A project report on identifying the opportunity for apparel retailing in south east bangalore

IDENTIFYING THE OPPORTUNITY FOR APPAREL
RETAILING IN SOUTH EAST BANGALORE”

A
PROJECT REPORT
ON

“IDENTIFYING THE OPPORTUNITY FOR
APPAREL RETAILING IN SOUTH EAST
BANGALORE”

At
JONES LANG LASALLE PROPERTY
CONSULTANTS PVT. LTD.
BANGALORE

Babasabpatilfreepptmba.com Page 1


SR.NO PARTICULARS

1 INTRODUCTION

2 COMPANY PROFILE

3 THEORETICAL FRAME WORK

4 RETAIL SECTOR OVERVIEW

5 RESEARCH METHODOLOGY

6 DATA ANALYSIS

7 FINDINGS

8 CONCLUSION

9 BIBLIOGRAPHY

10 ANNEXURE



EXECUTIVE SUMMARY

The project title: “Identifying the opportunity for apparel retailing in South East
Bangalore”.

The primary objectives were to identify whether the specialty retail stores are
required in suburban areas – South East Bangalore and to identify the customer
attitude towards apparel shopping and the customer buying behavior. The secondary
objectives to identify the real estate requirement for setting up such stores.

The sample taken up was 200 and places covered for the study is South East
Bangalore, which includes areas like Whitefield, Kormangala, Marathalli,
Bannerghatta Road, Electronic city, HSR Layout, Hosur etc. These areas have retail
outlets and shopping malls – Forum, Globus, factory outlets etc.

The research covered call centre professionals, fresh graduates, middle and senior
level executives and housewives.

The outcome of the research says that there is a need for such retail outlets in South
East Bangalore and the retail sector opening up for foreign investment will lead to
many challenges. The availability of space in terms of real estate is very challenging.
In future, there is a huge opportunity for the developers to built more shopping malls
and maximize their revenues.



INTRODUCTION

Retail is India's largest industry, accounting for over 10% of the country's GDP and
around 8% of the employment. The retailing industry in India is estimated at
Rs.930,000 crore (2003-04) is expected to grow at 5% p.a. Booming IT and BPO
sectors with rising incomes, emergence of profitable retail models, availability of
retail space, increasing interest of foreign retailers in India, all have led to the growth
of retail sector. In this growth where the preferences of the people are shifting, new
retail outlets and shopping malls, coming up should be properly planned as the real
estate retail space availability is low and calls for huge capital expenditure.

The objective of the research is to study the market for branded apparels in South
East Bangalore, as it is one of the growing areas in Bangalore and lot more is
expected to happen in terms of real estate. Thus, helping Jones Lang LaSalle to cater
to their clients effectively and maximise the returns.



COMPANY PROFILE

Jones Lang LaSalle was formed by the 1999 merger of LaSalle Partners Incorporated
and Jones Lang Wootton. Building on Jones Lang Wootton’s international strengths
in Europe and Asia Pacific and LaSalle’s depth in North America and its position as a
leader in real estate investment management services, Jones Lang LaSalle brings
together two organizations with rich histories of client service.

Jones Lang LaSalle is a leading global provider of integrated real estate and money
management services. The Company serves clients locally, regionally and globally
from offices in more than 100 markets on five continents. Approximately 19,300
employees stand ready to provide each client with comprehensive investment,
transaction and management services.

Company’s real estate money management business, LaSalle Investment
Management, is one of the world's largest and most diverse, with approximately US$
23 billion of assets under management.

Jones Lang LaSalle Hotels, hotel and tourism specialty, is the first fully integrated
global hotel real estate investment banking services group delivering advisory,
transaction, financial and management services.

Jones Lang LaSalle’s Research function lies at the heart of their business, tracking
and interpreting the market forces and economic trends that affect the business to
support the professionals as they provide the best-informed solutions to meet our
clients' needs.
Working from three geographic regions— America, Asia Pacific and Europe—the
Company delivers management, transaction and advisory services to real estate
owners, occupiers and investors.



The branches across the world support multinational clients with the assistance of
two management functions: Global Client Services and Strategic Consulting.
These groups coordinate client activities and ensure consistent, high-quality services
across geographic regions and among businesses by offering clients a single point of
contact at Jones Lang LaSalle.

Jones Lang LaSalle is the world's only autonomous globally integrated real estate
services and money management firm. Wherever Jones Lang LaSalle’s employees
are located, they report to the same ownership and management structure. As a result,
the Company can deliver a consistent and comprehensive range of fully integrated
services to the clients, wherever their needs arise. The ability to combine
complementary services allows the Company to develop and implement real estate
strategies that meet increasingly complex business and financial needs.

Jones Lang LaSalle’s presence:



Organization Structure:

Jones Lang LaSalle has a flat organization structure. However, each Country follows
the below organization format:

National Director

Associate Director

Senior Manager

Manager

Senior Executive

Analyst / Executive



Services:

The Global Client Services function assists clients who require multiple services, are
looking for coverage in more than one region, or need help determining which
services will best serve their real estate objectives. Global Client Services also
ensures that operations worldwide work and interact at the consistently high levels.

The Company believes that their investments in people, research, technology and
knowledge not only helps them create and expand enduring client relationships, but
also enables them to continually strengthen their service capabilities. Whether the
client requires one real estate service in a single location or broader support across a
geographical region or around the world, the Company has the people, resources and
systems in place to deliver effective solutions with consistently high levels of service
and skill.

AGENCY LEASING

From portfolios of smaller properties to the world's most recognizable landmark
buildings, the leasing specialists are dedicated to achieving the highest possible rental
rates while exceeding lease-up schedules.
The leasing activities are characterized by:
• Extensive experience with assets of all types and sizes.
• Strong relationships with brokers in markets around the world.
• Dedicated research professionals in all major markets.
• Excellent track record for achieving top-of-market rates



CAPITAL MARKETS

Jones Lang LaSalle's Capital Markets combines the in-depth local knowledge of over
370 investment and corporate finance professionals based in 100 markets around the
world with the industry’s most respected property research capability.
By integrating real estate expertise in structuring, arranging and managing financial
transactions, and harnessing both local and cross-border capital flows, which
maximise returns from real estate holdings, and create valuable new opportunities to
serve the needs of investors, owners and users of real estate.

Capital Markets services include:
• Investment Sales: A leader in the sale of single assets, portfolios and loan
notes, the Company supports their clients at all stages of the sales cycle: from
pre-offering due diligence, to marketing campaigns, negotiations and due-
diligence support, and on through closing.
• Investment Acquisitions: The Company represents clients at all stages of the
acquisition process for single assets and portfolios, from research-based advice
on sector and location, through opportunity sourcing, stock selection, due
diligence and acquisition.
• Corporate Finance: We offer clients a range of specialist real estate
investment banking services that provide strategic advice and implementation
on indirect vehicles. The Company is active in the areas of limited partnerships,
equity raising, mergers and acquisitions, securitisation, joint ventures,
structured finance, corporate disposals and real estate sales and financing
transactions including sale/leasebacks, synthetic leases and other net lease
structures.
• Debt Capital Markets: Specialists in large, structured debt transactions, the
Company represents clients in single-asset financing, development financing,
loan note sales, portfolio financing and credit facility financing.
• Equity Capital Markets: The Company is skilled at raising project and entity
level equity, developing balanced financial structures with an optimal mix of
flexibility, control and exit strategies.



• Workouts and Advisory: The Company also conducts complex, confidential
analyses supported by the industry expertise, research and local and global
market knowledge to create effective solutions for owners, investors and
creditors.
• International Capital Group: Extends the reach and impact of existing local
and regional Capital Market teams, delivering consistent, high-quality
investment sales, acquisition, and financing services between the major markets
and capital flows of all three regions – Europe, Americas and Asia-Pacific

CORPORATE FINANCE

Decisions about whether to own, lease, sell or finance corporate properties—and how
to structure such transactions—depend on many factors. The Company work’s
closely with owners and occupiers to explore available options and select the
alternative that best addresses specific real estate and business objectives.
Corporate Finance activities encompass:
• Sale/Leasebacks: The Company advises corporations on structuring and
executing sale/leasebacks, enabling them to re-deploy capital to core business
priorities while continuing to occupy premises as long-term tenants with full
control of property operations.
• Synthetic Leases: The Company help corporations structure net-lease financings
at low cost and with attractive ongoing purchase options.
• Net Lease Financing: The Company assists in placing debt that is secured by the
corporation's credit and is typically priced at less expensive levels than typical
mortgage debt.
• Dispositions: The Company provides clients with comprehensive pre-contract
property due diligence, marketing services and an aggressive sealed-bid process.
• Consulting: To bring discipline to the real estate decision function and make real
estate support broader corporate business and financial goals, the Company
develops portfolio strategies that focus on the appropriate balance sheet role of
corporate real estate



CORPORATE PROPERTY SERVICES

The Company delivers property, asset and operational management and property
management services to corporations and institutions that outsource the management
of their occupied real estate. The facilities manage range from corporate headquarters
and data centres to educational and industrial sites.
The core services include:
• Facility Management
• Occupancy Planning
• Engineering and Operations
• Sourcing and Procurement
• Facility Line

GLOBAL CLIENT SERVICES

The Global Client Services team works with clients to determine, and then act on, the
most effective ways in which Jones Lang LaSalle can support their needs. A Global
Client Services professional serves as a single point of client contact for Jones Lang
LaSalle resources across a region or around the world, assembling appropriate people
and expertise and serving as a client advocate to ensure service quality and
timeliness.

GOVERNMENT

The Company uses a collaborative approach to develop and implement real estate
solutions that help the public sector address its real estate challenges and priorities:
• Improving the quality of life for military families
• Maximizing real estate assets
• Reducing costs
• Managing facilities effectively



The government practice comprises a dedicated team of public sector specialists with
full access to global network of resources. The Company combines private sector
expertise with public sector experience to deliver integrated real estate solutions that
are focused on the unique needs of government agencies. The areas of expertise
include:
• Asset Management
• Development and Project Management
• Facilities Management
• Portfolio Strategy and Management
• Public-Private Partnerships

HEALTHCARE

The Company delivers the highest quality service to healthcare clients in an
extremely dynamic and challenging environment. Our healthcare real estate
professionals develop strategies to meet the needs of investors, hospitals and
physicians, offering strategic insight into the doctor/hospital relationship and
healthcare delivery systems. Access to capital from varied sources enables to develop
financial solutions for a wide range of healthcare facilities.
The specialized services for the healthcare industry include:
• Financing
• Acquisitions and Sales
• Development
• Property Management
• Leasing



HIGHER EDUCATION

The Company is the leader in delivering comprehensive real estate services and
solutions to colleges and universities. The unique needs of educational institutions are
well understood, and have helped administrators worldwide successfully address
important real estate needs and concerns. The Company’s professionals develop a full
understanding of each institution's mission, objectives and challenges to formulate
and implement strategies that add value to real estate assets and facility operations.
The range of services to the higher education community, includes:
• Campus Operations Assessments
• Commercial Leasing Analysis
• Development Feasibility Studies
• Master Plan Financial Analysis
• Lease versus Buy Analysis
• Project and Development Management

HOTELS

Jones Lang LaSalle Hotels is the world's largest and most qualified specialist hotel
real estate investment advisor. Working through 16 dedicated offices and the global
Jones Lang LaSalle network, provides clients with value-added investment
opportunities and advice, helping them achieve maximum value from their hotel and
tourism property assets.
The firsthand experience in local markets and financial expertise lead to superior
solutions across a range of disciplines:
• Valuation and Appraisal
• Transactions
• Mergers and Acquisitions
• Financial Advice and Capital Raising
• Asset Management



• Strategic Planning
• Operator Assessment and Selection
• Industry Research
• Project and Development Management
Focusing on these areas, the Company helps clients maximize investment return,
minimize risk, increase operational efficiencies and synergies, and tap innovative
funding sources on a global scale.

INDUSTRIAL SERVICES

The Industrial Services practice leverages the firm's extensive global resources to
control costs, improve effectiveness and enhance the value of industrial real estate
holdings.
The worldwide capabilities for industrial users, investors and owners include:
• Acquisition and Disposition
• Project and Development Services
• Strategic Consulting
• Portfolio Management and Administration

INVESTMENT MANAGEMENT

LaSalle Investment Management, Inc., a member of the Jones Lang LaSalle group, is
a leading global real estate money manager with approximately US$23 billion of
public and direct real estate assets under management.
The investment strategy is shaped by three priorities:
• Developing and executing customized investment strategies that meet the
specific investment objectives of each of our clients.
• Providing superior performance for all clients.
• Delivering uniformly high levels of service.



The Company offers separate accounts and co-mingled funds, for direct real estate as
well as public real estate securities in the United States, Europe and Asia:
• Private Investments in Real Estate Properties: The Company oversees the
acquisition, management, leasing, financing and disposition of real estate
investments across a broad range of property types.
• Investments in Public Equity and Debt Securities: The Company also offers
clients the ability to invest in separate accounts focused on public real estate,
debt and equity securities.

LEISURE SERVICES

The Company creates and implement innovative real estate solutions for the leisure
and entertainment industries. In Europe, the specialist teams provide management
advice on over 2 million square feet of leisure and lease over 3 million square feet of
commercial leisure developments.
The range of Leisure Services includes:
• Investment Funding
• Finance
• Valuation
• Leasing and Development
• Consultancy and Research
• Management
• Professional Services

OFFICE

With a presence in more than 100 of the world's leading property markets, Jones
Lang LaSalle has the expertise to enhance the value of their client's office properties.
The network of professionals provides a full complement of services to office
building owners, occupiers and investors worldwide.



PROJECT AND DEVELOPMENT SERVICES

The Company provides a full range of services that address all aspects of the
development, construction, refurbishment and occupancy of buildings. The diverse
client base and consequent experience extend to property types ranging from offices
and industrial to warehousing. In addition to meeting or surpassing the agreed
objectives of each project, the goal is to add value to the client's position by applying
our expertise and best practice methodology.
The core service activities include:
• Building Surveying
• Development Advisory
• Development Management
• Interiors Project Management
• Move Management
• Multi-Site Program Management
• Privatisation
• Renovation and Rehabilitation

The Company delivers added value to their clients by relieving demand on internal
resources, maximizing client purchasing power and utilizing state-of-the-art
technology systems to monitor schedules and control costs.

PROPERTY MANAGEMENT

In a deregulated financial climate, real estate assets must be aggressively and
professionally managed if they are to achieve the best possible returns for owners and
investors, and compete effectively for investment capital. Owners across the globe
entrust their diverse real estate investments - large and small assets and portfolios,
new development and renovation, and urban and suburban properties.



The goal is to enhance clients' property values through active day-to-day
management that focuses on maintaining high levels of occupancy and tenant
satisfaction, while lowering property costs.
From due diligence and financial underwriting to environmental and engineering
services, we have the broad base of experience and knowledge needed to provide the
technical, operational and construction services that achieve the clients' objectives.

RESIDENTIAL DEVELOPMENT AND INVESTMENT

The Company provides marketing and sales services for major residential
development projects in Australia, Asia and select European markets. The Company
offers a philosophical approach to marketing clients' residential projects, which on
key points differs from the traditional agent's model of project marketing.
Jones Lang LaSalle has:
• The financial strength to provide the services offered throughout the life of the
project
• The skilled human resources and experience vital to sales and marketing
success
• The international network, widening the market
• The corporate commitment to its particular approach to the marketing of major
residential developments

RETAIL

The Company’s network of specialists provides retailers and retail property investors
in the world's leading markets with a full complement of services:
• Leasing
• Specialty Leasing
• Acquisition and Disposition
• Property Management
• Project and Development Services



• Construction Management
• Consumer Marketing
• Tenant Representation
• Strategic Consulting

SALES AND ACQUISITIONS

The Company is a market leader in the sale and acquisition of large, institutional-
quality office, retail, industrial and mixed-use properties. Located in every major
market in the world, our professionals are positioned to market properties
internationally, using first-hand local knowledge to provide valuable insights into
what occupiers and investors are seeking in the marketplace.

STRATEGIC CONSULTING

The Company ensures that real estate is positioned to support the clients' business
objectives.
A network of 150 professionals in three regions allows them to share best practices
globally, invest in R&D, and assemble global teams. The professionals have
backgrounds in real estate, business, finance, design and corporate strategy.

Strengthening corporate real estate's contribution. The Company ensures that
corporations get value and efficiency from their real estate. Services include:
• Aligning real estate with corporate objectives
• Positioning real estate to accommodate changes in business needs
• Creating best-in-class real estate departments
• Disposing of redundant facilities quickly, at highest price
• Providing better facilities using less capital
• Assisting in location selection



Designing development strategies. Working with developers, investors,
corporations and governments. Services include:
• Regeneration and master-planning
• Repositioning vacant or under-utilized properties
• Disposals and acquisitions
• Strategic marketing
• Transport related development
• Development for arts, culture, education & sport facilities
• Mixed-use schemes

Providing sound strategies for investors. The Company objectively analyses
investment opportunities to examine risks and returns associated with diverse
portfolios. They work with investors to:
• Explore cross border opportunities
• Advise on acquisition and divestment strategies
• Achieve value enhancement and risk reduction, for single assets and portfolios
(including NPL and distressed assets workout strategies and REITs emerging in
many markets)
• Advise on portfolio structuring and positioning

Offering solutions for retail clients. The Company works with retailers, owners and
developers to maximise the performance of retail outlets. The advice ranges from
refining retail portfolios to developing and repositioning the retail offers in major
cities. By using consumer led research, and provide all of the above for retailers.

TENANT REPRESENTATION

The Company develops strategic alliances with clients with complex real estate
requirements while partnering with them to evaluate and execute transactions that
meet their ongoing occupancy needs. The multi-discipline approach supports
occupancy strategies that are linked to the clients' core business objectives.



The Company works to help clients lower their real estate costs, minimize occupancy
risk, improve occupancy control and flexibility, and create more productive office
environments. In the process, they define space requirements, identify suitable
alternatives, recommend appropriate occupancy solutions and negotiate lease and
ownership terms with third parties.
Our transaction services encompass:
• Portfolio Occupancy Strategy
• Business Location Strategy
• Acquisition
• Disposition
• Contact Centres
• Mergers & Acquisitions
The Company also provides clients with the knowledge needed to consider the
development of new facilities, weigh the benefits of purchase or lease decisions and
evaluate long-term financing options for every asset type including industrial
properties. We also represent clients in large, complex transaction assignments that
typically involve relocations of headquarters facilities or major office consolidations.

VALUATIONS

From commercial office buildings, retail outlets and factories, to retirement villages,
hotels and hospitals, occupiers and owners in the public and private sectors benefit
from the proven valuation experience.
The services—which may focus on a single property or a global portfolio of multiple
asset types—help clients determine accurate values of office, retail, industrial and
mixed-used properties in the areas of:
• Strategic Disposition Analysis
• Investment and Market Analysis
• Hold-Versus-Sell Analysis
• Due Diligence
• Feasibility Studies



• Securitization
• Asset Valuation
• Bond Financing Cash Flow Feasibility
• Asset Review and Market Surveys
• Highest and Best Use Studies
• Strategic Reviews
• Acquisition Advice and Analysis
• Valuation for Sale/Leaseback
• Portfolio Valuation
• Debt and Equity Financings
• Mergers and Acquisitions
• Privatisation
The valuation service fulfills the need for maximum accountability at the highest
professional level. The professionals work with clients to ensure comprehensive
recording and full utilization of property resources, regular revaluation of assets to
review performance and ascertain the best use of a property, and rapid evaluation of
property assets in any measurement of a company's value



RETAILING:

WHAT IS RETAILING …….?

“Retailing consists of those business activities, which are involved, in the sale of
goods or services to consumers for their personal, family or household use.” It is the
final stage in the distribution process for goods and services from manufacturers to
final consumers

Figure 1 A Typical Distribution Chain
Source: -Ron Hasty, James Reardon - Retail Management
Retailing involves:
- Interpreting needs of the consumers
- Developing good assortments of merchandise
- Presenting them in an effective manner so that consumers find it easy and attractive
to buy.

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

Organizational buyers purchase in order to perform a task or sell a product
effectively, efficiently and at a profit. They could be industrial buyers or intermediary
buyers. Industrial buyers are those who purchase goods and services to be used in or
to aid manufacturing process. Intermediary buyers are those (i.e. wholesalers and



retailers) who buy merchandise for resale. Retailers include street vendors, local
supermarkets, department stores, restaurants, hotels, barbershops, airlines and even
bike and car showrooms. Still retailing may or may not involve the use of a physical
location. Mail and telephone orders, direct selling to consumers in their homes and
offices and vending machines - all fall within the purview of retailing. In addition to
it, retailing may or may not involve a "retailer." Manufacturers, importers, non-profit
firms and wholesalers are acting as retailers when they sell goods and/or services to
final consumers.

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

Retail Marketing Mix

Product Branding Price
Packaging Cost of goods
Product Design Business Expenses
Assortment Gross Margin
Services Profit
Promotion Distribution
Advertising Logistics
Personal Selling Store Location
Sales Promotion Site Evaluation
Public Relations Transportation
Visual Merchandising Storage of goods

Source: -Ron Hasty, James Reardon - Retail Management



Importance of Retailing

So far, it has been seen that retailing is a vital and involuntary action performed by
the living structure of the market economy (as opposed to the case in a barter
economy). In a barter economy, barter transactions take place between consumers
themselves. Consumers interact directly whereas in a centralized market economy,
transactions taking place at a larger scale (both in terms of volume and variety)
necessitate an interface between the manufacturers and final consumers. Hence we
reinforce the fact that retailing is not a new deal. This industry is extant as an
interface between production and consumption, from times immemorial, benefiting
us - consumers or producers in the various ways discussed above.

Our study concentrates on organized retailing, which consists of shopping malls,
super markets, Factory outlets stores, and like. In the last few years a shift has
occurred in India from individual retail outlets owned separately and managed
distinctively to professionally managed retailing. This is an industry, which has now
started attracting better investments and talent. Things changed primarily because of
the rising expectations of Indian consumers and the corporate responding quickly.

Today, the industry (in India) seems to be functioning somewhere between the
accelerated development and maturity stages, with high growth rates, intense
competition and moderate profitability. For reference, the table, depicting the various
stages of the Retail Life Cycle is given in order to get an idea of the magnitude of the
issue we are dealing with, we look at the international scenario. During 1992, the
largest 100 retailers in the world generated over $1.1 trillion in revenues.

Retailing is the second largest industry in the world, one of the largest employers of
the world and an index of economic growth. In India there are about 5 million retail
outlets varying in sizes and nomenclatures. India has the highest number of retail
outlets per capita in the world but has the lowest retail space per capita in the world
(2 ft / person). Out of these 5 million outlets 96% are smaller than 500 sq. ft. in area
3. There are about 3 million outlets in India's 3700 designated towns and more than



6,00,000 villages. About 350 million people live, within one-minute walk of these
retail shops According to retail census conducted by market researcher ORG-MARK,
Rs.4,79,568 crore worth of products were sold through these 5 million retail outlets

Manufacturers owned and retail chain store are springing up in urban areas to market
consumer goods to the middle class in a much similar style as malls around the globe.
At present about 8% of the Indian population is employed in the retailing industry as
against 20% in USA. As India moves towards the service oriented economy, a rise in
this percentage is expected. The number of the retail outlets is growing at about 8.5%
annually in the urban areas and in towns with population between 1,00,000 to 1
million; the growth rate is about 4.5%.

According to Kurt Salmon Association, a global management consulting firm,
organized retailing seems all set to power ahead from Rs. 5000 crore currently to
about Rs.30,000 crore in next five years. A.T.Kearney reports that organized retailing
will account for about 20% of the total $8 trillion retail market in India in the next 5-
7 years as against 1-2% today.

Consumer Spend by 2005 (in Rs. crore) Unorganized Retailing 7,08,836
Organized Retailing Food and grocery 5,956 Non food 23,886
Source: Shah, Jindal " Shop at Leisure" Economic Times (4th Feb 2000)

In India, organized retailing is catching up fast. Yet retailing is to be recognized as
full-fledged industry in the India. Organized retailing is bound to grow tremendously
provided the right marketing strategies are adopted.



Even though the big retail chains are concentrating on the upper segment and
selling products at higher prices like Crossroads, Akbarally's and Shopper's Stop,
retail stores are sprouting that cater to the needs of the middle class. With a huge
middle class population, the retailers like RPG's Food World are tapping this
market. The market is flooded with products - branded and unbranded. The
customers are in a dilemma as to pick which one! The organized retail chains,
display all the products and the most attractive product catches the customer
attention. Gone are the days of customer loyalty with increasing number of
products of similar quality hitting the market. Differentiation plays the lead role.
According to Mr. Simon Bell of A.T.Kearney, there is a close relation between
the growth of brands and the growth of the organized retailing. "Companies
selling branded products prefer to have big and organized retail outlets such as
supermarkets where there can be differentiated from unbranded products" he
opines. India is going through that phase in retailing, which the US experienced
in 80s and early 90s. From product based shopping, the importance has shifted to
experience based shopping.

The customers of the 21st century would expect to pick his/her own products
from an array of choices rather than asking the local kirana wallas to deliver a
list of monthly groceries. Thus the way of distribution of products has gained
importance in the past decade.



BUYING BEHAVIOR:
Consumer decision making varies with the type of buying decision.the decision to
buy a toothpaste, tennis racket, a personal computer and a new car are all very
different. Complex and expensive purchases are likely to involve more buyer
deliberation and more participants.
Henry Assael distinguished four types of consumer buying behavior, based on the
degree of buyer involvement and the degree of differencec among brands.

High involvement low involvement

Complex buying behaviour variety-seeking buying
Significant
differences Behaviour
between
brands

Few
differences Dissonance-reducing habitual buying
between
brands buying behaviuor behaviour

Complex Buying Behavior:
Complex buying behavior involves a three-step process. First, the buyer develops
beliefs about the product. Second, he or she develops attitudes about the product.
Third, he or she makes a thoughtful choice. Consumers engage in complex buying
behavior when they are highly involved in a

purchase and aware of significant differences among brands. This is usually the case
when the product is expensive, bought infrequently, risky, and highly self-expressive,
like an automobile.



The marketer of a high-involvement product must understand consumer’s information
gathering and evaluation behavior. The marketer needs to develop strategies that
assist the buyer in learning about the product’s attributes and their relative
importance, and which call attention to the high standing of the company’s brand on
the more important attributes. The marketer needs to differentiate the brand’s
features, use print media to describe the brand’s benefits, and motivate sales
personnel and the buyer’s acquaintances to influence the final brand choice.

Dissonance-Reducing Buyer Behavior:
Sometimes the consumer is highly involved in a purchase but sees little difference in
brands. The high involvement is based on the fact that the purchase is expensive,
infrequent, and risky. In this case, the buyer will shop around to learn what is
available. If the consumer finds quality differences in the brands, he or she might go
for the higher price. if the consumer finds little difference; he or she might simply
buy on price or convenience. Marketing communications should supply beliefs and
evaluations that help the consumer feel good about his or her brand choice.
Habitual Buying Behavior:
Many products are bought under conditions of low involvement and the absence of
significant brand differences. Consider salt, consumers have a little involvement in
this product category. They go to the store and reach

for the brand. If they keep reaching for the same brand, it is out of habit,not strong
brand loyalty. There is good evidence that consumers have low involvement with
most low-cost, frequently purchased products. Consumers do not search extensively
for information, evaluate characteristics, and make a decision. Instead, they are
passive recipients of information in television or print ads. Ad repetition creates
brand familiarity rather than brand conviction. After purchase, they may not even
evaluate the choice. For low-involvement products, the buying process begins with
brand beliefs formed by passive learning and is followed by purchase behavior, which
may be followed by evaluation.



Variety-Seeking Buying Behavior:
Some buying situations are characterized by low involvement but significant brand
differences. Here consumers often do a lot of brand switching. Think about cookies.
The consumer has some beliefs about cookies, chooses a brand of cookies without
much evaluation, and evaluates the product during consumption. Next time, the
consumer may reach for another brand out of a wish for a different taste. Brand
switching occurs for the sake of variety rather than satisfaction.
The market leader and the minor brands in this product category have different
marketing strategies. The market leader will try to encourage habitual buying
behavior by dominating the shelf space, avoiding out of stock conditions, and
sponsoring frequent reminder advertising.
Individuals are subject to a number of influences that tend to distort their perception;
some of these are discussed are below:

Physical appearances:
People tend to attribute the qualities they associate with certain people to others who
may resemble them, whether or not they consciously recognize the similarity. For this
reason, the selection of models for print advertisements and for television
commercials can be a key element in their ultimate persuasiveness. Studies on
physical appearance have found that attractive models are more persuasive and have a
more positive influence on consumer attitudes and behavior than average looking
models; attractive men are perceived as more successful businessmen than average-
looking men. Some studies suggest that models influence consumer perceptions of
physical attractiveness and through comparisons their own self-perceptions.
Stereotypes:
Individuals tend to carry “pictures” in their minds of the meanings of various kinds of
stimuli. These stereotypes serve as expectations of what specific situations, people or
events will be like and they are important determinants of how such stimuli are
subsequently perceived.



Irrelevant cues:
When required to form a difficult perceptual judgment, consumers often respond to
irrelevant stimuli. For example, many high-priced automobiles are purchased because
of their color, style or luxury options, rather than on the basis of mechanical or
technical superiority.
First impressions:
First impressions tend to be lasting; yet, in forming such impression, the perceiver
does not yet know which stimuli are relevant important, or

predictive of later behavior. A shampoo commercial effectively used the line,” you’ll
never have a second chance to make a first impression. “Since first impressions are
often lasting, introducing a new product before it has been perfected may prove fatal
to its ultimate success; subsequent information about its advantages, even if true, will
often be negated by the memory of its early performance.
Jumping to conclusions:
Many people tend to jump to conclusions before examining all the relevant evidence.
For example, the consumer may hear just the beginning of a commercial message and
draw conclusions regarding the product or service being advertised. For this reason,
some copywriters are careful to give their most persuasive arguments first.



POSTPURCHASE BEHAVIOUR
After purchasing the product the customer will experience some level of satisfaction
or dissatisfaction. The marketers’ job does not end when the product is sold to the
buyer, marketers must monitor post purchase satisfaction, post purchase actions, and
post purchase product uses

POSTPURCHASE SATISFACTION
The buyer’s satisfaction is a function of the closeness between the buyer’s
expectations and the products perceived performance. If performance falls short of
the expectations then the buyer is disappointed, and if it meets the expectations then
the customers is satisfied, and if the performance exceeds the consumers expectations
then the consumer is delighted, these feelings makes a difference in weather the
customers buys the product again and talks favorably or unfavorably about the
product.

POSTPURCHASE ACTION:
The consumer’s satisfaction or dissatisfaction with the product will influence
subsequent behavior. If the consumer is satisfied then he or she will exhibit a higher
probability of purchasing the product again. And he may also tend to speak good
about the brand. Dissatisfied consumers may abandon or return the product or
sometime they may also take public actions.



INDUSTRY ANALYSIS

ENVIRONMENTAL ANALYSIS

In order to understand the industry we undertook two different
environmental analyses. The first is the PEST Analysis where the
political, environmental social, and technological aspects are
looked into. In the Porter's Five Forces the competitive
environment of the industry is analyzed.

I) PEST Analysis:

Now, in a particular geographic region, the environment there
affects the retailers in the region in various ways. We have studied
the effects under the following heads:
- Political environment
- Economic Environment
- Social (Socio-Cultural) Environment
- Technological Environment



Political Environment:
With the opening up of the economy, more and more MNC's have
pervaded the Indian Business arena, through joint ventures,
franchisees or even self-owned stores. The very first MNC getting
into the business was Spencer's, a tie up between the RPG Group
and the Dairy Farm International, a $10 bn Hong Kong based
company, and a part of the Jardine Mathenson group.
Government uses regulation to prevent development of
monopolies, which results in restricted competition and fixed
prices. (MRTPC). Government also propounds price competition
laws and unfair trade practice laws. Retailers must understand what
rights they have in pricing merchandise, what provision they
should make for customer relations, what rights and
responsibilities they possess when making a sales, what rights their
employees have and what liabilities they may face while selling
products to the consumers.

Economic Environment:
The type of economic system (capitalism or socialism etc.) existing
in a country has a direct bearing on the potential for and the
development of the retailing industry in that country. A retailer
cannot escape the effects of the factors in the macroeconomic
environment, be it domestic or global that influences the local
market.



Inflation, unemployment, interest rates, tax levels, the GDP and the
rate of real growth in GDP (Inflation adjusted) are some aspects of
the economy which a retailer must cope with.
Real growth makes more income available to people who then tend
to spend more, leading to higher sales and more profits for the
retailers.

However growth also leads to higher competition in the long run.
As the economy expands, higher demand levels lead more firms
into the market, trying to fulfill the consumers' needs. The inflation
(i.e. increase in price) leads to less goods being bought at higher
prices. As the retailers' cost of goods increases, they attempt to
pass on this increase to the consumers. However, it is often not
possible to pass on the entire amount to the consumer, hence
resulting in cuts in the retailers' profits.

With the increase in Purchasing Power Parity (PPP) and the
disposable income of the Indian consumer, retailing is catching up
at a very fast pace in the country.

Social Environment:
As discussed under the title 'demographic and lifestyle trends'
above, the demographic trend and lifestyle patterns, of the society
that a retailer intends to serve, decide the retailer's strategy.



Traditionally, children seldom accompanied their parents while
grocery food shopping. Shopping for children was confined to that
during festivals when dresses were brought for them. But, in the
present day, due to scarcity of time, working parents prefer to
spend as much time as possible with their children and this
includes their shopping hours also. As the organisation retail sector
offers the option of entertainment along with shopping, the
younger couples opt for these retail outlets for shopping.
Speaking at KSA Retail Summit, 2000, Peter Lau, Chairman of
Giordans International, Hong Kong, said, "It is the format of
consumer expectation that changes, not the goods or services they
want. " This is depicted in the following diagram:

KSA Technopark conducted a study on consumer attitude towards
shopping in association with the market research firm ORG-



MARG in January and February 1999. The study was spread over
the four zones of India viz. North, South, West and East and
covered a random sample of 7300 respondents in twelve cities.
The results of this study clearly reflect that the buying patterns do
vary according to the customs and lifestyle of a region. In the south
approximately seven hours are spent on shopping per week. This
figure is the highest amongst the four zones, which probably
explains the more spurt of new malls and supermarkets in the south
than in the other zones. Further, the study has attempted to find out
what a customer expects out of a store. Here, the six attributes
desired by most number of people (65% and above) are polite and
courteous salespeople, quality of products, non intrusive sales
persons, value for money, attractive displays and range of
products. Although desired by a very low percentage of people
(only 10%) yet the attribute of an entertainment centre for children
has also figured in.

That is to say, apart from quality and range of products, value for
money and attractive displays, the human touch has a vital role to
play. Smart, polite and courteous sales people might make all the
difference for a store, which is like any other in terms of its
product offerings.
There is also emphasis on schemes and promotions, which, as the
study ratifies, do pull customers. Further the trend is towards more
convenience and flexibility in terms of exchange/ return policies,
which play a vital role in encouraging the purchase.



Technological Environment:
Technology is probably the most dynamic change agent for the
retailing industry. The computerization of the various operations in
a retail store, including inventory management, billing and
payments as well as database (of customers) management,
widespread use of bar coding, point -of-sale terminals and
Management Information System has changed the face of retailing
drastically. Apart from providing the retailers with better and
timelier information about their operations, the technology also
does the job of preventing theft, promoting the store's goods and
creating a better shopping atmosphere. These can be done with the
help of closed circuit televisions, video walls, in-store video
networks, kiosks and other forms of interactive applications
ranging from CD-ROMs to virtual reality to let customers select
and buy products.

They make the customer's life a lot easier by facilitating the use of
developments like credit cards. Toll free 800 numbers have
brought about a revolution in consumer's ordering and feedback
mechanisms. These also pave way for tele-shopping and net-
shopping. Emerging technologies will also facilitate just-in-time
management of certain products within the store. These trends are
already visible in the music and greeting card industries.



RETAIL SECTOR OVERVIEW

Retail is India's largest industry, accounting for over 10% of the country's GDP and
around 8% of the employment. The retailing industry in India estimated at
Rs.930,000 crore (2003-04) is expected to grow at 5% p.a. in line with predictions
made in 2002. However, the size of organised retailing market stands at Rs.28,000
crore in 2004, thereby, making up a mere 3% of the total retailing market. It is way
behind the development curve when compared with modern economies like the US
where organized retail forms about 85% of total retail sales. India also lags behind
other emerging markets in Asia (Taiwan, Malaysia, Thailand, Indonesia, China),
Eastern Europe (Poland) and South America (Brazil) where significant progress has
been made in the last two decades.

But the story is set to change. Moving forward, organised retailing in India is
projected to grow at the rate of 25-30% p.a. and is estimated to reach an astounding
Rs.100,000 crore by 2010. Its contribution to total retailing sales is likely to rise to
9% by the end of the decade.

Retail industry in India is at the crossroads. It has emerged as one of the most
dynamic and fast paced industries with several players entering the market. It is
gradually inching its way toward 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 in India. Modern retail has entered India in the
form of sprawling shopping centres, multi-storied malls and huge complexes that
offer shopping, entertainment and food all under one roof. The Indian retailing sector
is at an inflexion point where the growth of organized retailing and growth in the
consumption by the Indian population is going to take a higher growth trajectory.

The changing demographics of the Indian population can be attributed to this
phenomenon. A large young working population with a median age of 24 years and
emerging opportunities in the services sector are going to be the key growth drivers



of the organized retail sector in India. The last few years have seen the emergence of
several factors that will drive growth going forward;

 Booming IT and BPO sectors with rising incomes
 Emergence of profitable retail models
 Availability of retail space
 Increasing interest of foreign retailers in India
 Surge in capex spend of Indian retailers

1. Booming industry and increasing incomes

The growth in our economy has resulted in growth of urbanization, which is only set
to grow further, producing younger families with both spending capacity and the
desire to spend. The continuously evolving consumer segment in India is the
youngest in the world with a median age of 24 years as compared to countries like the
USA where the ‘baby boom’ generation is now nearing retirement. The young Indian
consumer is willing to spend on lifestyle-oriented products and services and aversion
to credit is now a thing of the past. Further, consumers are spending on a wider range
of products and services because of which non-conventional product categories like
cell phone ringtones (estimated at Rs.400 crore) and Valentine’s Day gifts (Rs.1,500
crore) have evolved in very small time spans.

Growth drivers:

• Urban households spend 2.5x more than rural families.
• Urban population in India expected to grow by 85 million over the next 10
years, the second highest in the world after China.
• The middle class (family income between Rs.2-10 lakhs p.a. as per NCAER),
currently estimated at about 92 mn, is expected to be around 153 mn by
2010.
• Real incomes expected to grow by 5-6% p.a. resulting in significant
improvement in purchasing power



These positive macro trends will add to the large pool of young, urban consumers
with higher disposable incomes and the right mindset to shift towards an organised
retailing experience.

2. Profitable retail models

The last few years have seen development of various retail models across product
categories. Hypermarkets, food supermarkets and discount retailers are the key value
retail formats in India. Only in the recent years have private sector retailers
recognised the growth potential. Standalone supply models have started to appear
while others have started to open in the malls that are mushrooming all over the
country. The enclosed table gives a snap shot of the key domestic retailers

Segment Key domestic retailers
Food, grocery and tobacco Pantaloon (Big Bazaar, Food Bazaar), RPG (Spencers,
FoodWorld), Subhiksha, Nilgiris, Marginfree, Trent
(Star India Bazaar), Barista, Café Coffee, Fuel retailers
(BPCL, Reliance)
Clothing Trent (Westside), Pantaloon (Big Bazaar, Pantaloons),
Lifestyle**, ITC (Wills Lifestyle), Shopper's Stop,
Ebony, Globus, Pyramid, Raymond, Arvind Brands
(Arrow, Lee, Wrangler), Indian Rayon (Madura
Garments- Louis Philippe, Van Heusen, Allen Solly,
Peter England), Provogue, Reliance (Vimal), Bombay
Dyeing, Zodiac, Indus League
Consumer durables Vijay Sales, Vivek's, BPL, Videocon, Onida, Philips,
Samsung, LG India, Whirlpool etc
Jewellery and watches Titan (Titan showrooms + Tanishq (jewellery)),
Pantaloon (Gold Bazaar)
Home décor & furnishing, Lifestyle**, Welspun, Himatsingka Seide
household goods (Atmosphere), Bombay Dyeing, Durian Industries,
Zuari Industries, Featherlite, VIP, Home Stores, KK
Birla Group (Style Spa)
Beauty & other healthcare Marico (Kaya), HLL (Lakme salons), RPG (Health &



Glow)
Medical care & health Subiksha, Apollo Pharmacy, RPG-Dairy Farm (Health
services & Glow), Dr. Morepen (Lifespring)
Footwear Liberty, Lakhani, Woodlands, Action

Books, music & gifts Archies, Landmark, ITC, Ebony, Shopper's Stop
(Crossword), Times of India Group (Planet M), RPG
(Music World), Oxford (Apeejay Group)
Source: HSBC

Currently, footwear and clothing have a large penetration in the organised retail
segment. Bata – the oldest MNC retailer, commands a market share of 15% in the
domestic retail footwear market. Foreign players in this category like Reebok,
Adidas, Nike also marked a significant presence through franchisee agreements.
Outlets of these companies are mostly seen in malls due to the easy availability of
space along with amenities and the trend is expected to continue.

While lucrative opportunities exist across product categories, food and grocery
present the most significant potential in the Indian context, as consumer spending is
highest on food. Further, ‘wet groceries’ i.e. fresh fruits and vegetables is the most
promising segment within food and grocery as very few organised retailers have
tapped this opportunity inspite of wet groceries being the preferred choice of most
Indian households.

Opportunities galore

• Home improvement: Potential exists for specialty retailing in the home
improvement segment with formats such as consumer durables retailing.
• Electronics: Home and electronics-related sectors have performed better and
gained a higher share of the overall retail cake across the world. Electronic
gadgets like mobile phones, digital cameras, PC software and games, and, for
the more extravagant, PDA’s, notebook computers, and Apple’s stylish iPod
have undoubtedly stolen retail spend from apparel, acting as a new way to
make a fashion statement.



• Wholesale trading: These cash-and-carry stores attract large volumes from a
sizeable number of retailers who do not have to maintain relationships with
multiple suppliers for their every need.
• Rural Retailing: This poor-cousin has of late caught the eye of retailers
looking for new areas of growth. These malls offer a diverse product range
including soaps, detergents, toothpastes, televisions, DVDs, sewing
machines, grinders, etc attempting to provide farmers a one-stop destination
for all needs.
• Baby care and Mother care segment: Huge potential also exists in these
segments where consumers are seeking “all under one roof” solutions i.e.
high quality products required for mothers (20 - 39 years) and child (0 - 6
years) with a deeper product assortment than what most kids specialty stores
today offer. The opportunity in this segment is highlighted by the fact that
currently no infant accessories brand has exclusive retail presence in India.

3. Availability of retail space

Unavailability of good quality real estate has hindered organised retail in India. It is
one reason why some of the first modern-format retailers have been real estate
developers (e.g., Shoppers’ Stop of Rahejas Group, CrossRoads of Piramals). But in
the last three years, organised retail space development in India has gone through a
significant change. With the rental yield on malls (12-15%) being much higher than
on commercial properties (7-12%), mall developers across the country are creating
superior real estate options at a frenzied pace.

From 35-40 operational malls currently occupying approximately 6 mn sq ft of retail
space, India is expected to have around 200 new malls by 2006 end, thereby adding
retail space to the tune of 35-40 mn sq ft. Further, by 2010, 500-600 malls occupying
~120 mn sq ft are at various stage of planning. While the six metros are expected to
account for a majority of these malls, they are expected to spread across 60 cities by
2010.



Many mall developers, in a bid to offer distinctive value propositions, are planning
‘specialty malls’, which will emerge as one-stop destinations in their chosen product
categories. The Delhi-based Aerens Group is one such exclusive jewellery mall. A
number of analogous developments like a ‘Wedding Mall’ by Omaxe Group,
‘Automobile Mall’ etc are also in the offing. ‘Home Malls’ offering the entire range
of building and interior decor solutions are also coming up. Concepts like a ‘Toys
Mall’ exclusively for kids and a ‘Factory Outlet Mall’ offering branded apparel at
throw away prices, which are popular in developed economies are likely to crop up in
India.

The fast-paced growth of mall development has been further fuelled by government
authorities like the Delhi Development Authority (DDA) beginning to release real
estate space for retail development in prime retail areas. In Mumbai a large supply of
defunct textile mill land is being released for development.

Is acquiring space really simple?

Getting good quality real estate in central locations is a tough game. Fragmented
private holdings, zoning laws and archaic regulations – all hinder development. But
the hope lies in state governments, which are expected to see retail as an opportunity
to reduce ballooning state fiscal deficits through sale/rent of land and through
generation of tax revenues that are easy to collect.

The lack of organised institutional capital also is a hindrance to the development of
malls in India. Most of the developers work on the “Design, Sell, Construct, Move
On” model, which has resulted in clustering of a large number of malls in a relatively
small geographical area. A chief example is Gurgaon where over 20 new malls are
likely to become operational in the next two years. This unhealthy concentration of
supply in a suburban zone with a limited catchment population will lead to mall
developers burning their fingers as their plans are not backed by the requisite
planning and market research. Also, with ownership being fragmented, a lot of mall
management issues are creeping in.



With the government opening up of 100% FDI in construction in Feb ‘05, it is
expected that joint ventures between Indian and foreign developers would increase,
which would in turn result in opening up of new malls. The entry of institutional
capital should result in ensuring unified ownership and thereby professional mall
management.

4. Foreign retailers eyeing the Indian markets

The last few years saw the entry of a multitude of international brands into the Indian
market on the strength of rising affluent levels of the young Indian population along
with the heightened awareness of global brands and international shopping
experiences and the increased availability of retail real estate space. Luxury brands
such as LVMH, Ermenegildo Zegna, Bvlgari, Escada, Hugo Boss, Tommy Hilfiger,
Cartier, etc have entered the Indian market with presence mostly in five-star hotels.
Many others are firming up plans to set up shop in the country to offer new-age
global Indians an aspirational lifestyle they have demanded for long.

Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M, Karstadt-Quelle, etc are
stepping up their sourcing requirements from India and moving from third-party
buying offices to establishing their own wholly owned/wholly managed sourcing and
buying offices which will further make India an attractive retail opportunity for the
global players.

5. Surging capex spends

Retail majors and manufacturers have laid out aggressive capex plans for the next few
years for expansion as well as renovation and maintenance of existing stores. In its
recent IPO, Shoppers’ Stop has raised about Rs.1.6 bn of which more than Rs.1.1 bn
would be used to finance new store capex. Pantaloons has been aggressively
acquiring prime real estate. It has recently made three strategic investments at a spend
of Rs.730 mn, by diluting 4.5% equity stake.



Trent, the retailing unit of the Tata Group has recently announced a Rs.1.18 bn issue
of preferentially convertible debentures to finance expansion. It has drawn up plans
aggregating an investment of ~Rs.1.25 bn between FY06-FY08. Its plans involve the
establishment of 16-18 new stores, upgrade of existing stores and strengthening of the
warehouse infrastructure.

These are just a couple of examples of Indian companies that have aggressive
expansion plans over the next few years.

Should foreign players be allowed to step-in?

India has the potential to become a giant in food processing and textiles as its
agricultural production is the lowest cost in the world, and textile labour is the
cheapest internationally. Allowing FDI in retail trade, especially in groceries and
garments marketing, provides the linkage effects of a modernised, globalised retail
trade.

Allowing foreign players into India would bring in better managerial practices and
IT-friendly techniques to cut wastage and set up integrated supply chains to gradually
replace the present disorganized and fragmented retail market. It is estimated that
India wastes nearly Rs.50,000 crore in the food chain itself. These international retail
outlets can help develop the food processing industry, which requires $28 bn of
modern technology and infrastructure.

Allowing entry of market-savvy and intelligent corporations like Wal-Mart, Tesco,
Carrefour, J C Penny etc into the country would also help in generating demand for
exports, which would in turn contribute towards the targeted GDP growth of 8 – 10%
per year.



OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES:
• To identify whether the specialty retail stores are required in suburban areas –
South East Bangalore.
• To identify the customer attitude towards apparel shopping and the customer
buying behavior.

SECONDARY OBJECTIVES:
• To identify the real estate requirement for setting up such stores.

HYPOTHESIS

Null Hypothesis:
H0: The specialty retail stores are only good for the sub-urban areas.
Alternative Hypothesis
H1: The specialty retail stores are not good for the sub-urban areas.

STASTICAL TOOLS
The statistical tool used in this study for analysis is z-test, as the sample size is more
than 30.
RESEARCH DESIGN
SAMPLING
SAMPLING METHOD: The sampling method used for the research purpose is
Stratified Random sampling which helped in defining the strata, then randomly
selecting the sample.

SAMPLE SIZE: The sample size taken for the study was 200, which includes Call
center executives, fresh graduates, Middle and Senior level executives and
housewives.



RESEARCH METHOD:
The tool used for the research was Interview method.
TOOL: The tool used for the data collection was Questionnaire.
A structured questionnaire was prepared and was administered personally.

SOURCES OF DATA COLLECTION:
PRIMARY DATA:
The primary data will be collected on the basis of questionnaire.
• Firstly there will be a set of questions for the consumers in Bangalore for
identifying their attitude.
• Secondly there will be a different set of questions for the people who stay in
the semi-urban areas about their beliefs.
• Thirdly there will be a different set of question for the local marketers on the
affect of these stores.
• Interview with the managers of these stores about what they feel about the
market of these stores.

SECONDARY DATA: Secondary data is collected from the business journals,
research reports and Internet.

SCOPE OF THE STUDY:
• The place covered for the study is only South East Bangalore, which includes
areas like Whitefield, Kormangala, Marathalli, Bannerghatta Road,
Electronic city, HSR Layout, Hosur etc.
• The survey is undertaken to know the buying behaviour only for clothing.



ASSUMPTIONS:
The annual income level’s are assumed as
• Call Centre professionals and fresh graduates - Rs. 96,000 to 2,40,000
• Middle and Senior level executives – more than Rs. 2,40,000
• Housewives – No income, but from families with good income.

LIMITATIONS OF THE STUDY:
• Strict boundaries were not followed in terms of data collection.
• Time given is very less.



ANALYSIS
Categories of respondents
⇒ Call center executives and fresh graduates 28%
⇒ Middle and Senior level professionals 46%
⇒ Housewives 26%

⇒ The sample interviewed were from different fields like Call center
executives, fresh graduates, Middle and Senior level professionals and
housewives wherein 46% of the respondents were Middle and Senior level
executives, 28% Call center executives and fresh graduates and 26% of
Housewives. The concept behind this was to have a set of diverse people in
the study living and working in South East Bangalore so that the result which
is derived from the study can be more accurate.

CATEGORIES OF RESPONDENTS

24%
Middle and Senior
Level Executives
48% Call Center and
Fresh Graduates
Housewives

26%



Frequency of shopping
⇒ The frequency of shopping varies as per the categories of the sample.
This is important for positioning of the product.

Frequency of Shopping

60%
52%
50%

40%
26%
30%
22%
20%

10%

0%
Once a week Once in a month Often

⇒ The analysis shows that around 52% people go shopping once in a week,
whereas 26% of people go very often for shopping.
⇒ The observation showed, Housewives usually go shopping twice in a
week, whereas call center and fresh graduates do shopping once in a
week usually weekends and Middle and Senior Executives go shopping
once in fortnight.



Preference of attributes while shopping
⇒ The attributes like – Price, Quality, brand and look & feel are considered
while making a purchase decision, to know what is more important for the
purchase.

ATTRIBUTES PREFERENCE

70%
58%
60%
50%

40%
30%
20%
20%
12% 10%
10%
0%
Price Quality Brand Look and Feel

The data collected shows that 58% of the people consider price as an important
attribute and while shopping the second is quality followed by brand, Where as the
least preferred is design.

⇒ Inference:
The data collected showed that people are very price conscious. This is the first thing
which the consumers look for when they go for shopping.
Further, it was observed that Call Center professionals and fresh graduates prefer low
price, whereas Senior Executives prefer quality and branded clothing for Housewives
look and feel is more important.



Preference of location for shopping
⇒ To know the preference of location as people go for shopping to main city
areas or nearby their work place or residents or any other specific areas.
⇒ The concept behind this is to identify where do the people go out for
shopping, whether they travel long distance and buy from city areas or they
do it in their own areas.

Location for Shopping

11%

41%
City areas
Nearby areas
Others
48%

⇒ As per the analysis, 48% of the respondents do their shopping in nearby
areas, where as 41% of the people prefer shopping from city areas.
⇒ Many people do not go to city areas for shopping so there is a wider scope for
the lifestyle stores in such kind of areas. And they also look for good variety
of clothes in their own area.



Place of Shopping
⇒ This question aims at finding out which store they prefer for shopping –
Factory outlets/exclusive showrooms, shopping malls or local shops.

Location for Shopping
50% 47%
41%
40%

30%

20%
12%
10%

0%
Factory Outlets Shopping Malls Local shops

⇒ The analysis showed that 47% of people make their purchases from factory
outlets/exclusive showrooms, whereas 41% of them from Shopping malls and
12% from local shops.



Consumers visits to Specialty retail stores

⇒ At this stage the respondents were screened to those who have visited and
those who have not visited a specialty retail store.

⇒ From the data we got 93 of the respondents had visited a specialty retail store
and 7 had not. The data is given below.

percentage of respondents actually visited
life style store

100 93

80

60
Series1
40

20 7
0
visited Not visited



Striking features
⇒ The question aims at the attributes that attracts the consumers to this stores,
that is to find out the striking features of the stores – Brands, Variety,
Convenience or Price.

Striking Features

40%
35%
35%
30%
30% 28%

25%
20%
15%
7%
10%
5%
0%
Brand Variety Convenience Price

⇒ From the analysis, it was found that variety and convenience are the most
preferred attributes or striking features of the stores.
⇒ From this we can infer that people are now looking for more and more
variety, availability of brands and convenience when they visit any store.



Price perception
⇒ This question aims to find out what is the perception of the consumers
regarding the pricing at these stores. It was to take their opinion about
whether the products sold by them are expensive or reasonable.

Price perception

70%
70%
60%
50%
40% 27%
30%
20%
3%
10%
0%
Very Expensive Expensive Reasonable

⇒ From the data collected it was found that 70% of the respondents are of the
opinion that the products are very expensive. Whereas 27% of the people
were of the opinion that the products are expensive and 3% said that the
products are reasonable.
⇒ The perception of the people is that these stores are very expensive. So the
stores should position themselves in the mind of the consumers in such a way
that these stores signify value for money, quality, provide excellent service
and relationship marketing should be followed.



Spending pattern:
⇒ The idea is to find out how much do people spend on shopping of clothes in a
month. Thus, the demand for such stores can be estimated.

Average spending per month

< 5000 62%
in Rs.

5000-10000 27%

> 10000 11%

0% 10% 20% 30% 40% 50% 60% 70%

⇒ From the data collected it was found that 62% of the people spend less than
Rs. 5,000 per month and 38% of the people spend around Rs. 5,000-10,000
per month.
⇒ From the analysis, its clear that the average spending is good enough for the
stores to be profitable.



Schemes and Offers
⇒ The idea behind this question is to find out whether the schemes and offers
drive the customers to the stores.

Schemes and Offers

13%

Yes No

87%

⇒ The results show that maximum of people would be driven to the stores
because of schemes, offers, discounts or sale and make the purchase decision.



Influencers
⇒ The idea behind this is to find out who are the influencers in the buying
decision process as they also have an important role to play in the buying
decision making process.

Influencers

60%
53%
50%

40%

30% 27%
20%
20%

10%

0%
Spouse Children Friends/Relatives

⇒ From the data collected it was found that 53% of the respondents get
influenced by their Children and spouse or friends/relatives play the
secondary role.

⇒ However, the friends score higher on influencing where the respondents were
bachelors.



Experience of the consumers

⇒ Through this question we try to identify what are the experiences of the
customer at these stores. And what do they perceive about these stores. It
helps us to find out their attitude towards these stores.

⇒ By the data collected it was found that around 56% of the people’s
experience was satisfactory and 20% of the people were extremely satisfied
and there were no dissatisfied customer.

⇒ Inference: by this we can say that people are really satisfied by these stores.
the variety in these stores and the services also play a very important role in
adding to the experience and ensure a second visit or recommendations to
other customers.

experience of consumers
56
60
50
40
30 20 17 Series1
20
10 0 0
0
SATISFACTORY

SATISFACTORY

DISSATISFIED

DISSATISFIED
NETURAL

EXTREAMLY
VERY



Do you think these stores can make you feel comfortable in sub-urban areas?

⇒ The concept behind this question is to see weather these stores are only
good in central city areas like highly crowded and commercial areas etc
or they also do well in semi-urban areas.

⇒ From the data collected it was found that 71% of the respondents said
that these stores can also do good business in sub-urban areas as these
people will not be able to go for leisure shopping during the weekdays
and most of the respondents do not prefer traveling as well as get into the
busy & crowded traffic during the weekends, they feel its waste of time.
Money and energy.

80%
70%
71%
60%
50%
40%
30%
20% 29%
10%
0%
Yes No



FINDINGS

• The people go for shopping frequently in suburban areas, especially on
weekends. There are only few people who do their shopping very often.

• The sample considered for the research is moving towards the new trends of
the new age and ready to accept the quick changes in the retail segment.

• The sample is moreover looking for the comfort and an easy way to hangout
as well as to shop.

• People have become more lifestyle oriented and brand conscious.

• Visiting and shopping in specialty retail stores has become a dignity and high
class showoffs.

• Family oriented people would like to take their family for a long drive so that
they feel comfortable and spent lot of time with the family.

• There is a segment which would like to shop during the weekdays as they do
not prefer entering crowded city malls and lifestyles.

• According to the real estate boom and the residential areas coming up in
these areas shows us a new ray of opportunity to these specialty retail stores.

• Word of mouth can spread faster in case of influencers being friends and
relationship marketing plays a very important role in spreading the word of
mouth as rightly said “one satisfied customer gets ten customers”

• The respondents who have visited life style stores are really satisfied and had
a good experience shopping there.

• The people really want these stores to come to sub-urban areas and here lies a
great opportunity for these stores to come and set themselves in these areas.

• As per the hypothesis it is also proved that this concept will do well in sub-
urban areas.



CONCLUSION:

Retail sector is growing full fledge against the hurdles like opposition from the left
parties and some sections within the Congress party is fending off the move. The
domestic trading community has also been lobbying aggressively against FDI on the
argument that it would hurt self-employment and lead to closure of many small
businesses. A study by the Associated Chambers of Commerce of Industry of India,
New Delhi, concluded that this would not happen for at least the next ten years.
Thereafter, the present fragmented system may get phased out or evolved into more
integrated networked units. This is already happening without FDI.

The government policy seems to be favourable with the Prime Minister Mr.
Manmohan Singh indicating that the government is yet to hit upon the right policy-
mix, but is certainly on its way to finding one soon. The policy for a measured
opening of retail sector is very much on reforms agenda and officials expect the move
to fructify before the PM's July visit to US.

The entry of foreign players would play an important role in how the industry shapes
up. While the current scenario certainly does not indicate the complete opening up of
the sector to FDI, the longer the entry is delayed, the greater the increase in scale,
resilience and competitive intensity of domestic retailers. This would provide an
opportunity for domestic retailers, who are still at a nascent stage to firm their base.
However, the extent would depend on how well these companies plan ahead and the
support they receive from the equity markets and other institutional investors.



`BIBLIOGRAPHY

• Marketing Research – Donald S. Tull & Del I. Hawkins
• Way 2 Wealth – Wealth Compass, June 2005 Issue
• Jones Lang LaSalle research reports

• www.joneslanglasalle.com



QUESTIONNAIRE

1. Name __________________________________________

2. Age _________

3. Occupation:

Call Centre Professional / Fresh graduates

Middle and Senior level executives

Housewife

Others please specify___________________

4. How often do you go for shopping of clothes?

Once in a month Once in a week Often

5. What do you look for, when you go to buy clothes and accessories?
Please rank

Price Quality Brand Look & Feel

6. Which areas do you prefer shopping your clothes?

City areas Nearby areas of work / Resident Other places

7. Where do you go for shopping?

Local shops Shopping malls Factory outlets/exclusive
showrooms

8. Have you ever visited specialty retail stores ?
Yes No

9. What really attracts you to these stores? Please rank

Brands Variety Convenience Price


A project report on identifying the opportunity for apparel retailing in south east bangalore

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