RETAILING Retailing includes all the activities involved in selling goods or services to the final consumers for personal,

non-business use. Philip Kotler In general words retailing includes all activities involved in selling goods or services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Thus, Retailing can be defined as a set of business activities that adds value to the products and services sold to final consumers fir their personal, family, or household use

RETAIL INDUSTRY IN INDIA

India has one of the largest numbers of retail outlets in the world. Of the 12million retail outlets present in the country, nearly 5 million sell food and related products. Thought the market has been dominated by unorganized players, the entry of domestic and international organized players is set to change the scenario. Organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the Wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011. India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further

been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current Size of US$ 7.5 billion. Shopping in India has witnessed a revolution with the change in the consumer buying behavior and the whole format of shopping also altering. Industry of retail in India which has become modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and sprawling complexes which offer food, shopping, and entertainment all under the same roof. India retail industry is expanding itself most aggressively; as a result a great demand for real estate is being created. Indian retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. It is expected that by 2010, India may have 600 new shopping centres. India retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort.

RETAIL SPACE

Driven by changing lifestyles, strong income growth and favourable demographic patterns, Indian retail is expanding at a rapid pace. Mall space, from a meagre one million square feet in 2002, is expected to touch 40 million square feet by end-2007 and an estimated 60 million square feet by end-2008, says Jones Lang LaSalle's third annual Retailer Sentiment Survey-Asia. Alongside, Indian cities are witnessing a paradigm shift from traditional forms of retailing into a modern organized sector. A report by Images Retail estimates the number of operational malls to more than double to over 412 with 205 million square feet by 2010 and further 715 malls by 2015, on the back of major retail developments even in tier II and tier III cities in India.

CHALLENGES FACING THE INDIAN ORGANIZED RETAIL SECTOR

The challenges facing the Indian organized retail sector are various and these are stopping the Indian retail industry from reaching its full potential. The behaviour pattern of the Indian consumer has undergone a major change. This has happened for the Indian consumer is earning more now, western influences, women working force is increasing, desire for luxury items and

better quality. He now wants to eat, shop, and get entertained under the same roof. All these have lead the Indian organized retail sector to give more in order to satisfy the Indian customer. The biggest challenge facing the Indian organized retail sector is the lack of retail space. With real estate prices escalating due to increase in demand from the Indian organized retail sector, it is posing a challenge to its growth. With Indian retailers having to shell out more for retail space it is effecting there overall profitability in retail. Trained manpower shortage is a challenge facing the organized retail sector in India. The Indian retailers have difficultly in finding trained person and also have to pay more in order to retain them. This again brings down the Indian retailers profit levels. The Indian governments have allowed 51% foreign direct investment (FDI) in the India retail sector to one brand shops only. This has made the entry of global retail giants to organized retail sector in India difficult. This is a challenge being faced by the Indian organized retail sector. But the global retail giants like Tesco, Wal-Mart, and Metro AG are entering the organized retail sector in India indirectly through franchisee agreement and cash and carry wholesale trading. Many Indian companies are also entering the Indian organized retail sector like Reliance Industries Limited, Pantaloons, and Bharti Telecoms. But they are facing stiff competition from these global retail giants. As a result discounting is becoming an accepted practice.

The retail sector in India is highly fragmented with organized retail contributing to only 2% of total retail sales. The retail sector in developed Countries was also highly fragmented at the beginning of the last century but Emergence of large chains like Wall Mart, Sears, and McDonalds led to Rapid growth of organized retail and growing consolidation of the retail Industry in the developed countries. Organized retail is growing rapidly and we see the emergence of large organized retail chains like Shoppers Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over the country. The opportunities in retail industry in India will increase since Indian retailing is on the threshold of a major change.

1. Perception In general psychological terms, perception is our ability to make some kind of sense of reality from the external sensory stimuli to which we are exposed. Several factors can influence our perception, causing it to change in certain ways. For example, repeated exposure to one kind of

stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of attention we focus on something can cause a change in our perception of it. Customers that are satisfied with a product or business have an overall good perception of that product or business. When consumers' perceptions are good, they will continue purchasing goods from this company. These customers also will avoid spreading disappointing experiences to others. Consumer perceptions are based on feelings. A customer perception measurement is an important tool used by companies that expresses how well the companies are satisfying customers.

ROLE OF PERCEPTION IN CONSUMER BEHAVIOUR By studying consumers, businesses can gain a better understanding of the role of perception in consumer behaviour. Companies can greatly improve their marketing strategies when they have a firm grasp on the psychology of how consumers feel, think and reason their way to a buying decision. Knowing how consumers are influenced by their environment, their informationprocessing abilities and their perception of a product can help companies to more effectively reach consumers. PerceptionPeoples perception of something can vary greatly from person to person, with each one forming an individual opinion about the stimuli (agents, action or conditions that elicit a response) being received. Individuals are continually receiving messages through the five senses: touch, taste, smell, sight and sound. Successful marketers use those senses to stimulate consumers to examine a product. Perception is one of the key psychological factors that influence consumer behavior.

Function In marketing, the role of perception in consumer behaviour is all about recognizing how consumers view a companys product or service. A consumer's motivation for buying a particular product or service often comes down to image. People wish to be perceived as having the ability to make the right choices and pick the right products. Marketers use perception to target peoples need to fit in and be part of a larger group of discerning consumers.

Significance The significant role played by perception can be exemplified when two identical products are marketed in completely different ways, thus creating distinct perceptions of each product. Depending on consumers perception, each product can be received quite differently: favorably, less favorably or not at all. Marketers must distinguish their message from their competitors to grab consumers attention. People are often willing to pay for a more expensive product over its less-expensive but identical counterpart just because they perceive it to be a better product.

Features There are several factors that can influence the role of perception in consumer behaviour: exposure to stimuli, interpretation of said stimuli and the ability to identify changes in the intensity of stimuli. Exposure involves the levels to which consumers encounter stimuli, like commercial messages in the form of billboards, television and radio advertisements or other advertising media. Interpretation involves consumers making sense out of the messages received, such as recognizing a brand name or logo. According to Webers Law, a consumer's ability to identify changes in stimulus intensity is strongly related to the original intensity of the stimulus. In other words, the more dramatic the change in the intensity, the more noticeable it will be to consumers. Considerations A number of aspects will influence how consumers perceive a product or service. The relevance to consumers lives will definitely affect how much attention consumers give to a perception of a certain product or service. Pleasant or very unpleasant stimuli (advertisements) can command consumers attention, with irritating messages sometimes being an extremely effective marketing strategy. Surprising stimuli or stimuli with a noticeable contrast (to its surroundings) or prominence (larger or center placement) will also gain greater consumer attention.