A PROJECT ON

ENTERPRINERSHIP DEVELOPMENT
CCA1008 A1
Evaluation of Small Retail Shop
(With Reference from Vellore)

Bachelor of Commerce

By:
PG SURESH

(15BCC0041)

SAMARTH SINGH

(15BCC0071)

KC ARUN KUMAR

(15BCC0097)

HARISH VENKATRAM

(15BCC0119)

Under the supervision and guidance of

Dr. MUTHUMEENAKSHI
Assistant professor

School of Sciences and Languages (SSL)

May - 2016

INDEX
CHAPTERS

TITTLE

PAGE NO.

Chapter I

Introduction and
Research Design

3-9

Chapter II

Analysis and Data

Interpretation

10 - 24

Chapter III

Findings and
Conclusion

25 - 27

CHAPTER I
INTRODUCTION AND RESEARCH DESIGN
RETAIL CONCEPT
The distribution of consumer products begins with the producer and ends at the
ultimate consumer. Between the producer and the consumer there is a
middleman---the retailer, who links the producers and the ultimate consumers.
Retailing is defined as a conclusive set of activities or steps used to sell a
product or a service to consumers for their personal or family use. It is
responsible for matching individual demands of the consumer with supplies of
all the manufacturers. The word retail is derived from the French work retailer,
meaning to cut a piece off or to break bulk.
A retailer is a person, agent, agency, company, or organization which is
instrumental in reaching the goods, merchandise, or services to the ultimate
consumer. Retailers perform specific activities such as anticipating customers
wants, developing assortments of products, acquiring market information, and
financing. A common assumption is that retailing involves only the sale of
products in stores. However, it also includes the sale of services like those
offered at a restaurant, parlour, or by car rental agencies. The selling need not
necessarily take place through a store. Retailing encompasses selling through
the mail, the Internet, door-to-door visits---any channel that could be used to
approach the consumer. When manufacturers like Dell computers sell directly to
the consumer, they also perform the retailing function.
Retailing has become such an intrinsic part of our everyday lives that it is
often taken for granted. The nations that have enjoyed the greatest economic
and social progress have been those with a strong retail sector. Why has
retailing become such a popular method of conducting business? The answer
lies in the benefits a vibrant retailing sector has to offeran easier access to a
variety of products, freedom of choice and higher levels of customer service.
As we all know, the ease of entry into retail business results in fierce
competition and better value for customer. To enter retailing is easy and to fail is
even easier. Therefore, in order to survive in retailing, a firm must do a
satisfactory job in its primary role i.e., catering to customers. Retailers cost and
profit vary depending on their type of operation and major product line. Their
profit is usually a small fraction of sales and is generally about 9-10%. Retail
stores of different sizes face distinct challenges and their sales volume
3

influences business opportunities, merchandise purchase policies, nature or

promotion and expense control measures.
Over the last decade there have been sweeping changes in the general
retailing business. For instance, what was once a strictly made-to-order market
for clothing has now changed into a ready-to-wear market. Flipping through a
catalogue, picking the right colour, size, and type of clothing a person wanted to
purchase and then waiting to have it sewn and shipped was the standard practice
in the earlier days. By the turn of the century some retailers set up a storefront
where people could browse, while new pieces were being sewn or customized
in the back rooms. Almost all retail businesses have undergone a similar
transition over the years.
CHARACTERISTICS OF RETAILING
Retailing can be distinguished in various ways from other businesses such as
manufacturing. Retailing differs from manufacturing in the following ways:
There is direct end-user interaction in retailing.
In is the only point in the value chain to provide a platform for
promotions.
Sales at the retail level are generally in smaller unit sizes.
Location is a critical factor in retail business.
In most retail businesses services are as important as core products.
There are a larger number of retail units compared to other members of
the value chain. This occurs primarily to meet the requirements of
geographical coverage and population density.

DIRECT INTERACTION WITH CUSTOMERS

Retail businesses have a direct interaction with end-users of goods or services in
the value chain. They act as intermediaries between end-users and suppliers
such as wholesalers or manufacturers. Therefore, they are in a position to
effectively communicate the response and changing preferences of the
consumers to the suppliers or sales persons of the company. This helps the
manufacturers and markets to redefine their product and change the components
of its marketing strategy accordingly. Manufacturers require a strong retail
4

network both for reach of the product and to obtain a powerful platform for
promotions and point-of-purchase advertising. Realizing the importance of
retailing in the entire value chain, many manufacturers have entered into retail
business by setting up exclusive stores for their brands. This has not only
provided direct contact with customers, but has also acted as advertisement for
the companies and has provided the manufacturers with bargaining power with
respect to other retailers who stocked their product. Retailing provides extensive
sales people support for products which are information intensive, such as in the
case or consumer durables.
FUNCTIONS OF RETAILING
Retailers play a significant role as a conduit between manufacturers,
wholesalers, suppliers and consumers. In this context, they perform various
functions like sorting, breaking bulk, holding stock, as a channel of
communication, storage, advertising and certain additional services.
ACTIVITIES PERFORMED BY RETAILERS
Retailers undertake various business activities and perform functions that add
value to the offerings they make to their target segments. Retailers provide
convenient location, stock and appropriate mix of merchandise in suitable
packages in accordance with the needs of customers. The four major activities
carried out by retailers are:
1)
2)
3)
4)

Arrange for assortment of offerings

Breaking quantity
Holding stock
Extending services

FOUR BASIC LEGAL FORMS OF OWNERSHIP FOR RETAILERS:

1) Sole proprietorship: - The vast majority of small businesses start out as
sole proprietorships. These firms are owned by one person, usually the
individual who has the day-to-day responsibility for running the business.

2) Partnership: - A partnership is a common format in India for carrying

out business activities (particularly trading) on a small or medium scale.
In a partnership, two or more people share ownership of a single business.
3) Joint venture: - A joint venture is not well defined in the law. Unless
incorporated or established as a firm as evidenced by a deed, joint
ventures may be taxed like association of persons, sometimes at
maximum marginal rates. It acts like a general partnership, but is clearly
for a limited period of time or a single project.
4) Limited liability Company (public and private):- The Limited
Liability Company (LLC) is a relatively new type of hybrid business
structure that is now permissible in most states. The owners are members,
and the duration of the LLC is usually determined when the organization
papers are filed
TRENDS IN RETAIL FORMATS
Retail industry is continuously going through changes on account of
liberalization, globalization and consumer preferences. While multinational
retail chains are looking for new markets, manufacturers are identifying,
redefining, or evolving new retail formats. The existing retail houses are also
gearing up to face the emerging competition from the organized sector and the
changing outlook of the consumers. For example, consumer spending is shifting
from goods to services. Accordingly the retailers too are fast adjusting to the
changing consumer preferences.
Consumers are not only looking for the core products or functional
benefits from the retailers but also the non-functional benefits, which need to be
compatible with their lifestyles. For example, most of the traditional eating
joints in India such as Haldiram, Bikaner and Sagar Ratna have revised their
product offerings and atmospherics on the lines of the multinational chains to
compete with them and to serve changed expectations of the consumers.

MOM-AND-POP STORES AND TRADITIONAL KIRANA STORES

6

The retail sector is changing as new store categories have started

dominating the marketplace. Mass merchandisers (Wal-Mart, Big Bazaar),
discount clubs (Subhiksha), so-called category killers (Home Depot, Vishal
chain), and speciality retailers (Time Zone, Tanishq) have all developed a
successful retail models. At the same time, the small mom-and-pop stores and
the traditional department stores, are finding the competition intense. In 2002,
while Wal-Mart and Target saw revenues grow (by 12% and 10%, respectively),
department stores such as Saks and Federated experienced declining revenues
(down 3% and 1% respectively). But even in the mass-merchandising segment,
the competition is fierce, as is evidenced by Kmarts bankruptcy announcement
in 2002. Small independent stores, across product categories, is a very common
retail formats they are also undertaking large scale renovations to appeal and
attract their target consumer segments.
OBJECTIVES OF RETAIL BUSINESS:
Customer Satisfaction:
Retailers know that satisfied customers are loyal customers.
Consequently, retailers must develop strategies intended to build
relationships that result in customers returning to make more purchases.
Acquiring the Right Products:
A customer will only be satisfied if they can purchase the right
products to satisfy their needs. Since a large Percentage of retailers do not
manufacture their own products, they must seek suppliers who will supply
products demanded by customers. Thus, an important objective for retailers
is to identify the products customers will demand, and negotiate with
suppliers to obtain these products.
Product presentation:
Once obtained, products must be presented or merchandised to
customers in a way that generates interest. Retail merchandising often
requires hiring creative people who understand and can relate to the market.
7

 Traffic Building:
Like any marketer, retailers must- use promotional methods to build
customer interest. For retailers a key measure of interest is the number of
people visiting a retail location or website. Building traffic is
accomplished with a variety of promotional techniques such as advertising,
including local newspapers or Internet, specialized promotional activities,
such as coupons.
Layout:
For store-based retailers, a stores physical layout is an important
component in creating a retail experience that will attract customers. The
physical layout is more than just deciding in what part of store to locate
products. For many retailers designing the right shopping atmosphere (e.g.,
objects, light, and sound) can add to the appeal of a store. Layout is also
important in the online world where site navigation and usability may be
deciding factors in whether a retail website is successful.
Location:
Where to physically locate a retail store may help or hinder tore
traffic. Well placed stores with high visibility and easy access, while possibly
commanding higher land usage fees, may hold significantly more value than
lower cost sites that yield less traffic. Understanding the trade-off between
costs and benefits of locations is an important retail decision.

Keeping Pace With Technology:

Technology has invaded all areas of retailing including customer knowledge
(e.g., customer relationship management software), product movement (e.g., use
of RFID tags for tacking), point-of-purchase (e.g., scanners, kiosks, self-serve
checkout), web technologies (e.g., online shopping
carts, purchase
recommendations) and many more.

RESEARCH METHODOLOGY:
Primary Data:
Primary research consists of a collection of original primary data collected by
the researcher. It is often undertaken after the researcher has gained some
insight into the issue by reviewing secondary research or by analyzing
previously collected primary data. In this project we collected the primary data
in the form conducting survey from 20 respondents with the help of preparing
questionnaires.
Secondary Data:
Secondary data refers to data that was collected by someone other than the user.
Common sources of secondary data for social science include censuses,
information collected by government departments, organizational records and
data that was originally collected for other research purposes. No secondary
data was collected.
The size of the sample depends on a number of factors and the researchers have
to give the statistical information before they can get an answer. The Sample
size of our survey conducted was 20 because we had to cover the areas in and
around VIT University.
The sampling technique which was used in our project was Simple Random
Sampling.

Chapter 2
ANALYSIS AND INTERPRETATION
In this chapter the researcher analyzed the collected data and interpreted. The
resultsare depicted here.
TABLE 2.1
SOURCE OF IDEA TO THIS BUSINESS
SOURCE OF IDEA

NO OF BUSINESS

Ancestral business
Own idea
Idea from sources

12
5
3
GRAPH 2.1

12
10
8
6
4
2
0
Ancestral business

Own idea

Idea from sources

Analysis: from the above table and graph we infer that the ancestral type of
business is more when compared to others. By this way we conclude that the
business is starting traditionally from their ancestors is more in case of small
retailers.

10

TABLE 2.2
INITIAL INVESTMENT
INITIAL INVESTMENT
below 20000
20000-30000
Above 30000

NO OF BUSINESS
7
8
5
GRAPH 2.2

NO OF BUSINESS
Above 30000

NO OF BUSINESS

20000-30000

below 20000

Analysis: by observation of above table we infer that the intial investment

remains small in major extent is around 20000 only. Thia literally reflects that
the shop itself is not their major source of income.

TABLE 2.3
11

OPERATIONAL COST PER DAY

Operational cost
below 500
500-750
750 above

No of business
6
11
3

GRAPH 2.3

No of business

below 500
500-750
750 above

Analysis: from the above table we can clearly understand that their operational
cost per day in most of the cases remain the new stock that has literally cleared
the previous day.

12

TABLE 2.4
WORK PER DAY
Work per day
4 hours and above
6 hours and above
10 hours and above

No of business
5
7
8
GRAPH 2.4

No of business

4 hours and above

6 hours and above
10 hours and above

Analysis: The above data clearly states the amount of time the small retailer
literally works. In most of the cases it is around 8-10hrs among that their
interest doesnt really care about their shops sale.

13

TABLE 2.5
CUSTOMER VISIT
Customer visit
Below 100
100-200
200 above

No of business
5
12
3
GRAPH 2.5

No of business

Below 100
100-200
200 above

Analysis: The above graph infers that in most of the cases per day customer
visit varies from 100-200. More members visit the shop but remain to deal with
some other business.

14

TABLE 2.6
CUSTOMER SATISFACTION
Customer satisfaction
yes
no

No of business
16
4
GRAPH 2.6

No of business
16
14
12

No of business

10
8
6
4
2
0
yes

no

Analysis: The above table infers that in most of the cases the job satisfaction is
high due to less work load and their dependency on other business field.

15

TABLE 2.7
PLAN OF EXPANDING YOUR BUSINESS
Plan of expanding your business
Yes
no

No of business
18
2

GRAPH 2.7

No of business

no
No of business

Yes

10

12

14

16

18

16

TABLE 2.8
SATISFIED WITH YOUR OWN BUSINESS
Satisfaction obtained
yes
no

No of business
12
8
GRAPH 2.8

No of business
12
10
8

No of business

6
4
2
0
yes
no

17

TABLE 2.9
SPECIAL THING ABOUT YOUR BUSINESS
Special thing
good quality
sufficient quantity
services provided

No of business
8
5
7
GRAPH - 2.9

No of business
8
7
6
5
4
3
2
1
0

No of business

good quality

sufficient quantity

services provided

18

TABLE 2.10
HEAVY COMPETITION
competition
yes
no

No of business
16
4
GRAPH 2.10

No of business

yes
no

Analysis: The above table infers that the competition usually remains high due
to the inclusion of other shops in large extent around that area.

19

TABLE 2.11
PROFIT MARGIN
Profit margin
5%
5% - 10%
10% - above

No of business
5
13
2
GRAPH 2.11

No of business
14
12
10
8
6
4
2
0

No of business

5%

5% - 10%

10% - above

Analysis: The above table infers that the retail shops have a margin of 5-10%
profit and that is high with low sales and lower work and interest.

20

TABLE 2.12
TYPE OF BUSINESS
Type of business
Sole proprietor
Labour intensive
Capital intensive
Partnership

No of business
4
7
3
6
GRAPH 2.12

No of business
7
6
5
4

No of business

3
2
1
0
Sole proprietor

Labour intensive

Capital intensive

Partnership

Analysis: the above table infers that their income doesnt not necessarily limit
to the shop but in extension have business on bases of Partnership in major
extent.

21

TABLE 2.13
WHOLESALE ANYTHING TO OTHER BUSINESS CUSTOMERS
wholesaler
yes
No

No of business
7
13
GRAPH 2.13

No of business

yes
No

Analysis: the above table infers that in most of the cases wholesale business is
not experienced by the small retail shopkeepers.

TABLE 2.14
22

CUSTOMERS VISIT
Customers visit
Labours
Student
Strangers

No of business
6
8
7

GRAPH 2.14

No of business
8
6
No of business

4
2
0
Labours

Student

Strangers

Analysis: the above table infers that most of the customers are in random since
the placement of the retail shops are in and around bus stands in most of the
cases.

23

TABLE 2.15
AGE GROUP OF CUSTOMERS MOSTLY VISIT
Age of customers
10 to 15 year
15 to 20 year
20 to 30 year
30 to 50 year

4
7
5
4
GRAPH 2.15

Age of customers
10 to 15 year
15 to 20 year
20 to 30 year
30 to 50 year

Analysis: the table confirms that the age group of customers remains mainly
between 15-20 years since the most sold product remains cigarettes.

24

CHAPTER III
KEY FINDINGS AND RECOMMENDATIONS:
The key finding of the research is as follows:
i. Unorganized vicinity of organized retailers have been adversely affected in
terms of their volume of business and profit. Unorganized retail has maintained
employment levels perhaps as a result of competitive response,
ii. The adverse impact on unorganized retailers tapers off over time,
iii. The major factors that attract unorganized retailers to consumers are
proximity, goodwill, credit sales, bargaining, loose items, convenient timings,
and home delivery,
iv. There is clear evidence of a competitive response from traditional retailers
who are gearing up to meet the threat from traditional retailers who are gearing
up to meet the threat from organized retailers.
v. Consumers have generally gained with the emergence of organized outlets
through the availability of better quality products, lower prices.
vi. The consumers who in most case visit remain as the student since the
product sold is necessarily that attracts the students and the youth.
vii. Most of the Small retail shopkeepers hold on to someother business as their
main source of income and held this one to rotate their free time productively.
viii. The retailers in most of the cases spend their time in their shops from 8-10
hrs in wideextent dealing their external business activities from this.
ix. There main concentration vests in their retail business and doesnt really
very much concentrate on wholesale as a medium of income.
x. The job satisfaction is high since it is ancestral and the work load remains
low.
xi. The retail shopkeepers doesnt really mind about the business on retail basis
since their main source of income remain in someother business like finance.
xi. The mode of development of their business doesnt really grabs their
attention and there progress of development remains slow.
xii. Some retailers run their life on basis of income from their business i.e., shop
suffer a lot with low income.

25

CONCLUSION:
By the survey we had took from the street sellers of small retail shops from in
and around the bus stops of Vellore and Chittoor, we got to know that, many
started their business out of the ancestral influence with low initial investment
but with having other source of income. People who started out of their own
idea have financial crisis even after working everyday without taking any leave.
We also get to know that most of them have started this business because that is
what their families have been doing for a very long period of time. Many of
them have not faced financial problems while starting the business since that
was their family business, but a few who have started the business with their
own idea got the finance on great difficulty from either friends, loans or from
their own money. The difference remains in two types of retailers one with
ancestral background runs the shop with free of tension since its not the main
source of income for him, he side-by-side runs finance. The other type is thje
sufferer who invests the money with the intention to survive as the shop as his
only source of income.
This remains our final mode of conclusion.

26