Page 174 - DMGT522_SERVICES MANAGEMENT

Unit 7: Delivering Services on the Web

Consumer Spending Habits
Notes
Figure 1: Consumer Spending Habits

23%

Food and beverage
48%
Clothing and foot wear
13% Rent, fuel & power
Transport & communication
Others
11%
5%
Population growth, combined with an increase in disposable incomes, has given a boost
to the retail industry. The brand-conscious urban population forms the largest segment of
demand for the majority of retailers. This segment has grown 3.22 per cent per annum
over the past decade, compared to the overall population growth of 2.13 per cent per
annum. In the past decade, consumer spending has increased at 11.5 per cent per annum. In
addition to the growth in population and consumer spending, spending habits are also
changing. Close to 50 per cent of consumer spending is on food & beverage (F&B). This has
not gone unnoticed by retailers.
Growth in the retail sector has been thus far focused on Tier I cities only. These cities have
mature markets, supported by immense competition, good infrastructure and high
consumer awareness. Retailer focus is now broadening to include Tier II cities as well.
Operations have been set up in secondary cities, including Nagpur, Indore, Jaipur,
Chandigarh, Lucknow and Kochi.
Question:
How should SangamDirect further use technology to beat Wal-Mart on its predicted entre?

7.6 Summary

This unit attempts to give an overview of the functions in as simple manner as possible.
 High technology innovations management and R&D – often synonymous – have been
extensively studied since the work by Schumpeter.
 At any rate, innovation and R&D has been seen as a central part of product development
and manufacturing. Previously, when the industry was dominated by FIPCOs the market
had ‘started’ after successful phase III trials and acquired FDA approval.
 However, along with increasing knowledge intensity the industry experienced a massive
disintegration through the birth of a vast number of biotechnology start-up companies.
 Disintegration meant that the traditional value chain was replaced and the old integrated
R&D process represented a myriad of business opportunities and a myriad of new markets.
 The traditional approach to innovations management had to be upgraded in order to
incorporate the customer and the numerous markets which suddenly appeared.
 For the purpose of understanding market needs and expectations and incorporate that
into a process we have presented the relationship marketing approach, which has three
fundamental elements; acts, episodes, and sequences, which form a relationship.
 For both of our illustrated areas these are highly relevant aggregation levels, however,
they are clearly expressed differently.

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