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RETAIL MANAGEMENT

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.

Functions and special characteristics of a Retailer:

(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.

(iii) A retailer maintains a personal contact with his customers.

(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.

Pre-Requisites of Retail Trade:

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.

(iii) Sales Promotion:

A retailer must arrange for proper sales promotion campaigns in order to familiarise the
customers of that area with his products.

(iv) Prudent Buying Principles:

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.

(v) Knowledge of Merchandise:

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.

(vii) Efficient Management:

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.

(viii) Display of Goods:

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.

Reasons for studying. Retailing:

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:

(1) identification, selection and development of a product,

(2) determination of its price,

(3) selection of a distribution channel to reach the customer's place, and

(4) development and implementation of a promotional strategy.

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.

Marketing concepts applied to retailing:

1.The customer is the most important person in your business

2 Retail is detail

3 Understand the four Ps:

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.

Retail Marketing Mix:

The retail marketing mix

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.

Storage and Warehousing:

A warehouse is a commercial building for storage of goods. Warehouses are used by


manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are
usually large plain buildings in industrial areas of cities, towns and villages.

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.

Life cycle and phase in growth of retail markets:

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.

Business models in retail:


Every business has its distinctive way of organizing the very many activities that are involved in
delivering its product or service to the end consumer. In retail parlance, one would term it as the
format adopted by the retailer to reach his end consumer. Over a period of time, as business
grows, changes occur in the environment, the customer and the geographies in which business is
conducted. Companies are confronted with new information and communication technologies,
shorter product life cycles, global markets and tougher competition. Various retail models exist
in the world of retail. To start with, let us first understand what a business model in retail entails.
A business model is the manner in which a business chooses to serve its customers and
stakeholders. In retail, a business model would dictate the product and / or services offered by
the retailer, the pricing policy that he adopts. The communication that follows to reach out to
customers and the size looks at the location of Retailers retail store. This is termed in retail as a
format in which the retailer operates.

Other Retail models:

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:

1. Deciding the stores philosophy, mission and objectives:

2. Situational Analysis (SWOT Analysis)

Situation Analysis:

Situation analysis refers to a collection of methods that managers use to analyze an


organization's internal and external environment to understand the organization's capabilities,
customers, and business environment.

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.

Need for identifying consumer needs:

Starting with existing data

Interviewing stakeholders

Mapping the customer process

Mapping the customer journey

Conducting follow me home research

Interviewing customers

Conducting voice of customer surveys


Analyzing your competition

Analyzing cause-and-effect relationships

Recording experiences through diary studies

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 and control:

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).

Consumer decision-making process:

I. Need recognition / Problem recognition :

II. Information search

III. Alternative evaluation

IV. Purchase decision

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.

Evolution and Size of retail in India:

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.

Drivers of retail change in India:

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.

Foreign Direct Investment in retail:

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.

Challenges to retail developments in India:

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:

1) Retail not being recognized as an industry in India: Lack of recognition as an industry


hampers the availability of finance to the existing and new players. This effects growth and
expansions plans.
2) The high costs of real estate: Real estate prices in some cities in India are among the highest in
the world. The lease or rent of the property is one of the major areas of expenditure; high lease
rentals eat into the profitability of a project.

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.

Challenges facing global retailers:

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.

Challenges and Threats in global retailing:

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.

Factors affecting the success of a global retailing strategy:


Global factors affecting business The way of running the business differs from country to
country. The marketing, sales and technical skills are required to increase the productivity of
business. Business in general is enhanced when people from different cultures find new
approaches to old problems, creating solutions by combining cultural perspectives and learning
to see issues from the viewpoint of others. Business Environment consists of factors influential
to the business operations.

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