ASSIGNMENT

MK0012 RETAIL MARKETING

Name 1205006802 Learning Centre : AIM Computer Education Learning 02030 ------------------------------------------------------------------------------------------------------------------------------------Q1.List the various techniques used for consumer promotions. Answer: Consumer Promotion Techniques Some of the popular consumer promotions techniques are: Sampling: Free samples of a new product or a new version of a product are distributed in small packs to induce trails. It is most effective way to make customers at least try the product one. This method, though being expensive, brings in new customers. Couponing: Coupons are the most popular sales promotion technique as they are used by nearly all the packed goods firm. Coupons make it possible to offer a price reduction only to those consumers who are price sensitive. Such consumers generally purchase because of coupons, while those who are not concerned about price buy the brand at full value. Coupons also make it possible to reduce the retail price of a product without relying on retailers for cooperation, which can often be problem. Coupons can encourage repurchase after initial trail. Premiums: A premiums is an offer in which some other items are given either free or at a lower price on purchase of a particular item of merchandise or service that acts as an extra incentive for purchasers. Fee premiums usually include small gifts or merchandise included in the product package or sent to consumers who mail in a request along with proof of purchase. Package-carried premiums have high impulse value and can provide an extra incentive to by the product. Contest and sweepstakes: A contest is a promotion wherein consumers are asked to answer some questions or complete slogans and the winners are awarded prizes or money. Contests usually provide a purchase incentive by requiring a proof of purchase to enter or an entry form that is available from a dealer or advertisement. Refund and rebates: Refund (also known as rebates) are offered by the manufacturer to return a portion of the product purchased, usually after the consumer supplies some proof of purchase. Bonus Packs: Bonus packs offer the consumer an extra amount of a product at the regular price by providing large containers or extra units. Price-off Details: Price-off deal, leads to reduction in the prices. They are offered on the package through specially marked price packs. Frequency Programmes: Frequency progarmme also referred to as continuity or loyalty programmes were initially introduced by airlines are frequent-flyer programmes.
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MBA: Semester III

: Ajit Kumar

Registration No. : Centre Code :

Event Marketing: In this kind of promotion, a company or brand is linked to an event or where the event is based on a theme to create customer experiences and promote a product services. As seen these days, marketers often promote their product by associating it with some popular activity such as a sporting event. Q2.What is the different types of retail store locations? What are their pros and cons? Answer: Site Selection, approaches to site selection Site selection in retailing refers to the type of building the retailer needs and its affordability. Retailers should decide whether they should own the property, lease the premises on rent or have a joint venture with the landlord. Site selection depends on the nature of the building, facade requirements, size requirements and costs. The site selection format is furnished below as a specimen. Address of the company Details of adjacent occupants-North, east, west and south Can the site be used commercially? Name & address of the title holder Is the site free of encumbrance? Are all relevant taxes paid and currently up to date? Is the site free of any civil suit? When was the building constructed? Total number of floors Other prominent facilities nearby Details of facilities space / parking space Revenue details / rate per sq. ft etc Site Selection analysis / Approaches to site selection: With the advent of new retail formats, such as planned shopping centers and malls, emergence of free-standing department stores, hypermarkets etc., and further development of traditional business districts and other unplanned shopping locations, a retailer is presented with a wider choice of locations. Consideration of all the options keeping in view the product mix, customer profile and overall business model presents an enormous challenge. A retailer has to consider the following factors while selecting a site: 1. Kind of products sold: For stores dealing in convenience goods, the quantity of traffic is most important. The corner of an intersection, which offers two distinct traffic streams and a large window display area, is usually a better site than the middle of a block. Convenience goods are often purchased on impulse from easily accessible stores. For stores dealing in shopping goods, the quality of the traffic is more important. Stores carrying specialty goods that are complementary to certain other kinds of shopping goods may desire to locate close to the shopping goods stores. In general, the specialty goods retailer should locate in the type of neighborhood where the adjacent stores another establishment are compatible with retailers operations. 2. Cost factor: Location decision on cost considerations alone is risky. Space cost is a combination of rent or mortgage payment, utilities, leasehold improvements, general decoration, security, insurance and all related costs of having a place to conduct business operations. Traditionally, the retail community placed great importance on owning the place since this was considered prestigious in the business community. With the emergence of new forms of retail formats such as franchising, malls and department stores, the dependence on rent or lease is increasing.
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3. Competitors location: The type and number of competitors is another important factor. The presence of major retail centers, industrial parks, franchisee chains, and department stores should be noted. Intense competition in the area shows that new businesses will have to divide the market with existing businesses. An excellent location may be next or close to parallel or complementary businesses that will help to attract customers. 4. Ease of traffic flow and accessibility: These two are the more important factors to some businesses than others. Retailers selling convenience goods must attract business from the existing flow of traffic. Studying the flow of traffic, noting one-way streets, street widths and parking lots, is hence important. The flowing factors like parking availability, distance from residential areas, side of the street, part of the block etc is to be considered. 5. Parking and major thoroughfares: Parking is another site characteristic that is especially a cause for concern in densely populated areas. When evaluating the parking that exists at a retail site, there are two considerations i.e. parking capacity and parking configuration. The ideal parking ratio for a food store is about 3:1 or 3 sq. ft of the parking space for every square ft of store. 6. Market trends: Evaluate the community from a broad, futuristic perspective. Local newspapers are a good source of information. Discussions with business owners and officials in the area can also help. 7. Visibility: Visibility has a varied impact on a stores sales potential. It is important when a shopper is trying to find the store for the first or second time. Once the shopper has become a regular customer, visibility no longer matters. It follows that of a store cannot readily be seen, new residents of an area probably will not choose it. Factors influencing retailers choice of location: Decisions regarding the location of a store are very critical not only to the future performance of that outlet but also the retailers long-term prosperity. Following questions need to be answered first before selecting the site: a. Is there a need to be in the middle of traffic flow of customers as they pass between the stores with the greatest customer pull b. Who will be the stores neighbors? c. What will be their effect on stores sales? d. How much space is needed? Based on experience of the retailer, the amount of space required can be determined to run theexpected level of operations. The amount of space will determine rent and other relatedexpe nses. Many retailers need to rethink their space requirements when locating in a shopping center. Rents are generally much higher and therefore, space must be used efficiently. This is compounded by the consideration of certain specific issues such as: 1. Consumers choice or preference of a location: The consumer behavior is most often guided by their consideration of the ideal location to shop. 2. To gain competitive advantage: The decision on where to locate the retail outlet will be of strategic importance because if they develop the best location, it will earn them a long-term competitive advantage. 3. Understanding of structural and social changes or trends: Any decision on location
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willdefinitely have to take into consideration the exiting trends and likely social changes. For instance, the importance of out-of-town shopping centers, the rise in multiple retailers and so on is an eye opener for retailers to select an ideal location to match the consumer shopping trends. 4. High investment involving long-term financial implications : The retailer has to consider the investment cost, lead times and long-term financial implications involved in the development of a retail location and site. 5. Select the final property asset carefully: The retailing firm has to exercise care while selecting the final property assets for its value can be very high almost as high s the firms annual turnover. 6. Government formalities: There could be many government policy decisions having a binding on the development of new retail outlets. This implies there could be restrictions on selection of new location sites for retailing purposes. The retailing firm has to consider the various dimensions of location decision making right from planning the location site through to the financial analysis and long term progress of the retailer. Location decisions and analysis involve examination of different disciplines of strategic marketing, the geography of retailing, town planning, operations research, consumer behavior and economics. Q3.Discuss the strategic retail planning process in brief. Answer: Situational Analysis: A firm needs to spot trends early enough to satisfy customers and stay ahead of competitors, yet not so early that shoppers are not ready for changes or that false trends are perceived. Merchandising shifts like stocking fad items are more quickly enacted than changes in a firms location, price, or promotion strategy. A new retailer can adapt to trends easier than existing firms with established images, ongoing leases, and space limitations. Small firms that prepare well can compete in a market with large retailers. During situation analysis, especially for a new retailer or one thinking about making a major strategic change, an honest, in-depth self-assessment is vital. It is all right for a person or company to be ambitious and aggressive, but overestimating ones abilities and prospects maybe harmful if the results are entry into the wrong retail business, inadequate resources, or misjudgment of competitors. 1. Organizational mission: An organizational mission is a retailers commitment to a type of business and to a distinctive role in the marketplace. It is reflected in the firms attitude toward consumers, employees, suppliers, competitors, government, and others. A clear mission lets a firm gain a customer following and distinguish it from competitors . Ownership and management alternatives: An essential aspect of situation analysis is assessing ownership and management alternatives, including whether to form a sole proprietorship, partnership, or corporation and whether to start anew business, buy an existing business, or become a franchisee. Management options include owner-manager versus professional manager and centralized versus decentralized structures. Consider that There is no single best form of ownership. Thats partly because the limitations of a particular form of ownership can often be compensated for. For instance, a sole proprietor can often buy insurance coverage to reduce liability exposure, rather than form a limited liability entity. Even after you have established your business as a particular entity, you may need to re-evaluate your choice of entity as the business evolves. Objectives
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1. Sales: Sales objectives are related to the volume of goods and services a retailer sells. Growth, stability, and market share are the sales goals most often sought. Some retailers set sales growth as a top priority. They want to expand their business. There may be less emphasis on short-run profits. The assumption is that investments in the present will yield future profits. A firm that does well often becomes interested in opening new units and enlarging revenues. However, management skills and the personal touch are sometimes lost with overly fast expansion. 2. Profit: With profitability objectives, retailers seek at least a minimum profit level during a designated period, usually a year. Profit may be expressed in dollars or as a percentage of sales. For a firm with yearly sales of $5 million and total costs of $4.2 million, pre-tax dollar profit is $800,000 and profits as a percentage of sales are 16 percent. If the profit goal is equal to or less than $800,000, or 16 percent, the retailer is satisfied. If the goal is higher, the firm has not attained the minimum desired profit and is dissatisfied. 3. Satisfaction of Publics: Retailers typically strive to satisfy their publics: stockholders, customers, suppliers, employees, and government. Stockholder satisfaction is a goal for any publicly owned retailer. Some firms set policies leading to small annual increases in sales and profits (because these goals can be sustained over the long run and indicate good management) rather than ones based on innovative ideas that may lead to peaks and valleys in sales and profits (indicating poor management). Stable earnings lead to stable dividends Image (Positioning) An image represents how consumers and others perceive a given retailer. A firm may be seen as innovative or conservative, specialized or broad-based discount-oriented or upscale. The key to successful image is that consumers view the retailer in the manner the firm intends. Through positioning, a retailer devises its strategy in a way that projects an image relative to its retail category and its competitors and that elicits a positive consumer response. A firm selling womens apparel could generally position itself as an upscale or mid-priced specialty retailer, a department store, a discount department store, or a discount specialty retailer, and it could specifically position itself with regard to other retailers carrying womens apparel. 4. Identification of consumer characteristics and needs: The customer group sought by a retailer is called target market. In selecting its target market, a firm may use one of three techniques: mass marketing, selling goods and services to a broad spectrum of consumers; concentrated marketing, zeroing in on one specific group; or differentiated marketing, aiming at two or more distinct consumer groups, with different retailing approaches for each group. 5. Overall Strategy: A. Controllable Variables: a. Store location b. Managing business c. Merchandise management and pricing d. Communicating with the customer B. Uncontrollable Variables: a. Consumers b. Competition c. Technology d. Economic conditions e. Seasonality f. Legal restrictions 6. Specific Activities: Short-run decisions are now made and enacted for each controllable part of the strategy. These actions are known as tactics and encompass a retailers daily and short-term operations. They must be responsive to the uncontrollable environment. 7. Control: In the control phase, a review takes place, as the strategy and tactics are assessed against the business mission, objectives, and target market. This procedure is called a retail audit, which is a systematic process for analyzing the performance of a retailer. The strengths and weaknesses of a retailer are revealed as performance is reviewed. The aspects of a strategy that have gone well are continued; those that have gone poorly are
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revised, consistent with the mission, goals, and target market. The adjustments are reviewed in the firms next retail audit. Q4. What do you mean by store layout? Discuss various types of layouts. Answer: Store Layout: Store layout is the term used to refer the interiors and the allocation or the plan in which the products are displayed in the store .It is quite imperative for the retailers to understand the customer and prepare a customer friendly layout. A customer friendly layout gives an impetus to the shopper to spend more time in the store hence increasing the chances of shoppers buying more merchandise. In the case of India many of the independent retailers do not have or have limited spaces for customer movement. Especially in smaller stores, one would find cash counter located at the store entrance. This treatment is common with so called 'Kinara Stores'. But on the other hand, many organized retailers provide adequate space within the store for shoppers and create layouts that facilitate a definite pattern of customer traffic .In other words the layout creates 'Aisles' so that the shopper can move on a predefined path inside the store. Layout planning caters to decisions about nature of traffic flow, kinds of product, space available and maintenance of the space on a daily basis. Store layout is one of the many facets of Retail Atmospherics and hence it is significant. Store layout plays a very important part in the cost analysis by the retail firm and also the general brand communication of the store. Store layouts generally show the size and location of each department, any permanent structures, fixture locations and customer traffic patterns. Each floor plan and store layout will depend on the type of products sold, the building location and how much the business can afford to put into the overall store design. Below are a few basic store layouts. 1. Straight Floor plan: The straight floor plan is an excellent store layout for most any type of retail store. It makes use of the walls and fixtures to create small spaces within the retail store. The straight floor plan is one of the most economical store designs. 2. Diagonal Floor plan: The diagonal floor plan is a good store layout for self-service types of retail stores. It offers excellent visibility for cashiers and customers. The diagonal floor plan invites movement and traffic flow to the retail store. 3. Angular Floor plan: The angular floor plan is best used for high-end specialty stores. The curves and angles of fixtures and walls make for it a more expensive store design. However, the soft angles create better traffic flow throughout the retail store. 4. Geometric Floor plan: The geometric floor plan is a suitable store design for clothing and apparel shops. It uses racks and fixtures to create an interesting and out-of-the-ordinary type of store design without a high cost. 5. Mixed Floor plan: he mixed floor plan incorporates the straight, diagonal and angular floor plans to create the most functional store design. The layout moves traffic towards the walls and back of the store. Q5. Discuss the different types of store based retailers. Give examples for each. Answer:
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Types of Store based retailers: Departmental Stores: Department Stores are the oldest form of large store. A department store is a multi-level store, which is split up into clearly defined areas or departments according to product category. Specialist Stores: Although some department stores might be considered specialist stores because of the restricted product range or the customer market that the target, most specialist stores are smaller, in line with the size of the product range offered. Category Killers: The term category killer, which originated in the USA, describes the large specialist retailer that is typically found in an out-of town or edge-of-town retail park or site. Convenience Stores (C-Stores): As yet no official definition of a convenience store has been established although the following criteria generally apply to this format. Supermarkets, Superstores and Hypermarket: Supermarkets, Superstores and Hypermarket cam be considered in the same family of retail format, in that the stores are selfservice, usually on one level and laid out in a functional grid pattern of aisles and shelving. Warehouse Clubs: A warehouse club is retail outlet that stocks a limited range of grocery and household products, some home oriented goods and some clothing products. Discount Stores: Discount stores are sometimes run on the basis of a product range geared by opportunistic buys by the retailer. Examples of emerging strong players who have adopted this type of format are reliance, West Side, Trent and Reynoldss in the clothing sector. Factory Outlets: Factory outlets retailers offer customers a range of second-quality and /or previous seasons. Charity Shops: Charity shops are usually run on the basis of selling stock that has been donated, although some for example Oxfam, also have a range of specifically sourced products. Q6. Discuss the stages in retail environment analysis. Answer: The Stages in analyzing retail environment include analyzing market size, competitors, rules, industry attractiveness and industry structure. These stages are explained below: Market Size/Age: Is the market relatively small or large, and can it be broadly classified by its stage of development (Start-up, emerging, growth, maturing, declining) Number of competitors: What is the level of competition for the market? Are there many small rivals or few large? How easy is it for new players to enter the industry? Rule of the game: How do firms compete in this market? Do they compete on price, quality, technology, service etc? What is the average level of profitability? Is it a profitable market or is it a high-volume, low margin field? Industry Trends/driving forces: What are the industry trends and how rapidly they change? Is the industry growing and innovative or stable or slow to change? The rate of market growth is critical factor because it influences the equilibrium between demand and supply. Industry Attractiveness: The overall attractiveness of an industry is determined by the interaction of these key structural forces. The higher the rate of growth and the weaker the competition, the more attractive the industry.
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Industry Structure analysis: The initial analysis of industry structure provides as nap of the competitive environment. The strategists also need to anticipate future trends, new development that may change the existing structure.
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