Swami Vivekanand Group of Colleges, Indore

MAJOR RESEARCH PROJECT On FACTORS AFFECTING THE LOCATION OF RETAIL OUTLET: A CASE STUDY

Submitted for the Partial Fulfillment of the Requirements of the Degree of Master of Business Administration (Full Time) Session (2009-11)

Submitted To:
Prof. SHUBHANSHU NAIK

Submitted By:
SATYENDRA TIWARI MBA, 4th Semester Enrol. No. D09MBA2270040

DECLARATION

I, Satyendra tiwari, student of Master of Business Administration, IV semester, from Swami Vivekananda Group Of College, Indore, declare that the Project entitled, FACTORS AFFECTING THE LOCATION OF RETAIL OUTLET: A CASE STUDY under the guidance of Prof. SHUBHANSHU NAIK (Faculty SVGC, Indore) is my own work and all the information given in this project is true and correct to the best of my knowledge.

SATYENDRA TIWARI (MBA IV Semester)

(i)

CERTIFICATE

This is to certify that Mr Satyendra tiwari, MBA IV semester student of Swami Vivekanand GROUP Of COLLEGE, Indore Has done a Research Project On the topic:FACTORS AFFECTING THE LOCATION OF RETAIL OUTLET: A CASE STUDY He has successfully completed the project under my guidance. This project certifies the work of the students based on actual survey of the concerned project.

Prof. AXAY DUBEY (Signature of Principle/Director)

Prof. SHUBHANSHU NAIK (Signature of Supervisor)

(ii)

ACKNOWLEDGEMENT
Making a project is a result of meticulous efforts put in by many minds that contribute to the final report formation. This is an honest effort towards putting forward whatever I have gained as a valuable experience that will surely help me move up the learning curve towards the path I have chosen. I express our deep sense of gratitude and heartfelt thanks to Prof. AXAY DUBEY, (Director S.V.C.E.) and Prof. PRAVEEN SAXENA (HOD SVGC, Indore ) for his faith in my ability & providing an opportunity to carry on this research project. Specially, I thank to Prof. SHUBHANSHU NAIK (Faculty SVGC, Indore) under whose kind guidance I have completed the project and who helped me at every stage of my research work. I am indebted to all my family members and friends for their continuous support and encouragement during the course of this research project.

DATE

SATYENDRA TIWARI

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LIST OF TABLES

S. NO. 4.1 4.2 4.3 4.4 4.5 4.6

TABLE LOCATION COST PARKING FACILITY POPULATION SECURITY & SAFETY COMPETITION ACCESSIBILITY FOR DELIVERY VEHICLE

PAGE NO. 38 39 40 41 42 43

4.7 4.8 4.9 4.10 4.11

ACCESSIBILITY FOR CUSTOMERS ROLE OF SHOPPERS NO. OF SHOPPERS TYPES OF SHOPPERS PERSONAL & SOCIAL FACTORS

44 45 46 47 48

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LIST OF GRAPHS

S. NO. 4.1 4.2 4.3 4.4 4.5 4.6

FIGURES LOCATION COST PARKING FACILITY POPULATION SECURITY & SAFETY COMPETITION ACCESSIBILITY FOR DELIVERY VEHICLE

PAGE NO. 38 39 40 41 42 43

4.7 4.8 4.9 4.10 4.11

ACCESSIBILITY FOR CUSTOMERS ROLE OF SHOPPERS NO. OF SHOPPERS TYPES OF SHOPPERS PERSONAL & SOCIAL FACTORS

44 45 46 47 48

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TABLE OF IMAGES
S. NO. 1.1 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.5 1.5.1 1.5.2 1.5.3 1.5.4 1.5.5 1.5.6 1.5.7 1.5.8 1.5.9 2.1 2.2 DISCRIPTION A Retail shop Infrastructure of mall Technology used in retail Structure of Supply chain Human resource in retail outlet Foreign direct Investment in retail Retail shop in village Malls Department store Hypermarket Supermarket Convenience store Discounters Branded store Dollar store Internet retailing Factor affect the Business Factor affect the location 0f retail business PAGE NO. 3 5 6 7 8 9 13 14 15 16 17 19 20 21 22 23 26 28

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TABLE OF CONTENTS
S. NO. 1 2 3 4 5 6 CONTENT DECLARATION CERTIFICATE ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES LIST OF IMAGES INTRODUCTION 1.1 NEED OF THE STUDY 1.2 BACKGROUND 1.3 CHALLANGE AHEAD 1.4 EMERGING TRENDS IN MODERN RETAIL 1.5 DEVELOPMENT OF RETAIL FORMATS LITERTURE REWIEW 2.1 RATIONAL BEHIND THE STUDY RESEARCH METHODOLOGY 3.1 OBJECTIVE OF STUDY 3.2 RESEARCH METHDOLOGY INTERPRETATION OF RESULT 11 DISCUSSION 12 13 CONCLUSION IMPLICATION OF STUDY 7.1 DIRECTION FOR FATURE STUDY 7.2 LIMITATION OF THE STUDY REFERENCES APPENDICES 51-58 49-50 PAGE N0. (i) (ii) (iii) (iv) (v) (vi) 1-3 3-4 4 5-10 10-12 12-24 25-35 35

9 10

36 36-37 38-48

59 60 61-62

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CHAPTER -1 INTRODUCTION

INTRODUCTION
Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family or household use. It is the final stage in a channel of distribution, which comprises all of the businesses and people involved in the physical movement and transfer of ownership of goods and services from producer to consumer. Retailing involves:1) Interpreting needs of the consumers. 2) Developing good assortments of merchandise. 3) Presenting them in an effective manner so that consumers find it easy and attractive to buy.

Retailing differs from marketing in the sense that it refers to only those activities, which are related to marketing goods and/or services to final consumers for personal, family or household use. Whereas marketing, according to American Marketing Association, refers to the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.

Organizational buyers purchase in order to perform a task or sell a product effectively, efficiently and at a profit. They could be industrial buyers or intermediary buyers. Industrial buyers are those who purchase goods and services to be used in or to aid manufacturing process. Intermediary buyers are those (i.e. wholesalers and retailers) who buy merchandise for resale. Retailers include street vendors, local supermarkets, department stores, restaurants, and hotels, Barbershops, airlines and even bike and cars how rooms. Still retailing may or may not involve the use of a physical location. Mail and telephone orders, direct selling to consumers in their homes and offices and vending machines - all fall within the purview of retailing. In addition to it, retailing mayor may not involve a retailer. Manufacturers, importers, non-profit firms and wholesalers are acting as retailers when they sell goods and/or services to final consumers.

Whatever the form of retailing, a retail marketing strategy defines the execution of the 1

marketing process and facilitation of customer satisfaction.

This retail marketing strategy involves selecting a retail target market (i.e. the carefully/exactly identified group of final consumers that a retailer seeks to satisfy) and then implementing the corresponding retail marketing mix (i.e. a combination of product, price, promotion and distribution strategies that will satisfy the retail target market). The elements of the marketing mix encompass the facets shown in the table below. The table depicts consumer service as the crux of the whole activity.

The choice of a store location has a profound effect on the entire business life of a retail operation. A bad choice may all but guarantee failure, a good choice success. This aid takes up site selection criteria, such as retail compatibility and zoning, which the smalls to re owner manager must consider after making basic economic, demographic, and traffic analyses. It offers questions the retailer must ask (and find answers to) before making the all important choice of store location. The first step in choosing a retail business location takes place in your head. Before you do anything else, define your type of business in the broadest terms and determine your long-term objectives. Write them down. This exercise will help you later in choosing a retail location. In picking a store site, many storeowners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of the population, about the kind of competition they'll be facing, and about traffic patterns in the area they're considering. Beyond a doubt these factors are basic to all retail location analysis. Once you've spotted a tentative location using these factors, however, you've only done half the job. Before you make a commitment to moving in and setting up, you must carefully check several more aspects of the location to help insure your satisfaction with and most importantly your success at the site you've chosen.

Retail consists of the sale of goods or merchandise from a fixed location, such a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of 2

retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.

Image no.1.1 A Retail shop Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing.

1.1 NEED OF THE STUDY

The choice of a store location has a profound effect on the entire business life of a retail operation. A bad choice may all but guarantee failure, a good choice success. This aid takes up site selection criteria, such as retail compatibility and zoning, which the small storeowner manager must consider after making basic economic, demographic, and traffic analyses. It offers questions the retailer must ask (and find answers to) before making the all important choice of store location. The first step in choosing a retail business location takes place in your head. Before you do anything else, define your type of business in the broadest terms and determine your long-term objectives. Write them down. This exercise will help you later in choosing a retail location. In picking a store site, many storeowners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of 3

the population, about the kind of competition they'll be facing, and about traffic patterns in the area they're considering. Beyond a doubt these factors are basic to all retail location analysis. Once you've spotted a tentative location using these factors, however, you've only done half the job. Before you make a commitment to moving in and setting up, you must carefully check several more aspects of the location to help insure your satisfaction with -and most important your success at - the site you've chose

1.2 BACKGROUND
The retail industry is continuously changing as the global and regional economies are transforming worldwide. Our industry experts study these developments to give critical analysis along with their personal opinion. Our blogs on retail industry encompasses retail industry aspects as diverse as organized retailing, retail channels like supermarkets, convenience store, and retail products (food and non-food).

Retail Sector is the most booming sector in the Indian economy. Some of the biggest players of the world are going to enter into the industry soon. It is on the threshold of a big revolution after the IT sector. Although organized retail market is not as strong as of now, but it is expected to grow manifolds by the year 2010. The sector contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end of the decade. The current growth rate is estimated to be 8.5%, but CRISIL report says that the retail market is most fragmented in the world and only 2% of the entire retailing business is in the organized sector. There are about 300 new malls, 1500 supermarkets and 325 departmental stores being built in the cities very soon.

The retail boom will face a strong competition from the 12 million mom-and-pop stores, which are easily accessible and approachable and provide services like free home delivery and goods at credit. But buying from Malls, Supermarkets and Department stores like Subhiksha, Marks & Spencers, etc gives a different feeling and the environment of pick and choose from a variety of products. A number of retail giants are also going to explore the market such as Reliance Retail Ltd and Wal-mart. The revolution is driven by large expectations where both domestic and international players will be channel through which other large stores in India are spreading themselves across the country. 4

1.3 Challenges Ahead 1.3.1 Infrastructure

Image no.1.3.1 Infrastructure of mall

Even though there is huge investment coming especially in the area of retail space development in the form of mall development, the challenges remain same from a retailers view point as the cost to acquire retail space in mall is increasing. Researchers from Knight Frank India, a real estate consultancy, cipher those rentals in established malls in top metros.

Generally retailers work out a rent-to-revenue ratio with developers at which they feel they can sustain their business. Normally, this figure varies between 4% for a hypermarket (that is, rent will constitute 4% of revenues) and 10% for a department store, to nearly 20% for very niche retailers. But, at a monthly rate of Rs 200 per sqft, a department store might have to make Rs 2,000 per sq ft per month just to breakeven. In such a scenario the reality of retail business could change and sustaining profitable business could pose the highest threat of its kind.

1.3.2 Technology

Image no. 1.3.2 Technology used in retail

Technology is going to play a major role in retail development in India. Retailers are going to experience the impact of technology in retail. Currently most of the retailers are operating almost everything manually. A country where almost 97 percent of retailing is in the hand of unorganized retailers it is predictable that the retailers are going have operational inefficiency. They face several challenges like maintaining inventory, ordering and above all.

Technology can be useful in this aspect. Most of the organized retailers are using available and affordable technology to capture consume information. Modern retailers are using scanner data to figure out answer to lot of questions. Through technology retailers can capture a whole lot of segmentation variables and subsequently use them for shopper segmentation. Technology helps to take better decision in some critical areas such as new product introduction, suitable product offering, quicker ordering and assortment planning. Retailers use shoppers loyalty data to design customized promotional offering for different set of customers.

1.3.3 Supply chain

Image no.1.3.3 Structure of supply chain

Till now most retailers in India have invested majorly into the front end but relatively little on the back end and supply chain. Even in countries like the USA, Germany and England where organized retail is highly developed supply chain efficiency is a concern. The nature of retail sector in India is different from other countries around the world. The biggest retailer in India, Pantaloon Retail is yet to open stores in each& every major city in India. Probably that is an indication of how the retail concentration is happening mainly in big cities. The sector is highly fragmented and organized retail contributes hardly 3-4 percent of total retailing pie. There are huge inefficiencies in the supply chain. For example Indian supply chain for food products is characterized by extensive wastage and poor handling. The wastage occurs because of multiple points of manual handling, poor packaging, and lack of availability of temperature controlled vans. The most important part of retailing business is to find a balance between investing in front-end and back-end operations.

Dynamics is going to change over next couple of years as the retailers 26 start growing in size and their bargaining power is likely to increase. Probably that would bring some kind of mutual understanding between manufactures and retailers to develop strong supply chain network. In such a scenario, both the existing operators and new operators must put collaborative efforts to phase out inefficiencies in the supply chain network. In a special lecture series at Indian Institute of Management, Ahmadabad, honourable minister for Railway, Mr. Laloo Prasad Yadav raised his concern over safe transportation of food. The minister is looking forward to use railway infrastructure to carry fresh fruits and vegetables in temperature controlled containers from various nodal points essentially opened in railway stations to different parts in India. Probably that would help a lot in reducing wastage in the supply chain and retailers would be happy to use railway infrastructure rather than spending huge amount of money in developing infrastructure. New entrants like Reliance Retail is 7

- believed to be investing substantially in the supply chain especially cold chain as it is set to start its venture by opening Reliance Fresh stores. Size of the store is likely to be around 4000 sq. ft. and expected to sell fruits and vegetables. Fresh Plus, another format is likely to have size between 4000 sq. Ft and 10000 sq. ft.

1.3.4 Human resource

Image no.1.3.4 Human resource in retail outlet

Even though AT Kearny places India as most attractive retail market for the second consecutive year in a row but it is lagging behind in the retail labour index and positioned in the 8th place. At this point of time talent is in short supply and employee churn has been high for all players. It is very difficult to get experienced store managers to run stores. For example, currently Pantaloon Retail India is operating around 48 Food Bazaars across the county and planning to increase the number to over 80 stores by the end of 2011. The retailer is ready with retail space indifferent malls and high traffic retail location but availability of qualified and experienced personnel is still a big concern for the retailer. Almost all retailers are indulged in poaching which is not a permanent solution. There is absolutely no issue in getting retailing space in prime locations but the bigger concern is to find additional store managers. The way the sector is growing in terms of opening stores it is very predictable that there is going to be huge scarcity of professionals to manage stores. Reliance Retail is planning to employ half a million work force in various levels in next five years. Currently the sector is facing a shortage of human resources. It is very difficult to develop human capital in a short time span of five years. If we look at the human resources employed by 8

-global retailers like Wal-Mart, Carrefour, Tesco, Home Depot and A hold, we find that none other than Wal-Mart exceeds half a million. Considering our robust policies for retaining and developing workforce, retailers should not worry about shortage of talent pool in the long run. The country also possesses a rapidly growing cadre of promising professional managers, a large educational system, and there is a cultural willingness among employees to work cooperatively with management. If, we use these resources properly we can develop a large talent pool to full fill the growing demand for various positions in the retail organization.

1.3.5 Foreign Direct Investment

Image no. 1.3.5 foreign direct investment in retail (1) Retail consolidation and increase in the share of the organised retail sector (2) Increase in employment in retail. (3) Increase supply chain efficiency which would lead to lower prices, superior though talk of opening up the retail sector for FDI has been making the rounds for quite some time now, no major breakthrough has happened yet. The country is expecting a strong economic growth of about 8-10% per year and this can be achieved by raising the rate of investments as well as by generating demand for the increased goods and services produced. Retail contributes about 10% to the national GDP and is expected to increase over the next decade or so. Price water house Coopers estimates that Indian retail will get USD 412 by 2011and majority of investment will be directed toward the two most popular retail formats: hyper markets and supermarkets. 9

Growth of this sector holds paramount importance to the Indian economy, so any augmentation of this sector will have a resultant growth effect on the economy. Although at this point in time FDI in retailing is receiving mixed reaction, but our feeling is that FDI would bring a lot of positive changes both for the operators and the consumer. The infusion of much-needed foreign investment would result in: quality for consumers, (4) Enhanced opportunity for domestic operators to join hand with global retail Players to bring in technical knowhow and global practices, (5) Making shoppers feel international shopping experience.

1.4 Emerging Trends in Modern Retail Formats

India has witnessed a frenetic pace of retail development over the past five years. Goldman Sachs has estimated that the Indian Economic growth could actually exceed that of China by 2015. It is believed that the Country has potential to deliver the faster growth over the next 50 years. As we all know that India has been a nation of Dukandars, having approximately 12million retailers. Obviously retailing is in our blood either as a shopkeeper or as a shopper. The Indian Retail market is estimated to grow from the current US $ 330 billion to US $ 427 billion by 2010 & U. S. $ 637 by 2015. Retail which contributes 10% of our GDP is the largest source of employment after agriculture.

In the year 2004, ratio of organized-Unorganized retail was 3:97 which is expected to be9:91 by 2010. It is not just the global players like Wal-Mart, Tesco and Metro group are eying to capture a pie of this galloping market but also the domestic corporate behemoths like Reliance, Neel Kamal, KK Modi, Aditya Birla group, and Bharti group too are at the same stage of retail development...

There is increased sophistication in the shopping pattern of customers, which has resulted to the emergence of big retail chains in most metros; mini metros and towns being the next target. Customer taste and preferences are changing leading to radical transformation in lifestyles and spending patterns which in turn is giving rise to new

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1.4.1 Business opportunities

The generic growth is likely to be driven by changing lifestyles and by strong surge in income, which in turn will be supported by favourable demographic patterns.

Development of mega malls in India is adding new dimensions to the booming retail sector. There is significant development in retail landscape not only in the metros but also in the smaller cities. Even ITC went one step ahead to revolutionize rural retail by developing Choupal Sagar; a rural mall, for the Rural India. On one hand there are groups of visionary corporate working constantly to improve upon urban shopping experience and on the other hand some companies are trying to infuse innovative retail experience into the rural Set up. Given the situation we can say that Indian Retailing is at boom.

1.4.2 The Macro Picture

Retailer inspired by the wall-mart story of growth in small town America, are tempted to focus on smaller towns and villages in India. However, a careful analysis of the towns ratawise population, population growth, migration trends of customer spending analysis reveals a very different picture of India.

As per the NCAER estimates the share of the 35 towns with a present population of greater than 1 million in Indias total population would grow much faster than their smaller counterparts, from 10.2 % today to reach 14.4 % by 2025.

Simultaneously, the share of these towns in retail market would grow from 21 % today to 40% by 2025. Within these top 35 towns, an estimated 70 to 80 % of retail trade would be in the organized sector. This is similar to the experience in China where in cities like Sanghai and Beijing, the organized sector accounts for 70 to 80 % of overall retails trade in certain categories. Retailers should therefore focus on top 37 towns in the next decade, as the opportunity in smaller towns and rural India would be smaller and more fragmented as compared to the larger towns. But again this is the one side of the coin only.

Classification of India (Customers) on the basis of Research: Research Conducted by Future Group research classifies Indian Customers into three sets and provides a base to the retailers 11

in segmenting the Indian market. The research shows that serving class consists of approximately 55% of the population, the major one & only 14%are in the upper middle class, regarded as consuming class.

1.5 Development of Retail Formats

It is difficult to fit a successful international format directly and expect a similar performance in India. The lessons from multinationals expanding to new geographies too point to this. For example, Wal-Mart is highly successful in USA but the story is different in Asian countries like China. Therefore, it is important for retailer to look at local conditions and insights into the local buying behaviour before shaping the format choice. Considering the diversity in terms of taste and preferences existing in India the Leading Spanish fashion retail chain operates the eight store formats Zara, Berschka, Massimo Dutti, Pull & Bear, Stradivarius, Kiddy's Class, Oysho and Zara Home. By the end of November 2005 it had a total of 2,643 stores in 60 countries.

Gap Inc. is one of the world's largest specialty retailers, with more than 3,000 stores and fiscal 2005 revenues of $16 billion. The retailer offers clothing, accessories and personal care products for men, women, children and babies under the Gap, banana republic, Old Navy and Forth & Towne brand names. Gap brand includes Gap, Gap Kids, baby Gap and Gap Body. The company also operates Gap Outlet, Banana Republic Factory Outlet and Old Navy Outlet stores. Retailers may go for experimentation to identify the winning format suited to different geographies and segments. For example, the taste in south is different from that in north and this brings challenges to the retailers. Therefore, most of grocery retailers are region-centric at this point in time. Now a number of retailers are in a mode of experimentation and trying several formats which are essentially representation of retailing concepts to fit into the consumer mind space. Apart from geography even rural and urban divide poses different kind of challenge to their retailer. Pantaloon Retail India is experimenting with several retail formats to cater to a wide segment of consumers in the market. Some of the new formats are Fashion Station (popular fashion), Blue Sky (fashion accessories), all (fashion apparel for plus-size individuals), Collection i (home furnishings), Depot (books & music) and E-Zone (Consumer electronics). The retailer is trying to segment the market with the help of format. The retailer developed another new format in the form of Wholesale. 12

Image no. 1.5 retail shop in village

The new format is going to be kind of wholesale club which is likely to be located close to Food Bazaar. Consumers who are interested to purchase on bulk can take benefit from this format. Similarly the Land mark group also operates multiple formats such as .hypermarket (Max), departmental store (Lifestyle), Shoe mart and Fun city etc. Such experimentation and identification of an appropriate format for the local conditions would separate winners from losers in India, possibly implying multiple formats could be the reality in the long run.

1.5.1 Malls Mall development is phenomenal in India. The mall mania is spreading fast and entering even the second tier cities in India. Real estate developers are jumping very fast to take this further from Metro cities to smaller cities and corporate houses like ITC and Sri ram group are making steady progress to make this phenomena feasible in rural market also. There is no denying that the top notch cities like Mumbai, Delhi, Bangalore, Hyderabad, Kolkata, Chennai and Pune are leading the way but the second tier cities like Ludhiana, Chandigarh, Nagpur and Surat are catching the eye of all retailers. Retail developers are in such a mood that they may over ride the requirement in a specific city. Large format malls are increasingly getting prominent with adequate retail space allocated to leisure and entertainment. Some states like Punjab have lifted entertainment tax on multiplexes till 2009. This boosted the confidence of the mall developers to accommodate entertainment players like PVR, Waves, Adlabs and Fun Republic in large malls. 13

A study conducted by Knight Frank India indicates that by 2007, approximately 75 million sq ft of mall space would be available in India. Of this, Mumbai, Pune, NCR (including Guregaon, Noida, Greater Noida, Faridabad &Ghaziabad), Bangalore & Hyderabad will have a 74% share. The balance 26% will be made up by the cities like Kolkata, Chennai, Ahmadabad, Jaipur, Nagpur, Lucknow, Indore, Ludhiana & Chandigarh. With such quantum of new format retail space in the pipeline, innovation, striking the right tenant mix, effective mall management and provision of ample parking space are components that will decide the future success of mall developments.

1.5.2 Department Store A department store offers an extensive assortment (width and depth) of goods and services that are organized into separate departments for the purpose of efficient buying, assortment, promotion and above all ease of shopping for the consumer .Such a format provides the greatest selection of any general merchandize and very often serves as the anchor store in shopping mall or shopping centre. In India, the number of department stores is less compared to other retail formats such as supermarkets and discount stores. Shoppers' Stop is the first one to open a department store in the early 1990s and currently operates 19 stores in 10 different cities in India.

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Image no.1.5.2 Department store

The store strongly focuses on lifestyle retailing and mainly divides into five departments such as apparel, accessories, home dcor, gift ideas and other services. Shoppers Stop is getting stronger and stronger year after year. It attracts more than 12 million shoppers every year with a conversion rate of 38 per cent. In the end of FY2000 this retailer had 5 stores and is in the process of reaching 39stores with retail space of 2,502,747 sq ft by FY08. Another operator Lifestyle India began operations in 1998 with its first store in Chennai in 1999 and in March 2006 it opened one of the largest department stores in the same city. The store spreads over75000 sq. ft and store provides customers a great shopping experience with three floors of apparel, footwear, products for children, household furniture and decor, health and beauty products.

1.5.3 Hypermarket Hypermarkets have emerged as the biggest crowd pullers due to the fact that regular repeat purchases are a norm at such outlets. Hypermarkets not only offer consumers the most extensive merchandise mix, product and brand choices under one roof, but also create superior value for money advantages of hypermarket shopping. With product categories on offer ranging from fresh produce and FMCG products to electronics, value apparels, house ware, do it yourself (DIY) and outdoor products, the hypermarkets are becoming popular formats in India.. Number of players operating hypermarket format are increasing day by day.

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Image no.1.5.3 Hypermarket

One of the leading players in this format is Pantaloon Retail India Limited which operates 32 Big Bazaars in twenty cities. In early 2006, the K. Raheja Corp (C .L. Raheja Group) has introduced its value retail concept Hyper city which is the countrys largest hypermarket at 118000 sq ft. Hyper city carries product range varies from Foods, Home ware, Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Clothing. Hyper city Retail plans to open 55 hypermarkets by 2015.Reports in media indicate that Reliance is set to open its hyper market format called Reliance Mart in Ahmadabad in December 2006 in 1.5 lakh sq ft of space.

As the market is expanding and consumers are in a mood to accept changes, hypermarkets are getting overwhelming response from consumer. Currently there are about 40 odd hypermarkets in India but this format holds a great potential for growth. Hypermarkets can offer whole lot of benefits to consumer. As all hypermarkets use food and grocery as crowd puller, the price plays major role. Apart from price, other things retailers need to worry about are offering right product mix at right price and right place. Ideally, a 40:60 mix of food to non-food should yield a blended gross margin of around 18-19 per cent.

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Hypermarkets will be successful if the retailers understand the shopper better and design product offering tailor made for specific segment of consumer. Retailers have to use efficient sourcing and merchandising process to bring down cost of operation. The most important one is to phase out inefficiencies from the supply chain and pass

1.5.4 Supermarket

Image no.1.5.4 Supermarket

Unlike western countries where supermarkets are prominently visible, in our country this is lacking. The supermarkets largely concentrate on selling food related products and are considerably smaller in size compared to hypermarkets. Their value proposition is also different from the hypermarkets. The supermarkets offer relatively less assortments but focus on specific product categories. They do not play the game on price rather use convenience and affordability as their salient features. In India this role is played by the provision stores and sweet shops. Interestingly the fresh vegetables and fruits are sold on the foot path and in open markets. Traditionally consumers feel conservative to buy fruits and vegetables from air conditioned supermarkets. They prefer to buy either from the local mobile vegetable sellers or from the nearest Sabji market. Probably that works as deterrent factor for the growth of supermarkets in India. But the situation is changing and slowly supermarket operators are coming to their own. 17

A supermarket normally sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small utensils, cutlery, stationery and Gift items. In India Food World, Food Bazaar, Nilgiri (30 plus stores), and Adani are the leading super market operators. One of the biggest super market operators in the western India is Adani Retail Limited which operates Adani super market plans to continue its journey to reach total 19 cities with the store strength of 60 plus in the state of Gujarat. ARL also plans to expand its operation in the neighbouring states of Rajasthan, Madhya Pradesh, Maharashtra and Chhattisgarh. Subhiksha is one of the leading super market operators, who largely operates in the southern part of India is expanding to western India. One more retailer Reliance Retail is on the move and this retailer opened its Reliance Fresh-a super market chain with 11 stores in Hyderabad in November 2006and is planning to enter 70 more cities within 2 years. Super Retail Limited is also expanding. By June 2006 Fab mall had 28 super markets in some cities and the retailer is planning to open 25 outlets in Kerala by March 2007.

Food Bazaar operates in major cities in India with a floor space ranging from 6,000sq ft to 16,000 square feet and the format sells both food and non-food items. The non-food items contribute about 22 per cent of total sales and rest is contributed by the food related items. A Food Store stocks an average of 7,000 stock keeping units (SKUs) and over 50,000 articles. The SKU's are divided into the broad categories -staples, fresh produce and branded foods, home & personal care products. Staples include groceries like rice, wheat, dal spices and oils. Fresh produce comprise of fruits and vegetables, which are sold loose through the concessionaire arrangement. Along with national brands and local brands the store keeps private labels in some product categories such as utensil cleaners, preservatives and bakery products. For example in utensil cleaner category private label gives the highest margin about 25per cent and commands a share of 50 per cent in the store. The private labels offer flexibility to both the retailer and the consumer on price front. The objective of the store is to offer variety at affordable price in each category. Food Bazaar is made the transition from a just grocery retailer to developing emotional bonding with shoppers by providing some value added services to the shoppers. Some of these initiatives include:

Live Chakki: which allows customers to buy fresh wheat and have it grinded there at the store.

18

Fresh Juice counter: This provides customer to have fresh juices. Live dairy: This provides customers with fresh milk and milk products. Live kitchen: Customers have the option of buying vegetables, getting them Chopped, cooked fully or partly. Soups, salads and sandwiches are also available 1.5.5 Convenience Stores

Image no.1.5.5 Convenience store A Convenience store offers location advantage for the shoppers and provides ease of shopping and customized service to the shoppers. It charges average to above average prices, depending on the product category and carries a moderate number of stock keeping units (SKUs). Normally it remains open for long hours and shop pursues it for buying fill-in merchandize and emergency purchases. In India, Convenience stores occupied 23 thousand sq. meter of retail space with sales of about Rs 1347 million in 2005 and are expected occupy 85 thousand square meter of selling space by 2010. During the same period, sales are expected to touch Rs 5271million and numbers of outlets are likely to grow from 510 to 2434. Twenty Four Seven a new format of convenience store is operational in Delhi from June 2005.Twenty Four Seven's portfolio comprises 3,500 stock keeping units (SKUs) of branded fast-moving consumer goods and another 3,500 SKUs of prescription and over-thecounter drugs besides 300 private labels products across food, focusing on staples such as pulses and rice. The promoter of this format, the Modi group, plans to set up 500 convenience stores in Delhi and Mumbai by 2007. 19

1.5.6 Discounters

Image no.1.5.6 Discounters

Wal-Mart, the largest retailer in the world is a discounter. Practically the discounters offer several advantages such as lower price, wider assortment and quality assurance. The discounters like Wal-Mart and Aldi were able to quickly build scale and pass on benefits to the consumer. However, in the long run success depends on the operational efficiency and consistent value delivery to the consumer. The same retailer Wal-Mart struggles in Asian countries like China but extremely successful in USA. It is believed that the average Indian consumer is highly price-sensitive and looks for savings in term of money in her grocery purchase. So price-value equation is a critical component in most of the grocery purchases. Despite this, there is hardly any national level discount chain operating in India. But retailers such as Aldi and Lidl are extremely successful in Europe. Due to regulatory issues no such retailers are allowed to sale their products directly to consumer. But they can sell in a cash and carry format which is exclusively B2B context. If these retailers are allowed to operate in India through their retailer stores they may find it extremely difficult in the early stages because of lack of experience in the grocery retailing in this market. Unlike the western markets where retailers largely depend on private labels to offer price advantage, here the concept of private label is very early stage. Some of the food retailers like Food-world and Adani sell private labels but they are not discounters. Soft discounters are present in India, 20

although their influence on grocery retailing in 2005 was very minimal with a value share at less than half a percentage point. The absence of strong discounters and the lack of local retailers initiatives in discounters have several reasons. Unlike most Western countries, Indian retailers are mainly small stores and do not have much bargaining power with manufacturers in order to negotiate terms. Due to low economies of scale, retailers are unable to offer significant discounts on their own. Consequently, the presence of discounters is much smaller than that of supermarkets. According to Euro-monitor (2006) report, in India there are 410 discount stores with 63 thousand sq, meter selling space and by 2010 that figure is going to be 555 discount retail outlets with 85 thousand selling space. Subhiksha, the Chennai based discount retail chain is going national. By July2006 the retail chain had around 150 stores and planning to open 350 more by March2007. The National Capital Region (NCR) is going to get a fair share of 145 stores. Apart from the NCR the retail chain is actively looking at markets in Maharashtra, Gujarat, Andhra Pradesh and Karnataka. The retail chain already started operation in Ahmadabad but the stores are largely selling fruits and vegetables at this point of time. They claim that they sell at a lower price compared to other places in the local market.

1.5.7 Branded Store

Image no.1.5.7 Branded store 21

The major apparel brands in India are Madura Garments, Zodiac, Raymonds, Colour Plus and Arvind Mills. Some of branded apparel stores prominent in India are Madura Garments (140 stores), Weekender (75 stores), Benetton (100 stores), Grasim (110 exclusive showrooms), Madura Garments (40 stores), Wills Life style (40 stores), Lee (59 stores), Newport (500 stores), Wrangler (37 stores), John Players (80 stores) and Raymond. Raymond a nationwide retail chain has 260 Raymond shops deals in fabrics, apparels and accessories. In addition to that its distribution network includes 20 exclusive Park Avenue Parx stores, and 1,000 multi-brand outlets. These specialty stores sell the well known brands like Park Avenue, Parx, Manzoni and Be. Park Avenue is an up-market brand, while Parx and Manzoni are targeted at the casual wear and the premium ranges respectively. Similarly BK Birlas Century Textile plans to increase its number of outlets from 60 currently to 100 by next year.

International brands like Tommy Hilfiger are also present in India through franchise arrangements with Arvind Murjani Brand Private Limited (AMBPL) and its first store was opened at Banjara Hills, Hyderabad. The 3,840 sq ft store retails wide variety of products such as mens denim wear & sportswear, womens sportswear, junior jeans and accessories like handbags, belts and watches. Apart from the new

1.5.8 Dollar Stores

Image no.1.5.8 Dollar store

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Dollar stores have their roots in America's homey five-and- dimes, the general stores that offered a range of products at low prices. But modern dollar-store retailers are having more sophisticated operations; leveraging their growing buying power to strike special deals with vendors and continuously striving for unique advantage of both convenience and price. Some chains sell all their goods at $1 or less. Others offer selected items at higher prices. Most sell a combination of paper products, health and beauty supplies, cleaning products, paper and stationery, household goods, toys, food and sometimes clothing. Both private-label and brand-name goods fill the shelves. They are looking for employing technology to manage large distribution networks. US based My Dollar Store started operation in Mumbai through master franchise arrangements with Sankalp Retail Value. The store opened with a floor space of about 4,000 sq ft of space in Nirmal Lifestyle In September 2005,Mallz99 chain of dollar stores has also started operation in Malviya Nagar, South Delhi and the retailer has a plan to open 200 stores (both franchised & company owned) in India by 2009. The store offers over 1000 imported products that are priced at INR 99. Major product categories sold at the store are cleaning, health &beauty, hardware, plastic ware, kitchenware, candles, flowers, household items, home-dcor, automobile, stationary, disposables, party supplies, fashion jewellery, glassware, chocolate & confectionary, gifts, toys, products for pets, melamine ware, novelties, socks and fashion accessories. For keeping the store attractive for shoppers the store adds new products on a weekly basis. Mulund boasts of three dollar shopson SL Road and one in Mulund (E) near the station. Royal Shoppe on SL Road offers everything from crockery to towels, shoes, curios, lamps, etc. Royal Shoppe now offers goods ranging from Rs 29 to over Rs 1,699.

1.5.9 Internet Retailing

Image no.1.5.9 Internet retailing

23

The importance of internet retailing is growing all over the world. Some internet retailers such as e bay and rediff.com are providing a platform to vendors to sell their products online and they do not take the responsibility of delivering the product to buyer. They provide virtual shopping space to the vendors. On the other hand online retailers like amazon.com and walmart.com have to maintain their warehouse to stock products and take the responsibility of delivering products to the buyer. So, most of the brick and mortar stores are entering into online retailing as they have physical infrastructure and they can use that to capture additional consumer wallet. All the big retailers like Target, Sears and Kmart are operating online shop and some manufactures also operate online. For example Apple Inc. operates throughapple.com and Dell Inc. sells its products online through dell.com.

In India internet retailing is growing by 29% CAGR and Euro monitor report estimates that the a CAGR 48 per cent and in value term it going to touch INR 27billion by 2010 from INR 4 billion in 2005. The report also predicts that the contribution of internet retailing to nonstore retailing to is likely to be 46 per cent by2010. In 2005 LG Ez buy was the major internet retailer in value terms with a commanding share of close to 23 per cent. Other major players in terms of value share are Times Internet (indiatimes.com), Yahoo Web services (yahoo.com), India Online (Rediff.com), Fabmall and Sify.com. Fabmall online store offers about three million stock keeping units and attracts about 10,000 visitors per day and on average ships over 20,000 orders per month. Fabmall sells major product categories jewellery, Electronics, Books, Movies, Music and Gifts.

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CHAPTER-2

LITERATURE REVIEW

LITERATURE REVIEW
Market Hence, marketers have to worry about purchasing power of consumer not where he is living. For example there are nearly 42,000 rural haats , average number of sales outlets per haat is 300 and average sales per outlet is INR 900 and average foot fall in a haat is about 4,500. In rural India there are 50million Kisan Credit Card (KCC) holders and in 2002-03, LIC sold 50 percent of its policies retailing in India is receiving global recognition and attention and this emerging market is witnessing a significant change in its growth and investment pattern. It is not just the global players like Wal-Mart, Tesco and Metro group are eying to capture a pie of this market but also the domestic corporate behemoths like Reliance, KK Modi , Aditya Birla group, and Bharti group too are at some stage of retail development. Reliance, announced that it will invest $3.4 billion to become the country's largest modern retailer by establishing a chain of 1,575 stores by March2007. The last couple of years have been rosy for real estate developers and the retailers are finding suitable retail space in prominent locations. The industry is buoyant about growth and the early starters are in expansion mood. There is increased sophistication in the shopping pattern of consumers, which has resulted in big retail chains coming up in most metros; mini metros and towns being the next target. Consumer taste and preferences are changing leading to radical alteration in lifestyles and spending patterns which in turn is giving rise to new business opportunities. Companies need to be dynamic and proactive while responding to the everchanging trends in consumer lifestyle and behaviour.

Retailing in India is currently estimated to be a USD 200 billion industry, of which organised retailing makes up 3 percent or USD 6.4 billion. By 2010, organised retail is projected to reach USD 23 billion and in terms of market share it is expected torise by 20 to 25 per cent. The report also predicts a stronger retailer growth than that of GDP in the coming five years.

The generic growth is likely to be driven by changing lifestyles and by strong surge in income, which in turn will be supported by favourable demographic patterns. Rapid growth in international quality retail space brings joy to shoppers and shopping malls are becoming increasingly common in large cities, and announced development.

25

FACTORS THAT AFFECT THE SELECTION OF A SUITABLE LOCATION FOR A BUSINESS

Cost of the land Transport Costs

FINANCIAL

Cost of buying or renting property Government Incentives Labour Costs

Near to the Market

LOGISTICAL

Supply of suitably qualified workforce Close to similar businesses Suitable infrastructure, roads, ports, etc

Near to Suppliers Close to Utilities

OTHER FACTORS

OTHER FACTORS

Prefer to stay where they are, family reasons Local Educational and Training Facilities

Industrial Inertia

Planning Restrictions

Image no.2.1 factor affect the business 26

AC Nielsens Retail and Shopper Trends 2004 Report made the following Observations on shoppers behaviour in India:

(1) Indian shoppers spend an average of INR2500 on food, groceries and personal Care items every month and (2) Convenience stores are booming in most markets, as the number of such stores Exceeds 80,000. According to the report, 48 per cent of shoppers in India admit that they love to try new things, making them the most novelty seeking shoppers around the region and total average monthly expenditure is only $50, of this, $21 is spent on fresh food, comprising 42 per cent of the entire monthly spend. Indians also appear to spend more on groceries and personal care items.

Business communities believe that sizable disposable income in India is concentrated in the urban areas and well off and affluent classes; income distribution is unequal compared to other Asian economies. In fact, the 20 million middle class home in rural India equal the number in urban India and thus have the same purchasing power. Therefore, there is significant and considerable opportunity for organized retailers in the rural areas. There is no denying that the rural market holds immense promise for the organized retail but companies ponder over how to serve that market profitably.

Unlike the urban market, it is less developed in terms of infrastructure and facilities. More than an thing else, the larger issue is to find out a suitable business model and retail format to fit local taste and preference. Of course cost of doing business in rural market would be lesser compared to urban market but reaching out to the mass is a concern. It is not impossible but a bit more difficult. For example the most successful and the largest incorporation Wal-Mart started in the rural market where as competition started in the urban market. This retailer has proved that it is important to understand how do you operate your business model rather than where you do it.

Given the increasing urban exposure of rural India, the urban and the rural upper-income groups can form an interesting continuum market, giving it a scale of 23million households, 27

or 115 million consumers. In 2006-07, the consuming class would be about 60 million households, or 300 million consumers.

NCAER data shows that for 1998-99, for a basket of 22 FMCG products it tracks, a total of over Rs 91,500 crore was spent. Of this, 37% was spent by the two lowest-income groups in rural India, and only about 20% by the top two income groups in urban areas. This is, perhaps, the best and only statement of the structure and potential of the Indian in rural India. These are some of the indicators how rural India is performing.
Number of Shoppers Type of Shoppers Competitors Attract Shoppers

Shoppers

Availability of suitable vacant Shop

Shops Nearby

FACTORS AFFECTING THE LOCATION OF RETAIL BUSINESSES Rent Access for Delivery Vehicles Customer Parking Available or Nearby Security

Image no.2.2 Factor affects the location of retail business Mendis & Ward 1999 June Multinomial logit models were used to explain consumer outlet selection when buying beef, specifically roasts, steaks, ground beef, and other types of beef. Outlets were grouped into supermarkets, butchers, warehouses, supercenters, and others, and the probability of selecting each outlet type over a range of demographic and other variables was tested. The models were estimated from household data, with 198,682 observations used in the estimation. Empirical results showed that the type of beef purchased and the size of the purchase played an important role in the choice of outlet. 28

 Hawes & Lumpkin 2002 Consumers can select products from a wide variety of retail patronage alternatives. This article examines the amount of perceived risk that is associated with shopping at six different patronage modes. Department and specialty stores are generally considered low risk modes, while media advertisements represent the highest risk alternative. This research also examines the importance of various risk-handling tactics that may help the consumer deal with the perceived risk involved with the selection of a particular retail patronage mode.

Spiggle & Sewall 1987 The authors present a method that retail managers can use to assess competitive effectiveness and identify opportunities for improvement as consumers move through the choice process. The basis of the analysis is a model of retail selection using the aggregation of consumers' choice sets. The model involves five new subsets of the evoked set concept-action, interaction, inaction, quiet, and reject sets-and is illustrated by an empirical example.

Hernandez Although formal techniques of locational analysis have been available for over 50 years, most retailers traditionally made no use of them, relying instead on intuition guided by experience and common sense. However, the simultaneous advent in the last 15 years of low cost computing and the increasing availability of retail related data of all types has given retailers the opportunity to take a much more rational approach to decision making. This paper examines the extent to which retailers have taken advantage of the potential released by these developments, and adopted more scientific rules based methodologies. The analysis is based on an extensive questionnaire survey of UK retailers conducted in 1998 which encompassed organizations operating altogether more than 50,000 outlets across eight sectors. The survey sought to identify the use made both of particular types of techniques, and of Geographical Information Systems, which act as a platform for them. It was complemented by a series of in-depth interviews with location specialists in a number of major retail organizations. 29

 Oates The conflicting research on the elderly has led many to question the wisdom of using age alone to segment the market. Psychographics, or lifestyle groupings, has emerged as a more robust technique of identifying distinct categories of the 65 and older market. An activities, interests, and opinions (AIO) questionnaire from 386 respondents provided data to identify five distinct groups of elderly shoppers. Significant differences were found among the five clusters with regard to the perceived importance of various retail attributes which sell overthe-counter drugs: quality of store and personnel, store characteristics, and use of coupons and discounts.

Mendes 2004 One of the most important decisions a retailer can make is where to locate a retail outlet. Because convenience is so important to today's consumers, a retail store can prosper or fail solely based on its location. Recently, a changing retail environment is augmenting the location importance as retail economic groups develop multi-outlet chains of small stores. The methods used in the development and calibration of location models for commercial spaces and sales forecast are multiple, varying from simple analogy forecast models to very complex spatial interactions models, which may incorporate dependence models in a gravitational or logit structure and many exploratory variables. More recent developments incorporating meta-heuristics such as genetic algorithms for the global problem of the multioutlet chain configuration, or the use of Voronoi diagrams in store trade area delimitation, are also presented. Finally, the Geographical Information Systems' role on the decision support process is equally explored.

Lilien 1976 Many factors affect retail outlet profitability, including market potential, distribution and product costs, market pricing levels, cost (and availability) of land or space, and the relation between share of outlets and share of market. This paper presents a model that was used to plan building decisions for outlets for a consumer product across time and market areas. The 30

model has been in use for a number of years and has provided important input for budgeting and planning decisions. The implementation process for this model is also discussed. The model and its use provide an example of what we believe to be a 'successful' management science application-the characteristics of and reasons for this success are discussed

Donthy 1998 Current approaches to retail productivity measurement have long been controversial because of difficulties in identifying the level of retail services. Data Envelopment Analysis, an operations research-based performance evaluation methodology, is introduced as one solution for resolving this problem and assessing managerially useful measure of store-level retail productivity. Data Envelopment Analysis measures relative-to-best performance efficiency of retail outlets characterized by multiple inputs and outputs. In an empirical illustration, using data collected over time from retail stores belonging to a restaurant chain, the potential applications and strengths of Data Envelopment Analysis.

Journal of the Academy of Marketing Science 2010 Consumers can select products from a wide variety of retail patronage alternatives. This article examines the amount of perceived risk that is associated with shopping at six different patronage modes. Department and specialty stores are generally considered low risk modes, while media advertisements represent the highest risk alternative. This research also examines the importance of various risk-handling tactics that may help the consumer deal with the perceived risk involved with the selection of a particular retail patronage mode.

Marketing Science 1988 Consumer store choice results from a process whereby information on various alternatives is evaluated by the consumer prior to the selection of one of these alternatives. In the application of store choice models it is often assumed that the information-processing strategy underlying store choice is a simultaneous one in which all possible alternatives are 31

evaluated by an individual. A competing assumption, increasingly recognized in a spatial choice, is that individuals initially evaluate clusters of alternatives and then only evaluate alternatives within a chosen cluster. The nested logit model is a well-known formulation for capturing this type of choice process. This paper adds to the above understanding of consumer spatial choice in the following ways: (i) It describes an alternative to the nested logit model, known as a competing destinations model, which can be used to model hierarchical spatial choice processes. While this model has been described previously in the geography and planning literature, this paper contains a novel derivation of it from within the random utility maximization framework. (ii) A general choice formulation is derived from which the logit, nested logit, and competing destinations models can be obtained. This allows the behavioral assumptions embedded in each model to be seen clearly and it allows a comparison of the nested logit and competing destinations formulations. The latter is shown to be preferable in most spatial choice situations. In particular, the latter can be used when restricted choice sets are fuzzy. (iii) The errors that arise when spatial choice results from a hierarchical process and when a simultaneous choice structure is assumed are demonstrated and are related to the presence of consumer competition/agglomeration effects between stores which are thought to be important in store choice.

Kishore Biyani, 2007

Emerging Trends in Consumers Income & Consumption Pattern: NCAER study and some other data published by different research & consulting sources indicate the following trend in Consumer income and put the following projections about the Indian retailing:

1) Growing Prosperity: Making Indian Consumers Great: As per Indias Marketing White book (2006)3 by Business world, India has around 192 million households. Of these, only a little over six million areafflu ent that is, with household income in excess of INR215, 000. Another 75 million households are in the category of well off immediately below the affluent, earning between INR45, 000 and INR 2, 15,000.

32

2) Increase in the Sizable Disposable Income: Business communities believe that sizable disposable income in India is concentrated in the urban areas and well off and affluent classes; income distribution in India is unequal compared to other Asian economies. In fact, the 20 million middle class home in rural India equals the number inurbanIndia4 and thus have the same purchasing power. Therefore, there is significant and considerable opportunity for organized retailers in the rural areas as well. There is no denying that the rural market holds immense promise for the organized retail but companies ponder over, how to serve that market profitably. Unlike the urban market, it is less developed in terms of infrastructural facilities.

3) Place is no more important: The Major issue is to find out a suitable business model and retail format to fit local taste and preferences. Of course, cost of doing business in rural market would be lesser, as compared to urban market but reaching out to the mass is a concern. For example the most successful and the largest incorporation, Wal-Mart started in the rural market where as competition started in the urban market. This retailer has proved that it is important to understand how do you operate your business model rather than where you do it. Given the increasing urban exposure of rural India, the urban and the rural upperincome groups can form an interesting continuum market, giving it a scale of 23 million households, or 115 million consumers.

4) Increasing Potential in Rural Markets: NCAER data shows that for 1998-99, for a basket of 22 FMCG products it tracks, a total of over Rs 91,500 crore was spent. Of this, 37% was spent by the two lowest-income groups in rural India, and only about 20% by the top two income groups in urban areas.

This is, perhaps, the best and only statement of the structure and potential of the Indian market. Hence, marketers have to worry about purchasing power of consumers not where. Do they reside. For example there are nearly 42,000 rural haats, average number of sales outlets per haat is 300 and average sales per outlet is INR 900 and average foot fall in a haat is about 4,500. In rural India there are 50 million Kisan Credit Card (KCC) holders. These are some of the indicators how rural India is performing well & coming up.

33

5) As per NCAER data no. of Household having income of < 90,000 per annum in2005-06 was 1,32,249 ( 000) is projected to come down to 1,14,394 by 2009-10 which indicates that middle class is growing and they are emerging as real customers.(Annexure:1,2,3,4)

6) Higher Proportionate Rural Expenditure: While an average City-dweller may bespending almost twice than his counter-part in rural areas but in terms of allocation of his budget to key segments, the villager has sprung a few surprises. According to the latest data on household Consumption expenditure, rural India is allocating almost 10% of the monthly household Budget for fuel & Lighting while an average urban household spends9% under the same head. (Annexure: 11) .Still it remains attractive because of intense competition in Urban India. In value terms, however there is a sharp difference with rural Indian households earmarking Rs. 60 a month as consumption expenditure, compared to Rs.110 in cities and towns. After all, at Rs.19 a day or Rs. 625 a month, the average consumption spending too is low in rural areas, compared to Rs. 39 a day or Rs.1171 a month in urban India. The rapid rise in incomes will lead to an even faster increase in demand for consumer durables and expendables. Result by; the ownership of goods will also go up significantly by getting empowered through rise in the size of the great Indian middle class.

7) Young Population: By 2010 almost half of our citizens will be in the working agegroup of 20-24 years. A youthful, exuberant generation, bred on success will not drive the productivity but also set a spiralling effect on consumption & generation of income. Currently the country has a population of over one billion, 60% of which is under 30years of age. This means majority of the population is young and working class with higher purchasing power. The low median age of population means a higher current consumption rate which augurs well for the retail sector. Consumer spending in India has grown at over 12 percent since mid-1990s and 64 per cent of Indian GDP is accounted for by private consumption. Over the last decade, the average Indian spending has gone up from INR 5,745 in 1992-93 to INR 16,457 in 200304 and is expected to grow around its trend rate of 12 per cent per annum.

8) Fundamental Changes in Indian Economy: There are fundamental but significant changes underway in our economy. In January 2006, the government announced that foreign companies can own up to 51 percent of a single brand retail company, such as Nike or Adidas. 34

This decision would certainly encourage retailers such as Zara5 and Gap6to enter this market. Tesco is planning to enter the market through a partnership with Home Care Retail Mart Pvt. Ltd and expects to open 50 stores by 2010.7

2.1 RATIONALE BEHIND THE STUDY

The choice of a store location has a profound effect on the entire business life of a retail operation. A bad choice may all but guarantee failure, a good choice success. This aid takes up site selection criteria, such as retail compatibility and zoning, which the smalls to re owner manager must consider after making basic economic, demographic, and traffic analyses.

It offers questions the retailer must ask (and find answers to) before making the all important choice of store location. The first step in choosing a retail business location takes place in your head. Before you do anything else, define your type of business in the broadest terms and determine your long-term objectives.

Write them down. This exercise will help you later in choosing a retail location. In picking a store site, many storeowners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of the population, about the kind of competition they'll be facing, and about traffic patterns in the area they're considering.

The study will help in understanding the Location strategy and site selection for new retail outlet and what are the things you need to know about selecting a retail location and the main factors which affect or influence the location of retail outlet. Study will reveal which are important factors in customer point of view so that by adding new service elements along with providing better quality in delivering current service, difference may be created.

35

CHAPTER 3

RESEARCH METHDOLOGY

3.1 OBJECTIVES OF STUDY

With this study following objectives are to be achieved. 1. To identify the factor affecting the location decision of retail outlets. 2. To make a comparative study of these factor. 3. How these factor influences business environment. 4. To suggest remedial measures to minimise the factor affecting adversely business and to exploit the favourable factor.

3.2 RESEARCH METHODOLOGY

Most sciences have their own specific scientific methods, which are supported by Methodologies (i.e. rationale that support the method's validity).

The social sciences are methodologically diverse using qualitative, quantitative, and mixedmethods approaches. Qualitative methods include the case study, phenomenology, grounded theory, and ethnography, among others. Quantitative methods include hypothesis testing, power analysis, met analysis, observational studies, re sampling, randomized controlled trials, regression analysis, multilevel modeling, and high-dimensional data analysis, among others.

3.2.1 TYPES OF RESEARCH

The research study under consideration is exploratory type. Basically there are two broad kinds of researches. Exploratory Research: This seeks to discover new relationships. Conclusive Research: It is designed to help executive choose the various Course of action.

3.2.2 DATA SOURCE

Sources of information for the purpose of this project study, primary secondary data was collected & observation study was made.

36

PRIMARY DATA Data original, collected form investigation are known as primary
data. The primary data in this study was collected from the retailers for this purpose questionnaires were framed for consumer.

SECONDARY DATA- Secondary data means data that are already available i.e. they
refer to the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, then he has to look into various sources from where he can obtain them. In this scale he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published or unpublished. Usually published data are available in various publications of the central, state, and local bodies. In technical and trade journals, books magazines, newspaper, reports and publication of various associations connected with business and industry, banks, stock exchanges etc.

3.2.3 TYPES OF DATA

Secondary: Websites, Annual reports of the companies, Magazines, CMIE data base etc. As it is a secondary research, all the data is selected after rigorous analysis of articles from Newspapers, Magazines and Internet.

All the research collected is done by marketing analyst across the world and is compiled in this project to understand this term Study of factors that influence the location of a retail store more effectively.

37

CHAPTER -4

INTERPRETATION OF RESULTS

1) Location cost plays a major role in select the location of retail outlet.

Table no.1 Location cost Serial no. 1 2 3 4 Parameter Strongly agree Agree Neutral Total Respondent 34 12 4 50 % 68 24 8 100

8% Strongly agree 24% Agree Neutral Disagree 68% Strongly disagree

Graph no.1 Location cost

Interpretation 68% people are strongly agreed, 24% people are agreed & 8% are neutral with the statement means location cost is a crucial factor for selection of location of a retail outlet.

38

2) A good Parking facility must in location of retail outlet.

Table no.2 Parking Facility Serial no. 1 2 3 4 5 Parameter Strongly agree Agree Neutral Disagree Total Respondent 28 11 5 6 50 % 56 22 10 12 100

12% 10% Strongly agree Agree Neutral 56% 22% Disagree Strongly disagree

Graph no.2 Parking Facility Interpretation 56% people are strongly agreed, 22% people agreed, 10% people are neutral & 12% are disagreed with the statement means good parking facility is a crucial factor for selection of location of a retail outlet. 39

3) How would you rate Population in selection of retail outlet?

Table no.3 Population Serial no. 1 2 3 4 Parameter Highly essential Essential Moderate Total Respondent 37 22 4 50 % 74 44 8 100

4% 22%

Highly essential Essential Moderate Not applicable Cant say 74%

Graph no.3 Population

Interpretation 74% people feel that population is a highly essential factor for the selection of location of a retail outlet, 22% people feel that it is essential & 4% people feel that population is moderate factor retail outlet. 40

4) The retailers must ensure Security as well as safety for customer.

Table no.4 Security & Safety Serial no. 1 2 3 4 5 Parameter Strongly agree Agree Neutral Disagree Total Respondent 22 19 5 4 50 % 44 38 10 8 100

8% 10% 44% Strongly agree Agree Neutral Disagree 38% Strongly disagree

Graph no.4 Security & Safety Interpretation 44% people are strongly agreed, 38% people are agreed, 10% people are neutral & 8% people are disagreed with the statement means Security as well as safety is a crucial factor for selection of location of a retail outlet.

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5) The availability of Competition plays a major role in selection of retail outlet.

Table no.5 Competition Serial no. 1 2 3 4 5 Parameter Strongly agree Agree Neutral Disagree Total Respondent 39 6 3 2 50 % 78 12 6 4 100

6% 12%

4% Strongly agree Agree Neutral Disagree Strongly disagree 78%

Graph no.5 Competition Interpretation 78% people are strongly agreed, 12% people are agreed, 6% people are neutral & 4% people are disagreed with the statement means competition is a crucial factor for selection of location of a retail outlet. 42

6) Kindly rate the accessibility {transportation} on scale of five

(a) For delivery vehicle Table no.6 Accessibility for delivery vehicle Serial no. 1 2 3 4 Parameter Highly essential Essential Moderate Total Respondent 38 9 3 50 % 76 18 6 100

6% 18% Highly essential Essential Moderate Not applicable 76% Cant say

Graph no.6 Accessibility for delivery vehicle Interpretation 76% people feel that accessibility (delivery vehicle) is a highly essential factor for the selection of location of a retail outlet. 18% people feel that it is essential & 6% people feel that accessibility is moderate factor for selection of location of retail outlet.

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(b) For customers

Table no.7 Accessibility for customers Serial no. 1 2 3 4 5 Parameter Highly essential Essential Moderate Not applicable Total Respondent 31 11 4 4 50 % 62 22 8 8 100

8% 22%

8% Highly essential Essential 62% Moderate Not applicable Cant say

Graph no.7 Accessibility for customers

Interpretation 62% people feel that accessibility (customers) is a highly essential, 22% people feel that it is essential, 8% people feel that it is moderate & 8% people feel that it is moderate factor for the selection of location of a retail outlet. 44

7) Thus the Shoppers play the major role in establishing a retail outlet?
Table no.8 Role of Shoppers Serial no. 1 2 3 Parameter Respondent Yes No Total 46 4 50 % 92 8 100

8%

yes no

92%

Graph no.8 Role of Shoppers

Interpretation 92% people feel that a shopper plays an important role to select the location of a retail outlet, & 8% people feel that it is not a important factor to select the location of retail outlet.

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(a) No. of shoppers

Table no.9 No. of Shoppers Serial no. 1 2 3 4 Parameter Highly essential Essential Moderate Total Respondent 40 6 4 50 % 80 12 8 100

8% 12% Highly essential Essential Moderate Not applicable 80% Cant say

Graph no.9 No. of Shoppers

Interpretation 80% people feel that No. of shoppers is a highly essential factor, 12% people feel that it is essential & 8% people feel that it is moderate factor for the selection of location of a retail outlet.

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(b) Types of shoppers Table no.10 Types of Shoppers Serial no. 1 2 3 4 5 Parameter Highly essential Essential Moderate Not applicable Total Respondent 32 9 7 2 50 % 64 18 14 4 100

4% 14% Highly essential Essential 18% 64% Moderate Not applicable Cant say

Graph no.10 Types of Shoppers

Interpretation 64% people feel that Types of shoppers is a highly essential factor, 18% people feel that it is essential, 14% people feel that it is moderate & 4% people feel that it is not applicable for the selection of location of a retail outlet.

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8) Personal & Social factors play a vital role in selection of a location for establishment of a retail outlet.
Table no.11 Personal & Social factor Serial no. 1 2 3 4 5 Parameter Strongly agree Agree Neutral Disagree Total Respondent 37 6 5 2 50 % 74 12 10 4 100

4% 10% 12% Strongly agree Agree Neutral 74% Disagree Strongly disagree

Graph no.11 Personal & Social factor

Interpretation 74% people are strongly agreed, 12% people are agreed, 10% people are neutral, 4% people are disagree with the statement means Personal & Social factors are crucial factor for selection of location of a retail outlet. 48

CHAPTER- 5

FINDING & DISCUSSION

After conducting the Meta Analysis for the Indian retailing market, it can be concluded That:

(1) Retailers need to think about shoppers not just about a format as understanding the Shoppers dynamics holds the key to such a business. Retailers would have to create new delivery formats that can cater to the mass huge of consumers.

(2) Retailers must understand what value shopper is looking for and how the retailers can Deliver that desired value to the customer. However, most retailers look for what they are Offering and how shoppers can fit into retailers scheme of offerings.

(3) In the long run such strategies may not be viable. Sam Walton and Jack Welch share a same line of thinking that consumer is the source of competitive advantage and one of leading UK based retailers Tesco Inc. has shown how understanding consumer can be a source of redefining business and gaining sustainable advantage. The retailer operates four different retail formats namely Express, Super store Metro and Extra to cater consumer need. The Group also has an additional 527 stores under the One Stop fascia. All the formats are profitable and each format is tailor made to full fill customer need. It is the value offering which makes Tesco so popular and profitable. Similarly in India Pantaloon Retail runs several formats and for value retailing Big Bazaar is receiving exceptional response from the customers.

(4) Retailing in India is entirely different from western countries for that matter even from Asian counterparts .Studies show that upgraded Kirana stores are growing at the same rate as organized retailers.

(5) It is also observed that in the changing retailing environment, understanding the psyche of customer is critical to success in retailing. Aggregate level picture may be misleading, as it averages the beats and the valleys. Hence, individual understanding is desirable.

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(6) Though, some Indians are behaving as sophisticated shoppers, tens of millions are still novice but no less avid consumers are joining the fray every year. So, retailers have to acknowledge this change and also stay a step a head of the evolution curve of the Indian market.

(7)Finally, it is not the format that gives business sustainability rather it is one of the vehicles to deliver the value to the customer.

(8)Indian consumers are still family-driven entities. Shopping, Entertainment and Eating out are family events. Since these decisions are normally group decisions, hence a marketer has to address family sensibilities more rigorously to woo Indian customers.

(9)Indian customers have become more sensitive to quality, customer service and status. She/he is ready to pay, sometimes, astronomical sums provided their needs are satisfied. They are basically looking for an experience which is more of cognitive than physical. In brief,

Jo Dikhta Hai Wo Hi Bikta Hai.

In some cases, few Kirana store owners find no competition because they understand what their customers want.

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CHAPTER-6 CONCLUSION

CONCLUSION

6.1 CHOOSING A RETAIL LOCATION

This aid takes up site selection criteria, such as retail compatibility and zoning, which the small storeowner manager must consider after making basic economic, demographic, and traffic analyses. It offers questions the retailer must ask (and find answers to) before making the all important choice of store location.

The first step in choosing a retail business location takes place in your head. Before you do anything else, define your type of business in the broadest terms and determine your longterm objectives. Write them down. This exercise will help you later in choosing a retail location.

In picking a store site, many storeowners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of the population, about the kind of competition they'll be facing, and about traffic patterns in the area they're considering. Beyond a doubt these factors are basic to all retail location analysis.

Once you've spotted a tentative location using these factors, however, you've only done half the job. Before you make a commitment to moving in and setting up, you must carefully check several more aspects of the location to help insure your satisfaction with -- and most importantly your success at - the site you've chosen.

6.2 LOCATION STRATEGY

Retail Revolution is a strategic marketing firm with expertise in and passion for place-based marketing - helping dynamic retailers get the best results from their location. Our site selection service includes: Market Analysis. Complete overview of the demographic and competitive environment of your business, including trade area analysis and customer targeting. 51

 Location Strategy. Using the information gathered in the market analysis, a comprehensive location strategy will be developed, including key spatial factors, square footage ratio calculations, and .ideal. site descriptions. Site Specific Analysis . Once the location strategy has been determined and shared with a commercial realtor, Retail Revolution will conduct on-site investigations of proposed outlets, exploring things like signage site lines, pedestrian and auto traffic counts, access, and how the site fits into the surrounding retail environment.

6.4 Seven Things You Need To Know About Selecting a Retail Location
Selecting allocation for your retail store is one of the most important decisions you will makes a small business owner. Picking the right location can lead to success and profits choosing the wrong spot for your retail operation could put you out of business.

6.3.1. Type of Business.

Well before hitting the streets to look for a location, take a hard look at the type of business you will be operating. For example, how many different kinds of products will you be selling? Your product mix will have an impact on such things as the amount of square footage and storage space required at the location. If you are a service provider, factors such as office space will be an important consideration.

Start brainstorming or "white-boarding" ideas of what your target audience might expect when they enter your store - make a list of all the factors you can think of including display space, aisles, aisle width, shipping/receiving area, storage space, office space, in-store traffic flow, etc. Once you visualize what the shopping experience looks like for your customer, you will gain a better idea of what will be required in a location.

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6.3.2. Demographics.
Another critical component of retail location selection understands your target market, both in terms of your target shopper and the geographic area surrounding your proposed location. Once you have established your target market i.e. gender, age, and income level. Etc. Start researching some of the following information: What neighbour-hoods are home to your target market? How far will prospective customers travel to shop at your location? What are the statistical trends in a proposed location i.e. population growth; income growth; aging trends, etc? How might this affect your store 5 or 10 years after locating? What are the employee demographics in particular areas? With labour shortages becoming an ongoing challenge for retailers, does your proposed location have access to potential full time and part-time employees?

6.3.3 Competition
Make sure that you have through knowledge of all the competition in a proposed location, good and bad. Bad competitors are those that will have a negative factor on your business. Some example might include retail store that might be selling the exact same products (at a discount) or store that attract the opposite target audience as your retail operation.

Good competitors are retail stores that compliment your business by drawing a similar target audience to your stores surrounding area a good example are retail pockets that exist in many cities- shopping destination that attract larger number of consumer by offering complimentary stores in close proximity to one and other i.e. fashion districts, areas with a high concentration of art galleries, auto malls etc.

6.3.4 Traffic pattern

Its also important to know how vehicle and pedestrian traffic patterns might affect business at a proposed location. Something to look for includes: Access to the store by traffic moving in both directions (both by car and on food) Number of cars passing the store location. Number of pedestrian walking by the location. Proximity to public transit. 53

David Gray, principle of DIG360, a retail consulting firm in Vancouver, BC, shares some suggestion about scoping out store location in a recent article in BC business. If you are savvy about it, you do a whole lot of looking. Youd be in car and do it, and then youd be on foot. And youd go weekends and weekdays, just to make sure theres not a big traffic difference, find out which side is the busy side of the street, and check out where the parking is.

6.3.5 Merchant Association

An often overlooked factor when considering a location is the presence and strength of a local merchant association. According to the BC Womens Enterprise Centre, merchant association can offer a number of benefits to your retail operation: A strong merchant association can promote and maintain business in a given area. The presence of an effective merchants association can strengthen your business and save your money through group advertising programs, group insurance plans, and collective security measures. A strong merchants association can accomplish through group strength what an individual store owner couldnt even dream of. Some association have induced city planners to add highway exits near their shopping centres. Merchants association can be particularly effective in promoting of share using common themes or events and during holiday seasons. The collective draw from these promotions is usually several times that which a single retailer could have mustered.

6.3.6 City by Laws, Zoning and Planning

Understanding all the rules and plans your municipality has laid out is very important when it comes to selecting a location-your retail stores long term success could depend on it some things to consider are: Zoning- Are there any restriction that might prevent you from doing specific renovations or leasehold improvements? By laws- What are some of the laws that might have an effect of your retail operation? For example, are you able to use the space in front of your store for promotions? Planning- Are there any major development plans could impact your retail operation? Is there any major road construction planned close to your store? 54

6.3.7 Dont rush- Be patient

Its very tempting to jump at a location you fall in love with- but just like in residential real estate, Head over Heart is the best approach when it comes to picking a retail location. David Gray cautions those who want to act on impulse. "You could just destroy your business being in a bad location. A bad spot might well be (a real trendy area); it might be that you cant take a left turn or theres no parking, so dont rush into anything until you know it's perfect, or close to it."

6.4 LOCATION FACTOR

Where you choose to locate your retail business will have a major impact on everything your shop does. The difference between selecting the wrong location and the right site could be the difference between business failure and success. Before choosing a retail store location, define how you see your business, both now and in the future. What do your customers look like? Can you visualize your building? Do you know what you want to sell and what you want your business to be known for? Have you determined how much retail space, storage area, or the size of the office you need?

Without the answers to these basic questions, it will be hard to find the perfect location for generating the maximum amount of profit for your retail store.

6.4.1 Type of Goods

Examine what kind of products you sell, as some goods will require certain types of locations. Would your store be considered a convenience store, a specialty shop or a shopping store? Convenience goods require easy access, allowing the customer to quickly make a purchase. A mall would not be a good location for convenience goods. This product type is lower priced and purchased by a wide range of customers. Specialty goods are more unique than most products and customers generally won't mind travelling out of the way to purchase this type of product. This type of store may also do well near other shopping stores. 55

A shopping store usually sells items at a higher price which are bought in frequently by the customer. Furniture, cars and upscale clothing are examples of goods found at a shopping store. Because the prices of these items are higher, this type of customer will want to compare prices before making a purchase. Therefore, retailers will do well to locate their store near like stores.

6.4.2 Population and Your Customer

If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. Any of these sources should have information on the area's population, income and age. You know who your customers are, so make sure you find a location where your customers live, work and shop.

6.4.3 Accessibility, Visibility and Traffic

Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if that shopper meets the definition of their target market. Small retail stores may benefit from the traffic of nearby larger stores. How many people walk or drive past the location. Is the area served by public transportation? Can customers and delivery trucks easily get in and out of the parking lot? Is there adequate parking?

Depending on the type of business, it would be wise to have somewhere between 5 to 8 parking spaces per 1,000 square feet of retail space. When considering visibility, look at the location from the customer's view point. Can the store be seen from the main flow of traffic? Will your sign be easily seen? In many cases, the better visibility your retail store has, the less advertising needed. A specialty retail store located six miles out of town in a free standing building will need more marketing than a shopping store located in a mall.

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6.4.4 Signage, Zoning and Planning

Before signing a lease, be sure you understand all the rules, policies and procedures related to your retail store location. Contact the local city hall and zoning commission for information on regulations regarding signage. Ask about any restrictions that may affect your retail operation and any future planning that could change traffic, such as highway construction.

6.4.5 Competition and Neighbours

Other area businesses in your prospective location can actually help or hurt your retail shop. Determine if the types of businesses nearby are compatible you're your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store. Place it next to a nail or hair salon and it may do much more business.

6.4.6 Location Costs

Besides the base rent, consider all costs involved when choosing a retail store location. Who pays for lawn care, building maintenance, utilities and security? Who pays for the upkeep and repair of the heating/air units? If the location is remote, how much additional marketing will it take for customers to find you? How much is the average utility bill? Will you need to make any repairs, do any painting or remodelling to have the Location fit your needs? Will the retailer be responsible for property taxes?

The location you can afford now and what you can afford in the future should vary. It is difficult to create sales projects on a new business, but one way to get help in determining how much rent you can pay is to find out what sales similar retail businesses are making and how much rent they're paying.

6.4.7 Personal Factor

If you plan to work in your store, think about your personality, the distance from the shop to home and other personal considerations. If you spend much of your time travelling to and from work, the commute may overshadow the exhilaration of being your own boss. 57

Also many restrictions placed on a tenant by a landlord, Management Company or community can hamper a retailer's independence.

6.4.8 Special Considerations

Your retail shop may require special considerations. Make a list of any unique characteristic of your business that may need to be addressed. Will the store require special lighting, fixtures or other hardware installed? Are restrooms for staff and customers available? Is there adequate fire and police protection for the area? Is there sanitation service available? Does the parking lot and building exterior have adequate lighting? Does the building have a canopy that provides shelter if raining? What is the crime rate in the area? Are there (blue laws) restrictions on Sunday sales?

Don't feel rushed into making a decision on where to put your retail store. Take your time, research the area and have patience. If you have to change your schedule and push back the date of the store's opening, than do so. Waiting to find the perfect store location is better than just settling for the first place that comes along. The wrong location choice could be devastating to your retail business.

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CHAPTER-7

IMPLICATION OF STUDY

7.1 DIRECTION FOR FATURE STUDY

The study will help in understanding the Location strategy and site selection for new retail outlet and what are the things you need to know about selecting a retail location and the main factors which affect or influence the location of retail outlet. Study will reveal which are important factors in customer point of view so that by adding new service elements along with providing better quality in delivering current service, difference may be created.

7.2 LIMITATIONS OF STUDY

Following limitations will affects this study. 1. Limited time for the study. 2. Proper funds are not available for the study. 3. Short area can be covered in limited time constrain. 4. The study is limited to a time period of june-july2011. 5. Data collected may be inadequate.

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CHAPTER-8

REFERENCES

8.1 REFERENCES
Sara Mendis & Carl L. Ward 2 June 1999 The International Food and Agribusiness Management Review Volume 2, Issue 2, Pages 195-219 Jon Donthy Spring 1998 Journal of Retailing Volume 74, Issue 1, Pages 89-105 Vilen N. Mendis January 2004, International Transactions in Operational Research Volume 11, Issue 1, pages 118, W. L. Lilien February 1976 Operation Research Vol. 24 No.1 January, Hawes & Lumpkin 2002, Journal of the Academy of Marketing Science Volume 14, Number 4, 37-42, DOI: 10.1007/BF02721814 Marketing Science Vol. 7, No. 3, Summer, 1988 J. Oatch Apr. 1967Management Science Vol. 13, No. 8, Spiggle & Sewale Apr. 1987 The Journal of Marketing Vol. 51, No. 2, Apr., 1987 Jack Hernandz International Journal of Retail & Distribution Management ISSN: 0959-0552 Bob Donthy Journal of Consumer Marketing Volume 13 issue 6 Kishor biani 2007, Business world, Pages 9-11 htpp://www.etretailbiz.com/ htpp://www.scribd.com/ Anshul jain, factor influencing the location of retail stores htpp://www.wikipedia.org/ htpp://www.school.jslcombe.com/ http://www.mumbaipropertyexchange.com/newsdetail.asp?news=84/ http://www.pantaloon.com/html/company_profile.htm/ http://retailindustry.about.com/od/abouttheretailindustry/p/retail_industry.htm/ ohttp://retailindustry.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=retailindus try&zu/ http%3A%2F%2Fwww.census.gov%2Fprod%2F2005pubs%2Fbr04-a.pdf/ http://www.plunkettresearch.com/Industries/Retailing/RetailingTrends/tabid/269 /Default.aspx/ http://www.euromonitor.com/reportsummary.aspx?folder=Retailing_in_China&/

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APPENDICES

Dear Respondent,
This questionnaire is prepared to study the factors affecting location of retail outlet. This information is purely for academic purpose.

PERSONAL DETAILS:Name: - Gender:Age: - Name of the shop:- Male Female

According to you 1) Location cost plays a major role in select the location of retail outlet.
Strongly agree Agree Neutral Disagree Strongly disagree

2) A good Parking facility must in location of retail outlet.

Strongly agree Agree Neutral Disagree Strongly disagree

3) How would you rate Population in selection of retail outlet?

Highly essential Esential Moderate Not applicable Cant say

4) The retailers must ensure Security as well as safety for customer.

Strongly agree Agree Neutral Disagree Strongly disagree

5) The availability of Competition plays a major role in selection of retail outlet.

Strongly agree Agree Neutral Disagree Strongly disagree

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6) Kindly rate the accessibility {transportation} on scale of five.

(a) (b)

For delivery vehicle For customers

Highly essential Highly essential

essential essential

Moderate Moderate

not applicable not applicable

cant say cant say

7) Thus the Shoppers play the major role in establishing a retail outlet?
Yes No if yes

(a) No. of shoppers

Highly essential Essential Moderate Not applicable Cant say

(b) Types of shoppers

Highly essential Essential Moderate Not applicable Cant say

8) Personal & Social factors plays a vital role in selection of a location for establishment of a retail outlet.
Strongly agree Agree Neutral Disagree Strongly disagree

9) If any other please specify: ..

Thank you for your co-operation

Date

Signature
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