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UNIT I
Retail: Meaning
A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier,
who normally sell their goods to another business.
A process of promoting greater sales and customer satisfaction by gaining a better understanding
of the consumers of goods and services produced by a company. A typical retail management
strategy for a manufacturing business might research the retail process that distributes the
finished products created by the business to consumers to determine and satisfy what buyers
want and require.
(i) A retailer is the link between a wholesaler and the ultimate consumer and he is the last
intermediary in distribution.
(ii) A retailer buys goods from wholesaler in bulk and resells them to consumers in small
quantities.
(iv) A retailer makes sufficient shop display of his wares to attract customers.
(v) Retailers perform all the marketing functions which a wholesaler performs and in addition
emphasises on advertisement.
(vi) Retailers deal in a variety of merchandise and are often known as general merchants.
(vii) Usually retailers are classified into two major groups, viz., small scale retailers and large
scale retailers.
(vii) Retailers aim at providing maximum satisfaction to their customers in limited area.
The success of retail trade is based on a proper combination of the following factors:
(i) Locations:
The ultimate success of a retailer depends on the location of his shop. Proper selection of
location is important for a retailer to establish his business.
(ii) Price:
A proper pricing policy can give better results for a retailer if he can combine low prices with
good quality to attract consumers.
A retailer must arrange for proper sales promotion campaigns in order to familiarise the
customers of that area with his products.
Every retailer ought to be a shrewd purchaser; only then he can give his best to his customers.
Careful buying earns rich dividends in retail trade.
Modern business is so complex and the variety and quality of goods being so diverse, a retailer
must have adequate and latest knowledge of the wares he sells. It would not only enable him to
answer customer queries satisfactorily but also to handle the complications of his business. Thus
adequate knowledge of merchandise is another pre-requisite feature of retail trade.
(vi) Services:
A retailer should concentrate on his services. Courteous and prompt service on his part will help
him in attracting more and more customers and thereby flourish in his business. Most retailers go
in for after sale service also, where they cater to the needs of the customers after the latter has
purchased a commodity from them. So efficient service should be the motto of every retailer.
Better planning, organisation and control by a retailer can offer efficient retail operations. A
retailer should have a proper and adequate work-force to assist him in his business. He should
always keep stocks ready for customers and even offer specialised comments on the products he
deals in. If a retailer plans his inventories and works in advance, there is no doubt that he will
achieve his targets and also attract more customers.
Since a retailer deals in a verity of products, he must display his goods in a proper and orderly
manner. This will enable him to get what is required by the customer quickly and also help in
attracting customers. The retailer must go in for tastefully decorated interiors and also have
proper and attractive window-dressing and display.
The goods must be neatly and orderly stocked and the pattern of window display should be
frequently changed for the better, so as to attract the customers eye. A retailer must not forget
that a well laid out window display will help him to entice and attract customers from his rivals
and competitors. Hence, proper care and attention ought to be given for display of goods out as
well as in the retailers shop or showroom.
Retailing is an important field to study because of its impact on the economy, its functions in
distribution, and its relationship with firms selling goods and services to retailers for their resale
or use. These factors are discussed next. A fourth factor for students of retailing is the broad
range of career opportunities.
Marketing:
He management process through which goods and services move from concept to the customer.
It includes the coordination of four elements called the 4 P's of marketing:
For example, new Apple products are developed to include improved applications and systems,
are set at different prices depending on how much capability the customer desires, and are sold in
places where other Apple products are sold.
Retailer Equation:
The Retail Equation (TRE), headquartered in Irvine, Calif., is the industry leader in retail
transaction optimization solutions at the point of sale and point of return.
2 Retail is detail
Product: You need products that your customers want to buy and a product range that
will satisfy your customers needs and desires. The products must also deliver a profit for
you to have a successful business;
Price: Price must be consistent across the marketing mix and meet all requirements for
your business. You need to price your product range at the correct level for the customers
to be able to buy your products, and for them to gain value from your products. This
could mean pricing high or low this very much depends upon your customer offering;
Place: You must provide somewhere for your customers to purchase your product, be
that a physical store, a catalogue or an e-commerce website;
Promotion: Once you have a product at the right price, in a place where the customer
can access it you need to tell them about this and promote your business and your
products; make sure your customers know that you and your products exist and are
available for them to enjoy.
Marketing is an underlying philosophy that guides business activities, but how does a retailer do
marketing? A retailer must engage in planning, research and analysis before implementing a
marketing strategy. At the core of any retail marketing plan is the mix consisting of the four Ps
(Product, Price, Place and Promotion) of marketing. The following images show retail examples
of each of the elements of the mix and the next activity describes each element of the mix
further.
They usually have loading docks to load and unload goods from trucks. Sometimes warehouses
are designed for the loading and unloading of goods directly from railways, airports, or seaports.
They often have cranes and forklifts for moving goods, which are usually placed on ISO standard
pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials,
spare parts, components, or finished goods associated with agriculture, manufacturing and
production. In Indian English a warehouse may be referred to as a godown
Risk Bearing:
A probability or threat of damage, injury, liability, loss, or any other negative occurrence that is
caused by external or internal vulnerabilities, and that may be avoided through preemptive
action.
2.Finance: The probability that an actual return on an investment will be lower than the expected
return. Financial risk is divided into the following categories: Basic risk, Capital risk, Country
risk, Default risk, Delivery risk, Economic risk, Exchange rate risk, Interest rate risk, Liquidity
risk, Operations risk, Payment system risk, Political risk, Refinancing risk, Reinvestment risk,
Settlement risk, Sovereign risk, and Underwriting risk.
Retailing as a career:
Job prospects in Retail Sector are:
Customer Sales Associate: It is the entry-level post of retail business. But as every retail
shop is completely dependent upon the sales they get, this is one of the important posts in
this profession. To be a good sales person, one should have good knowledge about the
products, the shop, the customers etc.
Department Manager / Floor Manager/ Category Manager - These are some of the
posts one could handle in the store.
Store Manager: Store managers sometimes called General Manager or Store Director,
are responsible for managing an individual store and its day-to-day functioning. The store
manager is in charge of the employees of the store and he himself may report to a District
or Area manager or the stores owner.
Retail Operation Manager: It is the duty of a retail manager to plan and coordinate the
operations of the outlet. This involves the layout of merchandise, monitoring the retail
orders and stock, analysing the supply etc. Candidates with Master Degree can start off as
retail managers.
Retail Buyers and Merchandisers: They are the persons who select and buy the goods
for the retail shop. They should understand the needs of the customer, should be aware of
the trends in the market, and should possess great enthusiasm and energy.
Visual Merchandisers: These people give the brand a face, so they hold one of the very
important positions in the industry. Being a part of concept and design one could also be
a technical designer, product developer and store planner.
Trends in Retailing:
Retail management pertains to the task of managing supermarkets and hypermarkets in strict
business terms. In India, the retail industry has seen a great upsurge in the past decade. From
adopting new marketing strategies to diversifying into businesses, companies have tried all
gimmicks to impress the customer. This is one industry that works clearly on the paradigm,
Customer is King. The next time you enter a Reliance Fresh supermarket or a Big Bazaar to
buy a commodity of your choice, try and analyze the various discount prices being offered. The
systems these days are super fast and dynamic and totally computerized. Unlike in the past where
you had a grocery or a kirana shop selling you products and commodities at higher prices, now
almost everything comes for a discount! It is the sale season for no proper reason! Right from
factory outlets to supermarkets, some brand or the other would offer you discounts to beat and
win the competition.
UNIT II
Retail Model and Theories of Retail Development:
1) Environmental where a change in retail is attributed to the change in the environment in
which the retailers operate.
2) Cyclical where change follows a pattern ad phases can have definite identifiable attributes
associated with them.
3) Conflictual the competition or conflict between two opposite type of retailers leads to a new
format being developed.
In Retail Industry the buying and merchandising team classifies their products into categories
based on sales and product life cycle. This gives them the edge to price the products and stay
ahead of their competitors in assortment planning and pricing. Before we get into product
classification, we will discuss the various phases a product goes through right from launch to
phase out.
1. Launch
2. Growth
3. Maturity
4. Decline
Prior to launch, all the products will go through a product development lifecycle and
procurement process which we will discuss in detail in separate blogs.
Manufacturer
According to the MIT Sloan School of Management, a manufacturer takes raw materials and
creates product. This business model also applies to companies that assemble products from
premade parts. For example, Dell Computers would be considered a manufacturer because it
assembles its computers from parts made by other companies. A manufacturer can choose to
represent its products directly to its customers, or it can outsource sales to another company.
Distributor
A distributor is any business that purchases products directly from a manufacturer for resale
either to retail outlets, or directly to the buying public. For example, a technology distributor
would purchase computer parts from a technology manufacturer and then sell those parts
wholesale to retail outlets for sale to the general public. An auto dealership that deals in new cars
would purchase vehicles directly from the manufacturer and sell them to the general public.
According to the University of Southern California, Wal-Mart Department Stores qualifies as a
distributor because it purchases product directly from the manufacturer. Not all department
stores have that kind of purchasing power.
CRM in retailing:
Segmentation
CRM helps you gather information about each of your customers, including preferences and
demographic data. You can use such information to segment your market and customize your
approach to each group of customers. For example, if you find you have a large number of young
families in a segment, you can create a family-friendly retail environment. If your data shows
you have many seniors, you can install ramps for wheelchairs and make your store more easily
accessible. The effect of segmentation based on CRM data is to adjust your retail strategies to
better suit the customers you have.
Promotions
The data you gather within a CRM system lets you not only target a market segment with
promotions that appeal to its members, but also to target individual customers. For example,
when you know that a customer is reaching retirement age, you can promote appropriate hobby
products to him. If you see that a customer has visited your website and looked at particular
products, you can include promotions of those products in his mailings. In this way CRM
reduces promotions that are of no interest to the recipient and increases the relevance of material
you send out.
UNIT III
Strategic Planning in Retailing:
Situation Analysis:
Objectives:
A situation analysis is a key foundation for any sound intervention. It helps to ensure a
programmes relevance and to find out the best course of action (e.g. strategies, entry points,
partnerships) by learning about community attitudes and practices regarding violence against
women; identifying what has already been done to address violence against women and what
results and lessons were obtained, as well as who the main actors have been and who might be
key to engage. In addition to ensuring the appropriateness of the intervention to the local context,
carrying out a situational analysis will help avoid duplication of efforts.
Interviewing stakeholders
Interviewing customers
Overall strategy:
Strategic planning is an organization's process of defining its overall strategy, or direction, and
making decisions on allocating its resources to pursue this strategy.
Feedback control in Technology Expand. electronics. A control system which monitors its
effect on the system it is controlling and modifies its output accordingly. For example, a
thermostat has two inputs: the desired temperature and the current temperature (the latter is the
feedback).
V. Post-purchase behavior
UNIT IV
Retail in India:
Retailing in India is one of the pillars of its economy and accounts for about 22 percent of its
GDP. The Indian retail market is estimated to be US$ 500 billion and one of the top five retail
markets in the world by economic value. India is one of the fastest growing retail markets in the
world, with 1.2 billion people.
The origins of retailing in India can be traced back to the emergence of Kirana stores and mom-
and-pop stores. These stores used to cater to the local people. Eventually the government
supported the rural retail and many indigenous franchise stores came up with the help of Khadi
& Village Industries Commission. The economy began to open up in the 1980s resulting in the
change of retailing. The first few companies to come up with retail chains were in textile sector,
for example, Bombay Dyeing, S Kumars, Raymonds, etc. Later Titan launched retail
showrooms in the organized retail sector. With the passage of time new entrants moved on from
manufacturing to pure retailing.
We are witness to the change happening in retail in the country. The local grocery shop has
gradually transformed himself into a small supermarket. The transformation of what used to be
known as Phoenix Mills, into High Street Phoenix is a reality. This change is not restricted to the
metro cities but has rapidly spread to smaller cities and towns as well. The person driving this
change is the Indian consumer. In this article we look into the reasons of the retail change in
India.
India retail reforms. Until 2011, Indian central government denied foreign direct investment
(FDI) in multi-brand Indian retail, forbidding foreign groups from any ownership in
supermarkets, convenience stores or any retail outlets, to sell multiple products from different
brands directly to Indian consumers.
Organized retail in India is little over a decade old. It is largely an urban phenomenon and the
pace of growth is still slow. Some of the reasons for this slow growth are:
UNIT V
Global retail markets:
The Global Retail Development Index is an annual study that ranks the top 30 developing
countries for retail expansion worldwide. The Index analyzes 25 macroeconomic and retail-
specific variables to help retailers devise successful global strategies and to identify developing
market investment opportunities. The GRDI is unique because it identifies today's most
successful markets and those that offer the most potential for the future.
Strategic planning process for global retailing:
Strategic planning is an organizational management activity that is used to set priorities, focus
energy and resources, strengthen operations, ensure that employees and other stakeholders are
working toward common goals, establish agreement around intended outcomes/results, and
assess and adjust the organization's.
With the rapidly changing profile of consumers the world over, it remains a challenge for
retailers to keep up with shifting shopping demands. Shoppers today are more discerning and
better informed about products and services than ever before, expecting a certain standard of
shopping experience from retailers. This might be a global trend, but in todays globalized
environment, similar consumer trends may be replicated across most local markets too
including that of India.
He revolution in retailing industry has brought many changes and also opened door for many
Indian as well as foreign players. In a market like India there is a constant clash between
challenges and opportunities but chances favour those companies that are trying to establish
themselves. So to sustain in a market like India companies have to bring innovative solutions.
Indian market has potential to accommodate many retail players, because still a small proportion
of the pie is organized.
This paper discusses the challenges like merchandising mix, retail differentiation, supply chain
management and also competition from supplier's brand in the Indian perspective.it tries to
describe the different segments in which retailing could have tremendous opportunity as well.