CHAPTER -1 INTRODUCTION INTRODUCTIONTO MALLS

Across the world, malls have played an important role in shaping the future of retailing. The planned shopping center or mall has today become an important part of contemporary lifestyle. Changing patterns of shopping as well as social and recreational activities have played important roles in the evolution of malls, since their first appearance in 1920s in US. One of the major reasons for their creation was to engineer a better shopping environment and thus, gain better operational performance. Until post-World War II period, retailing in US was primarily a 'Main Street' activity with individual department, drug, variety stores and coffee shops clustered in the heart of towns and cities. But as large segments of the population moved to suburbs in the 1950s and 1960s, a new retailing revolution took place. Large shopping centers provided an assortment of merchandise that often exceeded the standalone store offerings. Combining many stores under one roof creates a synergy that attracts customers than those stores, which have separate locations. The rise in popularity of these shopping centers resulted in a rapid shift in the venue of retailing -mainly towards the shopping mall. MALLS IN INDIA Organized Indian retail real estate market has witnessed a boom over the last two years, nearly a decade after the first signs of its evolution. India is expecting over 100 million sq.ft. of retail real estate space by year 2011. Malls arc coming up in small cities like Indore, Ludhiana and Meerut, leave alone metropolitans like Delhi and mumbai where the pace of development is amazing. Mall development has attracted many real estate

developers across the country, some with a shear "me too" approach. Currently the country has some 1000 malls, with the National Capital Region (NCR) and Mumbai accounting for maximum numbers of the gleaming shopping centers. According to a study conducted there are more than of 1000 operational malls in India with a total built-up area of 211.6 million sq ft. The number will rise to 358 malls by the end of the current year i.e. 2011 The total retail space in India is set to grow 181 per cent from 32 million sq ft as of August 2007 to 90 million sq ft by 2011, according to a report on 'Malls of India'. By 2011, north zone will account for 39 percent of total mall space, followed by west zone (33 percent), south zone (18 percent) and east zone (10 percent). A lot more activity on the mall development front was expected from the smaller cities in the coming years. This increase would require an investment of around Rs 40,000 crores. The organized retail industry is growing at an average of 30 per cent per annum and by 2011 is expected to stand at $ 24 billion, around 10 per cent of the estimated size of the overall retail industry. WHAT DRIVING INDIA'S MANIA FOR MALLS? Real estate speculation is one major factor: In many cases, it's the 'loot-and-scoot* model. You see an opportunity, you build a mall, and you sell out and leave." Mall builders like acknowledge that there has been speculative mall building, but blame it on smaller competitors that lack their long-term vision. Instead of putting a check on the mall-building glut, India's state and local governments are all too happy to encourage it. "Governments sell land because they get great prices for it.

However, an administrator with Urban Development Authority, which oversees the development of Gurgaon. denies that the government has been reckless in sanctioning new malls, asserting that "20 or 25 malls is not too much for a city. Another concern is that India doesn't yet have the infrastructure needed to support all of its new malls; the daily exodus of shoppers is creating chaos on the already congested roads. But that's only the start of the trouble because electricity is unreliable all over the country smaller malls will have to run their own diesel-power generators which will cause a significant amount of pollution. And because the water supply is also shaky, he adds, many of the malls will have to dig wells and suck upgroundwater, thus lowering the water table in the region. Such environmental concerns are a key reason to proceed with caution before sanctioning more construction of malls, sitting in the food court on the top floor of the Mega Mall, the latest shopping emporium to open in Gurgaon, with Domino's Pizza and Subway close at hand, it's easy to imagine you're in a city like New York or Sydney. Yet India's mall boom is premature for the country's level of economic development, Incomes in India have grown, no doubt, but they need to grow much fasterat 10% for five or six years, like Chinabefore Indians can support all these malls.

MALLS AND EMPLOYMENT While there will be a large number of jobs created in the sector (2 per over ISO sq ft of retail space) there are not enough trained people which is one of the immediate areas of concern. In the enthusiasm to meet consumers' demand, the retailer's demand for both quality personnel as well as a betterorganized back end is being ignored.

FOREIGN RETAILERS IN INDIA Foreign retailers can operate now through a franchisee, a joint venture or in the cash-andcarry and wholesale operations. Britain's Marks & Spencer and Dubai's Lifestyle International have franchises and joint ventures, while Germany's Metro AG and South Africa's Shoprite Holdings operate in the cash and carry segment. Dairy Farm International Holdings recently exited a joint venture with India's RPG group and is seeking a partner. Global giants such as Wal-Mart Stores, Tesco and Carrefour are keenly eyeing India, where rising consumer incomes have led to a mushrooming of malls in cities INTRODUCTION TO MARKETING According To PETER DRUCKER "THE AIM OF MARKETING IX TO MAKE SELLING SUPERFLUOUS" This essentially means that marketers do not have to do much of selling , if they are able to identify unfulfilled needs of customers and satisfy them. MARKET A market "as an area for potential exchanges". Market consists of force of supply (seller) and demand (buyer) interested in negotiating the terms of purchase/sales of goods. A market is a convenient meeting place for buyers and sellers to gather together in order to conduct buying and selling activities e.g. a spot, cash, or, physical market, wholesale or retail market. Market means a group of people having unmet wants, purchasing power to make their demand effective and the will to spend their income to fulfill those wants. Today a market is equated with the total demand MARKETING

Marketing is social and managerial process by which individual and groups obtain what they need and want through creating, offering of exchanging product of value with others. marketing is a comprehensive term and it includes alt resources and set of activities necessary to direct and facilitate the tlow of goods and services form the producer to the consumer in the process of distribution. Businessmen regards. marketing as a management function to plan promote and deliver products to the clients or customers. Human efforts, finance and management constitute the primary resources in marketing. CORE CONCEPTS OF MARKETING (i) Needs, wants and demands: Marketing starts with human needs and wants. A human need is a state of deprivation of some basic satisfaction. People require food, clothing, shelter, safety, belonging and esteem these needs are mot created by society or the marketers. Wants are desires for specific satisfiers of needs. Human wants are continually shaped and reshaped by social forces and institutions. Demands are wants for specific products that are backed by an ability and willingness to buy them. Wants become demands when supported by purchasing power. (ii) Product (goods, services and ideas): People satisfy their needs and wants with products. A product is anything that can be offered to satisfy a need or want. A product

mainly consists of three components they are physical goods, services and ideas. (iii) Exchange and transactions: Marketing emerges when people decide to satisfy needs and wants through exchange. An exchange is the act of obtaining a desired product from someone by offering something in return. When an agreement is reached in an exchange a transaction takes place. While a transaction is a trade of values between two or more parties. (iv) Relationships and networks: Relationship marketing is the practice of building long term satisfying relations with important parties like the customers, suppliers and distributors in order to retain their long term preference and business. The outcome of relationship Marketing is the building of a unique company asset called a marketing network. It consists of the company and all of its supporting customers, employees, suppliers, distributors, retailers, ad agencies and others with whom it has built mutually profitable business relationship (vi) Markets: A market consists of all the potential customers sharing a particular need or wants who might be willing and able to engage in exchange to satisfy that need or want. The concept of exchange leads to the concept of market. The size of the market varies on the basis of needs and wants of the consumers as well as the ability of the seller to offer his resources in exchange for what they want. (vii) Marketers and Prospects: A marketer is someone seeking one or more prospects who might engage in exchange of values. A prospect is one whom the marketers identify as potentially willing and able to engage in a transaction. A marketer can be a seller or a buyer, but in normal situation the marketer is a company serving a market in the

face of competitors as he sends his products and messages to the end users. MARKETING MANAGEMENT Marketing management represents an important functional area of business management efforts for the flow of goods and services from the producer to the consumers. It looks after the marketing system of the enterprise. It has to plan and develop the product on the basis of known customer demand. Marketing management may be defined as, *a process of management of marketing programs for accomplishing organizational goals and objectives*. Marketing management has to build up appropriate marketing plan or marketing mix to fulfill the set goals of the business. It has to formulate sound marketing policies and programs. It looks after their implementation and control. It has to implement marketing strategies, programs and campaigns. It must evaluate the effectiveness of each part of marketing mix and introduce necessary modifications to remove discrepancies in the actual execution of plans, policies, strategies, procedures and programs.

MARKET RESEARCH According to British Institute of Management and the American Marketing Association , market research is the objective gathering, recording, and analyzing of all facts about problem relating to the transfer and sales of good and services from the producer to consumer or user. PRODUCT POSITIONING Product positioning refers to the position a product occupies in hypothetical abstract space in the prospect's mind in relations to other competing products. Product positioning focuses on buyer perception and preferences about the place a product occupies in specified market. The objective of the positioning strategy is to have the

brand favorably perceived by the people in the target market. CUSTOMER CARE Customer care is a customer service that seeks to acquire new customers, provide superior customer satisfaction, and build customer loyalty."

A CUSTOMER IS FOR LIFE -MAKE IT POSSIBLE Select the right customer through market research. Know your purpose for being in the business. Move customers from satisfaction to loyalty by focusing on retention and Loyalty schemes Develop reward programs. Customize the products and services Train and empower the employees in excellent customer service. Respond to customers" needs with speed and efficiency. Measure what is important to the customer - always add value. Know why customers leave your enterprise, by conducting Customer exit Survey. Know what exactly customers want in their relationship with you. Conduct a failure analysis at regular intervals of time. Use market value pricing concepts. And lastly, try to do everything in just the right way A customer is a person who avails the products or services offered by a firm or a business entity.

The various other features of customer are y Business needs customers to survive and exists in the market. V Customer is important person in business. I* A customer is someone who brings his expectations to the organization, and it is their job to meet there expectation and satisfy their wants. > A customer is the blood of any business without which it cannot function. V A customer is a person who does a favour to the company by calling on them, but the do not do so by serving in return. V A customer is not dependent on the organization; the organization is dependent on him. CUSTOMER SATISFACTION Whether the buyer is satisfied after purchase depends on the offer's performance in relation to buyer's expectation. In general satisfaction is a person's feeling of pleasure or disappointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectations.

FIVE RULES OF CUSTOMER SATISFACTION Rule 1: Ask your customers what they want and give it to them Rule 2: Concentrate on systems, not smiles Rule 3: Do without a customer relations department. Any person working in your company is in customer relations.

Rule 4: Under-promise and over-deliver Rule 5: Measure customer satisfaction in monetary figures

CUSTOMERmALLnflMtPOROyUNT C - CARE FOR THE CUSTOMER U - UNDERSTAND THE CUSTOMER S - STUDY THE CUSTOMER T - TRUST THE CUSTOMER O - OBLIGE THE CUSTOMER M - MEET THE CUSTOMER E - EVALUATE THE CUSTOMER R - RESPOND TO THE CUSTOMER S - SELL AND WIN THE CUSTOMER

The purpose, of course, in measuring customer satisfaction is to see where a company stands in this regard in the eyes of its customers, thereby enabling service and product improvements which will lead to higher satisfaction levels. CUSTOMER CENTRIC ORGANISATION 'There is only one boss, the customer and he can fire anybody in the company from the Chairman down, simply by spending his money somewhere else."" These words by Sam Walton, CEO of Wal-Mart truly testify the power wielded

It has become imperative these days to place the Customer at the centre of any organization. This enables an organization o enjoy the following benefits: To differentiate itself from the competition To improve its image in the eyes of the Customer. To minimize price sensitivity. To improve profitability. To increase customer retention and satisfaction. To enhance the reputation of a company. To improve staff morale. To increase employee satisfaction and retention. To increase productivity. To reduce costs. To encourage employee participation. To create a reputation as a caring, customer oriented company To foster internal customer/supplier relationships. To bring about continuous improvements to the operations of the company SERVICE IN A COMPETITIVE ENVIRONMENT Over recent years organizations have placed increasing emphasis on customer service as a means of gaining competitive advantage. Peter Drucker mentioned that * there is only one valid definition of business purpose: to create a customer.9 he said that an organization's ability to remain in business is a function o f its competitiveness and its ability to win customers from the competition. The customer is the foundation of the business and keeps it in existence.

As competition has become more global and more intense, many organizations have realized that they cannot compete on price alone. It is in these market places that many companies have developed a strategy of providing superior customer care to differentiate their products and services. The most important thing is to realize that dealing with customers is not always about selling them something there are many different situations in which customer services is provided: 1. Providing information: the types of information required by customers and clients vary a lot, so it can be impossible to know the answer to every question customers ask. E.g. keeping a promise to find out quickly and keeping that promise is more important. 2. Giving advice: - this is more precise than information. This involves more detail, greater specialist's knowledge and is tailored to the needs of the person making the request. 3. Receiving and passing on messages 4. Keeping records. 5. Providing assistance 6. Dealing with problems: - this can be like refunds and dealing with complaints 7. Dealing with dissatisfied customers: - this is basically solving out the problem and seeing what one can do to make them happy. Offering extra services PRICE Economist defines price as the exchange value of a product or service always expressed in money. Price is the mechanism or device for translating into the quantities terms the perceived value of the product to the customer at a point of time. IMPORTANCE OF PRICING Pricing is a matter of vital importance to both the seller and the buyer in the market place. In a competitive market economy, price is determined by free play of demand and supply. Price is prime regulator of production, distribution and consumption of goods.

Price influence consumer purchased decision. It reflects purchasing power of currency Pricing decision inter connect marketing actions with the financial objective of the enterprise. Among the most important marketing variables influenced by pricing decisions are: 1. Sales volume 2. Profit margins 3. Rate of return on investment [ROI] 4. Trade margin 5. Advertising and sales promotion 6. Product image New product development DISCOUNTS Discounts and allowances are price concessions offered to trader or buyers in the form of deductions form the list price or from the amount of a bill or invoice. They are a form of indirect price competition. "ONE SATISFIED CUSTOMER IS EQUAL TO 100 NEW CUSTOMERS" Understanding this factor, many companies are striving hard to keep their existing customers happy. They are spending enormous amount of money to retain their customers. Today the growth and profitability of any organization depends on the number of satisfied customers that it has, not its financial assets. To maintain customer loyalty and brand loyalty, it is very important for any organization to have a good and long lasting relationship with its customers. Building long lasting customers requires understanding their needs, expectations, feelings, etc. once it is know what the customers expect, it is simple and easier to fulfill their expectations and delight them. In this context "Customer Care" is very critical. It is about understanding and building a strong bond between the organization and the customer continuously, by serving him in the best possible way when he knocks at your door, or maybe when he requires you to knock at his door.

To develop this bond, the organization needs to keep in touch with customers regularly. This would help to understand the changing attitude, perception, interest and needs of the customers. More are the customers known to the organization; it serves better and earns its goodwill. Customer's difficulties and problems, valuable suggestions, ideas towards the organization, products, services and people will help the organization in becoming a better enterprise by developing new products and offering superior service. This will also make the customer feel good that he, his problems and his ideas are important to the organization, and will help the organization to build a better relationship. To achieve these objectives, for any organization it is a priority to give thrust on "Customer Care and Management", which is independent of any other department We are inching towards becoming a service economy. Yet few organizations are truly delighting customers. Over recent years organizations have started to place increasing emphasis on customer service as a means of gaining competitive advantage. Who would have imagined 15 years ago, for example that organizations such as Amazon.com could capture market share from the high street by offering the customer a wide selection of value for money products backed by a quality service? Or that companies such SBM.K CONSUMER BEHAVIOR:The aim of marketing is to meet and satisfy target customers needs and wants. The field of consumer behavior studies how individuals, groups, and organizations select, buy use and dispose of goods, services, ideas, or experience to satisfy their need and desires. Understanding consumer behaviour and "Knowing Customer" are never simple. Customer may state their needs and wants but act otherwise. They may not be in touch with their deeper motivations. They many respond to influences that change their

mind at the last minute Nevertheless, marketers must study their target, customers wants, perception, preferences and shopping and buying behavior A MODEL OF CONSUMER BEHAVIOR:At one time, marketers could understand consumers through the daily experience of selling of the. But the growth of the companies and markets has removed many marketing managers from direct contact with customers. Increasingly managers have has to rely on the 7 framework for consumer research to answer the following key questions about any market:> Who constitutes the market ? > What does the market Buy ? > Why does the market buy ?

> Who participates in the buying ? > How does the market buy? > When does the market buy ?

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A Customer is for life - Make it possible > Select the right customer through market research. > Know your purpose for being in the business. > Move customers from satisfaction to loyalty by focusing on retention and loyalty schemes. > Develop reward programs. > Customize the products and services. > Train and empower the employees in excellent customer service. h Respond to customers' needs with speed and efficiency. > Measure what is important to the customer - always add value. r Know why customers leave your enterprise, by conducting customer exit surveys.