CHAPTER-1

RETAIL INDUSTRY IN INDIA

• RETAIL DEFINATION & MEANING

• RETAIL FORMATS

• EVOLUTION OF INDIAN RETAIL

• RETAIL TRENDS IN INDIA

• AN OVERVIEW OF INDIAN RETAIL

• STRUCTURE OF INDIAN RETAIL

• SIZE OF RETAIL SECTOR.

• FDI IN RETAIL

• MAJOR COMPONENTS IN RETAIL

• FUNCTIONS IN RETAIL OPERATION

FIGURE 1.1

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RETAIL DEFINITION
The word ‘retail’ is derived from the French word ‘retailer’, meaning ‘to cut a
piece off’ or ‘to break bulk’. It includes all the activities directly related to the
sale of goods and services to the ultimate consumer for personal or non-
business use. In simple terms, it implies a first-hand transaction with the
customer

MEANING OF RETAIL

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. Retailing involves a direct interface with the
customer & the coordination of business activities from end to end- right from
the concept or design stage of a product or offerings, to its delivery & post-
delivery service to the customer. The world over the retail sector has grown
rapidly with increasing sophistication and modernization of the life-style of
households and individuals and with increasing globalisation of trade; India
has begun to cater up rather astonishingly rapidly. The industry has
contributed to the economic growth of many countries & is undoubtedly one of
the fastest changing & dynamic industries in the India and world today.

THE EVOLUTION OF INDIAN RETAIL INDUSTRY

For Indian retailing, things started to change slowly in the 1980s, when India
first began opening its economy. Textiles sector (which companies like
Bombay Dyeing, Raymond's, S Kumar's and Grasim) was the first to see the
emergence of retail chains. Later on, Titan, maker of premium watches,
successfully created an organized retailing concept in India by establishing a
series of elegant showrooms. For long, these remained the only organized
retailers, but the latter half of the 1990s saw a fresh wave of entrants in the
retailing business. These were pure retailers with no serious plans of getting
into manufacturing. These entrants were in various fields, like - Food World,
Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in
music; Crossword and Fountainhead in books. As of the year ending 2000 the
size of the Indian organized retail industry was estimated at around Rs.

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13,000 crore. Retail growth is already gathering momentum and the organized
retail industry is expected to grow by 30 per cent in the next five years and is
expected to touch Rs. 45,000 crore in 2005. Thus, the growth potential for the
organized retailer is enormous

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FIGURE 1.2

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 RETAIL

Introduction
India has often been called a nation of shopkeepers. Presumably the
reason forThis is; that, a large number of retail enterprises exist in India. In
2004, there were 12 million such units of which 98% are small family
businesses, utilizing only Household labor. Even among retail enterprises,
which employ hired workers.
Majority of them use less than three workers. Retailing is the
combination of activities involved in selling or renting consumer goods and
services directly to ultimate consumers for their personal or household use. In
addition to selling, retailing includes such diverse activities as, buying,
advertising, data processing and maintaining inventory. While sales people
regularly call on institutional customers, to initiate and conclude transactions,
most end users or final customers, patronize stores. This makes store
location, product assortment, timings, store fixtures, sales personnel, delivery
and other factors, very critical in drawing customers to the store. Final
customers make many unplanned. In contrast those who buy for resale or use
in manufacturing are more systematic in their purchasing. Therefore, retailers
need to place impulse items in high traffic locations, organize, store layout ,
trains sales people in suggestion , and place related items next to each other,
to stimulate purchase.

WHAT DOES THE RETAILING INDUSTRY INCLUDE?

 Department Stores
 Discount Stores
 Clothing Stores
 Specialty retailers
 Convenience Stores
 Grocery Stores
 Drug Stores
 Home furnishing retailers
 Auto Retailers

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 Direct Sales Catalog and mail order companies
Retailing consists of the sale of goods or merchandise from a fixed
location, such as a department store; shopping mall etc .The retailer buys
goods or products in large quantities from manufacturers 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 retailing as a
necessary part of their overall distribution strategy. In the retail outlet various
type of good and service are provide to the customer but all the goods and
services are generally homogenous in nature through all the other retail
outlets. Product and services of every company are available in every retail
outlet. It is also find that many customer only used to shopping in own decided
outlet rather from every outlets even there is homogenous among the product
and service offer by the
Every retail outlet .So This put the question in the mind of the every
retailer that is there is any gap between what customer expected from
retailers and what retailer provides to customer during shopping. No two
customers have the identical likes and preferences. Delivery value and
narrowing down the zone of tolerance is a tightrope walk for marketer in
organized retail sector. Especially in market like India the challenges is
formidable because organizations need to cater to a wide and diverse group
of customers .Thus building equity and generating volumes in such complex
market tapers down to the function of managing customer expectation.
Customers take their time to first sketch their needs and then arrive at a
specific decision. At the end of the day the question is what does the
customer expect? How to fulfill the glaring gap between need and
expectations? The answers to this question are “by delivering the value “
But in many case retailers are not aware of what their customer expect.
Hence they are unable to deliver the right value to the right customer and
satisfy them .Especially in this competitive scenario where the customer are
well informed, commanding and demanding at the same time it has become
imperative for the organization to be updated on the “WHAT”,”WHY”and
“HOW” of each and every customer. This calls for empathizing with the

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customer by indulging into their priorities and decision making. Even in the
case of a product as simple as beauty soap, customer have versatile
expectations like, good packaging fragrance, herbal or medical benefit,
glowing skin etc. and all this at an affordable price. A daunting task but
companies have no option but to offer the expected value, that too by keeping
the operating costs low.

Following general expectations of a typical customer

 Value of Money
 Availability and location
 Service expectations
 Quality in Product
 Need based solution
So in other to deliver the value, Retail outlets in addition to providing
products and services, need to cater for a wide range of motives. The various
determinants of retail outlet preference include cleanliness, well-stocked
shelves, and range of products, helpful staff, disabled access, wide aisles, car
parking, multiple billing points and environmentally friendly goods. These
differing motives arise as retailers cater to different types of shoppers who
include economic consumers (concern with value), personalized consumers
(concern with relationships), recreational shoppers (shopping as a leisure
activity) and apathetic consumers (who dislike shopping). Retailers have to
satisfy budding customers, older consumers as well as time crunched
individuals whose motives all tend to be conflicting as well as different.
Retailers need to establish a good image to prevent customers from shopping
around. They must cater to shoppers need for pleasure and practicality. If
expressed as a calculation, customer satisfaction might look something like
this:
Customer expectations
Companies Performance/ Companies Satisfaction
Satisfaction is a consumer’s post-purchase evaluation of the overall
service experience. It is an affective reaction (Menon and Dubé, 2000) in
which the consumer’s needs, desires and expectations during the course of

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the service experience have been met or exceeded (Lovelock, 2001).
Satisfaction in this sense could mean that a supermarket has just barely met
the customer’s expectations, not exceeded nor disappointed those
expectations. The benefits of taking the customer’s response beyond
satisfaction at this level by exceeding expectations, is a competitive strategy
many retailers aspire to achieve. There is a recurrent struggle for existence
and survival in the wake of deep competition, drastically changing customer
attitudes and expectation levels. The study would enable us to understand the
impact of various factors that influence a consumer’s shopping behavior in a
departmental store. It would also help in knowing the magnitude and direction
of movement of these factors amongst each other. These factors have been
divided into three heads- Store, Situation and Shopper factors.

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THE IMPORTANCE OF RETAILING
Organized retailing in India was estimated at Rs.18,000 crores in 2002-
2003 and has grown at about 40% over the last 3 years (Source KSA Retail
Outlook). Retailing has a tremendous impact on the economy. It involves high
annual sales And employment. As a major source of employment retailing
offers a wide range of career opportunities including; store management,
merchandising and owning
A retail business. Consumers benefit from retailing in that, retailers
perform marketing functions that makes it possible for customers to have
access to a broad variety of products and services. Retailing also helps to
create place, time and possession utilities. A retailer's service also helps to
enhance a product's image. In general, retailers perform four distinct function
as, shown in Figure 1.1 below: Retailers participate in the sorting process by
collecting an assortment of goods and services from a wide variety of
suppliers and offering them for sale. The width and depth of assortment
depend upon the individual retailer's strategy.
They provide information to consumers through advertising, displays
and signs and sales personnel. Marketing research support is given to other
channels, members. They store merchandise, mark prices on it, place items
on the selling floor and otherwise handle products; usually they pay suppliers
for items before selling, them to final customers. They complete transactions
by using appropriate locations, and timings, credit policies, and other services
e.g. delivery. Retailing in a way, is the final stage in marketing channels for
consumer products. Retailers provide the vital link between producers and
ultimate consumers.

RETAIL STRATEGY AND STRUCTURE

Successful retail operations depend largely on two main dimensions:
margin and turnover. How far a retail enterprise can reach in margin and
turnover depends essentially on the type of business (product lines) and the
style and scale of the operations. In addition the turnover ,also depends upon
the professional competence of the enterprise.In a given business two retail

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companies may choose two different margin levels,and yet both may be
successful, provided the strategy and style of management are appropriate.

Margin Turnover Model

Ronald R. Gist "Suggested a conceptual frame work, using margin and
turnover, for understanding the retail structure and evolving a retail strategy."
Margin is defined as the percentage mark tip at which the inventory in the
store is sold and turnover is the number of times the average inventory is sold
in a year. is a diagrammatic representation of the frame work and can be
applied to almost any type of retail business. Depending upon the,
combination of the two parameters, a retail business will fall into one of the
four quadrants. For instance L-L signifies a position, which is low on both
margin and turnover; whereas, H-L indicates high margin and low turnover.

Low Margin High Turnover Stores

Such an operation assumes that low price is the most significant
determinant of customer patronage. The stores in this category price their
products below the market level. Marketing communication focuses mainly on
price. They provide Very few services; if any, and they normally entail an extra
charge whenever they do. The merchandise in these stores is generally pre-
sold or self sold. This means that the customers buy the product, rather than
the store selling them. These stores are typically located in isolated locations
and usually stock a wide range of fast moving goods in several merchandise
lines. The inventory consists of well-known brands for which the manufacturer
through national advertising creates a consumer pull. Local promotion focuses
on low price. Wal-mart in the United States is an example and Pantaloon
Chain or Subhiksha are Indian examples of such stores.
High Margin Low Turnover
This operation is based on the premise that distinctive merchandise,
service and sales approach are the most important factors for attracting
customers. Stores in this category price their products higher than those in the
market, but not necessarily higher than those in similar outlets. The focus in
marketing communication is on product quality and uniqueness. Merchandise

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is primarily sold in store and not pre-sold. These stores provide a large
number of services

High Margin High Turnover Stores

These stores generally stock a narrow line of products with turnover of
Reasonably high frequency. They could be situated in a non-commercial area
but not too far from a major thoroughfare. Their location advantage allows
them to charge a higher price. High overhead costs and, low volumes also
necessitate a higher price.

Low Margin-Low Turnover Stores

Retail enterprises in this category are pushed to maintain low margins
because of price wars. Compounding this problem is the low volume of sales,
which is probably a result of poor management, unsuitable location etc. such
businesses, normally get wiped out over a period of time. RETAILING
FORMATS (CLASSIFYING RETAIL FIRMS) Regardless of the particular type
of retailer (such as a supermarket or a department store), retailers can be
categorized by (a)
Ownership, (b) Store strategy mix, and (c) Non store operations. Figure 1.3
illustrates this concept.

1. Form of Ownership
A sole proprietor, partners or a corporation can own a retail business
like any other type of business. A majority of retail business in India are sole
proprietorships and partnerships.

2. Independent Retailer
Generally operates one outlet and offers personalized service, a
convenient location and close customer contact. Roughly 98% of all the retail
businesses in India, are managed and run by independents, including barber
shops, drycleaners, furniture stores, bookshops, LPG Gas Agencies and
neighbourhood stores. This is due to the fact that into retailing is easy and it

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requires low investment and little technical knowledge. This obviously results
in a high degree of competition. Most independent retailers fail because of the
ease of entry, poor management skills and inadequate resources.

3. Retail Chain
It involves common ownership of multiple units. In such units, the
purchasing and decision making are centralized. Chains often rely on,
specialization, standardization and elaborate control- systems. Consequently
chains are able to serve a large dispersed target market and maintain a well
known company name. Chain stores have been successful, mainly because
they have the opportunity to take advantage of "economies of scale" in buying
and selling goods. They can maintain their prices, thus increasing their
margins, or they can cut prices and attract greater sales volume. Unlike
smaller, independent retailers with lesser financial means, they can also take
advantage of such tools as computers and information technology. Examples
of retail chains in India are Shoppers stop; West side and IOC, convenience
stores at select petrol filling stations.
4. Retail Franchising
Is a contractual arrangement between a "franchiser" (which may be a
manufacturer, wholesaler, or a service sponsor) and a "franchisee" or
franchisees, which allows the latter to conduct a certain form of business
under an established name and according to a specific set of rules. The
franchise agreement gives the franchiser much discretion in controlling the
operations of small retailers. In exchange for fees, royalties and a share of the
profits, the franchiser offers assistance and very often supplies as well.
Classic examples of franchising are; McDonalds, Pizza Hut and Nirulas.

5. Cooperatives
A retail cooperative is a group of independent retailers,that have combined
their financial resources and their expertise in order to effectively control their
wholesaling needs. They share purchases, storage, shopping facilities,
advertising planning and other functions. The individual retailers retain their

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independence, but agree on broad common policies. Amul is a typical
example of a cooperative in India.

Store Strategy Mix

Retailers can be classified by retail store strategy mix, which is an
integrated combination of hours, location, assortment, service, advertising,
and prices etc. The various categories are:

(A) Convenience Store:

Is generally a well situated, food oriented store with long operating
house and a limited number of items. Consumers use a convenience store;
for fill in items such as bread, milk, eggs, chocolates and candy etc.

(B) Super markets:

Is a diversified store which sells a broad range of food and non food
items. A supermarket typically carries small house hold appliances, some
apparel items, bakery, film developing, jams, pickles, books, audio/video CD's
etc. The Govt. run Super bazaar, and Kendriya Bhandar in Delhi are good
examples of a super market. Similarly in Mumbai, we have Apna Bazar and
Sahakari Bhandar.

(C) Department Stores:

A department store usually sells a general line of apparel for the family,
household linens, home furnishings and appliances. Large format apparel
department stores include Pantaloon, Ebony and Pyramid. Others in this
category are: Shoppers Stop and Westside.

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(D) Speciality Store:
Concentrates on the sale of a single line of products or services, such
as Audio equipment, Jewellery, Beauty and Health Care, etc. Consumers are
not confronted with racks of unrelated merchandise. Successful speciality
stores in India include, Music World for audio needs, Tanishq for jewellery and
McDonalds, Pizza Hut and Nirula's for food services.

(E) Hyper Markets:

Is a special kind of combination store which integrates an economy
super market with a discount department store. A hyper market generally has
an ambience which attracts the family as whole. Pantaloon Retail India Ltd.
(PRIL) through its hypermarket "Big Bazar", offers products at prices which
are 25% - 30% lower than the market price.

Non Store Retailing

In non store retailing, customers do not go to a store to buy. This type
of retailing is growing very fast. Among the reasons are; the ability to buy
merchandise not available in local stores, the increasing number of women
workers, and the presence of unskilled retail sales persons who can not
provide information to help shoppers make buying decisions The major types
of non store retailing are:

(A) In Home Retailing:

Where, a sales transaction takes place in a home setting - including
door-door selling. It gives the sales person an opportunity to demonstrate
products in a very personal manner. He/She has the prospect's attention and
there are fewer distractions as compared to a store setting. Examples of in
home retailing include, Eureka Forbes vaccum cleaners and water filters.

(B) Telesales/Telephone Retailing:

This involves contact between the prospectand the retailer over the
phone, for the purpose of making a sale or purchase. Alarge number of mobile

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phone service providers use this method. Other examples are private
insurance companies, and credit companies etc.

(C) Catalog Retailing:

This is a type of non store retailing in which the retailers offers the
merchandise in a catalogue, which includes ordering instructions and
customer orders by mail. The basic attraction for shoppers is convenience.
The advantages to the retailers include lover operating costs, lower rents,
smaller sales staff and absence of shop lifting. This trend is catching up fast in
India. Burlington's catalogue shopping was quite popular in recent times.
Some multi level marketing companies like Oriflame also resort to catalogue
retailing.

(D) Direct Response Retailing:

Here the marketers advertise these products/ services in magazines,
newspapers, radio and/or television offering an address or telephone number
so that consumers can write or call to place an order. It is also sometimes
referred to as "Direct response advertising." The availability of credit cards
and toll free numbers stimulate direct response by telephone. The goal is to
induce the customer to make an immediate and direct response to the
advertisement to "order now." Telebrands is a classic example of direct
response retailing. Times shopping India is another example.

(E) Automatic Vending:

Although in a very nascent stage in India, is the ultimate in non
personal, non store retailing. Products are sold directly to customers/buyers
from machines. These machines dispense products which enable customers
to buy after closing hours. ATM's dispensing cash at odd hours

(F) Electronic Retailing/E-Tailing:

Is a retail format in which retailers communicate with customers and
offer products and services for sale, over the internet. The rapid diffusion of

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internet access and usage, and the perceived low cost of entry has stimulated
the creation of thousands of entrepreneurial electronic retailing ventures
during the last 10 years or so. Amazon.com, E-bay and Bazee.com
HDFCSec.com are some of the many e-tailers operating today. THE WHEEL
OF RETAILING Is a hypothesis that attempts to explain the emergence of
new retailing institutions and their eventual decline and replacement by newer
retailing institutions. Like products retailing institutions also have a life cycle.
According to this theory new retailers enter the market as, low margin, low
price,low status institutions. The cycle begins with retailers attracting
customers by offering low price and low service. Over a period of time these
retailers want to expand their markets and begin to stock more merchandise,
provide more services, and open more convenient locations. This trading up
process. Increases the retailers costs and prices, creating opportunities for
new low price retailers to enter the market. The evolution of the department
store illustrates the "wheel of retailing" theory. In its entry phase, the
department store was a low cost-low service venture. With time it moved up
into the trading-up phase. It upgraded its facilities, stock selection, advertising
and service. The same department store then moves into the vulnerability
phase, because it becomes vulnerable to low cost/low service formats, such
as full line discount stores and category specialists. Figure 1.5 illustrates this
theory. While the wheel hypothesis has a great deal of intuitive appeal and
has been borne out in general by many studies of retail development, it only
reflects a pattern. It is not a sure indicator of every change, nor was it ever
intended to describe the development of every individual retailer.

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 RETAILING DECISIONS
There are many factors for retailers to consider while developing and
implementing their marketing plans. Among the major retailing decisions are
these related to (a) Target markets (b) Merchandise management (c) Store
location (d) Store image (e) Store personnel (f) Store design (g) Promotion,
and (h) Credit and collections. This is shown diagrammatically in Figure 1.6.

Target Markets:
Although retailers normally aim at the mass market, a growing number
are engaging in marketing research and market segmentation, because they
are finding it increasingly difficult to satisfy everyone. Through a careful
definition of target markets, retailers can use their resources and capabilities
to position themselves more effectively and achieve differential advantage.
The tremendous growth in number of speciality stores in recent years is
largely due to their ability to define precisely the type of customers, they want
to serve.

Merchandise Management:
The objective here is to identify the merchandise that customers want,
and make it available at the right price, in the right place at the right time.
Merchandise Management includes (i) merchandise planning (ii) merchandise
purchase, and (iii) merchandise control. Merchandise planning deals with
decisions relating to the breadth and depth of the mix, needed to satisfy target
customers to achieve the retailers return on investment. This involves sales
forecasting, inventory requirements, decisions regarding gross margins and
mark ups etc. Merchandise buying involves decisions relating to centralized or
decentralized buying, merchandise resources and negotiation with suppliers.
Merchandise Control: deals with maintaining the proper level of inventory and
protecting it against shrinkage (theft, pilferage etc.)

Store Location:
Location is critical to the success of a retail store. A store's trading-area is the
area surrounding the store from which the outlet draws a majority of its

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customers. The extent of this area depends upon the merchandise sold. For
example some people might be willing to travel a longer distance to shop at a
speciality store because of the unique and prestigious merchandise offered.
Having decided on the trading area a specific site must then be selected.
Factors affecting the site include, traffic patterns, accessability, competitors'
location, availability and cost and population shifts within the area.

Store Image:
A store image is the mental picture, or personality of the store, a
retailer likes to project to customers. Image is affected by advertising,
services; store layout, personnel, as well as the quality, depth and breadth of
merchandise. Customers tend to shop in stores that fit their images of
themselves.

Store Personnel:
Sales personnel at a retail store can help build customer loyalty and
store image. A major complaint in many lanes of retailing, is the poor attitude
of a salesperson. There is a growing trend now, to provide training to, these
sales clerks to convert them from order takers to effective sales associates.

Store Design:
A store's exterior and interior design affect its image and profit
potential. The exterior should be attractive and inviting and should blend with
the store's general surroundings. The term "Atmospherics" is used to refer to
the retailer's effort at creating the right ambience. Merchandise display is
equally important. An effective layout guides the customer though the various
sections in the store and facilitates purchase.

Promotion:
Retail promotion includes all communication from retailers to
consumers and between sales people and customers. The objective is to
build the stores image, promote customer traffic, and sell specific products. It
includes, both, personal and non personal promotion. Personal

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communication is personal selling - the face to face interaction between the
buyer and the seller. Department stores and speciality stores, emphasize this
form of promotion. Non personal promotion is advertising. The media used
are TV, Radio, Newspapers, Outdoor displays and direct mail, other forms of
promotion include, displays, special sales, give always and contests etc.

Credits & Collections:

Retailers are generally wary of providing credit, because of additional
costs-financing accounts receivables, processing forms and bad debts etc.
But many customers prefer some form of credit while purchasing. This
explains the popularity of different types of credit cards and debit cards.

EMERGING TRENDS IN RETAILING

In recent years the nature of retailing has changed dramatically, as
firms try to protect their positions in the market place. Many customers are no
longer willing to spend as much time on shopping as they once did. Some
sectors of retailing have become saturated, several retailers are operating
under high levels of debt and number of retailers after running frequent
"sales", have found it difficult to maintain regular prices. Retailers are adapting
to*the shopping needs and time constraints of working women, dual earner
households and the increased customer interest in quality and customer
service:

Shopping Malls:
A growing number of shopping malls are coming up all over the
country. In north India; there seems to be a proliferation of such malls
surrounding Delhi, in places like Gurgaon and Noida. In general they target
higher income customers, with their prestigious speciality shops, restaurants
and department stores.

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Factory Outlets:
Manufacturers are opening factory outlets to sell off surplus inventories
and outdated merchandise. This forward vertical integration gives
manufacturers greater control' over distribution, than selling the merchandise
to off price retailers. Mohini knitwear of Ludhiana (Punjab) and number of
woolen and hosiery manufacturers set up their outlets in Delhi during winters.

Non Store Retailing:

Non store retailing is accelerating at a faster rate than in store retailing.
This includes direct marketing. In Home shopping TV shopping and e-tailing
etc.

Diversification of Offerings:
Scrambled (unrelated products or services) merchandising is taking on
a broader meaning and inter type competition among retailers is growing. For
instance Citibank is organizing tourist trips and sending mail order catalogues
to its credit card customers.

Impact of Technology on Shopping Behavior:

The way retailers present their merchandise and conduct their
transactions are changing. Cable TV Channels are used to present
merchandise, Videos have replaced catalogues and computer linkages to
acquire information and make purchases are on the increase. Virtual
shopping through PDA's is another possibility.

Multi Channel Retailing:

Traditional store based and catalogue retailers are placing more
emphasis on their electronic channels and evolving into multi channel
retailers, because they can reach new markets and overcome limitations
posed by traditional formats,

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FIGURE 1.3

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 FIGURE 1.4

RETAIL TREND IN INDIA

Globally, retail is the largest private industry. However, in India, it is in

its nascent stages. The total retail market is estimated at Rs 900,000 Crores.
Organized retail at around 5% is estimated at Rs 28,000 Crores. The
organized retail share as per the estimates made by most consultants is
estimated to reach a level of 10% by 2010. In absolute terms this would
amount to Rs 110,000 Crores. Retail is India’s largest industry, accounting for
over 10 percent of the country’s GDP and around eight percent of
employment.

Retailing in India is gradually inching its way to becoming the next boom
industry. The whole concept of shopping has altered in terms of format and
consumer buying behavior, ushering in a revolution in shopping. Modern retail
has entered India as seen in sprawling shopping centers, multi-storied malls
and huge complexes offer shopping, entertainment and food all under one
roof. India represents an economic opportunity on a massive scale, both as a
global base and as a domestic market. Indian Retail sector consists of small
family-owned stores, located in residential areas, with a shop floor of less than
500 square feet.

Retailing in India is at a nascent stage of is evolution, but within a small period

of time certain trends are clearly emerging which are in line with the global

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experiences. Organized retailing is witnessing a wave of players entering the
industry. These players are experimenting with various retail formats. Yet,
Indian retailing has still not been able to come up with many successful
formats that can be scaled up and applied across India. Some of the notable
exceptions have been garment retailers like Madura Garments & Raymonds
who was scaled their exclusive showroom format across the country.

OVERVIEW OF INDIAN RETAIL SECTOR.

The India Retail Industry is the largest among all the industries, the
retail sector has helped in giving strong impetus to overall economic growth
as a significant driver of the growth of services sector, which contributes as
mush as 54 per cent of GDP. It has strong backward and forward linkages
with other sectors like agriculture and industry through stimulating demand for
goods and through mass marketing, packaging, storage and transport.
Moreover, it creates considerable direct and indirect employment in the
economy. Also, the consumers have benefited in terms of wide range of
products available in a market. The Retail Industry in India has come forth as
one of the most dynamic and fast paced industries with several players
entering the market. But all of them have not yet tasted success because of
the heavy initial investments that are required to break even with other
companies and compete with them

The total concept and idea of shopping has undergone an attention

drawing change in terms of format and consumer buying behavior, ushering in
a revolution in shopping in India. Modern retailing has entered into the Retail
market in India as is observed in the form of bustling shopping centers, multi-
storied malls and the huge complexes that offer shopping, entertainment and
food all under one roof. With growing time constraints and choices, the
consumer is getting used to having options readily at hand when one steps
out to make the final purchase decision without much dissonance Need for an
enhanced look and feel of the shopping environment. With retail ambiences
getting upgraded, clearly the poky neighborhood kirana stores are becoming
part of the past for the hypermarket consumer, and one will soon find it difficult
to shop "regularly" at the dusty grocery shop.

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 Today with the growth of malls and hypermarkets, consumers no longer
think "expensive looking" means "expensive". To actually establish premium
imagery through shopping environment is going to be that much more difficult!
Need for customer service to encourage consumers to come back again and
again and buy more. Quite contrary to the thought that technology will
dehumanize transactions, the truth is humans will make all the difference.

It may seem that in a vast country like India, this is restricted to a few
urban towns. This could be myopic thinking. The revolution was brewing in
South India in the 90s but seems to have taken speed in the 21st century.

As "retail" brands see the value of volumes and with the ready
availability of both technologies for back-end management and real estate for
front-end face, business compulsions and opportunities will make them
expand faster than one can imagine.

Consumers moving up the "diminishing return" curve. After getting a

certain level of quality in many categories, consumers are unwilling to pay
more for incremental quality and so are ready to make do with "acceptable
quality", which store brands offer very easily.

Media fragmentation makes its more and more difficult for mass
marketed brands to actually connect with consumers. So the battle moves to
the market place where by sheer ownership, store brands hold an edge.

They are cost advantage, because store brands operate on much less
overheads because their target markets are limited to the catchments area in
and around the store and so depend much less on "expensive" mass media
brand-building advertising. And above all there are fewer partners to share the
"margin goodies" with. A large young working population with median age of
24 years, nuclear families in urban areas, along with increasing
workingwomen population and emerging opportunities in the services sector
are going to be the key factors in the growth of the organized Retail sector in
India. The growth pattern in organized retailing and in the consumption made
by the Indian population will follow a rising graph helping the newer
businessmen to enter the India Retail Industry.

26
 In India the vast middle class and its almost untapped retail industry
are the key attractive forces for global retail giants wanting to enter into
newer markets, Clearly, the impact of this retail revolution could be bigger
than just the changing façade of the market place and enhancing consumer
buying experience. It is a looming threat to "mass brand marketers" and the
sooner they take cognizance of that, the better. Mass retailers may not only
redefine shopping experiences, but also redefine market spaces. The future
of the India Retail Industry looks promising with the growing of the market,
with the government policies becoming more favorable and the emerging
technologies facilitating operations.

27
 STRUCTURE OF INDIAN RETAIL SECTOR

The retail sector is classified broadly into two:

1. Organised Retail Sector and,

2. Unorganised Retail Sector

ORGANISED RETAIL

Organized retailing refers to trading activities undertaken by licensed

retailers, that is, those who are registered for sales tax, income tax, etc.
These include the corporate-backed hypermarkets and retail chains, and also
the privately owned large number of retailers, greater enforcement of taxation
mechanisms and better labour law monitoring systems. It is not just a stocking
and selling, but is more about efficient supply chain management, developing
vender relationships, quality customer service, efficient merchandising and
timely promotional campaigns. It, however, constitutes a very little share of at
around 5 per cent (Rs 500 billion) of the total retail market. According to the
Retailers Association of India, the share of organised sector to the overall
retailing market in India is expected to grow from 3 per cent to 20 per cent in
the next 10 years. The KSA Technopak’s estimate is that by 2005, the
organised retail sector would be employing in excess of 2, 50, 000 individuals
directly and perhaps 8-10 times as many indirectly in the supply chain. The
organised retailing has been successful in metropolitan cities so far, more so
in the south and west India. It is expected that the tier II cities would take
another 5 years to absorb modern retailing opportunities. Moreover, the case
for Indian retailers to explore rural markets is also strong due to the size of
rural population and agricultural income growth in last couple of years. A clear
indicator of this potential is the share of rural market across most categories
of consumption.

UNORGANISED RETAIL

Unorganized retailing, on the other hand, represents 97 per cent of the

total retail market is mainly characterised by typically small retailers,

28
traditional formats of low-cost retailing, more prone to tax evasion and lack of
labour law supervision. The local kirana shops, owner manned general stores,
paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.
Food retail trade is a very large segment of the total economic activity of our
country and due to its vast employment potential; it deserves very special
focused attention. Efficiency enhancements and increase in the food retail
sales activity would have a cascading effect on employment and economic
activity in the rural areas for the marginalized workers. India is one of the
largest unorganised retail markets in the world and more than 96 per cent of
the retailers work in less than 500 sq ft of area.

FIGURE-1.5

29
SIZE OF THE MODERN RETAIL SECTOR

A retail revolution is sweeping through India. Organized retail, which is 5% of

the whole currently, is in turn pegged to grow to Rs. 100,000 Crores by 2015.
And one consequence of all those investments will be the fact that India's
present two square-feet per capita retailing space will rise 15-20% by 2010.

The emergence of new formats and the evolution of modern retail in India has
attracted attention in recent years. The retail sector, currently, is said to
contribute 12 per cent of India’s GDP and is expected to grow at a robust rate
of 45 per cent per annum by the end of 2008 (Associated Chambers of
Commerce and Industry of India, ASSOCHAM). This growth would expand
the size of the market to over Rs 14, 79,000 crore from its current level of Rs
5, 88,000 crore. The Indian retail market is estimated at Rs 9,300 billion and is
expected to grow at a compounded rate of 30 per cent over the next five
years (Retailers Association of India). Moreover, the retail sector employs over
7 per cent (21 million) of the national workforce, the second only to
agriculture. The retail density more than doubled between 1978 and 1996 and
the number of outlets per 1000 people at an all India level, increased from 6.5
in 2000 to 20.5 in 2005. For the urban sector alone, the shop density
increased from 12.6 per 1000 people in 1999 to 20.3 per 1000 people in 2005.
Until now, Indian retailers have very little bargaining power with
manufacturers, unlike in the case of retailers in developed countries.

With the growth of malls, multiplexes, and hypermarkets, the consumer is

being exposed to a new kind of shopping experience and services which is
quietly and surely redefining her expectations from shopping.

FIGURE- 1.6

30
A look at the statistics shows that the retail sector in India is worth USD 394
billion and is growing at the rate of 30% annually. Study has found that
retailing ($180 billion) contributes to 10 per cent of GDP and employs 7 per
cent (21 million) of the workforce. According to AT Kearney, India is given the
top ranking as the next foreign investment destination, as markets like China
become increasingly saturated. India is the 4th largest economy as regards
GDP (in PPP terms) and is expected to rank 3rd by 2010 just behind US and
China1. Over the past few years, the retail sales in India are hovering around
33-35% of GDP as compared to around 20% in the US. The table gives the
picture of India's retail trade as compared to the US and China.

The last few years witnessed immense growth by this sector, the key drivers
being changing consumer profile and demographics, increase in the number
of international brands available in the Indian market, economic implications
of the government increasing urbanization, credit availability, and
improvement in the infrastructure, increasing investments in technology and
real estate building a world class shopping environment for the consumers. In
order to keep pace with the increasing demand, there has been a hectic
activity in terms of entry of international labels, expansion plans, and focus on
technology, operations and processes. This has lead to more complex
relationships involving suppliers, third party distributors and retailers, which
can be dealt with the help of an efficient supply chain. A proper supply chain
will help meet the competition head-on, manage stock availability; supplier
relations, new value-added services, cost cutting and most importantly reduce
the wastage levels in fresh produce.

FOREIGN DIRECT INVESTMENT (FDI) IN RETAIL

The recent clamor about opening up the retail sector to Foreign Direct
Investment (FDI) becomes a very sensitive issue, the most important factor
against FDI driven “modern retailing” is that it is labour displacing to the extent
that it can only expand by destroying the traditional retail sector. This is
because the primary task of government in India is still to provide livelihoods
and not create so called efficiencies of scale by creating redundancies. As per
present regulations, no FDI is permitted in retail trade in India. Allowing 49%

31
or 26% FDI (which have been the proposed figures till date) will have
immediate and direct consequences. Entry of foreign players now will most
definitely disrupt the current balance of the economy; will render millions of
small retailers jobless by closing the small slit of opportunity available to them.
Retailing is not an activity that can boost GDP by itself. It is only an
intermediate value-adding process. If there aren’t any goods being
manufactured, then there will not be many goods to be retailed! This
underlines the importance of manufacturing in a developing economy.

Global retailers have already been sourcing from India; the opening up of the
retail sector to the FDI has been fraught with political challenges. With
politicians arguing that the global retailers will put thousands of small local
players and fledging domestic chains out of business. The only opening in the
retail sector so far has been to allow 51% foreign stakes in single brand
consumer stores, private labels, high tech items/ items requiring specialized
after sales service, medical and diagnostic items and items sourced from
Indian small sector (manufactured with technology provided by the foreign
collaborations). Parties supporting the FDI suggest that the FDI in retail
should be opened in a gradual/ phased manner, such that it can promote
competition and contribute to the growth of the Indian economy. The impact of
the FDI would benefit the end user of the consumer to a great extent and will
help to generate a decent amount of employment as more and more
entrepreneurs would be coming forward to invest and taste the new
generation in retail marketing. The opening of FDI should be designed in such
a way that many sectors - including agriculture, food processing,
manufacturing, packaging and logistics would reap benefits. The table below
lists the pros and cons of allowing FDI into retail.

BENIFITS OF FDI IN RETAIL

 Inflow of investment and funds.

 Improvement in the quality of employment.

 Generating more employment.

32
  Increased local sourcing.

 Provide better value to end consumers.

 Investments and improvement in the supply chains and warehousing.

 Franchising opportunities for local entrepreneurs.

 Growth of infrastructure.

 Increased efficiency.

 Cost reduction.

 Implementation of IT in retail.

 Stimulate infant industries and other supporting industries.

DRAWBACKS OF FDI IN RETAIL

 Would give rise to cut-throat competition rather than promoting

incremental business.

 Promoting cartels and creating monopoly.

 Increase in the real estate prices.

 Marginalize domestic entrepreneurs.

 The financial strength of foreign players would displace the

unorganized players.

 Absence of proper regulatory guidelines would induce unfair trade

practices like Predatory pricing.

Thus it can be said that this investment boom could change the face of Indian
retail by offering quality goods at lower prices to the consumers. In addition to

33
this, the presence of global retailers will further enhance exports from India as
they would also source Indi

goods for their international outlets in a big way leading to a remarkable

increase in Indian exports.

30
22
FDI in retail
15
7

7 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0
8 0 5 0 1 2 3 4 5 6 7 8 9 0 1 2

Years

FIGURE-1.7

······SWOT ANALYSISFOR RETAIL SECTOR

Retail sales grew @ 19.6% CAGR for the next 4 years
after the introduction of FDI in 2002

KEY SUCCESS FACTORS:

 Price
 Schemes
 Customer Delight
 Availability of all types/brands

34
 Quality of products

35
STRENGTHS:
1. Price – Lowest, full value
2. Schemes – innovative, targeting new and potential customers
3. Availability – availability of all items and maximum brands. This is because
of the different tastes and preferences of customers
4. Good Customer base and spreading word of mouth – Brand of
the future.

WEAKNESS:
1. Non enthusiastic staff at stores.
2. Initial Bad image due to hiccups at launch or long speculation.
3. Quality problems.
4. Communication problems within the organization

OPPORTUNITIES:
1. The other retailers like Vishal Mega mart have set up the trend for these
types of retail outlets in a place where just around 9% of population goes to
supermarkets
2. The market itself which is growing at very fast rate.
3. The expansion of the city at a fast pace and new centers like City Centre,
Ansal Plaza, Omaxe and numerous other malls coming up in the city.

THREATS:
1. The competitors are placed very well in the market and their
association with the customers.

2. The credit system provided by the Kirana and Departmental stores.

Therefore it becomes difficult for the customer to switch.

36
 STRENGTHS WEAKNESS
• Price – Lowest, full value • Non enthusiastic staff at stores.
• Schemes – innovative, • Initial Bad image due to hiccups at
targeting new and potential launch or long speculation.
customers • Quality problems.
• Availability – availability of all • Communication problems within
items and maximum brands. the organization
This is because of the different
tastes and preferences of
customers
• Good Customer base and
spreading word of mouth –
Brand of the future.

THREATS OPPORTUNITIES
• The other retailers like Vishal Mega
• The competitors are placed mart have set up the trend for
very well in the market and these types of retail outlets in a
their association with the place where just around 9% of
customers. population goes to supermarkets
• The credit system provided by • The market itself which is growing
the Kirana and Departmental at very fast rate.
stores. Therefore it becomes • The expansion of the city at fast
difficult for the customer to pace and new centers like magnum
switch. mall, Ishaniya mall and numerous
other malls coming up in the city.

37
Although the weakness quoted above can develop when the operations start,
but these have been stated above so that a proactive approach can be
adopted rather than a reactive approach. This will definitely help Reliance to
be excellent, both functionally as well as strategically.

MAJOR COMPONENTS OF RETAIL SECTOR

The major components of the retail sector are: Food and Grocery, Fast
Moving Consumer Goods (FMCG), Consumer Durables, Apparel, Footwear
and leather, Watches, Jewellery, and Health and Beauty

The anatomy of the retail market has shown that the clothing and textiles
constitutes 39 per cent of the organised retail pie, followed by food and
grocery, which accounts for 11 Percent share of organised retail market.

Clothing and Textiles

Percentage Share Of Retail
Segments in Total Food and Grocery

Retail Sector Consumer Durable

8 Footwear
3
3 Furniture and
7 Furnishing
39 Catering Services

7 Jewellery and Watches

Books, Music and

8
Gifts
Mobile Handsets
9
5 11
Others

FIGURE-1.8

However, according to the survey conducted by KPMG for Federation of

Indian Chamber of Commerce and Industry (FICCI), among these, the food
and grocery is expected to witness the fastest growth followed by clothing as
the second-fastest growing segment.

38
 CHANGING RETAIL FOOD SECTOR

1. Introduction
One of the major facets of globalization that is changing the food
marketing system, both domestically in India and internationally in other
countries, is the emergence of supermarkets and hypermarkets4 into the
retailing sector. In other words, the retail sector has become more globalize.
In India, the development of these modern retail outlets has seen tremendous
growth since the 1990s. The pull factors driving the rise of hypermarkets
coupled with the multi-nationalization of supermarket chains include, among
others, the relaxation of investment and trade restriction and hence the influx
of Fids to the country, and increase in urbanization and increase of population
and thus market density. At the global front, the saturation of and increased
competition and profit squeeze in food markets in Europe and North America
have forced the hypermarkets companies to expand their territories to the
Asia-Pacific Region which are enjoying buoyant economic growth. The
presence of these supermarkets and hypermarkets brought direct impact onto
the local scene affecting traditional market outlets, consumers, suppliers,
trade and employment. Traditional markets are losing ground, but are still
important outlets for fresh fruits and vegetables. This paper attempts to
elucidate the India’s changing food retail sector. The first part reviews the
development of the food retail sector with emphasis on the emergence of
supermarkets and hypermarkets. This is followed by the identification of the
driving forces that drive the development of these modern retails outlets. This
is then followed by the discussion on the impacts of the modern retail sector
on traditional retail outlets, agricultural production and food quality. The final
part summarizes the implications of these changes on the policy.

2. Development of the Food Retail Sector

The food retail sector is made up of wet markets, dry markets, night
markets, sundry/provision shops, convenience stores, discount stores,
specialty stores, supermarkets, department stores, and hypermarkets. These
different channels cater to different segments of the Indian population.

39
Traditionally the provision shops made up the large segment of the food retail
sector. As time progress and due to various factors such as consumer
lifestyle, price disadvantage and limited working capital, the number of these
provision shops has been on the decline. Nevertheless, these segments still
contribute around 25% of all retail sales in India. The total numbers of retail
outlet (food/non-food) establishments in India increased from 126,385
establishments in 1999 to 139,960 in 2003 The retail outlets comprise
department stores, supermarkets, hypermarkets, convenience stores,
traditional stores such as independent grocers, etc. Food retail outlets made
up 75% of the total number of retail outlets in the country, the majority of
which were independent grocers. The structure of the retail sector has
changed with the increasing presence of hypermarket, supermarket and direct
selling. A survey on shopping habits in 1997 indicated that shoppers at

.2.1 Modern Retail Store

Modern retail stores such as supermarkets and hypermarkets are
mainly located in the majorurban centers and are continuing to grow in
numbers. The foreign-owned supermarkets isdominated by Giant, Tesco,
Makro, and Carrefour, while the local-owned is The Store, X-Tra, and Mydin.
Tables 3 and 4 show the profile of the supermarkets and their sales share,
respectively. The Government has recently introduced new guidelines on the
opening of new hypermarkets in an attempt to slow down their rapid growth
and to provide some level of protection for small retailers. More Indians are
shopping at these stores, particularly the affluent middle to upper income
consumers, because these large retail stores offer a wide range of
sophisticated food and beverage products. Their products are mainly made up
of high quality, branded goods sourced from both local and overseas
suppliers. These retailers are increasingly sourcing from local sources to
remain price competitive. For example, Tesco sources 95% of the products
from local suppliers.

40
2.2 Convenience Store
Convenience stores are still a fairly new retail store concept in India.
They have around 11% of the total retail sales. These stores are mainly
located in major urban centers and along the North-South Highway to capture
busy customers who seek convenience. They concentrate on selling a small
range of convenience foods in medium to small sized packaging, usually
single serve sizes. Imported products form a small proportion of their product
lines. More convenience stores such as petrol station stores have been
opening, particularly in major urban center and along the North-South
Highway. These store concepts are still at the early stage of introduction and
most shoppers do not automatically turn to these stores for their shopping
needs. The limited ranges of products offered by these stores also act as a
barrier to attracting more customers to these stores. The main convenience
store is 7-Eleven although other smaller local convenience stores exist.

2.3 Traditional Store

The traditional stores sub-sector is large but highly fragmented. It
includes provision shops, grocery shops, wet markets, mini markets and other
similar retail outlets, which sell a limited range of food and beverage products
on a small scale. They generally sell local products and brands with low to no
presence for imported products, depending on the target customers and the
location of the store. The majority of Indians continues to shop from traditional
stores and still continue to command a significant share of the retail market,
as these types of outlets are conveniently located near to their homes or
places of work. Most of these retailers continue to source their products from
local suppliers to remain price competitive.

2.4 Future Scenario

Supermarkets and hypermarkets will continue to perform strongly over
in the future. It is very unlikely that independent grocery stores will be able to
bridge the pricing advantage and convenient and comfortable shopping
environment that these two types of outlets offer. Strong economic conditions
will ensure that there is a continued increase in demand for niche and value-

41
added products. Sales by food retailers on the whole are expected to achieve
a cumulative growth of about 28% over the 2003-2008 periods Sales through
hypermarkets are expected to reach a very similar level to that of
supermarkets.

3. Driving Forces for the Changing Retail Food Sector

a. Income growth
Supermarket chains are rapidly growing to meet the needs of more
affluent consumers. With rising affluence and education levels, consumers’
shopping and eating lifestyles have changed drastically over the years. Indian,
especially in urban areas, prefer to shop in modern retail outlets, which offer
them one-stop shopping options. However, traditional stores such as provision
and grocery shops, which are conveniently located in residential and
workplaces are still popular.
b. Consumer tastes and changing behaviour
India’s consumer lifestyle has been evolving and changing due to in
part of rising income and education level. High profile international retailers
and the global mass media have also played a hand in shaping consumer-
buying behavior. Foreign owned hypermarkets are fast gaining popularity in
India, attracting customers with their “one – stop” and “all under one roof”
concepts. Since then, foreign retailers have been expanding rapidly in India.
Indian consumers, particularly those in the 20-40 age group, who can afford
and are willing to pay for the price of convenience, have a preference for
semi-prepared foods and/or
takeaway meal. India is becoming urbanized. This has contributed to the
development of a country's modern retail sector.

c. Urbanization
Increase in urbanization and population has increased the market
density (thus increase ineconomies of scale of processing and retail units and
decrease in transaction costs). There was an increase of 3.13 million people
in the urban areas in 1991-2000.

42
d. Food Safety Concern
Together with improvement in education level and increase in income,
Indian is more aware of nutritional issues, and shifts in shopping habits
towards healthy eating.

e. Infrastructure and Advances in Technology

The good infrastructure together with advances in technology in India
has made the rapid rise of supermarkets in India possible. Besides, nearly
90% of the household in India have refrigerators, and the number of homes
with microwaves ovens around 15-20% and growing.

4. Impacts on Traditional Outlets

Independent grocers such as provision shops and mini-markets
gradually closed. Many would attribute this to the emergence of modern
retailing with supermarkets and hypermarkets. In 2003, retailers with an
annual turnover of at least RM1.25 million accounted for the largest share of
total retail sales in India. This was not the case before 2000, when retailers
with less than RM1.25 million in retail turnover, collectively, accounted for
slightly more than 50% of total
retail sales.

5. Impact on Agricultural Producers

The differences between the hypermarkets marketing channel
compares to the traditional one are as follows: (i) under the traditional system,
the farmers produce has to go through a number of intermediaries before it
reaches the consumers. Whereas in the case of marketing through the
hypermarket, the farmers could either sell their produce direct to or through
the processors who then sell it to the hypermarkets, hence shortening the
distribution channel;
(ii) under the traditional channel, the price is generally discovered through
“personal negotiation” while the sale to the hypermarkets are normally
formalized in the form of contract; hence price is determined by the hyper-
retailer who then passes it down to the producer;

43
(iii) the transactions between the supplier and the hypermarkets are normally
done under contractual terms
(iv) producers or suppliers are subjected to rigorous quality standards as
specified in the contracts. There is no empirical study that has been carried to
evaluate the economic impacts of such arrangement on the producer as well
as on the marketing system in India. The preliminary observation on this
development suggests that invasion of MNCs into the food retailing sector has
redefined the supply chain management. It provides a new market outlet for
the producers

6. Consumers’ Preferences, Perception and Opinion of

Modern Retail Food Outlets
A total of 120 respondents were interviewed to obtain consumers’
preferences, perception and opinion of modern food retail outlets such as
supermarkets and hypermarkets. Although the number of respondents is
small, nevertheless, it provides some insight on the consumers

44
 CHAPTER – 2
COMPANY PROFILE

• INTRODUCTION

• PRODUCT RANGE

• STORE BRAND

• COMPETATIOR PROFILE OF SPENCER

45
 CHAPTER -2
COMPANY PROFILE

SPENCER’S HYPER(JAIPUR)
INTRODUCTION
Pencer’s Retail is one of India’s fastest growing retail stores with
multiple formats and retailing food, apparel, fashion, electronSics, lifestyle
products, music and books. Established in 1996, Spencer’s has become a
popular destination for shoppers in India with supermarkets, hypermarkets
and dailies spread all over India. RPG Enterprises comprises of more than
20 companies spanning across 7 business sectors, Retail, Technology,
Entertainment, Power, Transmission, Tyres and Specialties. It has a turnover
of US$ 3 billion.

Spencer’s has retail footage of over 1.3 million square feet and over 350
Spencer’s stores in 50 cities.

FIGURE-2.1

RPG enterprises
• 40,000 + Employees

• 4, 00,000 + Shareholders

• R- RESPOND

46
• P- PERFORMG- GROW

OPERATIONS

The company operates through the following formats:-Spencer’s

Hypermarkets:-

A fast growing retail, network of hypermarkets with large format

stores in Mumbai, Gurgaon,Ghaziabad, Luck now, Calicut, Hyderabad,
Vizag, Vijayawada, Aurangabad, Durgapur and Kolkata.

Spencer’s Super :-

One of the largest supermarkets Chain in the food and grocery

segment in India.

Spencer’s Daily :-

Small format store conveniently located with a range of

products to meet your daily household needs.

Spencer’s Express :-

Your food and grocery store to next door.

MILESTONES

2003 RPG crosses the 7000 Cr turnover mark reaching 7472 Cr in

sales.

2001 'Giant' hypermarkets are established.

2000 International Computers India Ltd (ICIL) becomes Zensar

Technologies Ltd.

Food world is established

1997 Music World and Health & Glow are formed

1996 RPG Netcom is established

47
1995 RPG Cellular commences its operations.

1988 HMV (His Master’s Voice) is acquired

1985 Saregama India (formerly the Gramophone of India Ltd) is

acquired

1983 RPG Life Sciences (formerly Searle India) is acquired

1979 Inception of RPG Enterprises by Mr. RP Goenka, a Rs. 700

million group, which comprises Phillips Carbon Black, Asian Cables,
Agarpara Jute and Murphy (India).

What is it that defines RPG Enterprises’ success and carries it on

through generations?

The set of values and the visionary focus of its leaders, which forms
the distinct identity of RPG Enterprises, is what constitute its business
drivers.

48
 IT’S VISION AND CORE VALUES ARE:

We shall be a leading Indian Group with a focus on market capitalization

through:

Leadership in profitability and revenue growth in our chosen businesses

Being a customer-centric organization and

Being the most exciting workplace.

People Orientation

Innovation & Entrepreneurship

Transparency & Integrity

Passion for Superior Performance

IT’S QUALITY POLICY

Group is to achieve customer satisfaction, through building trust and

confidence in our customers by anticipating, understanding and meeting in
full, customers' needs with a helpful attitude and supportive behaviour and
providing them with consistent quality products and services.

We will attain this as a team with the full involvement of our suppliers,
employees and partners."

49
 MIAN MOTO’S OF THE COMPANY

S.T.U.C= Show that you care

SPENCER'S OPENS FIRST OUTLET IN MUMBAI

Spencer’s Retail today is the largest supermarket chain in India.
At Spencer’s there are extensive range of products and durables,
designed to satisfy all shopping needs. Today SPENCER’S has 350
stores across 50 cities covering a retail trading area of half a million
square feet and an astonishing 3 million customers a month. No
wonder, after more than 100 years, people continue to trust the name
Spencer’s. And this trust has been the outcome of a consistent high-
quality service.

In 1863, since we first opened our gates to the Indian consumer, But
our Endeavour, by which we still stand firm, has always been to provide
a pleasant and delightful shopping experience for you, our valued
customer. As RPG, when we took over Spencer’s, we pioneered the
retail revolution in India, by introducing the concept of specialty stores
like Food World, Health and Glow and Music World. In 2000,
SPENCER’S introduced the Indian consumer to the first ever
Hypermarket.

SPENCER’S is having five type of Outlet for different need of different

type of customers.

SPENCER’S FRESH

SPENCER’S EXPRESS

SPENCRE’S DAILY

SPENCER’S SUPER

SPENCER’S HYPER

50
 SPENCER’S WAY

Organized modern retailing which encompasses the four key

ingredients

Price

Product

Service

Ambience

WHAT WE SELL

We believe in presenting you with a unique experience that

compliments your shopping. An experience that can only be delivered
through valuing your time and making you feel special. These are the
values that we have internalized over the last 100 years to deliver what
we call,' Shopping, the Spencer's Way.'

Our endless choice of foods is what makes shopping at Spencer's so

special. Exotic fruits & vegetables, sauces & supplies for your favourite
international cuisines, and imported foods. Added to these are a wide
range of diet food, organic food and specialty cuisines, giving you the
perfect reason to indulge your taste buds at Spencer's.

51
 OUR PRODUCT PROFILE INCLUDES THE
FOLLOWING:

♦ Fresh Fruits & Vegetable

♦ Groceries, Grains and Cereals

♦ Baked Chilled and Frozen Foods

♦ Personal Care and Baby Care Products

♦ Home Care Products

♦ Office and Home Stationery

♦ Apparel and Fashion Accessories

♦ Electrical and Electronics

SPENCER’S RETAIL SPENCER’S

VERTICAL

SPENCER’S FRESH

SPENCER’S DAILY BOOK &

BEYOND

SPENCER’S X-PRESS MUSIC

WORLD

SPENCER’S SUPER CELLUCON

SPENCER’S HYPER

52
 PG RETAIL – VISION

To be a customer focused differentiated, foods intensive retail

company with clusters of destination and convenience stores.

(Hyper, Super, Dailies)

To establish Spencer’s express & mass proliferate.

To set up Retail chains in focused verticals like music, books, mobility

solutions, apparel, footwear, luxury brands and life style brands where
domain knowledge exists or is acquired through partnerships.

To achieve pan India presence with 2000 store through current

verticals by 2009 & 5000 stores by 2011.

SPENCER’S RETAIL GROWTH

 India’s largest Super market chain

 350 Stores today and a new store every 2 days.

 Hyper and super alone will be 150+ by 2011

53
 SPENCER’S RETAIL- FOOD VERTICAL FORMATS

Area in Assortment Mix

Sq.ft

Spencer 3000-5000 Fruits & vegetables, Beverages, staples, ready to eat,

’s Daily
processed foods, takeaways, bakery,

home & personal care, fish, meat,

Spencer 1400-1800 Store next door with essential SKU’S form above
’s X-
Press

Spencer 10000- Full offering of daily’s + home, brown goods, select

’s Super 18000 apparels

Spencer 30000- Full offering of super’s + full range HWP & Apparels,
’s Hyper 75000
white goods, electronics & electrical

54
BRAND STRATEGY FOR SPENCER’S RETAIL

• Customer’s focused, differentiated, foods intensive retail

company with cluster of “destination” and convenience store

• Brand strategy for Spencer’s retail has been mapped with strong
focus on “unique brand differentiators”

55
56
FIGURE-2.2

57
 Favourable
demographics

Retail
growth

Malls boom
Rising
consumers

FIGURE-2.3

58
 “DIFFERENTIATION IS THE MANTRA”

PRODUCT RANGE
SPENCER’S HYPER (JAIPUR)
The company launched its first hyper store in Jaipur and plans to
expand in the city with six more stores - a super format in Vaishali Nagar, a daily
format in Bapu Nagar and four express formats in Bani Park, Jhotwara Road,
Adarsh Nagar, and Mansarovar each.
'There are 15 Spencer's stores due to be launched in Jaipur by the end of 2007',
said J H Mehta, president & CEO of Spencer's Retail.
Mehta said that Spencer's hyper store in the city is spread across an area
of 20,000 sq.ft 'this will be the first organized retail format in Jaipur', he claimed
Spencer's hyper store offers almost 25,000 products under one roof. From
groceries, fruits and vegetables to personal care products, toys and appliances,
shoppers can choose from a plethora of merchandise. The store also has a
bakery, and food court.
Sumantra Banerjee, president & CEO of RPG Retail said, 'We are
delighted to bring an international shopping experience to the discerning
customers of Jaipur. Spencer's addresses the contemporary retail aspirations of
Jaipur, a city preserving its old-world charm.
RPG Retail has so far opened over 150 Spencer's outlets with 9
hypermarkets, 5 supermarkets, 3 fresh, 17 express and 116 dailies across 30
cities in the country. Spencer's currently has a national consumer base of over
35million people.

59
FIGURE-2.4

60
 IN SPENCER’S HYPER MAIN SECTION ARE

1. FMCG
2. F&V
3. STAPLES
4. HWP
5. Garments
6. Electronics & Electrical

FMCG

THERE ARE NINE MAJOR CATEGORIES IN FMCG-:

 Ready food
 Instant food
 Chilli & frozen
 Household needs
 Beauty care
 Toiletries
 Beverages & severages
 Fish & meat
 Bakery & food serving

THERE ARE TWO TYPES OF SUBCATEGORIES-:

 Food
 Nonfood

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 HWP

THERE ARE THREE MAJOR CATEGORIES IN HWP-:

1. Home
2. Work
3. Play

IN HOME SECTION WE HAVE NINE

SUBCATEGORIES-:
 Kitchen ware
 Pooja implements
 Gift & novality
 Home linen
 Cleaning aids
 Bath accessories
 Dinner ware
 Home ware
 Disposables items

IN WORK SECTION WE HAVE THREE SUB

CATEGORIES-:
 Stationery
 Tools kit
 Luggage

IN PLAY SECTION WE HAVE TWO SUB CATEGORIES-:

 Games
 Soft toys

62
63
 F&V

F&V STAND FOR FRUIT AND VEGETABLES

THERE IS 2 MAJOR CATEGORY

1.Fruits
2.Vagetables

STAPLES

THERE ARE SEVEN MAJOR CATEGORIES IN

STAPLES-:
 Pulses
 Cereals
 Spices
 Non-Spices
 Flour
 Oil
 Sugar & Salt

GARMENTS

IN GARMENTS WE HAVE THREE MAJOR

CATEGORIES-:
1. Kids wear
2. Man’s wear
3. Women’s wear

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 ELECTRONICS & ELECTRICAL

All electronics and electrical items like Iron, Owen, T.V., Freeze,
Washing Machine, Mixer Grinder, Tube, Bulb etc.

STORE BRAND
Spencer’s to further its leading market position has developed its own
brand called Spencer’s Value which covers most product categories from
FMCG, HWP, Electronics, Staples and several other product categories.

FIGURE-2.5

In FMCG category they have Spencer’s value jam, Spencer’s Dipper,

and Spencer’s phenyl. IN HWP they have Spencer’s value double bed sheet,
Spencer’s value kadai, Spencer’s value Tawa, Spencer’s value wet Tissues.
In HWP Section if we talk about Dinner set category they have their home
brand called RAK dinner set which come under top ten brand of Spencer’s
Hyper.With all the above, and an unparallel customer service focus, Spencer’s
home products have good image in consumers mind.

65
HOW THE FOUR P’S SHOULD BE THERE FOR SPENCER TO
OPERATE BETTER IN THE MARKET:

PRICE EQUIVALENT TO THE MARKET

PROMOTION STRONG AND AGGRESSIVE

PLACE EASILY ACCESSIBLE AND NEAR TO

RESIDENTIAL AREAS

PRODUCTS ALL VARIETIES AND GOOD QUALITY

These are the 4 P’s which should be as explained above when it launches
itself into the market and for the better and fast growth prospects of
SPENCER HYPER (JAIPUR).

66
 COMPETATIOR PROFILE OF SPENCER

RELIANCE

RELIANCE GROUP
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is
India's largest private sector enterprise, with businesses in the energy and
materials value chain. Group's annual revenues are in excess of USD 27
billion. The flagship company, Reliance Industries Limited, is a Fortune Global
500 company and is the largest private sector company in India. Backward
vertical integration has been the cornerstone of the evolution and growth of
Reliance. Starting with textiles in the late seventies, Reliance pursued a
strategy of backward vertical integration - in polyester, fibre intermediates,
plastics, petrochemicals, petroleum refining and oil and gas exploration and
production – to be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas,
petroleum refining and marketing, petrochemicals (polyester, fibre
intermediates, plastics and chemicals), textiles and retail. Reliance enjoys
global leadership in its businesses, The Group exports products in excess of
USD 15 billion to more than 100 countries in the world. There are more than
25,000 employees on the rolls of Group Companies. Major Group Companies
are Reliance Industries Limited (including main subsidiaries Reliance
Petroleum Limited and Reliance Retail Limited) and Reliance Industrial
Infrastructure Limited.

RELIANCE FRESH

APKA FRESH APKA PADAOS ME

India’s Fortune 500 private sector giant, Reliance Industries Ltd, has, in
fact, been first off the blocks by launching its first Reliance Fresh outlets in
Hyderabad,

67
 Reliance fresh is the retail chain division of reliance industries of India
which is headed by mukesh ambani. Reliance has entered into this segment
by opening new retail stores into almost every metropolitan and regional area
of India. Reliance plans to invest rs 25000 crores in the next 4 years in their
retail division and plans to begin retail stores in 784 cities across the country.
The reliance fresh supermarket chain is ril’s rs25,000 crore venture and it
plans to add more stores across different g, and eventually have a pan-India
footprint by year 2011. The super marts will sell fresh fruits and vegetables,
staples, groceries, fresh juice bars and dairy products and also will sport a
separate enclosure and supply-chain for non-vegetarian products. Besides,
the stores would provide direct employment to 5lakh young Indians and
indirect job opportunities to a million people, according to the company. The
company also has plans to train students and housewives in customer care
and quality services for part-time jobs.

RELIANCE FRESH IN MYSORE

In Mysore their are 4 outlets of reliance fresh:
1. NAZARBAD
2. N.R. MOHALLA
3. K.D.Road
4. CHAMARAJA DOUBLE ROAD

On an average turn over is 50,000rs in Mysore, where as compare to

other cities it is too low. Their main aim is to provide good quality products in
lower price & customer service & customer satisfaction. According to reliance
fresh store manager they were satisfying 75% of customer expectations.

Reliance Retail Ltd. Launched its much awaited format and India's
largest hypermarket under the brand name 'Reliance Mart' at Iskon Mall, SG
Highway, Ahemdabad on August 15. After the successful launch of the
Supermarket format 'Reliance Fresh' and the consumer electronics concept
mega store 'Reliance Digital', the hypermarket is the third retail format
launched by Reliance Retail.

Spread across 165,000 square feet of shopping area, RelianceMart will

provide the shoppers a never before experienced shopping delight. The

68
hypermarket will carry a range of over 95,000 products catering to the entire
family. Shoppers will have the option to choose from the wide array of
products in every category ranging from fresh produce, Food & grocery, home
care products, apparel and accessories, non - food FMCH products,
consumer durables and IT, Automotive
Accessories, lifestyle Product, Footwear and much more. Commenting
on the launch of this new product, Shri. Mukesh Ambani, Chairman and
Managing Director, Reliance Industries Ltd. said, 'Organised Retail has
potential to trigger socio-economic transformation on an unprecedented scale
in our country and will bring about enormous spin-off benefits to the Indian
economy and its various constituents'. The launch of Reliance Mart is yet
another step by Reliance Retail towards providing an nternational shopping
experience to all our customers at unmatched affordability, guaranteed quality
and choice of products and services. RelianceMart marks the achievement of
another milestone in our effort to unleash a retail revolution in India.' Shri
Ambani added. RelianceMart offers some unique services to the shoppers like
tailoring, shoe repair, watch repair, a photo shop, gift services and laundry
services all within the store. The store also houses its own

Fresh bakery serving 'hot off the oven' bread and bread products
through out the day and local savories, an ice-cream train for the kids, a
chakki, ready-made batter and loose tea and pickle for housewives
RelianceMart will also sell fine jewelry and fashion jewelry as a part of its
Lifestyle section. RelianceMart will also house a health and wellness store
providing pharmaceutical drugs and other wellness products. For the
shopper's convenience, the store providing pharmaceutical drugs and other
wellness products. For the shopper's convenience, the store has a cafeteria
providing quality food and beverages for ready consumption, an ATM machine
and a consumer service / membership desk to provide the customer a truly
international shopping experience. The hypermarket also launched a host of
Reliance's own brands in select categories with superior quality and
affordable prices like 'First Class', 'Network, Netplay, Team Spirit' and Sparsh
in Men's and Women's Formal / Casual and Ethnic wear, 'DNM- X' in the
jeans category for men and women, 'Panda' for kids clothing and ' Grip' in the

69
luggage section. The footwear category will carry 'Zig' in formal wear. 'Hi
Attitude' for semi -formal, 'Tosco' as party wear and 'Monza' for the sports

V MART
Each single step is a new step, towards life, towards future. A story that
started with a small confident step is today exploring and Running the retail
revolution in India. Way back in 2003, V Mart opened its first store at Law
Garden, Ahmedabad and today boast of its presence in almost all the major
cities across India. With chain of 26 outlets in 22 cities V Mart is having pan
India presence, V Mart covers over 3,50,000 sq.ft. of area and delights 60,000
satisfied shoppers each day.V Mart is a multi-branded family store that works
on the “Value for money” retail concept thus providing the masses with the
best quality at cheaper price.
The vast product range caters to every age and all the family needs
with Apparels for men, women & kids, Food & Home products, Health &
Wellness, Lifestyle Products, Footwear and Travel Accessories for men,
women and kids. The “Sabse Sasta, Sabse Achcha” Story. V Mart has
positioned itself in the “Value for Money” category thus providing customers
with the most economic and best of quality products. The Sabse Sasta, Sabse
Achcha theme says every thing about V Mart, the philosophy and the values.
One can find the best of products, quality, latest fashion and every thing that
keeps customers healthy and happy and of course the vast range to choose
from. company hopes to expand rapidly with similar format stores that offer a
fine balance between style and price retailing. V Mart targets to expand into a
100 outlets by March 2010.

Wal-Mart
World's largest discount retailer.
Headquarters:
Bentonville, AR 72716
Employees: 2,200,000+
CEO: Lee Scott

70
 When you think of Wal-Mart, think big! It's the world's biggest retailer
and also the biggest employer with over 2 million full- and part-time workers
worldwide -- 1.4 million in the U.S. It operates Wal-Mart stores along with
Sam's Club membership warehouses in the U.S. and 12 foreign countries.
Known for its low pricing and wide selection of goods, Wal-Mart has become
the undisputed king of retailing. It is also a feared giant for its sheer size and
pricing power.

As of May 2008, Wal-Mart had the following store count:

Retail Units Worldwide 7,343

US Retail Units 4,195
Wal-Mart Stores 937
Super centers 2,527
Sam's Clubs 593
Neighborhood Market 138
International Retail Units 3,148

Wal-Mart Discount Stores average 107,000 square feet, employ an

average of 225 associates and offer 120,000 items.Wal-Mart Super centers
average 185,000 square feet, employ 350 or more associates on average and
offer 142,000different items.Each Sam's Club employs an average of 160 to
175 associates and offers approximately 5,500 different products. A
membership fee ($35 annually for businesses/$40 annually for individuals) is
required to shop at Sam's Club. There are 584 Sam's Club locations.

The company also operates Neighborhood Markets. Generally, they

are located in markets with Wal-Mart Super centers, supplementing a strong
food distribution network and providing added convenience while maintaining
Wal-Mart's Every Day Low Prices. First opened in 1998, the now more than
120 Neighborhood Markets, averaging 42,000 square feet, feature a wide
variety of products, including fresh produce, deli foods, fresh meat and dairy
items, health and beauty aids, one-hour photo and traditional photo
developing services, drive-through pharmacies, stationery and paper goods,

71
pet supplies, and household chemicals. Neighborhood Markets employ 95
associates on average and offer about 29,000 items.

Wal-Mart reported record revenues for 2007 of $378.7 billion. Wal-Mart

stores in the U.S. generated $239.5 billion in sales while Sam's Club reported
$44.3 billion in revenues. International stores brought in $90.6 billion.
Membership fees and other income added $4.27 billion. Net income for the
entire company was $12.7 billion in 2007.

The company has recently begun to offer new health plans for
employees with lower fees and higher deductibles. Wal-Mart says 92.7% of all
employees now have health coverage with the company or through their
spouse.

The company said the average hourly wage for a regular full-time
hourly associate in the U.S. is $10.86 an hour al-Mart reportedly will cut 700-
800 jobs at its corporate headquarters this year in merchandising, real estate,
marketing and support divisions in its U.S. division and in the Sam's Club unit.

History

The first Wal-Mart store opened in tiny Rogers, AR in 1962 by brothers

Sam and Bud Walton. By 1964, Wal-Mart had 24 stores with $12 million in
sales and in 1969 Wal-Mart moved outside the state of Arkansas with stores
in Sikeston, MO, and Claremore, OK. The company was guided by founder
Sam Walton's passion for customer satisfaction and "Every Day Low Prices."

In 1970, the company opened its first distribution center and corporate
headquarters in Bentonville, AR, where it is located today. Wal-Mart also went
public the same year. In 1983, the first Sam's Club warehouse store opened.
In 1988, the first Wal-Mart Supercenter opened which featured a Wal-Mart
store with a full-scale supermarket inside.

Medical Coverage

Every associate who works in the United States can become eligible
for individual health coverage costing as little as $5 per month in some areas

72
and as little as $8 per month nationwide. As soon as an associate becomes
eligible for benefits, their children become eligible too. Today, more than 92
percent of associates have health insurance-either through Wal-Mart or
through other coverage. For our associates who choose coverage with Wal-
Mart, we also offer more than 2,400 generic prescription drugs for $4. This
includes prescription drugs to treat everything from diabetes to heart disease.
Wal-Mart associates will find more than 50 ways to customize their health
coverage. They can select from a menu of deductibles, health care coverage
options, and health credits and premiums.

We want associates and their families to have the peace of mind that
their healthcare needs will be met, especially when they need it most. To
ensure that peace of mind, Wal-Mart's health coverage includes no lifetime
maximums on most health care expenses.

Exclusive, Everyday Savings

We save Americans thousands of dollars a year. And our associates get even
more. Every Wal-Mart associate receives:
- 10 percent off regularly priced general merchandise in Wal-Mart stores or on
www.walmart.com with the associate discount card
- 10 percent off of fresh fruits and vegetables
- An additional 10 percent off eyewear at Wal-Mart Vision Centers
- Over 100 discounts on walmartbenefits.com - our associate-only website-for
everything from new cars to movie tickets.
We believe in our associates' futures. Last year, we put $870 million into
associates' Profit Sharing and 401(k) Plan accounts. We do this whether or
not an associate looses to contribute. We also make it easy for associates to
have an ownership in the company. The Associate Stock Purchase Program
allows associates to purchase stock without most brokerage fees. Plus, we
match a portion of their purchases.

Wal-Mart Success = Your Success

Every associate is eligible to receive performance bonuses based on the
performance of their store. We also offer a long-term service award, which

73
rewards hourly associates and assistant managers who have been with the
company for 20 years or more with an extra week of pay.

During the fiscal year ending January 31, 2008, Wal-Mart said it contributed:
- $724.4 million to 838,955 hourly associates in profit-sharing and 401(k)
contributions.
- $50.1 million to 764,098 hourly associates toward the company's associate
stock purchase plan.
- $420.2 million in discounted merchandise to hourly associates and their
family members through the merchandise discount program.

74
Subhiksha
When R Subramanian became an entrepreneur and started a retail
chain called Subhiksha, there were not many entrepreneurs in India. In his
family too, there were no entrepreneurs. After obtaining an engineering
degree from the Indian Institute of Technology-Madras, he decided to join
Indian Institute of Management-Ahmedabad as he was sure about one thing --
that he would not leave India to go abroad. Ten years after Subhiksha was set
up, the retail chain has around 500 outlets all over India which Subramanian
wants to double by 2007-end. In an exclusive interview with Contributing
Editor Shobha Warrier, Subhiksha managing director R Subramnian talks
about his adventures, the success of his retail chain and also his future plans.

Starts his first company called Viswapriya

I wanted to start a company of my own and told Mr Viswanathan about

it. He asked me from where was I going to get the money? I had no idea. I
told him I would figure out. He then told me that he would give me money to
set up the company and I run it for him. As long as I could run the company, it
was fine with me. He provided me with the money, and in 1991, I set up my
first company called Viswapriya. We got a galaxy of very good people on
board. We basically did three things. We bought debentures from thousands
of people who had them in very small numbers and consolidated as 1 lakh
(100,000) or 2 lakh (200,000) debentures and invested in mutual funds. And
the investors got a monthly income. Every time the money went to lakhs of
investors, it went from Viswapriya and that way our company's name became
popular. It was a good business to start and we were the pioneers in it. After
we started, all the big guys got into the business. So it was good fun.

Entering the retail market ten years ago

There was no great logic behind entering the retail market in 1997. We
made a study of two areas: software and retail. Between software and retail,
we thought we were a bit late for software as Satyam, Infosys, Wipro, TCS,
etc had already established by then. We didn't want to be a small and late
entrant. In retail, we would be one of the early entrants, so we would have the

75
learning curve much to our advantage. We allocated a Rs 5 crore (Rs 50
million) corpus to it and entered the retail business. There was a lot of thought
process behind it. We wanted to attract not the top end customer but the aam
aadmi. From our research of three months, we found that consumers prefer
buying groceries from closer home. So, we decided to set up 1,000 sq ft
shops all across the city and not a 10,000 sq ft big store at one location in
Chennai. The next question was why would he come to our store abandoning
the existing store? It had to be the price, because ultimately there is no
difference between the branded products like say Boost or Surf or such
things. So, we decided to sell branded products at a lower price.

On starting Subhiksha

We looked at all sorts of names; and finally we chose the Sanskrit word
Subhiksha (prosperity) because it reflects the Indian ethos and it is a word
that can be understood all over India. What we were trying to do was different
from the western model; our model is truly Indian. Our theme was, why pay
more when you can get it for less at Subhiksha? In March, 1997, we opened
our first store in Thiruvanmiyoor in Chennai with an investment of around Rs
4-5 lakh (Rs 400,000-500,000). We opened it with the clear idea that it is part
of a larger system. We thought the day we opened, there would be a
stampede because the prices were low and we would sell goods of Rs 30-40
lakh (Rs 3-4 million) by the month end. But there was nothing of that sort! We
sold goods of only Rs 5-6 lakh (Rs 500,000-600,000) in the first month. Yes,
consumers were very surprised, and they gingerly looked at the products and
asked, are they seconds or old stock or defective products? In the first year,
we opened ten stores in Chennai. We also started selling medicines at a
discount. On the third day of our opening the pharmacy, there were about 100
people outside our store in the morning. We thought all of them were waiting
to buy from our store. What we were expecting on day one happened on day
three, we thought happily. But we soon found that they were not there to buy
anything; they were chemists from the neighbourhood who had come to do a
dharna (protest) saying we could not sell medicines at a discount.Finally we
had to go to court, and it was only in 1999 that the Supreme Court gave a

76
ruling that we could sell medicines at a discount. We were doing quite well on
the pharma front and we enjoyed all the attention we got. Another thing is the
medicines that we were selling at a discount were bought mainly by the
elderly who have no fixed income and they welcomed any discount. We were
quite happy to be able to help them in some way. Medicine retailing is more of
a service than business for us. Of course, it is good business for us too. But
our main motto is service.

On his expansion plans

By March 1999, we started expanding rapidly. From 14 stores, we

expanded to 50 stores by June 2000. In the next two years, we had 120-130
stores across Tamil Nadu. Another big thing was, in 2000, ICICI Venture
invested in our company. Today, we have 145 stores all over Tamil Nadu. We
saw to it that the moment we got into a city, we started as many stores as
possible there. Only that made business sense. Then, till 2004, we made sure
that we consolidated before we expanded, though there was a lot of pressure
on us to expand nationally. We decided to look at every part of India which is
significantly literate and is a significant consumption market. We wanted to be
everywhere. We looked at the telecom companies as our role model. They
employed capable regional managers and expanded. Our business is also
extremely local. We can't sit in Chennai and run a store in Chandigarh. We
decided to have very good quality people to run the region, area, town and the
store. In 2004-05, we decided to have 420 stores in places like Gujarat, Delhi,
Mumbai, Andhra and Karnataka by 2006. In 2005, we started recruiting
people in various regions. Today, we have 500 plus stores in all the places
that we had planned. It will go up to 600-plus by the month end. We are
already India's largest retail chain store with 500-plus stores. We plan to have
1,000-plus stores by the end of this year. India is a large country and there are
still opportunities to avail of. Though now, the thought of opening stores
outside India

Risk in retailing and expansion?

We are not mad risk takers. We are not producing movies. We do a lot
of research before starting business in an area, and we have back-up plans in

77
place. We work with very good people, and if something goes wrong, we try to
take corrective steps. The big advantage we have is, we are not creating
products. So there are no worries about whether it would succeed or not.
Consumers are smart and they are all price-conscious and they want to finish
the work as fast as they can. They don't go to a provision store for fun.

On the entry of MNCs and Reliance in the retail market

Everybody has been asking me, are you worried about Wal-Mart
coming to India? Ultimately Wal-Mart is also going to be run by people like us.
The point is you need not worry about anybody's entry. There is a huge
potential for growth in India. There is potential for another ten people to come
in. Ultimately the share of the unorganised kiranas will come down and the
share of organised sector will go up because of the efficacy in buying and
distributing. Also, this is an extremely low margin business. Ultimately,
everybody has to sell within the cost. It is not that we are geniuses; we have
been in the business for ten years, and we have made enough mistakes and
learnt from them. I don't think any child will learn to walk without falling down
first, however good the parent is. We made our mistakes when we were small.
The bigger you are, the mistakes will cost you more.

Satisfaction

There are two kinds (of satisfaction). We genuinely believe that through
efficiency, we are helping the consumers save more. We are also happy that
we are bringing in a model that is Indian, capable of supporting the middle
class of India.

78
On what he does other than thinking about Subhiksha

I would like to say I think of Subhiksha all the time, but I do not. I read a
lot, mainly online. I lead a reasonably balanced life. Working 12-13 hours a
day six days a week, is my working pattern. I keep Sunday evenings and
afternoons only for family. But I travel 12-15 days a month visiting all the
Subhiksha regions. I am a pretty cool person, relaxed all the time. I am not
hassled about anything.Personally I am not a very ambitious person; I am
happy with my curd-rice! What gives me a kick is to show that a business
model from India is superior to a business model imported from the West. We
are living in an age where we do not have to be taught by the West what we
should do in our country.

79
Vishal Retail Ltd

What started as a humble one store enterprise in 1986 in Kolkata

(erstwhile, Calcutta) is today a conglomerate encompassing 183 showrooms
in 110 cities / 24 states. India’s first hyper-market has also been opened for
the Indian consumer by Vishal. Situated in the national capital Delhi this store
boasts of the singe largest collection of goods and commodities sold under
one roof in India The group had a turnover of Rs. 1463.12 million for fiscal
2005, under the dynamic leadership of Mr.Ram Chandra Agarwal . The group
had a turnover of Rs 2884.43 million for fiscal 2006 and Rs. 6026.53 million
for fiscal 2007. The group’s prime focus is on retailing. The Vishal stores
offer affordable family fashion at prices to suit every pocket.

The group’s philosophy is integration and towards this end has initiated
backward integration in the field of high fashion by setting up a state of the art
manufacturing facility to support its retail endeavors. Vishal is one of fastest
growing retailing groups in India. Its outlets cater to almost all price ranges.
The showrooms have over 70,000 products range which fulfills all your
household needs, and can be catered to under one roof. It is covering about
29, 90, 146 sq. ft. in 24 states across India. Each store gives you international
quality goods and prices hard to match. The cost benefits that is derived from
the large central purchase of goods and services is passed on to the
consumerVishal Retail Ltd. has a factory in Gurgaon, Haryana. This factory
has morethan 700 imported machines that have a capacity to manufacturer
150000 pieces a month. The factory occupies 80000 sq ft of covered
space.The Vishal group indirectly gives employment to more than a 1000
people.

These people work in ancillaries that supply finished goods to the

company Our 10 warehouses cater to 183 showrooms in 24 states/110 cities
across India. It is covering about 29, 90, 146 sq. ft. Vishal Mega Mart is one
of India’s fastest growing retail chains.. The chain currently has 183 company
stores in 24 states / 110 cities in India. The Vishal brand is known for great
modern style for men, women and children. Vishal offers high level fashion
styling. Since 1986, our name has been synonymous with quality, value and

80
fashion integrity. We offer an unparalleled collection of clothes for the entire
family. Each garment is hand selected for quality and contemporary styling.
Vishal manufactures majority of its own garments and out sources some
under its direct quality supervision. This enables us to offer the lowest
possible and most reasonable prices. Our goal is to provide a range of fashion
wear to suit every pocket.

Our product mix represents the most current fashion trends in tops,
bottoms, formals and accessories for men, women and kids. Our courteous
staff will ensure that consumers get a perfect fit.

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 CHAPTER – 3

RESEARCH METHODOLOGY

• PROJECT TITLE & INTRODUCATION

• RESEARCH PROCESS

• SAMPLING METHOD

• SAMPLE SIZE

• SOURCES OF INFORMATION

• DATA ANLYSIS

82
 CHAPTER-3
Research Methodology
PROJECT TITLE & INTRODUCATION

FIGURE-3.1

83
 Customer Satisfaction
INTRODUCTION
From the beginning of the “customer service revolution” almost 20
years ago, a body of business research has focused on customer satisfaction
and customer-focused organizations.1 Business consultants, corporations
and others have worked to identify the characteristics of organizations that
consistently please their customers, to develop tools for monitoring customer
satisfaction, and to build continuous, quality improvement systems that
respond to consumer feedback. Although much of the research has been
conducted by and for the corporate world, customer service and satisfaction is
not limited to the private sector. Publicly funded organizations that are
incorporating practices developed in the business world provide a growing
body of experience and study. Increasingly, federal, state and local
government agencies are attempting to gauge their performance and the
effect on those they directly serve. Throughout the public sector, initiatives to
“reinvent” government—including education reform, privatization, and
managed care—have elevated customer service and satisfaction to new
priorities. Within the European Union, a shift is underway to re-think and
reform social services with social inclusion and “user involvement” as driving
forces in quality improvement.
Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods helped the Center identify effective approaches used by
market-driven organizations to monitor and improve customer satisfaction.
Further study examined strategies for applying customer-driven quality
improvement strategies to public services, including European approaches
and experiences with user involvement and customer satisfaction
in social services. This paper provides a brief synthesis of this
formative research. Although it draws primarily from the business world’s
prolific study of market-driven organizations, it also provides public sector
examples and experiences. explores key components of customer-focused
organizations, including: Customer-oriented vision that is clearly defi ned and
communicated; Customer-oriented culture that embeds customer satisfaction

84
throughout organizational practices; Focus on the total customer experience;
and
Customer service standards and accountability. examines the critical
role of frontline staff and strategies for ensuring that employees have the
capacity to put customer service first, including training, employee
empowerment, and recognition and rewards for performance. describes tools
and strategies used to research and improve customer satisfaction,including
surveys, customer behavior research, complaint resolution approaches,
testersand “secret shoppers,” and continuous feedback loops. The conclusion
briefly describes the potential for applying customer satisfaction research and
customer service strategies in the public sector and among vulnerable
populations.

Why Organizations Focus on Customer Satisfaction

Businesses monitor customer satisfaction in order to determine how to
increase their customer base, customer loyalty, revenue, profits, market share
and survival. Although greater profit is the primary driver, exemplary
businesses focus on the customer and his/her experience with the
organization. They work to make their customers happy and see customer
satisfaction as the key to survival and profit. Customer satisfaction in turn
hinges on the quality and effects of their experiences and the goods or
services they receive.

What is Customer Satisfaction?

The definition of customer satisfaction has been widely debated as
organizations
increasingly attempt to measure it. Customer satisfaction can be experienced
in a variety of situations and connected to both goods and services. It is a
highly personal assessment that is greatly affected by customer expectations.
Satisfaction also is based on the customer’s experience of both contact with
the organization (the “moment of truth” as it is called in business literature)
and personal outcomes.

85
Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods It was the consensus of the groups that lack of information
often leads to low expectations. They further agreed that the process of
obtaining a service and the way it is delivered can have a major impact on the
users’ experience. The qualities of relationships and staff were central to
positive outcomes.8 Because customer satisfaction is a highly variable
assessment that every individual makes based on his/her own information,
expectations, direct contact and interaction, and impact, it makes sense to
involve and consult consumers when designing customer satisfaction
approaches.

Service Quality
Research identifies many characteristics that are associated with
service quality.
Business researchers Benjamin Schneider and David Bowen assert that
“service
organizations must meet three key customer needs to deliver service
excellence:” security, esteem, and justice.9 Research identifies an array of
service quality factors that are important for customers, including: Timeliness
and convenience, Personal attention, Reliability and dependability, Employee
competence and professionalism, Empathy, Responsiveness, Assurance,
Availability, andTangibles such as physical facilities and equipmentand the
appearance of the personnel. Research shows that these characteristics also
apply to citizen satisfaction with public service quality. Timely service is an
especially strong determinant of quality across different types of public
services. Fairness and outcomes are additional factors important to public
service customers.10 Public sector quality improvement initiatives are on the
rise worldwide as contracting and private service provision has become more
common. At the same time, European and consumer-oriented services has
produced a quality gap: a gulf in perceptions of quality and the impact of
services on the end user. She calls for rethinking quality initiatives to interlink
quality improvement with user involvement and participation and with

86
Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods customer service. According to marketing expert Barry Feig, a
strong mission statement both inspires and challenges employees.13 It can
also help employees feel that they are part of something important, another
operating principle of high-performing companies.14

A. It helps set and manage customer expectations.

The American
Airlines Customer Service Plan states: “We are in business to provide
safe, dependable, and friendly air transportation to our customers, in the
hopesthat you will fly with us again and again.” The Customer Service Plan
then goes on to provide service goals, guarantees, and promises for
customers and employees. It is continually updated based on information
from customer research, including focus groups, discussions and surveys.

B. Total Customer Experience

Business experts recommend focusing on the entire customer
experience with each service contact. “It is the totality of the buying
experience that will keep your customers coming back for more.”25 More than
just the basics of customer service create a favorable experience for the
customer; everything, conscious and unconscious, can affect it. Successful
service companies attend to every detail to ensure that the customer’s
physical, social, and psychological experience is pleasant.

87
Personal Contact and Relationships
Research shows that, in an increasingly impersonal world, customers
want personalized service. It is essential to customer satisfaction. “Customers
experience service one-onone, subjectively, impressionistically. An
organization looks like the people who greet them, write up their order, deliver
something to them … it sounds like the last person the customer talked to on
the phone.”26 Honeywell and Contracting Business Magazine conducted
consumer focus groups to determine customer expectations and perceptions
of heating and air conditioning contractors. They learned that reliance on
answering machines and interactive telephone-computer communications
were viewed as definite negatives.

Customers wanted not only a skilled technician, but also someone who
was easy to talk to, looked professional, enjoyed talking to the customer, and
respected the customer.27 Proven techniques for putting customers at ease
include simple courtesy, using each customer’s name, answering customers’
questions, and remembering their names, preferences, and personal things
about them. One way staff members at an exemplary Marriott Hotel in
California put customers at ease is by using the customer’s name several
times at every interaction.28 At the Crown Paradise Resort in Cancun,
Mexico,and other hotels, the concierge frequently calls guest rooms to see if
customers needfresh towels, new drinks in the refrigerator, or other services.
Walmart places a greeter

CUSTOMER-ORIENTED ORGANIZATIONS
In many areas, customer satisfaction ultimately boils down to the
customer’s contact with frontline staff. Capable, empowered frontline staff put
customer-focused mission statements, standards and culture into practice.
Thunderbird Samaritan Medical Center in the Phoenix suburb of Glendale
improved the satisfaction of hospital patients from the 10th percentile
nationally to the 90th percentile in two years. Hospital leaders created the
Service Excellence Initiative and shifted “from counting beans to caring for the
fieldworkers.” Here is how they summed it up: “Of the lessons learned in this

88
initiative, the most salient may be the importance of staying focused on the
most important asset: our people.”40

The Golden Rule: Treat Employees Well

Research consistently shows that the way employees are treated by
their management has a direct impact on the way those employees treat the
businesses’ customers.41 This translates in to a single principle that high
performing customer service organizations share: Treat your employees as
you want them to treat your customers. As Bill Marriott, Jr., chairman of
Marriott Hotels, says: “Motivate employees, train them, care about them, and
make winners of them. At Marriott we know that if we treat our employees
correctly, they’ll treat the customers right. And if the customers are treated
right, they’ll come back.”42 To satisfy customers, staff need tools, including
thorough training, flexibility and empowerment to solve problems and satisfy
customers. To know that the organization values them, frontline staff also
need recognition and rewards for strong performance.

A. Selecting and Preparing Customer Service Staff Hiring

The first step for focusing staff on customer service is hiring the right
people. For a growing number of companies and government agencies, a pre-
employment video narrows the applicant pool to those who will help the
organization accomplish its mission of customer satisfaction. For example, the
Emanuel Medical Center video makes the organization’s mission and
expectations clear by stressing the hospital’s “non-negotiable standards of
patient care.” It encourages individuals to proceed with the application
process only if they share Emanuel’s philosophy and standards.43 In the
U.K., recent social policies require that local government and public agencies
consult with those they serve when making decisions that affect them.
Increasingly, this consultation includes hiring decisions. The Hertfordshire,
England county council,

89
Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoodsin a collaborative effort with the adult care service agency and
the national health service, involves service users with learning disabilities
and their family caregivers in the recruitment and selection of new staff. They
have developed a manual to guide managers onpreparing, training and
providing support needed to involve users in an effective way. 44

Orientation and Training

Customer service leaders place heavy emphasis on instilling a
customer-first culture throughout their organizations by training new
employees and reinforcing a customer focus with current employees.
Disneyland’s Disney University provides one of the premier examples of
employee orientation. It is provided after a candidate is offered a job and
includes discussions of company history and philosophy, where Disneyland
fits within the Disney Corporation, the standards expected of employees
(called cast members at Disneyland), and a tour of Disneyland. After this initial
phase, new employees go through division training, which introduces the
employees to their particular jobs. Then, actual job training begins. Successful
service organizations such as American Express, L.L. Bean, Disney, Marriott,
Nordstrom, and J.C. Penney all make a clear commitment to training the
employees who interact with the public, whether they provide service by
telephone or in-person. Their training programs include formal classroom
instruction that focuses on job skills and attitudes and the expectations of
management, as well as on-the-job training that allows staff to learn about the
organization and the work from interaction between coworkers.45 The Ritz-
Carlton, two-time winner of the Malcolm Baldrige National Quality Award,
provides 250 hours of training to first-year, frontline employees, known as the
“The Ladies and Gentlemen of the Ritz-Carlton.”46 American Express
telephone service representatives spend five weeks in a classroom, two
weeks in on-the-job training, and three weeks in a training unit before they are
on their own.

90
 In lectures, listening, and role-playing, they learn basic operating
policies, how to calm angry customers, and how to help customers who need
immediate assistance.47 When MidState Medical Center shifted its entire
organization to a customer satisfaction focus, it made hiring and training top
priorities. Not only were new employees “indoctrinated” in customer service
expectations, values and behaviors; a reorientation program immersed
current employees in the new customer focus.48

B. Empowering Employees to Satisfy Customers

Hiring, orientation and training of staff are common ways of focusing
employees on customer service. Employee empowerment—giving employees
the flexibility and leeway to satisfy customers—is less widely practiced.
However, studies show that it can lead to improved customer service and
increased customer satisfaction and that it is energizing and highly motivating
for employees.

Removing Barriers to Customer Satisfaction

To empower employees, they must have the means to satisfy
customers, as well as the blessings of management. Any Ritz-Carlton
employee can spend up to $2,000 to resolve a problem or handle a
complaint.50 Similarly, employees of the San Antonio River Center Marriott
have flexibility and authority to enact the hotel creed, “Every guest leaves
satisfied.” Associates who encounter unhappy guests solve the problem on
the spot without going up the chain of command. They have an arsenal of
products and services at their disposal (including a free night’s stay, a free
dinner, or a gift certificate for a future weekend stay) to smooth over difficult
situations.51 Emanuel Hospital is also “breaking down the institutional barriers
that sometimes prevent employees from doing what they believe is the right
thing.”

91
 One step was the development of caring baskets. Each hospital
department has caring baskets full of movie passes, car wash certificates, and
restaurant vouchers. Any employee can use one of these gifts to make up for
customer service mistakes immediately.52 Nordstrom is another company
that allows employees to go to great lengths to satisfy customers. According
to Bruce Nordstrom, what distinguishes the company in customer service is
“its army of highly motivated, self-empowered people who have an
entrepreneurial spirit, who feel they’re in this to better themselves and to feel
good about themselves, to make more money and to be successful.”53
Nordstrom trains its employees and gives them the freedom to make
decisions. One of the most famous Nordstrom examples is the salesperson
who gladly accepted a returned set of automobile tires and gave the customer
a refund even though Nordstrom has never sold tires.
The customer purchased the tires from one of three stores in Alaska
that Nordstrom acquired in 1975. Instead of being reprimanded by
management, the employee became a company hero, and the story
reinforces the Nordstrom mystique of customer service and drives other
employees to exemplary performance.54 As this example illustrates,
Nordstrom, employees “are instructed to always make a decision that favors
the customer before the company. They are never criticized for doing too
much for a customer; they are criticized for doing too little.”55

Involving Employees in Organizational Planning and

Improvement
Customer-oriented organizations also empower and motivate
employees by involving them in essential organizational processes. When
everyone participates in developing.

Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods organizational plans and strategies for improvement, it adds
more ideas, increases employee buy-in, and contributes to a culture of
employee empowerment. The Ritz-Carlton involves all levels of employees in

92
the company’s strategic planning process. After senior leaders identify specific
company objectives, they communicate those objectives to staff at “lower
levels” of the organization. The employees on those levels identify the actions
and deeds that if done will collectively meet the objectives.56 MidState
Medical Center’s steps for engaging frontline staff in setting customer service
standards are another example of employee empowerment.

C. Recognizing and Rewarding Employee Performance

A common practice among successful service organizations is constant
recognition, reward and praise for employees who provide outstanding
customer service. This can take many forms; it does not always need to be
expensive to be effective. A Press Ganey survey asked hospital employees
how morale could be improved. More than half the responses were: smile,
thank them, recognize and appreciate them.57 Emanuel Hospital’scaring
baskets (described as a tool for resolving customer problems) can also be
used to motivate employees to provide exemplary service and allow
employees to encourage each other. Regardless of rank, any employee can
reward another employee with a movie pass, car wash certificate, or
restaurant voucher from the caring basket. Moreover, each month employees
who went “above and beyond” are praised in front of coworkers and
managers and given certificates and gifts from the caring baskets. Nordstrom
is among the many businesses that use inter-company and inter-store sales
competitions to motivate employees. Rewards include flowers, cash, dinners,
or trips.
In addition, the company constantly recognizes and praises its top
performers.58 MidState Medical Center established two highly visible
employee and team awards for quality and customer service. Informally,
hospital executives attend staff meetings to honor employees in front of their
co-workers. In addition, the hospital sometimes takes out newspaper ads and
billboards to congratulate staff on awards and outstanding customer survey
results.59

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 CUSTOMER SATISFACTION
A. Introduction
Although companies conduct customer satisfaction research for
various reasons, the overall goal is to help them “stay as close to their
customers as humanly possible.”60 Many leading edge companies and
research firms focus on obtaining useful feedback from customers and clients
and converting it into “actionable” steps to improve their performance. Some
want feedback from customers about existing or new products and services.
Others want to know how to target their resources on issues of concern to
customers. Still others want to demonstrate a commitment to listening to their
customers.
As a by-product, customer feedback can provide actual examples of
good and bad practices for employee training and continuous improvement
efforts.61 The organization’s objectives define what it wants to learn from
customers and guides how the information is collected. Experts advise that
first defining measurable objectives will allow organizations to “learn the
effectiveness of your survey, and it will help you in reinvesting the information
you learned.”62 In general, the research focus is how reliably the organization
fulfills customer satisfaction and what can be done to improve. “The most
active verb when you speak in the vocabulary of customer satisfaction is to
improve.”63 How frequently an organization measures customer satisfaction
depends on the nature of its service and what it wants to gain. For instance, if
customers make daily decisions about the services offered, frequent
measurement is appropriate.
Many consumer product and service companies need this type of day-
to-day or weekly information. The National Performance Review (NPR) found
that “best-in-business” organizations solicit feedback from customers before,
during, and after service.64 The methods chosen for measuring customer
satisfaction depend on customer characteristics, time availability, costs, and
the information an organization hopes togather. Many of the top performing
companies identified by the NPR used sophisticated market research
techniques: “Feedback was obtained through customer focus groups,

94
Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods

B. Customer Satisfaction Surveys

Surveys and questionnaires are the most common marketing research
methods. Typically, they are used to: assess the level of customer satisfaction
with a particular product, service or experience; identify factors that contribute
to customer satisfaction and dissatisfaction; determine the current status or
situation of a product or service; compare and rank providers; estimate the
distribution of characteristics in a potential customer population; or help
establish customer service standards.
Benefits and Challenges
Surveys allow an organization to quickly capture vital information with
relatively little expense and effort. A primary advantage of this method is its
directness: “the purpose is clear, and the responses straightforward.”66
Additionally, the information gathered by surveys can easily be analyzed and
used to identify trends over time. The public views consumer product polls
and pollsters in a generally positive manner compared to political and other
polls. One study found that at least sixty percent of the public feels that
market research about products and services has a positive impact on
society. Seventy percent consider the people who conduct such surveys to
have positive impacts on society.67 A major disadvantage of customer
surveys is that the responses may be influenced by the measurement itself
through various forms of bias. For example, most surveys are voluntary, and
some researchers have found differences between survey respondents and
non-respondents.
People who respond to surveys answer questions differently than those
who do not respond, and late responders answer differently than early
responders. Most demographic studies report that non-response is associated
with low education. One study found that non-respondents were more often
single males.68

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Methods and Examples
Two types of surveys are widely used by companies and research
firms: transactional and image-based. These can be combined or used
separately. Each time a customer interacts with an organization is a
transaction—a call, a message, using the product or service. Many
companies use ongoing transactional satisfaction measurements to monitor
customer service, support or sales groups over time. In addition, each
customer has an overall impression of the company or organization. These
images are based on

Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods Surveys can be used in combination with other research
strategies to obtain fuller understanding of customer satisfaction. The federal
Veterans Health Administration (formerly Department of Veterans Affairs)
sends annual surveys to outpatients, recently discharged inpatients, and
extended care patients. Along with customer complaints, survey data are
tracked in a National Patient Feedback program and correlated with National
Customer Service Standards.
The Administration uses focus groups to identify major issues and to
flesh out initial responses to the customer satisfaction surveys. Additional
surveys further determine areas of improvement. The “satisfaction questions
deal directly with issues the focus groups identified as important and ask for
patient feedback about what happened (the patient serving as a reporter).
There are a few global questions about how the patient views the care (the
patient as a rater). Focus groups identified specific areas of concern such as
relief of pain, emotional support, adhering to patient preferences,
communication with members of the treating team, etc.
The scores in these areas, rather than specific questions, will be used
to determine whether a concern about patient satisfaction should be
included on a performance contract.” 72 In Norway, customer
satisfaction surveys are widely used to measure the perceived quality of
public services. In 1996, half the county governors and agencies

96
already used customer satisfaction surveys. A 2004 survey in the Oslo
community expanded on earlier studies in 1998 and 2001. It included
questions regarding: whether residents felt they were being treated
respectfully, whether staff was able and willing to provide information
and services to them, and the availability of and access to services. The
Dutch research institute Verweij-Jonker developed a computerised
system called SATER for measuring clients´ views on the effect of and
the satisfaction with individual social interventions. Social work agencies
have implemented pilots in a variety of settings including cities and rural
areas.
All clients whose cases are closed are asked to participate,
including those who drop out before the end of treatment. (People who
are negative about the services can provide especially relevant
information for improving the treatment.) Participants complete
anonymous, computerized questionnaires, even if they have no
previous experience with computers. The software routes participants to
specific questions based on their individual characteristics and
circumstances.
The computer procedure avoids the problem of socially correct
responses and allows clients to take all the time they need to read the
questions and fill in the answers. Most clients in pilot sites appreciated
the opportunity to complete the survey and found it easier to handle
than paper questionnaires. In some cases where it is not possible to
provide space for clients to use a computer or to arrange access to an
office, the interviews were administered by telephone.
The questionnaire takes into account the following issues: the
clients´ personal defy nation of the situation, through an inventory of the
problems that they experienced at the start of the intervention; selection
of the four most important problems; assessment of the various stages
of the intervention process with opportunity to specify and elaborate on
negative experiences; satisfaction with the social worker and with the

97
way they were treated by the social worker; and satisfaction with a
number of more general and physical aspects of the agency and the
treatment process.75

C. Complaint Monitoring and Resolution

While employee empowerment provides capacity for responding to
individual complaints, systems for monitoring and examining complaints
reveal patterns of organizational practices that need to be addressed. “Oops”
moments—those instances in which things do not go as smoothly as they
should for service organizations—offer opportunities for both ongoing learning
and immediate improvement.76 because problems can always arise, “service
recovery” (remedying customer dissatisfaction) is vital for service excellence.
The federal National Performance Review found that “best-in-business
organizations actively encourage customer complaints.” 77 Research further
supports the importance of actively seeking customer input and involvement
rather than waiting for them to complain. Making it easy for customers to
complain and to resolve problems on the first contact is the ideal.

Benefits and Challenges

Systems for monitoring and responding to customer complaints can
capture a range of useful information. “Substantial evidence suggests that
complaint behavior is not just a function of the intensity of dissatisfaction but
of several other factors as well, such as consumer characteristics, consumers’
perceptions of the attributes of dissatisfaction, expectancy of outcomes,
economic costs involved, product type, etc.”78 Complaint response systems
can yield further benefits in positive customer and public perceptions.
Generally, only four percent of dissatisfied customers formally complain to a
company about an unsatisfactory product, service or experience. Instead, the
average dissatisfied customer voices displeasure to eight to ten other people,
each of whom will tell at least five others. Thus, at least 50 people can
eventually learn of one customer’s dissatisfaction without the company finding
out.79 In contrast, satisfied customers tell only five other people about their

98
pleasant experience with an organization—half thenumber who will hear
about a negative experience.80

Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods Some research has shown that customers who had
complaints that were resolved were more satisfied than customers who did
not have problems in the first place. “Customers who get their problems
satisfactorily and quickly solved tell their friends and neighbors.”81 At the
same time, complaint systems have inherent limitations. They are self-
selecting; only the most dissatisfied customers tend to complain, skewing the
accuracy of the data for judging overall customer satisfaction. Many
dissatisfied customers cease using a product or service without notifying the
company. While complaint systems are useful, they must not be the sole
feedback mechanism an organization employs. Instead they provide a
valuable supplement to more standard and reliable research methods.

Methods and Examples

Retail stores use mystery shoppers to covertly test their services and
products. Some companies use video cameras to record consumer behavior,
and some customers even allow video observation in their homes. Television
research groups enlist viewers to keep track of what shows they watch for a
week or two. Viewers record when they watched television, what show they
watched, how long, etc. Customer ratings play a strong role in determining
which shows remain on the air and in developing ideas for future
programming. The Montgomery County Department of Health and Humans
Services (DHHS) Office of Planning, Accountability and Customer Service
worked with a number of Department divisions to develop a Customer Service
plan. DHHS used “secret shoppers” to assess the behavior of employees
responding to phone calls from residents, to visit service centerwaiting rooms,
and to observe interactions between workers and customers.

99
Panels of customers and other testers.
One research firm uses consumers todevelop new products for
companies. It tests consumers for creativity and selectsa certain number for
“Super Group” panels comprised of “idea-centric creatives.”90 Food service
contract managers in hospitals have used taste testers to improve patient
satisfaction. Riverside Methodist Hospital in Columbus, OH, serviced by
ARAMARK, uses an internal Nutritional Services Quality Resource
Management team composed of managers, dieticians, supervisors, cooks,
and tray line personnel to sample food before sending it to patients. Food
quality scores by patients have increased as a result. An employee also visits
all new patients to describe the diet their physician ordered and provide
information about additional services.91

100
Sophisticated product testing strategies.
Consumer Reports operates the National Testing and Research
Center in Yonkers, New York, the largest nonprofit educational and consumer
product-testing center in the world. The Center gathers data about products
and services, consumer demand, and what its subscribers plan to purchase.
The company purchases the products it will test and conducts laboratory
testing. For example, it has an auto-test track for car and truck testing. The
company has over 100 “testing experts” in seven technical departments:
appliances, autos, baby & child, electronics, food, health & family, and
recreation & home improvement. Additionally, it utilizes 150 anonymous
shoppers throughout the country. The laboratory tests use

E. Customer Behavior Research

Although all the strategies described above provide information about
customer perceptions, customer behavior research provided in-depth
information about how and why consumers make choices. Observing, probing
and analyzing consumer behavior can help organizations develop products
and services that fit the use patterns and preferences of their target
customers. Likewise, organizations can use their findings to develop customer
service standards and performance measures. McDonald’s provides a good
example of how customer knowledge can be used to improve services and
profits. In the late 1980s and early 1990s, McDonald’s customer satisfaction
ratings declined. Surveys showed that 60 percent of customers left the
restaurants dissatisfied. Consumer research revealed that the company’s
“heavy users,” who made up its largest customer segment visited their favorite
fast food restaurant six times a week, but McDonald’s was losing their
business. Because one more visit a week by these customers meant millions
of dollars in revenues, the company decided to focus
on these customers.
In response to research that focused on heavy users, McDonald’s
introduced its Value Menu packages, improved its drive-through service, and
cut minutes off in-restaurant service time. The result was dominance over the
competition.93 Usually; customer behavior research is an in-depth approach

101
that is intended to obtain detailed information. Although skilled researchers
are often required and those can be costly, relatively small numbers of
consumers are needed. Consequently, compared to the large scale surveys,
targeted customer behavior research can yield valuable data with limited
expense. A general lesson from customer behavior research is the importance
for companies and organizations to observe, listen and analyze free of biases.

Methods and Examples

Observation.
A maker of frozen baby food wanted to research the behavior of
consumers when buying frozen foods. She dressed in jeans and went
shopping with friends who were parents. Using consumers as informants, she
learned valuable information about consumer tendencies in the frozen foods
aisle.94

In-depth interviews.
A common method for talking to customers is the in-depth interview, a
private 45 to 90 minute conversational interview “designed to uncover both
broad contextual information about participants and detailed information about
specifictopics.”95 An individual interview may be the best method for probing
personal opinions,

Customer Satisfaction:
Improving Quality and Access to Services and Supports in Vulnerable
Neighborhoods beliefs, and values. Some large companies use group
interviews to brainstorm about product modifications and new products.

Focus groups.
Although focus groups are falling out of favor, they have been a very
popular method for obtaining in-depth information from customers and
consumersregarding the motivations and explanations behind their behavior.
Focus groups typically involve 8 to 12 people identified as highly involved with

102
purchase, usage, or brand decisions. In a session lasting about two hours,
researchers probe the participants’ attitudes toward brands, services, new
products and ideas, advertising, political issues and candidates, and a host of
other issues.
Research firms suggest that focus groups be used when companies want to
know how consumers perceive a product or service, why they behave in
certain ways, what issues are important to their customers, and what issues
should be the focus of further research. Like all methods, focus groups have
some disadvantages. Perhaps the primary drawback is that focus group
research cannot be generalized to an entire population. The information
gathered in a focus group lacks statistical precision and can lead only to
hypotheses that must be tested further.

F. Continuous Feedback Loops

For information about customer behavior, satisfaction and preferences
to be useful, it must be connected to organizational planning, day-to-day
practices, employee training and assessment, and performance monitoring.
The goal is a continuous improvement system that uses customer input to
plan, design, measure, assess and improve a product or service. Customer
satisfaction information is continuously gathered, analyzed and fed back into
quality improvement efforts. Customer satisfaction research strategies serve
as assessment tools, They provide a direct line connecting the organization’s
objectives, quality dimensions, measurement mechanism, and analysis—
together, these comprise the feedback loop. Thus, continuous feedback loops
are less a strategy than a performance-based approach to operating a
customer service organization.

Connecting with strategic planning.

High performing organizations closely tie customer satisfaction
information to the strategic planning process at all levels of the organization.
To make this connection, many private-sector organizations conduct “internal
environmental scans,” which survey all aspects of a company to determine
how well it is fulfilling objectives such as customer needs. The Federal

103
Benchmarking Consortium cited one governmental organization that uses its
customers (citizens of that community) to perform the environmental scans.
Customers were involved in determining the “how” as well as the “what” of the
organization and participated in discussions of the organization’s processes
and services. The result was “customerdriven process improvement.”96

Connecting with performance measurement.

As part of the constant process of improvement, senior leaders at the
Ritz-Carlton benchmark other recipients of the Malcolm Baldrige National
Quality Award to identify possible innovations.97 After the company won its
first Baldrige award, it committed itself to a target of “defect-free” experiences
for guests, “implementing a measurement system to chart progress toward
elimination of all customer problems, no matter how minor.”98

Connecting with ongoing performance improvement efforts.

Susquehanna Health System (SHS) began its customer-centered
program by researching patient expectations. The organization found that the
top fifteen expectations all had to do with customer intimacy and personal
service. SHS has implemented a number of programs aimed at improving
personal service performance, including: constantly monitoring customer
feedback regarding patient expectations and how they view their service
experiences; utilizing various training programs for its employees, and on-
going programs of recognition and reward for employees who exceed
expectations.99 Saint Luke’s Hospital (SLH) in Kansas City won a 2003
Malcolm Baldrige National Quality Award for its “continuous-loop model,
known as the Performance Improvement Model,” which is used to “plan,
design, measure, assess, and improve the way it delivershealth care service.”
Employees in all departments learn the model during orientation and receive
training on its use. Known as the “Listening and Learning” process, it includes
surveys, focus groups, follow-up calls, daily conversations with patients,
families, and others—all to determine patient requirements. Simultaneously,

104
 A customer satisfaction research program continuously gathers
customer and market requirements and helps measure customer
satisfaction.100 To fully understand customers’ expectations, experiences and
perceptions requires an ongoing system of research. Single strategy or
inconsistent monitoring is not adequate. Ideally, customer-derived information
is consciously used to inform staff and improve services.

RESEARCH PROCESS-:

Setting of Objective

Setting the area under

the study

Design the method of

data

Defining the sample

size

Collection of data

Interpretation and
analysis of collection data

Deduction and
conclusion

105
 The present study can be accomplished by conducting a market research.
Market research is the systematic design, collection, analysis and reporting of
data and findings that are relevant to different marketing situations facing the
company. The marketing research process that was adopted in the present
study consists of the following stages: -

A) Defining the research objective:

The objective of the research is to know about the customer satisfaction at
Spencer (Jaipur)
1. To study the view of consumer.
2. To assess the effectiveness of selling programmers.
3. Are they satisfied with the price and quality of the product.
4. Increase in the sales.
5. To check the loyalty of consumers towards the brand.

Scope of the study:

The scope of the study is related to the spanscer jaipur.
Respondents are consumer of spanscer hyper only for the
purpose of study.

B) Developing the research plan:

The next step is to prepare a plan for getting the information needed for the
research.
C) Collection and sources of data:
A survey of Customers located in Jaipur area was done. We asked them to
questions related to our project.

D) Analyze the collected information

This involves converting raw data into useful information. It involves tabulation
of data and using Microsoft Excel software for developing graphs and charts
to retrieve useful information from the data collected.

106
E) Report research findings:
This phase marked the culmination of the marketing research effort. The
report with the research finding is a formal written document. The research
findings and personal experience will be used to propose by conveying the
view of the Customers. The methodology used for the study was very
rigorous. Interviews with customers were held and various books and
websites were checked for any type of information related to the study.

SAMPLING METHOD:
Random Sampling method is used for the collection of data.
The sample size of the study is of 120

SOURCES OF INFORMATION:
 PRIMARY DATA – The primary data are those, which are collected for
the first time hence they are fresh and thus happens to be original in
character. Primary data pertain to demographic and socioeconomic
characteristics of the consumer, attitudes and opinion of the respondent,
their awareness and knowledge and other similar aspects.

SOURCES OF PRIMARY DATA COLLECTION

 Observation
 Interviews
 Opinions

The primary data for the present research work was obtained through the
observation

SECONDARY DATA - It includes those data, which were collected for

some earlier research work and are applicable in the study the researcher has
presently undertaken. The data collected from the websites and books was
good enough to be included in the study analyzed and concluded.

107
 SOURCES OF SECONDARY DATA COLLECTION
 Internet.
 Company Website.
 Other Websites
 Books
 Journals
 Newspaper

DATA ANALYSIS:
Tables and Pie Diagrams are used for representing the data.

108
 RESEARCH METHODOLOY

Marketing research is the systematic objective and exhaustive search

for and study of the forth relevant to any problem in the field of marketing a
systematic approach is needed to solve the marketing problem. The approach
is needed to solve the marketing problem. The approach is planed and should
be analytical and objective which include the following steps.

Topic of Study:
Customer satisfaction at Spencer’s product:
The Study is a sample survey. It consists of small size to facilitate the study as
also it is a pilot survey. It consists of small size of facilitate the study as also it
is a pilot research here the main emphasis is on view towards Spanscr
product. Customer satisfaction is the one most important things in marketing.

DATA ANALYSIS & INTERPRETATION:

All the collected data was analyzed and interpreted to get the
conclusion. The objective of analysis is to an organized integrated and
meaning feel whole.
Report formation :
It was the final stage of project formation. The collected data, which was
analyzed, and interpretation was systematically arranged and henceforth
printed in the form of a report is clear and understandable format.

109
1. Occupation of the consumer.
Occupation of the consumer No. of Consumer
Business 60
Service 30
Housewife 20
Others 10

Chart 1

60
60
No. Of Customer

50
40 30
30 20
20 10
10
0
Buss. Serv. Housewife Others
Occupation

CHART-3.1

Interpretation:- The above graph shows that most consumers are belong to
Business group, and 30 consumers are servicemen rests of consumers are
housewife and others

110
 2. Income group of consumer.
Income Group No. Of Consumer

Less then Rs.5000 p.m. 5

More than Rs. 5000 & less than Rs. 10,000 P.M. 25

More than Rs. 10,000 & less than Rs. 15,000 P.M. 60

More than Rs. 15,000 P.M. 30

Chart 2
60
60
50
40 30
No. of 25
30
consumer
20
5
10
0
Below 5000- 10,000- Above
5000 10,000 15,000 15,000
Income group

CHART-3.2

Interpretation:-
From the above histogram it is the clear that the sample size made from
4.16% are from whose monthly income is less than 5000 Rs PM. 20.83% from
more than 5000 but less than 10000 Rs. 50% customer from more than 10000
but less than 15000 Rs. 25% customer from whose monthly income is more
then 15000

111
3. Information source of Spencer
Source of Information No. Of Customer
Print Media 70

Exibation & fair 5

Neighbor & Relative 30

Local Cable network 15

Chart 3

Local Cable
network
13%
Neighbor &
Relative
Print Media
25%
58%
Exibation & fair
4%

CHART-3.3

Interpretation:-
According to above histogram 58.33% customer knew about the spencer
from print media, 4.16% from fair, 25% from neighbor & relative & remaining
12.5% knew from local cable network.

112
 4. Frequency to visit to Spencer
Frequency to Visit No. Of Customer
2 to 3 time in a week 5

Weekly 30

Monthly 60
After 2 to 3 Month 25

Chart 4

60
60
50
40
No. of 30 30 25
customers 20
5
10
0
2 to 3 Weekly Monthly After 2 to
time in a 3 Month
week
Frequency to Visit

CHART-3.4

Interpretation:- from the survey of 120 customers, major 50% consumer are
visit to spencer mall monthly. 25% weekly 20.83% after 2-3month & remaining
4.16% customers are visit to spencer mall 2-3 time in a week.

113
5. Purchasing product Every Visit From Spencer
Response No of Customers
Yes 115
No 5

chart 5

115

120
100
80
No. of
60
Customers
40 5
20
0
Yes No
Responce

CHART-3.5

Interpretation:-most of the customer i.e. 95.83% customers are purchase

something every time when they visit to spencer.

114
6.Knoledge of Various Product of Spencer

Response No. of Customers

Yes 90
No 5
Only few 25

Chart 6

Only few
21%

No
4%

Yes
75%

CHART-3.6

Interpretation:-from the survey of 120 customers, major chunk that is 75%

consumer knew, 21% consumer knew about only few, & 4% consumer are not
know about various product of spencer.

115
7. Product you most like to purchase from Spencer
roduct No of customer

clothes 55

Grossly product 20

Electronic product 15

Sports & toys 15

Footwear 10

Others 5

chart 7
60 55

50
No. Of Custome r

40

30
20
20 15 15
10
10 5

0
clothes Electronic Footwear

Purchasing Preferance

CHART-3.7

Interpretation:-from the above histogram 45.83% customers are most likely

purchase cloths, 16.66% customer are most likely to purchase to grossly
product, & electronic as well as sports and toy are purchase by 12.5%
customer.

116
8 why you give preference to spencer

Reason No of customer
Good services 50
Cost efficient 40
Availability of product 20
Easily available 10

Chart 8
50

50
40
40

No. Of 30 20
Customer 20
10
10

0
Good Cost Availability Easily
services efficient of product available
Responce

CHART-3.8

Interpretation:-above chat 41.86% customer prefer spencer due to its good

services, 33.37% due to cost efficient, 16.67% due to availability of every
product under a roof & remaining, 8.83% are prefer spencer due to easily
available of required product

117
9 From which spencer mall you prefer to purchase mostly ?

Location No of customer
Vaishali Nagar 20
Gaurav Tower 60
Adarsh Nagar 10
Mansarovar 30

Chart 9

Vaishali Nagar
Mansarovar 17%
25%

Adarsh Nagar
8%
Gaurav Tower
50%

CHART-3.9

Interpretation:- there are 4 spencer mall situated in different area of Jaipur

most of the consumer i.e. 50% of the customer are purchase from gaurav
tower branch,25% from mansurover branch,17% from vaishali nagar branch
remaining 8% are purchasing from adarsh nagar branch of sprncer.

118
10 Your thinking about the services providing by employees

Response No of
customer
Better 70
Good 30
Average 15
Not satisfactory 5

Chart 10

70
70

60
No. Of Customer

50

40 30
30
15
20
5
10

0
Better Good Average Not
satisfactory
Responce

CHART-3.10
Interpretation:-from the survey most of the consumer i.e 58.33% think that
employee provide better services, 25% think employee provide good
services,12.5% think that employee provide avg. service,& 4.16% think that
need to improvement in services.

119
11. Spencer give offer time-to-time YES/NOT (if YES than) in
which offer you prefer to purchase?

Offer No of customer
Off on print price 60
Buy one get one 40
Lottery coupon offer 10
Others 10

Chart 11
60
60
50 40
40
No. Of
30
Customer
20 10 10
10
0
Off on print Buy one Lottery Others
price get one coupon
Offers

CHART-3.11

Interpretation:-From the survey,50% consumer prefer to purchase from

spencer due to off on print price, 33.33% due to buy one get one free & 8.33%
due to lottery coupon offer.

120
12. At time of purchase product is not available you would
Response No of customer
Wait for it 40
Go to another branch of 60
Spencer
Purchase from other Retail 10
mall
Purchase from local Market 10

Chart 12

60
60
50 40
No. Of Customer

40
30
20 10 10
10
0
Wait for it Another Other retail Local
branch of mall market
spencer

Responce

CHART-3.12
Interpretation:- from the survey, 50% customer are go for another branch of
spencer when any product is not available at the time of purchase, 33.33 are
wait for it, 8.33% purchase from another retail mart,& 8.33% purchase from
local market.

121
13. Price of product in Spencer are appropriate as compare to
other retail mart

Response No of customer
Yes 118
No 2

Chart 13
No
2%

Yes
98%

CHART-3.13

Interpretation:- From the survey, Most of the customers i.e.

98.33%customers are think that price of product in spencer are appropriate as
compare to other retail mart.

122
14. Say about the billing process of Spencer

Response No of customer
Attractive 80
Good 20
Average 15
Need to improvement 5

Chart 14
80

80
No. Of Custome r

70
60
50
40
20
30 15
20 5
10
0
Attractive Good Average Need
improvement
Billing Policy

CHART-3.14

Interpretation:-Above chart show that 66.67% customers are say that billing
process of spencer is attractive, 16.67% say that good, 12.5% say that
average and 4.16% say that need of improvement.

123
 CHAPTER – 4

FINDINGS CONCLUSION SUGGESTION

• FINDINGS

• CONCLUSION

• SUGGESTION

• LIMITATIONS

• SWOT ANALYSIS

124
 FINDING:
It is the findings of survey that was done for the project that brings the
whole crux of the project.

 Average no of People are using the organize retail from months and they
are willing to come down.
 Most of people are aware of the Spencer’s.
 When it comes to the CSA (customer sale associate) service most of
customer of Spencer’s are not so much happy with their service quality.
 Most of people like the private label product of Spencer’s that are due to
quality and price of product in compare to market.
 According to customer perception the price of “fruit and vegetable and
some FMCG” the price is higher then local retailer and some competitors.

It is found in the survey that most of customers are suspect able to change their
service provider given better deal in terms of “Price” and “Value added service”.

FIGURE 4.1

125
 CONCLUSION
The research has done on the study of view of consumers about
Spencer's product from the study. Some customer is not satisfied with the
price of. Benefits. Thus this study provides the overall view of consumer about
SPENCER product.
In the Retail market Spencer ’s has better image in consumers
mind. Everyone likes to shop here. Spencer ’s providing fresh and
good range of Fruits, vegetables, Staples, Dairy, FMCG, Garments,
and general product.

In the Indian retail market many players like More, India Bulls,
Subhiksha, are here. Spencer ’s make good brand name among this
market. After having tough competition in retail market Spencer ’s
product range and display of the products is much better as
compare to other retail store and if they want to catch more
customers then they have to work on promotion activities and they
have to provide more attractive offers to their loyalty card
customers. Employees are very friendly to customers. Spencer ’s
has very good appearing shop. Customers are very interested to
come in Spencer ’s due to its good service.

126
SUGGESTION

1. Packaging should be eco-friendly.

2. Delivery of Spencer products should be on time.
3. Servicing should be improved.
4. Proper inspection of all branches should be there.
5. Company should start free schemes and discount to customer.
6. Company should have to reduce price of some product etc.
7. There should be proper and continuous benchmarking, so the chances of
price & quality higher then others will be reduce.
8. CSA should be more attentive so then solve more query of customer and
tell then about the offers and scheme of different products.
9. PCM (price change master) should be update properly and system should
show the different promo.
10. Offer simple choice by memorandum weekly and informed by “e” and
mobile [what in store and what is new].
11. Call back to customer and tell them what we have done for their
suggestion and compliant, those have written their views/ compliant about
the service.

12. Your view matter book should be properly filled by customers.

13. Their should proper coordination between marketing and operation person
the promos what they are giving, so their should be no confusion between
customer and operation person.
14. Offering more attractive Promotional schemes.

127
 LIMITATIONS OF THE RESEARCH:
A though the research was conducted in a way to ensure accurate
results but certain errors might have occurred due to some unavoidable
reasons.
DATA COLLECTION
-Non-response by some of the respondents.
-Since the population is not homogenous, some biasness might have
creped up.
-Many persons were reluctant in responding.
FOR EMPLOYEES
 A thought of Risk of loosing their jobs, if gave any company
information
 Busy in Store operations Or with Customers
FOR CUSTOMERS
 Insufficient time
 Prejudice of taking the enumerators as some company’s
employee.
 Occupancy with Carry Bags or kids
 Sharing their Addresses and Contact Numbers was a
cumbersome issue for people.

FINANCE
SYSTEM
STORE
WAREHOUSE OPERA
TION
MANAGEM
ENT

PURCHASE
ORDER
MANAGEMENT

TRANSFER
MANAGEMENT

ANALYSIS AND
PLANNING MERCHANDISE
RECEIPTS
PRICE AND COST
MANAGEMENT

FIGURE-4.2
128
 ANALYSIS:-
After see this bench marking we can say that “More” and “India Bulls”
Price Policy is high and Spencer’s and Reliance fresh pricing policy is low.
When I asked to the customer about Spencer’s quality and rate they said to
me Spencer’s provide us good quality on good rate Spencer’s quality is good
in comparison of other stores we are satisfy for Spencer’s.
When I asked to customers about Reliance Fresh they said to me it
provide merchandise on cheep rate but it don’t have the quality and about
India Bulls and More customer perception is that they said they provide
merchandise on high rate. When we get good quality at cheaper rate in
Spencer’s why we should go in other stores.
So we can say that Spencer’s have good Image in customer mind in
comparison of other stores.

ALLOCATION OF BAY

Bay is combination of 5-6 rakes. There is mainly two types of bays is

used

1. A SHAPE: In this kind of bay we can put / display the SKU on

both side of bay. This type of bay is used in middle side of floor
and not to close the wall.

2. L SHAPE: In this kind of bay we can put / display the SKU on

one side of bay. This type of bay is used beside the wall; it is
because they have only one side display and other side faces to
wall.

Allocation of bay is decided by the layout and type of which kind of

store. No. of bay is decided by mainly by layout and then by
merchandiser, it is because sometimes merchandisers need more bays
due to quantity of SKU.

129
 DISPLAY OF GOODS
Display of goods is followed by some rules and standards, they are;
1. There is increase in weight of SKU from “Left to Right”. This is
mainly followed by Staples & FMCG.
Exp. 250 gm Channa Dal then 500 gm- 1kg- 2kg
2. There is increase in weight of SKU from “Small to Big” that
means small quantity at bottom and at top large quantity.
Exp. Biscuit 100 gm at bottom then 250 gm and 500 gm.
3. In HWP glass items are placed according to company name
means same company glasses are placed in one bay.
4. In F&V display of fresh fruits & vegetables, this is done after
shorting.

SWOT ANALYSIS STRENGTH

♦ First Hyper retail outlet in Malviya Nagar.

♦ People are will to come.

♦ Specialty food and exotic vegetables are available.

♦ Value added service like Home delivery, delivery on Phone.

♦ Quality of product.

♦ Convenient to customer.

♦ Hygiene standard.

♦ High standard of display and shelf discipline.

♦ Customer is informed through leaflet, by daily or weekly offers.

130
131
WEAKNESS
♦ Cash team is not quick in billing.

♦ Promo is not well communicated by marketing.

♦ Proper benchmarking is not done.

♦ On weekend and on evening, CSA can not attend properly to customers.

♦ Complaint of customer should be fulfilling not on regular basis.

OPPORTUNITY

♦ Loyalty card customer will increase through proper communication.

♦ Value added service like replacement guarantee, money refund, and price
guarantee.

♦ Exclusive offers for loyalty card customer.

♦ More combo offers in all categories to increase ABV.

♦ Weekly & fortnightly offers for customer’s exp. Kids carnival, school
contact programme, etc.

THREAT

♦ More and more convenient store is coming.

♦ More price war from unorganized retail

132
 APPENDIX
Questionnaire
Customer Satisfaction at Spencer in Jaipur

Name: ………………………… Address: ………………………..

Age: ………………………… Tel. No.: ………………………
Occupation……………………. …. Sex………………………..
A) Service b) Business c) Housewife

Q. 1 income group
a) Less than Rs. 5000 P.m.
b) More than Rs. 5000 & less than Rs. 10,000 P.M.
c) More than Rs. 10,000 & less than Rs. 15,000 P.M.
d) More than Rs. 15,000 P.M.

Q.2 How did you know about the product?

a) Print Media b) Exhibition of Fair
c) Dealers & Suppliers d) Local cable Network

Q. 3 what is Your Frequency it visit to Spencer mall?

a) 2-3 time in a week b) Weekly
c) Monthly d) After 2-3 Month

Q. 4 Do you Purchase something every time?

a) Yes b) No

Q. 5 Do you know about various product of Spencer?

a) Yes b) No

Q. 6 which product you like most of Spencer?

a) Cloths B) Grossly product
C) Electronic Product D) Sports & Toys
e) Footwear and Othe

133
Q. 7 why do you prefer Spencer?
a)ood Services
b) Cost efficient
c) Availability of every product under a roof
d) Easily available

Q. 8 from which Spencer you prefer to Purchase mostly?

a) Vaishali Nagar b) Gaurav Tower
c) Adarsh Nagar d) Mansarovar

Q. 9 what do you think about the services given by the employee?

a) Better b) Good
c) Average d) Not Satisfactory
Q. 10 Do the Spencer give various offer time to time? If yes/ then Which type
offer you prefer to purchase from Spencer? (Yes/No)
a) Off on Print Price
b) Buy one get one free
c) Lottery Coupon offers
d) Others
Q.11 At the time of purchase if any product is not available you would-
a) Wait for it
b) Go for another branch of Spencer
c) Purchase from other retail mall
d) Go at local Market

Q.12 Are price of product in Spencer are appropriate as compare to other

Retail Mart?
a) Yes b) No

Q. 13 what do want to say about the Billing Process of Spencer?

a) Attractive b) Good
c) Average d) Needs Improvement
Q. 14 your suggestion
…………………………………………………………………………………………

134
 BIBLIOGRAPHY

• Kotler Philip, Marketing Management, Prentice hall of India Pvt. Ltd., New

Delhi.

• Kothari C.R. Research methodology, published by, Wishwa prakashan,

New Delhi.

• Shrivastava P.K. Marketing Management for a developing economy,

sterling,publishing,

New Delhi.

135