Customer Satisfaction Towards

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ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET A DISSERTATION ON “Analysis of customer satisfaction towards supermarket” Submitted in partial fulfilment of the requirement for MBA Degree of Bangalore University BY SATISH S MUSTI Register Number 04XQCM6080 Under the guidance of Prof. Shinu Abhi M. P. Birla Institute of Management Associate Bharatiya Vidya Bhavan #43, Race Course road, Bangalore-560001 M. P. B. I. M, Bangalore 1 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET DECLARATAION I hereby declare that the project report titled “Analysis of customer satisfaction towards supermarket. is a record of independent work carried out by me towards the partial fulfillment of the requirements for the Masters Degree in Business Administration course of Bangalore University, at M. P. Birla Institute of Management, Associate Bharatiya Vidya Bhavan, Bangalore – 560001. This has not been submitted for the purpose of any award or degree or diploma of any other university or institution. Place: Bangalore Date: (Mr. Satish S Musti) 04XQCM6080. M. P. B. I. M, Bangalore 2 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET PRINCIPAL’S CERTIFICATE This is to certify that Mr. Satish S Musti, bearing registration no. 4XQCM6102 has undertaken a research project and has prepared a report titled “ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET”, Under the guidance of Prof.

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Shinu Abhi. This has not formed a basis for the award of any degree/ diploma for any other university/Institution. Place: Bangalore Date: Dr. Nagesh. S. Malavalli M. P. B. I. M, Bangalore 3 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET GUIDE CERTIFICATE This is to certify that Mr. Satish S Musti, bearing registration no. 04XQCM6080 has undertaken a research project and has prepared a report titled “ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET”, Under my guidance. This has not formed a basis for the award of any degree/ diploma for any other university. Place: Bangalore Date: Prof. Shinu Abhi M. P. B. I. M, Bangalore 4 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET ACKNOWLEDGEMENT At the very outset, I take the opportunity to thank Dr. Nagesh Malavalli, Principal, M. P. Birla Institute of Management for providing me with the academic support. I express my sincere regards and gratitude for every individual linked with my Research Work.

One such person is my guide for the semester Prof. Shinu Abhi, whose inspiring words made me, put in all I had to offer. His continuous guidance and suggestions are the cardinal aspects that have ultimately led me to see this fruitful end. I would like to thank all the respondents and personnel for their co-operation and providing the relevant data required. I express my sincere gratitude to all my friends and well-wishers who helped me in completing this Project Report.

Last but not the least; I would like to thank the Almighty for being there always in this endeavor. Yours truly Mr. Satish S Musti M. P. B. I. M, Bangalore 5 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET CHAPTER PATICULARS Page No. 1 2 EXECUTIVE SUMMARY INTRODUCTION TO RETAILING

• Retailing

• Supermarket

• Retailing in India

• Indian retail market

• Food retailing in India

• FDI in retail

• Developments in retail sector 1-2 3-35 3 4 REVIEW OF LITERACTURE DESIGN OF THE STUDY

• Research gap

• Problem statement

• Objective of the study

• Scope of the study

• Contribution from the study RESEARCH METHODOLOGY

• Research design

• Sources of data collection SAMPLING DESIGN

• Sample technique

• Sample unit

• Sample description RESEARCH ANALYSIS RESEARCH LIMITATIONS 6-39 40-43 5 6 7 DATA ANALYSIS & INTERPRETATION MAYOR FINDINGS OF THE RESEARCH RECOMMENDATIONS 44-61 62 63 M. P. B. I. M, Bangalore 6 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET EXECUTIVE SUMMARY Amidst the competitive and complex market scenario in India, it is difficult to analyze the changing attitudes, likes, dislikes and satisfactory levels of customers. The field is such that only the ending and most outstanding will survive without being choked. The attempt made here is to analysis the customer satisfaction level towards Supermarket. On the outset itself the problem was identified and defined as to assess the customer satisfaction towards food and grocery retailing and design marketing strategies for enhancement of customer happiness in clear terms with the help of a pilot survey. The researcher carried out this survey keeping in mind the need and importance of the proposed study.

And this has enabled the researcher to easily determine the scope and objectives of this study. Descriptive approach was considered ideal for the study as it entailed the ever changing opinion of the customers. Simple random sample has been taken as 100 respondents with 20 respondents from each of the retail outlet brands such as food world, subhiksha, spencers, fabmall and reliance fresh. These outlets have been from mahalaxmi layout and rajaji nagar in Bangalore north. They were considered adequate to represent the entire characteristics of the population for the study. Primary data was collected using structured questionnaire as an effective instrument. The collected data was tabulated for the purpose of consolidation and logicality, and the same was analyzed and interpreted in a judicious way to facilitate systematic progression of the subject matter of the study.

The findings were taken up for drawing logical conclusions. Based on the findings suitable suggestions and recommendations were brought out for the benefits Supermarket. The respondents were presented with a well structured questionnaire as a part of the survey method, which was easy to fill up. And the opinions of the respondents were rated on a percentage to arrive at the level of satisfaction. The main sources of data were the questionnaire and the other relevant magazines, books and websites. M. P. B. I. M, Bangalore 7 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Thus the survey centred on the features of Supermarket most preferred by the customers. The survey indicates that most or all-most all the customers are satisfied with provision store and it is because of its quality and availability of wide range of products, free home delivery, replacement on dissatisfied products, good packing facilities, price reduction on total purchase, friendly and helpful salesperson, good services, etc However, it is observed that there is lack of good parking facilities, discounts, coupons, ventilation, and lighting in some of the Supermarket to reach out genuinely to all masses. M. P. B. I. M, Bangalore 8 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET RETAILING Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organization selling to final consumers whether it is a manufacturer, wholesaler or retailer is doing retailing. It does not matter how the goods or services are sold or where they are sold. TYPES OF RETAILERS Consumers today can shop for goods and services in a wide variety of retail organizations.

There are store retailers, nonstore retailers and retail organizations. Perhaps the Best-know type of retailer is the department store. The most important retail-store types are described. Speciality Store: Narrow product line with a deep assortment. A clothing store would be a single-line store; a men’s clothing store would be a limited-line store; and a men’s customshirt store would be a super speciality store Examples: Athlete’s Foot, The body shop Departmental store: Several product lines-typically clothing, home furnishings, and household goods-with each line operated as a separate department managed by specialist buyers or merchandisers Examples: Sears, JC Penney. Supermarket: Relatively large, low-cost, low-margin, high-volume, self-service operation designed to serve total needs for food, laundry and household products.

Examples: Kroger, Food world, big bazaar. M. P. B. I. M, Bangalore 9 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Convenience Store: Relatively small store located near residential area, open long hours, seven days a week and carrying a limited line of high-turnover convenience products at slightly higher prices, plus takeout sandwiches, coffee, soft drinks. Examples: 7-Eleven, Circle K. Discount Store: Standard merchandise sold at lower prices with lower margins and higher volumes.

Discount retailing has moved into speciality merchandise stores, such as discount sporting-goods stores, electronics stores and bookstores. Examples: Wal-Mart, Circuit city. Off-price retailer: Merchandise bought at less than regular wholesale prices and sold at less than retail; often leftover goods, overruns and irregulars. Examples: Sam’s club, Max clubs. Superstore: About 35000 square feet of selling space traditionally aimed at meeting consumers’ total needs for routinely purchased food and nonfood items, plus services such as laundry, dry cleaning, shoe repair, check cashing, and bill paying. A new group called category killers carries a deep assortment in a particular category and a knowledgeable staff.

Examples: IKEA, Home Depot. Catalog Show room: Broad selection of high-markup, fast-moving, brand-name goods at discount prices. Customers order goods from a catalog, and then pick these goods up at a merchandise pickup area in the store. Example: Service Merchandise. Levels of service: The wheel-of-retailing hypothesis explains one reason that new store types emerge. Conventional retail stores typically increase their services and raise their prices and less service.

New store types meet widely different consumer preferences for service levels and specific services. M. P. B. I. M, Bangalore 10 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Retailers can position themselves as offering one of four levels of service: 1. Self service: Self service is the cornerstone of all discounts operations. Many customers are willing to carry out their own locate-compare-select process to save money. 2. 3. Self-selection: Customers find their own goods, although they can ask for assistance. Limited service: These retailers carry more shopping goods and customers need more information and assistance. The stores also offer services (such as credit and merchandise-return privileges). 4. Full service: Salespeople are ready to assist in every phase of the locate-compareselect process. Customers who like to be waited on prefer this type of store.

The high staffing cost, along with the higher proportion of specialty good as and slowermoving items and the many services, results in high-cost retailing. MARKETING DECISIONS In the past retailers held customers by offering convenient location, special or unique assortments of goods, greater or better services than competitors and store credit cards. All of this has changed. Today, national brands such as Calvin Klein, Izod and Levi’s are found in department stores, in their own shops, in merchandise outlets and in off-price discount stores. In their drive for volume, national-brand manufacturers have placed goods everywhere. The result is that retail-store assortments have grown more alike. Service differentiation also has eroded.

Many department stores trimmed services and many discounters have increased services. Customers have become smarter shoppers.

They do not want to pay more for identical brand, especially when service differences have diminished; nor do they need credit from a particular store, because bank credit cards are almost universally accepted. Supermarkets have opened larger stores, carry a larger number and variety of items and upgrade facilities. Supermarkets have also increased their promotional budgets and moved heavily into private brands. Retailers’ marketing decisions in the areas of target M. P. B. I. M, Bangalore 11 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET market, product assortment and procurement, services and store atmosphere, price, promotional and place. Target Market: A retailer’s most important decision concerns the target market.

Until the target market is defined and profiled, the retailer cannot make consistent decisions on product assortment, store decor, advertising messages and media, price and services levels. Some retailers have defined their target markets quite well: Product assortment and procurement: The retailer’s product assortment must match the target market’s shopping expectations. The retailer has to decide on product-assortment breadth and depth. The real challenge begins after defining the store’s product assortment and that is to develop a product-differentiation strategy. Here are some possibilities:

• Feature exclusive national brands that are not available at competing retailers. Thus Saks might get exclusive rights to carry the dresses of a well-known international designer.

• •

• •

• Feature mostly private branded merchandise: Many supermarket and drug chains carry private branded merchandise.

Feature blockbuster distinctive merchandise events: Bloomingdale’s will run month shows featuring the goods of another country, such as India, throughout the store. Feature surprise or even-changing merchandise: Benetton changes some portion of its merchandise every month so that customers will want to drop in frequently. Feature the latest or newest merchandise first: The sharper image leads other retailers in introducing electronic appliances from around d the world. Offer merchandise customizing services: Harrod’s of London will make customtailored suits, shirts and tries for customers in addition to ready-made menswear. Offer a highly targeted assortment: Circuit city’s decision to drop major appliances gave it more than 200 square feet to stock more units of higher-margin electronics.

Remodeling also expanded total floor space by an additional 10,000 square feet, providing even more for higher-margin home electronics. M. P. B. I. M, Bangalore 12 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET SERVICES AND STORE ATMOSPHERE Retailers must also decide on the services mix to offer customers:

• •

• Prepurshase services include accepting telephone and mail orders, advertising, window and interior display, fitting rooms, shopping hours, fashion shows, trade-ins. Postpurchase services include shipping and delivery, gift wrapping, adjustments and returns, alterations and tailoring, installations, engraving. Ancillary services include general information, check cashing, parking, restaurants, repairs, interior decorating, credit, rest rooms, and baby-attendant service. The services mix is a key tool for differentiating one store from another; so is atmosphere. (See “Marketing for the New Economy: Extreme Retailing”. ) Atmosphere is another element in the store arsenal. Every store has a physical layout that makes it hard or easy to move around. Every store has a “Look”. The store must embody a planned atmosphere that suits the target market and draws consumers toward purchase. PRICE DECISION Prices are a key positioning factor and must be decided in relation to the target market, the product-and-service assortment mix and competition. All retailers would like to achieve high volumes and high gross margins.

They would like high Turns x Earns, but the two usually do not go together. Most retailers fall into the high-makeup, lower-volume group (fine specialty stores) or the low-markup, higher-volume group (mass-merchandisers and discount stores). Within each of these groups are further gradations). Retailers must also pay attention to pricing tactics.

Most retailers will put low prices on some items to serve as traffic builders or loss leaders. They will run storewide sales. They will plan markdowns on slower-moving merchandise. Some retailers have abandoned “sales pricing” in favour of everyday low pricing (EDLP). EDLP could lead to lower advertising costs, greater pricing stability, a stronger image of fairness and reliability and higher retailer profits. Frank Feather cites a study showing that supermarket chains practicing everyday low pricing are often more profitable than those practicing sales pricing. M. P. B. I. M, Bangalore 13 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET PROMOTION DECISION Retailers use a wide range of promotion tools to generate traffic and purchases. They place ads, run special sales, issue money-saving coupons and run frequent shopper-reward programs, in-store food sampling and coupons on shelves of at checkout points.

Each retailer must use promotion tools that support and reinforce its image positioning. Fine stores will place tasteful full-page ads in magazines such as Vogue and Harper’s. They will carefully train salespeople to greet customers, interpret their needs, and handle complaints. PLACE DECISION Retailers are accustomed to saying that the three keys to success are “location, location and location”. Customers generally choose the nearest bank and gas station. Department-store chains, oil companies and fast-food franchisers exercise great care in selecting locations. The problem breaks down into selecting regions of the country in which to open outlets, then particular cities and then particular sites. A supermarket chain might decide to operate in the Midwest; in the cities of Chicago, Milwaukee and Indianapolis; and in 14 locations, mostly suburban, within the Chicago region. Retailers can locate their stores in the central business district, a regional shopping center, a community shopping center, a shopping strip, or within a larger store. General business districts: This is the oldest and most heavily trafficked city area, often known as “downtown”. Store and office rents are normally high.

Most downtown areas were hit by a flight to the suburbs in the 1960s, resulting in deteriorated retailing facilities; but in the 1960s, a minor renaissance of interest in downtown apartments, stores and restaurants began in many cities.

• Regional shopping centers: These are large suburban malls containing 40 to 200 stores. They usually draw customers from a 5 to 20 mil radius. Malls are attractive because of generous parking, one-stop shopping, restaurants and recreational facilities. Successful malls charge high rents and may get a share of stores’ sales.

• Community shopping centres: these are smaller malls with one between 20 and 40 smaller stores. anchor store and M. P. B. I. M, Bangalore 14 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET

• Strip malls (also called shopping strips): these contain a cluster of stores, usually housed in one long buildings, serving a neighbourhood’s needs for groceries, hardware, laundry, shoe repair and dry cleaning. They usually erve people within a five to ten–minute driving range.

• A location within a larger store: Certain well-known retailers-McDonalds’s, Starbucks, Nathan’s, Dunkin’ Donuts-locate new, smaller units as concession space within larger stores or operations such as airports, schools or department stores. In view of the relationship between high traffic and high rents, retailers must decide on the most advantageous locations for their outlets.

They can use a variety of methods to assess locations, including traffic counts, surveys of consumer shopping habits and analysis of competitive locations. Several models for site location have also been formulated. Retailers can assess a particular store’s sales effectiveness by looking at four indicators: 1. 2. 3. 4. Number of people passing by on an average day. Percentage who enter the store Percentage of those entering who buy Average amount spent per sale. M. P. B. I. M, Bangalore 15 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET TRENDS IN RETAILING At this point, the main developments retailers and manufacturers need to take into account in planning competitive strategies. . 2. New retail forms and combinations: some supermarkets include bank branches. Growth of intertype competition: Different types of stores–discount stores, catalog showrooms, department stores-all compete for the same consumers by carrying the same type of merchandise. 3. Growth of giant retailers: Through their superior information systems, logistical systems, and buying power, giant retailers are able to deliver good service and immense volumes of product at appealing prices to masses of consumers. They are crowding out smaller manufacturers what to make, how to price and promote, when and how to ship and even how to improve production and management. Manufacturers need these accounts; otherwise they would lose 10 to 30 percent of the market.

Some giant retailers are category killers that concentrate on one product category such as toys (Toys “R” Us), home improvement (home Depot), or office supplies (staples). Others are super centers that combine grocery items with a huge selection of nonfood merchandise (Kmart, Wal-Mart). 4. Growing investment in technology: Retailers are using computers to produce better forecasts, control inventory costs, order electronically from suppliers, send e-mail between stores and even sell to customers within stores. They are adopting checkout scanning systems, electronic fund transfer, electronic data interchange, in-store television, store traffic radar systems and improved merchandise-handling systems. 5. Global presence of major retailers: Retailers with unique formats and strong brand positioning are increasingly appearing in other countries. 6. Selling an experience, not just goods: Retailers are now adding fun community in order to compete with other stores and online retailers.

There has been a marked rise in establishments that provide a place for people to congregate, such as coffeehouses, tea shops, juice bars, book shops. 7. Competition between store-based and non-store-based retailing: Consumers now receive sales offers through direct mail letters and catalogs and over television, computers and telephones. These non-store-based retailers are taking business away M. P. B. I. M, Bangalore 16 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET rom store-based retailers. Some store based retailers initially saw online retailing as a definite threat. Home Depot shocked its top vendors ( Black & Decker, Stanley tools, etc) by issuing a memo implying that if they started to sell online, Home Depot might drop them as suppliers; but now Home Depot is finding it advantageous to work with online retailers. M. P. B. I. M, Bangalore 17 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET SUPERMARKET Inside Le Marches shop in New Delhi.

With 15 million shops, India has the highest density of retail outlets in the world. Large self-service shop selling food and household goods. The first, Piggy-Wiggly was introduced by US retailer Clarence Saunders in Memphis, Tennessee, 19919. Supermarkets have a high turnover and are therefore able to buy goods in bulk. This cuts down the unit cost and, in turn, the price which further encourages business. Classic self-service 4,000-20,000sq-ft with shopping carts as popularized in India by ‘Crazy Boys’ films with typical focus on regular groceries, household goods and personal care products. Tesco and Safeway are famous chains. In India Nanz Food world and Nilgirils are popular name. M. P. B. I. M, Bangalore 18 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET STRENGTHS OF SUPERMARKET FROM CONSUMER POINT OF VIEW: Supermarket format of retailing try to fulfill these expectation through following merits. 1. 2. It saves the time because customer will get everything at a one place with self-service. It provides perfect platform for comparison of a same product from different company with a different brand name with complete information, which could be required to compare the brands and take a best purchasing decision. . Multi brand department stores offer an intermediate solution with complete brand choice to the customer and spacious shop, which allows the manufacturers to present his product appropriately. 4. Sometimes customer also get discount because multi brand stores go for bulk purchase and pass the earning of differences toward the customer. 5. Customers get a detail and computerize bill so there is no possibility of any discrepancy in billing. M. P. B. I. M, Bangalore 19 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET CHALLENGES FACED BY SUPERMARKET Though theoretically, supermarket stores offer a number of reasons to purchase goods from supermarket instead of purchasing from traditional provision store. It will save the time, give a spacious purchasing experience, provide platform to get variety scheme and services and faultless and accurate computerized billing system etc. In spite of having all these benefits, supermarket still has not proved itself successful in India market because still it is struggling for survival and facing the following problems. . 2. Very low sales volume.

According to experts, the real boom in organized retailing will come once supermarkets starts selling daily need goods at 90% of the regular price that result into low sales turnover because of that there is very low gross margin, low net margin and very low turn over per sq feet compare to unorganized sector in Indian and organized sector in foreign. 3. Another very important thing is gross margins return on investment. But the problem of Indian retailing is to source on credit and sells on cash. Yet, retail margins in India are lower than overseas. The large format players face high costs, especially in comparison with traditional retailers that pay very little rent for real estate. 4. 5. Competition from unorganized retail shop. Typical mindset and psychology of Indian middle class. So, it would be a biggest challenge to transform the psychology of Indian middle class segment. 6. From strategic decision point of view another biggest problem is to select a right retail format to fight against unorganized retail organization. Thus, there is question regarding very existence and survival of supermarket because still it has not proved successful in India. 7. Still organized sector does not provide full satisfaction to customer in terms of quality, quantity, competitive price and convenience in terms of various service, assessable location and layout of supermarket. M. P. B. I. M, Bangalore 20 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET RETAILING IN INDIA 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 behaviour, ushering in a revolution in shopping.

Modern retail has entered India as seen in sprawling shopping centres, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. By 2007, an estimated 50 million square feet of quality retail space will be available across India. This is in sharp contrast to the situation a decade ago. Then, there was not one shopping mall in India. Today, in Delhi, Mumbai and their suburbs, there are about 100 malls. Of the 700 new malls coming up all over India, 40 per cent are concentrated in the smaller cities. Organized retailing in small-town India is growing at a staggering 50-60 per cent a year compared to 35-40 per cent in the large cities.

India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Traditional markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and second-rung cities alike, introducing the Indian consumer to an unparalleled shopping experience. As organized retailers carve out a bigger piece of the retail pie for themselves it’s an exciting time for the retail sector.

With the growth of organized retailing estimated at 40 per cent (CAGR) over the next few years, Indian retailing is clearly at a tipping point. India is currently the ninth largest retail market in the world M. P. B. I. M, Bangalore 21 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET The Indian retailing sector is at an inflexion point where the growth of organized retail and growth in the consumption by Indians is going to adopt a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector. Initially, this was about Indian corporate houses rolling out malls and supermarkets, but with Wal-Mart coming into the Indian market, the era of the superstore is dawning. Unlike the kirana stores that served us for decades, this new breed of retail chains is heavily dependent on IT. Wal-Mart, the world’s largest retailer, and Bharti Enterprises have signed a Memorandum of Understanding (MoU) to explore business opportunities in the Indian retail industry.

This joint venture will mark the entry of Wal-Mart into the Indian retailing industry. M. P. B. I. M, Bangalore 2 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET THE INDIAN RETAIL INDUSTRY / MARKET The Indian retail industry in valued at about $300 billion and is expected to grow to $427 billion in 2010 and $637 billion in 2015. About 98% of the retail trade in India is in the hands of 15-20 million unorganized small retailers. In our daily lives, we find them everywhere, as kirana and pan shop vendors, hawkers, sellers of fruits and vegetables, either at the street corner or carrying their wares in baskets or carts to deliver them at the doorstep of the residents. They are invisible but omnipresent. They supply a wide variety of items that we consume daily. They account for as much as 10 percent of the GDP. Only four percent of the retailers in the unorganized sector have shops that occupy more than 500 sqft. Most of them are so small that they occupy not more than 30-40 square feet. In a way, small retail business in India helps absorb about sex to seven percent of the huge mass of the unemployed for whom the gov’t agencies are struggling hard to find employment by investing thousand crores of rupees every year. Only three percent of Indian retail is organized. It is estimated at only US$ 8 billion. However, the opportunity is huge—by 2010, organized retail is expected to grow to US$ 22 billion. It is expected to grow 25 per cent annually, driven by changing lifestyles, strong income growth and favorable demographic patterns. It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011. Many of these people are looking for more choice in where to spend their new-found wealth. Strong fundamental changes including the changing lifestyles of Indian people, rising incomes etc have fuelled the growth of modern retailing and has attracted investment in this sector. M. P. B. I. M, Bangalore 23 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET With the government being in the process of determining the level of FDI in Retail, a number of foreign players including Wal-Mart, Carrefour, tesco have evinced interest for entering India in a big way.

Retail in India has grown beyond mere retailing and now encompasses sectors such as telecom, automobiles and finance. Given the size, and the geographical, cultural and socio-economic diversity of India, there is no role model for Indian suppliers and retailers to adapt or expand in the Indian context M. P. B. I. M, Bangalore 24 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET FOOD RETAILING IN INDIA Food and Grocery (F) Retail Market in India Unlike in the past, the debate today is no longer whether food and grocery retail in India would grow but rather how fast can it grow and what challenges need to be overcome. Tata Strategic Management Group (TSMG) projects that organized F retail in India could grow to Rs. 750Bn (at current prices) by 2015 representing 11% of overall F sales. A recent world bank report on India’s fruits and vegetables trade comes up with some sour facts India producers 11 percent of the world’s vegetables and 15 percent of fruits at 53-63 percent of global prices, but its share in global fruits and vegetables trade is 1. 7 percent and 0. 5 percent respectively. Key Challenges in Food Retailing Demand Side Penchant for fresh/home-made and value consciousness The Indian consumer, unlike his western counterpart, has a penchant for freshly cooked food over packaged food. This is a result of dietary patterns, poor electricity supply, low penetration of refrigerators and a family structure where one of the primary roles of the housewife is feeding the family. The Indian consumer is extremely value conscious. A TSMG study indicates that packaged food players need to drive down prices by almost 3540% to be comparable on cost with home made food.

Diversity of tastes and preferences Multiple cultures, languages and religions have a huge bearing on the tastes and preferences of the Indian consumer. This will pose a challenge for players aspiring to develop a pan Indian presence Willingness to travel M. P. B. I. M, Bangalore 25 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Given the current density of retail outlets in India, retailers will have to motivate the consumer to trade convenience with price, range and ambience. Supply Side Sourcing base and efficiency The fragmented agri supply base coupled with an inadequate legal framework make it difficult for retailers and food processors to procure quality produce at competitive costs directly from farmers. The small size of the food processing industry further limits the supply options. Real estate availability and cost Rentals account for 7-7. 5% of the total costs for organized retail in India against global bench marks of less than 3%. Real estate availability and costs will continue to remain a challenge in the retail industry with factors like adequate parking, ambience and proximity being the key drivers of footfalls. Manpower availability As organized retail expands, there is expected to be a dearth of skilled manpower. The lack f institutions and courses for different aspects of retail management will have an impact on the overall supply of quality manpower. M. P. B. I. M, Bangalore 26 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Emerging trends in food retailing Big becoming bigger Globally, retailers have realized that size drives profitability, not just through economies of scale in operations but also through higher bargaining power leading to better margins. While many players are entering the retail space in India currently, the growth stage will be characterized by rapid expansion and consolidation among these players. Rise of organic foods and health and wellness segment Consumer attitudes and preferences are undergoing a shift owing to factors like increased disposable incomes, changes in lifestyle patterns, shift in age structure, increased number of working women and multi cultural exposure.

These would lead to increasing health consciousness in the future. Organic foods and wellness products would be emerging opportunities in the years to come.

Increasing focus on private labels. As competition in the organized retail market increases, discounts and promotions are expected to play a critical part in generating footfalls. To counter the impact on profitability, organized players will find it more attractive to promote private labels or store brands given their higher margins. The consumer too would benefit from lower prices. M. P. B. I. M, Bangalore 27 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Scope for innovation in food retail As the organized food retail market matures in India, there would be an increased need for players to differentiate through innovation. Innovations would largely come under two heads: Innovation on Retail format – Players can innovate on formats in different ways: By targeting specific customer segments and serving their needs better e. g. working women, single office goers, etc By changing the product mix e. g. entirely private label stores, exclusively fresh produce stores By offering new forms of convenience and wider range to the customer e. g. tele- retail and internet retail Technological Innovations – Employing cutting edge technology in retail could prove to be the source of competitive advantage for retailers. Self-scan checkouts have the potential of both reducing check-out time manpower cost for the retailer Using RFID tags can help track and reduce in-store inventory management costs and give retailers better insights into customer in-store movement patterns Web-enabled POS systems, e-SCM systems, e-Procurement systems and warehouse management systems will enable food retailers in integrating the entire agri value chain leading to efficient procurement and supply chain management. Use of cutting edge analytics can bring insights into customer buying behaviour with implications on store layout, pricing and promotions. M. P. B. I. M, Bangalore 28 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET FDI IN RETAIL FDI in retail is a subject that seems to rear up its ugly head every now and than. It is not as though these that oppose it or support it are consistent about what they say. In India, the logic and ideology that go into either supporting a reform or opposing it depends on whether the concerned political party is in power or not. There is no clarity or There are about nine million understanding of the ground retailers that should guide such small grocery shops in India decisions. In January 2006, UPA government allowed FDI up to 51% in single-brand multipleproduct retail business.

This drives the foreign institutional investors would be permitted to control equity in retailing up to even 100 percent. Retailers of multiple brands can operate through a franchise or a cash-and-carry. But allowing in the big multi-brand, international retail groups like Wal-Mart, Tesco and Carrefour was considered a step too far. The gov’t has announced a partial opening of the retail market, to single-brand retailers. ” But beyond that, gov’t need to find a model that doesn’t displace the existing retailers. The Indian government has been conducting an impact analysis of how the introduction of supermarket chains like Tesco and Carrefour would hit its retail sector. An estimated 50% of the country’s fruit and vegetables rot by the roadside before they reach market. For the first time, chains like McDonalds, Marks & Spencer, Body Shop and Ikea can, if they want to, open and control their own operations in India.

Previously, many of them had gone down the path of working with franchise partners, a policy followed by M which supplies clothes to eight “Planet Sports” stores. They look like M stores on the inside, but they are owned by local retailers, and the UK retailer has no plans for that to change. holesale model. M. P. B. I. M, Bangalore 29 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Challenges in organized retail The first challenge facing the organised retail industry in India is: competition from the unorganised sector. Traditional retailing has established in India for some centuries. It is a low cost structure, mostly owner-operated, has negligible real estate and labour costs and little or no taxes to pay. Consumer familiarity that runs from generation to generation is one big advantage for the traditional retailing sector. In contrast, players in the organised sector have big expenses to meet, and yet have to keep prices low enough to be able to compete with the traditional sector. High costs for the organised sector arises from: higher labour costs, social security to employees, high quality real estate, much bigger premises, comfort facilities such as air-conditioning, back-up power supply, taxes etc. Organised retailing also has to cope with the middle class psychology that the bigger and brighter a sales outlet is, the more expensive it will be. M. P. B. I. M, Bangalore 30 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET DEVELOPMENTS IN RETAIL SECTOR India’s first true shopping mall – complete with food courts, recreation facilities and large car parking space – was inaugurated as lately as in 1999 in Mumbai. (This mall is called “Crossroads”). 1. $ 7 billion to be invested in retail by Bharti Bharti enterprises plan to invest about US $ 7 Billion by 2010 to set up 200 hypermarkets and hundreds of small stores across India. This group had recently announced a joint venture with the world’s top retailer, wal-mart stores; Inc. it expects to earn $1-2 billion revenue from its retail business, which would constitute 10-20 percent of the group’s turnover 2010. The group aims to have 200 large stores and hundreds of small stores in the first phase. Depending up on the company’s real estate and logistics business the company will invest around US $ 7 billion by 2010. The group plans to enlist small retailers as franchises and also decide whether the venture would undertake logistics or out source functions such as trucking and cold chains. It would operate several hundred stores across the country within five years and investment could run into billions of dollars. 2. Mother care India, the UK based retailer for expecting mothers and kids is on an expansion mode in India.

The company’s exclusive franchise, shoppers stop is now expanding their retail network to 14 stores at a combined investment of about Rs-10 crores in 4 months. M. P. B. I. M, Bangalore 31 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET 3. Land mark books and music retailer Books and music retailer ‘Landmark’ launched its first store in western India at Infiniti Mall, Andheri, Mumbai on April 26. Spread across 18,000 sq. ft Landmark is housed on the 2 nd floor of the mall, with lavish interiors. This is the sixth Landmark store in the country. Landmark so far had five stores – three in Chennai, one each in Kolkata and Bangalore. The store has over 1, 00,000 plus book titles, 70,000-plus movies, a wide range of stationery, toys, accessories, perfumes, diamond jewellery and an inviting, comfortable environment, Landmark is a category killer in all focus categories. Later this year Landmark plans to open stores in Delhi, Baroda, Pune and one more in Mumbai . 4. Prozone- omaxe in retail JV As part of Prozone’s plan to develop India’s largest shopping mall network, Prozone Enterprises, the wholly owned subsidiary of Provogue, signed a JV with Omaxe Group, one of the largest real estate developers in North India, to develop shopping malls in townships owned by the latter. In the first phase, a SPV promoted by the joint venture will invest Rs. 1 ,500 crore to develop 10 malls across north India and in the second phase invest Rs. ,000 crore to develop 30 properties owned by Omaxe. Omaxe is building 30 townships and 14 malls, has projects worth Rs. 12, 000 crore under implementation and another Rs. 10,000 crore under-pipeline projects. At present, Omaxe is developing 4. 1 million sq. ft of commercial development, mainly malls.

Prozone is M. P. B. I. M, Bangalore 32 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET developing over 12 million sq. ft. of modern retail space and plans to develop 50 retail malls across the country focused on tier two cities which will come up in two years. . AFL launches India’s first ‘Convenience Services’ retail store AFL, a leading provider of integrated supply chain services in India, has launched AFL Touch World, India’s first ‘Convenience Services ‘ retail store in Mumbai. The various services offered at the AFL Touch World store include Forex, money transfer, international telephony, international and domestic courier, travel insurance and e-ticketing. It is for the first time in India that such a wide range of ‘convenience services’ is being offered under one roof. The first Touch World store is located near Regal Cinema in south Mumbai and the company plans to expand into all major Indian cities in the near future. 6. Calvin Klein Inc. , the clothing design and marketing studio formed in 1968, is to set up a retail operation in India.

The clothing empire and Murjani India Ltd. have announced an agreement for the latter to market and distribute the brand’s various labels throughout India and open dozens of retail stores planned for the subcontinent. The agreement authorises Murjani to market the Calvin Klein lineup through exclusive retail outlets and select department stores approved by the company. It includes the original Calvin Klein Jeans line and the unisex ck Calvin Klein label, which the company introduced in the mid-1990s. 7. Infiniti Retail, a 100-per cent subsidiary of Tata Sons, has launched the first mega store of Croma, India’s first national chain of multi brand outlets for consumer electronics and durable products. Ratan Tata, Chairman, Tata Sons, and Roger Corbett, Independent Consultant, Woolworth’s, Australia, jointly launched the first Croma mega store in Juhu, Mumbai , amidst a high-tech display of technology and human interface built around the concept of ‘See, Touch and Feel’. The sprawling store, spread over 20,000 sq ft of space, has on display more than 6,000 products across eight categories, namely, home entertainment, small appliances, white goods, computers and peripherals, communication, music, imaging and gaming software. The store currently offers more than 180 national and international brands. M. P. B. I. M, Bangalore 33 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET 8. Wadhawan Food Retail Pvt. Ltd. (WFRL), which operates 10 food retail outlets under the brand name Spinach, has plans to open 60 food and grocery stores in Mumbai and Pune by the end of this year. The company plans to expand further to the Eastern and Northern states in another two years. WFRPL launched its first store in Mumbai in February this year and targets to cover 1,54,000 sq. ft of retail space by the year end.

These stores are mainly in supermarket format and will be rolled out in three sizes — Spinach Express of about 1,000sq. ft, Spinach Local of 3,000 sq. ft and Spinach Super of 6,000 sq. ft. 9. Bangalore based real estate developer; Prestige Group, plans to invest Rs. 2,500 crore into the mall development business over the next two to three years. The group has plans to set up malls in Chennai, Hyderabad, Bangalore, Mangalore, etc. Each mall will entail an investment of about Rs. 200 to 300 crore and will be designed with the expertise of an in-house team and a set of out sourced architects. The company plans to dedicate three million sq. ft of space across the four cities. 10. Trinethra Super Retail Ltd. (TSRL), the Hyderabad-based retail marketing chain, will invest Rs. 1 billion over the next two years in order to expand business and open more outlets in South India. The number of retail outlets would be increased to 205 by the end of current fiscal from the existing 170. The number of outlets in Andhra Pradesh would be increased to 90 from the present 73, and 50 would be opened in Karnataka. TSRL will open 40 retail shops in Tamil Nadu and 25 in Kerala by the end of FY`07. All the stores in Kerala would be opened under the group’s ‘Fabmall’ brand. By September end, there would be nine Fabmall stores, including two supermarkets at Aluva and Kottayam and a supercentre at Kakkanad. The company, which had a total turnover of Rs. . 4 billion in FY`06, has targeted turnovers of Rs. 3. 6 billion by March 2007 and Rs. 6. 5 -7 billion by FY`08. 11. Kaya Skin Clinic, the beauty & wellness services chain from Marico Ltd. , plans to open 55 outlets by the end of 2007. The company is hoping for a tally of 50 such outlets covering a total retail space of 75,000 sq. ft across 18 cities by the end of FY 2006-07. Kaya Skin Clinics – all owned and operated by the company – is targetting to touch a turnover of Rs. 65 crore in the current fiscal, growing from Rs. 45 crore in the last year. The chain is also setting up Kaya M. P. B. I. M, Bangalore 34 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Skin Zones in malls across India to provide easy access for customers to Kaya range of skin solutions. The company is aiming to establish 15 Kaya skin zones by end-2007. 12. New Delhi-based florist Ferns n Petals plans to add 15 more outlets to its existing 55 retail points across 32 cities by the end of the FY 2006-07. The company would be adding 11,000 sq. ft of retail space, with the cumulative total rising to 40,000 sq. t, through this expansion plan. 13. Corporate safety and security service provider, Zicom Electronic Security Systems Ltd. (ZESSL) is planning to enter the consumer segment through its new division Zicom consumer service group.

Through this division, the company plans to launch 600 Zicom retail stores in 100 cities across the country by 2008-09. The stores would retail Zicom Home security systems priced between Rs. 6,495-12,995 and Zicom Business security systems for small and medium enterprises and retail outlets priced from Rs. 54,995 to Rs. 99,995. In the first phase, the company plans to enter the retail market with 100-125 stores in 24 towns across all directions. Spread in 500-600 sq. ft area, the stores are targeted at high footfall regions. Expansion will be through franchise route . The Company is planning to invest Rs. 10-15 lakh in the set up of each outlet. The cost would include investment in leasing out spaces and doing up the outlet in terms of branding and interiors.

The outlets will then be handed over to franchisee for day-to-day operations. Franchisees would need to invest in stocks while returns will be in the form f margins generated from sales. The retail outlets will also provide add-on services like installation, after sales services, central monitoring etc. to customers. 14. Vishal Group launched their first hyper market Vishal Mega mart in Udaipur this month. Spread over 25,000 sq. ft, the store offers extensive range of men’s, women’s and kids’ range of fashion clothing. Beside fashion attire, it will also have separate sections and counters for watches, sunglasses, fashion accessories, gifts and novelties, electrical appliances, digital diaries, perfumes, cosmetics and grocery items etc. Currently, Vishal Mega Mart operates 29 fully integrated and self-owned stores spread over a total shopping area of 5,70,000 sq. ft in 21 cities across India M. P. B. I. M, Bangalore 35 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET 15. RPG Retail is planning to foray into books retail, with the launch its own bookstores “Books and Beyond” by October this year. “Books and Beyond” will follow the Music World strategy for its expansion.

The first standalone outlet will be launched in Kolkata before moving ahead with pan-India expansion. “The outlets are to occupy spaces between 15,00018,000 sq. t and will also include the concept of a Music. Meanwhile, RPG is also planning to expand its retail brand Music World to the Middle East market.

The format would primarily target areas with a substantial chunk of Indian population. “For the Middle East market. 16. Murjani India, a subsidiary of the Murjani Group, focuses on attracting international brands and retail concepts to India. Murjani forged a separate deal with The Warnaco Group, a New York-based apparel company, granting Warnaco exclusive rights to distribute the Calvin Klein Underwear line of roducts in India and supply Calvin Klein Jeans to Murjani. The broad plan is to open at least 40 Calvin Klein-branded stores during the first five years of the operation, with construction beginning as early as March 2007. 17. EMKE group, the biggest retail chain based in the UAE with operations spread across the Middle East is all set to enter the Indian retail sector with mega shopping malls and hypermarkets. The group which has the flagship “LULU” Hypermarkets and department stores chain with 48 branches in all major cities of Gulf, controls 34 per cent market share of the Middle East retail sector. The proposed shopping mall is coming up in Cochin, the commercial capital of Kerala.

Apart from this one million sq. ft shopping mall, the project also consists of a 250 room five star hotel and an International standard convention centre which will be set up in the second phas 18. Pantaloon enters healthcare retail Pantaloon Retail is preparing to enter the healthy & beauty segment with beauty salons and diagnostic healthcare centres. The first retail outlet catering to the Big Bazaar profile customers, “Star and Sitara”, will open in Bangalore in March. The salon would be spread across 2,500 sq. ft and will offer services for both sexes. Thereafter Pantaloon plans to enter Ahmedabad, Mumbai, Hyderabad, and other cities where the group would have a mall presence through Kshitij The diagnostic centres will offer eye, skin, dental treatments and M. P. B. I. M, Bangalore 36 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET preventive care. They will also include pharmaceuticals, beauty centres and will also provide alternative treatments like ayurveda and homeopathy. 19. Pantaloon Retail & Liberty Shoes ink MOU on Large Format Footwear Retailing Pantaloon Retail (India) Limited & Liberty Shoes Limited on September 2, entered into a JV for setting up a chain of stores for footwear retailing and other accessories. PRIL will hold 51% and Liberty 49% stake in the new company; having an authorized capital of rs. 25rore. The company will set up a chain of large format footwear stores across the country, with each store covering an area of 10,000-15,000 sq. ft. The proposed JV will combine the property and retail expertise of Pantaloon with the design sourcing & merchandising expertise of Liberty. This will provide a focused attention to the footwear category, which today commands a sizeable portion of the consumer spending.

The MOU is only for retailing and not for manufacturing; it will retail all brands and products sources from all over the world as well as India. 20. Deccan chronicle buys odyssey Media group Deccan Chronicle Holdings (DCHL) on September 5 had acquired South Indiabased retail chain Odyssey for Rs 61 crore, in an all-cash deal, and upped its revenue and profit targets for this fiscal. DCHL, which went public earlier this year, said as part of the deal, it has acquired 100 per cent equity of Odyssey, which currently has 40,000 sq. ft of retail space in 12 locations in six cities — Chennai, Hyderabad, Trichy, Coimbatore, Salem and varnasi. Odyssey has lined up major expansion plans, including growth in western and northern India by March 2008. The retail chain sells books, music, toys, greeting cards and FMCG products of leading domestic and international brands, including that of ITC, Cadbury, Duracell, Parker and Penguin. 21. Oswal group targets 120 sensa stores M. P. B. I. M, Bangalore 37 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Two years after the split of Ludhiana -based yarn manufacturer Oswal Group, a breakaway group led by Ashok Oswal is foraying into retail with major expansion plans for the existing fashion chain stores AO’s and Sensa , through Amram Trading Pvt . Ltd. Sensa, among India’s first multi-brand intimate wear retail chains with about 16 brands, plans to set up 120 stores by the next three years with total investment of Rs. 30 crore. 22. Adidas India to expand retail in tier II & III towns Adidas India is planning to expand its distribution network in North India, targeting the tier II and III towns. To add on to the current 80 exclusive outlets, company plans to open 60 new brand stores. Adidas India is following a franchise model and prefers to be located on high streets and through stand alones. 23. US footwear major marks 2006 for India launch The $325-million privately-owned fashion company and US footwear major Global Brand Marketing, Inc. (GBMI) will launch retail operations in India next year, with the opening of exclusive brand stores across the country. Founded in late 1996, GBMI is the majority owner of Pony International, LLC, owner of the Dry- shoD brand and retail store chain Global Feet and Global Feet Kids, and the authorized global footwear licensee of Diesel, XOXO, Nautica, and Mecca. Based in California, GBMI designs, develops and markets stylish apparel, footwear and accessories for men, women and children, and is distributed in over 130 countries worldwide. 24. Derby Clothing to open Colombo shop-in-shop Chennai-based apparel retailer Derby Clothing Pvt. Ltd is to open a shop-in-shop in Colombo, Sri Lanka on November 15. The outlet is a new venture of DSI group Samson & Sons Ltd. – the largest footwear brand in Sri Lanka.

The launch is part of the current fiscal’s expansion targets for the company, which hopes to set up 12 more stores this year. Derby Clothing currently has 14 exclusive stores, eight of which are company-owned and six are franchised. The existing stores are spread over Tamil Nadu, Andhra Pradesh, M. P. B. I. M, Bangalore 38 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Kerala, Karnataka and Gujarat (one store at Ahmedabad). With typical store size of around 800 sq. t. and median shop-in-shop space of about 150 sq. ft. , average investment per store is around Rs. 25 lakh. The company is also setting up two new manufacturing units at Chennai, to buttress its current production capacity of 20,000 shirts and 9,000 trousers. 25. Dabur India is planning an entry into the consumer retail business especially in the area of health and wellness. Presently their plan will be Focused and specialized with health and wellness being the obvious option at the moment.

The new business could be through dabur India or a separate company. The idea behind the move is that the company would sell its own brands and also offer a complete portfolio of products, catering to the health conscious urban Indian. This model would be close to one followed by retailer boots in the UK. Dabur India is still exploring various formats and working on possible store sizes. If dabur ventures into this specialty format, it will have to set up stores measuring close to 2000-2500 square feet.

The company may also in for an arrangement with one of the upcoming multi-brand or hypermarket retail chains. 26. Redtape –Indians finest fashion footwear and lifestyle brand known for its international style, quality and elegance and its core competency lies in providing excellent quality to its customers. Red tape is one of the brands which have been able to get world wide recognition, acceptance and admiration. Globally, red tape is recognized as a stylish and high fashion brand. It is planning to expand 50 retail outlets by the end of this year in India. Currently it has 40 retail outlets in India & two international stores in sharjah & Dubai. It has moved from men’s footwear to women’s footwear called ‘miss red tape’. It has also diversified its brand in to men’s apparel and accessories like belts, wallets & so on. The company is also planning to introduce women apparel line same time next year. It is also planning to set up its own manufacturing base of customers M. P. B. I. M, Bangalore 39 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET REVIEW OF LITERATURE The retail sector in India is highly fragmented and organized retail in the country is at a very nascent stage. Of the 12 million retail outlets, more than 80% are run by small family businesses which use only household labour. China and Brazil, took 10-15 years to raise the share of their organized retail sectors from 5% to 20% and 38% respectively.

India too is moving towards growth and maturity in the retail sector at a fast pace. Value retailing: more hypermarkets in the offing The hypermarket route has emerged as one of the most preferred formats for international retailers entering India. In most emerging retail markets, such has Eastern Europe, Latin America and china; hypermarkets have been the major high growth format. Hypermarkets provide consumers with a combination of good prices, overall shopping convenience and experience. Product range and quality. Currently there are less than 50 hypermarkets in India, operated by 4-5 big retailers. The report says that India’s 67 cities with population of half a million or more have potential to absorb many more hypermarkets in the next 4-5 years. On the success of hypermarkets, the report draws a parallel between consumer behaviour in India and china. It says that there is a similarity in the buying pattern of the Indian and Chinese consumers. In china.

Most hypermarkets are located with in the city limits as consumers do their shopping more than once a week, have low passenger car penetration and limited refrigeration space at home. Malls to move beyond the metros The boom in the retail sector is also associated with rise of malls across India. There are 220 mall projects in the pipeline till 2007, 139 in the big 8 cities-including the metros-and 81 in other tier II cities. Increasing awareness levels in tier II cities are eroding the ‘urban aspiration’ lead of the metros and the international brands have started looking at these smaller cities to increase their penetration. Organized retail penetration highest across footwear, clothing M. P. B. I. M, Bangalore 40 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET The footwear and clothing categories have seen the highest organized retail penetration (ORP). Footwear has a 22% ORP which is driven by high levels of franchising activity and dominance of home-grown players as well as MNC retailer Batas dominant market share.

Clothing, with a 12% penetration, is also hotting up for further organized retail presence due to high level of branding activities by apparel retailers and merchandising spread across formats such as department stores, hypermarkets, own retail outlets and franchises. The report says that though the food & grocery segment contributes about 41%of private consumption expenditure and about 77% of total retail sales, it is largely controlled by the unorganized small outlet sector- penetration of organized retail is about 1% in this segment. Other segments like books and music, jewellery, consumer durables, home furnishings, medical care and health & beauty have seen limited penetration of organized retail and will require innovative and aggressive plans on the part of Indian and international retailers to fully exploit their potential. Franchising is the way ahead The report says multinational retailers are firming up their India entry strategies. If they are already present here, they are undergoing rapid expansions. Franchising is gaining steam with the retailers and franchisee activity in tier II cities is pegged to rise. The report forecasts a number of strategic partnership opportunities between Indian and international retailers. An international retailer looking to enter India needs to be extremely well versed with local retail culture and know-how. The number of states and union territories in India number 35 and languages, cultures; habits and consumer preferences are different in every one of them. Companies have to understand and retain customers. A 5% reduction in customer defections can treble profits. M. P. B. I. M, Bangalore 41 ANALYSIS OF CUSTOMER SATISFACTION TOWARDS SUPERMARKET Fraud and theft: an expensive affair The report also lists fraud and theft as key challenges for the sector in the future.

Theft, including employee pilferage, vendor frauds and inaccuracy in supervision and administration costs the Indian industry a huge amount every year. The implications and size of this loss will be more significant as retailers continue to scale up and increase product lines. Shorted of talented professionals Though the retail industry is expected to create 2 million jobs by 2010, shortage of professionals remains a big challenge.

There has been a rise in the number of retail management programmes and institutes, which is expected to bridge the gap in availability of talented professionals. However, talented professionals will put increased

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