Navneet's MT Final Report

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A Thesis On

A COMPARATIVE STUDY OF MERCHANDISE ASSORTMENT PLANNING OF VARIOUS

APPAREL OUTLETS AND RETAIL COUNTERS OF SRI GANGANAGAR WITH STUDY OF CUSTOMER

PREFERENCES TOWARDS IT.

ByNavneet Juneja

7NBGN018

Management Thesis Final Report

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A THESIS ON

A COMPARATIVE STUDY OF MERCHANDISE ASSORTMENT PLANNING OF VARIOUS APPAREL

OUTLETS AND RETAIL COUNTERS OF SRI GANGANAGAR WITH STUDY OF CUSTOMER

PREFERENCES TOWARDS IT.

ByNavneet Juneja

7NBGN018

A report submitted in partial fulfillment ofthe requirements of

THE MBA PROGRAM (The Class of 2009)INC Sri Ganganagar

Copies marked list:

Mr. Nilesh Arora

(Faculty Supervisor)


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TABLE OF CONTENTS

Page No.

1. Declaration 5

2. Certificate 6

3. Acknowledgement 7

4. Abstract 8

5. Introduction

i. Retailing Overview

ii. In Apparel Segment and Merchandise Assortment

Planning

iii. Objectives

iv. Limitations

v. Benefits to.

10-15

16-17

18

19

20

6. i. Research Design/Methodology

ii. Process Flow of the Project

22-24

25

7. Review of Literature 27-28

8. Empirical Analysis 30-32

9. Findings and Suggestions 34-48

10. Conclusion 50-51

11. Appendices

i. Questionnaire for retailers

ii. Questionnaire for customers

iii. Assortment plan example of Spykar

iv. Ladies’ Wear

v. Men’s Wear

53

54-56

57

58-59

60-61


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12. References 63

13. Glossary 65-67


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DECLARATION

I am Navneet Juneja hereby state that this Management Thesis Report has been

submitted to ICFAI National College in partial fulfillment of the requirements of MBA

(Master of Business Administration) Program Class of 2009.

The empirical information of this report is based on my own research and observation.

Any part of this project has not been reported or copied from any report of any university

and others.

Date: NAVNEET JUNEJA

Place: Sri Ganganagar (7NBGN018)


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CERTIFICATE

This is to certify that the Management Thesis work entitled “A comparative study of

Merchandise Assortment planning of various apparel outlets and retail counters of

Sri Ganganagar with study of customer preferences towards it.” is being submitted

by Navneet Juneja (7NBGN018) for partial fulfillment of MBA to the ICFAI National

College, Sri Ganganagar is recorded a Bonafide work carried out by him under my

guidance and supervision.

Date: Mr. Nilesh Arora

Place: Sri Ganganagar (Faculty Supervisor)

ICFAI National College,

Sri Ganganagar


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ACKNOWLEDGEMENT

I am writing this Final Report of Management Thesis for the program of Master of

Business Administration for ICFAI National College, Sri Ganganagar.

It has been a great challenge but a plenty of learning and opportunities to gain huge

knowledge on the way preparing this management thesis. I would not succeed without

Mr. Nilesh Arora, my amazing faculty supervisor, who seemed to be with me always;

and prepared to give me feedback and guidelines whenever I needed it. Thank You Sir!

I also would like to thank all my friends, my colleagues and all those persons whom I met

in this time period for all feedback and help which they provided to me. And of course to

all those executives from various apparel outlets whom I interviewed for all their help

and support. Thank You all!

I have learned a lot during this time period of preparing this thesis and I hope you will

find my working as interesting and knowledge earning as I have and that this report is

presenting to all. And it will be useful for others wanting to learn about apparel industry

and retailers’ policies and strategies about merchandise assortment planning.

NAVNEET JUNEJA

(7NBGN018)


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ABSTRACT

In today’s competitive scenario where more and more players are coming into the picture,

there is a need to look into the customer or client behavior to know your client well. And

also there is a need to spread their business like this in which one can choose the best for

them. Till now here in India most of people prefer unbranded clothing and they buy

clothing from traditional apparel stores but after entrance of big giants in this segment,

today’s emerging retailing environment, people’s income level and spending power,

increasing preference for fashion & new trends; hence there is a wide scope in India for

apparel industry and till now it is at the flourish stage.

The variety and assortment of merchandise offered by a store play a major role in

attracting customers. Merchandise comes in a variety of sizes, colors, makes and models.

So any retailer, big or small, take many decisions regarding what to purchase and what to

made the goods available to customers. This is called systematic merchandise planning.

So basically merchandise decisions are related to what type of product they are going to

offer and assortment planning is related to the varieties of product and goods offered by

them in their outlets.

Because of high cut-throat competition, when all market players are fighting with each-

other for attracting and retaining customers. But today customers are also very smart and

they know the value of their money; and a lot of choices are available in the market for

them. Especially in apparel industry, a lot of brands and a wide range of fashion are

available so it’s too difficult for customers to taking the purchase decision. So it’s

necessary for every retailer to provide the best and biggest possible range of product to

customers. And researcher studied these all in preparing this thesis and found that these

decisions and planning are continuously adopting by every big and small retailer; because

it is the demand of current time.


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1. INTRODUCTION

i. Retailing Overview

ii. In Apparel Segment and Merchandise

Assortment Planning

iii. Objectives

iv. Limitations

v. Benefits to.


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Retailing Overview-

It’s a human tendency to have a comfort, luxurious life and have all facilities to him. And

as there is a golden period going on now; anybody can enjoy these benefits. And retailing

concept is also from one of these facilities. Retailing is simply provides the end product

to customer. So retailers are directly in touch with customers. Retailing in India is

witnessing a huge revamping exercise. India is rated the fifth most attractive emerging

retail market: a potential goldmine.

As per a report by KPMG the annual growth of department stores is estimated at 24%.

Ranked second in a Global Retail Development Index of 30 developing countries drawn

up by AT Kearney.


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Retail Sales 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 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.


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

segments


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And apparel industry is also one of these SBU’s; so definitely these all things make it

more valuable than others.

Global retail sales are estimated to cross US $ 12 trillion in 2007, reflecting the growth in

the world economy, global retail sales grew strongly in the last five years (2001-06) at an

average nominal growth of about 8 per cent per annum in dollar terms. This is in contrast

to near stagnant global retail sales during the previous five years, 1996-01. Grocery

dominates retail sales with a share of approximately 40 per cent which varies from about

30 per cent in rich Japan to an average of 60 per cent in poor Africa. Retail sales through

modern formats have been rising faster than total retail sales; the share of modern retail

has risen from about 45 per cent in 1996 to over 52 per cent in 2006.

The growth of the retail trade in India is associated with the growth in the Indian

economy. Gross domestic product (GDP) grew by an annual rate of 6.6 per cent during

1994-00 but the growth slackened to 4.7 per cent per annum during the next three years

before the growth remarkably rose to 8.7 per cent per annum in the last four years. This

meant a substantial rise in disposable income of Indian households since the mid-1990s.

Based on the Market Information Survey of Households (MISH) of the National Council

of Applied Economic Research (NCAER), the number of people in the income groups of

“aspirers” and the middle class with annual income ranging from Rs. 90,000 to one

million, more than doubled from 157 million to 327 million during the last decade 1995-

96 to 2005-06.3 The data from the Central Statistical Organization (CSO) indicate that

the growth of real private final consumption expenditure, which dipped from an average

of 5.7 per cent per annum during 1994-00 to 4 per cent per annum during 2000-03, shot

up to 6.7 per cent per annum during 2003-07. Retail sales (in nominal terms) in the

country also followed a similar pattern: a high annual growth of 13.6 per cent during

1994-00, a low growth of 4.8 per cent during 2000-03 and a smart pick up in the last four

years, 2003-07 at around 11 per cent.


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Retail Sector is the most booming sector in the Indian economy. Some of the biggest

players of the world are going to enter the industry soon. It is on the threshold of bringing

the next big revolution after the IT sector. Although organized retail market is not as

strong as of now, it is expected to grow manifolds by the year 2010. The sector

contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end

of the decade as against the current growth rate of 8.5%. A CRISIL report says that the

Indian retail market is the most fragmented in the world and that only 2% of the entire

retailing business is in the organized sector. This suggests that the potential for growth is

immense. There are about 300 new malls, 1500 supermarkets and 325 departmental

stores currently being built in the cities across India.

Exhibit – A. GDP, Private Final Consumption Expenditure and Retail SalesGrowth, 1994-07 (Compound Annual Growth Rate)

1994-95 to

1999-00

2000-01 to

2002-03

2003-04 to

2006-07

Real GDP 6.6 4.7 8.7

Real private final consumption expenditure 5.7 4.0 6.7

Retail sales 13.6 4.8 10.9

Traditionally retailing in India can be traced to the emergence of the neighborhood

‘Kirana’ stores catering to the convenience of the consumers, an era of government

support for rural retail: Indigenous franchise model of store chains run by Khadi &

Village Industries Commission, 1980s experienced slow change as India began to open

up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S

Kumar's and Grasim first saw the emergence of retail chains. Later Titan successfully

created an organized retailing concept and established a series of showrooms for its

premium watches. The latter half of the 1990s saw a fresh wave of entrants with a shift

from Manufactures to Pure Retailers. For example Food World, Subhiksha and Nilgiris in

food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in


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books. Post 1995 onwards saw an emergence of shopping centers, mainly in urban areas,

with facilities like car parking targeted to provide a complete destination experience for

all segments of society. Emergence of hyper and super markets trying to provide

customer 3 V’s - Value, Variety and Volume. Expanding target consumer segment: The

Sachet revolution - example of reaching to the bottom of the pyramid.

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.

Exhibit –B. 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 & footwear

7.3 8.8 8.6 9.3

4. Furniture, furnishing, appliances & services

4.8 5.8 6.2 6.8

5. Non-institutional healthcare

9 8.6 8.5 8

6. Sports goods, entertainment, 2 2.4 2.6 2.7


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equipment & books

7. Personal care 3.5 3.8 3.9 4.2

8. Jewellery, watches, etc

5 5.4 5.4 5.9

Total Retail 100 100 100 100

In Apparel Segment and Merchandise Assortment Planning-

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,


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colors, 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.

(Exhibit- C) 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 changes according to his

expectations of what products or fashions will be really significant for the coming season.

EXHIBIT: C

Assortment Plan For Boys’ Jeans

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

Retail price

(in Rs.)

999 1399 1799 1299 1599

Type of

Fabric

Regular

denim

Stone

washed

denim

Tinsel-

Lyera based

denim

Broken twill Over dyed

Colors Light blue Dark blue Light blue Light blue Blue

Black Indigo Black Black Black


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Black Deep blue

This plan describes general styles, price levels, fabric composition and colors. The

process of developing an assortment plan can be quite complex, especially in multi-store

chains like Shoppers’ Stop, Pantaloons or FoodWorld. An effective assortment plan

requires equal or more effective sales, inventory turnover and GMROI forecasts, to

complement the experienced judgment of the merchandise planner.

RESEARCH PROBLEM/OBJECTIVES OF THE STUDY

Management Thesis is a part of the MBA Program. The objective of a Management

Thesis is to train the student in designing and implementing a research project in respect

of a business problem. A Management Thesis is the culmination of training provided to

the student on practical applicability of the theoretical concepts learned by them. Apart

from this objective the other objective related to the project study is given below.

The study was performed aiming at the following objectives:

Primary Objective of the study-

Understanding the merchandise assortment planning concept and process

adopting by apparel outlets at Sri Ganganagar.

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.


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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 fulfill demands of customers.

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.

Because all research is related to Sri Ganganagar city only and here a limited

scope is available for these types of studies.

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.


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BENEFITS TO

i. To Self-

Knowledge earning.

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.


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2.

Research Design/Methodology

Process Flow of the Project


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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.


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f) Preparing and presenting the research report.

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 can be conducted using both qualitative and quantitative technique.

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 Sri Ganganagar context this research is an attempt to know the perception of Sri

Ganganagar people and the apparel store retailers.

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.

Secondary data studies: This is concerned with the analysis of already existing data that

is related to the research topic in question.

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,


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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.

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.

Since in Sri Ganganagar, 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 13 for apparel outlets to study their merchandise

assortment planning and around 50-60 for customers to understand their preferences.

Sampling Unit: John Players, Adidas, Oxemburg, Spykar, Reebok, Peter England,

Lilliput, Sportking, Gini & Jony, Monte Carlo, Priknit, Cotton County, Koutons.

Sampling Area: Sri Ganganagar city.

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 will be used in the research

comprises of surveys therefore data collected will be of primary in nature and partly

secondary since secondary data will also be taken.

EVALUATING AND ANALYSING 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.


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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.

PROCESS FLOW OF THE PROJECT


DESIGN OF QUESTIONNAIRE

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Digram-1 - PROCESS FLOW OF THE PROJECT


PILOTING BASED ON QUESTIONNAIRE AFTER

FEEDBACK

REDESIGN THE QUESTIONNAIRE

QUALITY CHECK

GETTING QUESTIONNAIRE FILLED

FINDINGS, RECOMMENDATIONS & CONCLUSION

CORRECTION OF DATA

DATA ENTRY

DATA CLEANING

ANALYSIS

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Review of Literature

REVIEW OF LITERATURE


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As merchandise assortment planning is one important issue for consideration for apparel

retailers, and by this an organization can gain a high level competitive advantage over

their rivals. So for this research, researcher has to go through-

Past reports/information available on this topic.

References books or study materials for understanding the topic in details.

Available data on internet, through electronic databases.

And for this topic, the areas of literature should be examined are-

The concept of merchandise and assortment(stock keeping units and categories),

Organizing the buying process by categories,

Category management,

Levels of buying organizations,

Financial objectives,

Gross margin return on inventory investment( GMROI),

Sales forecasting

Product mix trends.

Literature review is important for-

Identify critical issues in literature,

Discuss how different authors works have complement one another

and how they can disagree,

Writing literature review develops research’s focus.

And on this topic, here in Sri Ganganagar before this study, never a research has been

conducted and because Sri Ganganagar is not a big city so here sources are limited but

scope for these type of study is very huge.

But now here so many apparel outlets are available for making this research successful

like John Players, Adidas, Oxemburg, Spykar, Reebok, Peter England, Lilliput,

Sportking, Gini & Jony, Monte Carlo, Priknit, Cotton County, Koutons and many more.


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So a good research will be possible on this topic. And my research study is restricted to

one aspect of retail management i.e. Merchandise Assortment Planning.


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EMPIRICAL ANALYSIS


Empirical Analysis

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Growing economy, globalization, retail trends, increasing income levels, healthy life-

style, technical advancement; these are some of the factors which are continuously

affecting every business segments. 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 he 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 colors product is available.

(apparel segment)

Before these decisions a retailer considers so many other factors too like

sales targets, financial objectives etc.


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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 verities 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 Rahul Bhutna

and Vinod Verma.

And Mr. Gagandeep 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-staller in front of Peter England outlet, Mr. Pappu said he also wears

Peter England shirts and the store owner also provides him a high rebates for

it and in this he feel more confident.

Mr. Deepak Bhardwaj said he prefer the goodwill/ brand name for

purchasing any new apparel. As he said he prefers Peter England and John

Players more than Koutons or Cotton County.

Miss Anisha said when John Players launched their new segment, Miss

Players, from that time she prefers Miss Players outlet for a new purchase.

And according to Mr. Mangi Lal, 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 young boys n girls of Sri Ganganagar prefer

Spykar Outlet for apparel purchase.

While young business persons and professionals prefer John Players and Peter

England 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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FINDINGS AND SUGGESTIONS


Findings & Suggestions

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As for this topic, there are two type of hypothesis can be possible, i.e.-

1. Null Hypothesis- Merchandise assortment is essential part for any retailer for

gaining competitive advantage & customers are satisfied and they have positive

perception towards it.

2. Alternative Hypothesis- Retailers can ignore it and customers also have negative

perception towards it, they are not satisfied with it.

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.

Questionnaire for Retailers-

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

and mission?

Ans.- For answering this questions, all retailers told about their own outlet’s

specialties.

As John Players and Peter England have a good name in formal apparels

and they have a good brand name also.

While on other side Adidas, Reebok, Spyker, Oxemburg have a huge

impact on youths, they are named as fashionable and casual apparel

brands.

And on other side some brands are there, those focuses on all family

apparel needs like Sportking, Monte Carlo, Priknit, Cotton County,

Koutons.

Same as Gini & Jony and Lilliput focuses only on children’s apparels.

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.


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Q.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.

Formals John Players, Peter England

Casuals Adidas, Reebok, Spykar, Oxemburg

All family apparel market Sportking, Monte Carlo, Priknit, Cotton

County, Koutons

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

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.


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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 Sri Ganganagar, 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.

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.- As in above questions’ answers given, local retailer got support from company side

too for their strategies and planning and they make some changes according to the local

circumstances.

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


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Ans.- Well, this is the question on which researcher found different approaches from

retailers. As John Players, Peter England, Adidas, Reebok these are some of the outlets,

which have a range of products of high prices. So in Sri Ganganagar, customers don’t

prefer these types of clothing because of its high prices. And others retailers as Cotton

County, Priknit, Koutons have low range products also and people of Sri Ganganagar like

these products much so they are enjoying profits more than high price showrooms.

Questionnaire for Customers-


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

a) Any traditional store (unbranded) or

b) A branded retail outlet.

Ans.- Mostly people from Sri Ganganagar prefers unbranded and traditional stores more.

37 people from total 60 customers said this. And others prefer branded clothing.

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

most-


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a) Price,

b) Variety

c) Quality

d) Looks

e) Fashion/trend

Ans.- As research is being conducted in Sri Ganganagar so, here most people prefers less

price items means price factor is most important thing for them. And they can

compromise with quality but they want fashionable and good looks items.

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

apparel outlets?


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a) Highly Satisfied

b) Satisfied

c) Neutral

d) Dissatisfied

e) Highly dissatisfied

Ans.- 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 favor of them

.

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

youths.)


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a) Spykar

b) Oxemburg

c) Adidas

d) Reebok

e) Sportking

f) Monte Carlo

g) Koutons

h) Cotton County

i) Or any other organized or unorganized retail outlet

Ans.-

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


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a) John Players

b) Peter England

c) Koutons

d) Cotton County

e) Monte Carlo

f) Or any other organized or unorganized outlet

Ans.-

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

purchasing)


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a) Lilliput

b) Gini & Jony

c) Or any other organized or unorganized outlet

Ans.


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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.-


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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 is 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.-


64 Management Thesis Final Report

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

a) Brand loyal,

b) Nothing like loyalty, just like this brand (on the base of past sales and

observation) but can switch if found any other good option,

c) Any brand no matter; just it should satisfy their needs.

Ans.-


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

will you give?

Ans.

MARKS NUMBER OF CONSUMERS GIVEN

MARKS IN THIS CATEGORY

10 3

9 9

8 12

7 8

6 11

5 7

4 3

3 3

2 4

1 0


64 Management Thesis Final Report

Conclusion

64

CONCLUSION

From all findings collected by researcher, he 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 wanna a long-term business then

they have to fulfill all demands of customers and follow all required patterns either it is a

big giant or a small business unit.

That’s why in a city like Sri Ganganagar also, retailers are very much aware about these

things and they are doing their business according to it. And here also customer can get

all those qualities and varieties which before some years they were only thinking in

dreams or watching in TVs, Movies. Now all branded items available here only because

of emerging market situations and customer-friendly market.

And if we talk about favorite brand of Sri Ganganagar people then on the base of research

findings, we found that-

Spykar is most famous between college/school going youths.

John Players is most favorite 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.


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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. Here same

famous Darwin’s Law (on Evaluation Theory) is applicable on retailers also,”the most

powerful and quick updating creature, according to the circumstances will remain

alive and others who couldn’t adopt themselves according to the changing

environment, will be finished.”

But ultimately these all things are going in favor of customers and customer will be

benefited at last.


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APPENDICES


Appendices

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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 ares-

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

mission?

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

3. Before taking decisions about your product varieties and range (Merchandise

Assortment Planning), what factors you considered?

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

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 Sri Ganganagar, 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?

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?

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

9. So at last if you wanna anything to change or wanna something should be like that

way which you want then you can say me?

Appendix-2


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Questionnaire for Customers-

1. From where you prefer to buy apparels-

c) Any traditional store (unbranded) or

d) A branded retail outlet.

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

most-

f) Price,

g) Variety

h) Quality

i) Looks

j) Fashion/trend

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

apparel outlets?

f) Highly Satisfied

g) Satisfied

h) Neutral

i) Dissatisfied

j) Highly dissatisfied

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

going youths.)

j) Spykar

k) Oxemburg

l) Adidas


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m) Reebok

n) Sportking

o) Monte Carlo

p) Koutons

q) Cotton County

r) Or any other organized or unorganized retail outlet

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

professionals.)

g) John Players

h) Peter England

i) Koutons

j) Cotton County

k) Monte Carlo

l) Or any other organized or unorganized outlet

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

purchasing)

d) Lilliput

e) Gini & Jony


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f) Or 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 so many other

negative factors?

d) Yes

e) No

f) We can ignore them.

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?

d) Yes, definitely

e) No, not at all

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

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

d) Brand loyal,

e) Nothing like loyalty, just like this brand (on the base of past sales and

observation) but can switch if found any other good option,

f) Any brand no matter; just it should satisfy their needs.

10. If you have to give marks to your favorite brand from out of 10, then how much

will you give?

Ans. - ……………………………………………

11. Do you wanna anything change in their operations or wanna something more

from them then you can tell me?


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Appendix-3

Assortment Plan For Boys’ Jeans

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

Retail price

(in Rs.)

999 1399 1799 1299 1599

Type of

Fabric

Regular

denim

Stone

washed

denim

Tinsel-

Lyera based

denim

Broken twill Over dyed

Colors 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.


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Appendix- 4

Ladies Wear

Apron An item of apparel in order to protect regular clothing. Generally made of cotton & may be decorative. It is fastened at the back using straps.

Bathrobe It is a wrap around robe styled with long sleeves, a shawl collar held by sash at the waist. Generally made of terry cloth.

BlousesClothing for the upper part of the body made generally of soft cloth & less tailored than a shirt May be embroidered with or without front opening.

Bra A fitted under garment worn by women to hold & mould breasts, usually consists of two cups & held by straps & elastic at the back. May be of cotton or p/v material.

PantiesApparel item for women worn under the outer garment covering torso below the waist. May be laced or without lace. With elasticated waistband.

Camisole This is a short length blouse with straight top and broad shoulder straps.

Cape This is a sleeveless outer garment of various lengths cut in full circle, in a segment & may have slit for arms & may have front opening.

Cardigan Named after 7th earl of cardigan, generally it is a knitted item which is open with ribbed cuffs & hem. May be half or full sleeves.

Corset One piece garment which has a foundation with firm support achieved by boning. Sometimes has an inner belt which helps to flatten abdomen & to shape the figure.

Dresses Knitted & Woven

It is a main item of apparel worn by women & girls. It may be made in one or two pieces & joined at the waistline may be front or without front opening.

Garters Basically elastic straps to hold the hose. These straps connect at waist line to an elastic band around waist.

Jacket/CoatDesigned to be worn over other clothing generally hip length. Mostly the coats are with set- in sleeves & the classic coats are generally fully lined & front open.

Knitted/ Woven Ensemble

A set of garments other than suits made up of same fabric. This set covers upper & lower part of body.

Leotards Knitted apparel item which is fitted and in one piece with tail which snaps between legs. Usually meant for dancers & acrobats.

Night DressMade from light weight fabric & worn while sleeping. Generally it is decorated and may have pleats or gathers with small / delicate print motifs.

Overall Pants with a bib top & suspender straps over the shoulder which close at the back.


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ParkaIntroduced during the 1930's for winter sports, this garment is a pull-on jacket with an attached hood & may have distinctive style features. .

PetticoatIt is an under garment for girls/ women starting at the waist. Depending on over garment it may be full or narrow, lace trimmed, tailored long or short.

RaincoatDesigned to be worn during rainy season & made up of water proof material or fabric with special surface finish to make it water repellent. It is generally front open with attached hood.

Romper One piece sport suit or jump suit with shirt & shorts or bloomer joined by waistline seam. May have elasticized waist.

ShirtsApparel for the upper part of the body. Usually worn with pants & buttoned right over left for women. Attached with collars in different styles such as button down or cut away & worn casually or formally.

Shirts With Zipper

Similar to shirt, but this item is meant for casual wear with zip opening in front. May be with or without hood & with or without sleeves.

Shorts Pants shorter than knee length mainly worn by adults & children for sports and/ or casual wear.

SkirtsSeparate item of clothing starting above or from the natural waistline. May be full knee or mini length. This item of apparel is generally neatly tailored with zip or button opening. May be pleated or wrap around.

SlipsUndergarments worn by women starting from bust & generally held in place by shoulder straps. Length can vary according to the length of the dress.

Swim-SuitAs the name suggests it is an outfit designed for swimming or sun bathing, two pieces or one piece. This outfit reveals more body as top is similar to brassier & the other piece similar to panties.

T-Shirt Knitted, pullover sport apparel made in any colour, frequently screen printed. May be crew neck or polo neck & with ribbed collor & cuffs.

Trousers Designed to cover lower torso & made to fit around each leg. Usually made with waistband & fly front or button closing.

WaistcoatAn item of apparel of waist length worn over shirt or under a suit jacket usually made of cotton / silk with or without embroidery with back part in satin fabric.

Wind Cheater Generally light weight nylon jacket, zipped front with close fitting elastic waistband & cuffs or drawstring waist often with attached hood

Appendix-5

Men's Wear

Anorak Hip length jacket with drawstring hem & waist with zip front. Often


64

quilted or fur lined, designed for cold weather.

Bathrobe It is a wraparound robe styled with long sleeves, a shawl collar held by sash at the waist. Generally made of terry cloth.

Blouson Jacket with a low waist line & usually shorter than hip length and gathered into flat waistband or pulled by drawstring.

Boxer ShortsShorts with elasticated waistbands similar to those worn by boxers & often printed in interesting motifs made up of cotton or synthetic material.

CarcoatCoats, generally of hip length with full front opening. May be single or double breasted with long sleeves. These are utility coats comfortable for driving.

Cardigan Named after 7th earl of cardigan, generally it is a knitted item which is open with ribbed cuffs and hem. May be half or full sleeves.

Night Gown / Dressing Gown

Styled for sleeping time and worn over night suit. It is generally made of silk or cotton. With string fastening at the waist.

Night Suit Sleeping outfit generally made of cotton. The shirt being front open and loose fitted while pants are with drawstring waist and wide bottom.

Overcoat Men's coat, heavier than topcoat and designed for very cold weather. Often fully lined, with fur or without fur.

Pullover Knitted apparel item- round, crew or V-neck pulled on over the head. May be in interesting knit structures such as purl, cable, and jacquard.

ShirtsApparel for the upper part of body. Usually worn with pants & buttoned left over right for men. Attached with collars in different styles such as button down or cut away & worn casually or formally.

Shorts Pants shorter than knee length mainly worn by adults & children as sportswear and casual wear.

Skisuit

As the name suggests, it is generally worn for winter sports especially for skiing. It may be a jumpsuit or two piece suit. Trousers are medium width with knitted band at the ankles. Jackets may be quilted with nylon insulation which is added for extra warmth.

T-Shirt Knitted, pullover sport apparel made in any colour, frequently screen printed. May be crew neck or polo neck & with ribbed collar & cuffs.

Track SuitOutfit designed for exercising, popularized in 60's. Consisting of zippered jacket and loose pants with elastic waistband. This suit is generally made up of fleece or velour.

Trousers Designed to cover lower torso & made to fit around each leg. Usually made with waistband & fly front or button closing.

Under Pants It is an under garment generally tight fitted & made up of stretch fabric/


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knitted fabric with elasticated waistband.

WaistcoatAn apparel item of waist length worn over shirt or under a suit jacket. Usually made of cotton/ silk with or without embroidery with back part in satin fabric.

Wind Cheater Generally light weight nylon jacket. Zipped front with close fitting elastic waistband & cuffs or drawstring waist, often with attached hood.

Workwear Basically one piece garment and with functional features. It is mainly for industrial use & made up of heavy fabric without any fancy features.


64

REFERENCES

List of books and articles-


REFERENCES

64

I. Retail Management, ICFAI University Press,

II. Business Research Methods, ICFAI University Press,

III. Case studies in Retail Management (Volume-2), ICFAI University Press

i. Nordstrom’s Perpetual Inventory System, Page No. 245-260

ii. Turnaround of JC Penney, Page No. 261-274

iii. Big Bazaar: Serving the Classes, Page No. 275-276

IV. Retail Management Review, ICFAI University Press

V. Cases of Retail Management, Prentice-Hall Publications.

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


http://www.prenticehall.com/

http://www.businesscases.com/

http://www.managementjuice.com/

http://www.answers.com/

http://www.montecarlo.com/

http://www.oxemburg.com/

http://www.lilliput.com/

http://www.rbk.com/

http://www.priknit.com/

http://www.adidas.com/

http://www.researchindia.org/

http://www.customerresearch.com/

http://www.koutonsindia.org/

http://www.johnplayers.com/

http://www.wikipedia.com/

http://www.google.com/

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GLOSSARY

Administrative Management Problems- The problems related to the resources retail

firms, chiefly, financial, human and locational resources.


GLOSSARY

64

Advertising Effectiveness- The degree to which the advertisements have produced the

desired results of helped the retailer accomplish its advertising goals.

Allowances- The additional discounts and price reductions that are given to customers by

the retailer.

Analog Model- It is used to estimate the potential sales of a new store on the basis of the

revenues of existing stores in identical areas, the competition at a prospective location,

the expected market share of the new store at the proposed location, and the size and

density of the primary trade area of the location.

Balance Sheet- It is a snap shot of the financial position of the retailer at that moment of

time. The balance sheet consists of three components Assets, Liabilities and Owner’s

equity (Net Worth). The balance sheet is based on a simple concept, i.e., in order to

acquire assets, a firm (retailer) must pay for them with either debt (liabilities) or with the

owner’s capital (shareholders’ equity).

Chain Stores- Stores that have two or more retail outlets that are commonly owned and

controlled. These stores have a centralized buying, and merchandising system and sell

similar lines of merchandise.

Combination Store- A blends of a super market and a general merchandise store, where

the general merchandise contributes more than 40 percent of the sales.

Customer service- A set of activities and programs taken up by a retail organization to

offer their customers a rewarding shopping experience.

Customization- The production of individually customized merchandise at the cost of a

mass produced product.


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Destination Store- Store that has larger trading area than a competitor with a less unique

appeal. It offers a better product assortment, have heavy promotions, and a stronger

image.

Everyday low pricing (EDLP)- A version of customary pricing, whereby a retailer

strives to sell its good and services at consistently low prices throughout the selling

season.

Franchise Store- A store based on a contractual arrangement between a franchiser

(manufacturer) and a retail franchisee, which allows the franchisee to conduct a given

form of business under as established name and according to a given pattern of business.

GMROI- Gross Margin Rate on Investment.

Hypermarket- A large retail store that offers products at a low price. It is a combination

of a discount store and a food based supermarket.

Main Store approach- Main store approach in this approach, the main store or the

parent organization control the operation of the branches.

Market Positioning- The kind of image the retailer wants to establish among its target

group and the group of firms with which it wishes to compete and coexist.

Market Segment- A group of customers whose needs will be satisfied by the same retail

offering because they have similar needs and go through similar buying processes.

Merchandise Controlling- A process for evaluating revenues, profits, turnover, shortage

of inventory, seasonal fluctuations and costs for each product in the merchandise

category being offered by the retailer.

Merchandise Handling- The physical handling of the merchandise by the retailer.


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Merchandise Mix- The total range of products that a store offers to its customers.

Resellers- Retailers who buy merchandise in large quantities at discounted prices from

the retailers, and sell them at normal prices in their shops.

Shopping Goods- Shopping goods are bought less frequently than convenience goods.

These goods include clothing and electronic goods etc.

Specialty store- A specialty store is a type of general merchandise store that sells limited

lines off closely related products or services to a select group of customers.

Store Image- Image of a store comprises how the consumer feels about the store.

Therefore, retailers must be sure about how they want their store to be perceived by the

customers.

Warehouse stores- are discount food retailer with a size of 100,000 square feet. They

cater to customers who look for low price deals.


Documents

Navneet's MT Final Report