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Indian Journal of Economics and Business June 1, 2006

Competitive strategies adopted by vegetable retailers in Mumbai cityof India--an insight.


BYLINE: Goel, Veena; Bhaskaran, Suku SECTION: Pg. 107(13) Vol. 5 No. 1 ISSN: 0972-5784 LENGTH: 7431 words

Abstract Study indicated the emergence of a more modern retail sector in the midst of traditional wet markets. To cope up with the resource constraints, small and medium sized retailers target the medium and low-price market segments, design merchandise mixes with the fast moving product lines and negotiate for the prices. Large sized retailers target the upper and medium price segments due to better asset positions,offer broader product choices of better qualities maintain prices higher, emphasize customer retention and market development. A handful of these retailers, has started depicting the developed country stylemodern selling patterns.

Keywords: Competitive Strategy, Vegetable Retailers, Competitive Advantage, Indian economy INTRODUCTION Retailing involves purchasing, distributing, displaying and marketing, selling and distributing a carefully composed assortment of goods and services to end consumers using stores and other ways (street trading, internet, direct selling, etc.) of distribution Hertog and Brouwer (2000). Traditionally, best retailers could generate pedestriantraffic, had well merchandised stores offering fresh displays and good service; presently, they are finding new ways to expand the markets, attract and retain customers by tailoring products and services totheir needs and restructuring the business processes for delivering products and services efficiently and effectively Shin (2001). With the coming up of informational technology leading retailers are leveraging customers to focus their merchandising, marketing and customer service offerings into a powerful integrated brand offering to build up two way relationship with them [Peppers and Rogers (2002), Shin (2001)]. Marketing of vegetables is more dynamic as it is directly affected by consumption and food distribution trends and its year-round availability is necessity for both foodservice and retail buyers Uva (2000). Differences in natural climatic and growing conditions between regions can provide a competitive advantage for products such as cabbage, onions, potatoes, carrots, green peas, etc. that have to main-

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tain competitiveness by improving production efficiency and developing marketing systems. Niche products such as organic / exotic / specialtyproducts, etc. that either lack a volume produced or are uncompetitive or the large volume products produced by small farms and marketed directly to consumers face a challenge to achieve differentiation andrealize higher prices to offset its high costs of producing and marketing. Retailers include independent retailers, those undertake own production, sourcing either directly, or through traders, and there can be an extensive chain between final retailers and actual producers yet the key value-added functions of marketing rest with the retailers Cook (2003a). However, developing countries due to the predominanceof agricultural sector are engulfed by rural poverty. Since agricultural production must be responsive to changing urban market demand for which poor farmers need access to specialized information, technology, professional knowledge, assets, institutions, infrastructure, andcredit to participate in growing global markets [Hulse (1999), IFPRI(2001)]. But they are constrained by the lack of information about markets, business and negotiating experience, collective organization to acquire power to interact on equal terms with the larger and stronger, market intermediaries that refrain them from markets IFAD (2001). An easier access to information along with a multitude of sources for the livelihoods advantages them to migrate from rural to the urbanareas Griffon (2002). An urban economic system integrates them in the informal sector, through a great variety of means at variable pacesHulse (1999). Since vegetable retailing is highly flexible that can be handled from a highly miniature scale involving abysmally low initial investment with quick returns, it offers immense opportunities toseek self employment. To earn for livelihoods and overcome resource constraints the migrants intensify competition at the market place tocapture a sizeable market share. This study reviews the competitive strategies adopted by the vegetable retailers. REVIEW OF LITERATURE "Competitiveness" has been defined as "the ability of a nation to meet the test of free international markets while expanding real incomes at home" Kirsten, Hassan and Abdalla (2004). It focuses on a sustained increase in productivity in the agribusiness sector as a resultof better business strategies and improved micro- and macro-economicconditions Porter (1990, 1998). A firm develops its marketing strategies by identifying the target market for its products or services, using a unique marketing mix to compete effectively to enhance sales ensuring profitability and sustainability [McCarthy (1960), Perreault and McCarthy (1999), Shin (2001)]. For food industry five potential marketing strategies include product differentiation and diversification; increased volume and variety of locally produced products; expanding market access and increasing market penetration; existing and emerging international market opportunities; strengthening trade associations and cooperatives and encouraging strategic alliances and collaboration Uva (2000). To obtain a competitive advantage, firm develops its business strategies by responding to five primary forces: (1) threat of new entrants, (2) rivalry among existing firms within an industry, (3) threat of substitute products/services, (4) bargaining powerof suppliers, and (5) bargaining power of buyers [Porter (1980, 1985), Porter and Millar (1985)]. A company in a given industry assesses these forces and tries to develop the market at those points where these are weak Porter (1979). Firm can derive a competitive advantage from tangible or intangible resources that enable it to produce more efficiently and/or more effectively a market offering that has value for a market segment or segments Hunt and Morgan (1995). Competitive strategy is an integrated set of actions taken by a firm that produce a sustainable advantage over competitors Vlosky (1996). Compan-

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ies canadopt competitive strategies such as product bundling that promotes the benefit of the whole package; innovation or the introduction of niche products to counteract the threat of product substitutes, new entrants and competition among existing firms; establish barriers to deter new entrants; cultivate unique or capital-intensive resources; increase bargaining power by increasing customers' switching costs and decreasing their own for switching suppliers; customer-centric strategy to customize products and offer promotions tailored for specific customer groups to build up loyalty, superior services, change attitudes towards consumers while emphasize customer retention in mature markets as firms realize that it is more cost effective than customer creation [Bakos and Brynjolfsson (1997), Dempsey (1978), Phillips and Peterson (20000, Sealey (2000), Vavra (1995), Viehland (2000)]. HealthFocus Trend survey (1997) indicated that product "freshness" has become more important than less fat, convenience, price or other productconsiderations and roadside stands have the advantage of offering "fresher produce" than supermarket chains Wolfe, et. al.. An expansion into related product lines can exploit transfer of skills or sharing of activities such as promotion and distribution, lower costs by achieving economies of scale and effectively utilizes company resources such as market information, managerial or technical expertise, and knowledge Porter (1987). Vertical co-operation/integration changes the informational structure in the channel, encourages downstream channel members to share their market knowledge with upstream members, that facilitates the transfer of information by mechanisms like establishment of common frames of reference, etc. Etgar (1976). Typical characteristics of prices such as its flexibility, speed of effect, force andmagnitude of the reaction it entails, have made it a relevant weaponin times of increased competition, fast technological progress and proliferation of new products and changing economic and legal condition Gijsbrechts and Campo (2000). Traditional mass marketing is no longer successful since consumers can easily acquire information on the price and characteristics of products [Sealey (1999, Hoffman and Novak(2000)]. Sellers can employ price discrimination strategies such as price lining and smart pricing strategy that make it difficult for buyers to compare the prices of alternative product offerings [Bakos (1998), Sinha (2000)]. This study adds to the extant literature by examining how resource poor vegetable retailers develop their strategies to maintain a competitive edge in a dynamic business environment. STUDY CONTEXT This study his been carried out for the Mumbai city (with a population of 11.9 million, Govt. of India, 2001) in India. Being a major commercial centre, it has witnessed fast growth due to natural growth and in migration of the poverty stricken rural population and the middle classes from various regions of the country. Several of its partsare also identified with the predominant ethnic groups such as Parsis, Christians, Marathis, Muslims, Gujaratis, Punjabis, etc. Long-termtrends such as rising household incomes (per capita income at current prices is Rs. 48,954 a little more than three times of India), higher female literacy rates (82.7%), increased workforce participation (68.1% of the 3.43 lakh main workers are employed in the service sector), busy lifestyles, changing consumer demographics have led to the emergence of developed country modern style buying patterns. While dietary concerns for balanced diets and body weight have increased per capita consumption of green vegetables. These developments have been acting as a "driving" force for structural changes in the retail markets such as emergence of small sized supermarkets in the developed suburban areas during the 1990s (there is only one large sized supermarket that has come up recently) with extended wet sections while the non conventional grocery / snacks retailers have extended the general mer-

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chandise along a selective fresh product lines. DATA BASE AND METHODOLOGY Municipal corporation (MC) retail markets 99 in number housing allcategories of food retail stores have, on the basis of business potential of a local area and the availability of infrastructural facilities, been classified into A (18), B (43) and C (37) categories. To capture maximum diversity of the market structure, a random sample of ten markets i.e., two from A, four from B and four from C has been selected. Of these, one A grade i.e., Dadar and one B grade i.e., Borivali (West) operate as semi-wholesale markets from about 6.00 AM to 10.00 AM and later as retail markets but the business is sluggish in thenoon. Among the other markets, A grade market (Crowford) has about ten, B grade markets (Matunga, Santakruz West and Kalina) about four while the C grade markets (Jogeshwari East, Govandi, Sion Koliwada andGhatkopar East) have one or two vegetable retail stores. So closer to all these markets except for Crowford, regular roadside markets have developed on the footpaths or feeder roads in the main retail markets and hawkers operate from these markets. But the local administration does not issue them licenses to discourage illegal business expansion. Retailers also operate in alliance with commission agents from acouple of blocks in the wholesale market located in new Mumbai on a regular basis but they are not the license holders. Both the organized and unorganized retailers of all the sizes have been randomly selected. Total sample comprises of 53 retailers--45 sole vegetable retailers (42 from the retail and 3 from the wholesale markets), 3 semi wholesalers/retailers, two grocers', one snacks retailer and two supermarkets one each of the medium and large sizes. Surveys have been completed through semi-structured, in-depth, face-to-face interviews with the proprietors, structured questionnaire and the observation technique. Interviews lasted from 15 minutes to about one hour that were completed during December 2002 and March 2003. All the markets were visited at least twice during the different business hours. Semi structured interviews were also completed with commission agents/traders/ importers, officials from the Marketing Department of the Agricultural Produce Marketing Corporation (APMC), MC and consumers. RESULTS AND DISCUSSION All the unorganized vegetable markets present an attractive mix ofthe store number, display sizes, layout patterns, merchandise mixes and, gender composition. In ownership patterns, local population dominates the organized while mainly migrants handle the unorganized market segments. On the basis of the value of the merchandise handled allretailers have been clustered into three groups: small (below $10), medium (between $10 and $ 35) and large (between $ 35 and $100) that constitute 43.40%, 35.85% and 20.75% of the sample size. 43.48% of the small sized retailers are females while only males manage the medium and large sized enterprises. 27.27% of the medium sized retailers are semi wholesalers. ASSET BASE OF RETAILERS An organization's asset base includes its physical assets, reputation, brand name, its staff- their knowledge and attitudes, business links, patents, licenses and so on (Blois 2000). Small sized retailers(table 1) have an average age of 40.43 years and schooling 0.35 years, mainly self manage businesses from fixed points in the unorganizedmarkets while only 8.7% from closer but isolated spots, with personal learning experiences. They use several low cost display structures such as old jute sacks spread on roadsides (60.87%) and baskets (17.39%) while a few of them also use old cots / wooden structure. Despitethe lack of ownership rights on their business premises police harassment remains

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low and trade credit worthiness is high. Lack of storage and refrigeration facilities necessitates a regular daily stock replenishment. Within this group, grocery/snack retailers operate from the organized markets, have concrete stalls and telephone facilities and rely partly upon cumulative learning experience due to hereditary business characters. Medium sized retailers have an average age of 43years and schooling 1.68 years. They also self-manage the businesseswith heavy reliance upon personal learning experiences; use display structures such as four wheeled hand operated rehris, wooden boards, concrete stalls and jute sack spread on floors; and also use these structures for product storage at night that reduces lot sizes of the regular product purchase. They operate from fixed points both from theunorganized (63.16%) and organized (36.84%) markets that increases theirs' credit worthiness. They oblige the area specific police and the municipality staff by giving regular bribes for a smooth business conduct. Average age of large sized retailers' is 44.55 years and schooling is 5.64 years. Both salespersons (36.36%) and they them self (63.64%) manage the businesses. Due to hereditary business character rely partly upon cumulative (27.27%) but mainly personal learning experiences. A large majority of them hires manpower for physical handlingof the products such as washing, loading / unloading, packaging, displaying etc. 90.91% of them have concrete shops / stalls while othersuse wooden boards. They operate from fixed points in the organized sector and a large majority of them own the telephone connections. Butthe central cooling and computer facilities are available only with the supermarkets. Large sized supermarket is located at an isolated location from the main markets and two retailers from the Crowford market handle its wet sections on a fixed commission basis of 10%. Retailers from all the three groups have been staying in their respective business lines due to cumulative trade specific knowledge, business links customers loyalty and market goodwills that reduces trade risks. COMPETITIVE STRATEGIES Retailers tailor competitive strategies to the demographics features, purchase, capacity and taste preferences of the target markets. Accordingly, they design the merchandise mixes--depth and breadth of product lines, product quality, lot sizes; fix prices, advertise product promotion, add services, operate for suitable business hours, and manage for logistic, etc. Competitive strategies of the retailers have been presented below. PRODUCT DIFFERENTIATION Product differentiation along a single/multiple attributes takes acomparatively longer time to change than price that could be changedat a very short notice and plays merely a tactical role (Mathur 2000). Among the various attributes of vegetable products quality, pre-cut and packaging, presentation, place of origin, production system, brand and additional services have been identified as most important for product differentiation (Baker and Crosbie 1994; Conklin and Thompson 1993; Steenkamp 1995; Wolfe et. al.). All vegetable products are produced domestically while garlic has also recently been imported from China. Small sized retailers' focus (table 2) on single varieties of the seasonal products mainly of medium qualities with an average size of 2.43 products. Product specialization is low and is restricted along the low value fast moving product lines for example potatoes and onions, spinach and radish, products having very thin demand but a broader base such as lemon / green chillies, coriander / mint leaves.Though remains negligible yet it is also practiced along the ethnic products, value added products i.e., cut products for salad (an extended product line of a snack retailer), sprouted

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pulses and peeled products such as husked baby corn, soup corn, green peas, beans, pluckedgreen gram pods. Grocers' extended vegetable product lines include potatoes, onions and ethnic products that have a longer shelf life. For the medium sized retailers merchandise mix comprises of an average 3.89 seasonal products of 1.32 varieties, mainly medium (94.74%) qualities. 47.37% of them specialize along the low to medium value fast moving product lines such as tomatoes, potatoes and onion, different verities of garlic okra. But it remains low along the ethnic product lines such as tapioca, kand, bamboo shoot, large sized arbi and the value added product lines such as sprouted pulses-black and green grams. For large sized retailers average size of the merchandise mix is of the 11.91 seasonal and exotic product lines and, 1.55 varieties mainly of the medium qualities. Extended product lines of these retailers include the exotic products (54.55%) such as yellow / red capsicums, broccoli, celery leaves, cherry tomatoes, mushrooms, etc. and the, offseason products (63.64%). It remains low along the ethnic and sprouted pulses product lines but is almost negligible along the peeled products and the low value products such as potatoes and onions. Added services such as consumer packs are available only at the medium sized supermarket. From this group a retailer is himself grower of the exotic products and supplies come fresh from the farm. MARKET DEVELOPMENT Small sized retailers' focus is high (table 3) on the low and medium and low on the high price segments; medium sized retailers' is high on the medium and moderate on the low and high price segments whileof the; large sized retailers' is high on the medium and high and low on low price segments. Quite often all sized retailers influence customer purchase decisions through salesmanship. Depending upon the sizes and characteristics of the target markets they adapt the marketing mixes. Within each market segment, customers comprise of two groups, regular and floating. Complete product selection choices are offered to both. Satisfied customers like to make repeat visits and recommend the business to a family and friends while those less satisfied with quality, price, service, or any other aspect hurt business by generating negative word-of-mouth advertising. In these markets, touching, feeling, smelling the products is common but freshness is very important in consumers' purchase decisions. This is because most of the large volume products are shipped over long distances, remain packed for long hours under varying temperatures, handled several times before presenting in the retail markets. So, to grab customers' attention retailers make theirs' product displays eyecatching. To do so they keeping the products neatly arrange after washing, sorting regularly for defective items, sprinkling several times, filling and using materials such as lush green banana leaves for a farm fresh look to products. Retailers maintain friendly and open communication with customers that builds up mutual loyalty and reliability for customer retention for repeat transactions. However, with floating customers it is largely business oriented since they shift quickly to the competitors depending upon product choices and relative price competitiveness. All the three sized retailers have customer retention but its share is about 20% for small, 30% for medium and 80% for the large sized retailers. For the small sized retailers customer loyalty is moderate and customer reliability is low for the medium sized both are moderate while for the large sized both are high. All groups build up and strengthen it by offering hidden price discounts and focusing on customer centric strategies such as replacing occasional defective merchandise, selling on credit while the large sized retailers also arrange on demand selective products in desired

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lots, times and places, and also occasionally offer free trial samples of the impulsive product lines. Small and the medium sized retailers quite often themselves invite the floating customers to their businesses and greet them with courteous, pleasant, and brief words such as brother, sister, sister in law eta and pay them personal attention. In contrast, customers themselves get attracted to the businesses of the large sized retailers for better quality and the impulsive products. Large sized retailers' main objective during the first contact is to welcome and make mere reel at home and understand the factors such as first impressions, interior and exterior environment, previous experiences, importance of good services etc that brought them to the business. This helps them to focus on the items that a customer was examining and find out more about the needs by opening a door for an exchange of information. Knowledge approach is also combined and they volunteer for additional information about a product such as its quality, taste, origin, specialty, or new ways to utilize, etc. Recognition of customers' hidden expectations makes it easy to match the product choices and handle the objections courteously. All the three groups of retailers also cater to the needs of several 'ready to eat food' outlets. But focus of the small and medium sized retailers is low and meets largely tothe requirements of low price food outlets such as vendors, roadsidedhabas and institutions. While of the large sized retailers it is moderate (54.55%) and is on the medium to high price food outlets such as restaurants and, hotels. SUPPLY CHAIN MANAGEMENT Supply chain management (SCM) refers to the management of entire set of production, distribution and marketing processes by which a consumer is supplied with a desired product (Woods 1999). Increased firmlevel integration helps retailers to position themselves as consistent year-round suppliers of differentiated products from multiple locations, and seek out varieties with superior flavor and other attributes (Cook 2003a). All sized retailers maintain a regular flow of the selected product lines, requisite varieties in appropriate lot sizes with a continuous replenishment of stocks at the competitive prices and minimal risks. Due to lose bindings between the market agents, retailers build up upstream networks by developing mutual trusts, i.e., by complying to word of mouth commitments of product quality, prices, timely payments, risk sharing, etc. Product lines, lot sizes, transaction costs of searching suppliers and markets and retailers' own asset positions impact purchase source choices. Small sized retailers' purchase choices are high (table 4) from the commission agents/wholesalers (73.91%) and traders/ agents (60.87%) but low from semi-wholesalers. Medium sized retailers' purchases are high from commission agents(94.74%) and semi wholesalers (68.42%), low from traders /agents andalmost negligible from farmers. A medium sized retailer-semi wholesaler has built up direct links with farmers to obtain the supplies of seasonal products. Large sized retailers' purchases are high from commission agents (72.72%), moderate from traders/agents (54.55%) and low from semi wholesalers and farmers. Presently the production of exotic products is on a small scale due to higher risks and lower yields.One large sized retailer purchases these products through the agents. They remain on the countryside and arrange for its supplies direct from farmers. Other retailers purchase these products from the retailer-grower in the crowford market. Agents themselves deliver to retailers' at the business premises products such as sprouted pulses, ethnic products, and mushrooms in the requisite lot sizes. Small traders /agents directly purchase discarded products from the large sized retailers in the Crowford, Dadar and Matunga markets at below the cost prices. These are sold to the small sized retailers particularly in the slum areas at low prices. Women retailers also

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purchase partially damaged products from the wholesale markets during lean business hoursand sell after removing the damaged portions. The responses are probed through asking retailers to (a) rank from "1"= Most Important Reason to "4"= Least Important Reason, and indicate (b) how significant (in percentage terms) each of these reasons account for purchase behaviour. Small sized retailers adduced that finance accounts for 45%, lack of storage and refrigeration for 30%, concern about freshness about 20%, and social environment about 5% of the purchase behaviour of their customers. Medium sized retailers adduced that finance accounts for 20%, lack of storage and refrigeration for 25%, stock range and variety about 25%, concern about freshness and hygiene about 30% of their purchase behaviour. Large sized retailers adduced that finance accounts for 5%, lack of storage and refrigeration for 5%, stock range and variety about 40%, and concern about freshness and hygiene about 50% of the purchase behaviour. PRODUCT PRICING Difficulty of controlling the product quality and volume, intra- and inter seasonality, proper temperature throughout the distribution system limits the evolution of true consumer franchises for specific brands that makes the dynamics of fresh produce markets largely commodity like and most firms act as price-takers Cook (2003a). However, retailers' purchase choices, lot sizes and the product supply positions at any point of time impact theirs' offer prices for the seasonal products in the wholesale markets. They use the principle of "cost plus" and "competitive" pricing for pricing products. Costs set the price floor while customers' and competitors' characteristics impact the actual price fixation. To the cost price i.e., purchase price plus incidental charges plus a margin of about 10 per cent for wastage, markup as a return for profit is added. It depends upon the product nature, i.e. its shelf life and scarcity/plentiness of supplies relative to demand. Prices are adjusted to take an account of the differentials in product quality. Since wholesale markets operate on a daily basis, retailers replenish stocks in the morning for the whole day that offer better selection choices so prices are maintained comparatively higher. In the evening, to push off stocks, small and medium sized retailers reduce mark ups and hence prices to tempt customers for impulsive purchases. Towards the closing of a day, to minimize losses of carrying stocks for the following day and limited product choices prices are reduced further even below the cost levels. Such periodic price discounts are highly sensitive to the shelf life of a product, availability of safe storage facilities, cash needs, etc. Large sized retailers maintain price rigidity throughout the day by a regular discarding of the partially damaged products. However, product prices at any point of time are neither strictly fixed nor uniform for all. To attract customers to the businesses and win confidence multi product retailers at times also quote a price below the purchase price for the product he/she was examining. Such losses are made up from the sale of other products as they recognize that consumers in a cluster-marketshop for a bundle of goods. These comprise of two groups: products purchased on every shopping trip and the impulse and infrequent purchase items. Even if it is easier for consumers to do comparison-shopping for the former and they easily switch over to the competitors due to 'weak brand' market, but it is not possible for each and every product line. A vast majority of the households (over 90%) do not engage in comparison-shopping by visiting several stores to seek out the best deal on a particular product Slade (1995). This enables them to rely upon complementary pricing to encash on the transaction costs of consumers. Retailers handling large volumes of the mixed lots of singleproduct lines also encash on differential and premium pricing to compensate for the losses incurred on low

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quality products. Products such as potatoes, onions and, tomatoes of the various sizes are offered at several prices to meet various customers' needs, or prices vary across the markets depending upon the prevailing market conditions and customers' valuations of the product i.e. retailers resort to price lining and smart pricing Sinha (2000). Markets remain highly competitive for seasonal products while are duopolistic or oligopolistic in nature for the niche products. This provides certain freedom for higherprofit margins depending upon product nature, shelf life, quality, number of competitor, etc. Product perishability limits storability thereby ability of firms to adjust to the short-run disequilibria in supply and demand, other than through price Cook (2003b). Percentage shares in the sales value for the three are: 15% for small, 55% for medium and 30% for the large sized retailers. CONCLUSION Findings of the study indicate an interesting picture of the co-existence of a village type retail operation with a more modern retail sector. However, it still remains predominantly traditional. Asset position of the retailers impacts the competitive strategies. To cope up with the resource constraints and earn for livelihoods, small and medium sized retailers rely upon own labour and target the medium and low-price segments. Merchndise mixes comprise of single varieties andmedium qualities of the fast moving product lines, mixed lot sizes, negotiate for prices and offer periodic price discounts since overhead costs are nearly negligible for them. They manage product purchasesfrom several sources to keep the cost prices low. Due to financial and physical constraints both these groups of retailers attempt to minimize the risks and are content with their businesses that provide a stable flow of income. In contrast, large sized retailers target the upper and medium price segments. Merchandise mixes comprise of the broader product lines over extended periods, novelty products, and the sorted lots. This helps them to maintain prices relatively higher forthe competitive products while exercise market power for the niche products thereby reap higher profits. They emphasize customer retention and market development. Small proportion of these retailers is beginning to depict developed country style modern sales patterns such asproduct variety, consumer packagings, convenience, hygiene and the shopping atmosphere. Most of these developments originate from retailers and the producers of new products. Unlike the developed countries,where fresh-cut products are regularly available in consistent quantities and qualities, marketed more like manufactured food products, often branded and backed by higher promotion budgets with shippers having a greater ability to influence price (Cook 2003b), these are soldunbranded but at the fixed prices. Nonconventional grocery and snackretailer have just begun to capitalize on their regular customers bycross merchandising along the selective product lines that fit well to the general category. REFERENCES Baker, G. A. and P. J. Crosbie (1994), "Consumer Preferences for Food Safety Attributes: A Market Segment a Roach," Agribusiness, 10 (4). Bakos, Y. (1998), "The Emerging Role of Electronic Marketplaces onthe Internet," Communications of the ACM, 41(August). Bakos, Y. and E. Brynjolfsson (1997), "Aggregation and Disaggregation of Information Goods: Implications for Bundling, Site Licensing and Micropayment Systems," in Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property, Kennedy School of Government, Harvard University, January. Blois, K. (ed.) (2000), The Oxford Textbook of Marketing, Chapter 1, New

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Page 12 Competitive strategies adopted by vegetable retailers in Mumbai cityof India--an insight. Indian Journal of Economics and Business June 1, 2006

Vlosky,R.P (1996), "Sources of Competitive Advantage for Wood Products Distribution Suppliers to Home Center Retailers," Working Paper 12, www.rnr.lsu.edu/lfpdc / publication/papers/DIS12. Wolfe, K.H.R. and J.Aaron "Roadside Stand Marketing of Fruits and Vegetables", www.agecon.uga.edu /~caed/roadside2.pdf Woods, E. (1999), "Supply Chains: What are they and Why be Interested?" Aciar Postharvest Technology, Internal Workshop, No. 20, Canberra, (1-2 December), www.aciar.gov.au/web.nsf/att/ACIA5MD9UE/$file/postharvest54-supplychains The study was undertaken during the principal author's visit as a Visiting Fellow of the U.G.C at the Dept. of Economics, University ofMumbai, Mumbai. VEENA GOEL Sr. Economist (Marketing), Punjab Agricultural University, Ludhiana SUKU BHASKARAN Director, Victoria University, Melbourne, Australia Table 1 Resource Base of Vegetable Retailers Small Resource/ Retailer category No. Self Management Manpower Availability Hereditary Business Location at the Market Structures Used Rehri (four wheeled & hand operated) Wooden Boards Concrete shops/stalls Jute bags Cots 1 Baskets Telephone Facilities Storage Facilities Central Cooling Facilities 1 3 14 4.35 4 2 5 -4.35 13.04 60.87 -17.39 8.70 23.81 -5 5 3 --2 11 -26.31 26.31 15.78 --10.53 57.89 -1 10 ---9 9 2 -81.82 81.82 1.82 9.09 90.91 ---6 31.58 --No 23 23 1 1 21 %age 43.40 100.00 4.35 4.35 91.30 No 19 19 3 1 19 %age 35.85 100.00 15.78 5.26 100.00 No 11 7 10 3 10 %age 20.75 63.64 90.91 27.27 90.91 Medium Large

Page 13 Competitive strategies adopted by vegetable retailers in Mumbai cityof India--an insight. Indian Journal of Economics and Business June 1, 2006

Safety at Market Place Harassment

18 3

78.26 13.04

17 3

89.47 15.79

11 --

100.00 --

Table 2 Product Mixes of Vegetable Retailers Small Product Lines Seasonal Products Product Quality Product Specialty No 23 %age 100.00 Medium No 19 %age 100.00

M-17; L-6 Onion and Potato-2; Lemon/chillies-1; Spinach and radish-1

M-18; L to M- 1 Tomato-4; Onion and Potato-2; Garlic-1 Okra-1; 1 --1 ---5.26 --5.26 ----

Extended Product Lines Ethnic. Exotic Impulsive. Value Added Products Sprouted Pulses Peeled Products Cut Products Consumer Packs 1 2 1 -Large Product Lines Seasonal Products Product Quality Product Specialty No 10 %age 91.91 4.35 8.70 4.35 -1 --4.35 ---

M-9; S-2 Onion and Potato-1

Extended Product Lines Ethnic. Exotic Impulsive. Value Added Products Sprouted Pulses Peeled Products Cut Products Consumer Packs 3 1 -4 27.27 9.09 -36.36 4 6 7 36.36 54.55 63.64

Page 14 Competitive strategies adopted by vegetable retailers in Mumbai cityof India--an insight. Indian Journal of Economics and Business June 1, 2006

L-Low; M-Medium; S-Superior. Table 3 Market Development of Retailers Small Category Market Segment High price Medium price Low price Product Choices Freshness Consumer Satisfaction Product Sorting Product Replacement Customer Category I Regular Friendly Attitude Customer loyalty Customer reliability Customer Category II Floating Business Attitude Food Service Outlets Vendors/Roadside dhabas Restaurants/Hotels Table 4 Product Purchase Choices of Retailers Small Purchase Source Direct from Farmers Commission Agents / wholesalers 17 73.91 18 94.74 8 72.73 No -%age -No 1 Medium %age 5.26 No 3 Large %age 27.27 2 -8.70 -5 3 26.32 15.79 -6 -54.55 23 23 100.00 100.00 19 19 100.00 100.00 11 11 100.00 100.00 20 23 10 8 86.96 100.00 43.48 34.78 19 19 8 8 100.00 100.00 42.11 42.11 11 11 8 8 100.00 100.00 72.72 72.72 21 23 23 1 90.48 100.00 100.00 4.76 19 19 19 -100.00 100.00 100.00 -8 11 11 2 72.73 100.00 100.00 18.18 6 16 18 26.08 69.57 78.26 11 19 11 57.89 100.00 57.89 8 11 3 72.73 100.00 27.27 No %age No Medium %age No Large %age

Page 15 Competitive strategies adopted by vegetable retailers in Mumbai cityof India--an insight. Indian Journal of Economics and Business June 1, 2006

Semi wholesalers Traders / Agents

4 14

17.39 60.87

13 3

68.42 15.79

4 6

36.36 54.55

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