WINTER PROJECT-2010

A PROJECT ON APPAREL RETAIL

Master Of business Administration In Retail

SANJEETH REDDY
KESHA RAJ
KISLAY KUMAR
HEMA SUHASINI
NAGI REDDY

BANGLORE

Contents
Introduction to Retailing
Importance of Retailing
Retailing Decisions
Features of a small or medium Retail Enterprise
Existing product line of the small or medium retail organization
Unmet Customer functional requirement
Future need fulfillment
Guidelines for expansion
Defining and selecting the consumer segment
Market Competitors
Market Environment factors
Government approvals needed
Features of the product
Designing the 4P’s
Product awareness and promotion
Resource Management (Manpower, Material & Money)
India's Retail Market
- Current Scenario
 Introduction To Retailing

India has often been called a nation of shopkeepers. Presumably the reason for this is;
that, a large number of retail enterprises exist in India. In 2004, there were 12 million
such units of which 98% are small family businesses, utilizing only household labour.
Even among retail enterprises, which employ hired workers, a majority of them use less
than three workers.
Retailing is the combination of activities involved in selling or renting consumer goods
and services directly to ultimate consumers for their personal or household use. In
addition to selling, retailing includes such 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.
THE IMPORTANCE OF RETAILING

Organised 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.
 India's Apparel Retail Market - Current Scenario

Indian apparel retail industry generated revenue of $ 2.0 billion in 2004 with a growth
rate of 8.2% during 2000-04. As a result,this industry in India is second largest in the
Retailing Decisions: Factors To Consider

A basic observation about the task of competing effectively can now be summarised. A
retailer must keep four basic dimensions in mind, which can be called Four C’s of market
positioning. He must consider the nature of the customers, channels, competition and his
own characteristics as an organisation. Successful retailing is a matter of achieving an
effective alignment of the organisation with customers, channels, and competitors.

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.
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 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 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.

Features of our retail store:

Name:spark fashions

Location :jayanagar, banglore.

Fatimanagar,pune.
 Karol bagh,delhi.

Spark@Jayanagar Spark@Pune

Spark @Delhi
Common layout of three stores
Unmet Customer functional requirement

The independent retailer will have to realize the shift in consumer behaviour taking place
due to new shopping experiences; locational advantages, assortments, category mix,
value propositions, ambience and service.

The Indian customer is strongly value driven, but at the same time enjoys the pleasure of
shopping. The retailer, therefore, has to ensure that cost efficiencies do not drive
emotions away.

The factors that need careful analysis are: what products/services do customers buy? How
much are they willing to pay? What mode of payment do they prefer?

Do they look for discounts and price offs ? What are the regional differences of
customers across the country ? (e.g. Chennai, Kolkata, Chandigarh, Mumbai etc.).

Government Approvals Needed

1)
The Shops and Establishment Act
This act, is in essence a state legislation seeking to regulate working conditions of
workers in the largely unorganized sector.
This includes all type of shops and establishments which do not fall under the purview of
the Factories Act Regulations.
It deals with rules and regulations regarding working hours, recess, overtime, holidays,
termination of services, working environments of shops, other rights and obligations of
the employer and employees so on.
Further it provides for provisions wherein compulsory registration of the shop/
establishment within 34 days of operational commencement and intimation of closure
within 15 days of closure is mandatory.
Thus the objective of this act we infer is to provide statutory obligation and rights to
employees and employers primarily in the unorganized sector.

2)Sales Tax Act

This acts states that a dealer who is engaged in activity of manufacturing, importing,
buying and selling of goods needs to register under the Bombay Sales Tax Act, 1959.
The following are the requirements for registration:
• Showing the books of account and statement of sales/purchases.
• Proof of partnership deed/memo of articles of association.
• Rent receipts of place of business and residence.
• Proof of identity (ration card/driving license etc.)
• Photos duly attested, certificate/license under the Municipal Act, Factories Act, shops
and establishments Act etc. as applicable.
• Copy of the assessment order under income tax if any.
• Court fee stamp on CST registration application and any other details to prove the
genuineness of the applicant.
3) The Consumer Protection Act, 1986
This act was legislated to provide protection to consumer interests through consumer
councils for settlement of disputes and other relevant issues.
It bestows the following rights on the consumer as per Consumer Protection Act:
The right to be protected against marketing of goods and services, hazardous to life and
property.
Right of information on quality, quantity, potency, price to protect the consumer against
unfair trade practices.
The right to have access to variety of goods and services at competitive prices.
The right to be heard and seek redressal for his grievances at appropriate forums against
exploitation by manufacturers or retailers.

4) The prevention of Food Adulteration Act, 1954

This act aims at making provisions for the prevention of adulteration of food. The
definition of adulterated food can be any of the below instances:
If the article contains any substance affecting the quality or nature, substance that is
injurious to health.
If the article has been kept, prepared, packed under insanitary conditions whereby it is so
processed as to effect its nature, substance or quality.
If it so coloured, flavoured, coated, powdered so as to conceal any damage to article.
If false claims are made for it upon label.
If it is being represented as being for special dietary uses without label bearing the dietary
information.
Unit sale price of the commodity and sale price of that particular package.

5) The standard of Weights and Measures Act, 1976

This act was enacted to establish standards of weights and measures, regulating inter-
state trade or commerce in weights, and measures.
Thus when commodities are sold or distributed in packaged form in the course of inter-
state trade or commerce, it is essential that every package must have:
• plain and conspicuous declaration thereon. showing the identity of the commodity in
package.
quantity in terms of standard units of weights and measures.
• names of the manufacturer and also of the packer or distributor to be mentioned.
• no one will sell any packaged commodity at a price exceeding the MRP or above the
revised rate.
• where the revised prices are lower than the price marked on the package. The
commodity shall be sold at that revised price irrespective of month of packing.
• the manufacturer or packer shall not alter price on a wrapper once printed and used for
packaging.

Further for packed commodities into India the following is mandatory:

Name and address of the importer. Generic or common name of the commodity packed.
Quantity in terms of standard unit of weight and measure without applying standard sizes
prescribed under the third article.
Month and year of packing in which commodity is manufactured or packed or imported.

The above requirements can be undertaken through label printing, additional wrapper
with the relevant information made available.

6) The Sale of Goods Act, 1930

This act governs the contracts relating to sale of goods. It is subject to the general
principles of the law relating to contracts.
A contract of sale of goods is a contract whereby seller transfers or agrees to transfer the
property in goods to buyer for a determined price.
Thus a "sale" must be distinguished from an "agreement to sell" since the legal
implications of the two terms are vastly different.

Further the conditions and warranties offered by the seller to the buyer may be expressed
or implied by law or custom by the following:

condition as to title • condition as to description • condition as to quality or fitness •

condition as to merchantability • condition as to wholesomeness • condition implied by
custom or trade usage • conditions in sale by sample • conditions in sale by sample as
well as by description.

7) The Essential Commodities Act, 1955

This is an act to provide the consumer, for the control of production, supply, distribution
trade and commerce in certain commodities.
A listing of the essential commodities are as follows:
• cattle fodder, oil cakes and other concentrates
• coal including coke and other derivatives.
• cotton and wollen textiles.
• food stuffs including edible
• iron and steel, paper products, petroleum products

8) The Factories Act

 This act requires that any retail establishment having more than 40 employees
(permanent/temporary) needs to get registered under the Factories Act and not under the
shops and establishments act.

9) Labour Act

This act is applicable to any retail establishment employing individuals

permanently/temporarily. The enforcement of this falls under the jurisdiction of the area
labour officer.

10) Public Provident Fund Act

This act is applicable to any retail entity employing>=l 0 employees where the retailer is
bound to maintain a separate provident account(with equal contributions from employer
and employee) with the Central Provident Fund department/ organisation.

11) Employee State Insurance Act

This act states that any organisation having more than 10 employees needs to have
license from the local ESIC office.

12) Service Tax Act

This act requires that any retailer providing transportation services needs to obtain a
license from the local excise department
Target markets:
Target Segment : College Students (Boys &Girls)
Age : 15 to 25
Fit : Custom Fit
FABRIC :10.5oz,12.5oz,14oz
Color : Blue-Black
Finish : Over dyed
Torn
Scraped
Bleach
Grinded