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India has often been called a nation of shopkeepers. Presumably the reason for this is; that, a large number of retail enterprises exist in India. In 2004, there were 12 million such units of which 98% are small family businesses, utilizing only household labour. Even among retail enterprises, which employ hired workers, a majority of them use less than three workers. Retailing is the combination of activities involved in selling or renting consumer goods and services directly to ultimate consumers for their personal or household use.
In addition to selling, retailing includes such divers activities as buying, advertising, data processing and maintaining inventory.
While sales people regularly call on institutional customers, to initiate and conclude transactions, most end users or final customers, patronize stores. This makes store location, product assortment, timings, store fixtures, sales personnel, delivery and other factors, very critical in drawing customers to the store. Final customers make many unplanned purchases. In contrast those who buy for resale or use in manufacturing are more systematic in their purchasing.
Therefore, retailers need to place impulse items in high traffic locations, organize, store layout , trains sales people in suggestion , and place related items next to each other, to stimulate purchase.
Organized retailing in India was estimated at Rs. 18,000 crores in 2002-2003 and has grown at about 40% over the last 3 years (Source KSA Retail Outlook).
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Retailing has a tremendous impact on the economy. It involves high annual sales and employment. As a major source of employment retailing offers a wide range of career opportunities including; store anagement, merchandising and owning a retail business.
Consumers benefit from retailing in that, retailers perform marketing functions that makes it possible for customers to have access to a broad variety of products and services. Retailing also helps to create place, time and possession utilities. A retailer's service also helps to enhance a product's image. Retailers participate in the sorting process by collecting an assortment of goods and services from a wide variety of suppliers and offering them for sale. The width and depth of assortment depend upon the individual retailer's strategy. They provide information to consumers through advertising, displays and signs and sales personnel. Marketing research support is given to other channels, members. They store merchandise, mark prices on it, place items on the selling floor and otherwise handle products; usually they pay suppliers for items before selling ,,them to final customers. They complete transactions by using appropriate locations, and timings, credit policies, and other services e. g. delivery. Retailing in a way, is the final stage in marketing channels for consumer products. Retailers provide the vital link between producers and ultimate consumers.
Successful retail operations depend largely on two main dimensions: margin and turnover. How far a retail enterprise can reach in margin and turnover depends essentially on the type of business (product lines) and the style and scale of the operations. In addition the turnover also depends upon the professional competence of the enterprise. In a given business two retail companies may choose two different margin levels, and yet both may be successful, provided the strategy and style of management are appropriate.
Retailers can be classified by retail store strategy mix, which is an integrated combination of hours, location, assortment, service, advertising, and prices etc. The various categories are:
Pantaloon Retail India Ltd. (PRIL) through its hypermarket "Big Bazar", offers products at prices which are 25% - 30% lower than the market price.
Is a hypothesis that attempts to explain the emergence of new retailing institutions and their eventual decline and replacement by newer retailing institutions? Like products retailing institutions also have a life cycle. According to this theory new retailers enter the market as low margin, low price, low status institutions. The cycle begins with retailers attracting customers by offering low price and low service.
Over a period of time these retailers want to expand their markets and begin to stock more merchandise, provide more services, and open more convenient locations. This trading up process increases the retailers’ costs and prices, creating opportunities for new low price retailers to enter the market. * The evolution of the department store illustrates the "wheel of retailing" theory. In its entry phase, the department store was a low cost-low service venture. With time it moved up into the trading-up phase. It upgraded its facilities, stock selection, advertising and service.
The same department store then moves into the vulnerability phase, because it becomes vulnerable to low cost/low service formats, such as full line discount stores and category specialists. While the wheel hypothesis has a great deal of intuitive appeal and has been borne out in general by many studies of retail development, it only reflects a pattern. It is not a sure indicator of every change, nor was it ever intended to describe the development of every individual retailer.
*There are many factors for retailers to consider while developing and implementing their marketing plans.
Among the major retailing decisions are these related to
Target Markets: Although retailers normally aim at the mass market, a growing number are engaging in marketing research and market segmentation, because they are finding it increasingly difficult to satisfy everyone. Through a careful definition of target markets, retailers can use their resources and capabilities to position themselves more effectively and achieve differential advantage.
The tremendous growth in number of speciality stores in recent years is largely due to their ability to define precisely the type of customers, they want to serve. merchandise that customers want, and make it available at the right price, in the right place at the right time.
Merchandise Management
Merchandise planning deals with decisions relating to the breadth and depth of the mix, needed to satisfy target customers to achieve the retailers return on investment.
This involves sales forecasting, inventory requirements, decisions regarding gross margins and mark ups etc. Merchandise buying involves decisions relating to centralized or decentralized buying, merchandise resources and negotiation with suppliers. Merchandise Control: deals with maintaining the proper level of inventory and protecting it against shrinkage (theft, pilferage etc. ).
Store Location: Location is critical to the success of a retail store. A store's trading- area is the area surrounding the store from which the outlet draws a majority of its customers.
The extent of this area depends upon the merchandise sold. For example some people might be willing to travel a longer distance to shop at a speciality store because of the unique and prestigious merchandise offered. Having decided on the trading area a specific site must then be selected. Factors affecting the site include, traffic patterns, accessibility, competitors' location, availability and cost and population shifts within the area.
Store Image: A store image is the mental picture, or personality of the store, a retailer likes to project to customers.
Image is affected by advertising, services; store layout, personnel, as well as the quality, depth and breadth of merchandise. Customers tend to shop in stores that fit their images of themselves.
Store Personnel: Sales personnel at a retail store can help build customer loyalty and store image. A major complaint in many lanes of retailing, is the poor attitude of a salesperson. There is a growing trend now, to provide training to, these sales clerks to convert them from order takers to effective sales associates.
Store Design: A store's exterior and interior design affect its image and profit potential. The exterior should be attractive and inviting and should blend with the store's general surroundings. The term "Atmospherics" is used to refer to the retailer's effort at creating the right ambience. Merchandise display is equally important. An effective layout guides the customer though the various sections in the store and facilitates purchase.
Promotion: retail promotion includes all communication from retailers to consumers and between sales people and customers.
The objective is to build the stores image, promote customer traffic, and sell specific products. It includes both, personal and non personal promotion. Personal communication is personal selling - the face to face interaction between the buyer and the seller. Department stores and speciality stores, emphasize this form of promotion. Non personal promotion is advertising. The media used are TV, Radio, Newspapers, Outdoor displays and direct mail, other forms of promotion include, displays, special sales, give always and contests etc.
Credits & Collections: Retailers are generally wary of providing credit, because of additional costs-financing accounts receivables, processing forms and bad debts etc. But many customers prefer some form of credit while purchasing. This explains the popularity of different types of credit cards and debit cards.
In recent years the nature of retailing has changed dramatically, as firms try to protect their positions in the market place. Many customers are no longer willing to spend as much time on shopping as they once did.
Some sectors of retailing have become saturated, several retailers are operating under high levels of debt and number of retailers after running frequent "sales", have found it difficult to maintain regular prices. Retailers are adapting to the shopping needs and time constraints of working women, dual earner households and the increased customer interest in quality and customer service.
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of USD 27 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.
Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail.
Reliance enjoys global leadership in its businesses, The Group exports products in excess of USD 15 billion to more than 100 countries in the world. There are more than 25,000 employees on the rolls of Group Companies. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited) and Reliance Industrial Infrastructure Limited.
India’s Fortune 500 private sector giant, Reliance Industries Ltd, has, in fact, been first off the blocks by launching its first Reliance Fresh outlets in Hyderabad, Reliance fresh is the retail chain division of reliance industries of India which is headed by Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country.
The reliance fresh supermarket chain is ril’s Rs 25,000 crore venture and it plans to add more stores across different g, and eventually have a pan-India footprint by year 2011. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian products. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs.
Reliance Fresh will…
It was a pleasant experience to have a summer project in a big company like Reliance.
It has given me an opportunity to know all dimensions of the market and how to tackle problems of it . I have learned various functions carried out at all the level of organization especially of middle level and lower level. After a rigorous period of my project I come to know that how practical knowledge is different from the theoretical concepts.
Retail Operations: Reliance Fresh. (2020, Jun 02). Retrieved from https://studymoose.com/retail-operations-reliance-fresh-new-essay
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