76 Retail Management

Neglected Market Segrnents

Retailers tend to be followers or conformists rather than innovators and therefore certain
categories of consumers are relatively neglected. This results in a concentration of retailers in a
particular location, to the point of saturation just in targeting one segment where as lower medium,
low class and rural mass is completely neglected.
Laxman Singh lives in a village 100 km away from a city. There is only one kirana shop in his
village, which sells kerosene to grocery, to shoes to tyre, and the problem with the villagers is that
they have to purchase whatever is available in the shop. Nobody can question the quality or price
of the products. Laxman Singh frequently visits city so he always complained about spurious
products and high prices as a result he was treated badly by that shopkeeper.
Lower middle class consumers are highly homogeneous in attitudes and buying habits. Research
has found that these consumers are dissatisfied with their shopping environment because of the
conservative approach adopted by the retailers. They are unhappy with the limited assortment of
goods and with the slowness of local merchants in stocking new items.

5.7 GROWTH STR/ATEGIES

The retailers usually pursue four types of growth opportunities. These are
o market penetration,
r market expansion,
r retail format development, and
. diversification.
These are shown in Diagram 5.3. The vertical axis indicates the degree to which growth
opportunities being considered are similar to the market segments the retailer is presently pursuing.
A growth opportunity positioned at the lower end of the axis would involve the markets the retailer
is targeting now. An opportunity at the upper end of the axis would involve markets that are new
and very dissimilar to the retailer's present markets.
The horizontal axis indicates the degree to which the growth opportunities are similar to the
retailer's present format. Opportunities positioned to the left involve the same formats being used
by the retailer, while opportunities to the extreme right involve new and very dissimilar formats

LOW

Similarity
to present
Retail
Format

HIG

HIG LOW
Similarity to present Target Market

Diagram 5.3: Markei Growth Strategies