. World Food Retail Overview After development in technology and policies in 1990, huge change in food industry has begun. With evolution in business globalisation, activities like mergers and acquisition has amplified which resulted growth of big players in efficient and dominant way. Globalisation also resulted an increase in tours and travel activities across the world. The expenses incurred on food and drink by a tourist is 30p on every  £1.00, as per survey conducted by regional tourist bodies of England, UK (IGD Global Retail Outlook Survey, August 2007). Among various sector, retail food sector create more value than that of others. The Organized food sector is such an area where both strong management system and sectorial operational specialization i.e. human and technology are mainly affected by large volume, Daily splitting in physical operations and lower margins, food retail in world are acumen and influenced by six basic trends: Uncertainty Variable Demographics Growth will/necessity Low Price Madness Technology Globalization It has been forecasted that the speed in retail globalization will further accelerate. In order to success, the competition between retailers and suppliers are more likely to increase in a diversified range of capability. Even though in retail sector, huge opportunities still exist, but success will depend on managing the risk and challenges at the same time by capturing the opportunities. According to IGD, In order to obtain sustainable growth, Retail Globalization has shifted its focus from flag-planting to targeted expansion. IGD conducted a survey in 12 countries where senior retailers and supplier has been questioned to derive the above statement (IGDs Global Retail Outlook Survey in August 2007), The top five supermarket companies in United Kingdom control a 50 percent share in market where as in Germany it is 60 percent and in France 90 percent (AC Nielsen). Industry Overview The top five biggest United Kingdom retailers and food selling companies influence the whole market, which are Tesco, Morrison, Sainsburys, Asda and Co-operative Group. In 2004, the whole market size was  £115 billion which includes the retailers from small shops who has store to the biggest supermarkets which have the full-scale operating chains. In 2004, Morrison ranked at 4th position among other 12 supermarkets in UK, which is illustrated below in Table (1). Whereas in 2008 February 79.4% market share captured by top 5 retailers i.e.30.9% by Tesco, 16.4% by Sainsburys, 11.6% by Morrison, 16.9% by Asda and 4.0% by Waitrose. Only 20.6% of market share has been left for others. With the above positioning Morrison can be concluded as upper-medium size food and grocery retailer in United Kingdom. Supermarket 2004 (%) 2005 (%) Aldi n/a 2.2 Asda 16.7 16.5 Co-op 4.8 n/a Iceland 2.1 1.9 Somerfield n/a 5.7* Lidl 1.8 n/a Marks and Spencer 3.5 n/a Morrison 14.6** 12.2** Netto 0.6 n/a Sainsburys 15.7 15.9 Tesco 29 29.8 Waitrose 3.5 3.7 To create portfolio, in same industry, five companies has been selected i.e. Tesco, Finsbury Food, Sainsburys, Thottons and Falkaland. In segregation, Sainsburys and Tesco are biggest supermarket, whereas Finsbury Food and Thorttons are the medium ones and Falkaland is small stores in UK. According to total asset, these portfolios almost represent the industry. Hence it is tried to increase the sample for closer representation of the population which is illustrated below in Table (2): UK Companies Size ( £) Falkland 24.25 Finsbury Food 102.60 Thorntorns 106.02 Morrison 7,370.90 Sainbarys 9,576.00 TESCO 24,775.00Table(2): the position of Morrison in the whole UKs industry according to total assets (2008) Business Drivers for sustainability strategies: There are various internal and external factors which might drives the growth in sustainability strategies in WM Morrisons and major supermarkets: Employees Communities Sustainable Product Development Competitors Green Buildings Waste Transportation and Logistics Costs Carbon Efficiency Rising Demand for Certified Products Expectation for Reporting and Performance Measurement Product Safety The above mentioned drivers are the key to change the retail sectors outlooks and providing competitive benefit to the retailers in terms of sustainability performance. Furthermore, competitive benefit can be drive by working with more innovative solution provider; brand owner and supply chain partners, which leads to reduce the cost the increases efficiency. Apart from above factors, supermarkets have already implemented a number of growth/sustainability strategies to achieve high growth. These are: Increasing focus into own label products. Expansion by organic growth and acquisition Convenience Sector Expansion Focus into nonà ¢Ã¢â€š ¬Ã‚ food items Graph 1 : Profit Margins of UK Supermarkets About Wm Morrison Supermarkets With acquisition of larger rival Safeway plc., Wm Morrison Supermarkets moved up in UK food chain. Founded in 1899, from 125 stores Wm Morrison runs approximately 425 stores in England and Scotland. It has already made a history beating UK supermarket giants like Tesco (the UKs No. 1 food retailer) and ASDA (Wal-Mart owned supermarket) in high concentrated acquisition battle. Through its Market Street specialty, Morrisons offer various food and non-food items. Morrison sell gas about 290 locations. With acquisition of Safeway, Wm Morrison enhanced its market presence with more than 12% share of grocery market. Aim of the Study The aim of this research is based on two objectives. The first objective is to examine the profitability of the WM Morrison within the superstore industry context in the UK market and secondly to examine the firms sustainability of competitive advantage on retail performance. Preliminary Literature Review The analysis of firm profitability is a bit difficult task because the majority of the performance indicator models focus on the success of various key financial indicators i.e. return on investment (ROI), return on assets (ROA) or return on capital employed (ROCE). These performance indicator models have been disapproved or criticized due to lack in the multiple dimensional approach of the performance as well as the its competitive advantages to organizations growth (Brignall and Ballantine, 1996). There are number of studies (Dawson,2005; Dess and Robinson,1984; Reynolds et al.,2005; Venkatraman and Ramanujam,1986) have faced challenge to consider right variables as a financial performance indicator. The understanding of the correct information and its non-availability to the public are the most common problems (Ailawadi et al., 1995). However, a number of alternative approaches have been implemented to getting best financial performance indicator in to order to handle above discussed problems. Therefore, subjective financial indicators are designed to measure firms performance i.e managers forecast on financial performance to compare with competitors performance. Although, some financial indictors has been considered in the number of empirical study (Capon et al.,1990; Dawson, 2005; Reynolds et al., 2005), which was significantly positive with the economic models. The most frequently used profitability indicator in the various studies could be return on equity, return on sale and return on investment etc. But still it is unconcluded regarding the best financial indicators to measure retail financial performance ( Ailawadi et al.,1995; Dawson,2005; Reynolds et al., 2005).On the other hand, the most commonly used performance indicators are rates of return, gross margin (Bradley and Taylor, 1992; Dobson, 2005; Reynolds et al., 2005) and sales growth, sales revenue (Doyle and Hooley,1992; Dobson,2005; Greenley,1995; Hooley et al.,1992; Reynolds et al.,2005). The accepted distinction between competitive advantage and sustained competitive advantage is matched by a range of studies which forward and debate the factors determining the sustainability of a competitive advantage (see Coyne, 1985; Williams, 1992). Whilst many of the studies of advantage sustainability are conducted from a resource based view, Porter (1980, 1990) contributes a number of observations at a more macro level. Briefly, Porter (1980) suggests that competitive advantage can only be sustained over time if consistent strategy is developed and applied promptly. Research Objective and Data Methodology An attempt has been made in this paper to analyze the profitability and examine the sustainability of competitive advantage on retail performance of the WM Morrison during 2005 -2010. Eventually top players will be identifying on the basis of total asset in UK superstore market. To identify competitors, Lexis-Nexis and Hoovers will be used. 5 years Balance sheet and other financial data will be extracted from Thomson One banker. The profitability of Morrison will be analyzed through decomposition method in context to peer group. Statistical analysis may be conducted as a support to the thesis. After performance analysis of Morrison, Industry performance will be compared to target company performance to analyze abnormality if any in the behavior pattern and the reason behind the pattern will be scrutinized. Analysis Factors: Return on Net Operating Assets (RNOA) Net Borrowing Cost (NBC) Operating profit margin Operating Liability Leverage Financial Liability Leverage (FLEV) Asset Turnover (ATO) Return on Common Equity (ROCE) Spread However one of the main aims is to analyze the driving factors for the performance of the firm and the industry and simultaneously to discuss the sustainability strategies of the firm for the competitive advantage. Conclusion

Personal Narrative: Hiking Accident :: essays research papers

Many years ago when I was a freshman in high school, an event happened to me that changed my life for the better. My friend invited me to go hiking with him and his sister. He was going to go hiking in Yosemite. The following day I prepared myself mentally and physically in order to accomplish this hike. While on the road my friend’s sister and I got to know each other very well. We talked about how we were doing in school, and many other things. As time went by we could see the mountains getting closer and closer to us. We could not wait to climb El Capitan. When we finally arrived, we unpacked and got ready to hike El Capitan. On the way up the hike we had a great time because as we hiked up we talked about how cool it was going to be up there on top of the world. After three hours we arrived at our first break stop. We stopped at a section that was on top of the waterfall. The view was amazing and spectacular because we had never seen anything like this. As we continued our hike after several more break stops, and nine more hours of hiking, we finally arrived at the top of El Capitan. Once we got to the top the view was amazing. We could not imagine how beautiful it was up there on top of the world. After about half an hour we started heading back down, when all of a sudden out of no where I felt someone push me out of the way. A man that was in a hurry to get back down pushed me so hard, that I lost my balance and fell of a twenty foot cliff. At that moment in time I could see flashbacks of my life. After a couple seconds of falling I somehow landed between two rocks which shattered my right foot. After that happen every one that was there tried to get help but unfortunately cell phones do not work in Yosemite, but the man that pushed me ove r the cliff had a walky-talky and he called for help.

The Trouble with Stereotyping Essay -- Stereotypes

The Trouble with Stereotyping   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  The world has hit a brick wall in human development. People have created a giant system that categorizes people and groups into classes. These classes are then broken down into subdivisions for people’s placement in the world, and everyone’s eyes. Stereotyping has become so prevalent in every persons thoughts that we now base everything we do on it. We base business, home, and social life on a stereotypical view that doesn’t need to be present in life.   Ã‚  Ã‚  Ã‚  Ã‚  In â€Å"Don’t Let Stereotypes Warp Your Judgments,† Robert Heilbroner states that, â€Å"Stereotyping is one way in which we ‘define’ the world in order to see it.† This statement proposes points that people don’t just see people anymore, but the stereotype class they put them in.   Ã‚  Ã‚  Ã‚  Ã‚  Stereotypes that appear in the business atmosphere are the most prevalent to see. Some of these typecasts are women in the workplace in certain jobs and the type of job they can accomplish or gain with their level of schooling completed. Women are not stereotypically recognized by men to hold high positions in a company. Women could have the same capabilities and maybe even higher qualifications than a man going for the same position, but men label women to be less qualified and have less of a reputation in order to be head of a company. However, this is not true. We need to eliminate the labeling of women. I believe that people’s education should and have no bearing on what everyone can accomplish in a w...

Lauching a Lebanese Beer Company Essay

Introduction 961 Beer has a fascinating history which illustrates to aspiring entrepreneurs that with hard work and determination, even crazy business ideas are able to succeed. At a time when building were being destroyed and the city of Beirut, Lebanon was in shambles, the founders of 961 Beer decided to move forward with founding Lebanon’s first craft brewing company – a surprising fact because this region of the world begin the tradition of brewing beer. As discussed below within the framework of a SWOT analysis, several factors contributed to the success of the company, and will play an integral part in the company’s future as it expands to meet demand. SWOT Analysis A SWOT analysis is meant to drive a company into meaningful action to capitalize on its strengths to seize opportunities as well as protect itself from outside threats or internal weaknesses. Strengths 961 Beer is fortunate in that it benefits from several internal strengths. Organizationally, the company is simplistic: with few employees and condensed management, the company is able to benefit from the strong direction of a select few. In addition, the few people involved, particularly Hajjar and Henrik, have a passion for food and drink and enjoy the process of providing high quality wine to their customers. In addition, with less â€Å"baggage† the company is able to quickly innovate and adapt to changes in the customers tastes. Hajjar is also very passionate about food and wines of the region, leading to his dedication to the success of 961 Beer. He provides leadership that focuses more on the product itself, in order to ensure that it will be a beer that the Lebanese will be 1 proud off. As a recent CEO, Hajjar also appears to bring a substantial amount of capital to initially invest in the business. However, money runs out quickly, and now 961 Beer must pay for itself. The 961 Beer product line also has several strengths. The beer is of high quality because it was produced using only fresh ingredients and in small batches. The company is able to produce several new beer styles, and it heavily uses Lebanese products in brewing its beer. This gives 961 Beer a unique advantage over other beer options, and it attracts customers who are looking to try something new, all while support Lebanese products. Several areas of marketing also have specific strengths. 961 Beer was able to coin the catchphrase â€Å"Are you resistant to change? † which took off in a time when the country was suffering from the effects of war. â€Å"Change† is a simple idea that is very popular in a downtrodden country, and by associating itself with such a concept, 961 Beer is able to appeal to a large group of potential customers. To further this concept, the packaging is deliberately â€Å"under-designed† and meant to be seen as simplistic, pure, and natural, which will attract customers interested in such aesthetic characteristics. The pub is also strategically placed in Beirut’s bustling nightlife scene. This helps to increase 931 Beer recognition and build brand loyalty among new customers. The pub also helps to provide as a gathering place for people to come and education themselves about the brewing process and try various types of beer. Weaknesses Like most entrepreneurs, 961 Beer was started by founders who had very little idea of what they were doing. By trial and error, Hajjar was able to brew batches of beer in his kitchen for several months until the beer began to improve. Although 2 Organizationally, the company is operating at capacity and is simply unable to produce any more for its additional customers. Also, it does not appear that 931 Beer is able to adequately predict how much demand is set to grow. Because the company is still new, there is little money for expensive advertising. This means that customers will be less mainstream, and more trendy, with the ability to follow the latest trends on the internet. Opportunities 961 Beer is the first craft beer in Lebanon in recent memory, even though Lebanon has a history in beer brewing. Education of customers leads to a fun, exciting experience that allows customers to â€Å"experience change† by trying more types of 961 Beer. This opportunity to provide a personal touch will give customers a lasting positive impression of 961 Beer. Personal interaction with customers allows the company to collect feedback on its beers and make adjustments. Customers are interested in supporting companies that heavily use Lebanese products. Particularly when the country is plagued by war, providing people the opportunity to work and be part of 931 Beer is a great way to create loyal customers. Advertising on social media is an effective way of reaching the younger, trendier crowd that is more along the lines of who is frequenting the bars and drinking on a regular basis. Threats Clearly, the colossal threat to the company’s survival is the place of its headquarters. Lebanon is routinely in wartimes, and has been through several wars with neighboring countries ever since 961 Beer began in 2006. Unfortunately, visitor levels to the 961 Bar decrease when conflict increases, which makes sales plummet. The competitive environment is monopolistic. The local beer market was monopolized by Almaza, which was acquired in 2002 by Heineken. In total, Heineken 3 controlled about 70% of the local beer market at the time 961 Beer was founded. With so much power, Heineken has pricing power that 961 Beer cannot match. Other bars became more reluctant to sell 961 Beer because the bar was seen as a threat to their own business. 961 Beer will need to befriend these bars and show them that the bars can enjoy more success by joining 961 rather than going against them. Many customers are not accustomed to drinking anything besides commercially processed, mass-produced beer from large competitors. This means that 961 Beer must educate their customers about the different types of beers and convince them to try 961 Beer. Evaluation Plan: Expand outside of Lebanon Based on the analysis performed above, it is clear that 961 Beer must expand out of Beirut, Lebanon in order to remain successful. While this will increase the risk of lesser quality or require the use of non-Lebonese products, expansion is required to ensure the company’s long-term success. Several steps must be taken before the expansion, all while 961 Beer continues to grow business in Beirut and manage bar operations. First, 961 Beer must address its capacity issues. 961 Beer seems to have had some difficulty in predicting the amount of beer it needs to brew in order to meet the growing demand. An analysis of their books will be helpful to garner a better idea of what demand will look like in the future, accounting for their company’s growth rate. Next, 961 Beer needs to establish relationships with businesses in neighboring cities and countries. Bottling and shipping beer from Lebanon is unrealistic with high likelihood of war, so 961 Beer will need to establish microbreweries within these other locations. Quality can still be maintained by ensuring that Lebanese ingredients are still used in the brew, but costs can be recuperated by charging customers in those 4 countries a higher premium for the same beer. Finally, 961 Beer needs to join international beer festivals in other countries in order to garner worldwide interest and to further increase recognition and demand among worldwide customers. There are several major risks that could undermine this plan for expansion. Clearly, the largest threat to 961 Beer is the ongoing threat of war in Lebanon and neighboring countries. Unfortunately, there is little to nothing that can be done to stop this threat. Without expanding into other countries, a war in Lebanon could wipe out the entire company. However, as discussed above, 961 Beer can minimize this risk by establishing separate microbreweries in other countries so that there is no single source where 961 Beer is brewed. Nonetheless, establishing other microbreweries increases another risk: the risk of uneven and unequal quality. 961 Beer can lessen this risk by brewing its â€Å"brewmaster’s select† along with seasonal beers to appeal to customers in the new countries. 5.

Project Report on Retail

EXECUTIVE SUMMARY 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. Retailing can be examined from many perspectives. A manufacturer of white goods like washing machine and refrigerators has many options to reach out to consumers. It can sell through dealers, the company showrooms (Sony World, Videocon Plaza) or hypermarkets (Big Bazaar). 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 the emergence of large chains like Wal Mart, Sears, and Mc Donald’s led to rapid growth of organized retail and growing consolidation of the retail industry in the developed countries. Today, in India we see a rise in the purchasing power and growth of a middle class which follows the western lifestyle. Hence, conditions are conducive for the rapid growth of organized retail in India. Organized retail is growing rapidly and we see the emergence of large organized retail chains like Shoppers’ 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. However, with the rapid growth in organized retail and increased emphasis of manufacturers on understanding sales at the retail level, the study of retailing has become increasingly relevant. -1- OBJECTIVE OF PROJECT v To understand the concept of retailing. v To understand the role and relevance of retailing for business and economy. v To identify the activities associated with retailing v To understand the operational structures associated with retail organizations v Understanding consumer behaviour in retailing v Understanding the importance of store location for retailer v To understand the nature of merchandise budgeting and unit planning v To understand the concept of relationship marketing and how does it apply to the retail sector. -2- METHODOLOGY This project is the mixture of theoretical as well as practical knowledge. Also it contains ideas and information imparted by the guide. The secondary data required for the project was collected from various websites and books of re puted authors. The project started with sorting all the raw data and arranging them in perfect order. To add value to the project and to understand the practicality of retailing business, I have visited various stores who are the best ones in retailing business. Further, to understand the consumers better, a field survey was also conducted to find out the tastes and preferences, purchasing habits, expectations of the consumers etc. Analysis of this primary data has been done to actually understand the survey in a better way. -3- ORIGIN OF RETAILING Although retailing does not enjoy the status of an Industry, the sheer size this behemoth will develop into, is grabbing attention. The origin of retail in India dates back to ancient times when the melas and mandis made heir presence felt. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores, which became a par of the civic planning. The next step was the commercial plazas, which comprised merely shops offering a variety of goods and services clubbed together. The inconveniences caused by lack of parking place, toilets and maintenance, ushered in the entry big international brands opening their exclusive showrooms. The opening up of the economy only fueled this globalization. There are, however, certain bottlenecks as well; the scarcity of space, coupled with the stringent provisions of the Rent Control Act, act as a dissuasive factor for many players to initiate operations in the main markets. This also explains why the Raheja’s forayed into their retail venture- Shoppers’ Stop. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. %. Retail is India’s larges industry after Agriculture with around 20% of the economically active population engaged in it and generation 10% of our country’s GDP. The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. The 12 million retail outlets in India are the hi ghest in the world, and cater to the purchase need of its pole. It is interesting to note, that the Urban Population although just 25% of the total, is an astounding 250 million in size and is growing at a healthy rate of 7% per annum. The chief driver of growth in the retail sector has been the consumer, with the spending increasing at an average of 11% per annum. The Core and the Lower middle have increased their share in the Growth. -4- The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores (corner stores), Kiosks, street vendors, weekly bazaars and high-street shops for consumer durables and luxury goods. To cater to this, each city developed its own identity and shopping cluster, for instance in Pune there is MG Road, Bangalore has Brigade Road and Commercial Street, Delhi has Connaught Place, Karol Bagh and South Extension. India will have 358 shopping malls by 2007. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have no ACs, organized parking lots and other public amenities, according to a study by fashion magazine Image. At present (September 23, 2005), In India we have 96 malls, covering an area of 21. 6 million sq ft. And by year end the count will shoot up to 158 malls. It will cover 34 million sq ft area. Currently estimated at $205 billion to grow to $400-500 million, over the next 2-3 years. v Smaller cities will have about 12. 8 million sq ft of mall space by 2007. Ludhiana to account for 2. 5 million sq ft. v Ahmedabad about 3. 4 million sq ft. v Delhi and Mumbai now have maximum number of shopping centres. v Gurgoan saw the largest development in terms of retail outlet. v North region has 39% of India’s retail share. v East region has 10% of India’s retail share. v West region has 33% of India’s retail share. v South region has 18% of India’s retail share. v Government and co-operative sector is also making their steps in retailing. For example, Kendriya Bhandar, Apna Bazar, Mother Dairy, Super Bazar etc. -5- MAJOR RETAILER SPACE HOLDERS IN INDIA ORGANIZATION Bata RPG Raymond Area Sq. ft 10,00,000 6,00,000 5,42,000 Pantaloon/Big Bazaar 5,00,000 Metro cash-n-carry Spencer LifeStyle Shoppers Stop Trent Globus Piramyd 3,00,000 2,80,000 2,50,000 2,00,000 2,00,000 1,75,000 1,50,000 The 2nd Annual Images Retail Awards (September 22, 2005):v Retail Face of the Year: Kishore Biyani, MD, Pantaloon Retail India Ltd. v Retail Destination of the year: Shoppers’ Stop v Retail Launch of the Year: Pantaloon Central. v Shopping Centre of the Year: Inorbit Mall v Retail Brand of the Year: Titan v Retail Concept of the Year: Reliance Truck Stop. Retailer of the Year: Value Retailing: Big Bazar v Retailer of the Year: Catering Service: McDonald’s. v Retailer of the Year: Food & Grocery: Food Bazaar. v Retailer of the Year: Health & Beauty: VLCC. v Retailer of the Year: Entertainment: PVR. v Retailer of the Year: Department Store: Westside. v Retailer of the Year: Forecourt Retailing: Bharat Petroleum Corp. Ltd. v Retailer of the Y ear: Leisure: Crossword Bookstore. -6- SWOT OF THE MARKET STRENGTH 1. Organized retailing at US$ 3. 31 billion, growing at 8%. 2. 2nd largest contributor to GDP after agriculture at 20%. . Pattern of consumption changing along with shopping trends. 4. A Growing population will translate to move consumers. 5. Consumer spending increasing at 11% annually. 6. Almost 25 million sq. ft. retail space available. 7. Paradigm shift in shopping experience for consumers pulling in more people. 8. Most of the entrants to organized retail come from 3 main categories, and have ventured into retail as their business extension. v Real Estate Developers v Corporate Houses v Manufacturers/Exporters WEAKNESSES 1. Shortage of quality retail spaces at affordable rates. 2. Government regulations on development of real estate(Urban Land Ceiling Act) 3. Need to provide Value for Money-squeezing margins 4. Lack of industry status. 5. Retail revolution restricted to 250 million people due to monolithic urban-rural divide. 6. Footfalls not a clear indicator of sales as actual consumers lower in number. 7. Lack of huge investments for expansion. OPPORTUNITIES 1. Increasing urban population-more participants in retail revolution. 2. Increase in consuming middle class population. 3. Social factors like dual household income has enhanced spending power. 4. Spends moving towards lifestyle products and esteem enhancing products. 5. Availability of old industrial lands-prime real estate locked in sick industrial units. -7- 6. Average grocery spends at 42% of monthly spends-presents a huge opportunity. 7. Increase in use of credit cards. THREATS 1. Rising lease/rental costs affecting project viability 2. FDI restrictions in the retail sector 3. Poor monsoons and low GDP Growth could affect consumer spending drastically. 4. Archaic labour laws are a hindrance to providing 24/7 shopping experience 5. Personalized service offered by Mom-&-Pop stores. 6. Unavailability of qualified personnel to support exponential growth in retail. 7. Differentiate taxation laws hindering expansion. RETAIL VIABILITY As per the CII McKinsey report, based on a GDP growth rate of 6-7% per annum, by 2010 the retail sector is expected to be US $ 300 Billion industry. Some of the major factors hindering the growth of this sector are as follows: v The non-industry structure and status v The lack of adequate infrastructure v FDI restrictions in this sector v The huge investments required in expanding their markets, v Problems associated with working Capital funding from lending Institutions. 8- BIG BAZAAR: THE INDIAN WAL-MART Pantaloon Retail (India) Limited is today recognized as one of the poneers in the business of organized retailing in the country with a turnover of over RS 400 crores in the financial year ending June 2003. The company is headquartered in Mumbai with zonal offices at Kolkata, Bangalore and Gurgaon (Delhi). It has 4 kinds of stores; 14 P antaloon Family Stores, 7 Big Bazaar discount hypermarkets, 6 Food Bazaar Stores with over 6. 5 lakh sq ft retail space across Kolkata, Mumbai, Thane Pune, Hyderabad, Bangalore, Bagpur, Ahmedabad, Kanpur, Chennai and Gugaon (Delhi). Pantaloon Retail India Limited is the flagship company of the Pantaloon group promoted by Mr Kishore Biyani. It has been one of the pioneers in organized retailing in India. It began its retailing operations in India way back in 1987. Currently, it manufactures and sells ready-made garments through its own retail outlets and two discounting stores. The company plans to diversify into the business of discounting in a big way, which is targeted at the growing middle class segment. It has India’s second largest retail chain with 17 retail outlets and two discounting stores branded as Big Bazaars across the country at an estimated retail space of ,01,300 sq. ft. The company plans to double its retail space in the next couple of years. Pantaloon has come up with an excellent revenue model, focusing on ‘value for money’ segment. Pantaloon plans to target the upper middle and the middle class segment, which forms the large chunk of Indian population. This segment is very price conscious and always looks out for value for money. Pantaloon successfully launched its discount store chain, which targets the large and growing upper-middle and middle class of Indian society. This is totally in contrast to the other organized retail players, which focus on high net-worth of individuals. Big Bazaar has strong own brand names in its portfolio across product categories. The brands include Pantaloon, John Miller and Bare. Higher percentage of ‘own brand’ sales improves margins, thus reducing the breakeven level of sales. Big Bazaar has diversified from apparels to household items in its discount stores. This has enabled them to enlarge their basket of offerings. -9- RETAIL CONCEPT The distribution of consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middleman—the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word ‘retail’ is derived from the French work retaillier, meaning ‘to cut a piece off’ or ‘to break bulk’. A retailer is a person, agent, agency, company, or organization which is instrumental in reaching the goods, merchandise, or services to the ultimate consumer. Retailers perform specific activities such as anticipating customer’s wants, developing assortments of products, acquiring market information, and financing. A common assumption is that retailing involves only the sale of products in stores. However, it also includes the sale of services like those offered at a restaurant, parlour, or by car rental agencies. The selling need not necessarily take place through a store. Retailing encompasses selling through the mail, the Internet, doorto-door visits—any channel that could be used to approach the consumer. When manufacturers like Dell computers sell directly to the consumer, they also perform the retailing function. Retailing has become such an intrinsic part of our everyday lives that it is often taken for granted. The nations that have enjoyed the greatest economic and social progress have been those with a strong retail sector. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer— an easier access to a variety of products, freedom of choice and higher levels of customer service. As we all know, the ease of entry into retail business results in fierce competition and better value for customer. To enter retailing is easy and to fail is even easier. Therefore, in order to survive in retailing, a firm must do a satisfactory job in its primary role i. e. , catering to customers. Retailers’ cost and profit vary depending on their type of operation and major product line. Their profit is usually a small fraction of sales and is generally about 9-10%. Retail stores of different sizes face distinct challenges and their sales volume influences 10- business opportunities, merchandise purchase policies, nature or promotion and expense control measures. Over the last decade there have been sweeping changes in the general retailing business. For instance, what was once a strictly made-to-order market for clothing has now changed into a ready-to-wear market. Flipping through a catalogue, picking the right colour, size, and type of clothing a person wanted to purchas e and then waiting to have it sewn and shipped was the standard practice in the earlier days. By the turn of the century some retailers set up a storefront where people could browse, while new pieces were being sewn or customized in the back rooms. Almost all retail businesses have undergone a similar transition over the years. DRIVERS OF CHANGE IN RETAILING v Changing demographics and industry structure v Expanding computer technology v Emphasis on lower costs and prices v Emphasis on convenience and service v Focus on productivity v Added experimentation v Continuing growth of non-store retailing. In today’s competitive environment retailers have redefined their role in general, and in the value chain in particular. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. As a result, they have a strong say in the success of the product or service launched by a business firm. kA product manager of household appliances claimed, ‘Marketers have to sell a new product several times, first within the company, then to the retailer and finally to the user of the product. ’ It is a well-established fact that manufacturers need to sill their products through retail formats that are compatible with their business strategy, brand image, and market profile in order to ensure a competitive edge. The role of retailers in the present competitive environment has gained attention from manufacturers because external parties such as market intermediaries and supplying partners are becoming increasingly powerful. It is necessary for -11- marketers of consumer products to identify the need and motivations of their partners in the marketing channel. This is especially true in the case or new products. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. Retailers want of optimize sales within the limited shelf space, governed by their individual sales philosophy. Retailers undertake risk in selecting a portfolio of products or brands to offer to their customers. Retailers have to make optimum selection of goods to be sold given the following major concerns: v Selling space available is relatively fixed and must return maximum profits. If such space is occupied by merchandise that is not moving, it will not result in profit. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. There is always the risk of non-performance in terms of quality, supplies etc. , which in turn harms the image of the retail outlet. Retailing is a dynamic industry—constantly changing due to shifts in the needs of the consumers and the growth of technology. Retail formats and companies that were unknown three decades ago are now major forces in the economy. Therefore, the challenges for retail managers the world over are increasing—they must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. Selecting target markets, determining what merchandise and services to offer, negotiating with suppliers, training salespeople—these are just a few of the many functions that a retail manager has to perform on a perpetual basis. The world over retail business is dominated by smaller family run chain stores and regionally targeted stores but gradually more and more markets in the western world are being taken over by billion dollar multinational conglomerates, such as Wal-Mart, Sears, McDonald’s, Marks and Spencer. The larger retailers have managed to set up huge supply/distribution chains, inventory management systems, financing pacts and wide-scale marketing plans. In the backdrop of globalization, liberalization and highly aware customers, a retailer is required to make a conscious effort to position himself distinctively to face the -12- competition. This is determined to a great extent by the retail mix strategy followed by a company to sell its products. GLOBAL RETAIL-INDUSTRY-RELATED FACTS v Worldwide retail sales are estimated at US $7 trillion. v The top 200 largest retailers account for 30% of the worldwide demand. The money spent on household consumption worldwide increased by 68% between 1980 and 1998. v Retail sales are generally driven by people’s ability (disposable income) and willingness ( consumer confidence ) to buy. v The 1998 UNDP Human Development Report points to the fact that global expenditures on advertising are ( including in developing countries ) increasing f aster than the world economy, suggesting that the sector is becoming one of the major players in the development process. REGIONAL FACTS v Some two-thirds or US $6. 6 trillion out of the US $10 trillion American economy is consumer spending. About 40% or that ($3 trillion) is spent on discretionary products and services. v Retail turnover in the EU was almost 2,000 billion in 2001 and the sector’s better than average growth looks set to continue in the future. v Retail trade in Europe employs 15% of the European workforce (3 million firms and 13 million workers). v The Asian economies (excluding Japan) are expected to have 6% growth rates in 2005-06. -13- CONSUMER EXPECTATIONS v Time and quality of life are becoming relatively more important than money; 60% of Americans want to lead a simple life. Product performance was found to be the top purchasing criterion, while environmental features were a close second in a survey conducted by the Alliance for Environmental Innovation in conjunction with SC Johnson Wax. CHARACTERISTICS OF RETAILING Retailing can be distinguished in various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the following ways: v There is direct end-use r interaction in retailing. v In is the only point in the value chain to provide a platform for promotions. v Sales at the retail level are generally in smaller unit sizes. Location is a critical factor in retail business. v In most retail businesses services are as important as core products. v There are a larger number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density. Direct Interaction with Customers Retail businesses have a direct interaction with end-users of goods or services in the value chain. They act as intermediaries between end-users and suppliers such as wholesalers or manufacturers. Therefore, they are in a position to effectively communicate the response and changing preferences of the consumers to the suppliers or sales persons of the company. This helps the manufacturers and markets to redefine their product and change the components of its marketing strategy accordingly. Manufacturers require a strong retail network both for reach of the product and to obtain a powerful platform for promotions and point-of-purchase advertising. Realizing the importance of retailing in the entire value chain, many manufacturers have entered into retail business by setting up exclusive stores for their brands. This has not only provided direct contact with customers, but has also acted as advertisement for the companies and has provided -14- the manufacturers with bargaining power with respect to other retailers who stocked their product. Retailing provides extensive sales people support for products which are information intensive, such as in the case or consumer durables. Lower Average Amount of Sales Transaction The average amount of sales transaction at retail point is much less in comparison to the other partners in the value chain. Many consumers buy products in small quantities for household consumption. Due to lower disposable incomes, some consumer segments in India even buy grocery items on a daily basis rather than a weekly or a monthly basis. Inventory management becomes a challenge for retailers as a result of the many minor transactions with a large number of customers. Hence, retailers must take care of determining average levels of stock, order levels and the retailer has to keep a tight control on costs associated with each transaction in the selling process. Credit verification, employment of personnel, value-added activities like bagging, gift-wrapping and promotional incentives all add up to the costs. One way to resolve this is for the retail outlets to be able to attract the maximum possible number of shoppers. Point-of-purchase Display and Promotions A significant relevant chunk of retail sales comes from unplanned or impulse purchases. Studies have shown that shoppers often do not carry a fixed shopping list and pick up merchandise based on impulsive or situational appeal. Many do not look at ads before shopping. Since a lot of retail products are low involvement in nature, impulse purchases of the shopper is a vital area that every retailer must tap into. Therefore, display, point-of-purchase merchandise, store layou8t and catalogues become important. Impulse goods like chocolates, snack foods and magazines can sell much more quickly if they are placed in a high visibility and high traffic location. Larger Number of Retail Business Units Location of retail store plays an important role compared to other business units. Manufacturers decide the location on the basis of availability of factors of productions -15- and market. Similarly, retailers consider factors like potential demand, supply of merchandise and store image-related factors in locating the retail outlet. The number of operation units in retail is the highest compared to other constituents ot the value chain, primarily to meet the needs for geographic reach and customer accessibility. THEORIES AND MODELS OF RETAILING 1. DIALECTIC PROCESS: – An evolutionary theory based on the premise that retail institutions evolve. The theory suggests that new retail formats emerge by adopting characteristics from other forms of retailers in much the same way that a child is the product of the pooled genes of two different individuals. 2. GRAVITY MODEL: – A theory about the structure of market areas. The model states that the volume of purchases by consumers and the frequency of trips to the outlets are a function of the size of the store and the distance between the store and the origin of the shopping trip. 3. RETAIL ACCORDION THEORY:- A theory of retail institutional changes that suggests that retail institutions go from outlets with wide assortments to specialized, narrow, line store merchants and then back again to the more general, wide-assortment institution. It is also referred to as the generalspecific-general theory. 4. RETAIL LIFECYCLE THEORY:-A theory of retail competition that states that retailing institutions, like the products they distribute, pass through and identifiable cycle. This cycle can be partitioned into four distinct stages: i. Innovation, ii. Accelerated development, iii. Maturity, and iv. Decline. 5. WHEEL OF RETAILING THEORY: – A theory of retail institutional changes that explains retail evolution with an institutional life cycle concept. 6. NATURAL SELECTION THEORY: – A theory of retail institutional changes that states that retailing institutions that an most effectively adapt to environmental changes are the ones that are most likely to prosper or survive. -16- 7. CENTRAL PLACE THEORY: – A model that ranks communities according to the assortment of goods available in each. At the bottom of the hierarch are communities that represent the smallest central places (centres of commerce). They provide the basic necessities of life. Further up the hierarchy are the larger central places, which carry all goods and services, found in lower-order central places plus more specialized ones that are not necessary. FUNCTIONS OF RETAILING Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services. SORTIONG Manufacturers usually make one or a variety of products and would like to sell their entire inventory to a few buyers to redu7ce costs. Final consumers, in contrast, prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the demands of both sides, by collection an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units. The above process is referred to as the sorting process. Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets in the US offer, on and average, 15,000 different items from 500 companies. Customers are able to choose from a wide range of designs, sizes and brands from just one location. If each manufacturer had a separate store for its own products, customers would have to visit several stores to complete their shopping. While all retailers offer an assortment, they specialize in types of assortment offered and the market to which the offering is made. Westside provides clothing and accessories, while a chain like Nilgiris specializes in food and bakery items. Shoppers’ Stop targets the elite urban class, while Pantaloons is targeted at the middle class. -17- BREAKING BULK Breaking bulk is another function performed by retailing. The word retailing is derived from the French word retailler, meaning ‘to cut a piece off’. To reduce transportation costs, manufacturers and wholesalers typically ship large cartons of the product, which are then tailored by the retailers into smaller quantities to meet individual consumption needs. HOLDING STOCK Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacturer to regulate production. Consumers can keep a small stock of products at home as they know that this can be replenished by the retailer and can save on inventory carrying costs. ADDITIONAL SERVICES Retailers ease the change in ownership of merchandise by providing services that make it convenient to buy and use products. Providing product guarantees, after-sales service and dealing with consumer complaints are some of the services that add value to the actual product at the retailers’ end. Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a product now and pay foe it later. Retailers fill orders, promptly process, deliver and install products. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. The display itself allows the consumer to see and test products before actual purchase. Retail essentially completes transactions with customers. CHANNEL OF COMMUNICATION Retailers also act as the channel of communication and information between the wholesalers or suppliers and the consumers. From advertisements, salespeople -18- and display, shoppers learn about the characteristics and features of a product or services offered. Manufacturers, in their turn, learn of sales forecasts, delivery delays, and customer complaints. The manufacturer can then modify defective or unsatisfactory merchandise and services. TRANSPORT AND ADVERTISING FUNCTIONS Small manufacturers can use retailers to provide assistance with transport, storage, advertising and pre-payment of merchandise. This also works the other way round in case the number of retailers is small. The number of functions performed by a particular retailer has a direct relation to the percentage and volume of sales needed to cover both their costs and profits. As a result of these functions, retailers are required to perform the following activities: ACTIVITIES PERFORMED BY RETAILERS Retailers undertake various business activities and perform functions that add value to the offerings they make to their target segments. Retailers provide convenient location, stock and appropriate mix of merchandise in suitable packages in accordance with the needs of customers. The four major activities carried out by retailers are: 1. Arrange for assortment of offerings 2. Breaking quantity 3. Holding stock 4. Extending services ARRANGING ASSORTMENT An assortment is a retailer’s selection of merchandise. It includes both the depth and breadth of products carried. Retailers have to select the combination of assortments from various categories. The assortments must include substitutable items of multiple brands and price points. They should be distinguished on account of physical dimensions and attributes e. g. , colour or flavour. The small retailer takes assortment decision on the basis of his experience; -19- on the other hand retailers from organized retailing depend on a detailed study of past trends and future projections. Retailers need to consider certain factors while devising assortment plans for their stores: profitability associated with particular merchandise mix, store image, layout and the level of compatibility between the existing merchandise. For example, FoodWorld, a leading food supermarket positioned as a one-stop shopping centre, deals in multiple product categories along with all possible variants of brands, stock keeping units, and physical attributes in order to meet the expectations of their consumers and survive in the business. Whereas, Subhiksha, a grocery chain in south India has impressive assortments of only the fast moving brands rather than all available variants in the market. Their assortment plan is governed by location, size and store image of their stores. BREAKING BULK Breaking bulk means physical repackaging of the products by retailers in small unit sizes according to customer’s convenience and stocking requirements. Normally, retailers receive large quantities of sacks and cases of merchandise from suppliers to reduce their transportation costs. In order to meet their customers’ requirements retailers have to break or arrange the bulk into convenient units. This entire function of the retailers adds value to the offerings not only for the end customers but also for the suppliers in the value chain. Even in the earlier days of generic and commodity-based trading most of the retailers used to perform this important function in the value chain. This function receives negligible attention from the retailers now due the introduction of new product categories, such as FMCG and readyto-wear apparel. HOLDING STOCK To ensure the regular availability of the offerings retailers maintain appropriate levels of inventory. Consumers normally depend on the retailers directly to replenish their stocks at home. Therefore, retailers, on periodic basis, maintain the required levels of stock to meet the regular or seasonal fluctuations in the demand. Retailers need to maintain equilibrium between the range or variety carried and the sales which it gives rise to. Retailers have to face the negative consequences of holding unwanted levels of stock—for instance, too little stock -20- ill hamper the sales volume, whereas, too much stock will increase the retailer’s cost of operation. Generally, in small towns of India most retailers have arrangements with the nearby warehouses to stock the goods. Some are so small that they have to stock only on the shop floor. Retailers in the organized sector, to a certain extent, are using effective software packages for maintaining adequate leve ls of inventory. At the same time, retailers avail of just-in-time deliveries with the help of efficient consumer response systems, which reduces the burden of maintaining high levels of stocks. EXTENDING SERVICES Retailing provides multiple services to immediate customers and other members of the value chain. The set of services extended by particular retailers may be part of their core product offerings or it may be ‘add on’ to their product or service. Retailers offer credit, home delivery, after-sales services and information regarding new products to their customers, thereby making the shopping experience convenient and enjoyable. At the same time, they provide stocking place, reach to the ultimate customers, and information about the oncerned target segment to the suppliers. For example, Time Zone, the first organized retail chain of wristwatches in India, started by leading watch manufacturers Titan, set up in all its stores, service centres with proper equipment and trained manpower. This has not only diluted the relevance of service providers in the unorganized sector but has also enhanced the confidence of the customers in the retai9l services provided by the particular retail chain, as after-sales service is considered to be an integral ingredient of the watch purchase. CATEGORIZING RETAILERS Categorizing retailers helps in understanding the competition and the frequent chandes that occur in retailing. There is no universally accepted method of classifying a retail outlet, although many categorization schemes have been proposed. Some of these include classifying on the basis of v Number of outlets v Margin Vs Turnover v Location v Size. -21- The number of outlets operated by a retailer can have a significant impact on the competitiveness of a retail firm. Generally, a greater number of outlets add strength to the firm because it is able to spread fixed costs, such as advertising and managers’ salaries, over a greater number of stores in addition to acquiring economies of purchase. While any retailer operating more than one store can be technically classified as a chain owner, for practical purposes a chain store refers to a retail firm which has more than 11 units. In the United States, for example, chain stores account for nearly 95% of general merchandise stores. Small chains can use economies of scale while tailoring merchandise to local needs. Big chains operating on a national scale can save costs by a centralized system of buying and accounting. A chain store could have either a standard stock list ensuring that the same merchandise is stocked in every retail outlet or an optional stock list giving the outlets the advantage of changing the merchandise according to customer needs in the area. Because of their size, chain stores are often channel captains of the marketing channel—captains can influence other channel partners, such as wholesalers, to carry out activities they might not otherwise engage in, such as extended payment terms and special package sizes. Big stores focus on large markets where their customers live and work. They use technology to learn more about their customers and target them with point-of-sale machines interactive kiosks, and sophisticated forecasting and inventory systems. They tend to stock a narrow range of inventory that sells well and maintain an extensive inventory of the fast selling products. Branding is important to them. Pricing is often a key area of focus for these retailers. Big stores have many strengths, including regional or national reputation, huge buying power, vast inventory and hassle-free return and exchange policies. Their prime locations, the consistency in their products and services, the fact that they are open when people can and want to shop and the clear consistent image and identity they develop and maintain challenge the abilities and resources of many small retailers. Perhaps their biggest advantage is their knowledge in every aspect of their business, from inventory selection to store layout. However, large retailers are not perfect. They have competitive weaknesses that small retailers can exploit. Most offer the same standardized assortments of products nationally. Local managers have little say in inventory selection. Often, sales staff has minimal product knowledge. Staff turnover is extremely high. Most large retailers have little connection with -22- the community they serve. They usually do not offer special services. Larger companies are often slow to recognize and react to changes in their local markets. Independent retailers can co-exist and flourish in the shadow of the big chains by developing a niche within the diverse market. The niche should be developed on the basis of new or unusual product offerings, superior service and overall quality. While value is important, price may be less important. Efficient operations, including precise buying practices, are a must. Customer contact within the niche market must be characterized by ‘high-touch’ service. The key factor is innovation: stores that do not change will perish. The road to success for the independent retailer lies in doing all the things those big chain stores can not or will not do. The successful independent retailers embrace the following principles: v Be prepared for change. v Move to a narrower niche market and stop competing directly with the big retailers. v Learn more about customers and include best customers in a database. Invest appropriately in advertising and promotion. v Charge regular prices and avoid discounting (ensure requisite mark-up). v Buy with precision and search out speciality suppliers. v Maintain essential inventory. v Focus on profit instead of volume (be ready to lose an occasional sale). v Provide extraordinary service. v Employ the best possible staff. v Understand the signi ficance of the Internet. Gross margin and inventory turnover is another means of classifying retailers. Gross margin is net sales minus the cost of goods sold and gross margin percentage is the return on sales. A 30% margin implies that a retailer generates Rs 30 for every Rs 100 sales that can be used to pay operating expenses. Inventory turnover refers to the number of times per year, on average, a retailer sells his inventory. On the basis of this, retailers are classified as low margin low turnover—those that cannot survive the competition—and low margin high turnover, exemplified by Amazon. com. Jewellery stores and appliance stores are examples of high margin low turnover stores and only a few retailers achieve high margin high turnover. These -23- etailers are in the best position to combat competition because their high turnover allows them to withstand price wars. The drawback of the classification by this method is that service retailers who have no inventory turnover cannot be encompassed. One of the old means of classification of retailers is by location, generally within a metropolitan area. Retailers are no longer satisfied with traditional locations within a cit y’s business district but are on the constant lookout for alternate locations to reach customers. Besides renovating old stores, retailers are testing unorthodox locations to expand their clientele. With the advent of the Internet, this area of retailing is likely to undergo tremendous changes in the coming years. Size is often used as a yardstick to classify retailers because costs often differ on the basis of size, with big retailers having lower operational costs per dollar than smaller players. However, in this sphere too, the Internet may make size an obsolete method of comparison. TRENDS IN RETAIL FORMATS Retail industry is continuously going through changes on account of liberalization, globalization and consumer preferences. While multinational retail chains are looking for new markets, manufacturers are identifying, redefining, or evolving new retail formats. The existing retail houses are also gearing up to face the emerging competition from the organized sector and the changing outlook of the consumers. For example, consumer spending is shifting from goods to services. Accordingly the retailers too are fast adjusting to the changing consumer preferences. Consumers are not only looking for the core products or functional benefits from the retailers but also the non-functional benefits, which need to be compatible with their lifestyles. For example, most of the traditional eating joints in India such as Haldiram, Bikaner and Sagar Ratna have revised their product offerings and atmospherics on the lines of the multinational chains to compete with them and to serve changed expectations of the consumers. Mom-and-pop Stores and Traditional Kirana Stores The retail sector is changing as new store categories have started dominating the marketplace. Mass merchandisers (Wal-Mart, Big Bazaar), discount clubs (Subhiksha), -24- so-called category killers (Home Depot, Vishal chain), and speciality retailers (Time Zone, Tanishq) have all developed a successful retail models. At the same time, the small mom-and-pop stores and the traditional department stores, are finding the competition intense. In 2002, while Wal-Mart and Target saw revenues grow (by 12% and 10%, respectively), department stores such as Saks and Federated experienced declining revenues (down 3% and 1% respectively). But even in the mass-merchandising segment, the competition is fierce, as is evidenced by Kmart’s bankruptcy announcement in 2002. Small independent stores, across product categories, is a very common retail formats they are also undertaking large scale renovations to appeal and attract their target consumer segments. E-commerce The amount of retail business being conducted on the Internet is growing every year. Indeed, Forrester Research Agency projects e-commerce revenue to rise to $123 billion in 2004, an increase of some 28% over the previous year and for e-tailing to comprise a bigger slice of the overall retail pie (5. 6%, up from 4. 5% in 2003). Many major retail organizations and manufacturers have online retail stores. Companies like Amazon. com and First and second. com, which helped pioneer the retail e-commerce concept, are now being followed by bricks-and-mortar and catalogue retailers like J. Crew, which are expanding retail e-commerce into new markets. Department Stores A few years ago, names like Sears, J. C. Penney, Macy’s, and Montgomery Ward dominated malls and downtowns all over America. Over the last decade or so, however, these department stores have suffered badly. In part, this is a result of changing shopping patterns and increased competition from discount stores. It has also come from financial burdens incurred by companies that acquired competing companies and grew too fast. It is unlikely that these players will disappear from the market. However, they should be ready to expect more bumps as the strong get stronger and the weak get absorbed. -25- Discount Stores These are giants such as Wal-Mart (the largest retailer in the world, with more than a million; employees), Target and Kmart, as well as membership warehouses, such as Costco. These, along with the category killers, have changed the landscape of both the retail industry and America. Where once mom-and-pop and department stores dominated retail, now the discount retailers and category killers are at the top of the heap. And where once shopping malls, anchored by at least one major department store, ;used to be the dominant retail presence lining the nation’s roads, now it is the behemoth Wal-Marts and Home Depots. Category Killers These are the giant retailers that dominate one area of merchandise (e. g. , Office Depot, Tower Records and The Sports Authority). They are able to buy bathroom tiles, file cabinets, electronic goods or pet food in such huge volumes that they can then sell them at prices even fairly large competitors cannot match. The future of this category is better than that of many of the more general discounters, but the same employment caveats apply. For most job seekers, these companies offer earn-and-learn experiences with vendors and distributors before they move onward and upward. Speciality Stores These include Crate & Barrel, the Body Shop, and Victoria’s Secret. These stores concentrate on one type of merchandise and offer it in a manner that makes it special. Some are very high-end (Louis Vuitton) while others cater to the price-conscious masses (Old Navy). Many are so successful that department stores have started to emulate their buying, marketing, and merchandise display strategies. Industry experts predict growth in this segment, particularly in home furnishings and home improvement, and it seems to attract many of the best and brightest in retail. Promotion and responsibility come quickly to those willing to work hard, and in many of these stores the hand of bureaucracy is not heavy. -26- E-tailers While most retailers have online storefronts, strictly online purveyors with no bricksand-mortar counterparts are hoping to snare a percentage of the retail profit. Major players, such as Amazon. com, have generated enough business to cause top brick-andmortar competitors to come up with their own Internet sites. Traditional retailers like Wal-Mart and Starbucks, hugely successful in their own right, have also set up online stores so as not to miss out on the revenue opportunities that the Interned offers. -27- BARISTA Barista positioned its outlets as a place where people meet each other in an environment, which fulfills both their social and intellectual needs. The music is not too loud and encourages conversation, and the person behind the counter is non-intrusive and friendly. Any consumer knows that even when it is crowded at Barista, you will have your share of privacy. This is because the other consumer is not listening in; he is too involved in himself. MARGIN FREE MARKETS Margin Free Markets is the largest retail chain in the state of Kerala and one of the leading retail chains in India. The first outlet of this chain started functioning on 26 January 1994 at Thiruvananthapuram. There are currently more than 275 franchisees of Margin Free Markets spread all over south India. The outlets are franchises and are not actually owned by the chain. The Consumer Protection and Guidance Society currently control Margin Free Markets, which is registered charitable institution that started functioning in 1993. The consumers are assured of quality, quantity and fair price of the goods sold through the Margin Free Markets. Any retailer can upgrade his shop to a Margin Free outlet by sending in an application to the society. If his application is accepted, he has to make the necessary investment as required. These shops deal in the enter gamut of foods required by a home for its monthly onsumption, grocery, food and non-food FMCG items, fruits and vegetables, consumer goods and household articles. Margin Free outlets are typical discount stores, offering one-stop-shop convenience and self service facility at significant discount to its customers. Most of these customers, in time, turn out to be its permanents customers by taking discounts cards, which permit them to obtain larger discounts than the non-card holders. The necessity to o ffer protection against the rising prices gave birth to the idea of Margin Free Markets. An enthusiastic entrepreneur, named Mr N. Ravikumar, conceived the idea. The idea turned out to be an instant success in Kerala especially because Kerala is more of, a ‘consumer’ state than a ‘producing’ state Kerala depends on her neighbouring states for her consumer needs. Due to the large number of intermediaries involved and the transportation costs, the prices are high and there is a wide fluctuation in the prices of groceries, fruits and vegetables. -28- RETAIL ORGANIZATION The term retail organization refers to the basic format or structure of a retail business designed to cater to the needs of the end customer. Recently, some scholars have started referring to India as a nation of shopkeepers. This epithet has its roots in the huge number of retail enterprises in India, which were over 12 million in 2003. About 78% of these are small family businesses utilizing only household labour. Retail firms may ;be independently owned, parts of a retail chain, operated as a franchisee, leased departments, owned by manufacturers or wholesalers, consumersowned or co-operative society. A retail unit could be owned by: v Manufacturer (e. g. , company owned retail outlets) v Wholesaler (e. g. Vastra outlet in Rajouri in New Delhi) v Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow) v Consumer (consumer owned grocery stores in man y residential societies) v Co-operative society (e. g. , Mother Dairy milk booths in Delhi) v Government (e. g. , Cottage Emporia) v Ownership shared among franchiser and franchisee (e. g. , Archies Gallery) Although most Indian retailers fall in the category o f small-scale units, there are also some very big retailers. Organized retail stores are generally characterized by large, professionally managed store formats providing goods and services hat appeal to customers, in an ambience that is conducive for shopping and provides a memorable experience to customers. From positioning and operating perspectives, each ownership format serves a marketplace niche and presents certain advantages and disadvantages. Retail executives must not lose sight of this in playing up their strengths and working around their weaknesses. THE CHANGING STRUCTURE OF RETAILING All dynamic developments in retailing, from the birth of departmental stores in the last century to the recent emergence of warehouse clubs and hypermarkets, have been -29- responses to a changing environment. Changing customer demand, new technologies, intense competition, and social changes create new opportunities even as they shake up existing business. The retail business formats have been changing very fast mainly due to technological influences. The Internet and the Web technologies have created a myriad f opportunities for the Web-based business model of retailing. This has created a competition for the retailer with its own self. Besides, the challenge for the retailer now is to keep abreast of these latest formats in order to maintain and grow its share of market and compete within its band of retailers. A key impact of technology has been provision ;of greater information to the customer. Hence, a big challenge for the retailer in the information savvy world of today is that the opportunities for price differentiate itself qualitatively by superior customer services or better value for money to the customer. CLASSIFICATION OF RETAIL UNITS Conceptual classification of a business unit provides the marketers with strategic guidelines, useful in the design of retailing strategy. Besides, retail businesses are extremely diverse and there are quite a few types of retail units. Therefore, retail units are classified on multiple of ownership, geographical locations, kind of customer interaction level of services provided etc. Retailers Classified on the Basis of Ownership One of the first decisions that the retailer has to make as a business owner is how the company should be structured. This decision is likely to have long-term implications, so it is important to consult with an accountant and attorney to help one select preferred ownership structure. There are four basic legal forms of ownership for retailers: 1. Sole proprietorship: – The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has the day-to-day responsibility for running the business. -30- 2. Partnership: – A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. In a partnership, two or more people share ownership of a single business. 3. Joint venture: – A joint venture is not well defined in the law. Unless incorporated or established as a firm as evidenced by a deed, joint ventures may be taxed like association of persons, sometimes at maximum marginal rates. It acts like a general partnership, but is clearly for a limited period of time or a single project. 4. Limited liability Company (public and private):- The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. Operational structure defines the key strategic decision of retail entity, whether to hire employees and manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by local entrepreneurs. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. Independent retail unit: – The total number of retailers in India is estimated to be over 5 million in 2003. About 78% of these are small family businesses utilizing only household labour. An independent retailer owns one retail unit. 2. Retail Chain: – A chain etailer operates multiple outlets (store units) under common ownership; it usually engages in some level of centralized (or coordinated) purchasing and decision making. 3. Franchising: – Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a -31- given form of business under and establishments name and according to a given pattern of business. 4. Leased Department or Shop-in-shop:-It refers to department in a retail store that are rented to an outside party. Usually this is done in case of department and speciality stores and also at times, in discount stores. 5. Co-operative Outlets: – Co-operative outlets are generally owned and managed by co-operative societies. In this context the detailed example of Kendriya Bhandar in India. Classification of Retailers on the basis or Retail Location Retailers have also been also been classified according to their store location. Retailers can locate their stores in an isolated place and attract the customers to the store on their own strength—such as a small grocery store or paan shop in a colony, which attracts the customers staying close by. Classification of retailers on the basis of location is discussed below: 1. Retailers in a free-standing location:- Retailers located at a site which is not connected to other retailers depend entirely on their sore’s drawing power and on the various promotional tools to attract customers. This type of location has several advantages including no competition, low rent, better visibility from the road, easy parking and lower property costs. For example the Haldiram’s outlet on the DelhiJaipur highway and the McDonald’s outlet on Delhi-Ludhiana highway. 2. Retailers in a Business-associated Location:-In this case, a retailer locates his store in a place where a group o retail outlets, offering a variety of merchandise, work together to attract customers to their retail area, and also compete against each other for the same customers. 3. Retailers in Specialized Markets: – Besides the above location-based classification, we also have in India-retailers who prefer specialized markets, particularly traditional independent retailers or chain stores. -32- In India, most of the cities have specialized markets famous for a particular product category. For example, in Chennai, Godown Street is famous for clothes, Bunder treet for stationery products, Usman street for jewellery, T Nagar for ready-made garments, Govindappan naicleen street for grocery, Poo Kadia for food and vegetables. 4. Airport Retailing: – For quite some time, duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Lately, serious efforts are being made to design new airport facilities in order to incorporate substantial amounts of retail space. The key features of airport retailing are: v Large groups of prospective shoppers v Captive audience v Strong sales per square foot of retail space v Strong sales of gift and travel items v Difficulty in replenishment v Longer operating hours v Duty-free shopping possible. ` -33- VARIETY OF MERCHANDISE MIX The retail merchandising has come a long way in India since the days when general stores (kirana) that stocked everything from groceries to stationery and small shops that sold limited varieties of products (such as clothes, furniture, medicines) reigned supreme. There are many different retail stores in India—convenience stores, supermarkets, hypermarkets, department stores, brand stores and discount stores characterized by the variety of merchandise mix offered by a respective retail format. The consumer can choose between different stores for different needs. Retail units, on account of variety of merchandise mix, can be classified as follows: . Department Stores: – It is a large retail store organized into a number of departments, offering a broad variety and depth of merchandise, commonly part of a retail chain. Usually, department stores are located within the planned shopping centres or traditional up market downtown centres. The leading fashion department stores in India are Ebony, Globus, LifeStyle, Pantaloon, Shoppers’ Stop and Westside. All of them are multiproduct stores, Ebony has 7 stores, Globus has 4 stores, LifeStyle has 3 stores and there are 12 Pantaloon Family Stores. Discount Stores: – Retailers offering a broad variety of merchandise mix, limited or no service and low prices are characterized by low margins, heavy advertising, low investments on fixtures, limited support from sales people etc. Discount stores prefer shopping centres that provide space at lower rents as they attract customers from other adjoining stores in the shopping centre. Speciality Stores: – Speciality stores stress on one or a limited number of complementary product categories and extend a high level of service to their customers. In India, the traditionally independent retailers in the specialized market centres operate in a particular product category, at these centres attract large crowds. Such specialized retail operations provide expertise economies of scale, bargain and image to the particular stores. Supermarkets and Hypermarkets:- A hypermarket is a very large retail unit offering merchandise at low prices. Superstores have a sales area of over 50,000sq. ft. Hypermarkets are characterized by large store size, low operating costs and margins, low prices and comprehensive range of merchandise. -34- RETAIL IN INDIA The retail industry in India is largely unorganized and predominantly consists of small, independent, owner-managed shops. Retailing is India’s largest industry in terms of contribution to GDP and constitutes 13% of the GDP (Gross Domestic Product). There are around 5 million retail outlets in India. There are also an unaccounted number of low cost Kiosks (tea stalls, snack centres, barber shops) and pushcarts mobile vendors. Total retail sales area in India was estimated at 328 million sq. mt. in 2001, with an average selling space of 29. 4 sq. mt. per outlet. In India, the per capita retailing space is about 2 sq. ft. , which is quite low in comparison to the developed economies. In 2000, the global management consultancy AT Kearney put retail trade at Rs 400,000 crore, which is expected to increase to Rs 800,000 crore by the year 2005—an annual increase of 20%. According to a survey by AT Kearney, an overwhelming proportion of the Rs 400,000 crore retail markets is unorganized. In fact, only a Rs 20,000 crore segment of the market is organized. There is no integrated supply chain management outlook in the Indian traditional retail industry. Food sales constitute a high proportion of the total retail sales. The share was 62. 7% in 2001, worth approximately Rs 7,039. 2 billion, while non-food sales were worth Rs4189. 5billion. However, the non-food retailing sector registered faster year-on-year growth than the food sales sector. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. The turnover from private labels by major retail chains was estimated at around Rs 1200 million in 2000. Growth in retail outlets (millions) Year 1978 1984 1990 1996 Urban 0. 58 0. 75 0. 94 1. 80 Rural 1. 76 2. 02 2. 42 3. 33 Total 2. 35 2. 77 3. 36 5. 13 Source: indiainfoline -35- Composition of urban outlets Retail Outlet Grocers Cosmetic stores Chemist Food stores General stores Tobacco, pan stores others Source: indiainfoline Composition 34. 7% 4. % 6. 3% 6. 6% 14. 4% 17. 0% 17. 0% Composition of rural outlets Retail Outlet Grocers Composition 55. 6% General stores 13. 5% Chemists Others 3. 3% 27. 6% Source: Indiainfoline EMERGENCE OF ORGANIZED RETAILING Organized retailing in India repres