A tool or understanding retail market and consumers>>>
Retail strategy is largely information based. Timely, relevant information is essential to provide an adequate basis for day to day decision making as well as to chart the organization’s path in an increasingly fast paced turbulent an competitive environment.
The turn of the present century has witnessed unprecedented levels of market velocity and volatility that demand a complete new approach to market and retail intelligence. Retailers today rely, more on intelligence than on pure information and market research plays a key in providing this intelligence.
Any market research activity deals with the following logical steps:
1) Collection of data
2) Analysis of the data collected
3) Deriving conclusions on the basis of the data collected.
Information is needed in established and mature markets s well as in merging markets. The gathering an analysis of data relevant to the retailer is done by market research. Information collected by way of market research can either be:
1) Primary data – data that the retailer collects for a specific purpose or
2) Secondary data – data that is available in the market or within the organization and which can be used by the retailer. Internal sources could be sales figures, company reports, customer complaints, etc. External sources of information could be government statistics, trade information, research done by commercial research agencies and financial institutions.
From the retailer’s perspective, market research needs to be done prior to the setting up of a retail store and after up of a retail store. The information needed at both stages varies significantly.
Research Prior to setting up a retail store
The main question faced a retailer prior to the setting up of a retail store is whether he should go ahead with the store in that state / country. The primary information that he would need to look at would be:
1) Demographic data
2) Consumer data
A study of the overall population, the age profile, the literacy rates, and social and economic trends is termed as the demographic data. This data helps the retailer understand the diversity of retailing in a particular region / nation. Many a times, it serves as the starting point for understanding consumer profiles. It also helps the retailer gauge whether the market is worth entering, the number of customers that exist in the market, thereby determining the ales potential. The issues that a retailer would look into would be:
The population: In the year 2001, the population of India has crossed the one billion mark. With this, India became the second largest country in the world after China in terms of population and the world’s largest democracy. By is sheer size, India is an attractive market. However, the number of people in the population does not necessarily mean consumers; hence a retailer needs to delve further.
Gross Domestic Product and Purchasing Power Parity:
In terms Power Parity>>
(PPP) India is considered to be the fourth largest economy. This indicates that India is way above on this count a compared to some of the more developed nations of the world. Its Gross Domestic Product (GDP) which is the value of all final goods and services produced within the country in a given year is higher than that of many economies of the world. In terms of population and PPP, India appears to be an attractive market however the per capita GDP gives the true picture.
The increase in the disposable income and the rise of the great Indian middle class>>
The number of households with an income of over Rs 45,000 per annum is expected to grow from 58 million in 1999-2000 to 81 million this fiscal, according to the National Council of Applied Economic Research (NCAER). This will add a large number of households to the consuming class.
The Indian nation comprise of 28 states and 7 union territories. The economic and socio cultural diversity is vast and all the states may not equally prosperous, hence it becomes necessary to look at state level data.
Level of urbanization, literacy levels and the per capita GDP level of the state are key factors which effect the development of organized retail trade.