MS 612 IGNOU MBA Solved Assignment - What do you understand by the term Retailing? Discuss the major activities performed by a retailer in the Indian Context.

What do you understand by the term Retailing? Discuss the major activities    performed by a retailer in the Indian Context.

Ans

Retail involves the sale of goods from a single point (malls, markets, department stores etc) directly to the consumer in small quantities for his end use. In a layman’s language, retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption.

Let us understand the concept with the help of an example.

Tim wanted to purchase a mobile handset. He went to the nearby store and purchased one for himself.

In the above case, Tim is the buyer who went to a fixed location (in this case the nearby store). He purchased a mobile handset (Quantity - One) to be used by him. An example of retail.

The store from where Tim purchased the handset must have shown him several options for him to select one according to his budget and need.

From where do you think the store owner (also called the retailer) purchased all the handsets?

Here the manufacturers and the wholesalers come into the picture.

The retailers purchase goods in bulk quantities (huge numbers) to be sold to the end-users either directly from the manufacturers or through a wholesaler.

The Supply chain

Manufacturers	........................	Retailers	................	End User (Consumer)
	Wholesalers

• Manufacturers - Manufacturers are the ones who are involved in production of goods with the help of machines, labour and raw materials.

• Wholesaler - The wholesaler is the one who purchases the goods from the manufacturers and sells to the retailers in large numbers but at a lower price. A wholesaler never sells goods directly to the end users.

• Retailer - A retailer comes at the end of the supply chain who sells the products in small quantities to the end users as per their requirement and need.

• Shopping - The process of purchasing products by the consumer is called as shopping. However there are certain cases where shopping does not always end in buying of products. Sometimes individuals do go for shopping but return home empty handed. Such a shopping is merely for fun and is called window shopping. In window shopping, individuals generally go to the market, check out various options and their prices but do not buy anything. This kind of shopping helps to break the monotony.

Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national & international products, the with help of print and electronic media. The social changes with the rapid economic growth due to trained personnels, fast modernization, enhanced availableness of retail space is the positive effects of liberalization.

The growth factors of the retail sector of Indian economy:


Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national & international products, the with help of print and electronic media. The social changes with the rapid economic growth due to trained personnels, fast modernization, enhanced availableness of retail space is the positive effects of liberalization.
The growth factors of the retail sector of Indian economy:


The growth factors of the retail sector of Indian economy:

• Increase in per capita income which in turn increases the household consumption

• Demographical changes and improvements in the standard of living

• Change in patterns of consumption and availability of low-cost consumer credit

• Improvements in infrastructure and enhanced availability of retail space

• Entry to various sources of financing

With the arrival of the Transnational Companies(TNC), the Indian retail sector will confront the following round of alterations. At present the Foreign Direct Investments(FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail sector in India.

The future trends of the retail sector of Indian economy:


With the arrival of the Transnational Companies(TNC), the Indian retail sector will confront the following round of alterations. At present the Foreign Direct Investments(FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail sector in India.
The future trends of the retail sector of Indian economy:


The future trends of the retail sector of Indian economy:

• The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.

• No one single format can be assumed as there is a huge difference in

• cultures regionally.

• The most encouraging format now would be the hypermarts

• The hypermart format would be further encouraged with the entry of the TNC's

The end user goes to the retailer to buy the goods (products) in small quantities to satisfy his needs and demands. The complete process is also called as Shopping.

The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The retail sector of Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast. The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making recess for the retail sector of Indian economy.

With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about quality of products and services. These demands are the visible impacts of the Retail Sector of Indian Economy.

The infrastructure of the retail sector will evolve radically. The emergence of shopping malls are going steady in the metros and there are further plans of expansion which would lead to 150 new ones coming up by the year 2008. As the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in food trade. The non-food sector, segments comprising apparel, accessories, fashion, lifestyle felt the significant change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena, with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC Ashirbad, fast foods chains like McDonald's, KFC, beverage parlors like Nescafe, Tata Tea, Café Coffee and Barista, the Indian food habits has been altered. This stores have earned the reputation of being 'super saver locations'.