Retail IIPM Project

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CHAPTER - 1

INTRODUCTION

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INTRODUCTION

1.1 Retailing Overview

Retailing is one of the world’s largest industries. It is in a permanent state of change, and the
pace of this change has been accelerating over the last decade. From the marketing
perspective, retailers are, by definition, closer to the consumer than manufacturing
companies. Retailers represent the culmination of the marketing process and the contact point
between consumers and manufactured products. While retailing has long set buying decisions
as its highest priority and was very focused on the product assortment, it now follows a more
holistic approach to management and marketing and is seizing the opportunity to be
consumer oriented, engage in the personal contact with customers, gather information on
consumer behaviour and exploit insights into consumer behaviour and preferences. What was
once a simple way of doing business is transforming into a highly sophisticated form of
management and marketing. Retail marketing consistently features more efficient, more
meaningful and more profitable marketing practices.

Modern retailing has entered India in form of malls and huge complexes offering shopping,
entertainment, leisure to the consumer as the retailers experiment with a variety of formats,
from discount stores to supermarkets to hypermarkets to specialty chains. However, kiranas
still continue to score over modern formats mostly due to the convenience factor i.e. near to
their house.

This organized segment typically comprises of a large number of retailers, greater
enforcement of taxation mechanisms and better labour law monitoring system. It's no longer
about just stocking and selling but about efficient supply chain management, developing
vendor relationship quality customer service, efficient merchandising and even the labour
class is also in the working process timely promotional campaigns. The modern retail formats
are encouraging development of well-established and efficient supply chains in each segment
ensuring efficient movement of goods from farms to kitchens, which will result in huge
savings for the farmers as well as for the nation. The government also stands to gain through
more efficient collection of tax revenues. Network marketing has been growing quite fast and
has a few large players today. Gas stations are seeing action in the form of convenience
stores, ATMs, food courts and pharmacies appearing in many outlets.

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In the coming years it can be said that the hypermarket route will emerge as the most
preferred format for international retailers stepping into the country. Estimates indicate that
this sector will have the potential to absorb many more hypermarkets in the next four to five
years

List of retailers that have come with new formats:

Retailer Current Format New Formats
Shoppers’ Stop Department Store Quasi-mall
Crossword Large Bookstore Corner shop
Piramyd Departmental Store Quasi-mall, Food retail
Pantaloon Own brand store Hypermarket
Globus Department Store Small fashion stores

Traditionally, the kirana retailing has been one of the easiest ways to generate self-
employment, as it required minimum investment in terms of land, labour and capital. These
stores are not affected by the modern format of retailing. In order to keep pace with the
modern formats, kiranas have now started providing more value-added services like stocking
ready to cook vegetables and other fresh produce. They also provide services like credit,
`phone service, home delivery etc.

The organized retailing has helped in promoting several niche categories such as packaged
fruit juices, hair creams, fabric bleaches, shower gels, depilatory products and convenience
and health foods, which are generally not found in the local kirana stores. Looking at the vast
opportunity in this sector, big players like Reliance has announced its plans to become the
country's largest modern retainers by establishing a chain of stores across all major cities.

Apart from metro cities, several small towns like Nagpur, Nasik, Ahmadabad, Aurangabad,
Sholapur, Kolhapur and Amravati has seen the expansion of modern retails. Small towns in
Maharashtra are emerging as retail hubs for large chain stores like Pantaloon Retail because
many small cities like Nagpur have a student population, lower real estate costs, fewer power
cuts and lower levels of attrition.

However, retailers need to adjust their product mix for smaller cities, as they tend to be more
conservative than the metros. In order for the market to grow in modern retail, it is necessary

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that steps are taken for rewriting laws, restructuring the tax regime, accessing and developing
new skills and investing significantly in India.

This chart is showing three lines mainly, overall retail sales; food, beverages and tobacco
segment sales and clothing sales. And here researcher’s focus is on clothing segment. So let
now discuss about apparel industry. As we know apparel is one of the basic needs of any
person. And now in India, either a rural person or an urban person, all prefer these easy and

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comfort retail formats for them. As a research conducted by KPMG/research firm; in India, in
rural segment there is a 61% spending and in urban market, there is 39% spending.

Indian Organized Retail is set to explode with Food & Lifestyle retail as major segments

And apparel industry is also one of these SBU’s; so definitely these all things make it more
valuable than others.

India is on the radar screen in the retail world and global retailers and at their wings seeking
entry into the Indian retail market. The market is growing at a steady rate of 11-12 percent
and accounts for around 10 percent of the country’s GDP. The inherent attractiveness of this
segment lures retail giants and investments are likely to sky rocket with an estimate of Rs
20-25 billion in the next 2-3 years, and over Rs 200 billion by end of 2010. Indian retail
market is considered to be the second largest in the world in terms of growth potential.

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TABLE –1 India Retail - Share of Categories (per cent)

2003-04 2004-05 2005-06 2006-07

1. Food & grocery 66.4 62.5 61.7 59.6

2. Beverages 2 2.7 3.1 3.6

3. Clothing & 7.3 8.8 8.6 9.3
footwear
4. Furniture,
4.8 5.8 6.2 6.8
furnishing,
appliances &
services

5. Non- 9 8.6 8.5 8
institutional
healthcare
6. Sports goods,
2 2.4 2.6 2.7
entertainment,
equipment &
books

7. Personal care 3.5 3.8 3.9 4.2

8. Jewelers, 5 5.4 5.4 5.9
watches, etc

Total Retail 100 100 100 100

Source: http://www.expresshospitality.com/20080615/management07.shtml

1.2 Apparel Retailing

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The order of present day business being global, a constant adaptation and reinvention of
marketing strategies is imperative so as to face the challenge of satisfying the local customers
in the global markets. In the Retail sector, India is currently witnessing tremendous growth;
but there has been a dismal performance by many owing to the fact that Westernised formats
in India have been blindly followed and replicated without considering the abysmal
differences in all types of macro and micro environmental factors. So it is obvious that we
need to find out some solutions for the retails in India, keeping in mind the intrinsic
differences in the people across the country in terms of culture, economic condition, purchase
attitude and so on. This paper attempts to highlight the differences in Retail Purchase Factors
across customers and suggest a way out for effective marketing & assortment for apparel
outlets with local orientation.

Keywords: Retail, Purchase behaviour, Consumer behaviour, Proximity, Price, Product
Assortment, Ambience, Service, Communication

A smart product mix is vital for the apparel supply chain

Style, fashion and brand image all capture the imagination of consumers shopping for value
in apparel items. However, increasing the product mix to ramp up market share can also lead
to operational losses and non- fulfilment of the delivery schedule.

Increasing market expansion and fashion volatility are all intensifying competition in the
apparel chain, and companies are being forced to diversify their products in an attempt to
improve market share.

This diversity is largely determined by attributes such as design, handle, size and fit - and
leads to a correspondingly wide spectrum of upstream manufacturing parameters and small
batch sizes. These, in turn, are major hurdles in meeting delivery schedule and quality
standards, which severely affect the marketability of a brand.

It's a typical problem faced by apparel supply chain, where the scheduling of work becomes
complicated by the introduction of a highly diverse range of products.

This complexity makes it more difficult to manage a given product basket in terms of time,
cost and serviceability. Moreover, product replenishment in the apparel supply chain assumes
a new dimension, as global sourcing becomes the order of the day with raw material supply;
manufacturing, distribution and retailing all are dispersed across the globe.

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Under these circumstances it becomes mandatory to "get the right product to the right place at
the right time at the right price."

Factors Affecting Replenishment

Replenishment of merchandise is dependent on:

1. Type of merchandise

2. Type of store

3. Storage capacity of the store

4. Lead times for supply of goods

5. Rate of sales

6. Relative stock positions across the chain

7. Planned marketing activity

8. Ensuing events like seasonality

9. Beginning, Mid or end of season

Basic Concept on Replenishment

There could be SEVERAL other factors like commercial contracts, priority
on stores etc. that affect the replenishment

Fundamentally replenishment is driven by standard replenishment models and variables

• Minimum stocks

• Maximum stocks

• Re-order point

• Re-order quantity

• Economic order quantity

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• Lead time for replenishment

Effect of Merchandise Type on Replenishment

Fashion retail best practice is to:

• Categorize entire merchandise into:

1. Regulars - Carried through all seasons

2. Seasonal - Carried through one or two seasons

3. Fashion - Carried only once and only one delivery is expected

Apparel fashion has always changed no matter what category of apparel it is, and men’s
business wear is no exception. Social forces are believed to influence fashion including

Replenishment efforts in terms of Min / Max / EOQ etc. is set ONLY for Regulars and a
few Seasonal

men’s. Ones spouse, family and culture are some of the forces that change fashion.

An example of ones spouse influencing an individual, when he buys apparel, is that she may
accompany him and offer suggestions when he purchases items of apparel. A male
consumer’s family and culture can influence his purchase decision because of the social
interaction he has with them, including whether his dress is acceptable to the group.

Identification of the role of apparel as a sign of business success is not a new concept. A
review of related literature revealed that self-image/product image congruity was related to an
individual’s behavior to a particular item and that apparel products had symbolic meaning.
Studies have considered the relationship between the self and apparel and have taken into
account the various aspects such as actual self-image and ideal self-image. If the image of an
outfit were a positive match with the self-image, including both the actual self and the ideal
self, the apparel item would be worn most of the time.

The Multi-Fibre Agreement (MFA), that had governed the extent of textile trade between
nations since 1962, expired on 1 January, 2005. It is expected that, post-MFA, most tariff

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distortions would gradually disappear and firms with robust capabilities will gain in the
global trade of textile and apparel. The prize is $360 bn market which is expected to grow to
about $600 bn by the year 2010 – barely five years after the expiry of MFA. An important
question facing Indian firms is whether their capabilities and their diverse supply chain are
aligned to benefit from the opening up of global textile market?

The history of textiles in India dates back to the use of mordant dyes and printing blocks
around 3000 BC. The diversity of fibres found in India, intricate weaving on its state-of-art
manual looms and its organic dyes attracted buyers from all over the world for centuries. The
British colonization of India and its industrial policies destroyed the innovative eco-system
and left it technologically impoverished. Independent India saw the building up of textile
capabilities, diversification of its product base, and its emergence, once again, as an
important global player. Today, the textile and apparel sector employs 35.0 mn people (and
is the 2nd largest employer), generates 1/5th of the total export earnings and contributes 4 per
cent to the GDP thereby making it the largest industrial sector of the country. This textile
economy is worth US $37 bn and its share of the global market is about 5.90 per cent. The
sector aspires to grow its revenue to US $85bn, its export value to US $50bn and employment
to 12 million by the year 2010 (Texmin 2005).

In the Indian Market so many National as well as International brand in different apparel
segment which include:

 Corporate Wears

 Ethnic Wears

 Sports Wears

 Casual Wears

Players in Apparel market

As we have discussed that there are so many players are ruling in the Indian apparels
industry out of which some players are national Players & some players are of International
standards

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Every player have their different product portfolio in a particular apparel segment Or there
are many players in each apparel segment which we have discussed above i.e.
corporate/formal wears, ethnic wears, Sports wears & casual wear segment

Players

 Corporate Wear’s segment

 LOUIS PHILLIP

 JOHN PLAYERS

 PROVOGUE

 PETERENGLAND

 PARK AVENUE

 DONEAR

 MAYUR

 Casual Wear’s Segment

 SPYKAR

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 PEPE

 LEECOOPER

 MONTE CARLO

 LEVIS

 CHARLE OUTLAW

 KOUTONS

 DUKE

 COTTONCOUNTY

Ethnic Wear’s Segment

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 TIMBERLAND
 LIBAS
 FAB INDIA
 MILLIONAIRE
 HERITAGE
 DIWAN SAHEB
 AMARSONS
 SIYARAMS
 VIMAL
 CAMBRIDGE

Sports Wear’s Segment

 REEBOK

 NIKE

 ADIDAS

 FILA

 YONEX

 HEAD

 PUMA

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 POLO

1.3 In Apparel Segment and Merchandise Assortment Planning

• Merchandise planning. The most critical decision in any consumer goods value
chain is which merchandise to stock. But this decision, although ultimately driven in
retail by the buyer’s judgment, must draw on data and analytics that evaluate, based
on historic demand) the relative likely revenue and margin resulting from different
merchandise portfolios, and test the feasibility of the portfolios against constraints
such as store space or labor availability or the firm’s available working capital.

• Size optimization. For retailers selling footwear or apparel a statistical understanding
of the distribution of sales by size by store is vital in order to meet consumers’ needs
and avoid mark downs and stock outs. It’s well known that consumers’ sizes vary
from one region or to another, with North Indians for example in general being taller
for example than population from the North East region of India but retailers need
powerful sparse data analytics to plan for the differences in populations that visit
urban and out of town stores.

• Space optimization. Retailers provide space in stores in proportion to their expect
sales and margin for each merchandise item. But the complex tradeoffs between
affinity items, with different margins and attracting different promotional funds
simply demand an enterprise analytic approach rather than single user planning tools.

• Revenue optimization. For retail, decisions about pricing and mark downs are
critical to the achievement of financial goals and while analytics are widely deployed
to understand the likely overall impact for example of a promotion on volume and
profit the real challenge is to solve simultaneously the merchandise assortment,
pricing optimization and space management for each store within the retailers’ supply
chain and working capital constraints

• Pack optimization. Pack optimization balances the complex cost and velocity trade
offs at different points in the supply chain between moving only highly aggregated
quantities, for example pallets and shipping highly disaggregated units. For example
single SKUs or Stock Keeping Units.

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Issues such as what merchandise to purchase and in what quantity, are of strategic
significance to every retailer, especially for the multi-store retail chains of today. For
decisions on these matters, a thorough plan called a merchandise assortment plan has to be
adopted.

And as clothing is one of the basic needs of every person. So definitely apparel industry has a
wide scope. That’s why right now many players are operating in this industry and new
players are also coming. So competition is also increasing in this industry day by day. And as
retailing environment is emerging now a days and Indian economy is also developing so a
wide range of fashionable and trendy clothing is available now and customers have a lot of
options in their hand that’s why it is essential for every retailer to position themselves as a
different and best option for customers.

For every industry, its product range and varieties are the best way to attract and retain
customers. That’s why this concept of merchandise and assortment planning emerged and
now most of retail organizations focusing on this for being alive in the market. The retailer
must make decisions regarding the merchandise offered depending on the sales targets and
financial objectives of the store. Merchandise comes in a variety of sizes, colours, makes and
models. Retailers should be very careful while deciding on the amount of stock to be
maintained in each category, if large stocks are maintained in a particular category, there may
not be sufficient resources left for providing a deeper assortment of goods. Hence, the retailer
should establish a trade-off between the type of categories or assortment and the inventories
being maintained. This is called merchandise assortment planning.

An assortment plan depicts what should be carried in a specific category of merchandise. An
assortment plan for a merchandise category based on fashion will not identify particular stock
keeping units, because fashions vary from year to year and sometimes, from season to season.
The more fashion-oriented the merchandise category is, the more necessary it is for the
merchandise planner to accommodate changes in fashion, and hence, the lower the level of
detail in the assortment plans. The starting point for developing an assortment plan for a
given season is the historical data for a particular merchandise category. Apart from the
assortment plan for a merchandise category in the previous season, sales, inventory turnover
and GMROI (Gross margin return on inventory investment) figures are used to develop an
assortment plan for the current season. The merchandise planner then makes the required

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changes according to his expectations of what products or fashions will be really significant
for the coming season.

TABLE- 2

Assortment Plan For Boys’ Jeans

Style Straight-leg Straight-leg Straight-leg Loose-fit Loose-fit

Retail price 999 1399 1799 1299 1599
(in Rs.)

Type of Regular Stone Tinsel- Broken twill Over dyed
Fabric denim washed Lyera based
denim denim

Colours Light blue Dark blue Light blue Light blue Blue

Black Indigo Black Black Black

Black Deep blue

Figure: Assortment Plan for Boy’s Jeans at Spykar

Source: Data collected from Spykar team.

This plan describes general styles, price levels, fabric composition and colours. The process
of developing an assortment plan can be quite complex, especially in multi-store chains like
Shoppers’ Stop, Pantaloons or Food World. An effective assortment plan requires equal or
more effective sales, inventory turnover and GMROI forecasts, to complement the
experienced judgment of the merchandise planner.

1.4 RESEARCH PROBLEM/OBJECTIVES OF THE STUDY

The study was performed aiming at the following objectives:

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Primary Objective of the study-

• Understanding the merchandise assortment planning concept and process adopting by
apparel outlets at Chennai.
• To study about customer’s preferences towards it.

Associated Objectives-

• To know about the factors influencing inventory management decisions of different
apparel outlets.
• To study competition between apparel industry and strategies followed by them to
overcome from it.
• Grasping the knowledge about how customers take these decisions taken by retailers
and its then their response towards it.
• Analyzing that difficult situation of operating business for apparel outlets in quick-
changing market conditions, competition and entry of big giants in this segment.

And apart from these all stated objectives my first and foremost objective was to acquire the
practical knowledge about the Merchandise Assortment Planning like how these retailers do
this process for their survival and how they fulfil demands of customers.

1.5 LIMITATIONS OF THE STUDY

• Time constraint- The major limitation of this project is the time period for this thesis
because it is not possible to look in to each and every aspect of Merchandise
Assortment Planning in such a short span of time.

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• Because all research is related to Chennai city only and here a limited scope is
available for these types of studies.

• Sample for the study taken is of only 100 consumers. Which can also act as a
constraint in the study

• People whom data will be collected can be biased on some time and because of lack
of awareness and lack of knowledge people can give wrong opinions.

• Since the results will draw on the basis of Information which will be provide by the
respondents; chance of response error might possible. Disinterest of customers may
generate non response while collecting data.

1.6 BENEFITS TO THE STUDY

i. To Self-
• Knowledge earning.

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• Gaining practical exposure to Merchandise Assortment Planning.
• Gain knowledge about customer preferences.

ii. To company-
• This report will be beneficial for companies and outlets too because from this
report they get to know about their customer’s preferences.
• From this report they will get the knowledge about required changes in their
strategies and customer base.

iii. To customers-
• They will get to know about retailer’s strategies and their work process.
• From this report they can say their views and their opinions about these
retailing strategies, so it is beneficial for them to make all required changes in
system.

CHAPTER - 2

LITERATURE SURVEY

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LITERATURE REVIEW

According to Torex, a Merchandise Assortment Planning firm, in its online journal says that,
merchandise Assortment Planning provides planners with everything they need that helps to
analyze efficiently and in a customer-centric manner. From store layout and sizing to packing
and allocation, the tools in the application help buyers give their customers the right product
in the right place at the right time. Perhaps most importantly Assortment plan helps in giving
customers and rich experience with continuous availability of fresh and appealing products.

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This results in lower inventory costs, lower markdown and increased sales. Retailers need
their products to fit their demographics. Stores with different climates need to carry different
products; thus Assortment plan must be done in different seasons. While customers expect
this, it’s hard for retailers to achieve with basic spreadsheets. Normally merchants plan
ranges based only on the size and sales of the store.

With Merchandise Planning, buying and merchandising teams maintain consistency, both
with their business processes and their execution. All of this adds up to decreased supply
chain management costs, lower markdown costs, increased sales and margins and a
competitive edge.

Merchandise Planning allows buyers to take customer demographics into account when
planning ranges. They can create assortment ranges by store as well as by store attributes.
They can also plan different delivery dates to allow for seasonal differences.

Source: http://www.torex.com/uk/docs/enterprise-solutions/TXDS_MPLENA4_1008_lr.pdf

Surinder mishra in his article India third most attractive market for apparel retailers has
found that India has emerged the third most attractive market destination for apparel retailers,
according to a new study by global management consulting firm AT Kearney. India comes
after Brazil and China in the AT Kearney Retail Apparel Index, which looks at ten drivers,
including apparel consumption and clothing imports/exports, to rank the top 30 emerging
markets for retail apparel investments. "In India, apparel is the second largest retail category,
representing 10 percent of the $37 billion retail market. It is expected to grow 12-15 percent
per year," said Hemant Kalbag, principal of Consumer Industries & Retail Practice, AT
Kearney India.

Gabay Gillie (2009):- The purpose of this paper is to empirically test the consumer-centred
approach to brand management theorized by Rust, Zeithaml and Lemon in 2004 to assist
companies in reducing the depreciation of brand equity. Brand equity was operationalized in
the context of conjoint measurement. In total, 5,364 respondents participated in interviews
testing drivers of brand equity for six brands each in apparels. It was found that brands did
not hold much beyond their name. Companies holding strong brands will need to define

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product design & Faison in terms of their perceived functionality across consumer cutting
edge methodology to test mindset segmentation by combinations of product features as a new
basis for brand management was used. In contrast to traditional segments Companies are to
build and position brands around customer segments. The study focused on brands in the
textile industry requiring the replication to additional industries. Data from the large-scale
study revealed that across categories brand value may not hold much beyond the name in the
minds of consumers. It was found that mindset segmentation may be a basis for brand
management. Messages that focused on product functionality were found to be stronger
drivers of preference of one brand over another. Product quality & design instead of brand
names emerged as the primary source of value across segments.

Kwan C.Y. (2004): This paper explores young Chinese consumers’ decision-making
behaviour towards casual wear purchase in Mainland China. Specifically, it offers empirical
results on the relationship between consumers’ decision-making styles and clothing choice
criteria towards buying casual wear. The Consumer Style Inventory (CSI), developed by
Sproles and Kendall (1986) for examining different consumer decision-making styles, was
adapted in this study. A questionnaire survey was employed as the tool to collect primary
data and the research instrument was administered to 161 University students in Shanghai,
Beijing and Guangzhou in the Mainland. The results show that six decision-making styles
(recreational and hedonistic consciousness, perfectionism consciousness, confused by over
choice, habitual and brand loyalty, price and value consciousness, and brand and fashion
consciousness) were found in the Mainland

CHAPTER - 3

RESEARCH METHODOLOGY

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3.0 RESEARCH METHODOLOGY

For the perfect thesis one has to know each and every aspect of the concept thoroughly. And
then for merchandise assortment planning one has to get update with the latest trends and all
factors which are continuously affecting these decisions. So acquiring the data regarding this
I gone through by several things like:

 Books;
 Magazines;
 Journals; and
 Web site.
In order to understand the merchandise assortment planning process, as per the objective
stated, the various steps which are to be followed are given below:

a) Planning the research design.
b) Selecting the research method.
c) Selecting the sampling procedure.
d) Data collection.
e) Evaluating the data.
f) Preparing and presenting the research report.

3.1 RESEARCH DESIGN

Research design essential because it facilitates the smooth flow of various research
processes. In order to get the appropriate results on a clearly defined research topic, the
design chosen by the research is exploratory in nature.

Exploratory studies: This research is carried out to make the problem suited to more precise
investigation or to frame a working hypothesis from an operational prospective. It is not used
in case where definite result is desired as in our research case where only impact is to be
studied.

This research was conducted using both qualitative and quantitative technique.

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As a part of exploratory studies the secondary data is being collected since this topic is very
highlighted in all over India and the sector growth is also very rapid. On the basis of that in
Chennai context this research is an attempt to know the perception of Chennai people and the
apparel store retailers.

3.2 RESEARCH METHOD

After developing an appropriate research plan, it is important for the researcher to select a
proper research method. For this research, the research method chosen by the researcher are
secondary data and survey methods.

a) Primary data: These are those data which are collected afresh and for the first time,
and thus happen to be original in character. I would be using the structured
questioners.
b) Secondary data: These are those which have already been collected by someone else
and which have already been passed through the statistical process. I have collected it
from the sources like internet, published data etc.

Surveys: This is a research technique, which is used to gather information from a sample of
respondents by employing a questionnaire.

These surveys will be conducted among the:

• Apparel store retailers,
• Customers,

And all the sources I got to know by the proper guidance and immense knowledge and
experience of my faculty supervisor. So these are the main sources of my project study.

3.3 SAMPLING PROCEDURE

Sampling is generally a part of the research design but is considered separately in the
research process. Sampling is a process that uses a small number of items or a small portion
of a population to draw conclusion regarding the whole population. For this research the
sampling method chosen is simple random sampling and Convenient Sampling.

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Since in Chennai, only few organized apparel outlets is their so the unorganized retailers also
being chosen for interviews and customers are chosen at random.

Sample Size: Sample size is around 5 for apparel outlets to study their merchandise
assortment planning and 90 for customers to understand their preferences, 5 for Experts
interview totally 100.

Sampling Unit: Colorplus, Derby, Raymond, Spykar and Adidas

Sampling Area: I have Chosen Chennai.

3.4 DATA COLLECTION
After preparing a suitable sample, the researcher collects the data from the units in this
sample. As stated above that research method which is used in the research comprises of
surveys therefore data collected is of primary in nature and partly secondary since secondary
data also be taken.

3.5 EVALUATING AND ANALYZING THE DATA.

This step includes editing, coding, tabulation and processing of collected data. The Schedules
are required to be edited during the field survey for necessary corrections. After the survey
was complete they are required to be checked again for completeness, accuracy and
uniformity.
The next step was coding. Different categories were identified into which responses are
classified. Then tabulation was done. Data was sorted into different categories and numbers
of cases that belong to those categories were counted.

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PROCESS FLOW OF THE PROJECT

DESIGN OF QUESTIONNAIRE

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PILOTING BASED ON
QUESTIONNAIRE AFTER FEEDBACK

REDESIGN THE QUESTIONNAIRE

QUALITY CHECK

GETTING QUESTIONNAIRE FILLED

CORRECTION OF DATA

DATA ENTRY

DATA CLEANING

ANALYSIS

FINDINGS, RECOMMENDATIONS &
CONCLUSION

Digram-1 - P R O C E S S F L O W O F T H E P R O J E C T

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CHAPTER - 4

DATA ANALYSIS AND INTERPRETATION

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4.1 Data collected after survey

 Researcher went to all those sample units for collecting data and found data from
direct interviews and surveys from customers and retailers.

Interview with Colorplus Ambattur factory outlet manager:

Address of the Factory outlet

(C10, Ambattur Estate, Chennai, Tamilnadu-600058)

4.2(a) Mr. Rajeev (Colorplus Merchandise Manager) has addressed on the topic that
How Merchandising Assortment planning is carried out in their outlets.

ASSORTMENT PLANNING: It involves determining the quantities of each product that
will be purchased to fit into the overall merchandise plan. Details of colour, size, brand etc
have to be specified.

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The aim of the range plan is to create a balanced range for each category of products that the
retailer chooses to offer. Good range planning should essentially take care of the following:

 The number of items/options available to the customer should be sufficient at all
times and should be such that it helps the customer make a choice.
 The range planning process should ensure that overbuying and under buying is
limited.
 Sufficient quantities of the product are available, so that all the stores can be serviced
and the product should be available at all stores across various locations.

Colorplus Model stock plan:

It gives the precise items and quantities that need to be purchased for each merchandise line.
To arrive at the model stock plan, we needs to identify the attributes that the consumer would
consider while buying the product, then decide on the levels under each attribute and finally,
allocate the total money available or the units to the respective item categories. The following
e.g.: illustrate the steps involved in preparing a model stock plan:

Colorplus has allocated Rs.1 lakh for buying of shirts. Assuming that the purchase price of
each shirt is Rs.100, he will be able to stock 1000 shirts in the store.

Step 1:

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The first thing that is we need to do is identify which factors affect the
customers buying decision and the number of levels under each attribute.

Step 2:

Identify the number of levels under each attribute. Merchandise manager
identifies the following attributes and the levels:

 Type of shirt (Dress, Casual, Formal, Sport)
 Size (small, medium, large, Extra large)
 Sleeve Length (Full Sleeves, Short Sleeves)
 Collar Type (Seville, Button down)
 Colour (White, Blue, Cream, Grey)
 Fabric (Cotton, cotton blend)
Step 3:

The third step is to be allocating the total units to the respective item categories. Thus the
units that are recommended for each item are into direct proportion to the estimated demand
patterns.

MODEL STOCK PLAN IN COLORPLUS:

Source: Colorplus Ambattur factory

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MERCHANDISE FORECASTING IN COLORPLUS

Forecasts are projections of expected retail sales for given periods. Is tomorrow’s expectation
based on yesterday’s achievements and today's plan is the foundation of merchandise plans.

 TYPES OF FORECASTS include

 Overall company projections
 Product category projections
 Item-by-item projection
 Store-by-store projections

One way to forecast sales for narrow categories is to project sales on a company basis and
by department and then to breakdown figures judgmentally into merchandise classifications.

STEPS

1. Reviewing past sales- necessary to establish if there is any pattern or trend in the
sales. It gives an indication of sales in the current and future period.
2. Analyzing the changes in the economic conditions- Economic conditions have a
direct link to the consumer spending patterns. Economic slowdowns or increase in
unemployment all affects business.
3. Analyze the changes in the sales potential- It is necessary to relate the
demographic changes in the market to the store and the products to be sold.
4. Analysing the changes in the marketing strategies of the retail organization and
the competition- is there a new line of merchandise to be introduced, existing store to
be remodelled. All these factors to be taken into consideration.
5. Creating the sales forecast- After taking into consideration the above mentioned
points, an estimate of the projected increase in the sales is arrived at.

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The external factors, internal factors and the seasonal trends must be anticipated and taken
into account.

External factors (consumer behaviour, competition, economy and demography)

Internal factors (addition and deletion of product claim, revised promotion, credit policy,
changes in hours of work) and seasonality. After a yearly forecast is derived it should be
broken into quarter or monthly.

BENEFITS

• Reduce the cost of inventory- We can avoid under stock and overstock.
• Helps in setting sales target.
• Helps in forming suitable advertisement and promotion programs.
• It helps in forecasting short term financial requirements and long term financial
requirements.
• Helps in planning man power requirement.
• Helps in planning of a new store or expansion of an existing store.
• Helps to reduce the business risk.
• Thus it helps to earn maximum profit.

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4.2(b) Raymond Apparel outlet

According to Mr.Devendra G.Mehta, Store Manager of Raymond’s branch Doveton, “as
technology advanced, a shift in consumer decision making influenced buying patterns. With
the ability to research and purchase any commodity including apparels online, many
consumers are no longer content to simply choose from a given selection in a particular store.
Thus it becomes important for retailers like us to give the maximum number of variety to the
consumers. The first challenge for retailers is to identify consumer preferences as accurately
as possible. This can be done by capturing decision-making data from a variety of resources,
ranging from in-store product performance to social networking options. We use this
information to create differentiated, customer-appropriate, and profitable assortments.”

He also said that they use specific software for assortment planning. This software offers the
ability produce flexible, customizable solution. Assortment planning technology can sift
through multiple options to generate plans based on product hierarchy or product attribute,
such as theme, collection, promotions etc... The software Raymond use can also calculate
optimal quantities based on space, rate of scale, initial distribution, and other user-defined
parameters.

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4.2(c) Mr.Balajiram
Adidas Store manager, Purasawalkam

In our company we follow Integrate chain level Merchandise and Location planning
processes weekly. It means Merchandise & Store Plans feed the Store groupings and
Assortment plans, for complete integration. Building targeted assortments based on customer
focused location groups Plan assortments using placeholders and defined items is the key to
our success. Assortment plans are initialized from targets and changes are spread down to
item by store group to provide an accurate plan with very few entries. System generated item
counts and plan based seeding keep assortments focused. Our Allocation Strategy allows
users to look at the full assortment in advance of allocating, and after each allocation.
Continuous review and updating original assortment plans by location group to reconcile with
the latest store performance has enabled our merchandise much more efficient and effective.

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4.2(d) Mr. Sanjeev
Spykar Store Manager, Nungabakkam

Our Integration with Merchandise & Store plans means that assortment roll-ups can be
compared to higher level plans as changes in the assortment. We generate recommendation of
items needed to meet plans or fit constraints. Group locations are usually based on attributes
such as volume, space and climate to tailor assortments to different customers. We manage a
product workflow and select a size profile that will optimize order constraints with store size
need. Methods we follow to execute allocation using a best aligned with item has been an
intangible asset for the store. Managing In-season Merchandise & Store projections has made
us so distinctive in terms of customer service. Advice from specialist consultants with years
of merchandise & assortment experience has developed best practice workflows. Systematic
approach of our merchandise assortment is definitely a competitive edge in this competitive
trend.

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4.2(e) Mr.Ajay
Derby Store Manager, Nungabakkam.

Planning by merchandise delivery is too complicated. Merchandise plans are broken down by
seasonality or launch collections, so that new and key item Assortment plans can be driven
from higher level plans. Reviewing the assortment by multiple attributes (such as colour and
fabrication) is dynamic yet simple for practice. Assortments are tailored to different climatic
zones, and distribution timings which are then offset by store group. Reviewing Allocations
of co-ordinate & linked items is a standard step before release of the allocations, meaning co-
ordinates are correct by store and exception filtering allows for immediate attention or
correction. The workflow integrates all modules transparently, so the user never needs to
move out of the workflow steps. This has made our presence in better service category and
customers as well acknowledged it very strongly.

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4.3 Questionnaire for Retailers

Q.1. Tell me something unique about your outlet and brand and about your vision and
mission?

BRANDS RETAILERS ANSWERS
John players King of apparel giving more offers and
excellent promotional strategies makes
different among the competitors.
Peter England The outlet prides itself on quality,
assortment and detail.
Adidas Universal Appeal and a very popular
logo that signifies better quality.
Reebok Lifestyle sports casual appeal, good
service signifies the outlet.
Spykar Many factors such as fair publicity,
affordable prices, suitable range of
colours and comfort that signifies the
outlet.

Venfield We offer a very broad assortment, with
continual flow of newness that makes the
outlet different.
Cotton County Youth spot. Different variety with low
price casual wear.
Colorplus Good promotional strategies to attract
customers and in terms of quality our
Brand is the best.
Kenith Parker Different variety with low cost signifies
the outlet.

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Derby We give our customers the latest
fashions at truly affordable prices.

So these all apparel outlet have their own identification in market by their own
brands, their own products features, varieties. And these all things give them
competitive advantage and customers are also satisfied with them.

2. Which is your target market and what you doing to capture it?

Ans. - As given in above question’s answer, these all retailers have their own target markets
and their all efforts are focused on capture as high market share as possible.

TARGET MARKET VARIOUS BRANDS

Formals John Players, Peter England.

Casuals Adidas, Reebok, Spykar, Cotton County.

All family apparel market Kenith parker, Color plus, Venfield, Derby.

Children’s market Gini & Jony, Lilliput.

And they are adopting so many strategies for it, like pricing strategies, promotional strategies
and most important merchandise assortment planning decisions.

Q.3. Before taking decisions about your product varieties and range (Merchandise
Assortment Planning), what factors you considered?

Ans. - For selecting what and how much merchandise they have to purchase and they have to
keep in their organization, they considers mainly-

 Financial Objectives
 Customer’s preferences and demand
 GMROI figures
 Retail brand’s image and good will
 Seasonal demand and fashion

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Q.4. Is there any proper strategy you are adopting for these decisions?

Ans. - Some stores have their own strategic plans for capturing market and company’s
management also helps these store owners in strategic planning. As all brands have their own
vision and mission so mainly these apparel store owners also adopting same strategies for
them. But as all customers have their own specialties so these retailers also have to change
their strategies according to their own localities.

As these retailers are getting their own sales plan for every year and for every month from
companies. Then they make some modifications in the plan according to the local
circumstances.

Q.5. Is it important to make a prior planning or strategy for merchandise decisions? And if
yes then why?

Ans. - Without any planning or strategy, we can do any work but for be assure about the
work’s success we should make some planning or strategies. Same is applicable in business
context also. And merchandise decision is not a small aspect for any retail organization.
Merchandise is the most important part for apparel industry. It shows the image of the
company, the vision of company, customer’s satisfaction or dissatisfaction.

So for create a good image in customer’s mind and for capturing most of the market share,
they have to make a prior planning.

Q.6. Are you facing any kind of problems or difficulties for these decisions and planning
because I think in a city like Chennai, it is not possible to keep a deep variety and we can’t
keep a limited range of variety also because of quickly changing customer’s preferences and
competition?

Ans. - Yes this thing is also very important for any apparel retailer. Sometimes because of
brand’s image and influencing customers they have to keep that merchandise also which have
no demand in market but often they prefer only that merchandise which has demand in local
market.

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Q.7. Are all decisions related with your outlet’s merchandise are independently taking by you
or is there any interference or support by company’s side also?

Ans. - From the above question it is clear that local retailer got support from company side
too for their strategies and planning and they make some changes according to the local
circumstances for their merchandise assortment planning.

Q.8. Do you think your plans are going well according to your expectations?

Ans. - Different approaches are followed by the retailers. As, Adidas, Reebok, John Players
these are some of the outlets, which consists of high range of products with maximum prices.
So in Chennai, customers sometimes prefer and sometimes do not prefer these types of
clothing because of its high prices. And others retailers as Cotton County, Derby, have low
range products also and people of Chennai like these products much so these retailers enjoy
more price than high price showrooms in Chennai.

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4.4 Questionnaire for Customers

TABLE-3

Q.1. From where you prefer to buy apparels-

a) Any traditional store (unbranded) or
b) A branded retail outlet.
Ans. - Mostly people from Chennai prefers branded clothing. 55 people from total 90
customers said this. And others prefer unbranded and traditional store clothing.

Customer’s Preferences Percentage

Branded 61

Unbranded 39

CHART-3

Inference:

From the above statistical information it is clearly visible that people are more conscious
about the brand they buy. So, they indulge in spending their valuable money on buying
branded apparels rather than shelling money on un-branded apparels. In my intensive
research, I have found that 61% of people choose to buy clothes from branded outlets.

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TABLE-4

Q.2. What factors you are considering before taking any apparel purchasing decision, most-

Ans. - As research is being conducted in Chennai so, here most people prefers Quality factor
is most important thing for them. And they can compromise with Price but they want
fashionable and good looks items.

Most affecting factor for purchase No of people

Price 24

Quality 43

Variety 7

Looks 5

Fashion & Trends 11

CHART-4

Inference:

From the research undertaken by me, I found that the people are more concious towards the
quality of the apparels they buy. They also give more importance to the price of the product
which may be influenced by the present recessionary condition. Other notable factors that
affect the purchasing decisions are Fashions & Trends, Variety and Looks.

TABLE-5

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Q.3. Are you satisfied with the services and varieties of products provided by these apparel
outlets?

Ans:-

Choice of Customers No.of.Customers

Highly Satisfied 17

Satisfied 34

Neutral 25

Dissatisfied 9

Highly Dissatisfied 5

CHART-5

Inference:

From my research I have found that the consumers are quite satisfied with the purchase.
Important thing is that they are getting large categories with low prices because of high
competition. So customers are satisfied with all these retailing scenario because it is in favour
of them.

TABLE-6

Q.4 Which apparel outlet you prefer most for buying clothing? (To college students)

a) Spykar

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b) Ven field
c) Adidas
d) Reebok
e) Kenith Parker
f) Color plus
g) Derby
h) Cotton County
i) Or any other organized or unorganized retail outlet
Ans.-

Favourite outlet(to college students) No. of male Youth

Spykar 4

Ven field 11

Adidas 5

Reebok 7

Kenith Parker 6

Color plus 18

Derby 16

Cotton County 14

other organized or unorganized retail outlet 9

CHART-6

46

Inference:

From the research I have found Color plus is highly preferred among college going students.
They also have options like Derby, Cotton County, but they don’t prefer brands like Adidas,
Spykar much.

TABLE-7

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Q.5. Which apparel outlet you prefer most for buying clothing? (To male young
professionals)

a) John Players

b) Peter England
c) Derby
d) Cotton County
e) Color plus
f) Or any other organized or unorganized outlet
Ans.-

Favourite Brands No. of. male Young Professionals

John Players 14

Peter England 6

Derby 22

Cotton County 9

Color plus 28

other organized or unorganized outlet 11

CHART-7

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Inference:

From the research I have found Colorplus is highly preferred among young Professionals.
They also have options like Derby, Cotton County, but they don’t prefer brands like Cotton
County, Peter England much.

TABLE-8

49

Q.6. Which apparel outlet you prefer most for buying clothing? (For children apparel
purchasing)

a) Lilliput

b) Gini & Jony
c) Or any other organized or unorganized outlet.

Ans.

Favourite brands(children apparels) No. of. Customers

Lilliput 24

Gini & jony 6

Other Organized & Unorganized Retailers 51

CHART-8

50

Inference:

From the Research I have found that parents purchase clothing for their children in Organized
& Un-organized retail apparels rather than purchasing it from branded outlets. It reveals that
they are price conscious but brand name is not preference to them.

TABLE-9

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Q.7. Do you think in organized retail store, a customer have less opportunities for bargain,
less number of choices, high prices, less knowledge and so many other negative factors?

a) Yes
b) No
c) We can ignore them.
Ans.-

CHART-9

Inference:

From the Research I have found that people don’t have much opportunity to bargain. Thus,
people are compelled to buy the apparel at a price charged by the retailer. I have found that
the greater portion of the sample size has no other option other than to buy at a fixed price.

TABLE-10

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Q.8. Then what you think is this new retailing scenario, good for India? As in India, literacy
rate is so low, people are not so much aware about new retail concept. So in this time does it
has a good future in India or not?

a) Yes, definitely
b) No, not at all
c) Can’t say anything now, let see in future.
Ans.-

Retailing Scenario No. of Customers

Yes, definitely 43

No, not at all 19

Can’t say anything now, let see in future. 28

CHART-10

Inference:

From the research I have found that India has a good retailing future mainly due to the size of
population and the increased purchasing power. Growing western culture in wearing the
apparels is yet another reason for the bright future.

TABLE-11

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Q.9 So do you want to keep your loyalty with your favourite brand or can switch?

Customer Loyalty towards No. of customers
brands

Brand Loyal 51

Any Brand, no matter 22

strictly based on recommendations 17

CHART-11

Inference:

From the research I have found that the People are more brand conscious in urban side. It is
due to the high income level and people relate a brand to themselves. It was found that 46
people out of 80 people prefer branded items, 19 don’t give importance to brand and the
remaining strictly make their purchasing decision based on the recommendations of others.

TABLE-12

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Q.10. If you have to give marks to your favourite brand from out of 10, then how much will
you give?

Ans.

MARKS NUMBER OF CONSUMERS GIVEN
MARKS IN THIS CATEGORY

10 7

9 17

8 19

7 15

6 11

5 8

4 6

3 4

2 3

1 0

CHART-12

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Q.11. List out the Top 5 Brands that you prefer with specific “Top of Mind Recall” for
those preferred brands with reason:

Brands Reasons

1. ………………………….. ………………………….
2. ………………………….. ………………………….
3. ………………………….. ………………………….
4. ………………………….. ………………………….
5. …………………………... …………………………..

Top Brands & Reasons No. Of. People

Colorplus (Esteem look) 36

Derby ( offer price) 27

louisphillipe(attraction) 13

levis (gentle look) 8

Spykar (best fit) 6

CHART-13

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Inference:

From the research I have found that Colorplus holds a strong brand recall which
inturn adds to the brand value. Derby comes next followed by louis phillipe, levis and
spykar.

4.5 Experts mail interview:

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Mail interview has been conducted with Experts in apparels and Marketing
Professionals working in different organizations to get their feedback.

1. What is your idea on when one should start with the Merchandising assortment
planning process?

First we have to know the Depth and Breath of our available stock.

2. How do you think that merchandising assortment planning process fits into the rest of
the Business?

If the assortment process is good enough the conversion of prospects to buyers is
easy.

3. Can you share your views on GMROI and how does it impact business?

It plays a major role in Retail Business, we can easily identify in which category the business
is making more profit, So that we can give preference for that particular Brand or category

4. Can I have some inputs on merchandising assortment planning for lean Sales?

We can give some offers to that particular Articles or make it as bundle offer like 1 Plus 1, 2
for 1 like tat.

Name of the Expert: P.Balajiram
Designation: Adidas Retail Store Manager (Purasawalkam)
Contact number: 9840354893

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planning process?

We put the effort into Merchandise Planning "in order to increase profitability".
Profitability is the key driver of most businesses. At the end of the day though, it is
the business requirements that dictate where should start. By making sure that our
efforts are targeted and attainable, we can be sure that our starting point is a good one.

the Business?

Merchandise Planning needs to span the activities between setting long term, high
level goals for sales, margin and investment for the business, right down to the
allocation of space within an individual store for a defined S.K.U. By using the
concept of merchandise planning in our retail outlet conversion of prospects to buyers
is easy and this is how it fits into the business.


Gross Margin Return on Investment (G.M.R.O.I.) that can provide invaluable insight
into merchandise performance. More preference can be given to the product which is
moving and less preference to the product which is not moving so that it can reduce
the space outlet and stock holding pattern.


Buy 1 get 1 free, purchase 4 shirts and pay the highest amount among the 4 shirts etc
and a good customer service that satisfy customers.

Name of the Expert: Mr.Srinivasan
Designation: General Manager of Hi-style

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planning process?

To increase the profit margin we can startup with Merchandise assortment planning
because that will increase the sales and avoid pitfalls.

the Business?

To control the business critical success factor will be defined and achievement against
these will be measured using Key Performance Indicators. Setting of key performance
indicators will lead targets for buying-in margin, stock-holding levels and mark-down
percentages. The implementation and monitoring of a plan to meet these success
factors will hopefully result in the eventual purchase by a customer of a specific item
in a store.


In simple terms it tells us how many times over a year we get our stock investment
returned with a given margin. GMROI is used as an important application in which it
gives a greater potential to a product which sells more than other product in specific
branch, From this we can make better informed decisions as to which should have
more space allocated to them, be better supported by stock or have ranges expanded
or contracted.


To attract customers more discounts and offers are given. Today branded outlets put
more offers and compliments to attract customers.

Name of the Expert: Mr.Javeed
Designation: Store manager of Cotton County

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planning process?

There are two major areas of profit leakage in retail. Firstly lost sales resulting from
lack of stock and secondly forced margin reductions due to excessive stock. So in
order to sustain and to overcome from this leakage is good way to start with
Merchandise Assortment planning.

the Business?

To increase the sales and profit margin Merchandise assortment planning is useful.
On the other side it gives customer satisfaction.


GMROI as a potential metric that we might consider in our assortment planning.
Gross margin % gives us a measure of relative profitability without taking into
account the costs of stockholding investment. Weeks cover tells us how effectively
we turned our stock without informing us about relative profitability. This enables us
to forecast the business at which it credits more profit and concentrate on it.


Offers will be provided when there is huge stock E.g. Aadi sale. End-of-season “must-
ship” logic to push excess inventory.

Name of the Expert: Dinesh G. Mehta
Designation: Manager of Raymond shop in Doveton.

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planning process?

Once the outlets are established and the time we come to know about our customer exact
needs and the customer base and their capabilities of the customer in that locality we could go
in for the merchandising assortment planning.

the Business?

The MAPP fits almost the same way for the rest of the business except for we do
more for merchandising the Brand name rather than to the assortment in the capital
business.


The impact is it enhances the growth of the business as this makes easy and comfortable for
the customers to choose their preferences according to their needs with spending less amount
of time. Definitely the ROI is seen growing and achieved faster.


For lean sales, we can do, compliment sales, more discount, make customer feel the value for
the money paid, good customer service, increased guarantee and couple it with some good
sales.

Name of the Expert: J.Jambukeswaran

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Designation: Carl Zeiss India
Chennai Branch
Service Manager - South


CHAPTER - 5

FINDINGS

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FINDINGS

Business is like a coin that termed as a coin which has two sides, considering one side as
bane and other side as boon. Some factors which are continuously affecting every business,
they are Growing economy, globalization, retail trends, increasing income levels, healthy
life-style, technical advancement; So we can say this is a golden period for business world.
But on the other side because of increasing competition, inflation, high customization; these
business persons are finding some new and effective ways to overcome these problems. And
in apparel segment, it is world’s biggest business industry. Clothing is one of the basic needs
of a common person. So in every circumstance, this is a sector which is definitely going to
make profit. And it will increase more and make a brand leader of this segment only by
adopting some latest strategies i.e. Merchandise Assortment planning.

As researcher have taken interviews from some executives from various apparel outlets, from
that collected data and analyzed that-

About retailers-

 Retailers are very much aware about this and they are making their all strategies
according to it.
 There are so many factors which came in front of taking these decisions i.e.
price, quality, fashion/trends, looks, brand name. And after considering these all,
retailers choose the best product mix for their outlets.
 And it is not a story of only big giants, even small players and traditional
shopkeepers also now adopting these strategies to attract and retain customers.
 Now a customer can find all those features and product which he thinks, in a
single store only because of these planning. For example, in a single outlet a
range of various styles in various sizes in various colours product is available.
(apparel segment)

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 Before these decisions a retailer considers so many other factors too like sales
targets, financial objectives etc.
 In merchandise assortment planning, for these retail outlets, apparel companies
are also providing support to them so that they can make profits for themselves
and for company too.
 Basically apparel industry is based on latest fashions and trends. And fashion
remains for a little time of period. So it is too difficult to keep a wide number of
varieties in their stores for retailers. As fashion become outdated their stock of
inventory will become waste. So they are very much considering merchandise
assortment planning and other benefit providing by apparel companies to them. If
it happened that fashion will become outdated then companies will also provide
full support to these outlets and they share loss also with them.

Customer’s preferences about it-

 The main thing which researcher found about customer’s perception about it that
they said, “When we wear any branded apparel then automatically they feel a
sense of satisfaction, a sense of grace in them.” Said by Sathish and Ajay.
 And Mr. Krishnan said they prefer mainly the discounts or any offers in outlets.
According to him because now in market all companies are providing a good and
similar quality, so why not we go for a discount store.
 A tea-staler in front of Peter England outlet, Mr. Arokia swamy said he also
wears Peter England shirts and the store owner also provides him a high rebate
for it and in this he feel more confident.
 Mr. Deepak said he prefer the goodwill/ brand name for purchasing any new
apparel. As he said he prefers Peter England and John Players more than Kenith
Parker or Cotton County.
 Miss Anitha said when John Players launched their new segment, Miss Players,
from that time she prefers Miss Player’s outlet for a new purchase.
 And according to Mr. Shah, because of Hrithik Roshan, as a brand ambassador
of John Players, he also prefers John Players.

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Different customers have their own demands and needs so their preferences also varied from
each other.

 But mostly youth/ college going Students of Chennai prefer Colorplus and Spykar
Outlet for apparel purchase.
 While young business persons and professionals prefer Colorplus, Derby and John
Players for apparel purchase.
 And in children’s segment, a surprising result came after research that is mostly
parents prefer traditional outlets for children’s apparel purchasing. Because in these
outlets, they will found more varieties and apparel categories then a branded outlet
and they can make here a high bargaining also.
 But if we see overall result, so today even so many branded outlets are here in market
then also mostly people prefers traditional outlets for purchasing apparels. One thing
is that also these branded clothing is available in these unbranded outlets too and on
these unbranded outlets, customer found these clothing at much cheaper rate then
their own brand’s outlet.(Mostly people think this)

So researcher analyzed so many important and some funny aspects also but these all analysis
shows the booming stages of retailing in India. And for these retailers so many things are
important for making profits as brand name, brand ambassador, quality, price,
displays/advertising, discounts and categories of merchandise. And researcher found that
Merchandise assortment is a vital need for them. After adopting these strategies now they are
feeling the change in terms of customer base, in terms of brand equity, in terms of profits and
in terms of happiness.

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CHAPTER - 6

SUGGESTIONS

68

SUGGESTIONS

During the period of my extensive research I have come to know that there are few
weaknesses in the Apparel outlet. Customers have several problems regarding some products
and service offered by the retailers, which the apparel outlets should overcome. The
following strategies will help the retailers to retain their existing customers.

 Range of clothes differs from one outlet to another outlet of the same brand and so
perception of customer gives bad credit to the brand. So the company should take
decision to make it available in all the branches to satisfy the customers.

 In Chennai youth is aware about the National & International brands but due to tough
competition with Unorganized Apparel outlet so companies should expand their
branch and distribution networks.

 To be more precise Apparel outlets can use Software for Merchandising Assortment
planning because that will increase the Sale and reduce time when it is done
automatically.

 The parking space should be extended because customers feel discomfort when they
park their vehicle outside. ("When these apparel shops can have more than six floors
to showcase their products, why cannot they provide just one floor for parking?"
wonders a shopper.)- addressed in Hindu Business line internet Edition.

Source: - http://www.thehindubusinessline.com/2005/11/01/stories/2005110102050800.htm

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 The number of trial rooms available at Apparel outlets is very less as compared to the
number of people coming. This usually results in long queues and waiting by
customers

CHAPTER - 7

RECOMMENDATIONS

70

RECOMMENDATIONS

 Consumer of the Indian market are very price conscious ,due to very high prices of
some international brand consumer is not able to afford that particular brands ,so
companies should make some of the stuffs of apparels available at the affordable price
as per the geographical regions.
 Most of the youth make the decision of buying the apparels when they aw that celebrity
is using & wearing that particular brands like john player brand is promoted by Hritik
Roshan. So companies should promote their brands by endorsing the Celebrity whose
personality is matching with the brands.
 It is also observed that in the changing retailing environment, understanding the psyche
of customer is critical to success in retailing. Aggregate level picture may be
misleading, as it averages the beats and the valleys. Hence, individual understanding is
desirable.
 Indian consumers are still family-driven entities. Shopping, entertainment and eating
out are family events. Since these decisions are normally group decisions, hence a
marketer has to address family sensibilities more rigorously to woo Indian customers.
 Indian customers have become more sensitive to quality, customer service and status.
She/he is ready to pay, sometimes; astronomical sums provided their needs are satisfied.
They are basically looking for an experience, which is more of cognitive than physical.
 To increase more footfalls more promotional activities must be carried out. For this
Apparel outlets can either offer more discounts or increase their advertisements.
Increase in the number of footfalls will lead to increase in sales.

71

 Allowing more space between the entrance of a store and a product gives it more
time in the shopper’s eye as he or she approaches it. It builds a little visual
anticipation.

CHAPTER - 8

CONCLUSION

72

CONCLUSION

From all findings collected I have reached to the conclusion that in this quick-moving
environment, now retailers also have realized that they need to work strategically for their
survival. That’s why now they are taking merchandise assortment decisions seriously and
spending their time and efforts for it.

And it is vital for them to consider it also before doing any business. It is not only for apparel
industry but now for every business segment it is necessary. Today’s scenario has totally
changed from past. Now market is totally customer-centric and highly competitive. So if any
company wants to alive here and want a long-term business then they have to fulfil all
demands of customers and follow all required patterns either it is a big giant or a small
business unit.

While there are obstacles, there are clear opportunities in modern retailing in India. In such a
scenario, preparedness of Indian retailers in terms of having appropriate formats, scalable
processes, appropriate technology and relevant organization capability would be crucial to
success. Now in Chennai all branded items available only because of emerging market
situations and customer-friendly market.

73

And if we talk about favourite brand of Chennai people then on the base of research findings,
we found that-

∗ Spykar is most famous between college/school going youths.
∗ Colorplus is most favourite brand for Professionals.
∗ And in children’s segment, parents prefer traditional outlets mostly.

And all other brands are still there in market and fighting each other for attracting more and
more customer market towards them. And this high retailing scenario affects traditional
unorganized outlets business too and now they are also giving a high competition to these
organized retailers. So for keep their presence with a great margin of profits also, all
organized and unorganized retailers are facing a high cut-throat competition with each other.
But ultimately these all things are going in favour of customers and customer will be
benefited at last.

HAPPY RETAILING

74

CHAPTER - 9

BIBLIOGRAPHY

75

BIBLIOGRAPHY

List of books and articles-

I. Retail Management, IIPM Library,
II. Retail Management Review, IIPM Library
III. Cases of Retail Management, Prentice-Hall Publications.
IV. Retailing Environment in India, Tata-McGraw Hill Publications.

List of websites articles-

• www.google.com
• www.wikipedia.com
• www.johnplayers.com
• www.koutonsindia.org
• www.cottoncounty,com
• www.customerresearch.com
• www.researchindia.org
• www.adidas.com
• www.priknit.com
• www.rbk.com
• www.lilliput.com
• www.oxemburg.com
• www.montecarlo.com
• www.answers.com
• www.managementjuice.com

76

• www.businesscases.com
• www.prenticehall.com
• http://www.indiainbusiness.nic.in/

CHAPTER-10
APPENDICES

77

Appendix-1

Questionnaire for Retailers- As this project study is totally based on detailed research on
topic Merchandise Assortment Planning so here researcher has used open ended and free
response questions in questionnaire, those areas-

1. Tell me something about your outlet and brand’s you deal?
2. What are your target markets and what do you do to address these markets?
3. Before taking decisions about your product varieties and range (Merchandise
Assortment Planning), what factors do you consider?
4. What are the important strategies you are adopt?
5. Is it important to make a prior planning or strategy for merchandise decisions? And if
yes then why?
6. Are you facing any kind of problems or difficulties for these decisions and planning
because I think in a city like Chennai, it is not possible to stock extensive variety and
neither you can be content with a limited range .How is this situation addressed?
7. Are all decisions related with your outlet’s merchandise are independently taken by
you or is there any support by brand owners as well?
8. How often your plans change?
9. Do you like to give any other specific inputs or details, that aren’t covered in this
questionnaire/interaction? If so, please do specify.

78

Appendix-2

Questionnaire for Customers-

1. From where you prefer to buy your apparels-
a) Any traditional store (unbranded) or
b) A branded retail outlet.

2. What factors do you consider before making a purchase decision, most- Please go by
priority:
a) Price,
b) Variety
c) Quality
d) Fashion/trend

3. Are you satisfied with the services and varieties of products provided by these apparel
outlets?

79

a) Highly Satisfied
b) Satisfied
c) Neutral
d) Dissatisfied
e) Highly dissatisfied

4. Which apparel outlet you prefer most for buying clothing? (To college/school going
youths.)

 Spykar
 Ven field

 Adidas

 Reebok
 Kenith Parker
 Colour Plus
 Derby

 Cotton County
 Or any other organized or unorganized retail outlet

5. Which apparel outlet you prefer most for buying clothing? (To young professionals.)

o John Players

80

o Peter England
o Derby

o Cotton County
o Color plus
o Any other organized or unorganized outlet

6. Which apparel outlet you prefer most for buying clothing? (For children apparel
purchasing)

o Lilliput

o Gini & Jony
o Any other organized or unorganized outlet

7. Do you think in organized retail store, a customer have less opportunities for bargain,
less number of choices, high prices, less knowledge and what other factors influence
a customer preference?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
………………………….

8. Then what you think is this new retailing scenario good for India? As in India, literacy
rate is so low, people are not so much aware about new retail concept. So in this time
is it has a good future in India or not?

81

o Yes, definitely
o No, not at all
o Can’t say anything now, let see in future.

9. So do you want to keep your loyalty with your favourite brand or can switch?

o Brand loyal,
o Nothing like loyalty, just like this brand (on the base of past sales and
observation) but can switch if found any other good option,
o Any brand no matter; just it should satisfy their needs.

10. List out the Top 5 Brands that you prefer with specific “Top of Mind Recall” for those
preferred brands with reason:
Brands Reasons

1. ………………………….. ………………………….
2. ………………………….. ………………………….
3. ………………………….. ………………………….
4. ………………………….. ………………………….
5. …………………………... …………………………..

11. If you have to give marks to your favourite brand from out of 10, then how much will
you give?

82

Appendix-3

Assortment Plan For Boys’ Jeans

Style Straight-leg Straight-leg Straight-leg Loose-fit Loose-fit

Retail price 999 1399 1799 1299 1599
(in Rs.)

Type of Regular Stone Tinsel- Broken twill Over dyed
Fabric denim washed Lyera based
denim denim

Colours Light blue Dark blue Light blue Light blue Blue

Black Indigo Black Black Black

Black Deep blue

Figure: Assortment Plan for Boy’s Jeans at Spykar

Source: Data collected from Spykar team.

83

Thesis Response sheet

RESPONSE SHEET-1

1) Name: V.Arun Kumar

2) ID Number: FW79/01109/MKT

3) The Topic of the study: “Merchandise Assortment for Apparel Outlets and Retail
Counters in Chennai to Cater to Customer Preferences”.

4) Questionnaire made to collect Primary Data (in the first or the second
response sheet): Collected input to frame the questionnaire.

5) Date when the Guide was consulted: 06.06.09

6) The outcome of the discussion:

• Framing questionnaire
• Analysis

7) The Progress of the Thesis: 1st discussion of thesis, started the thesis based on
the input given by External guide Mr. Muralidharan S.S

84

RESPONSE SHEET-2




response sheet): Please attach the same


6) The outcome of the discussion: Literature review and data analysis

85

7) The Progress of the Thesis: 2ndst discussion of thesis, a valuable suggestions and
corrections for literature review and data analysis

RESPONSE SHEET-3




4) Questionnaire made to collect Primary Data (in the first or the second response
sheet): Framed the Questionnaires and External guide has approved it.


86


• Analysis
• Gaining knowledge to develop
Questionnaire

7) The Progress of the Thesis: 3rddiscussion of thesis, taking survey.

RESPONSE SHEET-4




response sheet):

• Tips to conduct interview.
• Tips to collect secondary data



• Analysis
• Getting appointments with managers of
apparel brands and making note of their
feedback.

Retail IIPM Project

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