Retail Marketing in India


Reetu Sharma
Teaching Associate
Department of Commerce
Kurukshetra University

Retail Marketing or Retailing

Retailing consists of the sale of goods from a fixed location such as a departmental store, hypermarket, supermarket or kiosk to the customers either in large or small quantities. A retailer buys products in large quantities from manufacturers or from wholesaler and in turn sells to the end-user. It is a vital part of any manufacturer's distribution strategy and retailers are at the end of the supply chain process. Selling of merchandise directly to the consumer. Retailing began several thousand years ago with peddlers hawking their wares at the earliest marketplaces. It is extremely competitive, and the failure rate of retail establishments is relatively high. Price is the most important arena of competition, but other factors include convenience of location, selection and display of merchandise, attractiveness of the establishment, and reputation. The diversity of retailing is evident in the many forms it now takes, including vending machines, door-to-door and telephone sales, direct-mail marketing, the Internet, discount houses, specialty stores, department stores, supermarkets, and consumer cooperatives.


Retailing is supposed to provide:

* Product Utility
* Place utility
* Time Utility
* Ownership Utility

It provides final end products to the consumers, not raw materials, end products in usable form to the consumers. Thereby it creates product utility. Second one, it is given in the place where it is required by the consumer. That is, retailing outlets are open in the places according to the convenience of the customer and also based on the demand of the consumer. Third One, it creates Time Utility. In the sense that, the shops are open as per the requirement of the consumer that is between 10 and 8 or 10 to 5. Whenever the consumers want to go and shop they can go and shop at a particular period convenient to the customer. Next one, when the product is sold finally it creates Ownership Utility. So, we can conclude that retailing is a marketing intermediary which creates Product Utility, Place Utility, Time Utility and Ownership Utility in providing goods and services to the consumers


Retail Sector can basically be classified in to two segments. One is organized segment and another one is unorganized segment. As far as India is concerned this organized segment contributes only to 3% of the retail trade and the unorganized segment contributes to remaining 97% of the retail trade. Why is it so?? Because all these days we have been purchasing only from the street vendors and from the local shops and organized retailing was not in vogue in India. Only after 1991, after opening up of economy and due to liberalization, this organized sector has come to light and presently it exists in various formats.

* Super markets
* Hypermarkets
* Departmental stores
* Specialty stores


With double salaries and nuclear families, disposable income in the hands of middle income group people is high and that is one reason why retail revolution has taken place. The second one is a very interesting feature. Now there is a customer called New Age Customer.

The Indian Scenario:

In 2006 AT Kearney's Global Retail Development Index ranked Asia as the region with the most promising prospects. Among 30 emerging countries worldwide, India ranked number one and China ranked number five. India's retail sector is quite fragmented with the top five retailers accounting for less than 2 percent of the $350 billion market, one of the ten largest in the world. There are over four million retail outlets in the country with one million located in urban areas. Single-brand foreign retailers can now own 51% of an India operation. Indian and foreign companies are making highly ambitious plans for large multi-brand retail operations. Foreign retailers entered China some year ago and today about 45 companies from Japan, Korea and the West operate in the country.


The industry is facing a shortage of middle management level professionals. Major retailers are hiring aggressively from the similar and smaller organizations by offering better packages. They are creating various levels of management and hiring on a spree. Some of the areas such as technology, supply chain, distribution, logistics, marketing, product development and research are becoming very critical for the success of the organizations. All of these would lead to the recruitment of highly professional people who specialize in these fields. There is also a trend for hiring hotel management graduates, though now many retail schools are coming up, and Pantaloon has set up links with major business schools from where it would be selecting the right candidates. The sector is likely to produce 2 million jobs in the coming 3 years. There also exists a possibility that the retail sector would become a poaching ground once a number of domestic and international players enter the industry.


India is one of the fastest growing economies in the world today. Topping the Global Retail Development Index for the third consecutive year as the most attractive market for retail investment, India has one of the most vibrant retail sectors in the world. Currently, there are 12 million retail outlets in India, which is estimated to triple by 2015. As per the study conducted by the ICRIER, retail sector is expected to contribute to 22 per cent of India's GDP by 2010 which illustrates the strong fundamentals of the sector. Conservative steps taken by the industry players have to an extent diminished the effects of recession considerably on the Indian economy and kept it protected. However, gradual changes and calculated risks are essential for India to realise its potential and to come at par with leading economies.

Reetu Sharma
Teaching Associate
Department of Commerce
Kurukshetra University

Source: E-mail July 21, 2010


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